To win you've got to stay in the game.
The lackluster markets may cause many to shift to their television screens to watch cricket. It’s a do or die situation for the Indian team which needs a good win to avoid being knocked out of the tournament. They’ve struck well with a couple of wickets at start. This is similar to our market movement which opens with a bang and ends with a whimper. But, the stock market is not a one-day game. It’s like a Test match though in the current conditions you have to play it one day at a time.
Bulls will hope for a much improved performance today. We see a positive start, but again like yesterday, trading may turn choppy and the mood will swing to the beat of the Asian and European markets.
Shares of OnMobile Global Ltd. will get listed today. The IPO of public sector power lending company Rural Electrification Corp. will open today. The issue is expected to do well despite the recent turbulence in the primary market and the disappointing listing of Reliance Power. Most brokerages have recommended a 'subscribe' to the issue.
Financial Technologies has informed that its subsidiary, the Multi Commodity Exchange of India Ltd. (MCX) yesterday filed the Draft Red Herring Prospectus (DRHP) with the Securities & Exchange Board of India (SEBI) in connection with the proposed IPO.
A number of uncertainties remain, especially on the global front. On the local front too, things are slowing down and India Inc. is clamouring for a rate cut. Whether the RBI Governor obliges them and the markets only time will tell. For now though, all eyes are on the Union Budget. Some say its become a non-event. We tend to agree to this growing view. But, the markets still look forward to it as quite a few proposals announced in the budget have a bearing on the sentiment.
The overall mood of the market tends to be positive in the run up to the budget. This year has been an exception so far, but the sentiment may improve over the next few days provided there are no new negative surprises from the global markets.
Nifty February futures discount decreased to 5 points from 12 points and around 6.46 lakh shares were added in open interest. But, volume in Nifty futures were significantly lower amidst huge volatility.
FIIs were net sellers of Rs3.42bn (provisional) in the cash segment on Monday. Local institutions too were net sellers of Rs1.34bn. In the F&O segment, FIIs were net buyers of Rs901.5mn. On Friday, foreign funds pumped in Rs11.47bn into the cash segment. Mutual Funds were also net buyers of Rs1.62bn on the same day.
The Government will give bonds worth Rs36.1bn to companies for selling fertilizer to farmers below cost. The bonds will have a coupon rate of 7.95% and will mature in 2026, the ministry said in a statement. This is the second and final tranche of bonds offered to the 23 fertilizer companies, it said.
Asian markets have extended their gains from yesterday. The Nikkei in Tokyo was up 75 points or 0.6% at 13,710 while the Hang Seng in Hong Kong climbed 381 points or 1.6% to 24,140. The Kospi in Seoul gained 17 points or 1% to 1713 while the Straits Times in Singapore advanced 17 points or 0.6% to 3100. The Shanghai Composite in China was flat at 4569 while the Taiex in Taiwan was up 77 points or 1% at 7968.
Mining companies rose after Rio Tinto said it was seeking price increases for its iron ore. Rio, the world's second-largest producer of iron ore, climbed to a two-month high on speculation that it will succeed in getting a bigger increase than its larger rival.
Toyota and Canon gained in Japan after the yen weakened against the dollar. National Australia Bank advanced after Qatar bought a stake in Credit Suisse.
The MSCI Asia Pacific Index gained 0.9% to 145.17 at 11:11 a.m. in Tokyo, with nine of its 10 industry groups climbing. All of Asia's benchmarks open for trading advanced, except in New Zealand and Vietnam.
Meanwhile, China's inflation accelerated to the quickest pace in more than 11 years last month after heavy snowstorms disrupted food supplies. Consumer prices rose 7.1% in January from a year earlier, the statistics bureau said today, after a 6.5% gain in December. The reading was more than the 7% average estimate of economists.
US financial markets were shut on account of the President's Day holiday. Investors will hope for the continuation of last week's rally in US stocks, but the nagging concern over the credit crisis and recession fears will continue to weigh on the market.
Market players will turn their attention to results from retailing giant Wal-Mart and a consumer-price inflation report. Wall Street will also consider reports from the beleaguered housing sector and results from JC Penney and tech heavyweight HP.
Results from European banks, many of which have been hit by the US mortgage meltdown, will also be keenly watched. Britain's Barclays will report on Tuesday and France's BNP Paribas will report on Wednesday.
Meanwhile, European shares rose on Monday with National benchmarks advancing in all 18 western European markets except Greece.
The pan-European Dow Jones Stoxx 600 index climbed 1.9% to 323.53, buoyed by big gains in UK banks after the British government said it will nationalize Northern Rock temporarily until it can find a buyer.
The UK's FTSE 100 closed up 2.8% at 5946.60, while the German DAX 30 advanced 2% to 6,967.55 and the French CAC-40 rose 1.9% to 4,861.80.
Credit Suisse rose the most in three weeks in Zurich after Qatar said it was buying shares in the second-biggest Swiss bank, while Barclays and Lloyds TSB climbed in London as traders speculated on higher dividends.
