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Friday, March 28, 2008
IPOs go bust
The recent crash and subsequent volatility in the stock market has adversely affected IPO plans of India Inc. As many as 20 companies, which were planning to collectively raise Rs37.18bn have already deferred their IPOs. These companies are already holding approval from capital market regulator SEBI and are now waiting for better times to enter the market. This is as per the study done jointly by ASSOCHAM and Prime Database. These 20 companies include among others Acme Tele Power, Pride Hotels, Prince Foundations, Vascon Engineers and Xenitis Infotech.
"Plans of another 44 IPOs, collectively planning to raise Rs310bn, which are presently awaiting SEBI approval, may also be hit until the markets recover. These include the IPOs of Ashoka Buildcon, DB Corp, Future Ventures, Jaiprakash Power Ventures, JSW Energy, Mahindra Holidays, NHPC, Oil India and Reliance Infratel," says Prithvi Haldea, Co-Chairman of the Capital Markets Committee of ASSOCHAM. Haldea, however, adds that some of these 64 pending IPOs might still go ahead with their plans, though at reduced valuations, even in the present market conditions.
It may be mentioned here that at the beginning of the year, ASSOCHAM and Prime Database had estimated that, subject to stable secondary market conditions, the calendar 2008 would have seen mobilization of nearly Rs600bn through IPOs. The first three months of the year have seen 17 IPOs, totaling Rs149bn, and this amount may have been larger but for the crash in the secondary market in later part of January.
Inflation soars to 13-month peak
Even as the Government is taking steps to remove supply side bottlenecks for key consumer and industrial commodities, inflation has raced past the 6% mark to touch the highest level in about 13 months. Inflation, based on the Wholesale Price Index (WPI), shot up to 6.68% in the week ended March 15 from 5.92% in the previous week, the Commerce & Industry Ministry said. The steep jump in the annual point-to-point inflation was largely due to higher prices of electricity, metals and certain fuels and was well above average forecast of 5.96%. It is also the highest since January 27, 2007, when inflation was 6.69%. The annual inflation rate was 6.56% during the corresponding week of the previous year.
The WPI for All-Commodities rose 0.8% to 223.6 in the second week of March from 221.8 in the previous week. The index for Primary Articles was up 0.3% at 230.50 while the index for Fuel & Power climbed 1% to 341.0 and the index for Manufactured Products gained 0.9% at 195.0. Meanwhile, the Government also revised the inflation rate for the week ended January 19, 2008 to 4.45% from a provisional estimate of 3.93%, while the WPI for the same period stood revised at 218.2 compared to 217.1.
From around 4% in the early part of February, inflation has surged to the highest levels in 59 weeks, partly because of the fuel price hike effected in February and partly due to a global rally in a whole host of commodities. The current inflation is way above the tolerable level of 5% set by the Reserve Bank of India (RBI). What is more alarming is that prices are rising even as the economy is slowing. This is surely going to give a headache to policymakers.
Not to long ago, analysts, bankers and India Inc. were clamouring for a reduction in interest rates as inflation was under control. But, in a matter of a few weeks, the scenario has changed considerably with inflation crossing 6%. And, if the price situation doesn't improve much over the next few weeks, the RBI will be in a fix when it frames its annual policy for next year. It may not jack up rates or hike CRR as growth is slowing down and credit offtake is also down. Given the limited options at its disposal, the central bank may allow the rupee to appreciate for tackling imported inflation.
Post Market Commentary - March 28 2008
The Indian market took a big leap after the mid session to close with handsome gains on the back of heavy buying across all the sectors. Tracking the favoring cues from the Asian market, the domestic market opened on a firm note but lost the grip towards the mid session on the back of weak inflation data that grew to its 13 month high of 6.68% in the week ended March 15 from the previous week rise of 5.92%. But the market gathered the momentum after the mid session to recover from the fall and kept on marching forward till the final closing of the session. From, the sectoral front, all the sectoral indices closed in green while the metal, capital goods and realty index saw more buying by the investors.
The BSE Sensex closed higher by 355.73 points at 16,371.29 and NSE Nifty closed up by 111.75 points at 4,942. The BSE Mid Caps and Small Caps also closed higher by 246.53 points and 375.20 points at 6,522.79 and 7,901.98 respectively
The market breadth was very strong as 2,333 stocks closed in green as against 370 stocks that closed in red.
Major gainers from the Sensex pack are Tata Steel 9.46%, L&T 6.19%, Infosys 5.94%, Wipro 5.56%, BHEL 5.37%.
The BSE Realty index closed up 333.63 points to close at 7,984.92 as HDIL 18.55%, Akruti City 15.01%, Mahindra Life 9.66%, Purvankara 8.04%, Indiabull Real 4.04%, Ansal Infra 4.03% closed higher..
The Metal index surged 800.21 points to close at 14,654.19. Major gainers are Jindal Steel 15.91%, Tata Steel 9.46%, Sterlite Inds 5.18%, Welspun Guj 7.12%, Ispat Inds 5.70% and Jindal saw 4.48%.
The Bankex index closed with marginal gains of 23.58 points at 8,200.24 as Oriental bank 3.92%, BOB 3.63%, Andhra bank 3.51%, Canara bank 2.69%, IOB 1.99%, Union bank 1.85%, SBI 1.77% closed in green.
The Capital Goods index grew by 740.70 points to close at 14,455.14. Gainers are Suzlon energy 12.57%, Alsotom projects 7.47%, Praj Inds 6.96%, L&T 6.19%, Punj Lloyd 5.90%, AIA Engineering 5.76% and BEML 3.76%.
The Oil and Gas index closed up by 306.63 points at 10,467.61 as Cairn India 6.95%, BPCL 5.47%, Essar Oil 5.40%, RNRL 5.35%, RPL 4.69%, Aban Offshore 3.93%, Reliance Inds 3.19% and HPCL 2.51% closed in positive.
The IT index increased by 178.28 points to close at 3,758.03. Scrips that gained are Mosear Baer 20.01%, Finance Tech 11.26%, Mphasis 10.65%, Patni Comp 10.06%, Infosys 5.94%, Wipro 5.56% and Tech Mahindra 5.25%.
From the Power index, Suzlon energy 12.57%, Torrent Power 8.27%, Tata Power 3.56%, Bhel 5.37%, GMR infra 4.55% and Reliance Power 1.72% closed higher.
Investing mistakes you should not make ...
Overconfidence - Don't be unrealistically optimistic
A bull market makes retail investors believe that they are geniuses - after all, anything they put money into goes up. This overconfidence in their own abilities leads to a complete disregard of the risks involved. Every new generation that invests in the market ignores past experience. These new investors wrongly believe that stock prices only go up.
Don't be overconfident and don't start believing that you have superior skills compared to the market. Recognise that in a bull market you are benefiting because the whole market is going up. If those around you are getting unrealistically optimistic, start managing your risk accordingly. Remember that sometimes markets do come crashing down.
Over enthusiasm to trade - Not every ball should be hit
Good batsmen realise that some balls outside the off-stump should be left alone. Similarly, professional investors realise that sometimes its better to just stand still than to rush into a stock. Retail investors often make the mistake of "flashing outside the off-stump" because they cannot resist the temptation to trade in every opportunity. And, like an inexperienced batsman, they suffer the same fate.
Too much trading will lead to a lot of churn, extra commissions to your broker and huge tax implications for you. Some of the world's best investors follow a buy and hold strategy - you should too.
