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Monday, April 28, 2008
Sensex down as market looks for RBI Policy
In a choppy trade, the Bombay Stock Exchange benchmark Sensex closed lower by 110 points as funds and investors turned cautious ahead of the RBI`s Credit Policy and the US Fed decision on interest rate.
The Sensex, which gained nearly 405 points on Friday, turned weak and lost 110.02 points at 17,015.96 as market players adjusted their positions before the Reserve Bank of India`s meeting on Credit Policy tomorrow.
Foreign funds were also cautious before the US Federal Reserve meeting on interest rate. The Fed is scheduled to meet on April 29-30.
The key-index touched the day`s high of 17,271.56 and low of 16,978.89 points.
The downward trend was checked at some levels as Reliance Power, Reliance Natural and Reliance Energy gained on attractive quarterly results.
The wide-based National Stock Exchange index Nifty also fell by 22.05 points at 5,089.65, after touching the day`s high of 5,147.45 and low of 5,079.15 points.
NSE Bulk Deal Watch - Apr 28 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
28-APR-2008,GEOMETRIC,Geometric Limited,VINAMRA UNIVERSAL TRADERS PVT.LTD.,BUY,366719,59.00,-
28-APR-2008,LICHSGFIN,LIC Housing Finance Ltd,MIRAE ASSET MANAGEMENT CO LTD,BUY,572732,347.33,-
28-APR-2008,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD,BUY,3788505,52.75,-
28-APR-2008,ORCHIDCHEM,Orchid Chemicals Ltd.,SURESH U.TREVADIA,BUY,329490,240.24,-
28-APR-2008,SITASHREE,Sita Shree Food Products,AMBIT SECURITIES BROKING PVT. LTD.,BUY,116685,57.91,-
28-APR-2008,SITASHREE,Sita Shree Food Products,DIPAK RAMANBHAI RATHOD,BUY,169191,58.41,-
28-APR-2008,SITASHREE,Sita Shree Food Products,MAHESH CHAND MITTAL,BUY,100000,57.69,-
28-APR-2008,SITASHREE,Sita Shree Food Products,MANOJ NANDKISHOR TEKRIWAL,BUY,243947,59.53,-
28-APR-2008,SITASHREE,Sita Shree Food Products,V J PATEL INVESTMENT,BUY,134250,59.94,-
28-APR-2008,VISESHINFO,Visesh Infotecnics Limite,HONEY BEE SECURITIES LIMITED,BUY,2500,17.50,-
28-APR-2008,CHI,CHI Investments Limited,HSBC GLOBAL INVESTMENT FUNDS A/C HSBC GLOBAL INVESTMENT FUND,SELL,109618,82.36,-
28-APR-2008,CHI,CHI Investments Limited,MERILL LYNCH CAPITAL MARKETS ESPANA S A SV,SELL,65000,87.33,-
28-APR-2008,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD,SELL,3788505,52.79,-
28-APR-2008,ORCHIDCHEM,Orchid Chemicals Ltd.,SURESH U.TREVADIA,SELL,329490,240.41,-
28-APR-2008,SITASHREE,Sita Shree Food Products,AMBIT SECURITIES BROKING PVT. LTD.,SELL,116685,57.90,-
28-APR-2008,SITASHREE,Sita Shree Food Products,DIPAK RAMANBHAI RATHOD,SELL,169191,60.25,-
28-APR-2008,SITASHREE,Sita Shree Food Products,MAHESH CHAND MITTAL,SELL,148000,58.97,-
28-APR-2008,VISESHINFO,Visesh Infotecnics Limite,HONEY BEE SECURITIES LIMITED,SELL,227500,17.51,-
BSE Bulk Deals to Watch - Apr 28 2008
Deal Date Scrip Code Scrip Name Client Name Deal Type * Quantity Price **
28/4/2008 531881 ARVIND CHEM GAURAV VINIMAY PVT LTD B 160177 43.81
28/4/2008 505506 AXON INFOTEC EUREKA STOCK AND SHARE BROKING SERVICES LTD S 5391 39.19
28/4/2008 532946 BANG MARUTI SECURITIES LTD B 91389 202.20
28/4/2008 530545 COSCO INDIA NAVENDU INVESTMENT CO PVT LTD S 23000 29.59
28/4/2008 532271 CYBERMAT INF EDELWEISS ESTATES PRIVATE LIMI B 730859 7.16
28/4/2008 532271 CYBERMAT INF EDELWEISS ESTATES PRIVATE LIMI S 781397 7.06
28/4/2008 532823 EURO CERAMIC RAMESH UTTAMCHAND RAMCHANDANI B 280836 155.00
28/4/2008 532318 GEMINI COMMU AYODHYAPATI INVESTMENT PVT LTD B 113327 251.80
28/4/2008 532318 GEMINI COMMU AYODHYAPATI INVESTMENT PVT LTD S 113327 251.30
28/4/2008 530701 GOMTI FINLEA HANUMAN LAMINATES PVT. LTD S 60100 3.63
28/4/2008 530701 GOMTI FINLEA MAHARASHTRA LAMINATES LTD. S 24000 3.89
28/4/2008 530777 INFRA INDUST VIRAL PRAFUL JHAVERI B 100010 6.35
28/4/2008 516078 JUMBO BAG LT VINAY JAIN S 39770 46.69
28/4/2008 530955 KAILASH FICO ABHA TRADEFIN PVT LTD S 99000 31.68
28/4/2008 531602 KOFF BR PICT UNIVERSAL CREDIT B 51000 20.93
28/4/2008 519560 NEHA INTERNA SANGITA KALPESH CHAWALLA B 50000 62.00
28/4/2008 524570 PODDAR PIGME GUJARAT FLUOROCHEMICALS LIMITE S 148500 30.79
28/4/2008 531374 SAAG RR INFR ANGEL INFIN PRIVATE LIMITED B 90500 61.35
28/4/2008 531374 SAAG RR INFR ASTUTE COMMODITIES AND DERIVATIVES PVT LTD B 72125 61.31
28/4/2008 531374 SAAG RR INFR ANGEL INFIN PRIVATE LIMITED S 90692 61.39
28/4/2008 531374 SAAG RR INFR ASTUTE COMMODITIES AND DERIVATIVES PVT LTD S 94956 61.39
28/4/2008 507894 SCHABLONA IN FOOT FAD PVT LTD S 20000 20.10
28/4/2008 532961 SITA SHREE KASHISH FINSTOCK B 177689 58.53
28/4/2008 532961 SITA SHREE N D NISSAR B 241793 58.11
Sensex sheds 110 points ahead of RBI policy review
The market snapped last two day’s rally to end in the red. The 30-share BSE Sensex fell below 17,000 level in late trading before once again regaining that level shortly. Investors were cautious ahead of central bank’s monetary policy meet tomorrow, 29 April 2008. Capital goods, IT and oil & gas stocks slipped. European markets which opened after Indian market were in the green.
