The world is moving so fast these days that the man who says it can't be done is generally interrupted by someone doing it.
The otherwise listless market is set to see a listing today of telecom infrastructure solution provider Nu Tek India. The company has fixed the issue price at Rs192 per share. Besides Nu Tek, action will be seen in Tech Mahindra. The Financial Times has reported that BT is considering selling its 31% stake in the Mahindra group's IT company. Firstsource will remain in the limelight amid reports that ICICI Bank and two other large investors have put their stake on the block. Sun Pharma is likely to be a gainer after a Tel-Aviv court has ruled in favor of the company. The court has ruled that no special Tender Offer is necessary in the case of the Taro Offer.
Coming back to the outlook for today, we expect the market to remain in a 'no-man's land' zone due to mixed global cues. Oil prices have inched up a little bit. FIIs continue to be net sellers. Nagging worries over local as well as global headwinds will keep investors on tenterhooks. Expect increased volatility ahead of tomorrow's F&O expiry. As we have mentioned earlier, the bulls and the bears are pretty indecisive at this juncture. Neither camp appears to be certain of it's next move. Even if they do, they are holding their cards close to their chest. As a result, the market will continue to be sluggish in the near term.
Though softening commodity prices are good for equities, the trend also points to worsening prospects for the global economic growth. Even the malaise in the western financial firms is far from over. At the same time, most central banks are wary of rising inflation. In India, we have been spared from much higher inflation due to the monetary as well as fiscal steps taken by the Government. And, with general elections only a few months away, one should not be surprised to hear more on this front from the RBI and the Centre.
Asian markets are trading mixed this morning. The Nikkei in Tokyo was down 14 points at 12,764 while the Hang Seng in Hong Kong climbed 163 points or 0.8% at 21,219. The Kospi in Seoul added 8 points to 1498 while the Straits Times in Singapore was nearly flat at 2709.
The Shanghai Composite in Shanghai was down 14 points at 2336 while the Taiex in Taiwan jumped 113 points to 7077.
FIIs were net buyers of Rs5.72bn (provisional) in the cash segment on Tuesday. Local institutions were net buyers of Rs2.77bn. In the F&O segment, the foreign funds were net buyers of Rs801.4mn.
US blue chip stocks ended marginally higher on Tuesday while the technology shares closed slightly down. Energy shares rose due to the fresh spike in oil prices. This helped investors offset speculation that the Federal Reserve would hike interest rates to curb inflation.
The S&P 500 index rose 4.67 points, or 0.4%, to 1,271.51. The Dow Jones Industrial Average advanced 26.62 points, or 0.2%, to 11,412.87 and the Nasdaq Composite Index slipped 3.62 points or 0.15% to 2,361.97.
Market breadth was positive. Almost two stocks rose for each that fell on the New York Stock Exchange. Trading on the NYSE was the slowest of the year for the fourth straight day, with about 856mn shares changing hands. Volume since the start of last week has been more than one-third lower than the year-to-date average.
With trading volume very light, every fresh piece of economic data moved the market only slightly. One housing report showed home prices tumbled more than 15% in the second quarter and a government report showed the number of new homes sold in July was still more than 30% behind the same month last year. On the positive side, the Conference Board said its reading on consumer confidence increased again in August, after making modest gains in July.
The FDIC, one of the regulators of the US banking system, published its second quarter reading on the banking industry and the agency's so-called "problem bank" list grew to 117, up from 90 banks in the first quarter. The number of banks on the "problem list" has increased since Americans started having trouble paying their mortgage payments.
Fed officials agreed at their last meeting that their next move in interest rates will be to raise them, while reaching no conclusion on the timing of such a decision, records of the gathering show. On Aug. 5, the Federal Open Market Committee (FOMC) had decided to leave the key interest rate unchanged at 2%.
Movement in oil prices moved the US markets. When oil prices were at their session lows, Wall Street was up and when oil prices were at their session highs, stocks hit their lows.