Missing the benefits of compounding of capital - Learn from Einstein
Albert Einstein is reputed to have said that compounding of capital is the 8th wonder of the world because it allows for the systematic accumulation of wealth. Even though any one in class 5 could tell you how compounding works, retail investors ignore this basic concept.
Compounding of capital can benefit you only if you leave your money uninterrupted for a long period of time. The sooner you start investing, the bigger the pool of capital you will end up with for your middle-aged and retirement years.
Don't wait to start investing only when you have a large amount of money to put to work. Start early, even if it's with a small amount. Watch this grow to a very large amount with the passage of time.
Worrying about the market - But there is no answer to your favourite question
Smart investors don't worry about the direction of the market - they worry about the business prospects of the companies whose stocks they own. Retail investors are obsessed with the question "Where do you think the market will go?" This is a wrong question to ask. In fact, no one knows the answer.
The right question to ask is whether the company, whose stock you are buying, is going to be a much bigger business 10 years from now or not? Don't take a view on the market, take a view on long-term industry trends and how your chosen companies can create value by exploiting these trends.
Timing the market - Around 99% of investors will fail in this strategy
Its very difficult to time the market, i.e, be smart enough to buy at the absolute bottom and sell at the absolute top. Professionals understand that timing the market is a wasted exercise.
Retail investors always wait for that elusive best opportunity to get in or to get out. But by waiting they let great investment opportunities go by. You should use systematic or regular investment plans to make investments. You'll have to make fewer decisions and yet can accumulate substantial wealth over time.
Selling in times of panic - You should be doing the opposite
The best opportunity to buy is when the markets are falling and there is fear in the minds of investors. Yet, many retail investors do exactly the opposite. They sell when the markets are falling and buy only when the markets are high. This way they end up losing twice - by selling low and buying high, when they should be doing exactly the opposite.
If nothing has changed about the long-term outlook for the company that you own, then you should not sell this company's stock. Use this opportunity to buy more of the same stock in falling markets. Some of the world's biggest fortunes were made by buying when others were selling in panic.
Focusing on past performance - Its like driving forward while looking backwards
It is a very common perception that because a stock has done well in the past one year, it's the best stock to invest in. Retail investors do not realise that often the best performers will underperform the market in the future because their optimistic outlook has already been priced into the stock.
Don't go after hot sectors that are currently producing high returns. Don't let greed drive your investment decisions. Look forward to see whether the gains produced in the past can get repeated or not. Short-term trends of the past might not get repeated in the future.
Diversifying too much will kill you - Investing is all about staying alive
Beyond a point, having too many names in a portfolio can be counterproductive. You might end up duplicating, or end up taking too much exposure to a sector. Over-diversification can upset your portfolio, especially when you have not done enough research on all the companies you have invested in.
If you are an active investor in the stock market, maintain a manageable portfolio of 15-25 names. Instead of adding new names to this portfolio, recognise ideal ones. Then back them with more capital. In the long-run, this will produce better returns for you than adding another 20 names to your portfolio. Investing is all is about patience and discipline. By avoiding mistakes you can improve the long-term performance of your portfolio, whatever the economic conditions prevailing in the market.
Via iTrust
Weekly Close: year end game or is it a sustainable recovery ?
Indian indices finished with yet another volatile week but with gains of 9.5%. Strong recovery was led across the board. Short covering on F&O settlement also led to recovery. Global markets continue to what they are but they are the reason why there seems to be some better performance in the Indian Markets.
This is also last week of the financial year. FY2007-08 was a good year for investors. Market had crazy rally during the year. It crossed 13k. then 14k then 15k then 16k..17k.. 18k?19k..20k..21k ! The rally post 15k was said to be driven by hot money. And to curb this FM made registration of FII's mandatory. This led to some correction in the market but recovery was again swift. The confidence during the year was so high that streets were talking about Indian markets decoupling from US ! Every one was positive. But then subprime issue emerged in US and it was again proved that the decoupling was only in theory. Emerging markets have not yet decoupled with US. Indian markets went into reverse gear post the subprime worries. US continues to struggle with its economic woes and recession talks are still on. FY2009 could bring some relief.
Inflation crossed 6% and stood at 6.68% led by Metal and Food items. Inflation is at 12 months high. The increase was led by metal and food items. Fuel surged by 1% which has around 14% weight age on WPI index. This is much higher than the RBI's tolerance rate. In such scenario probability of rate cut seems bleak and there are talks of rate hikes as well.
It was quite a volatile week, but it still turned out to be the biggest weekly gain for the Sensex. The BSE 30-share index gained 9.5%, while the Nifty added 8% over the week. Realty index +12.7%, IT index +11.5%, BSE Capital Goods index +10.4% and BSE Bankex +9.4%. These are followed by FMCG index +8.2%, Metal index +8.6% and Oil & Gas index +7.7%. Bhel +13.35%, DLF +10.91%, HDFC +19.30%, Hindalco +13%, Infosys +14.39%, ITC +10.57%, JP ASSO +17.65%, Larsen +10.53%, REL +10.85%, Tata Steel +12.98%, Wipro +21.35%. Ranbaxy -2.49%, Tata Motors -0.22%,
Tata Motor completed its Land Rover Jaguar deal for $2.3bn. This is a big deal. Aggressive bidding would increase the debt burden..This has already weighted on the stock. The counter continues to be weak. For now this would continue to weigh on the stock. Time will only tell whether Jaguar and Land Rover acquisition would turnaround. It may be a feather in the cap for Tata Motors but certainly the shareholders have not appreciated the same. At least not yet !
Gujarat Heavy Chemicals Ltd (GHCL) which operates in two segments namely Soda Ash & Home Textiles and also has a strategic interest in ITES business through its KPO unit. Recently GHCL Management planed to demerge the whole business namely Soda ash, Retail, and Home textiles. The company will continue to remain listed. The home textile and retail business is to be shifted into 100% subsidiaries. GHCL reports that the demerger will be effective from April 1. It makes a strategic sense for GHCL as it will be better to focus and valuations for each of these businesses. In view of the value unlocking potential arising out of restructuring of business is stable soda ash business. We believe that there is not much direct synergies between soda ash and home textiles and expected restructuring will not affect the performance of the company. Hence, the story remains the same. Re-structuring activity will have a positive impact for the longer term business growth.
Sujana Metals (SMPL) which is into value-added steel products was the star for the week. It manufactures various types of TMT steel bars, structural steel and re-rolled steel products used in towers for both power and telecom sectors apart from being used in construction and industrial segment. The stock rallied soon after a report stated that it is close to acquire a steel plant in Vizag at a cost of INR 150 cr. Company has lined up huge capex of Rs.1600 Cr in two phases to put up this capacity. De-merger of tower business would provide much required focus and unlock value and Capacity enhancement would provide economies of scale.
Government has withdrawn the Duty Entitlement Passbook Scheme, or DEPB benefit on cement. The government has also scrapped the DEPB on manganese, chrome and ferrous metal. Ambuja Cement, Ultratech and Gujarat Sidhee Cement are the major cement exporters. The government's move on DEPB is aimed at controlling increase in the commodity prices and to increase local supplies which can help indirectly to control inflation. The DEPB is 3% on Cement, so this doesn't have impact on cement exporters.
We still have one last day of the year to go. This is the day where the prices of the stocks are used to determine the NAV of the many funds which are invested into India. Mid caps which have had a battering are seeing some level of sharp recovery. There is a reason of undervaluation in that and also some level of NAV propping as sellers are also unwilling to sell. Also small level of value buying is helping a bit. Next week of course marks the beginning of the new fiscal year. Some level of taxes will come into force and that may tend to reduce volume.. but in the bigger scheme of things this does not matter too much and soon will be over come just like STT was. Going ahead, we believe that the markets will tend to be a bit more decoupled from Global markets and the upside is there on cards. We are not too worried about inflation as others seem to be. We believe that there is a base effect and that should wear off by the end of April.
