India Equity Analysis, Reports, Recommendations, Stock Tips and more!
Search Now
Recommendations
Thursday, February 11, 2010
ICICI Bank February 2010 futures at premium
Turnover declines
Nifty February 2010 futures were at 4,832.30, at a premium of 5.45 points as compared to the spot closing of 4,826.85. Turnover in NSE's futures & options (F&O) segment was Rs 73,749.79 crore, lower than Rs 81,243.48 crore on Wednesday, 10 February 2010.
ICICI Bank February 2010 futures were at premium at 825.55 compared to the spot closing of 823.75.
Tata Steel February 2010 futures were near spot price at 533.35 compared to the spot closing of 534.10.
Reliance Industries February 2010 futures were near spot price at 1,018.30 compared to the spot closing of 1018.80.
In the cash market, the S&P CNX Nifty rose 69.65 points or 1.46% at 4,826.85.
Asian markets rallies on positive economic developments
Hang Seng, Seoul led region gains while Sensex, Shanghai, Sydney follows them
Stock markets in Asian region finished with notable gains on Thursday, 11 February 2010, on easing concerns about the global economy amid hopes the European Union will soon devise a package to aid Greece in tackling its financial crisis. Though cues from Wall Street were not that significantly positive following a flat close overnight, the South Korean central bank’s move to leave interest rates unchanged and the better-than-expected employment data from Australia are seen aiding sentiment in the region.
On Wall Street, stocks closed modestly lower, as more uncertainty on a debt-rescue plan for Greece and signals that the Fed may start to turn more hawkish weighed on the minds of investors. The Dow Jones Industrial Average lost 20 points, or 0.2%, to 10,038. The S&P 500 fell 2 points, or 0.2%, at 1068 and the Nasdaq went lower by 3 points, or 0.1%, at 2148.
In the commodity market, crude oil rose for a fourth day in New York on speculation oil demand will increase this year as Europe helps tackle Greece’s crippling debt problem and China reported a lower-than-expected inflation gain.
Crude for March delivery rose as much as 58 cents, or 0.8%, to $75.10 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $74.88 at 4:07 p.m. Singapore time.
Brent crude for March settlement gained as much as 54 cents, or 0.7%, to $73.08 a barrel on the London-based ICE Futures Europe exchange. It was at $72.82 a barrel at 4:15 p.m. Singapore time. The contract added 41 cents, or 0.6%, to $72.54 a barrel yesterday.
Gold gained in London as a declining dollar increased demand for the metal as an alternative investment. Gold for immediate delivery added $7.80, or 0.7%, to $1,079.90 an ounce at 8:55 a.m. London time. Bullion for April delivery was 0.3% higher at $1,079.90 on the New York Mercantile Exchange’s Comex unit.
In the currency market, the U.S. dollar was mixed in Asian trade after risk appetite improved on better-than-expected Australian jobs data and markets now wait for the end of a European Union summit for details of any rescue plan for Greece.
The Japanese yen was trading at 89.93, about unchanged from where it had ended in New York overnight. The US dollar fell against the Japanese yen on Wednesday after the U.S. trade deficit widened. The trade gap increased to negative $40.2 billion in December.
The Hong Kong dollar was trading at HK$ 7.7710 against the dollar. Actually the Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.
In Sydney trades, the Australian dollar leapt over a US cent after a thumping jobs report led investors to bet the Reserve Bank may raise interest rates next month. The dollar bounded to a high of $US0.8893, and closed locally at $US0.8874, from $US0.8748 yesterday, after data showed Australia created 52,700 jobs in January, surging 3-½ times past what was forecast. Unemployment fell to an 11-month low of 5.3%, stirring concerns about inflation.
In Wellington trades, the New Zealand dollar hitched a ride higher with the Australian dollar in reaction to news of stronger than expected jobs growth across the Tasman, but it lost ground on the Australian cross. The NZ dollar was worth US 69.79c at 5 pm from US 69.38c at 8 am and US 69.37 c at 5pm yesterday.
The South Korean won ended at 1,156.80 won to the greenback, up 3.5 won from Wednesday’s close of 1,160.30.
The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.0450, 0.0210 up from Wednesday’s close of NT$32.0660.
In equities, Asian markets ended higher with Hong Kong and Chinese stocks rising after data showed a moderation in the mainland's consumer price inflation, while Australian shares received a boost from a solid jobs report.
In Japan, stock markets were closed on the account of public holiday.
In Mainland China, the share market finished the choppy trading in positive terrain, as investors cheered by dip in January inflation data, although gains were limited as most of investors opted to stay on sidelines ahead of Lunar New Year holidays next week.
At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, rose 3 points, or 0.1%, to 2,985.49, meanwhile the Shenzhen Component Index on the smaller Shenzhen Stock Exchange climbed 39.22 points, or 0.32%, to 12,224.60. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, added 0.2%, to 3,220.40.
On the economic front, the National Bureau of Statistics announced today that the China’s consumer price index, a main gauge of inflation, rose 1.5% year on year in January 2010. The CPI last month edged up 0.6% from December last year. The CPI rose 1.4% from a year earlier in urban regions, while the CPI in rural areas increased 1.8%, according to the statistics.
The producer price index, a major measure of inflation at the wholesale level, rose 4.3% in January from a year earlier, according to statistics released by the National Bureau of Statistics today.
Domestic banks lent 1.39 trillion yuan in January in anticipation of monetary policy tightening, the central bank said on its Website today. The amount was more than the total amount in the previous three months.
The National Development and Reform Commission (NDRC) said that China property prices in 70 cities rose 9.5% in January from a year earlier, the fastest pace in 21 months.
The People’s Bank of China said on Thursday that M2 money supply, the broadest measure of money supply in the country, surged 26% year-on-year in January, slower than the 27.7% increase in the previous month. The M1 money supply growth rate stood at 39%.
In Hong Kong, the shares galloped throughout the session, with key benchmark indices spurted 1.9% as investors risk appetite increased, underpinned by more benign than feared China inflation data, ease worries of further China tightening moves. Broad market volume remains thin as investors wary of being caught out over long weekend.
At the closing bell, the Hang Seng Index soared up 368.47 points, or 1.85%, to 20,290.69, meanwhile the Hang Seng China Enterprise, which tracks the overall performance of 43 Mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, spurted 236.67 points, or 2.09%, to 11,582.31.
In Australia, a surprisingly strong employment figures coupled with superior gains in energy and materials pulled key All Ordinaries higher. At the closing bell, the benchmark S&P/ASX200 index added 40.90 points, or 0.91%, to 4,554.30, meanwhile the broader All Ordinaries rose 42.80 points, or 0.94%, to 4,575.80.
In economic section, the Australian Bureau of Statistics said that the unemployment rate in Australia came in at a seasonally adjusted 5.3% in January, following the 5.5% rate in December. Employment increased 52,700 in January, following the addition of 35,200 in December.
Australia’s consumer inflationary expectations decreased to 3.2% in February from 3.5% in January, according to the outcome of latest survey by the Melbourne Institute.
In New Zealand, stock market declined once again, unable to hold on the slight gains made yesterday. At the closing today, the NZX 50 fell 0.66% or 20.23 points to 3065.29. Meanwhile, the NZX 15 declined by 0.82% or 45.19 points to close at 5506.63.
On the economic front, New Zealand food prices increased 2.1% in the January 2010 month. This follows five consecutive monthly falls in the food price index (FPI) and prices have now returned to levels last seen in September 2009. Fruit and vegetable prices rose 4.8%. For the year to January 2010, food prices rose 2.2%.
Meanwhile, the country’s manufacturing sector managed to post its fifth month of solid, though unspectacular growth. The PMI for January of 52 decreased a point from December to return almost to November's level of activity. A figure over 50 indicates the sector is generally expanding. While the overall seasonally adjusted result was in expansion, the unadjusted results showed all regions in decline during January.
