Bulls set to swing

Win as if you were used to it, lose as if you enjoyed it for a change.

The bulls will hope to get back to their winning ways after taking a break on Wednesday. Global weakness has not caused a major dent to the sentiment as yet. We may see the main stock indices touching new highs. Though provisional data shows marginal net sale figure by the FIIs on Wednesday, it may just be an aberration rather than a potential change in trend.

Coming to today's session, we expect a smooth rollover in the F&O segment. Despite, Wednesday's weakness, bulls continue to have an edge over the bears. Some consolidation or correction going ahead could always take place. The derivative settlement is also likely to increase the intra-day gyrations. A few key results may also have some bearing on the direction of the market today.

The outlook on the Indian economy is strong with inflation softening considerably from a two-year high hit in January. Interest rates seems to have stabilised, albeit at a higher level. The RBI is unlikely to jack up key short-term lending rates at the upcoming review of its annual policy, on July 31. However, the abundant liquidity in the banking system and the non-stop rise in the rupee may prompt some kind of a response from the central bank. One has to watch out for that.

Globally, the housing market crisis and trouble in the credit markets in America, higher crude oil prices and overheating in China are some of the key issues to keep an eye on. Also, interest rates may go up in key economies like the UK, Europe and Japan over the next few months. The uncertainty over what could be the next move by the Federal Reserve is also keeping investors across the globe on tenterhooks.

Wipro may be in action amid reports that the company, along with Coke and Danone are in the race for acquiring Bisleri, the popular bottled water business from Ramesh Chauhan. Sun Pharma will attract some attention as Sanofi Aventis has sued the domestic pharma major to prevent it from launching a generic version of the French drug maker's blockbuster cancer treatment Eloxatin.

Public sector Oil Marketing Companies (OMCs) will be in focus amid media reports that pressure is mounting on the Government to raise local retail prices of petrol and diesel following the spike in crude oil prices. Firstsource is the stock to watch out for as the BPO firm is reportedly eyeing a big-ticket acquisition in the US. Karuturi Networks is also expected to be in the limelight as a financial daily reports that it is looking at acquisitions in the US.

US stocks managed modest gains on Wednesday on the back of positive earnings from Amazon.com and Boeing, while investors shrugged off credit and housing market jitters. Energy shares rallied on a surge in oil prices.

The S&P 500 added 7 points, or 0.5%, to 1518.09. The Dow Jones Industrial Average advanced 68 points, or 0.5%, to 13,785.07. The Nasdaq Composite Index gained 8 points, or 0.3%, to 2648.17.

In its so-called Beige Book report, the Federal Reserve revealed modest economic growth in the United States, and further declines in homebuilding and real estate in most regions.

Early gains quickly vanished after the National Association of Realtors said that the pace existing home sales fell more than expected in June.

Adding pressure to stocks was news that private equity firm Cerberus Capital was experiencing difficulties tapping debt markets for the $20bn needed for the purchase of Chrysler fanned credit market fears.

Oil prices surged above $75 a barrel in New York. US light crude soared $2.34 to $75.90 a barrel on the New York Mercantile Exchange. Treasury prices edged higher, leaving the yield on the 10-year note at 4.9%, down from 4.91% on Tuesday. The dollar gained against the euro and the yen.

European stocks closed lower as investors reacted with dismay to earnings and outlooks from Volvo, Randstad and Siemens and the postponing of a sale of Chrysler's bonds.

The pan-European Dow Jones Stoxx 600 lost 0.9% to 385.80. The German DAX 30 declined 1.5% to 7,692.55 and the French CAC-40 fell 1.2% to 5,837.11. The UK's FTSE 100 dropped 0.7% to 6,454.30.

Major Latin American equity markets closed mixed. Mexican stocks succumbed to pressure from a weak report on US housing sales while Brazilian equities pushed through the sluggish data to finish higher.

In Sao Paulo, the Bovespa stock index closed up 207 points, or 0.4%, at 56,001.30. In Mexico City, the IPC index fell 359 points, or 1.1%, to 31,103.53. The Merval index in Argentina finished nearly flat at 2,242.78. But the IPSA index in Chile fell 30 points, or 0.9%, to 31,103.53.

Among the other emerging markets, the RTS index in Russia shed 0.1% to 2047.

It is a mixed picture in Asian markets this morning. The Nikkei in Tokyo was down 46 points at 17,811 while the Hang Seng in Hong Kong was up 141 points at 23,502. The Kospi in Seoul was flat at 2004 and the Straits Times in Singapore dropped 6 points at 3627.