Tech view on markets: Sensex has crossed the resistance zone of 16300 with a penant formation in the intraday charts. This gives a bullish view on the market with a target of 17000--17100.
Sensex sails past 16300; Metal, CG trigger rally
The market remained upbeat on the extended day's trading session and registered gains of more than 300 points during the intra-day trades on phenomenal buying in metal, consumer goods, information technology (IT) and consumer durables (CD) stocks. After a slight hiccup in early trades, where the Sensex opened 85 points higher over its last close at 16,016 and soon dipped to an intra-day low of 15,884, it came off its early lows and remained firm thereafter on sustained buying support. The index breached the 16,400 mark in early noon trades and appreciated further to touch an intra-day high of 16,452, up 568 points from the day's low. The Sensex finally ended 2.22% or 356 points higher at 16,371, while the Nifty advanced 2.30% or 112 points to close at 4,942.
In broader market, gainers outpaced losers by nearly 6:1 on the Bombay Stock Exchange (BSE). Of the 2,742 stocks traded, 2,333 stocks advanced, 370 stocks declined and 39 stocks ended unchanged. All sectoral indices managed to end with significant gains. The BSE Metal index was the major gainer and soared 5.78% followed by the BSE CG index (up 5.40%), the BSE IT index (up 4.98%), the BSE CD index (up 4.86%), the BSE Realty index (up 4.36% and the BSE Power index (up 4.16%).
Leading the upsurge, Tata Steel vaulted 9.46% at Rs716.75, Larsen & Toubro shot up by 6.19% at Rs3,147, Infosys advanced by 5.94% at Rs1,526, Wipro scaled up 5.56% at Rs454 and BHEL moved up by 5.37% at Rs2,092. Among other gainers, Jaiprakash Associates at Rs240.40, NTPC at Rs204.25, REL at Rs1,333, Satyam Computer at Rs408.45, DLF at Rs695.70, RIL at Rs2,347 and ITC at Rs 206.30 gained above 3% each. Select frontline counters however eased on profit taking. HDFC Bank dropped 2.36% at Rs1,401, HDFC declined 1.81% at Rs2,613, ONGC lost 1.65% at Rs1,051 and Tata Motors shed 1.41% at Rs645.
Metal stocks witnessed sustained buying support. Jindal Steel flared up 15.91% at Rs2,218, Tata Steel jumped 9.46% at Rs716.75, Welspun Gujarat added 7.12% at Rs389.65, Ispat Industries scaled up 5.70% at Rs32.45 and Sterlite Industries gained 5.18% at Rs756.15. Shree precoated, Jindal Saw, Maharashtra Seamless, Gujarat NRE and Sesa Goa shot up by over 3-5% each. Consumer goods too registered a smart bounce back. Suzlon Energy zoomed 12.57% at Rs270, Alstom Projects soared 7.47% at Rs546, Praj Industries scaled up 6.96% at Rs132.10 and Punj Lloyd surged by 5.90% at Rs333.15. AIA Engineer, Kisloskar Oil, Kalptaru, BHEL, Jyoti Structures, Thermax, Lakshmi Machine and Crompton rose by 4-5% each.
Over 1.92 crore Ispat Industries shares changed hands on the BSE followed by RNRL (1.55 crore shares), IFCI (1.02 crore shares), RPL (0.98 crore shares) and Centurion Bank of Punjab (0.83 crore shares).
Reliance Industries was the most actively traded counter on the BSE and registered a turnover of Rs356 crore followed by Reliance Capital (Rs263 crore), HDFC (Rs236 crore), RNRL (Rs160 crore) and SAIL (Rs159 crore)
Market to take cues from global equities
The investors will remain cautious after market reeled under global and domestic pressures recently. The next major trigger for the market is Q4 results of Indian companies which are slated to hit the market next month. The market will also closely look at further global cues.
Marketmen are keenly awaiting Q4 and full year March 2008 results from Indian corporates. Robust corporate advance tax payments in Q4 March 2008 indicate that corporate profit growth will be strong in the quarter. Advance tax figures showed banks, hospitality and software firms are doing better than sectors like automobiles and cement.
India’s economic growth is expected at close to 9% in the fiscal year ending March 2008, finance minister P. Chidambaram said on Wednesday 26 March 2008. He also said problems stemming from the credit markets will also affect India, even though only one Indian lender had exposure to US subprime mortgages.
A torrent of bad news such as meltdown in global markets, earnings downgrade recently by brokerages of ICICI Bank and Larsen & Toubro, lower-than-expected industrial production data for January 2008 and a surge in inflation created havoc on the bourses recently. Hike in short-term capital gains tax and alteration of tax treatment of the Securities Transaction Tax (STT) in Union Budget 2008-09 announced on 29 February 2008 had dented the sentiment earlier. The fears of a global turmoil in credit markets eased after a steep 0.75% interest rate cut by the US Federal Reserve on Tuesday, 18 March 2008 and following better-than-expected results from two major investment banks -- Goldman Sachs Group and Lehman Brothers Holdings.
The wholesale price index rose 6.68% in the 12 months to 15 March 2008, surging from the previous week's rise of 5.92%, government data showed on Friday. The rate is highest since 27 January 2007, when inflation was 6.69%.
At current 16,371.29, Sensex trades at a PE multiple of 16.37 based on projected FY 2009 EPS of about Rs 1000 for 30 Sensex companies.
Foreign institutional investors (FII)’ outflow in March 2008 totaled Rs 772.90 crore (till 26 March 2008). FII outflow in calendar year 2008 totaled Rs 11,749.30 crore (till 26 March 2008). Mutual funds (MF)s were net sellers of shares worth Rs 2,173.50 crore in this month, till 26 March 2008.
Sensex garners 1,376 points on buying by FIIs
The market started the week on a buoyant note taking cues from positive global markets with Sensex surging 928.09 points on Tuesday 25 March 2008 its second biggest single-day rally in points as well as percentage terms. The expiry of March 2008 derivative contracts kept the market volatile later. However, it ended the week on positive note shrugging the high inflation data announced on Friday. Buying by foreign institutional invstors supported market. The BSE Sensex rose in 3 out of 5 trading sessions in the week.
Sensex surged 1,376.46 points or 9.18% to 16,371.29 in the week ended Friday, 28 March 2008. The S&P CNX Nifty rose 368.05 points or 8.04% to 4,942 in the week.
The BSE Mid-Cap index rose 558.69 points or 9.37% to 6,522.79 in the week. The BSE Small-Cap index rose 679.78 points or 9.41% to 7,901.98.
Foreign institutional investors (FII) bought shares worth Rs 2227 crore in the first three trading sessions of the week till 26 March 2008. FII outflow in March 2008 totaled Rs 772.90 crore (till 26 March 2008). FII outflow in calendar year 2008 totaled Rs 11,749.30 crore (till 26 March 2008). Mutual funds (MF)s were net sellers of shares worth Rs 2,173.50 crore in this month, till 26 March 2008.
The 30-share BSE Sensex rose 294.57 points or 1.96% at 15,289.40 on Monday 24 March 2008. A strong rebound was witnessed in late trade. Positive cues from the global markets supported the domestic bourses which opened after a long weekend. The market sentiment remained edgy on reports Monsoon Capital LLC, a $1.20 billion hedge fund firm run by Gautam Prakash, has been hit hard by a slump in Indian stocks this year.