BHP Billiton followed metal prices higher in Europe, while Cia. Vale do Rio Doce rallied in Sao Paulo after winning a 65% price increase for iron ore from Japanese steelmakers.
Copper rose to a four-month high in London as imports from China, the world's largest user, increased to the highest level since April. Copper for delivery in three months rose 3.2% to $7,975 a ton on the London Metal Exchange, the highest intraday price since Oct. 18.
Most emerging markets ended sharply higher. The Bovespa in Brazil climbed 2.5% to 62,801 while the IPC index in Mexico gained 1.5% to 29,172. The RTS index in Russia rose by nearly 1.9% to 2026 and the ISE National 30 index in Turkey surged 3.5% to 57,253.
Markets to consolidate further
Markets snapped four day wining streak as selling gathered momentum. Key indices turned choppy and dull as benchmark indices were trading in a range for major part of the day. Selling pressure was seen in the IT, Realty and Oil & Gas stocks. However, it was the Small-Cap and the Mid-Cap stocks which ended with smart gains. Also, recently listed RPower which fell sharply hogged the limelight, as board of the company announced that they would consider bonus issue.
Finally, the 30-share Sensex closed at 18,048 losing 67 points. The NSE Nifty closed at 5,276 losing 26 points. Overall about 1,847 stocks advanced, 875 stocks declined while 50 stocks remained unchanged. Among the BSE 30 index 11 stocks advanced while 19 stocks declined.
KNR Construction provider of engineering, procurement and construction services across roads & highways, irrigation and urban water infrastructure management got listed on the bourses at Rs189 against its issue price of Rs170. However, immediately lost ground as investors preferred booking their profits. Finally the scrip ended at Rs154 slipping by almost 9% after hitting an intra-day high of Rs210 and a low of Rs151 and recorded volumes of over 54,00,000 shares on NSE.
RPower rallied by over 7.5% to Rs413 after the Board of Directors of the company announce that it would consider a proposal for issuing free bonus shares to all categories of shareholders, excluding the promoter group (comprising of Reliance Energy Ltd. and the ADA Group), and/or other measures, which will result in reduction of the cost of Reliance Power Ltd. shares below the IPO price of Rs430 per share for retail investors, and Rs450 per share for institutional and other categories of investors. The scrip touched an intra-day high of Rs430 and a low of Rs397 and recorded volumes of over 1,00,00,000 shares on NSE.
Nalco advanced by 7.5% to Rs389 as the company said that it raised prices by Rs8,000 per metric ton to Rs127,000. It raised prices for the second time this month after the metal gained in London. The scrip touched an intra-day high of Rs394 and a low of Rs364 and recorded volumes of over 99,000 shares on NSE.
Sesa Goa surged by over 6% to Rs3335 on reports that Japanese steelmakers, led by Nippon Steel Corp., have agreed to a 65% increase in annual iron ore prices could prove beneficial for the iron ore producer. The scrip touched an intra-day high of Rs3444 and a low of Rs3170 and recorded volumes of over 3,00,000 shares on NSE.
L&T slipped 1% to Rs3508. The company announced that it won Rs12.50bn order from ONGC. The scrip touched an intra-day high of Rs3598 and a low of Rs3410 and recorded volumes of over 3,00,000 shares on NSE.
BL Kashyap ended flat at Rs1576. The company announced that it won new project worth Rs11bn. The scrip touched an intra-day high of Rs1750 and a low of Rs1575 and recorded volumes of over 2,000 shares on BSE.
Goldiam International was locked at 5% upper circuit to Rs56.35 after the company announced that it would consider buy back of shares on February 25, 2008. The scrip touched an intra-day high of Rs56.35 and a low of Rs56.25 and recorded volumes of over 9,000 shares on NSE.
Flawless Diamond was down 2% to Rs80.50. The company announced that it launched 8 New Series of Designer Diamond Studded Jewellery. The Company developed 5000 exclusive Designer Jewellery for their valuable customer. After launching this Series of Jewellery, the product portfolio of the Company becomes more wider and giving better choice to the customer. The scrip touched an intra-day high of Rs85.90 and a low of Rs79 and recorded volumes of over 19,000 shares on BSE.
Bank of Baroda surged by over 4% to Rs427 after the bank announced that it would consider cutting lending rates on Feb. 23, 2008. The scrip touched an intra-day high of Rs432 and a low of Rs412 and recorded volumes of over 6,00,000 shares on NSE.
Kalindee Rail advanced by 2% to Rs424 after the company announced that it would mull raising Rs1.5bn via QIP. The scrip touched an intra-day high of Rs425 and a low of Rs402 and recorded volumes of over 7,000 shares on NSE.