Among interest rate sensitive stocks, while banking shares edged lower, realty and auto stocks rose ahead of Reserve Bank of India’s annual monetary policy review tomorrow 29 April 2008. Metal stocks were mixed following reports the government plans to rejig the duty structure to rein in surging steel prices. The market breadth was negative.
The 30-share BSE Sensex lost 110.02 points or 0.64% to 17,015.96. The market had moved in a narrow range, moving between positive and negative zone in early afternoon trade. A bout of volatility was witnessed earlier in the day. The market had opened on a firm note extending last week's rally. Sensex hit a high of 17,271.56 in early trade. At the day’s high, Sensex rose 145.58 points. Sensex hit a low of 16,978.89 in late trade. At day’s low Sensex fell 147.09 points.
The BSE clocked a turnover of Rs 5511 crore as compared to Rs 6060.58 crore on Friday, 25 April 2008.
The NSE's futures & options (F&O) segment turnover was Rs 25,459.22 crore, which was lower than Rs 33,831.87 crore on Friday, 25 April 2008.
The broader based S&P CNX Nifty was down 22.05 points or 0.43% at 5,089.65. Nifty May 2008 futures were at 5117, at a premium of 27.35 points as compared to spot closing of 5089.65.
The market breadth was negative on BSE with 1295 shares advancing as compared to 1374 that declined. 71 remained unchanged.
The BSE Mid-Cap index rose 0.16% to 7067.40 while BSE Small-Cap index declined 0.21% to 8,709.82.
BSE Metal index (down 0.71% to 15624.22), BSE IT index (down 0.9% to 4026.74), BSE Oil & Gas index (down 1.08% to 11430.02) and BSE Capital Goods index (down 1.2% to 13755.04) undrperformed Sensex.
BSE Consumer Durables index (up 1.87% to 4460.65), BSE PSU index (up 0.53% to 7878.78), BSe HealthCare index (up 0.32% to 4,215.91), BSE Realty index (up 0.22% to 8,168.07), BSE Power index (down 0.15% to 3,304.59) and BSE FMCG index (down 0.28% to 2,400.22), BSE Auto index (down 0.57% to 4,577.20) and BSE Bankex (down 0.58% to 8,816.54) outperformed Sensex
As per the provisional figure, Foreign institutional investors (FII) sold shares worth Rs 38.33 crore today, 28 April 2008 and domestic funds sold shares worth Rs 166.61 crore.
Capital goods stocks declined. Larsen & Toubro (down 0.86% to Rs 2,945.75), and Suzlon Energy (down 3.75% to Rs 278.45) edged lower. India’s largest electric equipment maker by sales Bharat Heavy Electricals was flat at Rs 1,867.
Oil & gas stocks were mostly in the red. Reliance Industries (down 1.24% to Rs 2,592.05), ONGC (down 0.72% to Rs 1,047.40), Reliance Petroleum (down 0.41% to Rs 193.95), BPCL (down 0.56% to Rs 391.40) and GAIL India (down 1.83% to Rs 436.90) edged lower. However, Indian Oil (up 1.88% to Rs 445) and HPCL (up 2.32% to Rs 253.35) edged higher.
New York crude oil futures hit a new record of $119.93 a barrel on Monday 28 April 2008, pushed higher as a refinery strike closed the BP PLC (BP)- operated Forties pipeline, which moves about 7,00,000 barrels of oil a day, or 40% of the UK's oil production.
Oil marketing firms Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) are making losses on retail sale of petrol and diesel as they are not allowed to pass on the rise in oil prices to retail consumers.
Consumer durables stocks rose. Titan Industries (up 6.38% to Rs 1,190.80), Lloyd Electric (up 3.65% to Rs 113.50), Videocon Industries (up 0.6% to Rs 378.95) edged higher.
IT stocks declined. Wipro (down 1.82% to Rs 457.70), Infosys (down 1.27% to Rs 1,664.95), Satyam Computer Services (down 0.37% to Rs 442.95) and Tata Consultancy Services (down 0.76% to Rs 883) edged lower.
Realty stocks rose. Unitech rose 1.61% to Rs 293.50. Two Middle East-based wireless operators — Kuwait’s Zain and UAE’s Emirates Telecommunications Corporation (Etisalat) — have reportedly joined South Africa’s MTN and Russia’s Altimo in the race to acquire 25-35% stake in Unitech’s new telecom venture.
Anant Raj Industries (up 8.01% to Rs 296.10) and DLF (up 0.06% to Rs 668.55) edged higher. However, Indiabulls Real Estate declined 2.56% to Rs 540.80. If the interest rates move up further, the cost of capital for new as well as ongoing realty projects will increase. The real estate market is already witnessing a slowdown and this will compound the problem.
Banking stocks declined. India’s largest private sector bank by assets ICICI Bank declined 2.31% to Rs 894.95. It came off from session's high of Rs 947. ICICI Bank reported 39.4% rise in net profit to Rs 1149.84 crore on 22.3% increase in operating income to Rs 10390.92 crore in Q4 March 2008 over Q4 March 2007.
India’s second largest private sector bank in terms of net profit HDFC Bank rose 1.38% to Rs 1517.95. However India’s largest commercial bank State Bank of India declined 0.77% to Rs 1,736.65.
India’s largest tractor maker by sales Mahindra & Mahindra declined 0.08% to Rs 635.25. The board of Mahindra & Mahindra will meet on Saturday, 3 May 2008 to consider a proposal for a private placement of securities.