The 30-share BSE Sensex rose 928.09 points or 6.07% to 16,217.49, its second biggest single-day rally in points as well as percentage terms on Tuesday 25 March 2008. The index gained 972.98 points at session’s high of 16,262.38, hit at the fag end of the trade. Buoyancy was visible across the global markets. The rally was triggered by JP Morgan raising Bear Stearns acquisition price by 5 times and US economic data that showed US new home sales had risen 3% in February 2008. In the domestic front, all the sectoral indices on BSE ended higher. The market breadth was strong.
Sensex lost 130.66 points or 0.81% at 16,086.83 on Wednesday 26 March 2008. Mixed global cues and imminent expiry of March 2008 derivative contracts kept the market volatile throughout the day. Concerns about the US economy which is said to be already in recession resurfaced following data that showed that US consumer confidence fell to a five-year low in March 2008. Uncertainty about the US outlook kept a lid on Europen and Asian markets. Back home, investors turned cautious after the previous day's 6.1% jump.
The key indices ended the highly volatile session on a mixed note on Thursday, 27 March 2008. The Nifty ended almost steady even as the Sensex declined. The imminent expiry of March 2008 derivatives contracts caused volatility. Most of the Asian indices slipped on worries that there will be more bank write-downs in the US after a prominent analyst lowered first-quarter profit forecasts for four major US banks namely -- Citigroup, Bank of America Corporation, JPMorgan Chase & Co, and Wachovia.
The key benchmark stock indices surged on Friday, 28 March 2008. Positive cues from Asian and European markets propelled the market higher. The sensex rose 355.73 points or 2.22% to 16,371.29. The market shrugged off a surge in inflation and overnight slide in US stocks. Capital goods stocks soared at the fag end of the session, followed by metal and IT stocks. Banking shares, which hovered in negative territory on surge in inflation, turned green at the fag end of the trading session. Mid-caps and small-caps surged with their barometer indices on BSE outperforming the Sensex.
India's largest state-run oil exploration firm in terms of revenue Oil and Natural Gas Corporation rose 5.96% to Rs 1051.55. Recent reports suggested the company would sign an agreement to develop two huge oil and gas fields in Iran. As per reports, Oil and Natural Gas Corporation (ONGC), through its overseas investment arm ONGC Videsh, and the Hinduja Group are together eyeing a role in developing the South Pars Phase 12 gas field and the Azadegan oil asset in Iran.
India’s largest truck maker by sales Tata Motors declined 0.69% to Rs 645.95 in the week. The company signed an agreement with Ford Motor Company on 27 March 2008 for buying two iconic British auto brands - Jaguar and Land Rover for $2.3 billion.
India’s second largest telecom services provide by sales Reliance Communications (RCom) rose 5.91% to Rs 536.40. Life Insurance Corporation raised its stake in the telecom services provider to over 5%. Promoters hold 66.16% stake in RCom.
India's second largest power utility by revenue Reliance Energy surged 10.54% to Rs 1,333.65 . The company said on 25 March 2008 it will seek shareholders' nod for buyback offer of the company worth Rs 2,000 crore.
The FMCG major by sales Hindustan Unilever rose 7.5% to Rs 242.20. The reports on 25 March 2008 said it may hike prices of select brands on the back of continuous increase in raw material costs.
India’s largest engineering and construction firm by sales Larsen & Toubro (L&T) rose 10.86% to Rs 3,147.20. The company said on Wednesday, 19 March 2008, it is set to ramp up its manufacturing capacity of super-critical boilers and super-critical turbine generators to 4000 megawatt per annum.
Infosys (up 13.75% to Rs 1,526.35), Reliance Industries (up 8.73% to Rs 2,347.55), Wipro (up 20.55% to Rs 454), ICICI Bank (up 8.98% to Rs 835.20), State Bank of India (up 4.79% to Rs 1,679.65) and Tata Consultancy Services (up 7.42% to Rs 870.10) edged higher.
India’s economic growth is expected at close to 9% in the fiscal year ending March 2008, finance minister P. Chidambaram said on Wednesday 26 March 2008. He also said problems stemming from the credit markets will also affect India, even though only one Indian lender had exposure to US subprime mortgages.
The Union Cabinet approved a Farmers' Debt Relief Fund with an initial corpus of Rs 10,000 crore to finance debt waiver and debt relief to farmers, which was announced in Union Budget 2008-09. The government had announced a massive Rs 60000-crore debt waiver package to farmers in the Budget.
The wholesale price index rose 6.68% in the 12 months to 15 March 2008, surging from the previous week's rise of 5.92%, government data showed on Friday. The rate is highest since 27 January 2007, when inflation was 6.69%.
Sensex adds 356 points in broad-based rally
Positive cues from Asian and European markets propelled the market higher today. The rally raised hopes that the market might have bottomed out after a recent steep fall. The market today shrugged off a surge in inflation and overnight slide in US stocks. Capital goods stocks soared at the fag end of the session, followed by metal and IT stocks.
Banking shares, which hovered in negative territory on surge in inflation, turned green at the fag end of the trading session. Mid-caps and small-caps surged with their barometer indices on BSE outperforming the Sensex.
As per market talks, mutual funds provided support to share prices to prop up year-end net asset values (NAVs) for the quarter and year ending 31 March 2008. Net Asset Value (NAV) propping, or window dressing, happens as professional investors like mutual funds seek to make their quarterly or annual performance look good to clients. Provisional data released by stock exchanges showed domestic funds which includes mutual funds and insurance firms bought shares worth a net Rs 729.50 crore today. Foreign institutional investors sold shares worth a net Rs 401.95 crore.
In Europe, key indices in UK, France and Germany were up by 0.05% to 0.53%. In Asia, the key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea and Taiwan were up by 0.20% to 4.94%.
India's wholesale price index rose 6.68% in the 12 months to 15 March 2008, surging from the previous week's rise of 5.92%, government data showed on Friday. The rate is highest since 27 January 2007, when inflation was 6.69%.
The 30-share BSE Sensex was up 355.73 points or 2.22% at 16,371.29. The index gained 436.52 points at session's high of 16,452.08, hit at the fag end of the session. The Sensex lost 131.11 points at the day’s low of 15,884.45, hit in the early afternoon trade.
The broader CNX S&P Nifty was up 111.75 points or 2.31% at 4942. Nifty April 2008 futures were at 4986.70, at a premium of 44.7 points as compared to spot closing of 4942.
The Sensex has gained 1561.8 points or 10.54% from a recent low of 14809.49 on 17 March 2008.
The NSE's futures & options (F&O) segment turnover was Rs 49,087.03 crore, which was lower than Rs 64,308.86 crore on Thursday, 27 March 2008.
The BSE Mid-cap index outperformed the Sensex, rising 3.93% to 6,522.79. The BSE small-cap index was up 4.98% at 7,901.98.
The market breadth was extremely strong. On BSE, 2333 stocks advanced, 370 declined and 39 stocks were unchanged.
BSE clocked a turnover of Rs 6368 crore as against Rs 6,399.95 crore on Thursday, 27 March 2008.
Low rollovers from March 2008 series to April 2008 series were witnessed on Thursday, 28 March 2008, when derivative contracts for March 2008 series expired. As per reports, the marketwide rollover of derivative positions series stood at 79% as compared to 84% in March 2008 series from February 2008. Similarly Nifty rollover stood at 63% as against 75% during in March 2008 series from February 2008.