In South Korea, stocks closed higher as investor sentiment was boosted by the imminent EU summit to help indebted Greece and China's economic data. The benchmark Korea Composite Stock Price Index rose 27.69 points to 1,597.81.
In Singapore, the key benchmark indices extended gains to hit fresh intraday high, as investors' risk appetite increased, underpinned by surprising economic data from Australia and China, and hope a key summit in Europe could lay out a rescue plan for debt-stricken Greece. At the settlement Thursday, the blue chip Straits Times Index was at 2,753.63, gained 19.24 points or 0.7%.
In Taiwan, equity markets were closed on the account of public holiday.
In Philippines, the stock market closed higher in line with the Asian markets despite a flat close on Wall Street overnight. The benchmark index PSEi escalated 1.80% or 51.64 points to 2,908.88, while the All Shares index went up 1.58% or 29.03 points to 1,856.20.
In India, the key benchmark indices pared gains after hitting fresh intraday highs in late trade. The BSE 30-share Sensex was up 230.42 points or 1.45% to 16,152.59. The S&P CNX Nifty was up 69.65 points or 1.46% to 4826.85.
Elsewhere, Malaysia’s Kula Lumpur Composite index finished slightly higher at 1249.42 while stock markets in Indonesia’s Jakarta Composite index gained by 24.32 points ending the day higher at 2507.75.
In other regional market, earnings from Rio Tinto, Credit Suisse and Danone helped shares gain ground in Europe on Thursday ahead of a meeting that could announce help for debt-laden Greece. Of major European regional equity markets, the U.K. FTSE 100 index rose 1.2% or 61.79 points to 5,194, the German DAX index advanced 0.3% or 18.58 points to 5,555 and the French CAC-40 index rose 0.8% or 26.49 points to 3,662.
Sensex breaks 3-week losing streak
After falling for three consecutive weeks, the Indian market bounced back this week to register gains led by continuous buying in information technology (IT), telecom and consumer durable(CD) stocks coupled with the hope of European Union bailout for Greece that eased the Euro zone debt concern. Both the domestic benchmark indices regained their crucial levels—the Sensex 16000 and Nifty 4800. The Sensex finished the week 237 points higher after swinging 550 points during the week. Nifty was up 1.44% for the week.
The bulls came to act again; it was all green on sector indices front. On improved investor interest in IT, telecom and consumer durable stocks BSE IT was up by 3.58% followed by BSE TECk that gained 3.35% and BSE CD that surged 2.35% for the week.
In the coming week the market will remain in a consolidation mode till we approach the Railway Budget (due on February 24, 2010) and Union Budget (due on February 26, 2010). How the European Union bails out Greece from the fiscal deficit will also set the trend of Indian market in the coming week.
Sensex regains 16K, Nifty 4800
Today's major news
Hindalco Industries to raise Rs4,900 crore; the stock rises 1.28%
Four Soft implements 4S eCustoms at Charter Brokerage; the stock surges 1.66%
Food inflation rises to 17.94% for the week
Bankers reject Reserve Bank of India’s suggestion over home loan teaser rates
Premier Energy’s board approves rights issue; the stock jumps 7.26%
Click here for more stories
Post-market summary
Global signals
European indices rose for the fourth straight session, as banks gained the most ahead of crucial EU summit that will discuss the rescue plan for Greece. At the time of writing this report FTSE 100 was up by 0.82%.
All the Asian indices closed higher with Hang Seng up by 1.85% and SGX Nifty up 64 points.
US stock futures opened higher on Thursday as investor keep an eye on data related to initial claims and continuing claims.
Indian indices
Taking lead from strong global markets, the Sensex opened only six points higher at 15928 (which was also the day’s low). As the day progressed, bulls capitalized on their gains and pushed the Sensex to the day’s high of 16203 led by heavyweights Reliance Industries and ICICI Bank and buying in automobile and oil & gas stocks. In the process, the Sensex regained 16000 levels while Nifty regained 4800 levels. At finishing line, the Sensex closed at 16202, 230 points higher while Nifty closed 70 points higher at 4827 level.
Market sentiment
The market breadth, the number of advancing shares to declining shares, was positive. Of the total 2,906 stocks traded on the BSE, 1617 stocks advanced, whereas 1194 stocks declined. Ninety-five stocks closed unchanged.
Sectoral & stock screening
All the 13 sector indices on BSE closed positive. On investor interest in automobile, oil and gas and real estate stocks, BSE Auto was up by 2.14%, the most for any sector indices, BSE Oil & Gas was up 2.06% and BSE Realty was 1.98% higher.
On the stocks' front, Shree Ranuka Sugars surged the most—by 6.08%—followed by Fortis Healthcare, which rose 5.75%, and Jain Irrigation that jumped 5.34%. On the losers’ list, Rural Electrification Corporation was hit the most--3.30%--followed by Power Finance, which slid by 2.18% and Glenmark Pharma that fell 1.95%.
Viewing volumes
India’s second biggest realtor Unitech drew maximum interest with 0.97 crore shares changing hands on the BSE followed by industrial finance company IFCI (0.38 crore shares), Fortis Healthcare (0.31 crore shares), wind power major Suzlon Energy (0.30 crore shares) and integrated steel maker Ispat Industries (0.29 crore shares)
ARSS Infrastructure Projects IPO subscribed 47.34 times
Gets bids for 11.89 crore shares as compared with 25.12 lakh shares on offer
The initial public offering (IPO) of the Orissa-based infrastructure company, ARSS Infrastructure Projects (AIPL) saw high investor demand. The IPO received bids for 11.89 crore shares as compared to 25.12 lakh shares on offer, NSE data showed. The IPO was subscribed 47.34 times.
AIPL is engaged in the business of construction activities in India. It undertakes construction of railway infrastructure, roads, highways, bridges and irrigation projects.
The proceeds of the issue are intended to be deployed for investment in joint ventures (at a cost of Rs 5 crore) and funding long term working capital requirement (cost of Rs 86 crore). The rest of amount will be used for issue expenses and general corporate purpose.
The company's order book position was at Rs 2877 crore as on 10 January 2010 and it had 145 projects in hand as on that date.
AIPL's net profit jumped 90% to Rs 51.04 crore on 99% growth in revenue to Rs 624.38 crore in the year ended 31 March 2009 over the year ended March 2008.
Small-cap, mid-cap indices outperform Sensex
Volatility ruled the roost as the key benchmark recovered tracking gains in global stocks. The undertone was cautious as investors awaited details of a likely European Union bailout plan for Greece.
The BSE Sensex rose 361.66 points or 2.3% to 16,152.59 in the week ended Thursday, 11 February 2010. The S&P CNX Nifty 108.2 points or 2.3% to 4826.85.
The BSE Mid-Cap index rose 162.37 points or 2.6% to 6,509.74 in the week. The BSE Small-Cap index jumped 229.16 points or 2.8% to 8,303.08. Both these indices outperformed the Sensex.
FII outflow in February 2010 totaled Rs 2252.60 crore (till 10 February 2010). FII had sold equities worth Rs 302.70 crore in January 2010. FII outflow in the calendar year 2010 totaled Rs 2753 crore (till 10 February 2010).
The key benchmark indices logged marginal gains on Monday, 8 February 2010, after swinging sharply either ways in what was a highly volatile trading session. The BSE 30-share Sensex rose 19.96 points or 0.13% to 15,935.61. The S&P CNX Nifty rose 3.15 points or 0.07% to 4760.40.