The Morgan Stanley Capital International Asia Pacific Index lost 0.4% to 160.03 as of 10:44 a.m. in Tokyo, after falling 0.5% yesterday. Australia's S&P/ASX 200 Index dropped 1%, the only other loser among markets open for trading.

Bears were back on the street ahead of F&O expiry as a volatile session in red. Global weakness and profit booking in the Realty, Auto, Capital Good and Metal stocks dragged the benchmark Sensex below the 15700mark and NSE Nifty below the 4600mark. Cement stocks led the downfall after reports stated that trade practices regulator ordered an investigation into an alleged price manipulation by top 14 cement manufacturers. Even broader market i.e. Mid-Cap and the Small Cap indexes also were on the receiving end. However, FMCG index was the only index that ended in green led by heavyweight ITC and Hindustan Lever. Finally, BSE 30-share Sensex slipped 95 points to close at 15699. NSE-50 Nifty lost 32 point to close at 4588.

ONGC gained by 2% to Rs934 after the company announced its Q1 result with net profit at Rs46.1bn (up 12%). However, its net sales were at Rs136.88bn (down 6.2%). The scrip touched an intra-day high of Rs940 and a low of Rs905 and recorded volumes of over 13,00,000 shares on NSE.

Reliance Capital surged by over 3.5% to Rs1243 after the company announced its Q1 group result with net profit at Rs3.25bn (up 187%) and net sales at Rs11.11bn (up 212%). The scrip touched an intra-day high of Rs1255 and a low of Rs1190 and recorded volumes of over 30,00,000 shares on NSE.

SAIL lost by over 5% to Rs153. The company announced its Q1 result with net profit at Rs15.25 (up 10%) and net sales at Rs80.4 (up 6.3%). The scrip touched an intra-day high of Rs161 and a low of Rs152 and recorded volumes of over 1,00,00,000 shares on NSE.

Educomp Solutions rallied by over 7.5% to Rs2408 after the company announced that it has signed agreement with Government of Chattisgarh to set up centers in 323 locations. The scrip touched an intra-day high of Rs2433 and a low of Rs2200 and recorded volumes of over 9,00,000 shares on NSE.

Nagarjuna Construction was down by 3% to Rs202. The company announced that it has secured a Civil Construction Contract valued at Rs2.85bn comprising of Design, Engineering, Construction, Development of a Road Project from Pondicherry to Tindivanam. The scrip touched an intra-day high of Rs208 and a low of Rs200 and recorded volumes of over 22,00,000 shares on NSE.

Cement stocks lost ground amid news that trade practices regulator MRTPC has ordered an investigation into an alleged price cartelisation by top 14 cement manufacturers. ACC dropped by over 4.5% to Rs1065, Grasim was down by 2% to Rs2966 and Gujarat Ambuja declined over 4% to Rs128.

IT stocks also were under the pressure as forward contracts in the foreign exchange market has turned into discounts from premium and the rupee also constantly strengthening against the dollar as it hit a nine-year high of 40.27 per dollar. Satyam Computer dropped by over 5.5% to Rs487, Wipro was down by 1.5% to Rs498, Polaris declined by 4% to Rs125 and i-Flex declined 3% to Rs2267.

Capital Good stocks were on the receiving end as of profit booking dragged them lower. ABB lost by 1.2% to Rs1134, BHEL was down by over 2.5% to Rs1786 and L&T dropped by over 3.5% to Rs2568.

FMCG stocks stood firm in a choppy market led by gains in the heavyweight ITC as the scrip surged by over 9% to Rs165 on speculation that cigarette sales will beat estimates, Hindustan Unilever gained by 1% to Rs201 and Colgate edged higher by 0.5% to Rs371 and Dabur marginally added 0.3% to Rs100.

Auto stock were in reverse gear as heavyweight Bajaj Auto fell over 3.5% to Rs2353, Tata Motors was down by 2.8% to Rs726, M&M dropped 1.7% to Rs781 and Maruti declined 1.2% to Rs809.

Pharma stocks were in poor health. Glenmark lost 2.6% to Rs687, Dr Reddy’s Lab was down by 1.7% to Rs660, Cipla declined 1.2% to Rs186 and Ranbaxy lost 1% to Rs346.

Results Today:

ABB, Alfa Laval, Apollo Tyres, Apar Industries, AstraZeneca Pharma, Bajaj Electricals, Balaji Telefilms, Bharti Airtel, Crompton Greaves, Cummins India, Dabur Pharma, Dena Bank, EIH, Everest Kanto, Federal Bank, Gayatri Projects, GSK Consumer, GSK Pharma, Gujarat State Petronet, Gujarat Gas, Hikal, ICRA, Indraprastha Gas, ING Vysya Bank, Jyoti Structures, Lanco Infratech, MRF, Maruti, Patni, Punjab Tractors, Rajesh Exports, Shree Renuka Sugars, RPG Transmission, Shree Ashtavinayak, Subex, Sterlite Optical, Taj GVK Hotels, Tata Power, VIP Industries and West Coast Paper.