India’s largest state-run oil explorer by market capitalisation ONGC fell 1.65% at Rs 1051.55 on reports the company may report losses on every barrel of crude oil that it sells due to the high subsidy burden that it has to bear. The company’s margin on oil sales is currently at an all-time low of around 15 cents per barrel, almost a tenth of what it was two years ago, the reports added.
India’s largest private sector firm by market capitalization and oil refiner Reliance Industries (RIL) rose 3.19% to Rs 2347.55.
Top Sensex gainers were, Tata Steel (up 9.46% at Rs 716.75), Larsen & Toubro (up 6.19% at Rs 3147.20), Infosys Technologies (up 5.94% at Rs 1526.35), Wipro (up 5.56% at Rs 454), and Bharat Heavy Electricals (up 5.37% at Rs 2092.45).
Top Sensex losers were, HDFC Bank (down 2.36% at Rs 1401.05), Housing Development Finance Corporation (down 1.81% at Rs 2613.50), Tata Motors (down 1.41% at Rs 645.95), Hindustan Unilever (down 0.74% at Rs 242.20) and Reliance Communication (up 0.31% at Rs 536.40).
The BSE Capital Goods index outperformed the Sensex, rising 5.40% to 14,455.44. Suzlon Energy (up 12.57% at Rs 270), Alstom Projects (up 7.47% at Rs 546.85), Praj Industries (up 6.96% at Rs 132.10), and Punj Lloyd (up 5.90% at Rs 333.15), soared.
The BSE Bankex underperformed the Sensex, rising 0.29% to 8,200.24. Oriental Bank of Commerce (up 3.92% at Rs 185.70), Bank of Baroda (up 3.63% at Rs 301.30), Andhra Bank (up 3.51% at Rs 76.75), State Bank of India (up 1.77% at Rs 1,679.65), and Axis Bank (up 1.47% at Rs 804.90), gained.
India's largest private sector bank by assets ICICI Bank was almost unchanged at Rs 835.20.
The BSE Metal index outperformed the Sensex, rising 5.78% to 14,654.19. Jindal Steel & Power (up 15.91% at Rs 2,218.65), Welspun Gujarat Stahl Rohren (up 7.12% at Rs 389.65), Ispat Industries (up 5.70% at Rs 32.45), Sterlite Industries (up 5.18% at Rs 756.15) and Shree Precoated (up 5% at Rs 171.45), surged.
Among the mid-caps, Global Broadcast News (up 23.57% at Rs 139.20), Moser Baer (20.01% at Rs 151.75), Asian Star Company (up 20% at Rs 985.85), Prakash Industries (up 18.28% at Rs 244.60) and Vishal Retail (up 17.38% at Rs 820), surged.
Among the small-caps, Nahar Industries (up 20% at Rs 90), Empee Distilleries (up 20% at Rs 169.05), Viceroy Hotels (up 20% at Rs 66.10), Donear Industries (up 20% at Rs 61.30) and Indowind Energy (up 20% at Rs 56.85), spurted.
Drug maker Alembic surged 20% to Rs 55 on reports that the company plans to set up its own special economic zone dedicated to the pharma sector.
India's leading manufacturer of inorganic chemicals by sales Tata Chemicals soared 6.21% to Rs 288.95 after the company said it has successfully completed the acquisition of US-based General Chemical Industrial Products Inc.
Varun Shipping Company surged 6.99% to Rs 72.70 after the company said it has acquired India’s third largest anchor handling and towing supply vessel.
Biotechnologies firm Jupiter Bioscience soared 9.10% to Rs 148.70 after the company said on Thursday, 27 March 2008 it would acquire a manufacturing facility of Merck Life Sciences, Switzerland, for an undisclosed sum.
Display units maker MIC Electronics advanced 4.23% to Rs 700.55 after the company informed stock exchange about it and its subsidiaries receiving new orders.
Construction firm Era Infra Engineering rose 0.79% to Rs 596.40 after the company said its joint venture company with KMB has secured an order worth Rs 148.40 crore from Delhi Metro Rail Corporation.
Reliance Industries clocked highest turnover of Rs 356.42 crore on BSE. Reliance Capital (Rs 263.64 crore), Housing Development Fiannce Corporation (up 236.14 crore), Reliance Natural Resources (Rs 160.54 crore) and Steel Authority of India (Rs 159.24 crore), were the other turnover toppers on BSE in that order.
Ispat Industries reported highest volume of 1.92 crore shares. Reliance Natural Resources (1.5 crore shares), IFCI (1.02 crore shares), Reliance Petroleum (98.08 lakh shares) and Centurion Bank of Punjab (83.93 lakh shares), were the other volume toppers on BSE in that order.
US markets dropped yesterday, 28 March 2008, following Oracle's weak sales outlook. Concerns about financial companies also continued. The Dow Jones industrial average slipped 120.40 points, or 0.97%, to 12,302.46. The Standard & Poor's 500 index slipped 15.37 points, or 1.15%, to 1,325.76, and the Nasdaq Composite index was down 43.53 points, or 1.87%, to 2,280.83.
Market to stay sideways
The market is expected to stay side ways on mixed global cues. US markets declined yesterday, 27 March 2008 while Asian markets opened higher today, 28 March 2008.
Lower rollovers from March 2008 series to April 2008 series were witnessed yesterday, 28 March 2008, when derivative contracts for March 2008 series expired. As per reports, the marketwide rollover of derivative positions series stood at 79% as compared to 84% in March 2008 series from February 2008. Similarly Nifty rollover stood at 63% as against 75% during in March 2008 series from February 2008.
However year-end net asset value (NAV) boosting exercise from local mutual funds may prevent steep losses.
The sharp rise in inflation has been a cause of concern, which has now risen above the Reserve Bank of India’s caution limit of 5%. As per data released on Thursday, 20 March 2008, inflation had surged to over 11-month high of 5.92% for the week ended 8 March 2008
Marketmen are keenly awaiting Q4 and full year March 2008 results from Indian corporates. Robust corporate advance tax payments in Q4 March 2008 indicate that corporate profit growth will be strong in the quarter. Advance tax figures showed banks, hospitality and software firms are doing better than sectors like automobiles and cement.
Asian markets were trading firm today, 29 March 2008. Hang Seng (up 1.27% at 22,951.40), Taiwan's Taiwan Weighted (up 0.34% at 8,635.17), Singapore's Straits Times (up 0.20% at 3,031.24), South Korea's Seoul Composite (up 1.07% at 1,694.13) and Japan's Nikkei (up 1.89% to 12,843.37) advanced
US markets dropped yesterday, 28 March 2008, on the back of oracle's weak sales outlook. Concerns about financial companies also continued. The Dow Jones industrial average slipped 120.40 points, or 0.97%, to 12,302.46. The Standard & Poor's 500 index slipped 15.37 points, or 1.15%, to 1,325.76, and the Nasdaq Composite index was down 43.53 points, or 1.87%, to 2,280.83.
Back home, the 30-share BSE Sensex fell 71.27 points or 0.44% at 16,015.56 yesterday, 28 March 2008. The broader CNX S&P Nifty rose 1.40 points or 0.03% at 4830.25 on that day.
As per provisional data, foreign institutional investors (FIIs) purchased shares worth Rs 247.98 crore on Thursday, 27 March 2008. Domestic institutional investors (DIIs) were net buyers of shares worth Rs 339.84 crore on that day.