The key benchmark indices logged decent gains in what was a choppy trading session on Tuesday, 9 February 2010. After suffering an initial setback, the market staged a comeback as Asian stocks and US index futures rose. The BSE 30-share Sensex jumped 106.57 points or 0.67% to 16,042.18. The S&P CNX Nifty rose 32.25 points or 0.68% to 4792.65.
A day after regaining the psychological 16,000 mark, the barometer index BSE Sensex fell below that level on Wednesday, 10 February 2010, on waning risk appetite among foreign investors. The BSE 30-share Sensex fell 120.01 points or 0.75% to 15,922.17. The S&P CNX Nifty fell 35.45 points or 0.74% to 4757.20.
The key benchmark indices surged on Thursday, 11 February 2010 as European leaders gathered to consider a possible aid package for Greece. The BSE 30-share Sensex rose 230.42 points or 1.45% to 16,152.59. The S&P CNX Nifty rose 69.65 points or 1.46% to 4826.85.
Index heavyweight Reliance Industries (RIL) rose 3.3% in the week. RIL recently submitted a $2 billion expression of interest for Value Creation Inc, a Canada-based private firm which holds oil sands assets.
Rate sensitive banking shares rose. The Reserve Bank of India said on Wednesday, 10 February 2010, it will introduce from 1 April 2010 a new base rate to price credit more transparently, replacing the existing benchmark prime lending rate (BPLR). The Reserve Bank of India said the base rate will be the new reference rate for determining lending rates.
India's largest private sector bank by net profit ICICI Bank rose 3.5%. India's largest bank by net profit and branch network State Bank of India rose 1.1%. India's second largest private sector bank by net profit HDFC Bank rose 1.4%.
According to draft guidelines, the RBI has proposed that the actual lending rate charged to borrowers would be the base rate plus borrower-specific charges including product-specific operating cost, credit-risk premium and tenure premium said. The base rate will be applicable for all new loans as well as for old loans that come for renewal. Existing borrowers who want to switch to the new system before the expiry of their contracts should agree on the revised rate structure with the banker, it said. The base rate could also serve as the reference benchmark rate for floating rate loan products, apart from the other external market benchmark rates, it said.
Rate sensitive auto stocks rose on strong vehicle sales in the month of January 2010. India's largest commercial vehicle maker by sales Tata Motors rose 2.2%. India's biggest tractor maker by sales Mahindra & Mahindra (M&M) rose 1.1%.
IT stocks rose on a possible financial rescue plan for debt ridden Greece's economy. Europe is the second largest market for Indian IT firms. India's second largest IT exporter by sales Infosys rose 6.2%. India's third largest software services exporter Wipro rose 2.3%. India's largest software services exporter TCS rose 2.3%.
Fame India surged 27.3% to Rs 64.65 as Reliance Capital Partners, a group firm of Reliance Anil Dhirubhai Ambani Group (ADAG), hiked its to 7.6% through open market purchases since 3 February 2010, when Inox Leisure announced a deal to acquire Fame.
Market may remain volatile ahead of Budget
Institutional investors are likely to remain on the sidelines with just a few days left for the presentation of the Union Budget 2010-2011 in parliament on 26 February 2010. The key focus of analysts and economists in the budget are a roadmap for implementation of the goods and services tax (GST) and direct tax code (DTC), exit from the fiscal stimulus, roadmap for exit from the stimulus measures, the government's borrowing programme for 2010-2011 and steps to reduce fiscal deficit which will have a bearing on interest rates. It also remains to be seen if the government announces new modes of financing the country's massive infrastructure investment.
A first step towards withdrawing the post-crisis fiscal stimulus may reportedly be taken in the Union Budget for 2010-11, with an increase in the Cenvat (Central value added tax) rate for excise duty by 2 percentage points. The government had reduced the Cenvat rate for excise duty from 14 to 8% - in two rounds, by four percentage points in December 2008 and two percentage points in February 2009. Analysts reckon that a phased withdrawal of fiscal and monetary stimulus in a gradual manner could help sustain the ongoing economic recovery.
Before the budget, the performance of global markets may dictate the near term trend on the domestic bourses. Global markets have recovered after a sell-off triggered by unwinding of dollar carry-trade. The dollar surged against a basket of six major currencies as fiscal woes of some the euro zone nations such as Greece and Portugal came to the fore. As per media reports, European Union leaders will lay the foundations for a financial bailout of Greece at a summit in Brussels on Thursday, 11 February 2010.
Foreign funds have pressed heavy sales of Indian stocks in early 2010. As per data from the stock exchanges, foreign institutional investors (FIIs) sold stocks worth a net Rs 11350.25 crore in calendar 2010 so far (till 10 February 2010). In contrast, domestic institutional investors (DIIs) have bought equities worth a net Rs 15146.54 crore this year so far.
The government will unveil industrial production data for December 2009 on Friday, 12 February 2010. The stock market remains closed on Friday on account of Mahashivratri. Industrial output rose a robust 11.7% in November 2009. On Monday, 15 February 2010, the government will unveil data on headline inflation in January 2010.
As regards government's divestment plan, Rural Electrification Corporation (REC) will be the next Government-owned entity to come out with a follow-on public offer (FPO). Its 17.17-crore share follow-on public offer (FPO) will open for bidding on 19 February 2010 and will close on 23 February 2010.
Sensex reclaims 16,000 on hopes of EU rescue plan for Greece
The key benchmark surged as firm Asian stocks and gains in US index futures boosted sentiment. The government's decision to ease foreign investment rules also underpinned sentiment. The BSE 30-share Sensex rose 230.42 points or 1.45%, up close to 225 from the day's low and off close to 50 points from the day's high. The barometer index regained the psychological 16000 mark. Metal, realty, auto and banking stocks vaulted. The market breadth was strong.
The market pared gains in early afternoon trade after a rousing start triggered by firm Asian stocks. However, buying at lower levels once again propelled stocks higher in afternoon trade. The Sensex hit a fresh intraday high in late trade. The stock market remains closed on Friday, 12 February 2010, on account of Mahashivratri.
Exports in January rose 11.5% to $14.3 billion, Trade Minister Anand Sharma said today. He also said foreign direct investment in December went up an annual 13% to $1.5 billion.
The Union Cabinet today eased foreign investment rules. Foreign Investment promotion Board (FIPB) can approve investments of up to Rs 1200 crore, Home Minister P. Chidambaram told reporters after a cabinet meeting. Earlier, the FIPB, an arm of the finance ministry, had power to approve foreign investments of up to Rs 600 crore.
Meanwhile, the data released by the government today showed that annual food inflation rose for the third straight week. The food price index rose 17.94% in the 12 months to 30 January 2010, higher than an annual rise of 17.56% in the previous week. The fuel price index rose 10.44 % and primary articles price index rose 15.75 %.
Reserve Bank of India Deputy Governor Subir Gokarn said on Thursday there would be no policy decision until April 2010 unless situation demands it. Gokarn also said there is no proposal to bring down interest rates on saving accounts.
European shares reversed early gains ahead of a key EU summit which could lay the groundwork for a rescue package of debt-stricken Greece. The key benchmark indices in France, Germany fell by between 0.13% to 0.47%. But UK's FTSE 100 rose 0.39%.
Asian stocks rose for the third day in a row on Thursday, powered by strong economic data from Australia and China, and ahead of a key summit that could lay out a rescue plan for debt-stricken Greece. The key benchmark indices in China, Indonesia, Hong Kong, South Korea and Singapore and were up by between 0.1% to 1.85%. Markets in Japan and Taiwan were shut for a public holiday.
South Korea's central bank kept the benchmark interest rate at a record low at 2% after unemployment surged to a 10-year high, increasing political pressure on the bank to support a recovery.
Trading in US index futures indicated Dow could gain 38 points at the opening bell on Thursday, 11 February 2010.