Fund Activity:

FIIs were net sellers of Rs354.7mn (provisional) in the cash segment on Wednesday. On the other hand, local institutions were net buyers at Rs1.5bn. In the F&O segment, FIIs were net sellers at Rs11.75bn.

On Tuesday, FIIs poured in Rs12.86bn in the cash segment. Mutual Funds were net sellers of Rs3.68bn.

Major bulk Deals:

Birla Sunlife has bought Esab India; Merrill Lynch has picked up Fact Enterprise; Citigroup and Goldman Sachs have purchased Fedders Lloyd; Reliance Capital has bought ICRA; Goldman Sachs and fidelity have purchased Lloyd Electric; Merrill Lynch has picked up Modison Metals and Abn Amro Bank has sold Suryachakra Power.

Insider Trades:

Gitanjali Gems Ltd: Goldman Sachs Investments (M) I Limited has purchased from open market 1000000 equity shares of the company on 19th July, 2007.

Lower Circuit:

Hindustan Oil exploration, Kothari Products, Prism Cement, IID Forgings and Vakran Software.

Upper Circuit:

Ganesh Forgings, TCI Industries, Anant Raj Industries, Oil Country and Jaybharat Textiles

Delivery Delight (Rising Price & Rising Delivery):

Indian Hotels, NDTV, IDFC, Ashok Leyland and HCC.

Abnormal Delivery:

Punjab Tractors, Adlabs, CESC, GAIL and L&T.

Major News & Announcements:

Infosys wins a seven-year, US$250mn contract from Philips

ONGC Q1 profit at Rs46.1bn (up 12%) and net sales at Rs136.88bn (down 6.2%)

Bombay Dyeing Q2 net profit at Rs691mn(up 100%), net sales at Rs3.04bn (up 6%)

Yes Bank Q1 profit at Rs360mn (up 113%) and revenue at Rs3.48bn (up 169%)

APIL Q1 profit at Rs175mn (up 50%), revenue at Rs2.5bn (up 8.2%)

Educomp Solutions signs agreement with Govt of Chattisgarh

BHEL wins Rs4.31bn order from IOC

Nagarjuna Construction secures order worth Rs2.85bn

Chambal Fertilizers Q1 profit at Rs617mn (up 92%) and revenue at Rs6.4bn (up 20%)

Nicolas Piramal Q1 net profit at Rs343.9mn (down 32%) and sales at Rs3.95bn (down 0.17%)

PNB Q1 net profit at Rs4.25 (up 15.4%) and revenue at Rs37.95bn (up 29.8%)

SAIL Q1 profit at Rs15.25bn (up 10%), net sales at Rs80.4bn (up 6.3%)

Reliance Capital Q1 group profit at Rs3.25bn (up 187%), net sales at Rs11.11bn (up 212%).

Asian Granito India

Promoted by Kamleshbhai Patel, Mukeshbhai Pate and Vinodbhai Patel, Asian Granito India manufactures vitrified tiles. The company currently has an installed capacity of 14,000 square meters(sq mt) per day and is second largest domestic producer of vitrified tiles controlling 10.57% of the installed capacity to produce domestic vitrified tiles. Asian Granito’s subsidiary, Asian Tiles, manufactures ceramic floor tiles. It has a capacity of 7,000 sq mt per day.

To modernise and expand its existing vitrified plant and set up a wall tile unit, Asian Granito is coming out with an initial public offering (IPO). For the proposed wall-tile plant and for future expansion requirement, the company has purchased 167,565 sq mt of agricultural land (at total cost of Rs 1.07 crore), of which 99,780 sq mt have been acquired from promoters. The average cost of acquisition of land from outsiders works out to Rs 35 per sq mt, while from promoters Rs 83 per sq mt, higher by 141%.

Strengths

• 2,000 sq mt per day of vitrified-tile capacity is likely to come on stream from October 2007.This will increase the vitrified-tile capacity to 16,000 sq mt per day. Production of vitrified tiles will be 4.51 million sq mt in the year ending March 2007 (FY 2007) and projected to be 5.2 million sq mt in FY 2008.

