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Wednesday, April 22, 2009

Earth Day…Bulls hope for some green!


Take what you can use and let the rest go by.

The rate cut did little to help the bull’s cause on Tuesday. But global cues today point to a better start at least. Financial shares helped the US indices recoup their losses after Treasury Secretary Timothy Geithner said the vast majority of the nation’s banks have enough capital lessening fears about banks having to raise more capital.

What the Indian banks do following the RBI rate cuts will be watched. A few banks have already announced a cut. The RBI governor also indicated that banks have been exaggerating worries about fear of losing deposits.

Wipro Ltd has posted a net profit of Rs10.10bn for the quarter ended March 31, 2009 as compared to Rs 8.8bn for the quarter ended March 31, 2008. The total income has increased from Rs57.97bn for the quarter ended March 31, 2008 to Rs65.83bn for the quarter ended March 31, 2009

The NSE on Tuesday announced the exclusion of 50 stocks from the F&O segment. Among the counters include Reliance Industrial Infrastructure, 3i Infotech, Ballarpur Industries, Bata India, Edelweiss, Gateway Distriparks, Gitanjali Gems, Hindustan Oil Exploration, Jet Airways, MindTree, MRF, NIIT, NDTV, S. Kumar’s Nationwide, TVS Motor, UTV Software and Wockhardt.

Asian markets are higher too with Japan’s export slump slowing in March, probably indicating that signs of recession may be easing. Oil climbed from a five-week low with crude futures rising 1.4%, following stocks higher.

Avoid fresh positions for the time being and use the gains to exit or shuffle portfolio.

Results today: ACC, Ambuja, Hind Zinc, M&M Fin, Marico, Reliance Industrial Infra, Yes Bank, Zee.

While contracts for new expiry months in these securities would not be available for trading on expiry of existing contract months, the existing unexpired contracts for April, May and June 2009 would continue to be available for trading till their respective expiry, said the NSE statement.

The NSE also announced fresh eligibility criteria for inclusion in F&O segment. The conditions are that the stock would be chosen from among the top 500 stocks in terms of average daily market capitalisation and average daily traded value in the previous six months on a rolling basis; the stock’s median quarter sigma order size (the average of the median buying and selling price) over the last six months should be not less than Rs 5 lakh; the market wide position limit (MWPL) in the stock should not be less than Rs1bn.

For an existing F&O stock, the continued eligibility criteria is that market wide position limit in the stock should not be less than Rs600mn and stock’s median quarter-sigma order size over the last six months should be not less than Rs2 lakh.

Indian market ended in the red on Tuesday extending losing streak to second straight trading session. After starting off with a negative gap down, key indices staged a smart and a gradual come back after the Central bank cut interest rates for the sixth time.

RBI reduced the reverse repurchase rate to 3.25% from 3.5% and the repurchase rate, or it's overnight lending rate, by a quarter-point to 4.75%, and kept the cash reserve ratio unchanged at 5%.

However, bulls were unable to hold on to their gains as profit booking at higher levels dragged the key indices to end with losses.

The banking, auto and capital goods stocks were among them major losers even the mid-cap stocks witnessed some selling pressure. However, the realty, FMCG and select Pharma stocks were among the major gainers.

Finally, the BSE Sensex slipped 81 points to close at 10,898 and the NSE Nifty ended lower by 12 points at 3,365.

Punj Lloyd announced that its wholly-owned UK subsidiary, Simon Carves Ltd ("SCL"), received a decision in adjudication proceedings initiated on December 22, 2008, regarding the termination, by Sabic UK Petrochemicals Ltd ("Sabic"), of a contract originally awarded in 2006 to design, build, construct and pre-commission a Low Density Polyethylene Plant at the Wilton Site in the UK.

Sable had earlier terminated this contract prior to its agreed completion date. SCL decided to seek the views of an Adjudicator as to the grounds upon which Sabic terminated the contract.

The adjudication decision has been received which is in favour of Sabic. This as an Interim decision in a longer dispute resolution process.

SCL will exercise its right to have all the issues that were heard by the Adjudicator, determined by the Court.

Whilst this initial decision is disappointing, SCL will now proceed to the next stage of dispute resolution by taking the necessary steps in consideration of court proceedings.

Shares of Punj Lloyd dropped sharply by 8.5% to Rs103 after hitting an intra-day high of Rs113 and a low of Rs98 and recorded volumes of over 10mn shares on BSE.

Shares of Welspun Gujarat rallied by over 15% to Rs103 after the company announced the demerger of its Plate-cum-Coil mill into a 100% subsidiary. The demerger is subject to statutory/regulatory approvals which includes Shareholders, Creditors and High Court and is likely to take about 4 months time.

The scrip touched an intra-day high of Rs107 and a low of Rs87 and recorded volumes of over 0.7mn shares on BSE