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Monday, March 07, 2011
Market loses ground as rally in crude oil stokes inflation worries
The key benchmark indices edged lower as investors shunned equities amid concerns about high oil prices and the ongoing spat on seat sharing between the Congress and its regional ally DMK. Nevertheless, the market came off the day's low after a steep intraday slide on market buzz the Congress and DMK may resolve differences over seat-sharing in assembly polls in Tamil Nadu and that a pact may be worked out by the two sides by this evening. Reports of likely good rains this year also aided the intraday recovery. The BSE 30-share Sensex was down 263.78 points or 1.43%, up 163.96 points from the day's low and off 138.98 points from the day's high. The S&P CNX Nifty fell below the psychological 5,500 mark.
Daily News Roundup - Mar 7 2011
CBI to file separate charge sheets against Swan (Etisalat DB), Loop Telecom and Unitech Wireless by the month-end. (ET)
L&T to raise Rs114bn from SBI-led consortium of banks. (BS)
Lanco Infratech agrees to acquire Australia’s Griffin Coal for ~Rs34bn. (ET)
Fortis Global Healthcare acquired 28.6% in Lanka Hospitals for ~Rs1.6bn. (ET).
Steady Sensex ends flat...Nifty holds above 5500
After three straight days of solid gains, the Indian markets ended flat on Friday, as investors decided to take a pause after the post-Budget rally. Markets started off with a gap up opening in the morning, tracking strong cues from the overseas markets, especially Wall Street. US stocks had their best day in three months after the weekly jobless claims hit nearly three-year low. Asian and European markets extended their gains today, notwithstanding concerns over the Middle-East tension and its impact on oil prices. However, as the day progressed, the benchmark Indian indices were unable to hold on to their gains.
Now showing - DMK drama
Drama is something people go through everyday. Change of character is nothing more than mood swings. ~ Kewana Bagby.
Well, just when the Indian market was looking like adding to the post-Budget gains comes yet another political jolt. The DMK has decided to pull out its ministers from the UPA II, ostensibly on differences over seat-sharing for the upcoming TN assembly polls. The DMK will offer issue-based support though.
Precious metals end with healthy weekly gains
Prices benefit as alternate investment as stocks slump
Precious metals benefited at Comex on Friday, 04 March 2011 from a flight to safety as stocks encountered renewed selling interest.
Gold hit a record high of $1432.80 per ounce and settled just off of that mark at $1431 per ounce with a 1.0% gain. It was a gain of $12.2. For the week, gold gained 1.4%.
Big gains for crude as Libyan turmoil continues
prices rise by almost 7% for the week
Oil prices set a new record high of $104.60 per barrel at Nymex in the April contract just before they closed with a 2.5% gain at $104.42 per barrel on Friday, 04 March 2011.
For the week, the energy component climbed 6.7%, which was primarily underpinned by continued concern about social and political volatility in North Africa and the Middle East.
Copper trades lower as oil zooms up
Prices pare early gains on demand concerns
Copper started the day in the black at Comex but turned lower as stocks deepened their losses as oil rallied on Friday, 04 March 2011.
Copper for March delivery retreated less than 1 cent, or 0.1%, to $4.47 a pound at Comex on friday. For the week, copper rose 0.7%.
Market may edge lower on political worries, high oil prices
The market may edge lower on political uncertainty after Dravida Munnettra Kazhagam (DMK), a key ally of the Congress-led UPA government at the Centre, said on Saturday, 5 March 2011, that it is pulling out of the government. A rally in crude oil prices and weak Asian stocks will also weigh on investor sentiment. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 68.50 points at the opening bell.
Sunday, March 06, 2011
5600: A CRUCIAL RESISTANCE
The week gone by turned out to be an extremely good one for the market as benchmark indices surged 4.4%, the highest percentage gain after the week ended 5th November 2010. Nifty closed in green on all the four trading sessions of the truncated trading week. On Friday however, the benchmark encountered a stiff resistance in the vicinity of important resistance levels, viz. 200 Day Exponential Moving Average and immediate previous top placed at 5601 and 5599 respectively, and slipped more than a percent from the top of the day to close at 5538, still gaining 235 points or 4.4% compared to previous week.