News Snippets:
NTPC may partner MCX’s power exchange. (Mint)
Reliance Industries is in advanced talks with the New York based Vornado Realty Trust to float an over US$1bn fund. (ET)
IOC along with HPCL and BPCL would be importing an additional 73,000 ton LPG during February-March. (DNA)
ONGC has been registered with Iraqi authorities for tenders to develop the world’s third-largest oil reserves. (Mint)
Bharti Airtel has overtaken BSNL as the largest national long distance service provider in terms of revenues. (BL)
Tata Power has tied up with Thales to offer optronics solutions for India’s multi-role combat aircraft and other air-borne platforms. (BS)
Indiabulls has entered into the aviation sector with the launch of chartered aviation services. (BS)
Coal India plans to float a global tender for private participation in eight coal blocks on a long-term basis, by end-February. (BL)
Coal India may enter into fuel supply agreements with consumers beginning March. (BL)
Reliance Industries has accused the Petroleum Ministry of violating Parliament approved norms for oil and gas exploration. (BS)
RCOM has added 1.6mn mobile subscribers in January, taking its user base to 42.6mn. (ET)
Unitech is developing 97 acres under slum redevelopment project near the Vakola flyover. (DNA)
United Phosphorus has acquired Colombia-based Evofarms, a marketing company in the crop protection industry, for an undisclosed amount. (BS)
Hindalco and Nalco have raised prices by Rs8,000 a ton. (Mint)
Polaris Software plans to enter six new markets with its banking software products. (ET)
Everest Kanto Cylinders is acquiring a US company for ~US$70mn. (DNA)
Dredging Corp of India is in talks with Belgium based Dredging International for a JV. (DNA)
Apar Industries has completed sale of its polymer division for Rs1.1bn and will use the proceeds for expansion. (ET)
Hindustan Motors to expand dealerships for Mitsubishi products to 45 by FY09. (ET)
Bank of Baroda will consider lowering lending rates on February 23. (Mint)
Educomp Solutions has joined hands with Ansal Properties to set up schools in 16 integrated townships over the next three years. (BL)
Ansal Properties has deferred its proposed follow-on-public offer by couple of months. It is also planning to raise US$250-300mn from international private equity firms. (BL)
Rane Group will set up a components unit at Singur to extend support to the Tata Nano car plant. (BL)
Elecon Engineering plans to invest Rs2bn in the next two years to expand capacities in windmill gearbox manufacturing. (BL)
Deepak Fertilisers and Petrochemicals has launched a clean development mechanism project at its manufacturing plant in Taloja. (BL)
Fortis Healthworld has tied up with Godrej Adhaar to extend its reach to rural India. (BL)
The Orissa Pollution Control Board has issued a closure notice to Bhushan Power and Steel for not making arrangements for the suitable disposal of solid waste. (BS)
Essar Steel is considering setting up a 6mn tons a year slab making facility in Brazil. (BS)
Assam Co is planning to list one of the group companies on the AIM part of the London Stock Exchange, by October. (BS)
Uttar Pradesh Power Corporation will soon sign a MoU with NTPC to set up a 4,000 MW power plant in Lalitpur district of the Bundelkhand region. (BS)
Indian Overseas Bank has entered into a joint venture with a private financial company to start a new asset reconstruction company. (BS)
Aditya Birla Group is likely to enter into alloy steel production with a 2mn tons per annum plant through Vikram Ispat. (BS)
Satyam Computer Services has lined up Rs8bn investment in SEZs. (BS)
Merrill Lynch has increased its stake in Vakrangee Software to 7.72%. (BS)
The Reserve Bank of India has cleared the branch licence of Swiss bank UBS AG. (BL)
Real estate firm Landcraft Developers plans to invest about Rs10bn in the next five years. (BS)
Tata Sons has made Tata Investment Corporation its subsidiary by consolidating its stake to ~55%. (DNA)
Economic Front Page
The Finance Ministry has announced that fertilizer bonds for Rs36bn are being issued at par to 23 fertilizer companies. (BL)
Banks will now have to make withdrawals from ATMs free of charge for their own customers. Requests for balance enquiries would have to be made free to customers of other banks as well. (BL)
Payments of Rs10mn and above between banks, NBFCs, primary dealers and any other entities regulated by the RBI may be allowed only through electronic mode from April 1. (BL)
Income generated from agricultural advances by state cooperative banks and district central cooperative banks is likely to be exempted from tax from 2008-09. (BS)
The Union government has cleared seven projects, estimated to fetch a combined investment of about US$7bn over the next 10 years to the “Fab City” project in Hyderabad. (BS)
Negotiations for iron ore prices for the financial year beginning April 1 began at 30% higher and it appears that it would be more than 65%. (BS)
The information technology sector in West Bengal is likely to see addition of 20,000 jobs in 2008. (BS)
To increase transparency in the banking system, the Government and the regulator are considering bringing the risk-based assessment of banks in the public domain. (FE)
In the first one-and-half-months of 2008, 68 new FIIs have registered, almost a third of the total FIIs registered with Sebi in 2007. (FE)
The Government proposes to extend the Industrial Infrastructure Upgradation Scheme in the 11th Plan period. (ET)
The Government is considering one more tax-free year for 100% export-oriented units. (ET)
SEZ exports increased to US$10bn during Apr-Dec’07. (ET)