Formula for success: Rise early, work hard, strike oil
If only we knew how to strike oil, life and markets would be a different ball game. Oil appears to be the latest spoilsport for the markets. US light crude oil for March delivery skyrocketed $4.51 to settle at $100.01 a barrel on the New York Mercantile Exchange. In fact, prices even briefly hit $100.10 a barrel.
US markets, which were positive at open came sliding down. High oil prices, increased worries about inflation, weakness in telecom stocks and financial sector woes pulled down the main US indices.
Asian markets too are weak. Worries about the impact of the rising oil prices took its toll on automakers and electricity producers.
Given the global weakness, we expect the markets to remain in the red at start. However, there is always a likelihood that some buying emerges to take the market into positive zone later in the day. The bulls and bears are a tired lot and that is evident from the low volumes on the bourses.
Remain light and in case you buy, do so only for the long term. Nothing prevents you from booking gains in the short term. But for doing that wait till you make some gains.
The primary market is showing some glimmer of hope. OnMobile made a decent debut yesterday. Today. Shriram EPC gets listed on the bourses.
Orchid Chemicals & Pharmaceuticals could gain as it has won approval to sell its version of GlaxoSmithKline Plc's antibiotic Ceftin in the U.S. The company was permitted by the Food and Drug Administration to sell tablets of cefuroxime axetil, or generic Ceftin.
FIIs turned net buyers of Rs940mn in Index Future and turned net buyers of Rs1.01bnin Single Stock Futures. In the Cash segment FIIs were net buyers by Rs3.29bn and DIIs were net sellers of Rs482.9mn.
Most of Asia's benchmarks open for trading were weak except in China. Japan's Nikkei 225 Stock Average was down 0.5 percent at 13,690.59.
Among the major bulk deals on Tuesday, Goldman Sachs sold over 1.6 lac shares of BL Kashyap at an average price of Rs1630 and Reliance Capital offloaded around 1.5 lac shares of Sundaram Finance at an average price of Rs660.
Lehman Brothers fell 2.5% after the Wall Street Journal reported the brokerage could face a considerable writeoff due to its exposure to bad mortgage bets.
Credit Suisse Group was down 5.2% after it said it would have to cut its profit by $1 billion.
Barclays, gained as it reported profit that topped expectations. However, it has lifted its 2007 writedowns related to assets tied to US subprime mortgages.
In media reports today:
National Hydroelectric Power Corporation (NHPC) is likely to come out with its initial public offering (IPO) only by early next fiscal as the company is still awaiting the appointment of the requisite number of independent directors on its board by the Government.
After restructuring its pharmaceuticals and investment businesses into two different entities, RPG Life Sciences hopes to get its pharmaceuticals business listed around March or April.
Reliance Industries Ltd (RIL) and Essar Oil Ltd have raised the retail selling prices of auto fuels – petrol and diesel – sold by them. The private sector retailers have increased the price of petrol by Rs 2 a litre and diesel by Re 1 per litre.
International Hospital Ltd a wholly owned subsidiary of Fortis Healthcare Ltd, along with Oscar Investments Ltd (OIL) has acquired 62.17 per cent equity of the Chennai-based Malar Hospitals Ltd (MHL) for Rs 34.68 crore.
Exide is planning to enter the US market in 2008-09, Gautam Chatterjee, Director -Industrial, was quoted as saying. The company is in dialogue with a few distributors there.
Bombay Dyeing plans to turn around its textile business in FY09.
NIIT Tech ties-up with Chinese province for setting-up IT training centers and training programs.
Plethico Pharma plans a manufacturing facility in Dubai to counter capacity crunch.
Mphasis sheds around 200 people at its Chennai centre.Market may continue to drift
Firm cues from the Asian markets coupled with buying momentum in scrip’s across the sectors lifted the markets to post a strong start. Key indices managed to hold on to their gains for major part of the session until, profit booking emerged in the last hour of trading session. Selling pressure was seen in the Realty, Power stocks and even the Mid-Cap and the Small-Cap stocks came under pressure. Sensex dropped 250 points and NSE Nifty slipped over 100 points from their respective days high. Finally, the 30-share Sensex closed at 18,075 adding 27 points. The NSE Nifty closed at 5,280 adding 4 points.
Overall about 1,507 stocks advanced, 1.238 stocks declined while 63 stocks remained unchanged. Among the BSE 30 index 19 stocks advanced while 11 stocks declined.
Among the BSE Sectoral indices, BSE Consumer Durable index (up 2.8%), BSE Auto index (up 1.6%), BSE Pharma index (up 1.3%). Among the losers were BSE Realty index (down 1.3%) and BSE Power index (down 1.1%)
OnMobile Global a provider of telecommunications value added software products and services got listed at Rs435 against issue price of Rs440. The scrip finally closed at Rs518 translating into a premium of 17.5% hitting an intra-day high of Rs579 and a low of Rs411 recording volumes of over 2,00,00,000 shares on NSE.
The company had entered the capital market with a public issue of 1.09crore equity shares at a price band of Rs425-450 and got subscribed 10.95 times. The IPO was subscribed 11 times. The QIB portion was subscribed 17 times, HNI 2.6 times and retail 1.3 times.
Shopper's Stop rallied by over 15% to Rs451 on report that Reliance Industries and Aditya Birla Group were interested in buying the retail chain. However, the company came out and clarified that the company was not on sale. The scrip touched an intra-day high of Rs467 and a low of Rs409 and recorded volumes of over 1,00,000 shares on NSE.