Crude oil futures for October delivery rose $1.16 to settle at $116.27 a barrel on growing fears that Hurricane Gustav will interrupt oil supplies from the Gulf of Mexico. Retail gas prices have declined more than 10% since mid-July on the back of declining crude prices. The price of regular unleaded gasoline fell to $3.672 a gallon.
The dollar gained against the 15-nation euro as Germany, the largest economy in Europe, reported its consumer confidence reading stood at a 5-year low. In addition, rising inflation in the euro zone is further weakening the value of the euro, allowing the dollar to recover.
In the bond market, government bonds were mixed with the yield on the 10-year benchmark note at 3.78%. COMEX gold for December delivery rose $2.40 to $828.10 an ounce.
Stocks in Europe swung higher, shedding early losses. The euro dropped to a six-month low after a worse-than-forecast reading of the Germany's Ifo Institute's August business climate survey pressured the euro to levels not seen since February.
The pan-European Dow Jones Stoxx 600 index closed up 0.2% to 282.74 in another lightly-traded session. Germany's DAX 30 ended up 0.6% at 6,340.52 and the French CAC-40 rose 0.3% to 4,368.55. After a three-day break, the UK's FTSE 100 rose 0.6% lower to 5,470.70, though that was still off early lows.
In the emerging markets, Brazil's Bovespa was down 0.2% to 54,358 while Mexico's IPC index fell 1.3% at 26,071. The RTS index in Russia plunged 4.2% to 1579 and the ISE National-30 index in Turkey was down 1.6% at 49,437.
Not much headway likely
It was another day of dull trade, where in the Indian stock markets managed to end with modest gains. Bulls managed to extend gains to third straight trading session led by banking, Auto and IT stocks.
Finally, the benchmark Sensex gained 31 points to close at 14,482 and Nifty ended 2 points higher to close at 4,337.
TCS gained by 2% to Rs832 after the company announced that it won a five-year, multimillion dollar contract from Singapore Airlines Ltd. The scrip touched an intra-day high of Rs836 and a low of Rs815 and recorded volumes of over 1,00,000 shares on BSE.
Shares of IOB declined by over 2.5% to Rs89. The board of the bank approved the issue of unsecured, redeemable, non convertible subordinated bonds (Series XII) aggregating to Rs3bn, on private placement basis. The board also approved the issue of unsecured, redeemable, non convertible subordinated (upper tier ii) bonds (series ii) aggregating to Rs7bn (to be raised shortly). The scrip touched an intra-day high of Rs91 and a low of Rs86 and recorded volumes of over 55,000 shares on BSE.
Parsvnath marginally slipped by 0.4% to Rs114 after Fitch Ratings-Mumbai/Singapore downgraded the company’s Issuer Rating to 'A-(ind)' (A minus(ind)) from A(ind)'. The Outlook is Stable.
Simultaneously, Fitch has downgraded Parsvnath Rs2bn long-term debt and INR9bn long-term bank loan ratings to 'A-(ind)' (A minus(ind)) from A(ind)' respectively, and its INR1bn short-term debt to 'F2+(ind)' from 'F1(ind)'. The scrip touched an intra-day high of Rs115 and a low of Rs111 and recorded volumes of over 1,00,000 shares on BSE.
Shares of Bosch Ltd rallied by over 14% to Rs4147 after the company announced that the board of directors would meet on September 02, 2008, to consider proposal to 'Buyback some part of the equity shares of the company. The scrip touched an intra-day high of Rs4294 and a low of Rs4109 and recorded volumes of over 25,000 shares on BSE.
Sasken Communication pared early gains and ended lower by 1.2% at Rs150. The company announced that it has filed an appeal before the Securities Appellate Tribunal (SAT) such that the company is permitted to proceed with the buy back scheme with the same conditions as set out in its public announcement.