FIIs were net buyers of Rs 270.74 crore in the futures & options segment on Thursday, 28 March 2008. They were net sellers of index futures to the tune of Rs 813.48 crore and bought index options worth Rs 1,198.92 crore. They were net sellers of stock futures to the tune of Rs 104.15 crore and sold stock options worth Rs 10.55 crore.
US oil futures fell $1.23 a barrel to $106.35 a barrel,as traders wary over the U.S. economic outlook took profits from a three-day rally.
Meanwhile, the BSE Sensex Futures will start trading on the US Futures Exchange (USFE) from 4 April 2008. It will be the first Asian index futures to go live on the US exchange. The -dollar denominated futures contracts will trade 23 hours a day on the USFE, and will have a notional value of 40,000 index units and the minimum price change would be $5
Trading Calls - March 28 2008
Nifty 4830 Supp 4700 Res 4902
Buy RPower (327) SL 322
Target 337, 342
Buy Sterlite (718) SL 711
Target 730, 735
Buy Dr Reddy's (580) SL 575 Target 590, 595
Sell i-Flex (953) SL 960
Target 938, 930
Sell SCI (196) SL 200
Target 185, 181
US Markets tumble on home sales drop
New home sales drop to a thirteen year low and durable goods order drop in February
Technology and Financial stocks weighed heavily on the US market sentiments today, Thursday, 27 March, 2008 and all three indices closed in the red for the day. US stocks began the day in positive territory but the major indices were restricted to the red for the entire second half today. Earnings miss from Oracle and some disappointed on the Google front were the main reasons for the technology sector to come under pressure today.
Better than expected economic data helped offset some disappointment over Oracle. Market opened in positive mood and indices swung in green during the first hour of trading. But soon market reversed its course. Nine of the ten major economic sectors finished in negative territory. Financials posted the largest loss while Utilities posted the only gain.
In the mornings session, the Dow was up by more than 25 points. At the end, The Dow Jones industrial Average ended the day with a loss of 120 points at 12,302. The Nasdaq Composite Index, finished lower by 43 points at 2,280. S&P 500 finished lower by 15 points at 1,325.
Twenty-eight out of thirty Dow stocks ended in the red today. Intel Microsoft and H-P led the group of Dow losers. The technology stocks dropped by more than 2% to 3% each. GE was one of the Dow winners for the day.
Economic reports that came out today were slightly optimistic in nature, given the current spate of data that has been currently hitting the wires. Initial jobless claims for last week fell to 366,000 from 375,000, which was slightly better than the expected. Separately, final fourth quarter GDP was left unchanged at 0.6%.
In the tech front, Oracle shares fell more than 7% after the business-software giant reported a slower-than-forecast 21% revenue rise for the third quarter, with profit increasing 30%. The company said on its call that customers got a little more cautious at the end of its quarter.
Also Google showed notable weakness today on reports that its "pay per click" number will be weak and due to having its price target cut at Lehman Brothers.
The financial sector continued to be badly hammered today after Oppenheimer cut earnings estimates for UBS and Merrill Lynch. On the other hand, Lehman Brothers cut its estimates on several banks like Citigroup, Bank of America and Wells Fargo.
Following the completion of the Fed's first Term Securities Lending Facility auction, the Fed said it will be lending $75 billion for 28 days. The bid-to-cover ratio came in at 1.15, which is the volume of bids divided by the total of funds available at auction. The stop-out rate, the lowest rate that the Fed accepted was 0.33%.
All Indian ADRs ended in red today. VSNL and Satyam were the top two losers of the day. The two ADRs gave up 6.4% and 4.2% respectively.
Crude prices shot beyond $107/barrel today as fresh tensions cropped up in Iraq and supplies from that country became uncertain. Yesterday’s report by Energy Department for last week showing that crude inventories dropped more than forecast also affected crude prices today. Crude-oil futures for light sweet crude for May delivery closed at $107.58/barrel (higher by $1.68/barrel or 1.6%) on the New York Mercantile Exchange. Crude prices are 71% higher on a yearly basis.
It was reported that a pipeline explosion took place in southern Iraq cutting supplies to the country's main export terminal. Also, clashes between Iraqi forces and militants were raging for the third-straight day.
Trading volume topped 3.9 billion shares on the New York Stock Exchange, where decliners outpaced gainers by 5 to 3. On the Nasdaq, 2 billion shares traded, and decliners topped gainers by 3 to 2.
The final fourth quarter GDP reading and Last week's jobless claims are due first thing tomorrow morning before the market opens. Other than that, a batch of Fed representatives are scheduled to speak tomorrow to discuss the U.S. economic outlook.
Titagarh Wagons - Allotment - Subscription Details
| Sr.No. | Category | No. of times of total meant for the category | ||
| 1 | Qualified Institutional Buyers (QIBs) | 10.3670 | ||
| 1(a) | Foreign Institutional Investors (FIIs) | |||
| 1(b) | Domestic Financial Institutions(Banks/ Financial Institutions(FIs)/ Insurance Companies) | |||
| 1(c) | Mutual Funds | |||
| 1(d) | Others | |||
| 2 | Non Institutional Investors | 2.7683 | ||
| 2(a) | Corporates | |||
| 2(b) | Individuals (Other than RIIs) | |||
| 2(c) | Others | |||
| 3 | Retail Individual Investors (RIIs) | 0.9798 | ||
| 3(a) | Cut Off | |||
| 3(b) | Price Bids | |||
| 4 | Employee Reservation | 0.0707 | ||
| 4(a) | Cut Off | |||
| 4(b) | Price Bids |
Grey Market - Titagarh Wagons slips into discount
Gammon Infra 167 4 to 5
Sita Shree Food Pro. 30 3 to 5
Titagarh Wagons Ltd. 540 to 610 Discount (However, there was high institution interest)
Kiri Dyes & Chemicals 125 to 150 6 to 8
Slow and unsteady!
The slower you go; the farther you will be.
The markets are getting slower, boring and yet choppy. The Finance Minister is visiting the Bombay Stock Exchange today. No fireworks are expected. Just yesterday he said the economic growth would slow in FY09 to around 8%. The Economist Intelligence Unit says growth will probably average around 7.5% for FY09 and FY10. For the day, we are mildly positive on the back of decent F&O cues and positive FII figures. If inflation softens a little, it will be a bonus for the bulls, but the volatility is here to stay.
Inflation figures will be released at noon, and a further spike in it could be a dampener. Over the past few days, the Government has taken several measures to boost domestic supply of key commodities. More steps are not ruled out if inflation remains above the RBI's comfort level of 4% for a sustained period.
A less than average rollover (63% vs 75%) in the F&O space suggests that the bulls may just be able to extend the current phase of recovery. The April Nifty futures ended yesterday at a premium of around 23 points to the spot Nifty. Also, the put-cal ratio of Nifty options for the April series has improved to 1.25 from under 1 that was the norm for most part of March series. These are indeed encouraging signs for the bulls who had been reeling under the bear squeeze since early part of January. Another positive is that the FIIs have been net buyers over the past few days.
So, in the near-term the bulls may just be able to hold the edge over the bears, unless another bad development takes place in the US. Still, one has to be on guard for any fresh negative news, from either abroad or from the home turf. On Tuesday, chairman of Bear Stearns' board sold 5.7mn shares at a price of $10.84 apiece ahead of the announcement that JP Morgan will buy the securities firm.
Next month's annual RBI policy meeting will be keenly followed for clues on the central bank's stance in the wake of the economic slowdown and spiraling inflation. The corporate report card for the fourth quarter will also play its role in determining the market sentiment. At the same time, one will have to keep oneself abreast with the events unfolding globally to gauge the impact on the Indian economy and local markets.