India’s largest car maker by sales Maruti Suzuki India declined 1.68% to Rs 724.90. India's biggest motorcycle maker by market share Hero Honda Motors rose 1.34% to Rs 818.15.
India' s largest truck maker by sales Tata Motors declined 0.86% to Rs 633.60.
Metal stocks were mixed. Sesa Goa surged 5.91% to Rs 3,707. The board of Sesa Goa will meet today, 28 April 2008 to consider a stock split and bonus share issue. But Tata Steel (down 3.19 % to Rs 777.70), Steel Authority of India (down 0.82% to Rs 175.75), Hindalco Industries (down 1.48% to Rs 186.20) edged lower. India’s largest public sector aluminium maker by sales National Aluminium Company (Nalco) declined 1.52% to Rs 439.50. It has reportedly lined up a $1 billion investment to put up smelters and a power plant in Iran.
Sterlite Industries (India) rose 2.63% to Rs 857.90. It reported 46.50% rise in net profit to Rs 306.45 crore on 14.75% rise in sales to Rs 3379.53 crore in Q4 March 2008 over Q4 March 2007.
Reportedly, the government is planning duty rejig to cool steel prices. Government is set to remove import duty on pig iron, mild steel, metcoke and levy 10% export duty on bars, rods, HR coils, HR sheets, HSM plates, CR coils, CR sheets, galvanised steel products, pipes and tubes. Besides, export duty of 10% is likely to be imposed on semi-finished products like pig iron, sponge iron, steel and iron scraps, reports suggest.
Jaiprakash Associates (up 2.22% to Rs 251.15), Reliance Communications (up 1.34% to Rs 584.80), HDFC (up 0.96% to Rs 2719.75), NTPC (up 0.18% to Rs 192.95) edged higher from Sensex pack.
Cipla (down 4.08% to Rs 215.15), Ambuja Cement (down 1.26% to Rs 113.35), ACC (down 2.04% to Rs 766.80), Hindustan Unilever (down 1.02% to Rs 247.20) edged lower from Sensex pack.
India’s second largest power utility firm by sales Reliance Energy rose 4.95% to Rs 1,426.10. The company’s net profit rose 35.33% to Rs 1084.63 crore on 14.08% rise in total income to Rs 7501.2 crore in FY 2008 over FY 2007.
Reliance Natural Resources clocked the highest volume of 2.4 crore shares on BSE. Nagarjuna Fertilisers and Chemicals (1.59 crore shares), IFCI (1.14 crore shares), Ispat Industries (1.07 crore shares) and Indiabulls Securities (97.9 lakh shares) were the other volume toppers in that order.
Reliance Natural Resources clocked the highest turnover of Rs 304.54 crore on BSE. Reliance Energy (Rs 257.66 crore), Reliance Capital (Rs 173.89 crore), Reliance Industries (Rs 158.17 crore) and Orchid Chemicals & Pharmaceuticals (Rs 140.62 crore) were the other turnover toppers in that order.
European markets opened strong. France’s CAC 40, Germany’s DAX and UK’s FTSE 100 were up by between 0.45% to 1.01%.
Asian markets were mixed. Indices in Hong Kong, Japan, Singapore, Taiwan were up by between 0.22% to 0.53%. China’s Shanghai Composite was down 2.33% and Singapore’s Seoul composite was down 0.08%.
After witnessing a battering in the last three months, the market has staged a comeback in the past few days on the back of good Q4 results and on firm global markets. Buying by domestic institutions has supported the market. The BSE Sensex gained 2316.49 points or 15.64% to 17,125.98 on 25 April 2008 from a recent low of 14,809.49 touched on 17 March 2008. However, it is still off substantially from its all time high of 21,206.77 hit on 10 January 2008.
The next two-three days may see the market remain in a wait and watch mode because of important events. RBI is set to unveil annual monetary policy review on Tuesday, 29 April 2008. Given the high inflation, the central bank may hike key rates. The stock market has factored in a 25 basis points hike in short term rates by RBI.
Meanwhile, the two-day discussion on Finance Bill 2008-09 begins in Lok Sabha today. The Finance Bill will be passed in Lok Sabha tomorrow, 29 April 2008.
The two-day US Federal Reserve policy meeting ends on Wednesday, 30 April 2008. The market expects the Fed to cut interest rates by 25 basis points to 2% and then signal that its rate-cutting cycle may be over for now in the face of mounting global energy and food inflation pressure.
Meanwhile, good news for India is that as per the latest 2008 US-India Business Council (USIBC) survey, India is, and will continue to be, a premier destination for investment by US firms, with a large number of respondents rating future economic growth in India as highly sustainable. USIBC, formed in 1975 at the request of the Government of India and the US Government to advance US-India commercial ties, is hosted under the aegis of the US Chamber of Commerce. The US Chamber of Commerce is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.
The Dow Jones Industrial Average and S&P 500 rose on Friday, 25 April 2008, after signs that American Express Co was holding its own amid the economic slowdown, but Microsoft Corp's weak profit forecast pulled down the Nasdaq. American Express said its quarterly profit fell, but the results beat expectations and the company affirmed its full-year earnings forecast, lifting its shares 5.7% and helping to boost the Dow. Higher oil prices underpinned the market's rise by lifting shares of oil services companies nearly 2% after a cargo ship chartered by the US military fired warning shots at two small boats in the Gulf.
The Dow Jones industrial average rose 42.91 points, or 0.33%, to end at 12,891.86. The Standard & Poor's 500 Index gained 9.02 points, or 0.65%, to 1,397.84. But the Nasdaq Composite Index fell 5.99 points, or 0.25%, to 2,422.93.
Post Market Commentary - Apr 28 2008
The Indian market closed in the negative territory after facing the volatility throughout the trading session. The market opened on a strong note tracking the firm cues from the global markets but was unable to sustain at higher levels and kept on moving between the positive and negative territory. Also, the RBI’s monetary policy review which is scheduled tomorrow and US Fed’s policy meeting on April 30 led the investors to take cautious approach through out the trading session. The market breadth was weak as 1374 stocks closed in red while 1295 stocks closed in green.
