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Monday, March 10, 2008
NSE Bulk Deal Watch - March 10 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
10-MAR-2008,GSSAMERICA,GSS America Infotech Limi,CHOKHANI SECURITIES LTD,BUY,89006,497.90,-
10-MAR-2008,GSSAMERICA,GSS America Infotech Limi,DINESH MUNJAL,BUY,86572,498.85,-
10-MAR-2008,GSSAMERICA,GSS America Infotech Limi,PRASHANT JAYANTILAL PATEL,BUY,70087,502.97,-
10-MAR-2008,GSSAMERICA,GSS America Infotech Limi,R.M. SHARE TRADING PVT LTD,BUY,80902,498.07,-
10-MAR-2008,GSSAMERICA,GSS America Infotech Limi,SANJAY BHANWARLAL JAIN,BUY,73050,500.49,-
10-MAR-2008,INDIABULLS,Indiabulls Financial Serv,SAURABH MITTAL,BUY,1275000,460.90,-
10-MAR-2008,OMNITECH,Omnitech Infosolutions Li,SACHIN BANSAL,BUY,80000,136.38,-
10-MAR-2008,OMNITECH,Omnitech Infosolutions Li,SURESH BANSAL,BUY,20000,136.80,-
10-MAR-2008,ORIENTCERA,Orient Ceramics & Industr,SAVERA SECURITIES PVT LTD,BUY,416,36.15,-
10-MAR-2008,ORIENTCERA,Orient Ceramics & Industr,VINTAGE CAPITAL MARKETS LTD,BUY,80010,37.48,-
10-MAR-2008,SB&TINTL,SB&T International Ltd,KHANDELWAL BROS. [PROP. DILIP KUMAR KHANDELWAL],BUY,150000,18.50,-
10-MAR-2008,TULSI,Tulsi Extrusions Limited,ADROIT FINANCIAL SERVICES PVT LTD,BUY,119429,71.27,-
10-MAR-2008,TULSI,Tulsi Extrusions Limited,MANISH VRAJLAL SARVAIYA,BUY,141246,72.87,-
10-MAR-2008,TULSI,Tulsi Extrusions Limited,RAJEEV GUPTA,BUY,87416,71.70,-
10-MAR-2008,TULSI,Tulsi Extrusions Limited,SANJAY BHANWARLAL JAIN,BUY,94585,71.70,-
10-MAR-2008,TULSI,Tulsi Extrusions Limited,TRANSGLOBAL SECURITIES LTD.,BUY,96070,71.39,-
10-MAR-2008,GSSAMERICA,GSS America Infotech Limi,CHOKHANI SECURITIES LTD,SELL,89006,498.44,-
10-MAR-2008,GSSAMERICA,GSS America Infotech Limi,DINESH MUNJAL,SELL,86572,497.67,-
10-MAR-2008,GSSAMERICA,GSS America Infotech Limi,PRASHANT JAYANTILAL PATEL,SELL,70087,502.51,-
10-MAR-2008,GSSAMERICA,GSS America Infotech Limi,R.M. SHARE TRADING PVT LTD,SELL,80902,499.26,-
10-MAR-2008,GSSAMERICA,GSS America Infotech Limi,SANJAY BHANWARLAL JAIN,SELL,73050,500.47,-
10-MAR-2008,OMNITECH,Omnitech Infosolutions Li,SACHIN BANSAL,SELL,20000,136.80,-
10-MAR-2008,OMNITECH,Omnitech Infosolutions Li,SURESH BANSAL,SELL,80000,136.38,-
10-MAR-2008,ORIENTCERA,Orient Ceramics & Industr,SAVERA SECURITIES PVT LTD,SELL,55000,36.50,-
10-MAR-2008,ORIENTCERA,Orient Ceramics & Industr,VINTAGE CAPITAL MARKETS LTD,SELL,25000,39.36,-
10-MAR-2008,SB&TINTL,SB&T International Ltd,KB CAPITAL MARKETS PVT LTD,SELL,150000,18.50,-
10-MAR-2008,TULSI,Tulsi Extrusions Limited,ADROIT FINANCIAL SERVICES PVT LTD,SELL,119429,71.24,-
10-MAR-2008,TULSI,Tulsi Extrusions Limited,MANISH VRAJLAL SARVAIYA,SELL,141246,72.84,-
10-MAR-2008,TULSI,Tulsi Extrusions Limited,RAJEEV GUPTA,SELL,87416,71.69,-
10-MAR-2008,TULSI,Tulsi Extrusions Limited,SANJAY BHANWARLAL JAIN,SELL,94585,72.02,-
10-MAR-2008,TULSI,Tulsi Extrusions Limited,TRANSGLOBAL SECURITIES LTD.,SELL,93570,71.29,-
BSE Bulk Deals to Watch - March 10 2008
Deal Date Scrip Code Scrip Name Client Name Deal Type * Quantity Price **
10/3/2008 531190 A V COTTEX I BEEJAY INV AND FIN CONS PVT LTD B 30200 13.86
10/3/2008 531381 ARIH FOUND H SALASAR STOCK BROKING LTD B 50000 388.50
10/3/2008 531381 ARIH FOUND H SHYAM SARAOGI S 50000 388.50
10/3/2008 532946 BANG MARUTI SECURITIES LTD B 100000 107.00
10/3/2008 532946 BANG DEUTSCHE SECURITIES MAURITIUS LIMITED S 103060 107.00
10/3/2008 531337 CHAN GUIDE I NEMICHAND LALCHAND JAIN S 51789 27.00
10/3/2008 531337 CHAN GUIDE I KAMLADEVI NEMICHAND JAIN S 71475 27.00
10/3/2008 531337 CHAN GUIDE I JAYSHREE RAJESH JAIN S 40000 27.00
10/3/2008 531337 CHAN GUIDE I ANUPAMA RAKESH JAIN S 50000 27.00
10/3/2008 519475 CHORD FOOD P AJITSINGH MALIKSINGH RAJPAL S 15000 45.91
10/3/2008 531067 CONTIL I LTD SAURBH MOHAN B 20512 6.18
10/3/2008 526550 COUNTRY CLUB WELLINGTON MANAGEMENT CO LLP A/C B 115178 625.00
10/3/2008 526550 COUNTRY CLUB CITIGROUP GLOBAL MARKETS MAURITIUS PVT.LTD. S 174600 624.60
10/3/2008 526550 COUNTRY CLUB MORGAN STANLEY MAURITIUS CO LTD S 82901 600.00
10/3/2008 507910 FIBERWB IN MAHALAXMI INVESTMENT S 88000 4.71
10/3/2008 500212 INTEG FIN SE PAWAN AGGARWAL B 50000 23.15
10/3/2008 524494 IPCA LAB LTD. MORGAN STANLEY MAURITIUS CP LTD S 187998 543.02
10/3/2008 530955 KAILASH FICO LOHIA SECURITIES LIMITED B 96257 57.94
10/3/2008 523810 KALE FILMS VINTEL SECURITIES PVT LTD B 921990 2.37
10/3/2008 523810 KALE FILMS KISHAN GOPAL MOHTA S 500000 2.34
10/3/2008 532950 MANJUSHREE MADHUBALA SHETH S 104000 24.43
10/3/2008 503776 MODIPON LTD GEMINI TRADELINKS LTD B 104764 58.00
10/3/2008 503776 MODIPON LTD THE INDIAMAN MAURITIUS LTD. S 60000 58.00
10/3/2008 511551 NETWO ST BRO ALOK TANDON S 51939 99.55
10/3/2008 509220 PTL LTD SHRI RANI SATI INV AND FINAN LTD B 800000 26.90
10/3/2008 506618 PUNJAB CHEM MOHIT SALECHA B 50000 184.54
10/3/2008 531888 REXNOR ELE C PANKAJ CHANDAK B 32500 7.68
10/3/2008 531888 REXNOR ELE C MANOJ CHANDAK S 32500 7.68
10/3/2008 531703 TRIBHVAN HSG G R PANDYA SHARE BROKING LTD B 82500 20.55
10/3/2008 531703 TRIBHVAN HSG RAJESH SOMCHAND SHETH S 41500 20.55
10/3/2008 531279 TRISH ELEC I TEJAS TRIVEDI B 14900 34.30
10/3/2008 531279 TRISH ELEC I TEJAS TRIVEDI B 14900 34.30
10/3/2008 531279 TRISH ELEC I SHIVANI PATEL S 14900 34.30
10/3/2008 531279 TRISH ELEC I SHIVANI PATEL S 14900 34.30
10/3/2008 500427 UNIFLEX CABE E LITE SPORTSNET LTD S 75000 40.60
10/3/2008 532765 USHER AGRO PRAKASH BALIRAM BHANDARKARA S 154944 158.80
10/3/2008 519602 VMF SOFT TEC P.KRISHNAM RAJU B 38100 3.34
10/3/2008 532757 VOLTAMP TRAN ICICI PRUDENTIAL LIFE INSURANCE B 71093 1250.00
10/3/2008 532757 VOLTAMP TRAN LEHMAN BROTHERS ASIA LTD A C HOLDINGS CAYMAN II LTD S 52509 1250.17
Gammon Infrastructure IPO Review