Ranbaxy spurted by over 4.5% to Rs415 after the Board of directors of the company approved demerger of research unit. The company declared that it would give 1 research unit share for every 4 held. The scrip touched an intra-day high of Rs419 and a low of Rs400 and recorded volumes of over 16,00,000 shares on NSE.
ABB slipped 2.7% to Rs1316. The company announced its Q4 results with net profit at Rs1.8bn (up 38.4%) and revenue at Rs18.6bn (up 29.1%). The scrip touched an intra-day high of Rs1374 and a low of Rs1291 and recorded volumes of over 2,00,000 shares on NSE.
3i Infotech surged by over 6% to Rs125 after the company announced that it entered into Joint Venture with for China’s Yucheng. 3i Infotech would hold 51% whereas, Yucheng would hold 49% in Joint Venture. The scrip touched an intra-day high of Rs127 and a low of Rs119 recording volumes of over 1,00,000 shares on NSE.
Canara Bank ended flat at Rs306. Media reports stated that the company would buy Indonesian bank with around 100 branches. The scrip touched an intra-day high of Rs312 and a low of Rs303 and recorded volumes of over 10,00,000 shares on NSE.
Educomp Solutions surged by over 6% to Rs4355 after reports stated that the company has entered into an agreement with Ansal Properties and Infrastructure to set up schools in 16 integrated townships with an investment of about Rs2.5bn over the next three years. The scrip touched an intra-day high of Rs4400 and a low of Rs4150 and recorded volumes of over 1,00,000 shares on NSE.
BEML surged by over 3.5% to Rs1222 as the company announced that they expect orders to rise to Rs40bn by March 31, 2008. The scrip touched an intra-day high of Rs1266 and a low of Rs1192 and recorded volumes of over 67,000 shares on NSE.
Castrol India gained 1% to Rs282 as the company posted a net profit after tax of Rs567.6mn for the quarter ended December 31, 2007 as compared to Rs380.8mn for the quarter ended December 31, 2006. Total income increased from Rs4.85bn for the quarter ended December 31, 2006 to Rs4.86bn for the quarter ended December 31, 2007. The scrip touched an intra-day high of Rs290 and a low of Rs281 and recorded volumes of over 57,000 shares on NSE.
News Snippets:
- Ranbaxy board approves de-merger of its R&D unit. The swap ratio has been fixed at 4:1.
- Reliance Capital gets RBI approval for ARC business. (ET)
- British Gas (BG) picks up stake in ONGC’s two deep water exploration blocks. (BS)
- M&M is targeting revenues worth US$3bn over the next ten years from deals in the defense space involving supply of land equipment systems to the armed forces. (ET)
- NTPC selects three foreign companies for a 40% stake in its renewable energy JV with ADB. (DNA)
- Reliance Communications likely to place an order for 5mn set top boxes for its proposed DTH broadcasting venture. (DNA)
- Bajaj Auto gets High Court approval for the proposed de-merger. (DNA)
- Bhel and Alstom bids for 740MW gas power project by ONGC Tripura Power Corporation. (FE)
- BEML order book to increase by 25% this fiscal. (DNA)
- Satyam Computers sets up a 350-seater delivery centre in Hyderabad. (BL)
- JSW Steel top increase its galvalume steel capacity to 0.6mtpa by October 2008. (BL)
- Tata Group invests an undisclosed sum in Singapore-based private jet operator, BJETS. (FE)
- UB Group to expand its product basket by launching about 80 wine brands including imported brands this year. (FE)
- BEML signs agreements with different companies to manufacture defence equipment in India. (BS)
- Bharat Electronics signs MoU with Israel’s defence equipment maker for making missile electronics and missile guiding systems for Indian military. (BS)
- Stand-alone tower companies such as Essar Telecom Tower, GTL Infra, Quipo, Xcel Telecom and TowerVision are planning to consolidate their businesses to compete with existing big three tower companies. (ET)
- Parsvnath Hotels, a subsidiary of Parsvnath Developers, has formed a JV with Royal Orchid Hotels which will develop ten hotels at an investment of Rs5bn. (ET)
- Biocon acquires majority 70% stake in Germany-based AxiCorp Pharmaceuticals for Euro 30mn. (ET)
- Patel Engineering in a JV with KNR Constructions has bagged a Rs2.1bn NHAI contract. (ET)
- Bhushan Steel sings an agreement with MP Government for setting-up coke and cement plants with an investment of Rs30bn. (BL)
- Coal India and IL&FS to form a JV to undertake project development for mine, power and other coal-based projects. (BL)
- 3i Infotech plans a JV with Chinese company for servicing its domestic clients. (BL)
- Sun TV to launch FM Radio stations in Kerala and Karnataka on February 20th and 21st respectively. (FE)
- Government may cut excise and custom duties on petroleum products. (ET)
- Rupee hits a 5-month low of Rs39.95 against the US Dollar. (ET)
- Large power projects including UMPPs may soon get a total duty waiver for purchasing equipments without going through international competitive biding. (ET)
- Railway freight earnings up 12.3% to Rs383bn in April’07-January’08. (ET)
- Finance Ministry extends the service tax refund scheme for exporters to include three more services - couriers, goods transport agencies and container transportation by rail. (BL)