• The wall-tile unit is likely to come on stream in January 2008. Production is projected to be 0.68 million sq mt in FY 2008, 2.89 million sq mt in FY 2009 and 3.06 million sq mt in FY 2010. Realisation of wall tiles is currently about Rs 183 per sq mt.

• From 1 July 2007, China has reduced the export subsidy for producer of vitrified tiles to 3%, from 8% earlier. This is likely to improve competitiveness of domestic vitrified manufacturers compared with importers of vitrified tiles who have received antidumping exemption: Nitco and Kajaria. Imports of vitrified tiles have increased from Rs 11.66 crore in FY 2004 to Rs 66.95 crore in FY 2006.

Weaknesses

• Entering into the less attractive wall-tile segment. The realisation in wall tile is less than vitrified tiles on account of presence of many large unorganised players. Also the market size of wall tiles is much smaller than vitrified tiles.

• Over the past few years, realisation in tiles has not shown any significant improvement.

• About 50% of the revenue is from institutional clients compared with 70% earlier. Increase in proportion of retail sale is likely to increase marketing cost and reduce average realisation as institutional clients generally buy high-end products.

Valuation

Consolidated FY 2007 EPS on post-issue equity workout to Rs 10.9. At the offer price band of Rs 85 – Rs 102, the P/E range works out to 7.8-9.3, respectively. Even after the 58% rise in price in the last nine trading session, Murudesh Ceramic (larger player compared with Asian Granito) is trading at 8.9 times its FY 2007 earning. TTM P/E of the ceramics tiles industry is 9.23.

IDEA Cellular, Hero Honda, Castrol India, Mindtree Consulting, Mahindra Gesco Developers, ABG Shipyard, KEC International, Mahindra and Mahindra Finan

IDEA Cellular, Hero Honda, Castrol India, Mindtree Consulting, Mahindra Gesco Developers, ABG Shipyard, KEC International, Mahindra and Mahindra Financial, Lanco Infratech

Market Outlook - July 26 2007

Market Outlook - July 26 2007

Globalization ... thoughts..

For years, globalization was touted as the undisputed good news in terms of the low prices it delivered to consumers. It was unqualified bad news only if you happened to be the fellow who made the goods now being produced in China.
Now the tide has turned. After more than a decade of “exporting” deflation, China has gone over to the dark side, according to the US government statistics. The price of Chinese imports to the US has risen in the last few months, triggering predictable reactions based on faulty assumptions.
Specifically, the question is, can one country import inflation from another? In the case of China and the US, it depends on whether one is flying from east to west or west to east. China pegs its currency to the US dollar. In other words, it has adopted US monetary policy as its own. If the US inflates, China inflates, not the other way around.
JPMorgan Chase & Co. senior US economist Jim Glassman says, “If China had an independent monetary policy and its currency wasn’t linked, rising prices would be offset by a falling currency and the US wouldn’t see any effect.
The broader issue is whether a sovereign nation with an independent central bank can import inflation—or deflation—from overseas. The answer is, it depends on what the monetary authority in the importing country does. A sovereign central bank isn’t a “price taker,” or an inflation accepter. Instead, it always has the ability to offset any relative price change, be it in domestic or foreign goods, with tighter monetary policy.
Forget about borders and exchange rates for a moment and think about individual prices in the domestic economy. Let’s say the price of oil goes up because demand increases. Is that inflationary? Former Federal Reserve chairman Alan Greenspan used to explain to Congress that relative price changes are not inflationary per se. That is as true for the price of oil as it is for the price of labour (wages), although you’d never know it from listening to policymakers.
For a given stock of money, a rise in the price of oil may translate into a one-time rise in the price level. With time, the price of something else will fall as consumers cut back on non-oil purchases. The same is true for the price of imports. If consumers have to pay more for items made in China, they will have less money to spend on domestic goods and services and other foreign imports—unless the central bank accommodates those higher prices by allowing the money supply to increase. So it is always and everywhere the province of the central bank to determine its domestic inflation rate.
Fed governor Don Kohn and San Francisco Fed president Janet Yellen have challenged the notion that central banks have to passively accept whatever price increases are thrust on them from abroad.
“In the end, however, policymakers here and abroad cannot lose sight of a fundamental truth: In a world of separate currencies that can fluctuate against each other over time, each country’s central bank determines its inflation rate,” Kohn said in a speech to the Boston Fed’s 51st economic conference in Chatham, Massachusetts, on 16 June 2006. While it’s too early to assess the inflation implications of the increased integration of goods and markets, “it is also clear that such developments do not relieve central banks of their responsibility for maintaining price and economic stability,” Kohn said.
Here, here. Another decade of globalization won’t change the basic reality either. “With respect to monetary policy, I find nothing either in theory or the existing empirical evidence to overturn the conclusion that a country like the US, operating under a flexible exchange rate regime, can ultimately achieve the inflation target of its choice,” Yellen had said in a May 2006 speech at a conference on the euro and the dollar in a globalized economy at the University of California at Santa Cruz.
The departure point for some recent studies on the role of globalization is the low and stable inflation globally accompanying increased economic integration. A recent working paper by economists Claudio Borio and Andrew Filardo at the Bank of International Settlements in Basel, Switzerland, concedes that better monetary policy, with central banks around the world adopting implicit or explicit inflation targets, explains the improved performance.
Still, they found some “prima facie evidence” of the role of “global slack” in national inflation, leading them to question the “near-term effectiveness of domestic policy levers.” (If you think the output gap is a slippery concept, try measuring global capacity.) To the extent that domestic inflation is increasingly influenced by “global capacity constraints, this could weaken the near-term efficacy of monetary policy levers because of their limited (i.e. domestic) reach,” they said.
If “globalization” and “common external shocks” are the main contributors to inflation, not common monetary policies, “this would imply that national central banks’ ability to steer domestic inflation has been severely reduced,” said Joachim Fels, chief fixed-income economist at Morgan Stanley in London, in an email response to my question. As long as globalization doesn’t mean one world central bank, “flexible exchange rates give countries the independence to set their own inflation goals,” Glassman says. “That insulates everyone else from what you choose to do.”
And as for price shocks, the central bank has the ability to offset them, whether they occur at home or abroad. Inflation isn’t transmitted via spores in the air. It’s a monetary phenomenon, and as such, starts and ends on native shores.
Globalization hasn’t made central banks impotent. To the contrary, their unity of purpose in the goal of price stability has made them more powerful.