Weekly News Roundup - Mar 6 2011
Fed says companies starting to hike prices
In its latest Beige Book survey on the state of the US economy, the Federal Reserve said that manufacturers and retailers across all 12 of the central bank's districts are passing on rising commodity prices to consumers. "Manufacturers in many districts conveyed that they were passing through higher input costs to customers or planned to do so in the near future," the survey found. "Retailers in some districts mentioned that they had implemented price increases or were anticipating such action in the next few months," the report said.
Crude oil rises for 3rd weekly gain on geopolitical risk
Crude oil headed for its third straight weekly gain amid persistent fears over the ongoing political turbulence in the Middle-East and North Africa. At the same time, economic reports this week confirmed that the US economy was on the mend, stoking speculation of a pick-up in fuel demand from the world's largest energy consumer.
MphasiS bows to market pressure...Unveils new disclosures
MphasiS has decided to reveal its financial numbers under the revenue heads as it used to do in the previous quarters. IT has also decided to publish data on average realised rate that it earns for onsite and offshore work. The company, which is in the midst of a corporate governance controversy, had stopped releasing this data since the last four quarters. It may be recalled that lack of adequate disclosures by MphasiS in the first quarter's financial statements had sent the company's shares sharply lower last week. The stock fell from Rs 627 a month ago, to Rs 450 as of Thursday's close on the BSE.
No diesel decontrol now: Kaushik Basu
The Government is not contemplating deregulation of diesel prices as of now as inflation remains elevated, but it may have to consider the move if crude oil continues to rise, chief economic adviser to the Union Finance Ministry, Kaushik Basu said. "Diesel price deregulation is not inevitable...given the inflationary situation right now, we don’t want to do that," Basu told reporters at an industry summit organised by the Confederation of Indian Industry (CII).
India's infrastructure sector growth picks up in January
India's infrastructure sector growth remained solid in January as compared to the previous month, as Petroleum Refinery, Cement and Electricity sub-segments saw improvement, data released by the Government showed. The core sector growth, as measured by the index of six key infrastructure industries, stood at 7.1% in January 2011 versus 6.1% in December, the Commerce & Industry Ministry said. The Index of six core industries, having a combined weight of 26.7% in the Index of Industrial Production (IIP), stood at 295.6 in January 2011. Infrastructure sector growth stood at 9.8% in January 2010. December's reading was revised to 6.1% as against the preliminary estimate of 6.6%.
Cabinet clears Banking Laws Amendment Bill
The Government gave a green signal to the Banking Laws Amendment Bill that seeks to align the voting rights in banks in proportion with the equity shareholding. At present, the voting rights of a shareholder is limited to 1% in state-owned banks and 10% in private banks irrespective of the equity holding. According to reports, the Amendment Bill will now be tabled in Parliament for approval. The amendments, once approved by Parliament, will enhance the voting power of shareholders in line with the portion of equity held by them.
India 's economy grows by 8.2% in Q3
India's economy slowed in the third quarter of the current fiscal year from the previous two quarters, as output of Manufacturing and Construction fell sharply while Government spending too softened. The Gross Domestic Product (GDP) grew by 8.2% in the October-December quarter as compared to an expansion of 8.9% in the first and the second quarters. GDP had grown by 7.3% growth in the third quarter ended December 2009. The GDP growth during April-December 2010-11 stood at 8.6% compared to 7.4% in the corresponding period of the previous fiscal year. Manufacturing output grew by mere 5.6% in Q3 FY11 as against 9.8% in the second quarter and 11.4% in the same quarter a year earlier. Meanwhile, Agriculture, Forestry & Fishing output rose by 8.9% year-on-year in the final three months of 2010, faster than the 4.4% increase in the previous three months. Farm sector output had shrank by 1.6% in Q3 FY10. Construction output stood at 8% in Q3 FY11 as against 8.7% in Q2 FY11 and 8.3% in the year-ago period. Community, Social & Personal services output was at 4.8% in Q3 FY11 versus 7.4% in Q2 FY11 and 7.6% in Q3 FY10.