Gammon Infrastructure Projects (GIPL), a subsidiary of Gammon India (GIL), is the holding company of the infrastructure assets of the Gammon Group. It provides operations and maintenance services to the road subsidiaries. GIPL currently undertakes and develops roads, bridges, ports, and hydroelectric and biomass power projects in public-private partnership through its special purpose vehicle companies. Additionally, it has also identified urban infrastructure, airports, mass rapid transit systems, power transmission lines and special economic zones (SEZs) as focus areas.
Currently, GIPL has four operational build-operate-transfer (BOT) projects consisting of three road, a port project and seven development projects. It holds 49.0% equity and a further beneficial interest of 44.5% of the equity of Rajahmundry Expressway (REL) and Andhra Expressway (AEL), the companies that developed and own two of its operational annuity road projects: Rajahmundra-Dharmavaram and Dharmavaram-Tuni, respectively. The equity interest in Cochin Bridge Infrastructure Company (CBICL) that owns and operates the New Mattencherry bridge project in Cochin was 97.65%. The company holds 42.22% equity interest in Vizag Seport owning and operating two multi-purpose berths at Visakhapatnam Port.
Projects in development consist of the toll road stretch between Vadape-Gonde on the National Highway 3 connecting Nashik and Mumbai, the annuity Gorakhpur bypass project in Uttar Pradesh and the annuity Kosi River Bridge project in Bihar. The company is also developing a 66-MW Rangit II Hydro, a hydroelectric project of the Sikkim Hydro Power Ventures (SHPVL) in Sikkim and a 30-MW co-generation power project in Maharashtra. Other projects in development comprise special purpose vehicle (SPV) Indira Container Terminal’s (ICTPL)’s offshore container berths and container terminal at Mumbai Port including operation and maintenance of Ballard Pier Container Terminal, and development of two biomass power plants of 12 MW each in the Patiala district of Punjab.
In addition to the 11 projects that are already operational or under development, GIPL has three projects in pre-development: Adityapur Auto Components SEZ , eight biomass power projects of 10-12 MW each in Haryana, and the Tidong – II hydro electric power project with a capacity of 60-80 MW in Himachal Pradesh.
Proceeds from the issue will be deployed in the equity of the project’s SPVs executing the Kosi Bridge Project (Rs 24.15 crore), the Gorakhpur Bypass project (Rs 36.89 crore), the Rangit II Hydroelectric project (Rs 89.60 crore), the Mumbai-Nasik Road Project (Rs 51 crore), and repaying Rs 10-core loans to Gammon India , the parent company. The balance will be used to meet general corporate purposes and investment in strategic initiatives and acquisitions.
Strengths
Operational BOT projects are a balanced mix providing assured return projects (annuity projects) and capturing market upside, i.e., traffic (toll projects). Of the three operational road projects, two are annuity projects providing assured return. The New Mattencherry bridge project in Cochin is a toll-cum-annuity-based project with the toll fully linked to the wholesale price index. Of the three road projects under development, two are annuity projects and one is a toll project.
With GIL, a leading construction company, as parent, has strong project execution capability with a timeline that can be counted/ leveraged on bidding. Has completed two of its BOT projects in Andhra Pradesh well ahead of schedule and earned a bonus of around Rs 16 crore from the National Highway Authority of India for early completion.
Weaknesses
Two multipurpose berths developed by Vizag Seaport (VSPL) have long-term take or pay clause with Sail covering the entire concession period. However, as Vizag Port is a major port covered under the Major Port Act, there is only limited freedom for fixing tariff as the Tariff Authority for Major Ports (TAMP) caps the tariff for private operators. Similarly, the offshore container berth and terminal project and Ballard Pier Container Terminal will also come under TAMP, leaving little pricing freedom for port operations. VSPL is in the red, with a loss of Rs 5.84 crore in the half year ended September 2007 and Rs 15.06 crore in the fiscal ended March 2007.
Though has the backing of a strong parent with long operational experience in the construction sector, the group has little experience in development and operation of power projects. Also, the long gestation of hydel-power projects with attendant issues ranging from rehabilitation, acquisition of forest land, and other environment factors are also a concern. Further, due to intense competition, the ability to win bids in consortium in verticals such as Mass Rapid Transit System (MRTS) and airports remains to be seen.
The Securities and Exchange Board of India (Sebi) conducted an investigation into certain alleged irregularities in the rights issue of GIL in 2001. It was alleged funds of promoter GIL were used by Chairman and Managing Director Abhijit Rajan, the promoter of GIL, for subscription to the rights issue. Based on the findings, Sebi passed an order prohibiting GIL and Abhijit Rajan along with two other companies controlled by Rajan from accessing the capital markets directly or indirectly. As a result, this IPO has already suffered a delay of over a year. The Securities Appellate Tribunal has now granted an interim relief for the IPO. The next hearing in the matter is scheduled on 13 March 2008.
The Mumbai offshore container berth and terminal project and biomass project in Patiala and the cogeneration power project in Maharashtra are yet to achieve financial closure. Similarly, SHPVL has not achieved financial closure. The deadline for achieving financial closure has expired and this could land the project in rough weather as the government of Sikkim or any other nodal agency has the option to terminate the agreement.
As GIL is the parent company and the construction contracts of the SPVs are handled by GIL, the collapse of a flyover constructed by GIL in Hyderabad in September 2007 has the potential to damage credibility during future biding.