EXCLUSIVE - Equibrain Report - July 26 2007

EXCLUSIVE - Equibrain Report - July 26 2007

Zylog Systems Limited Allotment Subscription Details

Qualified Institutional Buyers (QIBs) - 89.5541 times

Non Institutional Investors - 143.9542 times

Retail Individual Investors (RIIs) - 35.1330 times


OVERALL - 76.51 times

Omnitech Allotment Subscription Details

Qualified Institutional Buyers (QIBs) - 61.7547 times

Non Institutional Investors - 108.6629 times

Retail Individual Investors (RIIs) - 50.9535 times

OVERALL - 61.84 times

Central Bank IPO Note - 23 Jul 2007

Central Bank IPO Note - 23 Jul 2007

Daily Technicals, Technical Futures - July 26 2007

Daily Technicals, Technical Futures - July 26 2007

ICICI Bank

ICICI Bank

Sensex erases its lows but sheds 96 points at close

Weak global cues and negative breadth in yesterday's trades, led the market open at a lower today. Bombay Stock Exchange's Sensex was down 83 points at the open and remained subdued as investors booked profits after the recent gains. Realty, capital goods and auto stocks took the major beating, but FMCG stocks bucked the trend on the gains in ITC. The index faltered under selling pressure by afternoon and slipped to the day's low of 15,573. While the market fluctuated sharply thereafter, the firm bullish sentiment and strong buying in heavyweights and FMCG stocks in the late trades helped the Sensex erase most of its losses. The Sensex finally ended the session by shedding 0.61% or 96 points at 15,699. The Nifty slipped by 0.69% or 32 points at 4,589.

The market breadth was negative, with the losers outpacing the gainers in the ratio of 2.01:1. Of the 2,685 stocks that traded on the BSE, 1,753 stocks declined, 862 stocks advanced and 70 stocks ended unchanged. Most of the sectoral indices ended in the red. The BSE Realty index dropped 2.90% at 8,132 followed by the BSE CG index (down 2.46% at 13,429) and the BSE Bankex index (down 2% at 5,023). However, the BSE FMCG index gained 3.91% at 1,951 and the BSE CD index (up 1.08% at 4,264).

Heavyweights led the fall in the Sensex. Satyam Computers slipped by 6.06% at Rs487, Ambuja Cement slumped by 4.50% at Rs128, ACC shed 4.24% at Rs1,071, Bajaj Auto lost 3.83% at Rs2,355, L&T was down 3.54% at Rs2,573 and Tata Motors tumbled by 2.86% at Rs726. Among the gainers ITC jumped 8.93% at Rs166, NTPC slipped 2.51% at Rs168, ONGC shed 2.05% at Rs934, Bharti Airtel fell by 1.57% at Rs947 and HUL was down 1.13% at Rs202, while Infosys and Reliance Energy ended with modest gains.