Wall Street ended in the negative zone but off intra-day lows on Wednesday, 10 February 2010. Traders mulled a possible bailout of Greece. Reports suggest that France and Germany are expected to present a bailout plan at an EU summit today. Speculation about the Federal Reserve's exit strategy after comments from Fed Chief Ben Bernanke also weighed on the market. The Dow Jones industrial average was down 20.26 points, or 0.20%, at 10,038.38. The Standard & Poor's 500 Index was down 2.39 points, or 0.22%, at 1,068.13. The Nasdaq Composite Index was down 3.00 points, or 0.14%, at 2,147.87
Federal Reserve Chairman Ben Bernanke on Wednesday detailed how the US central bank will begin to wean the economy off its extraordinary monetary stimulus, even as he stressed it was not yet time to do so. Bernanke said the Fed would likely begin tightening monetary policy by removing some of the cash from the financial system before it turns to raise benchmark short-term interest rates.
The US financial system averted a meltdown but it is not yet back up to full strength, US Treasury Secretary Timothy Geithner said on Wednesday.
European Union leaders will lay the groundwork for a financial rescue of Greece at a summit on Thursday, but any support is likely to require a big commitment from Athens on getting its economy in order. Germany and possibly France are expected to take the lead in any aid package the EU draws up to help Greece weather its mounting debt and deficit crisis, although the structure, size, nature and any conditions attached to a deal remain unclear.
Greece's ballooning deficit and debt have reverberated across financial markets in recent months, hitting the euro , regional banking stocks and some government bonds, and prompting many investors to pull back from riskier assets worldwide.
Closer home, government's gross market borrowing in the fiscal year 2010/11 may reportedly be within the current year's target, allaying market fears of higher borrowing. The government has completed record gross borrowing of Rs 451000 crore ($97 billion) for the current fiscal year to fund a 16-year high fiscal deficit of 6.8% of gross domestic product (GDP). Earlier this month, Reserve Bank of India (RBI) Governor Duvvuri Subbarao said the government's gross market borrowing in the fiscal year to end-March 2011 might be slightly higher than the current fiscal year because of the redemptions. The government has said it hopes to return to the path of fiscal consolidation and intends to bring down the deficit to 5.5 percent of the GDP.
The economy will grow faster in 2009/10 than the government has forecast, the finance minister Pranab Mukherjee said on Wednesday, adding to expectations that a strong recovery would lead to tighter fiscal and monetary policy.
A top economic adviser C Rangarajan said plans for an exit from stimulus policies may be in the national budget on 26 February 2010, and the deputy governor of the Reserve Bank of India (RBI) Subir Gokarn said reforms were needed to sustain growth in a weaker global environment.
Mukherjee said the economy would grow 7.75% in 2009/10, slightly above the central bank's view and higher than a forecast of 7.2 % issued by the government's statistical office on Monday. Earlier this moth, the International Monetary Fund forecast growth in 2009/10 of 6.75%. Asia's third-largest economy has been picking up momentum since mid-2009, and data on Friday 12 February 2010 is expected to show industrial output grew an annual 12 % in December. At a policy review last month, the RBI increased banks' reserve requirements but held key interest rates steady.
A first step towards withdrawing the post-crisis fiscal stimulus may reportedly be taken in the Union Budget for 2010-11, with an increase in the Cenvat (Central value added tax) rate for excise duty by 2 percentage points. Encouraged by signs of growth revival and desperate to reduce the fiscal deficit, Union Finance Minister Pranab Mukherjee is expected to take this step when he presents his Budget to parliament on 26 February 2010. The government had reduced the Cenvat rate for excise duty from 14 to 8% - in two rounds, by four percentage points in December 2008 and two percentage points in February 2009.
The BSE 30-share Sensex rose 230.42 points or 1.45% to 16,152.59. The Sensex gained 280.70 points at the day's high of 16202.87 in late trade. The Sensex rose 6.11 points at the day's low of 15,928.28 in early trade.
The S&P CNX Nifty rose 69.65 points or 1.46% to 4826.85.
BSE clocked turnover of Rs 3951 crore, sharply lower than Rs 5123.04 crore on Wednesday, 10 February 2010.
The BSE Mid-Cap index rose 0.78% and the BSE Small-Cap index rose 0.82%. Both the indices underperformed the Sensex.
The BSE Auto index (up 2.14%), BSE Oil & Gas index (up 2.06%), BSE Realty index (up 1.98%) and BSE Metal index (up 1.59%), outperformed the Sensex.
The BSE HealthCare index (up 0.24%), PSU index (up 0.38%), BSE Power index (up 0.46%), BSE Capital Goods index (up 0.62%), BSE Teck index (up 0.9%), BSE Consumer Durables index (up 1.06%), BSE FMCG index (up 1.17%), BSE IT index (up 1.17%), BSE BSE Bankex (up 1.31%), underperformed the Sensex.
The market breadth, indicating the overall health of the market was strong. On BSE, 1593 shares advanced as compared with 1191 that declined. A total of 97 shares remained unchanged.
From the 30-member Sensex pack, 28 rose and two fell.
Index heavyweight Reliance Industries (RIL) rose 2.98%. RIL recently submitted a $2 billion expression of interest for Value Creation Inc, a Canada-based private firm which holds oil sands assets.
Oil exploration firms rose, after the crude oil prices gained more than 1% on the New York Mercantile Exchange, on Wednesday, 10 February 2010. India's biggest state-run oil exploration firm by revenue Oil & Natural Gas Corporation (ONGC) rose 1.14%. Cairn India advanced 1.23%. But, India's second biggest oil and gas exploration firm by revenue, Oil India, fell 0.27%.
Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms. Light, sweet crude oil gained 77 cents, or 1.04%, to $74.52 a barrel on the New York Mercantile Exchange on Wednesday, 10 February 2010 lifted by an upbeat global oil demand growth estimate for this year and hopes of a rescue plan for Greece.
PSU OMCs fell after a senior government official said finance and oil ministers will meet on 14 February 2010 to discuss fuel pricing and subsidies. BPCL and Indian Oil Corporation fell by between 0.79% to 1.29%. But HPCL rose 0.09%.
Rate sensitive banking shares rose after the central bank said on Wednesday it will introduce from 1 April 2010 a new base rate to price credit more transparently, replacing the existing benchmark prime lending rate (BPLR). The Reserve Bank of India said the base rate will be the new reference rate for determining lending rates.
India's largest private sector bank by net profit ICICI Bank rose 3.22%. Its ADR fell 0.54% on Wednesday. India's largest bank by net profit and branch network State Bank of India rose 0.43%. India's second largest private sector bank by net profit HDFC Bank rose 0.07%. Its ADR rose 1.25% on Wednesday.
According to draft guidelines, the RBI has proposed that the actual lending rate charged to borrowers would be the base rate plus borrower-specific charges including product-specific operating cost, credit-risk premium and tenure premium said. The base rate will be applicable for all new loans as well as for old loans that come for renewal. Existing borrowers who want to switch to the new system before the expiry of their contracts should agree on the revised rate structure with the banker, it said. The base rate could also serve as the reference benchmark rate for floating rate loan products, apart from the other external market benchmark rates, it said.
Rate sensitive realty shares rose on bargain hunting after a recent fall. India's largest realty firm by sales DLF rose 1.74%. Among other realty stocks, Indiabulls Real Estate, Peninsula Land and Housing Development and Infrastructure rose by between 0.81% to 4.67%.
Unitech rose 3.67%, extending gains for the second consecutive day, after Telenor bought a further 7.15% stake in telecom joint venture Unitech Wireless by pumping in additional Rs 2022 crore of fresh equity.