CBCIL has been assigned as concessionaire for the developing, operating and maintaining of the New Matterncherry bridge on BOT for 13 years and nine months under the agreement with the government of Kerala , Greater Cochin Development Authority and GIL on 27 October 1999. Subsequently, a supplementary concession agreement is being worked out, extending the concession by six years. However, this extension has been challenged in court. Nevertheless, CBICL continues to account the yearly annuity revenue as revenue even though it has not received the annuity from government of Kerala for the past 2 years.
Valuation
Consolidated revenue was Rs 147.70 crore in the fiscal ended March 2007 (FY 2007) as against Rs 76.78 crore in the 15 months ended March 2006, translating into a growth of 140% annualised. Net profit after minority interest was Rs 29.85 crore, a rise of 104% annualised. The spike in revenue and profit was partly due to getting controlling stake in AEL and REL from October 2005.
The EPS for FY 2007 works out to Rs 2.1. The P/E at the offer price band of Rs 167-Rs 200 is 79.5-95.2 times. Normally, such companies are valued based on sum-of-parts and net present value (NPV) of BOT projects. Thus, and EPS and P/E may not reflect the true picture
Market Close: Recovered but ends lower
Dramatic turnaround in the market after a steep fall as its Asian peers fell too. It was a red carpet welcome for the market at the start as engineering majors LNT and BHEL witnessed selling pressure. LNT slipped after some report says that its subsidiaries in Middle-east incurred commodity hedging losses. Sensex slipped over 600 points within the opening hours. Market swung over 1000 points before closing down marginally. Dollar appreciated against the Rupee to trade at Rs 40.70 which is good for Techies but all went for profit booking. Bajaj Auto was replaced by JP Associates in Nifty 50 but both rallied. During the final hours market recovered over 500 points due to value buying at lower levels. Recovery was led by PSU bank, metal, oil stocks. Energy stocks traded up crude trading near $105 per barrel. Asian markets ended in mixed while European in the same direction.
Sensex ended down 51 points. Top gainers were Bharti, ACC, Cipla, Tata Steel, Reliance Petro, Sterlite Ind, JP Associate, M&M, Cairn India and HCL Tech while L&T, BHEL, Maruti, Satyam and Wipro ends lower in negative
Ceat was one of the lime light for the day after Ceat reported that it has signed a deal to sell a part of its land measuring 7 acre in the Mumbai suburb of Bhandup for Rs 130 crore. An agreement has been signed with Ashford InfoTech for development of the land. Ceat intends to use the proceeds for expansion plans which include setting up two facilities in the country. The company will invest Rs 800 crore in the Greenfield projects. Stock ended up by 12.5% following to this news.
Auto stocks traded weak. TVS Motor has launched a new three-wheeler and is confident of seeing the vehicle adding Rs 400 to the company's revenue streams within the next 18 months. The company will initially sell the three-wheeler, popularly known as auto rickshaws, in south India and will make it available across the country by December 2008. India's No 2 motorcycle maker, Bajaj Auto is currently the leading three-wheeler maker. The company has created a dedicated facility, with an installed capacity of one lakh units per year at its Hosur factory, investing Rs 120 crore. TVSM would be leveraging its existing distribution and service network in the country, besides it would also export three-wheelers to more than 20 countries. TVS King would offer about 30 km per litre of petrol due to its new 200-cc, low friction 7-port engine. After this launch Bajaj could see some pressure on the sales number but comparatively bajaj has lower priced below the TVS king prices. TVS ended marginally up by 2%.
Technically Specking: Sensex has nearly made a double bottom when compared to the low made on 22nd January 08. We are not in a clear situation to call the end of the fall. But some respite might come here with small upsides in a few index and broader index stocks. Sensex made an intra day high of 15998 and low of 15362. The breadth was in favor of Declines, as there were 1916 Declines against 751 Advances. Market turnover was at Rs 6856 Cr. Support for tomorrow lie at 15700 and 15430 levels and resistance at 16000 and 16250.
Post Market Commentary - March 10 2008
The Indian market made a smart recovery during the trading session after a sharp fall at the initial session. The market opened a disappointing note backed by the unfavoring cues from the global markets and tumbled down due to heavy selling pressures. The market staged a strong recovery after the mid session as the buying intensified across the sectoral indices and kept on marching forward. A lot of volatility was witnessed during the trading session. From the sectoral front, the capital goods was the worst hit as most selling was witnessed from these baskets while metal and oil & gas posted a smart recovery as most buying was seen from these counters. The BSE Sensex closed lower by 51.80 points at 15,923.72 and NSE Nifty closed higher by 28.8 points at 4,800.40. The BSE Mid Cap and Small Cap also closed lower by 36.47 points and 160.45 points at 6,767.92 and 8,248.73 respectively.
The Metal index closed up by 346.01 points at 15,799.61. Major gainers are Tata steel (4.78%), Sterlite inds (3.17%), SAIL (1.72%).
The Capital Goods index declined 684.03 points to close at 13,341.09. Major losers are L&T (8.17%), BHEL (6.45%), Alstom Projects (5.59%), Havell India (5.43%), Siemens (4.28%) and SKF (3.61%).
The Realty index fell by 76.62 points to close at 7,705.76 as Mahindralife (11.62%), Purvankara (10.71%), Indbull Real (6.03%), Anant Raj (3.37%), Sobha Dev (3.90%), Unitech (3.09%) closed lower.
The Bankex index dropped by 38.47 points to close at 8,438.99. Losers are Axis bank (4.09%), Karnataka bank (3.32%), ICICI bank (2.42%), BOB (1.79%), Federal bank (1.19%), BOI (1.18%).
The Oil and Gas index closed higher by 202.76 points at 10,225.67. Major gainers are RPL (7.82%), Essar Oil (7.59%), Cairn India (6.88%), HPCL (1.89%), ONGC (1.36%), RNRL (1.17%).
From the IT index, Finance Tech (8.55%), Karut Net (7.61%), NIIT (5.38%), Satyam (3.72%), Wipro (3.14%) and Rolta India (2.48%) closed lower.
A tame ending to a highly volatile session
The market maintained a cautious trend for the day as the Sensex eased marginally at close on selective buying. However, the market was extremely volatile as stocks gyrated sharply, leading to a swing of 636 points during intra-day trades. After resuming 292 points lower at 15684, the Sensex dropped another 322 points in early trades on sustained selling to touch the day's low of 15362. It languished in negative territory thereafter in the first half and steadily erased its losses to rebound and close in positive territory in the afternoon session. It edged past the 15980 mark and touched the intra-day high of 15998 during the day. The Sensex failed to hold on to its steady gains and lost 52 points to close at 15924 whereas the Nifty ended 28 points higher at 4800.
Dragging the Sensex, L&T lost 8.68% at Rs2,728.80, BHEL dropped 5.69% at Rs1,910.40, Maruti Suzuki fell 4.25% at Rs893.45 and Satyam Computers declined 3.72% at Rs408. Wipro, ICICI Bank, HDFC, Grasim, Hind Utiliies, REL, Infosys, Ranbaxy and TCS were down nearly 1-2% each. However, Bharti Airtel advanced 6.85% at Rs802.80, Tata Steel scaled up 5.13% at Rs812.20, Bajaj Auto added 5.07% at Rs1,984.95, ACC gained 4.39% at Rs767.10, DLF jumped 3.44% at Rs680.35, Reliance Communications was up nearly 2.78% at Rs558.45 and SBI gained 2.20% at Rs1,882.40.