The BSE Sensex closed lower by 110.02 points at 17,015.96 and NSE Nifty fell by 22.05 points to close at 5,089.65. The BSE Mid Caps closed up by 11.19 points at 7,067.40 while Small Cap closed lower by 17.90 points at 8,709.82.
Major losers from the BSE are Siemens (9.87%), Spice Tele (4.45%), Cipla (4.08%), Infra Dev Fin (3.83%), Suzlon Energy (3.75%) and Indus Ind Bank (3.63%).
Gainers from the BSE are LIC Housing Finance (11.60%), Bharat Ele (7.39%), Deccan Aviation (6.48%), Titan inds (6.38%), Pantaloon Retail (5.98%), Sesa Goa (5.91%), Lanco Infra (5.48%).
The Capital Goods index dropped by 166.83 points to close at 13,755.04. Major losers are Siemens (9.87%), Suzlon Energy (3.75%), Alstom Projects (2.77%), ABB (1.65%), Crompton Greaves (1.54%), L&T (0.86%), Lakshmi Machines (0.79%).
The Metal index dropped by 110.96 points to close at 15,624.22. Losers are Welspun Guj (3.51%), Tata Steel (3.19%), Jindal Stainless (2.37%), Ispat inds (2.30%), Nalco (1.52%), Hindalco inds (1.48%) and JSW Steel (1.12%).
The Bankex index fell by 51.24 points to close at 8,816.84 as Karnataka bank (2.97%), Canara bank (2.68%), ICICI bank (2.31%), Federal bank (1.83%), Yes bank (0.94%), SBI (0.77%) closed in red while Kotak bank (3.11%), Union bank (2.02%) and IOB (2.15%) closed in green.
The Oil & Gas index slipped by 124.57 points to close at 11,430.02. Scrips that fell are Essar Oil (3.10%), Gail India (1.83%), Aban Offshore (1.45%), Reliance inds (1.24%), RPL (0.41%) and RNRL (0.28%).
The Realty index closed marginally higher by 18.30 points at 8,168.07. Gainers are Anant Raj inds (8.01%), Mahindra Life (4.83%), Ansal Infra (2.40%), Unitech (1.61%), Akruti City (1.52%).
Sensex sheds 110 points
The Sensex opened in positive territory on firm Asian markets and buying interest in cement, sugar and banking stocks. However the Sensex came off its high on substantial selling in heavyweights, CG and oil & gas stocks and slipped into red. After wiping out the early gains of 146 points, the market remained weak throughout the session. The Sensex slipped further in the afternoon on reports of a rise in the inflation rate and touched a low of 16,979, down 293 points from the day's high. There was buying at lower levels and the Sensex managed to pare some losses towards the close and end the session at 17,016, down 110 points. The Nifty shed 22 points and closed at 5,090.
Among the draggers of the index, Cipla shed 4.08% at Rs215.15, Tata Steel slumped 3.19% at Rs777.70, ICICI Bank declined 2.31% at Rs894.95, ACC lost 2.04% at Rs766.80, Maruti dipped 2.02% at Rs722.35, Wipro dropped 1.82% at Rs457.70, Hindalco slipped by 1.48% at Rs186.20, Infosys faltered 1.27% at Rs1,664.95 and Ambuja was down 1.26% at Rs113.35. However, Reliance Energy rose 4.95% at Rs1,426.10, Jaiprakash Associates raised 2.22% at Rs251.15, Reliance Communications moved up 1.34% at Rs584.80 and HDFC Bank was nearly up a per cent at Rs1,517.95.
All the 13 sectoral indices bar the four ended in red. The BSE CG index was the major loser and dropped 1.20% at 13,755 followed by the BSE Oil & Gas (down 1.08% at 11,430), the BSE IT index (down 0.90% at 4,063) and the BSE Metal index (down 0.71% at 15,624). The breadth of the market ended weak. Of the 2,469 stocks traded on the BSE, 1,374 stocks declined, 1,295 stocks advanced and 71 stocks ended unchanged.
CG stocks declined sharply. Siemens tumbled 9.87% at Rs580.65, Kisloskar Brothers dropped 5.53% at Rs287.20, Suzlon Energy lost 3.75% at Rs278.45, Elecon slipped by 2.77% at Rs170.35 and Kirloskar OIL shed 2.66% at Rs108. ABB, Crompton Greaves, L&T and Lakshmi Machine were down around 1% each.
Over 2.44 crore RNRL shares changed hands on the BSE followed by Nagarjuna Fertilisers & Chemicals (1.59 crore shares), IFCI (1.14 crore shares), Ispat Industries (1.07 crore shares) and IB Securities (1.07 crore shares).
Trading Calls - Reliance Communications, Bharti Airtel
Buy Reliance Communication with a stop loss of Rs 525 with resistance at Rs 610 and Rs 633
Buy Bharti Airtel with a stop loss of Rs 840 with resistance at Rs 950 and Rs 1012
Market may extend gains
The initial batch of Q4 March 2008 results have been good with the exception of Tata Consultancy Services (TCS). ICICI Bank on Saturday, 26 April 2008, reported 39% growth in net profit to Rs 1149.84 crore on 22.3% growth in total income to Rs 10390.92 crore in Q4 March 2008 over Q4 March 2007.
After witnessing a battering in the last three months, the market has staged a comeback in the past few days on the back of good Q4 results and on firm global markets. Buying by domestic institutions has supported the market. The BSE Sensex gained 2316.49 points or 15.64% to 17,125.98 on 25 April 2008 from a recent low of 14,809.49 touched on 17 March 2008. However, it is still off 4080.79 points or 19.24% from its all time high of 21,206.77 hit on 10 January 2008.
The next two days may see the market remain in a wait and watch mode because of important events. RBI is set to unveil annual monetary policy review on Tuesday, 29 April 2008. Given that the high inflation, the central bank may hike key rates. The stock market has factored in a 25 basis points hike in short term rates by RBI.
Meanwhile, the two-day discussion on Finance Bill 2008-09 begins in Lok Sabha today. The Finance Bill will be passed in Lok Sabha tomorrow, 29 April 2008.