Weekly Newsletter - Mar 6 2011
The Budget actually turned out to be a savior for the markets, at least for the week, with the key indices posting smart gains before finishing flat on Friday. At the moment, it is not clear whether the post-Budget rally will sustain or the market will soften a bit. either of the two scenarios could unfold. So, it would pay to stay cautious. The trend may be volatile and the indices will stay within a trading range. The Nifty is likely to trade between 5400 and 5650 in the short term.
Union Budget...FM pulls off a smart balancing act
The Union Budget 2011-12 aims to sustain economic growth, strengthen infrastructure, moderate the price rise, particularly of agricultural produce and reduce social imbalances through inclusive development. Presenting the Budget for FY12 in the Lok Sabha on Feb. 28, Finance Minister Pranab Mukherjee said that the budget is a transition towards a more transparent and result oriented economic management system in India. He said while developments on India’s external sector have been encouraging, continued high food prices have remained a principal concern. Mukherjee said that the trend revealed shortcomings in distribution and marketing system. The Finance Minister said that huge differences between wholesale and retail prices are at the expense of remunerative prices for the farmers and competitive prices for consumers.
Further strength likely above 5,570
The markets staged a strong comeback on the back of a populist Budget. The Sensex rallied 1,000 points during the week, from a low of 17,719 to a high of 18,737. The BSE benchmark index finally ended with a gain of 786 points at 18,487.
Among the index stocks, Mahindra & Mahindra zoomed nearly 14 per cent to Rs 676. Maruti and ITC also soared over 10 per cent each. HDFC, HDFC Bank, Bajaj Auto, Reliance Communications, Larsen & Toubro, Tata Motors, BHEL, Jaiprakash Associates, NTPC, Jindal Steel and Hindalco gained 5-9 per cent each. Reliance Infrastructure down 5 per cent was the only major loser.
Atlas Copco
Industrial machinery maker Atlas Copco (India) has made a voluntary offer to delist the company's shares from the BSE and Pune Stock Exchange.
The floor price for this offer is Rs 1,426 and the company has provided an indicative offer price of Rs 2,250. Current market price is Rs 2122.
Lovable Lingerie IPO Analysis
With strong brands in its kitty, presence in both mid-market and premium segments, a wide network of dealers and low debt, lingerie maker Lovable Lingerie is a good, if high risk, bet on the niche textile space.
The company's future plans rely on heavy advertising spends, which will compress margins in the near-term. Capacity additions will fully come onboard only FY-13 onwards.
MRPL
Efforts to resolve the oil-payment row with Iran, an expansion plan ahead of schedule, positive outlook for the refining sector, and the recent sharp fall in its stock price make MRPL an attractive bet for long-term investors. At its current price of Rs 58.6, the stock discounts its trailing 12-month earnings by around 11.7 times. This is lower than the trading multiple of other pure-play refiners such as Chennai Petroleum and Essar Oil, and also below MRPL's own historical-trading range.
Bartronics
The stock of Bartronics India has fallen over 61 percent in the last one year, on investors fears about heavy FCCB(foreign currency convertible bonds) repayment and also on concerns of the promoters pledging a chunk of their holdings. This apart its order-book position too has remained stagnant.
Saturday, March 05, 2011
Friday, March 04, 2011
Nifty March 2011 futures at premium
Turnover plunges
Nifty March 2011 futures were at 5,547.75, at a premium of 9 points over spot closing of 5,538.75. Turnover in NSE's futures & options (F&O) segment plunged to Rs 104831.15 crore from Rs 150590.73 crore on Thursday, 3 March 2011.
High oil prices may cap upside
Market friendly measures announced by Finance Minister Pranab Mukherjee in Union Budget 2011-12 presented on 28 February 2011 may continue to push the market higher. Progress of the peace talks in the Middle East, crude oil price and global market moves will also influence Indian stocks which have witnessed a solid post-Budget rally.
Market gives thumbs up to Budget
The key benchmark index surged in the week ended Friday, 4 March 2011, after the Finance Minister refrained from raising excise duty in the Union Budget 2011-12 unveiled on Monday, 28 February 2011. The market logged gains in three out of four trading sessions. The stock market was closed on Wednesday, 2 March 2011, on account of Mahashivratri.