The breadth of the market was negative. Of the 2,708 stocks traded on the BSE, 1,915 stocks declined, 749 stocks advanced and 44 stocks ended unchanged. Of the 13 sectoral indices trading on the BSE, five indices ended in the green and eight slipped into the red. The BSE Metal Index was the major performer on the upside and gained 2.24% at 15799.61. The BSE Oil & Gas Index was up around 2.02% at 10.225.67.
Over 4.21 crore RNRL shares changed hands on the BSE followed by RPL (2.14 crore shares), Ispat (1.67 crore shares), Essar Oil (1.09 crore shares) and IFCI (0.92 crore shares).
Nifty in green, Sensex in red
The two niche indices, BSE Sensex and S&P CNX Nifty, saw divergent trend with the later posting gains helped by spurt in non-Sensex constituents viz. Reliance Petroleum and Cairn India. But a key reason for the divergence of the two indices was a sharp fall in L&T. L&T has a much higher weightage of 7.18% in Sensex compared to the stock's 3.16% weightage in Nifty.
The market staged a solid rebound in second half after suffering a sharp fall earlier in the day as Hong Kong's Hang Seng index moved into green from red. The market had tumbled earlier in the day after a surprisingly weak US employment data on Friday, 7 March 2008, heightened fears of a US recession.
Reliance Industries staged a strong comeback. Heavyweights from the capital goods sector regained some ground after early sell-off. The market breadth, however, remained weak. 16 shares from the 30-member Sensex pack advanced.
The next trigger for the market would come from the figures of advance tax payment by corporates for the fourth installment, which falls due on 15 March 2008.
The 30-share BSE Sensex was down 51.80 points or 0.32% at 15,923.72. It rose 22.81 points at day’s high of 15,998.33 hit in late trade. Sensex hit a low of 15,362.17 in mid-morning trade. At the day’s low, the Sensex lost 613.35 points. It oscillated in a band of 636.16 points for the day
The broader based S&P CNX Nifty was up 28.80 points or 0.60% at 4,800.40. It gained 43.35 points at day's high of 4,814.95 struck in late trade. Top gainers from the Nifty pack were Reliance Petroleum (up 7.51% to Rs 153.85), and Cairn India (up 7.02% to Rs 209.45).
Nifty March 2008 futures were at 4778, a discount of 22.40 points as compared to spot closing
The market breadth was negative: on BSE 1,916 shares declined as compared to 751 that advanced. 40 shares remained unchanged.
The BSE Mid-Cap index was down 0.54% to 6,767.92 while the BSE Small-Cap index declined 1.91% to 8,248.73. Both these indices underperformed the Sensex.
The total turnover amounted to Rs 6856 crore as compared to Rs 6,272.94 crore on Friday, 7 March 2008.
Turnover in NSE’s futures & options segment rose to Rs 42402.3 crore as compared to Rs 38712.25 on Friday, 7 March 2008.
Sectoral indices on BSE displayed mixed trend. The BSE IT index (down 1.86% to 3,570.84), the BSE Consumer Durables index (down 2.78% to 4,145.34), the BSE FMCG index (down 0.79% at 2,190.26), the BSE Health Care index (down 0.74% at 3,797.45), the BSE TecK index (up 0.59% to 3,070.24), the BSE Power (down 1.36% to 3,112.34), the BSE Capital Goods index (down 4.88% at 13,341.09), the BSE Bankex (down 0.45% at 8,438.99), the BSE Realty index (down 0.98% at 7,705.76), underperformed the Sensex
The BSE Auto (up 0.42% at 4,653.96), the BSE Metal index (up 2.24% to 15,799.61), the BSE Oil & Gas index (up 2.02% to 10,225.67), and the BSE PSU index (up 0.45% to 7,612.83), outperformed the Sensex
India’s second largest two wheeler maker by sales Bajaj Auto galloped in volatile trade. It jumped 5.35% to Rs 1990. It was the top gainer from Sensex pack. Jaiprakash Associates surged 12.81% to Rs 233.35. The Bombay Stock Exchange said on Saturday, 8 March 2008, Jaiprakash Associates will replace Bajaj Auto in the benchmark BSE 30-share Sensex pack from 14 March 2008.
India’s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries recovered sharply from day’s low of Rs 2123.10. It settled 1.03% higher at Rs 2272 on 15.70 lakh shares.
Bharti Airtel, the country’s largest telecom services provider in terms of market capitalisation surged 5.16% to Rs 790.10 on 4.59 lakh shares.
Banking pivotals recovered in volatile trade. HDFC Bank (up 2% to Rs 131.95, off day’s low of Rs 1226), and State Bank of India (up 1.86% to Rs 1876, off day’s low of Rs 1785.30), advanced. However ICICI Bank, the country’s largest private sector bank in terms of net profit was down 3% to Rs 866. The stock hit low of Rs 836 and high of Rs 911.90.
Tata Steel (up 5.10% to Rs 812), ACC (up 3.69% to Rs 762), and Reliance Communications (up 3.44% to Rs 562.05), edged higher from the Sensex pack.
Heavyweights from capital goods sector recovered some ground after early sell-off. India’s largest private sector engineering & construction company in terms of order book plunged 8.57% to Rs 2732, off day’s low of Rs 2615.05. It was the top loser from Sensex pack. The stock tumbled on concerns of losses from commodity hedging for the fiscal year ending March 2008.
India’s largest engineering & construction company in terms of order book, Bharat Heavy Electricals was down 6.20% to Rs 1900, off sharply from day’s low of Rs 1820.
Hindustan Unilever, the country’s top FMCG company in terms of sales, was down 1.50% to Rs 223.25. The stock saw high volumes of 31.88 lakh shares, of which 10 lakh shares came through a single block deal struck on BSE at 10:06 IST at Rs 226 per share.
Wipro (down 3.63% to Rs 400), Maruti Suzuki India (down 5.43% to Rs 882.50), and Satyam Computer Services (down 4.31% to Rs 405.50), were the other losers from Sensex pack
Reliance Natural Resources was the top traded counter on BSE with turnover of Rs 423.39 crore followed by Reliance Industries (Rs 346.76 crore), Reliance Petroleum (Rs 333.48 crore), Larsen & Toubro (Rs 322.34 crore), and Essar Oil (Rs 249.22 crore), in that order
Among the stocks with high volumes, Reliance Natural Resources rose 1.22% to Rs 107.90 on volumes of 4.20 crore shares. The stock had dipped to a low of Rs 92.85
Ispat Industries advanced 3.10% to Rs 34.95. A total of 1.66 crore shares were traded on the counter.
Among the side counters, ABC India (down 18.40% to Rs 34.80), Mayur Leathers (down 14.40% to Rs 24.75), Geojit Financial Services (down 13.80% to Rs 44.45), and Subex Azure (down 13.60% to Rs 186.10), slumped
However English Indian Clays (up 20% to Rs 838.80), STC India (up 20% to Rs 838.80), and Ashim Investments (up 18.60% to Rs 73.05), advanced.