As per provisional data, FIIs bought shares worth a net Rs 313.09 crore on Friday, 25 April 2008. Domestic funds sold shares worth a net Rs 75.47 crore on that day.
FIIs were net buyers of Rs 1,222.79 crore in the futures & options segment on Friday. According to data released by the NSE, FIIs were net buyers of index futures to the tune of Rs 672.32 crore and bought index options worth Rs 452.66 crore. They were net buyers of stock futures to the tune of Rs 53.64 crore and bought stock options worth Rs 44.16 crore
Meanwhile, good news for India is that as per the latest 2008 US-India Business Council (USIBC) survey, India is, and will continue to be, a premier destination for investment by US firms, with a large number of respondents rating future economic growth in India as highly sustainable. USIBC, formed in 1975 at the request of the Government of India and the US Government to advance US-India commercial ties, is hosted under the aegis of the US Chamber of Commerce. The US Chamber of Commerce is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.
The Dow Jones Industrial Average and S&P 500 rose on Friday, 25 April 2008, after signs that American Express Co was holding its own amid the economic slowdown, but Microsoft Corp's weak profit forecast pulled down the Nasdaq. American Express said its quarterly profit fell, but the results beat expectations and the company affirmed its full-year earnings forecast, lifting its shares 5.7% and helping to boost the Dow. Higher oil prices underpinned the market's rise by lifting shares of oil services companies nearly 2% after a cargo ship chartered by the US military fired warning shots at two small boats in the Gulf.
The Dow Jones industrial average rose 42.91 points, or 0.33%, to end at 12,891.86. The Standard & Poor's 500 Index gained 9.02 points, or 0.65%, to 1,397.84. But the Nasdaq Composite Index fell 5.99 points, or 0.25%, to 2,422.93.
Asian stocks were mostly in green today. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore, and Taiwan were up by between 0.07% to 1.27%.
Morning Call - Apr 28 2008
Market Grape Wine :
In House :
Nifty at a support of 5010 and 5060 resist of 5143 and 5185
Sensex at a support of 16968 and 16810 resist of 17200 and 17340
Cash:
Buy: century textile above 810 tgt of 832 with a SL of 801
Buy: Balaampurchini above 102 tgt of 109 with a SL 99
F&O:
Buy: Lichousing above 315 tgt of 334 with a SL of 308
Sell: Essaroil below 282 tgt of 266 with a SL of 289
Out House :
Markets at a support of 16786 & 17017 and resistance at 17272 & 17474 levels .
Buy : RPL & RPower
Buy : RIL
Buy : LKP & IOL
Buy : Tisco
Buy : BombayDye & UBulls
Buy : GujNRE
Buy : Coreproject ( bullet )
Buy : HDIL & Unitech
Buy : Bhel & BEL
Dark Horse : LT , HDIL, IBull , CORE, RIL , RPOWER & RPL
R
Today's Pick - MTNL
We recommend a buy in Mahanagar Telephone Nigam from a short-term perspective. From the charts of Mahanagar Telephone Nigam, we see that the stock has been trending up from its 52-week low of Rs 92 (touched on March 24). The positive divergence in the daily momentum indicator had supported the stock and aided its upward reversal. During the current up move, the stock crossed over 21- and 50-day moving averages one after other. We notice that there is an increase in volume over the past two weeks. The daily moving average convergence and divergence had displayed a positive divergence and it is on the verge of entering the positive territory. The daily momentum indicator is featuring the bullish region and the weekly momentum indicator has entered the neutral region from the bearish zone.
Our short-term outlook for the stock is bullish. We expect the stock to move up to our price target of Rs 128 in the short-term. Investor with short-term perspective can buy the stock while keeping the stop-loss at Rs 106.
Trading Calls - Apr 28 2008
Nifty (5112) Sup 5060 Res 5180
Buy Bharti (922) SL 914
Target 940, 945
Buy ONGC (1055) SL 1045
Target 1080, 1085
Buy RNRL (124) SL 120
Target 130, 132
Buy M&M (634) SL 627
Target 648, 653
Sell Patni (250) SL 255
Target 240, 238
Hunting bulls hope to remain safe!
The bird hunting a locust is unaware of the hawk hunting him.
Technically and even sentimentally speaking, the bulls are on a roll, with the key indices posting strong gains in the past couple of weeks. The market has recovered smartly on the back of a firm global trend. The bulls have chosen to overlook the CRR hike, rising inflation, mixed corporate results and soaring oil prices. The RBI will announce its annual monetary policy tomorrow, and there is a fair chance of the central bank maintaining its hawkish stance. Inflation rose further to 7.33% for the week ended April 12 versus 7.14% in the previous week. Experts are divided whether the RBI will go for a 25 bps increase in short-term rates. The market could get a jolt if it does announce a small rate hike. On the other hand, a status quo may prove to be a shot in the arm for the bulls.
The current intermediate uptrend is most likely to persist, however, the rally may face some resistance as FIIs have largely been in the sidelines. Globally, we may well have a 25 bps rate hike from the Federal Reserve, on April 30. But, our market will only be able to react to the Fed decision and to whatever comments it makes on May 2, as the markets will be shut on Thursday on account of Maharashtra Day. Wall Street will also brace for a few key economic reports - first-quarter GDP data, ISM's Manufacturing report and the jobs data.
So, we are in for a cracker of a week in terms of big-ticket events. Plus, the results will continue to pour in over the next few days. Some more results are expected next month too. The slew of events and results will keep the bulls on tenterhooks, though they would certainly like to carry on the good work of the past two weeks. Today, we expect the market to open higher owing to positive global cues. The Nifty is likely to cross its 200 day moving average of 5150. But, it remains to be seen if it manages to sustain that level.
Key Results Today: 3M India, Akruti City, Allied Digital, Alok Industries, Bata India, BOC India, CESC, Clutch Auto, Consolidated Construction, Cords Cable, Diamond Cables, Dwarikesh Sugar, Eicher Motors, Euro Ceramics, Finolex Cables, Glenmark Pharma, Godrej Consumer, GSS America, Hexaware, Hikal, Hindustan Unilever, Indian Overseas Bank, IDFC, Ingersol Rand, KPIT Cummins, Monnet Ispat, Nirma, Nitco Tiles, Plethico Pharma, Reliance Energy, RNRL, Sesa Goa, Shiv-Vani Oil, Strides Arcolab, Subros, Sunil Hitech, TV18, Thomas Cook India, Titagarh Wagons, Welspun Gujarat and Wockhardt.