Rate sensitive auto stocks rose on strong vehicle sales in the month of January 2010. India's largest commercial vehicle maker by sales Tata Motors rose 2.67%. India's top small car manufacturer by sales Maruti Suzuki India rose 1.54%. As per reports the company expects a 20% growth in sales and hopes to double its exports to around 1.6 lakh units this fiscal ended March 2010. India's biggest tractor maker by sales Mahindra & Mahindra (M&M) rose 3.17%.
Two wheeler stocks rose. Hero Honda Motors, TVS Motor Company and Bajaj Auto rose by between 0.65% to 4.13%.
Metal stocks rose on strong domestic demand. Hindalco Industries rose 1.28% on reports the company hopes to complete raising Rs 4900 crore of debt in the next two weeks to achieve financial closure for Utkal Alumina Refinery, a 15 lakh tonne per annum project in Orissa.
JSW Steel rose 2.66% on reports the company is close to buying two coal mines in the US
Among other metal stocks, Steel Authority of India, Tata Steel, National Aluminum Company, Hindustan Zinc, Jindal Steel & Power rose by between 0.28% to 2.85%.
Shares of firms whose fortunes are linked to orders from Indian Railways rose, following a strong response to the initial public offer of ARSS Infrastructure Projects. Container Corporation of Indaia, BEML, Kalindee Rail Nirman, Stone India, Texmaco and Titagarh Wagons rose by between 2.27% to 16.19%. The initial public offer (IPO) ARSS Infrastructure Projects was subscribed nearly 46.34 times by 16:00 IST on the last day of the issue today, 11 February 2010.
India's largest drug maker by sales Ranbaxy Laboratories rose 1.75%. Daiichi Sankyo said it will launch new innovative products in Mexico through the marketing division of Ranbaxy's Mexican subsidiary Ranbaxy Mexico.
Among other healthcare stocks, Fortis HealthCare, Sun Pharmaceutical Industries, Dr Reddy's Laboratories, Wockhardt rose by between 0.16% to 5.75%.
India's largest power utility firm by sales NTPC rose 1.07% on bargain hunting after recent fall. The company's follow on public offer managed to scrape through with the issue getting subscribed 1.2 times. The issue, through which the government is divesting 5% of its stake, at a floor price of Rs 201 a share, opened on 3 February 2010 and closed on 5 February 2010. At the floor price, the follow-on-public offer (FPO) is valued at Rs 8,286 crore.
Among other power stocks, Torrent Power, Reliance Infrastructure, Reliance Power rose by between 0.36% to 0.79%.
Consumer durables stocks rose on hopes of higher consumer spending as disposable income increases. Rajesh Exports, Titan Industries, Videocon Industries, Gitanjali Gems rose by between 0.48% to 4.08%.
Infrastructure stocks rose on recent reports the government is considering new guidelines for private equity investment in infrastructure companies in an attempt to open new sources of equity funding for the sector. The move comes in the backdrop of the poor response from private companies and banks in financing projects, especially those in sectors like highways and urban transport and infrastructure. Gayatri Projects, Nagarjuna Construction Company, Valecha Engineering and Hindustan Construction Company rose by between 0.16% to 3.83%.
IT stocks rose on a possible financial rescue plan for debt ridden Greece's economy. Europe is the second largest market for Indian IT firms. India's second largest IT exporter by sales Infosys rose 1.05%. Its ADR fell 0.28% on Wednesday.
India's third largest software services exporter Wipro rose 1.2%. Its ADR rose 0.1% on Wednesday. As per recent reports, Wipro Consumer Care and Lighting, the FMCG arm of Wipro, is in advanced talks to buy Nigeria-based skincare company, Tura International. India's largest IT exporter by sales Tata Consultancy Services rose 1.44%. Reportedly TCS' Passport Seva Project, which aims to issue passports in flat three days, is all set to be launched in a week or two.
India's largest power equipment maker by sales Bharat Heavy Electricals rose 0.76%. The company on Monday secured a contract for the electro-mechanical equipment package for a 1,200 megawatt hydroelectric project in Bhutan valued at Rs 1,016 crore.
India's largest engineering and construction firm by sales Larsen & Toubro rose 0.82%. The company said on Tuesday it won orders worth Rs 582 crore.
FMCG stocks rose on bargain hunting. ITC, Hindustan Unilever, Tata Tea rose by between 1.37% to 2.24%.
Cals Refineries clocked the highest volume of 5.19 crore shares on BSE. Indiabulls Power (1.23 crore shares), KRBL (0.98 crore shares), Unitech (0.97 crore shares) and Radhe Developers (0.63 crore shares) were the other volume toppers in that order.
Titagarh Wagons clocked the highest turnover of Rs 154.68 crore on BSE. Reliance Industries (Rs 124.95 crore), Tata Steel (Rs 104.95 crore), Thinksoft Global (Rs 102.21 crore) and Hindustan Oil Exploration (Rs 85.51 crore) were the other turnover toppers in that order.
Sensex to open gap-up
Headlines for the day
Budget may signal end to issue of oil bonds - Business Line
Auto, cooking fuel prices may rise - Business Standard
New loan pricing regime from April - Business Standard
Base rate to replace BPLR from April 1 - Business Line
Tata Consultancy to add 30,000 staff in FY11 - DNA Money
Events for the day
Major corporate action:
Ex-date for interim dividend of Dalmia Cement & Graviss Hospitality
Hathway Cable & Datacom Ltd IPO closes today
ARSS Infrastructure Projects Ltd IPO closes today
Weekly Inflation to be out today
IIP Numbers for December to be out today
Pre-market report
Global signals
The European stocks closed higher on third consecutive day on hopes of possible European Union bailout plan for Greece. FTSE 100 closed 0.39% higher at 5132.
On Wednesday, US markets closed marginally lower; Nasdaq closed 0.14% lower.
In today's trade, All the Asian indices are trading in positive territory. Japan’ Nikkei and Taiwan markets closed today. At the time of writing of this report SGX Nifty trades 35 points higher.
Indian markets
Domestic market set to open higher on the back positive signals that are coming from the global markets.
Among the local indices, the Nifty could test the 4800-4850 range on the up side, while on the down side it could find support at 4680 and 4700. While the Sensex is likely to get support at 15700 and may face resistance at 16300.
Indian ADR's
Among the Indian ADRs trading on the US bourses, HDFC Bank surged the most with gains of 1.25%, while Patni Computer slid the most with loss of 3.51%
Commodity cues
In the commodity space, wherein the Crude oil prices recorded marginal gain, with the Nymex light crude oil for March series up by $0.37 to settle at $74.86 a barrel.
In the metals space, Comex Gold for April series declined by $1.10 to settle at $1076.10 to a troy ounce.
In the metals space, Comex Silver for March series declined by $0.11 to settle at $15.33 to a troy ounce.
Daily trend of FII/MF investment in equities
On February 10, 2010, FIIs were the net sellers of the Indian Stocks in the tune of Rs395.60 crore (with the gross purchase of Rs1978.80 crore and gross sales of Rs2374.40 crore).
While the Domestic mutual funds, on February 09, 2010, were the net buyers of the stocks in the tune of Rs259.30 crore (with gross purchase of Rs669.90 crore and gross sales of Rs410.50 crore).