Infrastructure Development Finance Company declined 7.86% to Rs 155.60 even as the company said it has entered into an agreement with Standard Chartered PLC to acquire its mutual fund business in India for $205 million. The company made this announcement after trading hours on Friday, 7 March 2008.
Action Construction Equipment declined 4.86% to Rs 312.05. The company set 24 March 2008 as record date for a 5-for-1 stock split.
Punj Lloyd surged 4.22% to Rs 317 after Lanco Infratech awarded a Rs 50 crore contract to a unit of Punj Lloyd to build a facility in Hyderabad.
KEC International galloped 15.74% to Rs 785 recovering from session's low of Rs 611.10 after the company said it has bagged a contract worth Rs 482 crore - the single largest order in the history of the company.
Mastek dropped 0.33% to Rs 260 even as the company said it has acquired 100% stake in Systems Task Group International, New York, in an all cash deal for $29 million through its wholly owned US subsidiary MajescoMastek.
CEAT surged 11.95% to Rs 140.55 after the company said on Monday it has agreed to sell nearly 7 acres of surplus land at Bhandup in Mumbai for Rs 130 crore.
Gujarat Fluorochemicals rose 8.25% to Rs 210 after the company said its board will meet on 21 March 2008, to consider a proposal to buy-back equity shares.
European markets which opened after Indian market, recovered after weak opening. Key benchmark indices in United Kingdom (up 0.19% to 5,710.70), France (up 0.09% to 4,623.32), and Germany (down 0.11% to 6,521.32), rose.
Some Asian markets recovered from early fall today, 10 March 2008. Hong Kong’s Hang Seng was up 0.91% at 22,705.06. Japan's Nikkei (down 1.96% at 12,532.13), Shanghai Composite (down 3.59% to 4,146.26), Taiwan's Taiwan Weighted (down 2.72% at 8,299.37), Singapore's Straits Times (down 1.04% at 2,836.59) and South Korea's Seoul Composite (down 2.33% at 1,625.17) edged lower.
US markets slumped on Friday, 7 March 2008 pushing the Dow Jones industrial average below the key psychological level of 12,000, after Fed action to stem the credit crunch failed to offset the damage from February 2008 job losses seen as the most blatant sign yet of recession. The Dow Jones industrial average declined 147 points down to 11,894, the Nasdaq Composite index ended 8 points lower to 2,212 and the S&P 500 index settled with loss of 10.97 points at 1,293.37.
US oil prices were above $105 a barrel, within sight of Friday (7 March 2008)'s record high of $106.54.
Today's Pick - Escorts
We recommend a sell in Escorts from a short-term perspective. From the charts of Escorts, we see that the stock encountered resistance at Rs 170 in early January 2008 and began to decline. The stock has been on a medium-term downtrend since its January peak. However, following a pullback rally from the support level at Rs 75, the stock recently met with significant resistance at Rs 115 and resumed the medium-term downtrend from here.
The stock is trading well below the 50 and 200-day moving averages. The daily momentum indicator is on the verge of entering the bearish zone. The daily moving average convergence divergence is featuring in the negative territory. Our short-term outlook for the stock is bearish.
We expect the stock to decline further to our target price level of Rs 85 in the short-term. Investors with a short-term perspective can sell the stock while keeping the stop loss at Rs 112.
Via Businessline
Market likely to open lower
PRE-SESSION
Market may open weak
The market is expected to open on a weak note tracking lower global equity markets. Market may also see volatile swings as experienced in the recent past.
The Indian market has been the worst hit in the recent meltdown witnessed by markets across the globe. The benchmark index BSE Sensex lost 21.25% to 15,975.52 in the calendar year as on Friday, 7 March 2008. The least hit market was that of Taiwan which slipped just 0.30% in the calendar year as on Friday, 7 March 2008.
All eyes will now be the US Federal Reserve which meets on 18 March 2008 to review interest rates. A cut in interest rate, as expected by street may provide some support to the markets. Fed Chairman Ben Bernanke had signaled a readiness to cut interest rates again to prevent further damage to the weak US economy, even as he took note of rising inflation risks.
Asian markets were trading weak today, 10 March 2008. Japan's Nikkei (down 1.43% at 12,599.78), Hang Seng (down 1.29% at 22,211.44), Shanghai Composite (down 2.30% to 4,201.74), Taiwan's Taiwan Weighted (down 2.28% at 8,336.70), Singapore's Straits Times (down 2% at 2,808.89) and South Korea's Seoul Composite (down 1.83% at 1,633.55) edged lower.
US markets slumped on Friday, 7 March 2008 pushing the Dow Jones industrial average below the key psychological level of 12,000, after fed action to stem the credit crunch failed to offset the damage from February 2008 job losses seen as the most blatant sign yet of recession. The Dow Jones industrial average declined 147 points down to 11,894, the Nasdaq Composite index ended 8 points lower to 2,212 and the S&P 500 index settled with loss of 10.97 points at 1,293.37.
Back home, the 30-share BSE Sensex plunged 566.56 points or 3.42% at 15,975.52 on Friday, 7 March 2008 which is its lowest closing since 18 September 2007. The broader CNX S&P Nifty was down 149.80 points or 3.04% at 4771.60 on that day.
Stock prices suffered losses during the week ended Friday, 29 February 2008 tracking weak global markets which in turn were hit by US recession worries. The sentiment was also hit by a hike in short term capital gains tax and alternation of tax treatment of securities transaction in Union Budget 2008-09 announced on Friday, 29 February 2008.
The BSE Sensex slumped 1,603.20 points or 9.12% to 15,975.52 in the week ended Friday, 7 March 2008. The S&P CNX Nifty declined 451.9 points or 8.65% to 4,771.60 in the week.
Inflation based on the wholesale price index rose 5.02% in the 12 months to 23 February 2008, higher than the previous week's rise of 4.89%, government data showed on Friday, 7 March 2008. The annual inflation rate was 6.20% during the corresponding week of the previous year.
As per provisional data, foreign institutional investors (FIIs) bought shares worth Rs 513.04 crore on Friday, 7 March 2008. Domestic institutional investors (DIIs) were net sellers of shares worth Rs 66.79 crore on that day.
FIIs were net buyers of Rs 584.26 crore in the futures & options segment on Friday, on Friday, 7 March 2008. They were net sellers of index futures to the tune of Rs 109.65 crore and bought index options worth Rs 387.19 crore. They were net buyers of stock futures to the tune of Rs 300.30 crore and bought stock options worth Rs 6.42 crore.
Crude oil rose today, 10 March 2008 bolstered by a bout of cold weather in the United States, but prices stayed below the record high of $106.54 a barrel struck on Friday, 7 March 2008. U.S. light crude for April delivery was up 26 cents at $105.41 a barrel
Grey Market - Sita Shree, V Guard, Rural Electrification
Rural Electrification 105 12 to 14
V. Guard Ind. 82 4 to 5
Gammon Infra 167 to 200 16 to 18
Sita Shree Food Pro. 27 to 30 2 to 4
Pre Market Watch - March 10 2008
The Indian Market is likely to have a negative opening today due to weak cues from he global markets. On Friday, The Indian market closed in the deep negative territory today with the BSE Sensex closed below the physiological mark of 16000 and the NSE Nifty settled below the 4800 mark. The market tumbled since the initial bell tracking the weak cues from the global market and kept on hovering in the negative territory throughout the trading session. Also, the rising of inflation to 5.02% in the week ended February 2008 adds to the negative sentiments in the market. The inflation grew to nine months high due to rise in prices of fruits, vegetables and oil seeds. The BSE Sensex closed lower by 566.56 points at 15,975.52 and NSE Nifty fell by 149.80 points to close at 4,771.60. We expect that the market may remain volatile during the trading session.