M&M could be in action as it's Board will meet on May 3 to consider a proposal from prospective investor(s) for private placement of securities.
FIIs were net buyers to the tune of Rs3.13bn (provisional) in the cash segment on Friday while local institutions were net sellers of Rs754.7mn. In the F&O segment, foreign funds were net buyers of Rs12.23bn.
Asian markets rose this morning, sending the region's benchmark to a three-month high. The MSCI Asia Pacific Index gained 0.9% to 150.63 as of 10:37 a.m. in Tokyo, headed for its highest close since Jan. 15. Financial stocks had the biggest increase among the index's 10 industry groups.
Japan's Nikkei 225 Stock Average added 1% to 13,995.15. Brother Industries, the maker of fax machines and printers, soared the most in almost two years after Mizuho Securities Co. upgraded its stock rating.
US blue chip shares rose on Friday, with the Dow Jones Industrial Average closing at a nearly 4-month high. The Dow added 0.3% to end at 12,891.86, closing at its highest point since January 3. The broader Standard & Poor's 500 index added 0.7% to a three-month high of 1,397.84. The Nasdaq Composite index lost 0.3% to close at 2,422.93. The three major stock gauges ended moderately higher on the week, too.
US stocks slipped throughout the session Friday on surging oil and gas prices, a weak consumer sentiment number and Microsoft's outlook, following a two-day rally that had left the Dow at a multi-month high. But by the late afternoon, investors had shrugged off most of the day's losses, with strength in financials, retailers and other areas of the market sparking a recovery.
US light crude oil for June delivery jumped $2.46 on supply concerns to settle at $118.42 a barrel on the New York Mercantile Exchange. The national average price for a gallon of regular unleaded gas hit an all-time record of $3.577, AAA reported.
COMEX gold for June delivery rose 30 cents to settle at $889.70 an ounce. The dollar rose versus the euro and the yen. Treasury prices fell, raising the yield on the benchmark 10-year note to 3.87% from 3.82% late on Thursday.
The University of Michigan's consumer sentiment index for April was revised down to 62.6 from 69.5 in March, a 26-year low reflecting the impact of higher fuel prices and falling housing prices.
In other news, the Government said it will begin distributing the economic stimulus payments four days earlier than initially planned, sending out the first 800,000 checks on Monday.
European shares ended higher on Friday for the third day in a row. The pan-European Dow Jones Stoxx 600 index rose 1.3% to 321.70, with technology shares leading the charge. The French CAC-40 rose 1% to 4,978.21 and the German DAX 30 climbed 1.1% to 6,896.58. The UK's FTSE 100 gained 0.7% to 6,091.40.
In the emerging markets, the Bovespa in Brazil climbed by nearly 1% to 65,187 while the IPC index in Mexico shed 2.3% to 31,009. The RTS index in Russia was up 1.3% at 2129 and the ISE National 30 index in Turkey gained 1.1% at 54,636.
Bulls look to extend gains
After Thursday’s decline, bulls made a strong come back on Friday a strong close in the US market and a firm start in equity markets across Asia lifted the sentiment on Indian bourses. The sentiment further improved after telecom major Bharti Airtel beat the street estimates.
Bulls shrugged off the spike in the inflation figures lifting the Nifty index above the 5100 mark and the Sensex index above the 17k mark. India’s Inflation rate was at 7.33% for the week ended April 12 as compared to 7.14% last week.
Finally, the BSE benchmark Sensex ended 404 points higher to close at 17,125 and the Nifty index ended 111 points higher to 5,111.
Overall about 1,253 stocks advanced; 1,454 stocks declined while 56 stocks remained unchanged. Among the 50-Nifty 39 stocks ended in green and 11 stocks ended in red.
RCom surged by over 8% to Rs577 following reports stating that the company bought 90% stake in UK-based WiMax operator, eWave World. The scrip touched an intra-day high of Rs580 and a low of Rs533 and recorded volumes of over 37,00,000 shares on BSE.
Bharti Airtel rocketed to Rs925 by gaining over 9.5% after the company announced its Q4 net profit at Rs18.53 (up 39%) and net sales rose by 45% to Rs78.19. The scrip touched an intra-day high of Rs941 and a low of Rs845 and recorded volumes of over 23,00 000 shares on BSE.
Reliance Industries was up by over a percent to Rs2624 after reports said that the company received government approval to start drilling at an oil & gas field that it found in 2006. The scrip touched an intra-day high of Rs2633 and a low of Rs2561 and recorded volumes of over 7, 90, 000 shares on BSE.
Hindustan Zinc gained by over 5.5% to Rs669 as reports stated that it would set-up two smelters for Rs36bn. The scrip touched an intra-day high of Rs674 and a low of Rs642 and recorded volumes of over 1,30,000 shares on BSE.
HCC slipped by 4.5% to Rs125. The company posted a net profit after tax of Rs1087.7mn for the year ended March 31, 2008 up 37% and total income increased 30% to Rs31207.5mn for the year ended March 31, 2008. The scrip touched an intra-day high of Rs134 and a low of Rs121 and recorded volumes of over 15,00,000 shares on BSE.
ABB edged lower by 0.8% to Rs1170. The company announced Q1 result with net profit at Rs1.18bn (up 37%) and revenues at Rs15.5bn (up 16.5%). The scrip touched an intra-day high of Rs1207 and a low of Rs1145 and recorded volumes of over 1,00,000 shares on BSE.
EID Parry rallied by over 18% to Rs255 after reports stated that the company would sell 47% stake in Parryware for Rs7.25bn. The scrip touched an intra-day high of Rs258 and a low of Rs213 and recorded volumes of over 7,00,000 shares on BSE.