Daily Grey Market Premiums - Feb 11 2010
| Company Name | Offer Price (Rs.) | Premium (Rs.) | Kostak (Rs. 1 Lac Application) |
| Aqua Logistics | 220 | 4 to 5 | -- |
| Syncom Healthcare | 75 | 10 to 12 | -- |
| Thangamayil Jewellery | 75 | 3 to 4 | -- |
| Vascon Engg. | 165 | 5 to 7 | -- |
| D. B. Realty | 468 | 11 to 13 | -- |
| Emmbi Polyarns | 40 to 45 | 2 to 3 | -- |
| NTPC (FPO) | 201 | 2 to 3 | -- |
| ARSS Infrastructure Projects | 410 to 450 | 45 to 50 | 1900 to 2100 |
| Hathway Cable & Data Comm. | 240 to 265 | 4 to 5 | 1800 to 2000 |
| Taxmao Pipes | 85 to 90 | 8 to 10 | -- |
| REC (FPO) | -- | -- | -- |
Daily Call - Feb 11 2010
US markets initially plunged deep in the red as Federal Reserve Chairman Ben Bernanke laid out plans to eventually raise some borrowing costs, but recovered thereafter to close with marginal losses as news was digested and markets realized that the immediate impact to the U.S. economy would be limited.
As expected, Nifty encountered a huge resistance around the upper band of the gap down opening on last Friday, the possibility of which was expressed in our Tuesday’s report. Our view that gains made merely on the back of short covering cannot be sustained, has also been vindicated by yesterday’s move. A further short covering was witnessed by FIIs yesterday as they bought index futures worth Rs. 879 cr while their OI went down by 22403 contracts. In Cash they provisionally sold worth Rs. 209 cr. DIIs however put in Rs. 459 cr. Put call ratio fell below 1 and Stock futures OI declined after a long time. An important observation I would like to share is that while a divergence on daily chart was already in place when markets made a lower bottom on last Friday but RSI made a higher bottom, a follow up action was required on the price chart to turn the view bullish. While a higher top higher bottom formation will only make that happen, a sustained crossover of yesterday’s high of 4827 will be the first move in that direction as it coincides with a trend line resistance joining tops of 22 Jan(5094) and 3rd Feb(4949). One can take a mildly positive stance if Nifty crosses 4827 decisively. Tomorrow markets are shut on account of Mahashivratri. Yesterday’s high of 4827 in Nifty, is now a crucial resistance while on the downside 4675 is the support.
US stocks fail to cling to gains
Indices register little losses as dollar fluctuates
US stocks ended with little losses on Wednesday, 10 February 2010. Stocks spent the entire day dancing to the tune of the fluctuating dollar. Stocks started the day in the red and lingered in the red for the entire first half of the trading session. The dollar's rebound amid ongoing speculation about loan guarantees for Greece and a hint at a rate hike from Fed Chairman Ben Bernanke led stocks lower in early action, but the market then recovered as support faded for the greenback. But at the end, indices coughed up all their gains and ultimately ended lower.
At the end of the day on Wednesday, 10 February 2010, the Dow Jones Industrial Average ended lower by 20.26 points at 10038.38. Nasdaq ended lower by 3 points at 2147.87. S&P 500 ended lower by 2.39 points at 1068.13. Dow opened 45 points lower earlier during the day and was trading lower by 91 points soon after. But in between it recovered and was trading higher by 23 points also.
Nine of ten economic sectors ended in the red today led by utilities, healthcare, and materials sectors. Financial sector was the sole gainer.
Of the 30 Dow components, all the financial components like Bank of America, JP Morgan Chase, Travelers and American Express posted gains.
Fed Chairman Bernanke today indicated in a prepared statement for a testimony before the House Financial Services Committee that the Fed might opt to raise the discount rate before long. Though Bernanke's statement was released, his actual testimony has been postponed. The statement has proved to be a positive for the dollar.
In the currency market on Wednesday, the dollar went up amid ongoing speculation about loan guarantees for Greece and a hint at a rate hike from Fed Chairman Ben Bernanke. The dollar index, which weighs the strength of dollar against the basket of six other currencies, went up by almost 0.5%. It rose almost 0.9% against the euro. The greenback has jumped 1% this month on concern that fiscal gaps in Greece, Spain and Portugal may widen.
During the mid trading hours, the dollar weakened and stocks went up. But then, the greenback has reclaimed some of its gains. The dollar's move caused the stock market to give up its gain and return to the unchanged mark.
Among economic report scheduled for the day, The Commerce Department in US reported on Wednesday, 10 February 2010, that the U.S. trade deficit widened to a seasonally adjusted $40.2 billion in December 2009 as imports of crude oil surged, outpacing a large increase in exports. It was the largest trade gap in a year. The trade deficit figure was more than expected.
As per the report, imports of goods and services increased $8.4 billion, or 4.8%, to $189.2 billion, led by higher imports of petroleum, autos, and capital goods. Imports of crude oil rose 9.2% to 8.9 million barrels a day from 8.2 million in November. On the other hand, exports of goods and services rose $4.6 billion, or 3.3%, to $142.7 billion, led by higher exports of civilian aircraft and industrial materials.
In other markets, crude oil prices rose for the third straight day on Wednesday, 10 February 2010. Prices rose despite the weekly inventory report by energy department expected to show an increase in crude and gasoline supplies for last week. The oscillating dollar aided in crude's rise. On Wednesday, crude-oil futures for light sweet crude for March delivery closed at $74.55/barrel (higher by $0.80 or 1.1%). Earlier during the day, prices dropped almost 1.6%.
EIA was expected to announce the latest weekly inventory data today. But the official government estimate was delayed to Friday because of a snowstorm that shut down government offices in Washington, D.C.
Indian ADRs ended mixed on Wednesday. HDFC Bank, VSNL and Wipro Technologies were a handful of gainers. HDFC Bank soared by 1.2% today. Punjab Tractors and Tata Motors were the main losers shedding 3.5% and 1% respectively.
Tomorrow, there are a couple of economic reports scheduled for the day – the initial and continuing claims data. Earning reports will continue to pour in.
Market may open higher on positive Asian stocks; inflation data eyed
The market may open on a positive note on firm Asian stocks on hopes European Union leaders will lay the groundwork for a financial rescue of Greece. The government will today unveil data on some wholesale price indices for the year through 30 January 2010 viz. the food price index, the primary articles index and the fuel price index. Stock markets remains shut on Friday 12 February 2010 on account of Mahashivratri.
Asian stocks rose on Thursday on hopes European Union leaders will lay the groundwork for a financial rescue of Greece today. The key benchmark indices in China, Hong Kong, Japan, Indonesia, South Korea, Singapore and Taiwan rose by between 0.31% to 1.46%.
South Korea's central bank kept the benchmark interest rate at a record low at 2% after unemployment surged to a 10-year high, increasing political pressure on the bank to support a recovery.
Wall Street ended in the negative zone but off intra-day lows on Wednesday, 10 February 2010. Traders mulled a possible bailout of Greece. Reports suggest that France and Germany are expected to present a bailout plan at an EU summit today. Speculation about the Federal Reserve's exit strategy after comments from Fed Chief Ben Bernanke also weighed on the market. The Dow Jones industrial average was down 20.26 points, or 0.20%, at 10,038.38. The Standard & Poor's 500 Index was down 2.39 points, or 0.22%, at 1,068.13. The Nasdaq Composite Index was down 3.00 points, or 0.14%, at 2,147.87
Federal Reserve Chairman Ben Bernanke on Wednesday detailed how the U.S. central bank will begin to wean the economy off its extraordinary monetary stimulus, even as he stressed it was not yet time to do so.Bernanke said the Fed would likely begin tightening monetary policy by removing some of the cash from the financial system before it turns to raise benchmark short-term interest rates.
The U.S. financial system averted a meltdown but it is not yet back up to full strength, U.S. Treasury Secretary Timothy Geithner said on Wednesday.
European Union leaders will lay the groundwork for a financial rescue of Greece at a summit on Thursday, but any support is likely to require a big commitment from Athens on getting its economy in order.Germany and possibly France are expected to take the lead in any aid package the EU draws up to help Greece weather its mounting debt and deficit crisis, although the structure, size, nature and any conditions attached to a deal remain unclear.