On Friday, the US market was closed in red. The Dow Jones Industrial Average (DJIA) closed lower by 146.70 points at 11,893.69 along with S&P closed down by 10.97 points at 1,293.37 and NASDAQ fell by 8.01 points to close at 2,212.49
Today the major stock markets in Asia are trading weak. Hang Seng is trading lower by 289.89 points at 22,211.44 along with Japan''s Nikkei trading down by 183.02 points at 12,599.78 and Taiwan Weighted trading at 8,336.70 down by 194.68 points.
Indian ADRs ended in negative. Satyam fell by (5.69%) along with Wipro by (4.71%) and Infosys by (3.02%). ICICI bank and HDFC bank fell by (4.87%) and (4.86%) respectively.
The FIIs on Friday stood as net seller both in equity as well as debt. The gross equity purchased was Rs2,852.50 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs2,982.20 Crore and gross debt sold stood at Rs414.30 Crore. Therefore, the net investment of equity reported was (Rs129.70) Crore and net debt was (Rs414.30 Crore).
Today, Nifty has support at 4,706 and resistance at 4,857 and BSE Sensex has support at 15,628 and resistance at 16,389.
Weak global markets may dampen sentiment
A fall in US markets and major Asian indices taking a sharp dip in morning trades may pull down the domestic indices in early trades. Also, FIIs turning net sellers of equities on friday might force the inverstors to play safe, while stock-specific activity will be seen during intra-day trades. On the technical side, the Nifty could test higher levels of 4850 and 4900 and on the downside it has a support at 4680. The Sensex may face resistance at 16060 and could test lower levels of 15680.
US indices ended with sharp loss on Friday, with the Dow Jones declined 147 points to close at 11894 and the Nasdaq moving down by 8 points at 2212
All Indian ADRs trading on the US bourses closed in the red. Rediff led the pack with loss of over 7% while MTNL, VSNL, HDFC Bank, ICICI Bank, Wipro, Patni Computers, Tata Motors, Satyam and Infosys gained over 4-6% each. However, Dr Reddy's eased marginally.
The Nymex light crude oil for April 08 series declined by 32 cents at $105.15 per barrel. In the commodity space, the Comex gold for April delivery declined $2.90 to settle at $974.20 a troy ounce.
Trading Calls - March 10 2008
Nifty (4772) Sup 4581 Res 4900
Buy Tata Chem (320) SL 315 Target 329, 332
Buy Dr Reddy’s (569) SL 563 Target 581, 585
Sell India Cem (202) SL 207 Target 194, 191
Sell United Phos (303) SL 308 Target 294, 292
Sell BPCL (435) SL 440 Target 425, 422
Waking up to red ticks!
Late to bed and late to wake will keep you long on money and short on mistakes.
Waking up late these days may save you some stress. There’s nothing much to do in the markets at start especially, when one wakes up most mornings to see red ticks across global markets. Ideally, with valuations relatively attractive, it would have been a better buying opportunity. But investors of all hues (barring some FIIs) are suffering from acute lack of confidence and conviction.
Though the scene at the start looks pretty gloomy, there is a silver lining. FIIs were net buyers of Rs5.13bn (provisional) in the cash segment on Friday, when the Sensex and the Nifty both lost 3% each. This may just provide the much-needed succor to the bulls in the time of real crisis.
Lots of fresh shorts are being added these days, so there is a hope of a pull back in the form of short-covering later. Don’t much read too much into any rebound despite the relatively better valuations. Shopping spree can start only after a sustained buying effort from both, the overseas as well as local funds. The market may remain choppy with mostly a negative bias in the near term, though the long-term trend remains positive as ever.
FIIs were also net buyers of Rs5.84bn in the F&O segment on Friday.
On Thursday, the foreign funds were net sellers of Rs1.3bn in the cash segment. Mutual Funds were also net sellers of Rs2.8bn on the same day.
Most Asian markets are trading lower this morning. The Nikkei in Tokyo was down 1.4% at 12.599 while the Hang Seng in Hong Kong fell 1.2% to 22,232. The Kospi in Seoul dropped 1.8% to 1633 while the Straits Times in Singapore dived2% to 2808.
The Shanghai Composite in China slumped 2.3% to 4201 and the Taiex in Taiwan shaved off 1.9% to 8367.
The MSCI Asia Pacific Index slumped 1.2% to 137.95 at 10:16 a.m. Tokyo, set to close at its lowest since Jan. 23. Materials and industrial stocks led declines among the index's 10 industry groups.
US stocks slipped again on Friday, with the Dow Jones Industrial Average falling to the worst levels in nearly 18 months after a grim February employment report and more financial sector troubles heightened recession fears.
Financial shares had their steepest slump in the Standard & Poor's 500 Index. Citigroup and AIG helped send the Dow below 12,000 for the first time since January. Nine of 10 S&P 500 industries slipped.
US non-farm payrolls fell by 63,000 in February, the second straight decline in employment, the Labor Department reported on Friday. It was the largest drop in payrolls since March 2003. Wall Street economists were looking for a gain of about 20,000.
The unemployment rate fell to 4.8% from 4.9%, versus forecasts for a rise to 5%. But the drop was a result of less people being in the workforce.
The Dow lost 1.2%, falling to its lowest point since Oct. 11, 2006. The S &P 500 fell 0.8%, closing at its lowest level since Aug. 23, 2006. The Nasdaq Composite shed almost 0.4% and ended at its lowest point since Sept. 11, 2006.
All three major indices had posted gains through the late morning, before turning lower and tumbling through the afternoon.
The S&P 500 slid 2.8% last week to 1,293.37, the lowest close since August 2006. The Dow lost 3%, the biggest weekly loss in a month, to 11,893.69. The Russell 2000 Index, a measure of companies with a median market value 96% less than the S&P 500, dropped 3.8% to a two-year low of 660.11.
Investors are now betting that the weak labor market would forced the Fed's hands yet again when its policy makers meet on March 18. The FOMC is likely to aggressively cut interest rates at the meeting.
Meanwhile, the Fed said it was taking more steps to try and ease the liquidity crunch by increasing the amount of money it would make available to banks in its auctions on March 10 and 24.
President Bush's top economic advisor said that the US economic growth could fall into negative territory this quarter. President Bush, also speaking in the afternoon, said "it's clear our economy has slowed."
JP Morgan Chase said in a note that the US economy is two months into a recession.
US light crude oil for April delivery fell 32 cents to settle at $105.15 a barrel in New York, after touching an all-time trading high of $106.54 earlier. Oil prices ended the previous session at a record high of $105.47.
The dollar touched a fresh record low against the euro on the weak jobs report, and fell to its lowest level versus the yen in three years.
COMEX gold for April delivery fell $2.60 to $974.50 an ounce. Gold prices, along with other dollar-traded commodities, have surged in response to the weak greenback. But after a big rally, prices have retreated for the last two sessions.