Over 1.56 crore IFCI shares changed hands on the BSE followed by Bellary Steel (1.44 crore shares), Allied Digital (88.27 lakh shares), Spice Telecommunication (71.15 lakh shares) and Suryachakra Power Corporation (60.90 lakh shares).

Reliance Energy registered a turnover of Rs317 crore on the BSE followed by Allied Digital (Rs300 crore), Housing Development & Infrastructure (Rs231 crore), Indiabulls Real Estate (Rs156 crore) and GMR Infrastructure (Rs147 crore).

Market snaps five-day rally

The market remained weak throughout the day’s trade, as correction set in after five straight days of rally. Weakness in global markets and unwinding of positions in derivatives ahead the expiry of July 2007 derivatives contracts tomorrow, 26 July 2007, played spoilsport. Volatility was high, which is likely to intensify tomorrow.

Stocks from cement, real estate, auto, IT sector came under intense selling pressure. However buying was seen in FMCG, oil & gas and consumer durable stocks.

Though most Asian and European markets were subdued to weak, Chinese market outperformed and it was at striking distance of all time high

The BSE 30-share Sensex lost 95.59 points to 15,699.33. It had opened lower at 15,711.87 but advanced to hit a high of 15,771.26 at 10:41 IST, on value buying coupled with short covering. It slumped to a low of 15,572.98 at 13:25 IST as selling intensified. At the day's lowest point, the Sensex had lost 222 points for the day.

Sensex oscillated 198.28 points today between a low of 15,572.98 and a high of 15,771.26

Prior to today’s fall, the Sensex had jumped 505.10 points in five trading sessions to 15,794.92 on Tuesday, 24 July 2007 from a recent low of 15,289.82 on 17 July 2007.

The NSE Nifty slipped 32.05 points to 4,588.70. The Nifty July 2007 futures settled at 4597, a premium of 8.30 points as compared to spot closing. The Nifty August 2007 futures settled at 4581.90, a discount of 6.80 points as compared to spot closing.

The market breadth was weak on BSE, with 1,735 shares declining as compared to 901 that advanced, while 68 remained unchanged.

The BSE Mid-Cap Index lost 57 points or 0.84% to 6,755.20, while the BSE Small-Cap Index slipped 97 points or 1.2% to 8,056.36.

The BSE clocked a turnover of Rs 5,605 crore as against Rs 6,464.27 crore on Tuesday, 24 July 2007.

The NSE F&O turnover vaulted to record of Rs 72,365.46 crore as compared to Rs 64,281.92 crore on Tuesday, 24 July 2007.

Among the Sensex pack, 23 of the 30 constituents were in the red.

India’s largest cigarette manufacturer ITC surged 8.57% to Rs 165.30 on 57.99 lakh shares. It was the top gainer from the Sensex pack. The company announces Q1 June 2007 results on Friday, 27 July 2007. Foreign brokerage CLSA has raised its price target to Rs 184, and upgraded it to buy from underperformer.

Meanwhile, ITC is reportedly planning to sell home and personal-care products to sustain growth as new taxes and curbs on smoking threaten cigarette sales. The new products will be sold through the company's network of 6,400 web kiosks and 18 supermarkets.

India's largest FMCG firm in sales Hindustan Unilever rose 1.03% to Rs 201.50 on rumors the company is disposing off of its prime properties across India including its corporate office Lever House in Mumbai. The company is also selling some of its residential properties in Mumbai's suburbs. It may either develop its 30-acre property in Bangalore or sell it entirely. The company, however, denied these reports.

The BSE FMCG Index jumped 3.91% to 1,915.35, and was the top gainer from sectoral indices on BSE. Colgate Palmolive India (up 0.65% to Rs 371.50), and Dabur India (up 0.80% to Rs 101.35) were the other gainers from the FMCG pack.

NTPC, India’s largest power generation company, gained 2.35% Rs 167.45. The stock had risen 3.6% on Tuesday 24 July 2007 after it signed an MoU with Asian Development Bank for setting up a joint venture company to undertake renewable power generation. The company made this announcement after trading hours on Monday, 23 July 2007.

India’s largest oil explorer ONGC advanced 2.35% to Rs 937 after it today, 25 July 2007, reported an 11.9% growth in net profit to Rs 4610 crore in Q1 June 2007 over Q1 June 2006.

IT pivotals were subdued after the rupee gradually approached the crucial 40-mark today, touching new nine-year high of 40.22 against the US currency in early trade. Fourth largest software services exporter Satyam Computers plunged 6.18% to Rs 486.25, on 9.20 lakh shares. It was the top loser from the Sensex pack.