Tata Motors ended flat at Rs639. According to reports, the company is in the process of entering into a technology tie-up with a Japanese government agency to covert its generators to dual fuel systems. The scrip touched an intra-day high of Rs648 and a low of Rs635 and recorded volumes of over 1,00,000 shares on BSE.
With a strong start to the May series, on Monday bulls would look to extend gains. However, with indices approaching the 200 DMA it markets would face some resistance.
Corporate News
Jindal Steel & Power proposed 2mn ton steel plant in Bolivia will start production in 2011.(BS)
NMDC plans to set up a 3mn ton steel plant on its own in Chattisgarh; JV partner SAIL opts out.(BL)
DLF to invest Rs13bn to expand multiplex business.(BS)
Government approves an oil and gas development plan of Reliance Industries in its D6 block off the east coast.(FE)
Hero Honda plans to enter the retail finance market.(ET)
SAIL to hold prices at present levels without levying raw material surcharge imposed by other producers.(BL)
Indian Oil is re-looking its plans to acquire an overseas exploration company as oil & gas assets get dearer.(BS)
Iron ore exporter Sesa Goa to consider stock split and bonus share issue at its board meeting on April 28.(FE)
ICICI Bank makes additional provisions of US$45mn for mark to market losses on its credit derivative obligations and credit-linked note portfolio in February and March 2008.(BS)
INOX plans to increase its properties to 67 from 22 by 2010 with an investment of Rs5bn. (ET)
Reliance Industries set to acquire a majority stake in an oil block in Peru.(BL)
Hinduja Group to invest US$10bn in various power projects across India in the next 10 years. (TOI)
United Bank of India has decided to submit a fresh proposal for restructuring its Rs15.3bn capital in the next two months. (DNA)
Coal blocks lying unused with Coal India to be auctioned off to steel and cement companies.(BL)
HDFC Bank makes a provision of Rs1bn on currency derivative trades.(FE)
Nalco to invest US$1bn to put up smelters and a power plant in Iran.(DNA)
Biocon to set up its own R&D subsidiary arm in the current fiscal.(Mint)
Cairn India has managed to extract 200mn barrels of oil from Andhra reserves which were estimated at 101 mn barrels.(ET)
Essar E&P, a subsidiary of Essar Oil, has bid for two shallow water offshore blocks in Australia.(BL)
Reliance Communication to invest Rs10bn on international data centres in the country.(BS)
Hinduja group-ONGC Videsh combine has won approval of Iran for taking stakes in the oil & gas fields in the Persian Gulf.(ET)
Indian Oil’s Rs250bn Paradip refinery could be delayed due to escalating costs.(DNA)
Pyramid Saimira is looking at raising Rs15-18bn by listing its film production business.(ET)
Government allocates 2MHz additional spectrum to Bharti Airtel in Tamil Nadu.(Mint)
ICICI Bank has applied for a license to set up a non-banking finance company.(ET)
Satyam plans to set up its first offshore development centre in Gujarat.(BS)
Wipro has started offering legal process outsourcing services. (ET)
Reliance Industries plans to set up agri goods terminals in nine cities with an initial investment of Rs10bn.(FE)
Kuwait’s Zain and UAE’s Emirates Telecommunications Corp. join South Africa’s MTN and Russia’s Altimo in the race to acquire 25-30% stake in Unitech’s new telecom venture.(ET)
Hindujas may acquire majority stake in French firm Valeo. (TOI)
Economic News
SEBI allows mutual funds to invest in real estate.(BS)
TRAI recommends raising the foreign investment limit in news channels and FM radio to 49%.(FE)
RBI may relax asset classification norms for infrastructure loans to push lending for the sector.(BS)
TRAI recommends a hike in the foreign direct investment limit to 74% in key broadcast services.(BL)
Government may go for complete decontrol of sugar by scrapping all curbs in one go, instead of the earlier plan for phased decontrol.(ET)
Government says that fixed-line telephony will be exempted from licence fee.(ET)
TRAI suggests to DoT that only existing mobile and universal access service license holders (2G) should be allowed to bid for 3G services.(TOI)
FMCG prices increase 10% on higher input costs.(BS)
Government is finalizing a system to prevent generic versions drugs from getting marketing nods for patented drugs.(ET)
Television prices may rise by 12% on the Government’s decision to levy an anti-dumping duty on imported colour picture tubes. (ET)
Government is set to remove import duty on pig iron, mild steel, met coke; to levy 10% export duty on bars, rods, HR coils, CR coils, galvanized steel products, pipes and tubes.(ET)
IRDA has sought a five year freeze on service tax to be charged on life insurance companies who offer Ulips.(ET)
Government wants private steel companies to voluntarily reduce prices to pre-April levels or face stringent fiscal or policy measures.(ET)
Action may continue
The market may show more exuberance and advance further on the back of bullish sentiment amongst investors. On Firday, the Sensex closed above 17100 mark on amid buying in several heavyweight and sectoral stocks. In morning trades, upmove in several Asian indices like Nikkei, Kospi and Jakarta may help the domestic indices commence in positive territory. On the technical side, the Nifty could test upper levels at 5180 and 5200 and should find support in the 5043-4977 range, while the Sensex may face resistance at 17300 and test lower levels at 16950.
On the earnings front, Alok Industries, Bata India, CESC, Eicher Motor, Finolex Cable, Glenmark Pharma, Godrej, Hexaware, REL, RNRL, SESA Goa and Welspun Gujarat etc are some of the major results to be announced today.
US indices on Monday displayed mixed trend. While buying action in technology stocks helped the Dow gain 43 points at 12892 and Nasdaq moved down 6 points at 2423.
Among the Indian ADRs trading on the US bourses, Rediff was the major gainer by 9.42%, followed by ICICI Bank up by 5.24%. HDFC Bank & MTNL were up by 4%, while Wipro registered at gain of around 2% and Dr Reddy, Infosys and VSNL ended in Positive Territory. However, Patni Computer, Tata Motors and Satyam slipped into the red.
Crude oil prices in the US market raised sharply, with the Nymex light crude oil for June 08 delivery gained by $2.46 to close at $118.52 a barrel. In the commodity space, the Comex gold for June 08 series advanced 30 cents to settle at $889.70 an ounce.