SEBI, in its earlier letters had imposed certain conditions / directives on the company in the implementation of the proposed buyback of shares. The scrip touched an intra-day high of Rs158 and a low of Rs149 and recorded volumes of over 12,00,000 shares on BSE.
BHEL gained by 2% to Rs1721 after the company announced that it won two orders of Rs1.4bn from Middle East for two 42MW has turbine units. The scrip touched an intra-day high of Rs1728 and a low of Rs1662 and recorded volumes of over 2,00,000 shares on BSE.
Shares of GS Auto was locked at 5% upper circuit to Rs100.20 after the company announced that the board of directors would meet on August 30, 2008 to consider the raising of funds for the company's expansion plan.
The board of directors of the company, would consider the plan for raising further funds, aggregating up to Rs500mn, by the issue of securities through Foreign currency convertible Bonds (FCCBs) / ADRs / GDRs / and or other convertible securities or through QIPs. The scrip touched an intra-day high of Rs100.20 and a low of Rs90 and recorded volumes of over 3,00,000 shares on BSE.
TTK Prestige was locked at 20% to Rs158.55 after the company announced that the board of directors would meet on September 1, 2008 to consider delisting of the company’s shares from the Bombay Stock and National Stock Exchange. The scrip touched an intra-day high of Rs158.5 and a low of Rs135 and recorded volumes of over 1,00,000 shares on BSE.
Shares of RayBan Sun Optics surged by over 3.5% to Rs135 after the company’s parent company announced its plans to acquire the shares it doesn't already hold in the unit and delist the company from the Bombay Stock Exchange. Ray Ban Indian Holdings plans to buy more than 7.21mn outstanding shares at a price of Rs140 per share. The scrip touched an intra-day high of Rs136 and a low of Rs133 and recorded volumes of over 6,00,000 shares on BSE.
ONGC Videsh has made a bid to acquire the UK-listed Imperial Energy and formally launched a negotiated takeover bid for the company at US$2.6bn. (BS)
DLF plans to seek shareholder approval to raise ~Rs100bn from institutional investors over the next 12 months. (BS)
TCS has bagged a five year multi-million dollar contract from Singapore Airlines Cargo. (ET)
Tata Sons is considering options to sell part of its stake in TCS to fund the group’s expansion plans, especially in telecom. (ET)
Cairn India may produce up to 16% more oil from the Rajasthan field. (BL)
FIPB approved the acquisition of Ranbaxy by Japan's Daiichi Sankyo and the deal would now have to be cleared by the finance minister and the Cabinet committee on economic affairs. (BS)
Reliance Industries plans to transfer 80% of its participating interest in the D6 block of the KG basin to four subsidiaries. (ET)
NTPC has placed an order to import 8.2mn tons of coal to meet the shortfall in total requirement of ~122mn tons in FY09. (ET)
The Adani Group has tied up with Ashapura Minechem to set up a Rs100bn aluminium refinery at Mundra in Gujarat. (BS)
Hero Group to diversify into making small aircraft. (BL)
BHEL won a contract for export of two gas turbine generating units worth Rs1.4bn in the United Arab Emirates. (BL)
HDIL plans to raise Rs10bn within a year to buy land and reallocate slum facilities for the Mumbai airport modernization project. (Mint)
The promoters and two major shareholders of Firstsource Solutions ICICI group, Aranda Investments and Metavante have put their combined 68% stake for sale for Rs18.65bn or Rs64 a share. (ET)
BGR Energy Systems has bagged Rs396mn order from Essar Oil for supply of air fin coolers in India. (ET)
Indian Overseas Bank is in talks with LIC to sell bonds up to Rs7bn. (ET)
Jet Airways plans to increase existing fares by ~20% over the next two months. (ET)
Cairn India is likely to sell its investments in Videocon Industries of ~2.7 lakh shares valued at Rs720mn at current market price. (ET)