Other IT pivotals, TCS (down 1.93% to Rs 1148), and Wipro (down 1.31% to Rs 499.85), also edged lower The BSE IT Index lost 1% at 4,906.79.

However, India's second-largest software services exporter Infosys Technologies gained 0.69% to Rs 1,992. The company announced after market hours today, that it was awarded a $250 million global BPO contract by Royal Philips Electronics.

Cement stocks plunged after their recent rally following reports today, 25 July 2007, that on Tuesday, 24 July 2007, MRTCP had ordered a probe into the business practices of 14 leading cement manufacturers.

Ambuja Cements (down 5% to Rs 127.70), ACC (down 3.83% to Rs 1075), Grasim (down 1.08% to Rs 2,990) Birla Corporation (down 5.82% to Rs 266.30), JK Cement, (down 0.58% to Rs 170), India Cement (down 9.01% to Rs 204), UltraTech Cement (down 4.94% to Rs 920) slipped.

India’s largest private sector company Reliance Industries (RIL) was down 0.19% to Rs 1,908.10, on 5.61 lakh shares. As per reports, RIL is planning to set up 4,000 mega watt gas-based power generation capacity at multiple locations at an investment of Rs 10,000 crore, in addition to a mega fertiliser plant at Kakinada in Andhra Pradesh.

Second largest bike maker Bajaj Auto slumped 3.61% to Rs 2,360 after it scheduled a separate meeting of equity shareholders and unsecured creditors on 18 August 2007 for considering and, if thought fit, approving with or without modification(s) the scheme of arrangement between the company, Bajaj Holdings & Investment & Bajaj Finserv and their respective shareholders & creditors.

HDFC, country’s largest housing finance company slipped 0.54% to Rs 1964. It posted 25.60% rise in net profit in Q1 June 2007 to Rs 372.81 crore over Q1 June 2006. Total operating income rose 46.60% to Rs 1830.39 crore in Q1 June 2007 over Q1 June 2006.

Allied Digital Services settled at Rs 331.80 on BSE, a premium of 74.63% over the IPO price of Rs 190. The scrip debuted at Rs 332.50 on BSE, and touched a high of Rs 370.50 and a low of Rs 309.50 during the day. On BSE, 88.27 lakh shares changed hands on the counter. Allied Digital Services IPO ended on 5 July 2007, with 60.87 times subscription.

Real estate stocks, DLF (down 2.95% to Rs 637), Parsvnath Developers (down 3.75% to Rs 372), Sobha Developers (down 1.24% to Rs 917) and Unitech (down 3.62% to Rs 567.45), slipped on profit booking. The BSE Realty index lost 2.90% to 8,131.93, and was the top loser among the sectoral indices on BSE

The BSE Capital Goods Index declined 2.5% at 13,428.80, as capital goods stocks came under selling pressure after recent rally. The index has rallied 107.10% in the past one year from 6394.21 on 24 July 2006.

Suzlon Energy (down 6.74% to Rs 1400), Praj Industries (down 3.45% to Rs 212.40), L&T (down 3.21% to Rs 2582), and Bhel (down 2.26% to Rs 1794), declined from the Capital Goods index.

Godavari Fertilizers & Chemicals plunged 9% to Rs 121.40 whereas Coromandel Fertilisers rose 0.92% to Rs 86 after their boards approved the amalgamation scheme, with shareholders of GFCL entitled to receive 3 equity shares of Rs 2 each of the CFL for every 2 equity shares of Rs 10 each held in GFCL.

India's largest paper manufacturers Ballarpur Industries gained 3.71% to Rs 124 after announcing a major restructuring exercise involving the paper manufacturer buying back 40% of its equity capital after splitting each share with a face value of Rs 10 into five shares of Rs 2 each. Each shareholder would be allowed to sell 2 out of every 5 split shares back to the company at Rs 25 each. Small shareholders owning up to 1,000 pre-split shares would be allowed to surrender their entire holdings.

Ballarpur Industries also said the board approved hiving off its three units into separate entities and raise Rs 1,950 crore. Its units at Bhigwan, Ballarpur and Kamalapuram would be separated into a wholly-owned subsidiary BILT Graphic Paper Products (BGPPL).

The largest steel manufacturer in India, Steel Authority of India's (Sail) slipped 5.16% to Rs 152.55 after its net profit rose 10% to Rs 1,525.12 crore in Q1 June 2007 over Q1 June 2006. Total income inched up 8.2% to Rs 8,346.40 crore in Q1 June 2007 over Q1 June 2006.