FIIs were net buyers of Rs2.48bn (provisional) in the cash segment yesterday while local institutions too pumped in Rs3.4bn. In the F&O segment, foreign funds were net buyers of Rs2.71bn. On Wednesday, FIIs were net buyers of Rs5.58bn in the cash segment while Mutual Funds pulled out Rs4.32bn on the same day.
Asian markets are trading mixed this morning. The Nikkei in Tokyo was nearly flat at 12,597 while the Hang Seng in Hong Kong rose 276 points or 1.2% at 22,940.
The Kospi in Seoul advanced 17 points or 1% to 1693 while the Straits Times in Singapore added 6 points to 3031. The Shanghai Composite in China gained 49 points or 1.4% at 3460 and the Taiex in Taiwan was static at 8609.
The MSCI Asia Pacific Index added 0.2% to 140.30 as of 11:33 a.m. in Tokyo, after earlier losing as much as 0.5%. An index of financial stocks retreated 1.2%, the biggest decline among the index's 10 industry groups.
The main MSCI benchmark gained 3.1% this week, its best weekly gain this year, as companies reported higher profits. The advance helped trim the index's 2008 decline to 11%. The benchmark is still on course for its worst quarter since the period ended Sept. 30, 2002.
Asian stock benchmarks advanced in other markets open for trading, except Australia and China.
US stocks closed lower for the second day running with the Dow Jones Industrial Average notching up its second straight triple-digit loss. Technology shares came under pressure as a result of disappointing numbers from Oracle and Google.
Oracle tumbled the most since November on revenue that trailed analysts' estimates. Google slid after the most popular search engine received fewer ad clicks last month. Lehman Brothers lost 9% as options traders increased bearish bets on the biggest US underwriter of mortgage bonds, while Bank of America and JPMorgan Chase fell on reduced earnings estimates for large banks.
The S &P 500 Index slipped 15.37 points, or 1.2%, to 1,325.76. The Dow lost 120 points, or 1%, to 12,302.46. The Nasdaq Composite index slid 44 points, or 1.9%, to 2,280.83.
Market breadth was negative. Three stocks fell for every one that rose on the New York Stock Exchange.
Financials and brokerages took a hit as a Lehman Brothers cut estimates on Citibank, Bank of America, UBS and other large banks. The analyst said losses from troubled loans will continue to drive down the banks' earnings. Two more analysts reduced estimates for Merrill Lynch.
The market opened the day higher after the government said personal spending, which accounts for more than two-thirds of the economy, rose at a 2.3% annual rate in the fourth quarter and jobless claims unexpectedly decreased last week.
The Commerce Department said its estimate of 0.6% growth in fourth-quarter GDP was unrevised from the previous two estimates.
A Texas judge ordered banks to fund the proposed $19bn acquisition of radio broadcaster Clear Channel by two private-equity firms. Clear Channel's shares rallied 11.3%, recovering much of the heavy losses they suffered Wednesday.
Boston Federal Reserve Bank President Eric Rosengren said credit market turmoil has reduced US banks' ability to lend, crimping economic growth. "As banks have seen housing prices decline, they have been reducing lines of credit associated with credit cards and home equity loans," Rosengren said in a speech in Seoul. Declining home prices also erode the collateral value for home-equity lines," he said.
Wall Street attempted several comebacks throughout the day, as the Fed auctioned off another $75bn in credit to investment banks. But the efforts for a rebound stalled each time, and stocks tanked towards the close of trade.
US light, crude oil for May delivery settled up $1.68 to $107.58 after surging more than $4 on Wednesday. Oil prices hit a record $111.80 in electronic trading last week. COMEX gold for April delivery settled down 40 cents to $948.80 an ounce. Gold hit an all-time trading high of $1,033.90 an ounce one week ago.
The dollar rose versus the euro and the yen. The greenback hit an all-time low versus the euro and a 13-year low versus the yen last week. Treasury prices slipped, raising the yield on the benchmark 10-year note to 3.53% from 3.47% late on Wednesday.
Across the Atlantic, European shares advanced. The pan-European Dow Jones Stoxx 600 index rose 1.3% to 308.46. The German DAX 30 closed up 1.4% to 6,578.06, while the UK's FTSE 100 increased 1% to 5,717.50 and the French CAC-40 rose 0.9% to 4,719.53.
In the emerging markets, the Bovespa in Brazil lost 1% at 60,761 while the IPC index in Mexico dropped 0.2% at 29,987. The RTS index in Russia rallied 1.75% to 2030 and the ISE National 30 index in Turkey finished almost flat at 50,693.
Choppiness may prevail
The benchmark Sensex which recorded its second biggest rally on Tuesday ended in negative terrain for second straight trading session. The major laggards were the IT, Bankex and Auto stocks which dragged the benchmark Sensex below the 16k mark hitting an intra-day low of 15,869. However, key indices managed to trim some losses, led by buying momentum in the Realty, FMCG, Power and Metal stocks. Finally, the BSE benchmark Sensex fell 71 points to 16,015 and the Nifty index ended flat at 4,830.
Overall about 1,490 stocks advanced; 1,223 stocks declined while 61 stocks remained unchanged. Among the 50 Nifty 28 stocks ended in positive territory. On the other hand, 22 stock ended in red.
BSE Realty index (up 2.2%), BSE FMCG index (up %), BSE Pharma index (up 1.3%), BSE Power index (up 1%) and BSE Metal index (up 0. 7%). On the other hand, BSE IT index (down 3%) and BSE Bankex index (down 1.5%).
Tata Motors dropped 3.5% to Rs655 after it signed a deal to buy luxury brands Jaguar and Land Rover (JLR) from Ford Motor for US$2.3bn in cash. The scrip touched an intra-day high of Rs689 and a low of Rs630 and recorded volumes of over 9,00,000 shares on BSE.
Nagarjuna Construction dropped by over 4.5% to Rs210. Media reports stated that 66 lakh shares of Nagarjuna Construction changed hands on BSE at an average price of Rs211. The scrip touched an intra-day high of Rs219 and a low of Rs208 and recorded volumes of over 68,00,000 shares on BSE.
PFC gained by 2% to Rs166 after the company announced that it has signed an MoU with RITES Ltd whereby both the parties have agreed to combine their resources and expertise to the facilitate import of coal from African countries and elsewhere to address the problem of power deficit in India. The scrip touched an intra-day high of Rs170 and a low of Rs158 and recorded volumes of over 6,00,000 shares on BSE.
Rajesh Exports gained by 3% to Rs72 after the company clarified saying that it they have no losses on options and commodity trading. The company also said that rising gold prices haven’t affected earning. The scrip touched an intra-day high of Rs74 and a low of Rs69 and recorded volumes of over 10,00,000 shares on BSE.
GMR Infra gained by 3% to Rs149 after media reports that they have bid for US-based power Generation Company. The scrip touched an intra-day high of Rs151 and a low of Rs141 and recorded volumes of over 24,00,000 shares on BSE.
J.B. Chemicals was locked at 20% upper circuit to Rs44.80 after the company announced its plan to buy back shares. The company would consider buyback plan on April 8. The scrip touched an intra-day high of Rs44.80 and a low of Rs37 and recorded volumes of over 4,00,000 shares on BSE.
Allahabad Bank was down 2% to Rs78. The company announced that they have cut PLR by 25bps. The scrip touched an intra-day high of Rs81 and a low of Rs77 and recorded volumes of over 1,00,000 shares on BSE.