HCL Technologies: Buy
HCL Technologies is among the Tier-I software players which has delivered good numbers for this fiscal, supported by strong March quarter numbers.
The company’s differentiated service offerings and the good growth prospects suggest that investments with a one-year perspective can be considered in the stock. At Rs 262, the stock trades at a modest valuation of 13 times its estimated 2007-08 earnings.
In an uncertain macro environment where Tier-1 and only select Tier-2 players are, perhaps, well-placed to weather the slowdown-related difficulties, HCL Technologies appears a better investment bet.
IMS holds the key
Infrastructure management services (IMS) contribute as much as 15 per cent of HCL’s total revenues and have grown 40 per cent over the past year.
This places HCL Tech above all other Tier-1 players in the proportion of revenues derived from this service offering. Infrastructure services is a key component of many large outsourcing deals (multi-million, multi-year, multi-service) that have flowed to IT majors in the past year. IMS is billed at higher rates compared to other volume-driven services and a higher contribution from this service means better realisations.
HCL Tech takes an ‘asset-light’ approach to IMS by focussing on the services component of the deals alone. Its becoming both hardware and vendor ‘agnostic’ would help in this endeavour.
Changing service and geographic mix
In terms of service mix, engineering and R&D services which command higher billing rates, have grown over the year and now contribute 25 per cent of its total revenues.
This may stem from the fact that HCL Tech was a late entrant to the BFSI client segment. The advantage here is that verticals such as Hitech (including aerospace, automotive verticals), at 29.5 per cent of revenues, have overtaken BFSI (28.4 per cent) as the key contributor to revenues.
The automotive and aerospace sectors are becoming increasingly software-driven and are expected to drive the proportion of IT outsourcing upwards. HCL Tech, given its relationships with top automotive and aircraft manufacturing and design companies, is well-placed to tap this pie.
Similar is the case with the telecom vertical (16.5 per cent). In terms of geographic spread, higher contributions from Asia-Pacific (14.5 per cent) and Europe (29.6 per cent) are healthy trends.
The company has been able to win multi-million, multi-year, multi-service deals from relatively newer outsourcing geographies such as New Zealand and Australia, reducing the company’s exposure to any US-centric problems.
Recent acquisition strengthens BFSI
HCL Technologies’ $40-million all-cash acquisition of Capital Stream in the US may help expand its offering to its financial services clientele.
Capital Stream provides processing solutions to banks in the areas of credit analysis, prospecting and sales, due diligence, documentation and portfolio monitoring.
HCL Tech had been using these products since 2002, which suggests that it would already have fair understanding and comfort in Capital Streams’ offerings. There appear to be two advantages from this acquisition.
One of the products of Capital Stream is a Web-based application. This will mean easier and quicker delivery of certain services at lower cost, as manpower required for this mode of delivery would be low. Capital Stream’s solutions could also be used to tap into clients in geographies outside North America.
Improvements in operational-metrics
Fixed-price contracts now contribute 35 per cent of HCL Tech’s revenues. Fixed-price contracts require greater planning in terms of resource allocation and utilisation and definitive timelines of implementation.
It enables the company to predict cash-flows better, formulate a suitable hedging strategy and generate realisations.
This may become even more relevant in the current turbulent times where clients of HCL and, indeed, all Tier-1 IT service companies’ clients are demanding output/outcome-based pricing with service-level agreements.
Utilisation at 71.3 per cent has improved over the past year and still leaves some room to drive volume growth.
The increase in offshore revenues, which now contributes in equal measure as onsite revenues, creates a lower cost structure for HCL Tech. Attrition has come down from 17.5 per cent to 15.2 per cent, lowering execution risks.
Concerns
Two of HCL Tech’s top 10 clients have kept IT budgets at the same level. The company has indicated that clarity from other clients on IT spend will emerge over the next few months.
The visibility on IT spend and pricing continues to be an area of concern for all Tier-1 IT companies. Infosys has indicated that 76 of its top 100 clients have suggested flat to lower IT budgets. Infosys and Satyam expect clarity on the BFSI-related problems and its effects on IT spends only over the next few months.
The pricing or billing rates are not expected to grow and may remain flat.
This may hinder any increase in realisations and may lead to a more volume-driven growth. Most of these concerns also apply to HCL Tech.
Nicholas Piramal: Buy
Investors with a 12-month perspective should consider buying shares of Nicholas Piramal, a leading pharma company engaged in custom manufacturing drugs for Western companies and selling branded formulations in India. It is one of the top contenders in India to capture a fair share of the $15-billion outsourced pharmaceutical manufacturing market, as it has both the expertise and capacities to make the cut.
At the current market price of Rs 355, the stock trades at 17 times its estimated 2008-09 earnings per share. This appears reasonable given the company’s strong growth in 2007-08, which has the potential to improve over the next couple of years.
In the last 12 months, Nicholas Piramal’s sales grew by a handsome 16.2 per cent and net profit by 53 per cent. The company has turned its focus to contract research and manufacturing services recently, buying Pfizer’s drug unit in 2006 and Avecia’s unit in 2005 (both in the UK).
Operating margins have scope for improvement to 20 per cent-plus on greater momentum in its India-based custom manufacturing (CMG) contracts and the rationalisation measures at its UK operations. With increasing number of long-term supply contracts (shipments to five started this year) and rising profitability of the CMG business with the expected entry into injectables, Nicholas Piramal has significantly expanded its portfolio to over 175 molecules. This endows the company with a strong product pipeline.
Nicholas Piramal also derives about 45 per cent of its revenues from the domestic market through sale of branded formulations. The company is set to see good growth in anti-infectives, nutritionals and anti-diabetic segments, where it has already outpaced the market.
Sales from the newly acquired Anafortan and CEFI brands, introduction of a new derma-cosmetic division and launch of new over-the-counter products are some of the initiatives to watch out for. Along with a huge field-force (above 3,000), Nicholas Piramal is positioned to perform well.
Adverse movement in euro-rupee rates may hurt the drug major’s profitability, because of euro denominated realisations. The historical pattern suggests that first half results may be muted. Given the significant domestic component, any increase in the scope of drug price controls or restrictive policies on the same, will hurt the company.
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