Some auto shares extend gains on strong February sales
The key benchmark indices pared initial strong gains to close flat as high crude oil prices triggered profit taking. The BSE 30-share Sensex was down 3.31 points or 0.02%, up close to 40 points from the day's low and off close to 245 points from the day's high. The Sensex and the 50-unit S&P CNX Nifty came off 5-week highs struck earlier in the day. World stocks rose as investors' confidence in the global economy was boosted by a drop in US jobless claims.
Thursday, March 03, 2011
Market Review - Mar 3 2011
It was the fourth consecutive day of positive close for market as benchmark indices managed to close modestly higher after a choppy trade. There was sharp intraday recovery from the lower level in the first half on the back of news that Gaddafi has accepted peace plan to end Libyan crisis. However, later on the news of fresh air strike on Brega oil terminal in East Libya led to a sharp spike down. Finally Sensex closed at 18489, up 43 points while Nifty ended at 5536, up 14 points. BSE mid-cap and small-cap indices gained 0.3% and 0.2% respectively. Capital Goods stocks led from the front, supported by Auto shares. European markets were trading with gains of nearly a percent while US stock futures were up about two third of a percent ahead of reports on jobless claims, nonfarm productivity and ISM non-manufacturing composite index.
Stocks mostly advance in Asia
Asian markets gain on upbeat US economic data, bargain hunting
Asian markets gained modestly today as positive closing on Wall Street in the previous session despite crude oil prices surging past the $100 a barrel mark on better than expected economic data triggered a wave of bargain hunting. In overnight trades, the US stocks ended mostly higher as the Fed's Beige Book stated that economic activity continued to expand at a modest to moderate pace in January and early February but also noted that costs are rising for manufacturers and retailers in most areas. However, the real turner proved to be monthly data out from payroll processor ADP, which indicated that US private companies added 217,000 jobs in February. The Dow edged up by 8.78 points or 0.1% to close at 12,066.80.
Lovable Lingerie sets Rs 195-205 per share IPO price band
IPO opens for bidding on 8 March 2011
Inner-wear manufacturer Lovable Lingerie has fixed a price band of Rs 195-205 per share for its initial public offering (IPO) which opens for bidding on 8 March 2011. The IPO which closes on 11 March 2011 would constitute 27.08% of the post issue paid-up capital of the company. The company plans to raise up to Rs 93.28 crore by offering 45.50 lakh shares through the forthcoming IPO.
Market extends gains for the fourth day
Hopes for financial sector reforms and the latest data showing easing of food inflation in mid-February 2011 and the services activity expanding at its fastest pace in three months in February 2011, helped Indian stocks eke out small gains in a highly volatile trading session. The BSE 30-share Sensex rose 43.26 points or 0.23%, up 236.14 points from the day's low and off 113.81 points from the day's high. The BSE Sensex and the 50-unit S&P CNX Nifty attained two-week closing highs.
Daily News Roundup - March 3 2011
Cairn India and its JV partners are set to undertake US $44mn drilling campaign in the eastern offshore Ravva Field of K-G Basin.(ET)
BHEL bags Rs32.2bn order for thermal power in west Bengal.(ET)
Tata Steel has increased its stake in Riversdale Mining to 27.14 % from 24.2 % at an investment of around Rs5bn. (BL)
The day after Budget…Sensex zooms 600 points
We saw the Indian markets reverse sharply on the Budget Day after notching strong gains initially. That performance led to some skepticism about the Finance Minister's Budget proposals, especially on fiscal deficit, spending and subsidies. But, the bulls had other ideas and even the bears had to fall in line once the rally gathered pace today.
Pressure on the bourses
"Truth will rise above falsehood as oil above water." - Miguel de Cervantes.
The bitter truth is that crude prices can upset the Budget estimates, which effectively means that the Finance Minister’s expectations on the fiscal front may not hold water. Now at some point, the Government will have to take a call on the promised diesel deregulation. That will in turn push inflation higher. Bear in mind, five states go to polls in the next few weeks. So, it would be all the more difficult for UPA II to decide on the sensitive issue.