Treasury prices rallied, lowering the yield on the benchmark 10-year note to 3.54% from 3.58% late Thursday as investors sought the relatively safer-haven of government debt. Bond prices and yields move in opposite directions
European shares ended last week on a downbeat note. The pan-European Dow Jones Stoxx 600 index fell 1.1% to 307.98. The UK's FTSE 100 closed down 1.2% at 5,699.90, while the German DAX 30 lost 1.2% to 6,513.99 and the French CAC-40 dropped 1.3% to 4,618.96.
In the emerging markets, the Bovespa in Brazil was down 1.8% at 61,867 while the IPC index in Mexico was down 0.4% at 28,612. The RTS index in Russia dropped 1.8% to 2012 and the ISE National-30 index in Turkey slid 2.3% to 51,436.
No relief for bulls
It was bears day out, as they dominated throughout the trading session. After the Sensex opened with a huge negative gap of over 300 points, unabated selling saw the index slip below the 16k mark. Sensex closed at the lowest level since September 18, 2007. The fall could be attributed to a melt down in the global equity markets. Finally, the 30-share Sensex closed at 15,542 dropping 566 points. The NSE Nifty closed at 4,771 losing 149 points.
The banking index posted its biggest weekly fall since May 2004, the index fell over 15.5% after finance minister yesterday said banks should consider lowering rates on housing loans up to Rs2nm as part of the government's efforts to boost economic growth.
REL plummeted by over 14% to Rs1250. The company on Wednesday said that the board of directors of the company approved a Rs20bn share buyback at a maximum price of Rs1,600 each. The scrip touched an intra-day high of Rs1459 and a low of Rs1248 and recorded volumes of over 38,00,000 shares on NSE.
Maruti Suzuki was down by 1.5% to Rs926. According to reports the company by March end will be able to roll out 0.17mn units per annum from the new facility, up 70% from the current installed capacity. The scrip touched an intra-day high of Rs938 and a low of Rs873 and recorded volumes of over 15,00,000 shares on NSE.
DLF slipped 4.4% to Rs651. Reports stated that the company planned to invest Rs4.1bn for setting up an asset management company. The scrip touched an intra-day high of Rs680 and a low of Rs645 and recorded volumes of over 33,00,000 shares on NSE.
NIIT Technologies dropped by over 6% to Rs112. The company announced its partnership with the Centre for Development of Advanced Computing (C-DAC), Noida, to offer value added application services through the Software as a Service mode of delivery. The scrip touched an intra-day high of Rs117 and a low of Rs109 and recorded volumes of over 3,00,000 shares on NSE.
TTML after hitting an intra-day low of Rs29 recovered and was down by 8% to Rs31 after the company announced that it may sell up to 49% stake in Mobile-Tower unit and short listed 15 potential investors in Tower arm. The scrip touched an intra-day high of Rs33 and a low of Rs29 and recorded volumes of over 1,00,00,000 shares on NSE.
Punj Lloyd was down by over 8.5% to Rs299. The company said that its consortium has been awarded the Sabah Sarawak Gas Pipeline Project for an approx. value of US$500mn by PETRONAS Carigali Sdn Bhd, a subsidiary of Petronas, the State Oil and Gas Major in Malaysia. The scrip touched an intra-day high of Rs324 and a low of Rs295 and recorded volumes of over 31,00,000 shares on NSE.
Eicher Motors was down by 3% to Rs270. The company said that it recorded a total sale of 2,799 units of commercial vehicles during February 2008, translating into a year-to-date growth of 7%. The scrip touched an intra-day high of Rs280 and a low of Rs265 and recorded volumes of over 34,000 shares on NSE.
Corporate Front Page
Punj Lloyd led consortium receives US$500mn Sabah Sarawak Gas Pipeline project in Malaysia. (FE)
DLF defers Singapore listing of DLF Office Trust, the REIT of DLF Asset, till improvement in market conditions. (BS)
ACC to invest Rs36bn to expand capacity to 32mn tons by 2010. (FE)
M&M to invest Rs23bn in the next two years to develop new vehicles. (BS)
Reliance Industries keen to set up a petrochem complex in Qatar, especially for polymer production. (FE)
M&M, Bharat Forge and Hinduja group may be in race to acquire the main forging unit of Thyssenkrupp for US$1bn. (BS)
Tata Teleservices to divest 49% stake in its tower subsidiary Tata Teleservices Infrastructure. (TOI)
Grasim plans to set up two greenfield cellulose projects worth Rs16bn to augment capacity. (FE)
Reliance Industries to surrender three blocks in Kerala-Konkan basin as government decides against granting special status. (BL)
Patel Engineering plans to invest US$100mn over next two years to strengthen overseas operations. (BS)
Sobha Developers to start work on projects covering 12mn sq.ft space in the next fiscal. (BL)
TVS Motor forays into the three wheeler market by launching ‘TVS King’. (ET)
Arcelor-Mittal open to securing independent mines other than Chiria, which has seen many claimants, including SAIL. (BS)
BSNL to adopt franchisee model for rolling out WiMax services; invites bids for revenue sharing partnerships. (BL)
India Cements on look out for opportunities to invest in coal mines abroad and to acquire bulk cargo carriers. (BL)
Reliance Retail plans to open 300 jewellery stores across the country by FY12 with an investment of Rs10bn. (TOI)
Reliance Industries may form a JV with Coal India for its proposed coal-to-liquid project. (TOI)
SCI may form a shipyard JV with ABG Shipyard. (ET)
Mitsubishi Motors to manufacture its SUV ‘Outlander’ in India, through its JV with Hindustan Motors. (BS)
Adhunik Metaliks in talks with several PE players to offload 11% stake in its subsidiary, Orissa Manganese & Minerals. (ET)
Bhushan Steel plans a third JV agreement with Australia's Bowen Energy for coal exploration and mining. (FE)
Damodar Valley Corporation plans to add 5,000MW generation capacity during 12th plan at an investment of Rs200bn. (ET)
Reliance Life plans European buyout; in talks with two contract research organizations. (FE)
Jindal Photo to invest Rs3bn in Jindal India Powertech. (DNA)
Cadila Healthcare moves Delhi High Court against Baidyanath for using its trademark ‘Sugar Free’ on the latter’s product. (ET)
UCO Bank may cut home loan rates by 50bps. (ET)
Gateway Distriparks is eyeing to transport cars on container trains between Delhi and Chennai. (DNA)
Vimal, the textile brand of Reliance Industries, proposes to open 21 showrooms in the next two years. (ET)
Arcelor Mittal may consider listing on Indian bourses. (ET)
Economic Front Page
Government may increase FDI cap of 26% in the defence sector 50%.(ET)
Withdrawal of seven year tax holiday on gas production to have only marginal impact for NELP VII, say industry officials. (BS)
Government would soon seek cabinet approval for a proposal to list some of the profit making state-owned enterprises. (ET)
Prices for steel, iron ore, coking coal and copper are expected to increase between 15% to 65% from next month. (BS)
About 11,000MW of thermal power capacity is idle due to lack of coal supplies. (Mint)
Cabinet sanctions 10 new textile parks; existing norms for government support to continue. (BS)
RBI Governor says price stability remains top priority as inflation breaches the central bank’s tolerance limit of 5%. (BS)
SIDBI to launch Rs20bn risk capital fund for small and medium enterprises schemes. (ET)
Egyptian government has imposed a dumping duty for the next five years on new bus and truck tyres of Indian or Chinese origin. (DNA)
Asian markets decline on US Cues
Asian markets declined to seven week low in the early trading sessions on Mar. 10, 2008 (Monday), led by mining companies and automakers, after there was unexpected job cuts in the U.S. in February, which raised concern that the world`s largest economy is in recession.
