Encouragement for bulls, but bear in mind profit booking
There are high spots in all of our lives and most of them have come about through encouragement from someone else.
Things are looking encouraging for the bulls as the results so far have been fairly good though the IT companies' earnings have lacked the usual spark. That may well have something to do with the rupee's remarkable appreciation against the dollar. Still, the numbers from software firms are not bad by any means. The outlook also appears to be strong despite currency fluctuations and the US slowdown. Talking about IT results, HCL Tech has surprised the market with much improved show in the third quarter. The stock may see some action on the up side.
Meanwhile, the rupee closed at 41.97 to the dollar yesterday after touching an intra-day high of 41.62. It may gain some more ground before the central bank steps in to check the rally. Some experts feel the Indian currency will eventually slide to 43 in the medium term. Right now though, exporters are feeling the heat while importers are rejoicing.
On to the markets now. We expect a higher opening, buoyed by the gains in the US blue chips overnight and firm trend in the Asian markets. But, as the bulls found out to their dismay, there could be selling pressure at higher levels. Apart from the barrage of corporate results, the market is awaiting the outcome of the RBI's policy meeting on April 24 as well as the weekly inflation data.
The IPO of Bhagwati Banquets & Hotels Ltd. opens today. Hilton Metal Forgings is entering capital market with an IPO of 54.5 lakh equity shares of Rs 10 each at a price Rs 70 per equity share. The IPO of Fortis Healthcare has been subscribed by just 0.7 times. The issue closed on April 20.
Shares of Dish TV, the DTH arm of Zee Entertainment will get listed on the bourses today. Watch out for TV Today as well as Reliance Capital has made an open offer for an additional 20% in the company at Rs30 per share. TV Today closed at Rs140 yesterday. Pritish Nandy too may attract some attention amid reports that it is looking to offload a part of its stake to PE funds.
There is a buzz in the market that Idea Cellular may be targeting BPL Mobile, which operates in the lucrative Mumbai circle. Pioneer Embroideries may get a large order from retail giant Wal-Mart, according to market grapevine. Tata Steel will also be in focus after announcing the funding mix for the acquisition of Corus. CESC is another stock to keep an eye on as it has declared a share swap ratio for the merger with Spencer's Retail parent.
Alfa Laval is expected to be in the limelight amid news that its Swedish parent could hike the open offer price, though Alfa Laval AB has denied such a move. Praj Industries will announce a bonus issue and results today.
FIIs were net buyers of Rs3.05bn (provisional) in the cash segment yesterday while the domestic institutional investors (including Mutual Funds) offloaded stocks worth Rs3.1bn, according to the NSE. The data is provisional in nature and is subject to changes. In the F&O space, FIIs pumped in Rs6.56bn yesterday. As per SEBI data, FIIs were net buyers of Rs7.88bn on Monday. Mutual Funds poured in Rs2.05bn on the same day.
US stocks closed mixed on Tuesday. The Dow Jones Industrial Average almost made a new record, spurred by better-than-expected economic and earnings reports. The Standard & Poor's 500 Index closed at the highest level since September 2000.
The Dow gained 52.58, or 0.4%, to 12,773.04. The blue chip benchmark rose as high as 12,790.02, above its all- time closing high of 12,786.64 on Feb. 20. Yesterday, the Dow erased losses spurred by the Feb. 27 sell-off in global equities, one day after the S&P 500 did the same.
The S&P 500 climbed 3.01, or 0.2%, to 1471.48, bringing its advance this month to 3.6%. The Nasdaq Composite Index fell 1.38, or 0.1%, to 2516.95.
Treasury prices rose, lowering the corresponding yields. The dollar fell versus the euro, yen and sterling - which hit a 15-year record versus the greenback. Oil prices slipped.
European shares held steady. The pan-European Dow Jones Stoxx 600 index finished a fraction of a percentage point higher at 387.86.
The UK's FTSE 100 was down 0.3% at 6,497.80 as the pound rose by over $2 for the first time in 15 years against the greenback after stronger-than-expected inflation data, potentially forcing the Bank of England's hand on interest rates.
The German DAX Xetra 30 rose 0.2% to 7,348.83, while the French CAC-40 lost 0.1% to 5,858.14.
Mexican and Brazilian stocks closed lower. Mexico's IPC index fell 120 points, or 0.4%, to 29,598.99. In Sao Paulo, the Bovespa, which also climbed earlier in the session, fell 166 points, or 0.3%, to end at 48,755.73.
Asian markets are mixed. The Nikkei in Tokyo was up 79 points at 17,606 while the Hang Seng in Hong Kong declined by 27 points to 20,761. The Kospi in Seoul rose 6 points to 1535 and the Straits Times in Singapore shed 3 points to 3411.
Bulls take a pause
Bulls took a breather after rallying in previous couple of trading sessions. After opening in green markets immediately pared its gains as profit booking was witnessed all over the bourses; except for Banking and Oil & Gas index all the key sectoral indices lost ground. The Technology index was the major loser other like Metal and FMCG index followed suit. Even Mid-Cap and the small cap index fell over 0.5% each dragging the NSE Nifty below the 4000mark.
Satyam Computer, SAIL and Tata Motors were the major losers, however HPCL, BPCL and ACC were the major gainers among the 50-scrip’s of NSE Nifty. Finally, the 30-share benchmark Sensex fell 88 points to close at 13607. NSE Nifty was down 28 points to close at 3984.
UTI Bank edged lower by 0.9% to Rs465. The Company announced its Q4 result with net profit at Rs2.12bn (up 39%) and revenue at Rs16.68bn (up 57%) and would pay Rs4.5 per share as dividend. The scrip touched an intra-day high of Rs475 and a low of Rs463 and recorded volumes of over 16,00,000 shares on NSE.