Lanco Infratech plunged 10.62% to Rs 209.15 after the empowered group of ministers (E-GoM) headed by power minister Sushil Kumar Shinde, on Tuesday, 24 July 2007, decided to scrap the allotment of the 4,000- mega watt Sasan power project in Madhya Pradesh to the lowest bidder, the Lanco-Globeleq consortium. E-GoM declared Lanco’s bid as void ab-initio (invalid from the outset).

Mid-sized software firm Mindtree Consulting tumbled 8.54% to Rs 670.70 after it lowered its profit guidance for 2007-08 to $22.5-$22.6 million due to the appreciation of the rupee against the dollar.

Real-estate firm Mahindra Gesco Developers lost 3.4% to Rs 599 even as it reported a 260.9% surge in net profit to Rs 12.20 crore in Q1 June 2007 over Q1 June 2006.

Pidilite Industries, India's biggest maker of adhesives, rose 5% to Rs 146 after its net profit advanced 53.03% to Rs 58 crore in Q1 June 2007 over Q1 June 2006

Power generation equipment maker Thermax gained 4.91% to Rs 631.20 after it reported a 103% surge in net profit to Rs 56.01 crore in Q1 June 2007 over Q1 June 2006.

Blue Star, maker of refrigeration and cooling systems, vaulted 11.33% to Rs 281 after it reported a 205% surge in net profit to Rs 22.32 crore in Q1 June 2007 over Q1 June 2006.

Modern Steel rose 4.69% to Rs 89.30 after its board recommended 3 bonus shares for every 2 shares held. The mid-sized carbon and alloy steel maker had made the announcement after market hours yesterday, 24 July 2007.

Minda Industries advanced 2.54% to Rs 137.50 following reports that it is looking for acquisitions of Rs 200 crore in Europe to enhance its global presence and product portfolio.

Asahi India Glass slumped 8.18% to Rs 101 even as it posted 316% rise in net profit to Rs 20.72 crore in Q1 June 2007 over Q1 June 2006.

The market is likely to be extremely choppy tomorrow, 26 July 2007 as derivatives contracts expire. The total open interest in NSE’s futures and option (F&O) segment vaulted to an all-time record of Rs 1,02,247.50 crore on 25 July 2007, from Rs 94,285.34 crore on the previous day.

Asian indices edged lower today, 25 July 2007, after US blue-chips suffered their biggest single-day loss since March 2007. Japanese shares fell on declines in exporters such as Canon Inc. and Sony Corp., while in Australia, resources companies such as BHP Billiton led losses. Japan's Nikkei tumbled 0.80% at 17,858.75.

Hang Seng (down 0.47% at 23,362.18) and Singapore's Straits Times (down 0.86% at 3,633.54) declined.

However, Shanghai Composite jumped 2.70% to 4,323.96, almost kissing its all time high of 4,335.96

All the European markets were trading lower today, 26 July 2007, except FTSE 100, which was up 0.04%

Wall Street shares slumped sharply yesterday, 24 July 2007, on disappointing earnings reports and rising concerns about the mortgage market. The Dow Jones shed 226.47 points, or 1.62%, at 13,716.95. Twenty-nine of the 30 Dow components fell. Other major stock indicators also suffered steep declines. The Standard & Poor's 500 index shed 30.53 points, or 1.98%, to 1,511.04. The Nasdaq Composite index lost 50.72 points, or 1.89% at 2,639.86.

Crude oil fell for a fourth day in New York on speculation US gasoline production will be sufficient to meet late summer demand. Crude oil for September 2007 delivery declined as much as 46 cents, or 0.6%, to $73.10 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $73.22 in Singapore

Chinese Stock Guru detained

The self-style guru of Chinese stocks, who was detained by police recently for selling stock tips to subscribers, will stand trial on charges of conducting illegal business operations worth up to USD 1.31 million. The Municipal People's Procuratorate in the northeastern city of Changchun will lodge a lawsuit to the municipal people's intermediate court against Wang Xiujie, known to his clients as "Big Brother Leader 777", over running an unlicensed business. Wang is suspected of earning more than 10 million yuan (USD 1.31 million) by selling stock market advice to thousands of subscribers since February, Xinhua news agency reported. Boasting that his predictions had a 90 per cent accuracy rate, Wang labelled himself the "patron saint" of individual investors. His blog received more than 30 million hits as more speculators rushed to cash in on the bull market. Chinese law prohibits the provision of securities consultancy services without approval by the China Securities Regulatory Commission, the stock market watchdog. It is still unclear when the court will start to handle the case.

Technicals, Futures Strategy - July 25 2007

Technicals, Futures Strategy - July 25 2007