Closer home, government's gross market borrowing in the fiscal year 2010/11 may reportedly be within the current year's targe, allaying market fears of higher borrowing. The government has completed record gross borrowing of Rs 451000 crore ($97 billion) for the current fiscal year to fund a 16-year high fiscal deficit of 6.8 % of gross domestic product (GDP).Earlier this month, Reserve Bank of India (RBI) Governor Duvvuri Subbarao said the government's gross market borrowing in the fiscal year to end-March 2011 might be slightly higher than the current fiscal year because of the redemptions. The government has said it hopes to return to the path of fiscal consolidation and intends to bring down the deficit to 5.5 percent of the GDP.
The economy will grow faster in 2009/10 than the government has forecast, the finance minister Pranab Mukherjee said on Wednesday, adding to expectations that a strong recovery would lead to tighter fiscal and monetary policy.
A top economic adviser C Rangarajan said plans for an exit from stimulus policies may be in the national budget on 26 February 2010, and the deputy governor of the Reserve Bank of India (RBI) Subir Gokarn said reforms were needed to sustain growth in a weaker global environment.
Finance Minister Pranab Mukherjee said the economy would grow 7.75 % in 2009/10, slightly above the central bank's view and higher than a forecast of 7.2 % issued by the government's statistical office on Monday. Earlier this moth, the International Monetary Fund forecast growth in 2009/10 of 6.75%. Asia's third-largest economy has been picking up momentum since mid-2009, and data on Friday 12 February 2010 is expected to show industrial output grew an annual 12 % in December. At a policy review last month, the RBI increased banks' reserve requirements but held key interest rates steady.
Exports are reportedly likely to grow for the third consecutive month in January 2010, as per estimates of the commerce department, making the case for a possible withdrawal of the stimulus package for sectors that were doing well. The finance and commerce ministers are scheduled to meet later in the week to take a decision on the continuation of the stimulus package for exporters, commerce secretary Rahul Khullar has said. Exports grew 13% in January 2010 over a year ago he said.
A day after regaining the psychological 16,000 mark, the barometer index BSE Sensex fell below that level on Wednesday, 10 February 2010, on waning risk appetite among foreign investors. Intraday volatility on the bourses was immense. The BSE 30-share Sensex fell 120.01 points or 0.75% to 15,922.17 on that day.
As per provisional figures on NSE, foreign funds sold shares worth Rs 208.62 crore and domestic funds bought shares worth Rs 459.11 crore on Wednesday.
Daily News Roundup - Feb 11 2010
TCS to hire 21% more in FY11. (BS)
SAIL divestment plan to be presented to cabinet in 10 days. (ET)
Hindalco to raise Rs49bn via debt. (BS)
The dispute between Netherlands based Brakel Corporation and Reliance Infra for twin Hydro projects in Himachal Pradesh has reached the Supreme Court. (ET)
ONGC not to set up arm for Assam operations. (BL)
RIL plans to shift registered office to Jamnagar. (ET)
Government plans private placement of BSNL shares. (BS)
Telenor buys additional 7% stake in Unitech Wireless for more than Rs20bn. (ET)
Shree Cement is setting up a grinding unit at Roorkee and Suratgarh for an investment of Rs3.5bn. (ET)
IDBI hikes FD rates by 50bps. (ET)
Ranbaxy to market Daiichi products in Mexico. (ET)
Kingfisher Airlines plans to raise Rs4bn via 1:1 rights issue. (ET)
Tata Tea to enter mass packaged mineral water market. (BL)
Fortis to raise Rs12.5bn by issuing shares in domestic and international market. (ET)
Essar Steel plans to raise US$1bn from overseas markets to fund expansions. (ET)
Bombay Dyeing promoters’ eye to hike their stake by 5% by subscribing to convertible warrants. (ET)
Elder Pharma enters into injectable segment with a new manufacturing facility at Dehradun. (BL)
Zensar Technologies may go for acquisition by September. (BL)
NIIT Technologies bags order worth Rs2.3bn from Border Security Forces. (BL)
FM to meet petroleum minister to discuss political feasible price rise in fuel prices. (ET)
RBI to introduce a new benchmark from April 2010 that will more accurately reflect movement in interest rates. (ET)
Centre plans to freeze F&O trade in companies opting for FPOs. (ET)
Government may remove anomaly in import duty structure, which is affecting the competitiveness of domestic firms. (ET)
Excise duties are likely to be raised by 2-4% in forthcoming budget. (BL)
Issuance of oil bonds are expected to be phased out as the first step towards containing fiscal deficit. (BL)
All India Tyre Dealer Federation has asked union finance and commerce minister to remove import curbs on tyres. (BL)
Hope is back, though not high!
Hope is the expectation that something outside of ourselves is going to come to our rescue and we will live happily ever after.
Looks like the stormy weather for world equity markets has eased a little bit amid speculation of an impending rescue of debt-laden Greece. Risk tolerance has improved just a tad as well. However, things remain murky and uncertain given a spate of concerns – local and global. We expect the Indian market to rise at start as global markets are mostly up. The Nifty may continue to swing in a range of 4700-4900 in the near term. For the Nifty to cross 5000 again the global sentiment should remain positive on a consistent basis. FII selling too has to abate.
On the whole, the market will remain in a consolidation mode till we approach the Railway Budget and Union Budget. The main indices could remain sideways and choppy during the summer depending on what the Finance Minister says in the Budget. Thereafter, the monsoon factor could have a significant bearing on sentiment. Among the other factors to watch out for going forward will be earnings, valuations, fund flows, inflation, interest rates, policy announcements (if any) and of course the ever changing global events.
FIIs were net sellers in the cash segment on Wednesday at Rs2.08bn on a provisional basis while the local funds were net buyers of Rs4.59bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers of Rs10.41bn. On Tuesday, FIIs were net sellers of Rs3.95bn in the cash segment, while Mutual Funds were net buyers at Rs2.59bn, according to SEBI web site.
US stocks ended in the red on Wednesday as investors weighed the Greek debt situation, a strong dollar and Federal Reserve chairman Ben Bernanke's plan for executing 'exit' from an ultra-loose monetary policy.
The Dow Jones Industrial Average lost 20 points, or 0.2%, to end at 10,038.38. The S&P 500 index lost 2 points, or 0.2%, to close at 1,068.13 and the Nasdaq Composite index shed 3 points, or 0.1%, to finish at 2,147.87.
The dollar rallied versus the euro and the Japanese yen.
US light crude oil for March delivery rose 77 cents to settle at $74.52 a barrel on the New York Mercantile Exchange.
COMEX gold for April delivery fell 90 cents to settle at $1,076.30.
Treasury prices fell, raising the yield on the 10-year note to 3.68% from 3.64% late on Tuesday.
Market breadth was negative.
US stocks had rallied on Tuesday as growing bets that the European Union (EU) will rescue Greece from its debt problems reassured investors after a four-week selloff. But stocks were choppy on Wednesday on concerns that Greece could just be the first of many countries that are feeling the pressure of a growing fiscal deficit.
Stocks also remain vulnerable to a retreat in the aftermath of 2009's big rally, in which the S&P 500 gained 23%. In the last nine months of 2009, it gained 65%, bouncing off 12-year lows hit in March. Since hitting a rally high on Jan. 19, the S&P 500 is down almost 7%.
Bank shares bounced up after several down sessions, countering some of the broader weakness in the market. The KBW Bank index gained 1%.
Bernanke said that while the US economy continues to require the support of emergency programs unleashed at the height of the financial crisis in 2008, at some point the central bank will need to tighten financial conditions.
