Motherson Sumi Systems
Friday, August 13, 2010
Indian markets continued to gain for the second day on Friday. The Sensex ended with moderate gains as realty, consumer durable and banking stocks rallied today. After opening flat with positive bias, the index traded in the range and further extended gains on heavy buying interest seen across board, touching a high of 18,260.39. Later, in the second half, it shed some gains to finally close in the green.
Today's major news
Reliance Communications Q1 consolidated net profit dips 85% yoy; the stock ends 2.94% lower
Tata Steel shines on strong Q1 results; the stock closes 1.39% up
Jet Airways flies high on strong July traffic; the stock ends 11.27% higher
Major news for the week:
June index of industrial production at 7.1%
Food inflation rises to 11.4%
State Bank of India hits 52-week high on robust Q1 results
Tata Motors hits an all-time high on robust Q1 numbers
Reserve Bank of India unveils discussion paper on new bank licenses
Nifty August 2010 futures were at 5,458.35, at a premium of 6.25 points, compared to spot closing of 5,452.10. Turnover in NSE's futures & options (F&O) segment was Rs 94,861.02 crore, lower than Rs 1,04,776.77 crore on Thursday, 12 August 2010.
Key benchmark indices eked out marginal gains in the week ended Friday, 13 August 2010 as select pivotals surged after reporting upbeat earnings. Sustained buying by foreign funds supported the market, as the barometer index BSE Sensex logged gains in three out of the five trading days of the week.
The key benchmark indices registered modest gains even as profit taking ahead of the weekend pulled the market off the intraday high. The BSE 30-share Sensex jumped 93.13 points or 0.52%, off close to 90 points from the day's high and up close to 120 points from the day's low. Index heavyweight Reliance Industries (RIL) came off the higher level. The market breadth was positive, weakening from a strong breadth earlier in the day. Realty, IT, banking and consumer durables stocks rose. European stocks reversed initial gains. US index futures, too, reversed initial gains.
Benchmark indices, after surging nearly a percent in the first half, gave away half of the gains to close higher by about half a percent on the last trading day of the week. Sensex gained 93 points to close at 18167 while Nifty settled at 5452, up 35 points. BSE Mid-cap and Small-cap indices gained 1% and 0.7% respectively. Cairn surged 4.3% while Sterlite Industries plunged by the same quantum on the back of reports that the Vedanta Resources is likely to pick up 51% stake in Cairn India. Patni galloped 8.4% after the announcement of a special dividend of `. 63 per share and the buzz that the stake sake is soon to follow. On weekly basis, Sensex and Nifty are up 0.1% and 0.2% respectively. Realty index surged 6.6% week-on-week, becoming the top gainer among the sectoral indices followed by Consumer Durable index, up 4.4%. IT and Teck indices were down the most, shedding 2.2% and 1.7%. European markets, after opening in the green, slipped in the negative territory and were trading around half a percent lower. US stock indices futures too were down about half a percent ahead of retail sales and inflation data.
Sometimes the cure for restlessness is rest. – C Wainwright.
Stellar results by banking major SBI helped counter the bad news on the economic front (IIP fell and food inflation spiked). One good thing is that trading volume has picked up in the past 2-3 sessions. Also, the India story still appears attractive with no let-up in FII inflows, though domestic funds continue to be circumspect. One should also take note of the spectacular debut of India’s MakeMyTrip on the Nasdaq. This only reinforces a view that quality Indian paper is still in high demand.
After falling for two straight trading sessions, the Indian market stabilised a little bit but not before going through a topsy-turvy ride. The benchmark stock indices finished off days low, thanks to better than expected quarterly earnings by banking major and index heavyweight SBI. Other banking shares also perked up following SBI's stellar numbers.
Disappointing economic data and cautionary statement from Cisco Systems weigh on stocks
Disappointing economic data and cautionary statement from Cisco Systems dragged US stocks lower for third straight day at Wall Street on Thursday, 12 August 2010. Initial claims data checked in earlier during the day. The Dow kicked off the day sharply lower but then managed to erase its loss partly throughout the day. Cisco Systems weighed heavily on the tech heavy Nasdaq. Stocks continued to bleed for the entire day once again. The dollar spiked up heading to its highest level in more than a month leading to lower commodity prices.
Prices rise after economic data disappoint
Bullion metal prices ended higher on Thursday, 12 August 2010 at Comex. Prices rose despite a strong dollar after initial claims data checked in worse than expected at Wall Street thereby increasing the appeal of precious metals as an alternate investment vis a vis equities.
We recommend a buy in the stock of Hercules Hoists from a short-term perspective. It is evident from the charts of the stock that from its March 2009 low of Rs 71.5, it has been on a long-term uptrend.