Petronet LNG fell 1.2% to Rs45. The company announced yearly result with net income at Rs3.13bn (up 60%) and Sales at RsRs55.45bn (up 44%). The scrip touched an intra-day high of Rs49 and a low of Rs45 and recorded volumes of over 51,00,000 shares on NSE.
JSW Steel slipped by 3.3% to Rs559. The company announced that they have restarted Furnace on April 12, it had shutdown Furnace after fire for almost 2 months. The scrip touched an intra-day high of Rs584 and a low of Rs555 and recorded volumes of over 7,00,000 shares on NSE.
Newly listed scrip ICRA was the show stopper the scrip witnessed huge intra-day gyrations. The scrip dropped by to a low of Rs880 after rallying over 17% hitting an intra-day high of Rs1135 and recorded volumes of over 1,00,00,000 shares on NSE.
Sunil Hitech gained 1.6% to Rs98 after the company secured orders worth Rs8.2bn. The scrip touched an intra-day high of Rs102 and a low of Rs92 and recorded volumes of over 2,00,000 shares on NSE.
Technology stocks were the worst hit sector as rupee strengthened against the dollar. Satyam Computer declined by over 5% to Rs455, Wipro was down by over 2% to Rs573 and Infosys dropped 2.4% to Rs2082. Polaris, Moser Baer and NIIT Ltd were the major losers among the Midp-Cap stocks.
Metal stocks lost their shine on back of profit booking. SAIL slipped by 3.2% to Rs123, Sterlite Industries dropped by 3.5% to Rs507, Tata Steel fell 1.2% to Rs527 and Hindustan Zinc was down 3.2% to Rs639.
Pharma stocks also ended on the receiving end. Cipla slipped 2.5% to Rs229, Cadila down 1.3% to Rs336, Lupin lost 1.5% to Rs657 and Wockhardt dropped 2% to Rs415.
Cement stocks continued its upward trend. ACC advanced by 2.8% to Rs807, Gujarat Ambuja gained by 1.4% to Rs113 and Mangalam Cement added 0.4% to Rs148.
Insider Trades:
XL Telecom Limited: Mr. Dinesh Kumar, Managing Director has purchased from open market 29610 equity shares of XL Telecom Limited on 5th April, 2007.
Titan Industries Ltd: Mr. Rakesh Jhunjhunwala and persons acting in concert with him has purchased from open market 50000 equity shares of Titan Industries Ltd on 12th April, 2007.
Market Volumes:
The turnover on NSE was up by 7.3% to Rs96.11bn. BSE Technology index was the major loser and lost 1.88%. BSE Metal index (down 1.29%), BSE Consumer Durable index (down 1.15%), BSE FMCG index (down 1.10%) and BSE Capital Good index (down 0.58%) were among the other major losers.
Volume Toppers:
SAIL, Satyam Computer, Dabur Pharma, Idea, Petronet LNG, RNRL, Bank of India, IDFC, India Cement, Orbit Corp, R Com, Reliance Industries, Essar Oil, PFC, Ashok Leyland and Ashok Leyland.
Lower Circuit:
Dhanlakshmi Bank, KEW Industries, Mefcom Agro, Godrej Industries and BF Utilities.
Results Today:
Praj Industries, Plethico Pharma, Genus Overseas, Greaves Cotton, Infotech Enterprises, Prithvi Information Solutions, Sujana Metal and South East Asia Marine.
Delivery Delight:
Alfa-Laval, ACC, Bharat Forge, Bharati Shipyard, Bombay Dyeing, Dabur India, Glenmark Pharmaceuticals, Gujarat Ambuja Cements, HDFC Bank, HCC, ICICI Bank, Punj Lloyd and Reliance Industries.
Abnormal Delivery:
Colgate, Steel Authority of India Ltd, Dr Reddys Laboratories Ltd, Indian Petrochemicals Corporation Ltd, Andhra Bank and Thermax Ltd.
Stock Futures with Largest Increases in OI:
UTI Bank, Bank of India, Satyam Comp, Cummins, Bombay Dyeing, Bajaj Hind, Ultra Tech Cement, GE Ship, PFC and Chennai Petroleum.
Stock Futures with Largest Decreases in OI:
IFCI, Sun TV, Divis Labs, Syndicate Bank, Guj Ambuja Cement, GMR Infra, IOB, Punj Lloyd and Bajaj Auto.
Brokers Recommendation:
TCS – Overweight from JP Morgan with target of Rs1650.
Long Term investment:
Patel Engineering
Results Corner:
BEL full year Profit at Rs7.1bn (up 22%) and sales at Rs39.6bn (up 12%)
HCL Tech Q4 profit at Rs2.39bn (up 77%), net sales at Rs9.59bn (up 35%)
UTI Bank Q4 profit at Rs2.12bn (up 39%), total income at Rs16.68bn (up 57%) and to pay Rs4.5 per share as dividend
Major News Headlines:
Tata Steel make a rights offer at Rs300 each; to sell 1 share for every 5 shares held to fund Corus acquisition
CESC to merge with holding company of Spencer’s retail; to give 1 share for every 1.98 shares of Spencer’s Retail
JSW Steel restarts furnace on April 12; it had shutdown the furnace after fire for almost 2 months
Sunil Hitech gets orders worth Rs8.2bn
Gemini Communication bags order worth Rs576mn
Alfa-Laval won't increase Offer Price for Indian unit's shares, buyback offer opens on April 19 and ends on May 8.