Employees of Taro Pharmaceuticals have sent a legal communique to the management of Sun Pharmaceutical to sign a MoU with them. (ET)
IOC’s board has not yet given the approval for Panipat petrochem project even after a lapse of four years of signing the MoU with Haryana Government. (FE)
SREI Infrastructure has tied up with Waha Leasing to expand its business in Middle East. (ET)
Lumax Industries expects three Greenfield projects to come on stream by the next quarter and has recently bagged orders worth Rs600mn from two customers. (ET)
Astra Microwave has received a Rs255mn order from the Indian Meteorological Department. (ET)
Reliance Retail has cut down 3,000 jobs in revamp. (FE)
Godrej and Boyce Manufacturing Co plans to invest up to Rs2bn to expand its store network and expects a turnover of Rs40bn over the next five years. (ET)
Sanyo Electric will end its 50:50 joint venture for manufacturing cathode ray tube (CRT) televisions with BPL. (BS)
Economy Front page
ONGC Videsh has made a bid to acquire the UK-listed Imperial Energy and formally launched a negotiated takeover bid for the company at US$2.6bn. (BS)
DLF plans to seek shareholder approval to raise ~Rs100bn from institutional investors over the next 12 months. (BS)
TCS has bagged a five year multi-million dollar contract from Singapore Airlines Cargo. (ET)
Tata Sons is considering options to sell part of its stake in TCS to fund the group’s expansion plans, especially in telecom. (ET)
Cairn India may produce up to 16% more oil from the Rajasthan field. (BL)
FIPB approved the acquisition of Ranbaxy by Japan's Daiichi Sankyo and the deal would now have to be cleared by the finance minister and the Cabinet committee on economic affairs. (BS)
Reliance Industries plans to transfer 80% of its participating interest in the D6 block of the KG basin to four subsidiaries. (ET)
NTPC has placed an order to import 8.2mn tons of coal to meet the shortfall in total requirement of ~122mn tons in FY09. (ET)
The Adani Group has tied up with Ashapura Minechem to set up a Rs100bn aluminium refinery at Mundra in Gujarat. (BS)
Hero Group to diversify into making small aircraft. (BL)
BHEL won a contract for export of two gas turbine generating units worth Rs1.4bn in the United Arab Emirates. (BL)
HDIL plans to raise Rs10bn within a year to buy land and reallocate slum facilities for the Mumbai airport modernization project. (Mint)
The promoters and two major shareholders of Firstsource Solutions ICICI group, Aranda Investments and Metavante have put their combined 68% stake for sale for Rs18.65bn or Rs64 a share. (ET)
BGR Energy Systems has bagged Rs396mn order from Essar Oil for supply of air fin coolers in India. (ET)
Indian Overseas Bank is in talks with LIC to sell bonds up to Rs7bn. (ET)
Jet Airways plans to increase existing fares by ~20% over the next two months. (ET)
Cairn India is likely to sell its investments in Videocon Industries of ~2.7 lakh shares valued at Rs720mn at current market price. (ET)
Employees of Taro Pharmaceuticals have sent a legal communique to the management of Sun Pharmaceutical to sign a MoU with them. (ET)
IOC’s board has not yet given the approval for Panipat petrochemical project even after a lapse of four years of signing the MoU with Haryana Government. (FE)
SREI Infrastructure has tied up with Waha Leasing to expand its business in Middle East. (ET)
Lumax Industries expects three Greenfield projects to come on stream by the next quarter and has recently bagged orders worth Rs600mn from two customers. (ET)
Astra Microwave has received a Rs255mn order from the Indian Meteorological Department. (ET)
Reliance Retail has cut down 3,000 jobs in revamp. (FE)
Godrej and Boyce Manufacturing Co plans to invest up to Rs2bn to expand its store network and expects a turnover of Rs40bn over the next five years. (ET)
Sanyo Electric will end its 50:50 joint venture for manufacturing cathode ray tube (CRT) televisions with BPL. (BS)