The Fed chief said that he will pull cash from the system before it lifts interest rates, and that its decision to boost the emergency discount rate is not the same as a shift in policy. The prepared testimony was meant to be delivered at a House Financial Services Committee hearing that was postponed due to snow.
Reports late on Wednesday said that France and Germany may present a rescue plan for Greece at Thursday's meeting of euro zone countries. Meanwhile, Greece has vowed to press forward with cutbacks, despite an ongoing worker strike.
A fresh financial crisis in Europe or elsewhere in the world would set back the still-fragile global economic recovery and hurt US financial institutions. Investors are also keeping an eye on the growing US budget deficit.
The debt crisis has sparked a flight from risk over the last few weeks, with investors choosing government bonds and the dollar over stocks. Investors have fled the euro in favor of the greenback and have sold dollar-traded commodities and commodity stocks.
The December trade gap widened to $40.2 billion in December from a revised $36.4 billion in November, the government reported Wednesday morning. Economists thought it would narrow to $35.8 billion. The widening reflected a pick-up in imports amid the recovering economy.
Walt Disney reported higher-than-expected quarterly earnings and revenue in a report released after the close of trading Tuesday. Disney shares rose 0.6%.
European shares gained, boosted by hopes that a solution will be soon be found for Greece's financial woes. Steel giant ArcelorMittal and carmaker Peugeot declined on disappointing earnings news.
After just scraping into the green to record a second straight day of gains on Tuesday, the pan-European Dow Jones Stoxx 600 index rose 0.6% to 240.69.
Greek lenders rose as speculation intensified that a European rescue plan is in the works. Representatives of Germany and other EU members were in discussion on Wednesday on stepping in to support Greece, ahead of a meeting of the top leaders on Thursday.
The ASE Composite climbed 2.4% to 1,940.82 in Athens and Greek government bond prices rebounded.
The UK FTSE 100 index rose 0.4% to 5,131.99, the German DAX index climbed 0.7% to 5,536.37 and the French CAC-40 index rose 0.6% to 3,635.61. All indexes closed off earlier highs.
After scaling back to the 16,000 levels in the previous trading session, bears yet again dragged the Sensex below the psychological level. This time Indian markets seemed to have ignored the positive cues spilling in from US, Asia and Europe.
On Wednesday, indices surrendered their gains in the last hour of the day as selling picked momentum. Barring the Consumer Durables and Realty index all the other sectoral indices ended in the red. The Capital Goods index was the top loser followed by PSU index losing 1%.
The BSE Sensex slipped 120 points to end at 15,922 after touching a high of 16,141 and a low of 15,892. The Nifty fell 35 points to end at 4,757.
Equity markets in Asia ended in the green. The Nikkei in Japan was up 0.3%, while Australia's S&P/ASX ended marginally higher by 0.2%. The Shanghai SE Composite ended higher by 0.4% and Hang Seng index in Hong Kong added 0.7%.
In Europe, stocks were trading higher as well. The DAX in Germany was up 1% and the CAC 40 index in France was up 0.8%. The FTSE in the UK was up 0.6%.
Coming back to India, among the BSE sectoral indices, the BSE Capital Goods index was the top loser, shedding 1.2%, followed by PSU index that was down 1% and BSE Power index was down 1%. The BSE Mid-Cap and BSE Small-Cap index both ended flat.
Among the 30-components of Sensex 21 ended in the negative terrain and 9 ended in the green. M&M, SBI, Tata Steel, Sun Pharma and L&T were among the top losers. On the other hand, major gainers were Hindalco, HDFC Bank, Sterlite, Grasim and Hero Honda.
Outside the frontline indices, the big losers in the broader market were Sun TV, Chambal Fert, Renuka Sugar, RCF and Jai Corp. On the other hand, gainers included Glaxo, REI Agro, IRB Infra and Voltas.
HCC announced that it received three letter of awards from NHAI to develop three contiguous sections of ~256 Kms length between Bahrampore to Dalkhola on NH-34 in the State of West Bengal on Design, Build, Finance, Operate and Transfer (DBFOT) Toll basis.
Shares of HCC advanced by 2% to end at Rs134. The scrip opened at Rs134.7 it touched an intra-day high of Rs137.5 and a low of Rs132.1 and recorded volumes of over 0.87mn shares on BSE.
BHEL secured a contract worth Rs4.5 for setting up a 330 MW (3x110 MW) Hydro Electric Project (HEP) in the state of Jammu and Kashmir. The turnkey order for the Kishanganga HEP of NHPC was bagged by Hindustan Construction Company (HCC) along with BHEL under stiff International Competitive Bidding (ICB), as its offer was found techno-economically the best.
BHEL ended lower by 1.3% to end at Rs2302. The scrip opened at Rs2341 it touched an intra-day high of Rs2346 and a low of Rs2290 and recorded volumes of over 63,000 shares on BSE.
Shares of Mcnally Bharat gained by 3% to end at Rs249 after the company received two orders, first to design, engineering, supply of equipment, underloading, storage, haqndling, erection testing & commissioning and structural work at site of an HDPS System for Aditya Aluminium Smelter Project of HINDALCO for a total value of Rs283.2mn; and
Also to Design, Engineering, Supply of Equipment, Underloading, Storage, Hanqndling, Erection testing & commissioning and Structural Work at Site of an HDPS System for Mahan Aluminium Smelter Project of HINDALCO for a total value of Rs283.2mn.
Shares of oil marketing companies were in demand after reports stated that the government would meet today to discuss panel recommendations on fuel pricing.
Implementation of the recommendations will result in an increase in gasoline, diesel and cooking gas prices, reports stated.
Shares of BPCL gained by 2% to end at Rs573, HPCL ended higher by 1.5% to end at Rs348 and IOC advanced 2% to end at Rs316.
The government rejected the first genetically modified food after protests by farmers. "There is no overriding food security argument for Bt brinjal," or genetically modified eggplant, Environment Minister, Jairam Ramesh was quoted as saying. "Our objective is to restore public confidence and trust in Bt brinjal." A moratorium will be imposed until safety studies are carried out "to the satisfaction of the scientific community," he said.
Monsanto, supplied the gene for the vegetable and introduced genetically modified cotton in India in 2002.
Shares of Monsanto India slipped by 6.5% to end at Rs1763. The scrip opened at Rs1899 it touched an intra-day high of Rs1899 and a low of Rs1755 and recorded volumes of over 12,000 shares on BSE.
Shares of Golden Tobacco were locked at 5% upper circuit to end at Rs135.35 after the company announced that the board of directors will meet on February 16, 2010 to consider a proposal to develop properties. The scrip opened at Rs135.35 it touched an intra-day high of Rs135.35 and a low of Rs134.5 and recorded volumes of over 53,000 shares on BSE.
NIIT Technologies
We recommend a buy in NIIT Technologies from a short-term horizon. It is apparent from the charts that the stock has been on a long-term uptrend from its all-time low of Rs 42.5 touched in March 2009. Since then, the stock has been forming higher peaks and higher troughs, penetrating key resistance levels. However, after rallying near Rs 200 the stock encountered resistance in mid-January 2010 and started to decline. A significant longer term support around Rs 160 arrested the stock's decline by providing support. Subsequently, the stock took support and rebounded gaining more than 7 per cent, accompanied with high volume. Moreover, with small blip the stock managed to close above the long-term uptrend-line which is still intact. The daily relative strength index (RSI) entered the neutral region from the bearish zone and weekly RSI has re-entered the bullish zone. Considering that the long-term support and uptrend is strong, we are positive on the stock from a short-term perspective. We expect its upward journey to continue until it hits our price target of Rs 187. Traders with short-term perspective can consider buying the stock while maintaining stop-loss at Rs 161.5.
via BL
Subscribe to:
Posts (Atom)