Toyota Motor, Japan`s largest automaker, declined after the yen touched eight-year high on speculation the U.S. Federal Reserve will further cut interest rates.
The world`s biggest mining company, BHP Billiton, declined on concern that the metals demand will fall.
Japanese benchmark index Nikkei lost 183.02 points, or 1.44%, to trade at 12,599.78.
Hong Kong`s index Hang Seng declined 153.13 points, or 0.68%, to trade at 22,348.20.
China`s Shanghai Composite lost 110.59 points, or 2.57%, to trade at 4,189.92.
Taiwan`s Taiex index lost 149.81 points, or 1.76%, to trade at 8,381.57.
South Korea`s KOSPI lost 27.15 points, or 1.63%, to trade at 1,636.82.
Singapore`s Straits Times lost 1.70 points, or 48.83%, to trade at 2,817.45
Precious metals end lower
Gold and silver prices end marginally lower for the week
Precious metal prices fell for the second straight day on Friday, 7 March, 2008 after gold and silver prices touched all time new highs during the middle of the week. The fall in prices on Friday was mainly due to a weak economic data on the job front. Prices also fell even as crude oil price closed a bit lower at $105/barrel. Silver prices also fell marginally today.
Comex Gold for April delivery fell $2.9 (0.3%) to close at $974.2 an ounce on the New York Mercantile Exchange. This year, gold prices have gained 17% till date. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. For the week, Last week, gold declined by 80 cents.
Comex Silver futures for May delivery fell by 2 cents (0.2%) to $20.25 an ounce. Silver has gained 31% in 2008. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years. In January this year itself, prices climbed 14%. In February, it gained another 15%.
The dollar has been dampened since last year, more since start of FY 2008 after interest rates were cut twice in January, 2008. Gold, as a dollar-denominated commodity, suffers from dollar strength. On the contrary, gold prices rise with falling dollar as inflationary concerns boosts the metal's appeal as an inflation hedge.
Barring the last few days of the week, the bullion metal prices have been on a roll after the Federal Reserve Chairman, Ben Bernanke hinted that Fed in all possibility will go for another soft landing in its next meeting thereby reducing interest rates by another 50 bps to avoid the US economy in all ways from slipping into a recession. With this, the dollar had slumped sharply against its rival currencies.
The Fed has cut the federal funds rate to 3% this year from 5.25% in mid-September, 2007. January 2008 itself saw two rate cuts in a gap of ten days.
In the energy market on Friday, crude-oil futures fell by 32 cents at $105.15/barrel after hitting an intra day high of $106.54/barrel. The dropping dollar also surged up crude prices.
In the currency market on Friday, the dollar dropped to three-year lows against the yen as a sell-off on Wall Street sapped investor appetite for risk, but the greenback was relatively steady against other major counterparts.
Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.
We are in a bear market ...
| After several weeks of range-trading, a clear trend was finally established post-Budget. Unfortunately, it was down. The Nifty dropped to 4,771.6 points, a week-on-week loss of 8.65 per cent. The Sensex was down 9.12 per cent at 15,974.52 points. The Defty lost 10.04 per cent as the rupee weakened as a consequence of dollar outflows caused by foreign institutional investor (FII) selling. Domestic funds were also sellers. |
| Background and breadth indicators were also poor. Volumes remained low, and declines far outnumbered advances. Smaller stocks lost more ground. The Nifty Junior was down 14.45 per cent and the Nifty Midcaps was down 11.31 per cent. The BSE 50 lost 10.59 per cent. The BankNifty lost an extraordinary 16.35 per cent while the CNXIT was down 5.59 per cent – relatively little damage due to the weaker rupee. |
| Outlook: Several key supports were busted as the market moved decisively outside the trading zone of 5,000-5,600. There is support at current levels and good support at 4,600. While there could be a short-term recovery, the upside will be restricted by resistance between 4,900-5,000. A major bear market is confirmed. |
| Rationale: The breakout has pulled the indices decisively below respective 200 Day Moving Averages (DMA) and those will be resistances on a pullback. In the short-term, momentum indicators are oversold and this could trigger a short-term recovery. In the long-term, sequential closes below the 200 DMA confirms a major bear market. |
| Counter-view: Liquidity will be a key factor in any recovery. But volumes are down through the past 6 weeks and that is a bad sign. It would be a positive signal if the market climbed back to 5,000-plus and closed above the 200 DMA. But that looks unlikely since it would require substantial volume increase. |
| Bulls and Bears: A few sectors have defensive strength. Pharma and auto shares look to have the best insulation along with FMCGs. Ranbaxy is looking like a counter-cyclical, as is Aurobindo. Metals look more risky but Hindalco, Sterlite, Sesa Goa and perhaps, Tata Steel are reasonable bets for aggressive long traders. Dabur India and HUL are defensive counters. In the auto sector, Hero Honda and Bharat Forge seem decent defensive bets. |
| On the flip side, bank stocks were butchered with panic across the board. There could be a smart pullback here eventually due to short-covering. The stocks to watch are SBI, Bank of Baroda, Kotak and of course, ICICI itself. Reliance Capital could also respond to the buyback offer, and LIC Housing is also likely to do beat other financial stocks. |
| MICRO TECHNICALS |
| Aurobindo Pharma Current Price: Rs 306.20 Target Price: Rs 318 |
| The stock has been consolidating along strong support between Rs 290-300 after a drop from the Rs 550-plus levels of early January. It has started generating high volumes and may be good for accumulation over 25-30 sessions. Daily volatility will be high. Traders can keep a stop at Rs 295 and go long. Cover above Rs 318 where there is resistance, although the stock could hit Rs 325 intraday. |
| Bharat Forge Current Price: Rs 277.10 Target Price: Rs 305 |
| The stock is consolidating and forming a bottoming formation at the current price levels. There is potential upside till Rs 305-310. The downside would be about Rs 265. Keep a stop at Rs 265 and go long with a 10-session perspective. |
| ConCor Current Price: Rs 1,700.80 Target Price: Rs 1,775 |
| The stock firmed up on extraordinary volume in Friday’s session. It has reasonable support at Rs 1,685-1,690 and it has an immediate upside till the Rs 1,775 level where it will hit strong resistance. If it closes above Rs 1,775 twice in succession, it is likely to move till at least the Rs 1,870 level. Keep a stop at Rs 1,685 and go long. |
| ICICI Bank Current Price: Rs 893.40 Target Price: Rs 835- 960 (Trading range) |
| The stock has broken every recent support on massive volume expansion. It has a projected downside till at least the Rs 830 levels on intraday basis. There was short-covering at Rs 855 and that could be an interim support. On the upside, it could lift till Rs 975 on short-covering. If you can handle extreme volatility, trade both sides with a pivot at Rs 920. Go short, with a stop at Rs 920 and cover below Rs 840. If the Rs 920 stop is broken, go long and cover above Rs 960. |
Via Business Standard
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