Precious metals continue to rise
Political tensions and inflation worries take prices higher
Gold prices struck new all time high on Wednesday, 02 March 2011 at Comex. Geo-political tensions, higher inflation worries, and comments by the Fed Chairman took prices higher to fresh highs. Silver continued to sport three-decade high figures.
Crude surpasses $102
Inventories register unexpected drop during last week
Crude prices surged higher on Wednesday, 02 March 2011 at Nymex. Prices went up as energy department reported unexpected drop in crude stockpiles for last week. Mid East geo political tensions further aided in rising crude oil prices.
Market may open lower as crude boils; food inflation data eyed
The market may open lower as crude oil prices held near 2-1/2 year peaks on Thursday as worries about supply disruption persisted given ongoing unrest in Libya. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 71 points at the opening bell. India imports more than 70% of its oil requirement. US crude oil futures were up 38 cents or 0.37% at $102.61 a barrel. Asian stocks were firm.
Wednesday, March 02, 2011
Precious metals rise substantially higher
Silver rises to fresh thirty-two year high
Precious metals ended considerably higher on Tuesday, 01 March 2011 at Comex. Geo-political tensions and comments by the Fed Chairman took prices higher to fresh highs. Prices rose despite a steady dollar.
Tuesday, March 01, 2011
US stocks end February with good gains
Economic data and crude price pull up stocks
US stocks ended with good gains on Monday, 28 March 2011. Nasdaq also joined the other two major indices to end in the green after staying in the red for most part. Better than expected economic data took stocks higher today. Crude prices paring earlier gains and slipping modestly lower also added to the momentum.
Market may extend gains on firm Asian stocks
The market may extend gains for the third straight day toady, 1 March 2011, on firm Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a gain of 47 points at the opening bell. As per provisional figures foreign funds sold shares worth Rs 39.86 crore and domestic funds bought shares worth Rs 317.38 crore on Monday when stocks had risen in choppy trade after Finance Minister Pranab Mukherjee laid stress of infrastructure and agriculture in Union Budget 2011-2012. Auto and cement stocks will be in focus as companies start unveiling sales data for the month just gone by.
Markets may start strong on positive global cues
The first session of March 2011 may begin on a positive note tracking healthy global markets
Headlines for the day:
OMCs may raise petrol prices by up to Rs 4 a litre
Cement makers likely to hike prices
SBI gets right to reduce stake in subsidiaries
Daily News Roundup - March 1 2011
The Government will infuse Rs9bn as equity capital into two PSU lenders - Andhra Bank and Allahabad Bank as part of its recapitaliszation scheme. (ET)
SRF Ltd received board approval to invest Rs6.65bn for expansion, including setting up of a packaging film plant in South Africa.(BS)
Tata Motors to unveil a new compact car, Pixel on its micro-car Nano platform exclusively for the European market. (ET)
Sensex swings wildly...Skyrockets then softens
The highly volatile Indian markets ended the day with decent gains after the Finance Minister presented his sixth Union Budget in the Lok Sabha today. Though the Budget fell short on several expectations, there weren't too many nasty proposals. Overall, the Budget was greeted with cheers by markets, corporates and analysts alike.
Speech done, now results
Leadership is not about making speeches or being liked; leadership is defined by results not attributes." - Peter F. Drucker.
The King’s Speech may have won the Oscar but investors are more keen to know whether the Finance Minister’s speech will deliver on the promises. The Budget Day show by the Sensex and the Nifty was a bit confusing, especially after having surged initially. Hopefully, most participants will get convinced about the FM’s Budget math sooner rather than later. Given the low level of expectations before the mega event, it is no surprise that the FM has managed to surpass expectations.
Precious metals eke out strong monthly gains
Gold ends flat while silver gains for the day
Precious metals stayed at high levels on Monday, 28 February 2011 at Comex. Geo-political tensions kept prices at these levels. Gold ended almost flat while silver gained. The low dollar pushed up prices today.
Crude sheds early gains
Prices gain more than 5% in February
Crude prices ended little lower on Monday, 28 February 2011 at Nymex. Prices went up initially due to the low dollar but then pared its gains as traders mulled over the fact that recent surge in crude price was overdone. Prices also dropped on reports that Saudi countries were increasing production to offset the loss from Libya.
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