Satyam Computer declined by over 4% to Rs395. The company announced the establishment of a Pega Business Process Management Center of Excellence (CoE) at its 2000-seat Global Solutions Center (GSC) at Cyberjaya, Malaysia. Satyam teamed with US-based business software maker, Pegasystems Inc., to create the facility. Satyam will leverage the capabilities of Pegasystems SmartBPM Suite to drive business agility, grow revenue, and improve productivity for its global customers. The scrip touched an intra-day high of Rs412 and a low of Rs392 and recorded volumes of over 3,00,000 shares on BSE.
Gujarat NRE Coke rallied by over 7% to Rs146 following reports that the company plans to set up coke oven flu gas power plants in its production facilities. The scrip touched an intra-day high of Rs152 and a low of Rs135 and recorded volumes of over 44,00,000 on BSE.
Corporate Front Page
Reliance Power to place Rs100bn equipment order for its power plants. (BS)
Ultratech to add 15mn tonne capacity by September. (BS)
Government relaxes Rs10bn equity investment cap on NTPC in a JV or subsidiary set up to bid for power projects. (FE)
Reliance Industries and BG group have sought 5mmsmd of gas produced from Panna-Mukta-Tapti gas fields before entering any agreement with Gail. (ET)
Maruti Suzuki to hike capacity to 1mn units by October; two years ahead of earlier schedule. (ET)
Daimler gets Government nod for Rs16.5bn JV with Hero Group. (BL)
Tata Tea to increase prices across all its seven brands. (BL)
Hindustan Zinc cuts zinc product prices by Rs5,200/tonne. (BL)
HCL Technologies' infrastructure deal with Bear Stearns could be in trouble. (ET)
India Cements to spend Rs20.1bn to boost capacity to about 14mtpa by December. (DNA)
UB has invested Rs700mn for a vineyard on 350 acres at Baramati. (DNA)
Prime Securities sets aside Rs230mn as a provision for losses suffered on investments during the recent market crash. (BS)
Power Finance Corporation and RITES sign a MoU to jointly import coal. (ET)
Dabur India has earmarked US$200mn for overseas acquisitions. (Mint)
Parsvnath Developers’ CFO quits on differences with the management. (BS)
Allahabad Bank cuts PLR as well as home loan rates by 25 bps effective next month. (BL)
Bharat Forge is eying 40% of revenues from non-automotive components in 3-4 years. (BS)
Firstsource Solutions is looking at healthcare industry for diversification. (FE)
Jindal India Thermal Power signs a MoU with MP Government for setting up a 2,000 MW coal-based power plant. (FE)
Volvo India to launch six car models in phases. (BL)
Japanese automaker Suzuki is likely to set up engineering and design work in India. (BL)
Economy News
Finance Minister admits to a lower GDP growth rate of near 8% in 2008-09. (FE)
TRAI proposes abolition of access deficit charge (ADC) wef April 1st 2008. (FE)
The Government is planning to ask iron ore producers to check prices. (FE)
The Government is planning to liberalise FDI norms in real estate by waiving two conditions; three year lock-in on foreign investment and the requirement of at least US$5mn investment in case of JVs. (ET)
IPO regime is set to change from July with requirement of 100% payment by QIBs and shorter period between IPO closing and listing. (BS)
DTH operators have approached TRAI asking it to fix the price that they have to pay to the broadcasters. (ET)
The Government projects 30% growth in exports in dollar terms in 2008-09. (BL)
The Government temporarily suspends export subsidy under the DEPB scheme on steel. (ET)
Trading Call - Orchid Chemicals
Buy Orchid Chemicals on declines with a stop loss of Rs 109 for a short term target of Rs 176
Today's Pick - Ranbaxy
We recommend a sell in Ranbaxy Laboratories from a short-term perspective. From the charts of the Ranbaxy Laboratories we see that the stock was on a medium-term uptrend from its January 2008 low of Rs 299 to a high of Rs 473 touched in mid March. After encountering resistance at around Rs 470 levels, the stock reversed direction recently, supported by the negative divergence in the daily momentum indicator. Subsequently, the stock began to decline and has breached the med ium-term up trendline and the 21-day moving average. We also notice that the volume has been declining since early March. The daily momentum indicator is falling in the neutral region and the weekly momentum indicator has entered the neutral region for the bullish zone. The moving average convergence divergence has crossed over, indicating a sell. Our short-term outlook for the stock is bearish. We expect the stock to decline to our target level of Rs 375 in the short term. Investors with a short-term perspective can sell the stock with stop loss at Rs 465.
Via BL
Bullion ends a little lower
Gold prices end marginally lower while silver ends marginally higher
Dollar rebounded today and thus precious metals ended almost unchanged today, Thursday, 27 March, 2008. Benign economic news helped dollar rebound today after the same fell to new lows against the euro since past couple of days. A lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies. Silver prices rose for the day. Last week, gold and silver prices had dropped by 8% and 18% respectively.
After dropping more than 8% last week, Comex Gold for June delivery fell $0.20 (0.2%) to close at $954 ounce on the New York Mercantile Exchange. Earlier last week on Monday, 17 March, prices skyrocketed to a high of $1,034/ounce. Since past couple of sessions, prices had gained almost 4%.
This year, gold prices have gained 12.3% till date. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. But in March, prices have succumbed. Last week, gold prices shed 8.3%.
Comex Silver futures for May delivery rose 16.7 cents (0.9%) to $18.55 an ounce. Silver has gained 25% 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%.
In the currency market today, the dollar rose as much as 0.8% against the euro.
In the energy market today, crude oil rose above $107 a barrel in New York after a pipeline explosion in southern Iraq cut supplies to the country's main export terminal.
Barring these three days, gold and silver prices had dropped in the three days prior to that. Prices were pressured as dollar strengthened. Dollar continued to rally after Federal Reserve decided to cut overnight lending rate by 75 bps to 2.25% earlier last week. A stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies. Hence, bullion metals along with other metals witnessed intense sell off together as traders parted away with commodities.
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.
The Fed action took the federal funds rate target down to 2.25%, the lowest since December 2004. Since last September, Fed has axed interest rates six times.
Gold witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. The Fed reduced federal funds rate three times in FY 2007. In 2006, silver had jumped 46% while gold gained 23%. Gold has tripled in five years as investment demand has soared and mine supplies have remained low.
At the MCX, gold prices for April delivery closed lower by Rs 1(0.008%) at Rs 12,334 per 10 grams. Prices rose to a high of Rs 12,385 per 10 grams and fell to a low of Rs 12,116 per 10 grams during the day’s trading.
At the MCX, silver prices for May delivery closed Rs 123 (0.51%) higher at Rs 23,948/Kg. Prices opened at Rs 23,911/kg and rose to a high of Rs 24,000/Kg during the day’s trading.
Turnover in F&O segment rises
Turnover in F&O segment rises
Nifty April 2008 futures were at 4849.45, at a premium of 19.20 points as compared to spot closing of 4830.25.
The NSE's futures & options (F&O) segment turnover was Rs 64,308.86 crore, which was higher than Rs 57,628.83 crore on Wednesday, 26 March 2008.
Reliance Industries (RIL) April 2008 futures were at premium at 2292 compared to the spot closing of 2270.80.
Larsen & Toubro (L&T) April 2008 futures were at premium at 2965 compared to the spot closing of 2959.95.
Tata Motors April 2008 futures were at premium at 656 compared to the spot closing of 655.35.
In the cash market, the S&P CNX Nifty gained 1.40 points or 0.03% at 4830.25.
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