Wipro to perk up sentiment
Wait until it is night before saying that it has been a fine day.
We are looking at a bounce early in the morning, purely on the back of what looks like stronger than expected numbers from IT major Wipro. The company has reported a Q4 net profit of Rs8.56bn, up 11.9% quarter on quarter. Revenues are up 8.9% over the previous quarter at Rs43.33bn. Global IT revenues have improved by 7% QoQ to Rs30.48bn. The company has beaten its own guidance on Q4 Global IT revenues. It had been looking for Global IT revenues of $685mn, but has delivered $697mn. For Q1 FY08 Wipro has announced a subdued guidance of 2% sequential growth in Global IT revenues at $711mn. On the face of it, the Wipro Q4 result looks robust. The stock should advance along with other IT peers and so should the market. We still have to look a close look at the Wipro report card.
Investors will have to keep a close eye on the results of other IT major Satyam, inflation data and global news. The bulls did well to weather the Asian storm yesterday. The key indices retraced smartly from their intra-day lows. Though the provisional figures show selling by FIIs in both the cash and the F&O segment, foreign funds have been pumping up the volume of late. FIIs have already poured in a net of over $800mn in the cash segment and we still have six trading days to go this month. On the liquidity front things appear to be encouraging. If only inflation moderates further and the RBI goes slow on monetary tightening, the market could well continue its winning ways in the near term. Having said that, the Indian economy is likely to cool off a little in FY08 and there could be some slowdown in earnings growth as well. We also have a raft of global factors to grapple with.
Given the flat closing on Wall Street, lower oil prices and strong Asian markets we expect a firm opening. As usual, the wild card today will be the inflation data, due to be released at noon. Last week's sharp drop was largely due to a high base effect. In any case, inflation and high prices are more because of supply side constraints rather than too much demand. One also has to keep an eye on global factors like the state of the economy in the US, China and Japan. Plus there is the uncertainty over currency fluctuations globally, particularly the Japanese yen and its fallout on the so-called "carry trades." The market will also be looking forward to the latest quarterly numbers from IT majors Wipro and Satyam and their guidance for FY08.
Fortis Healthcare IPO has been subscribed by only 1.2 times. The IPO closes for subscription today. The IPO of Bhagwati Banquets has been subscribed by just 0.2 times.
FIIs were net sellers to the tune of Rs2.29bn (provisional) in the cash segment yesterday. On the other hand, domestic institutions poured in Rs2.74bn. In the F&O segment, FIIs were net sellers of Rs9.34bn. On Wednesday, they were net buyers of Rs6.4bn. Mutual Funds were net buyers at Rs190mn on the same day.
On Wall Street, the Dow Jones Industrial Average ended at an all-time high on Thursday, closing at a record for the second day in a row. However, the broader market struggled amid worries about global economic growth.
The US stock market was influenced by the declines earlier in the day across Asia and Europe amid concerns that China's economy was overheating. The S&P 500 index's fall ended a five-day advance.
The S&P 500 fell 1.77 points, or 0.1%, to 1470.73. The Nasdaq Composite Index dropped 5.15 points, or 0.2%, to 2505.35. The Dow added 4.79 points to 12,808.63.
US stocks opened lower after Chinese shares slumped the most since the Feb. 27 sell-off. China's economy grew at an 11.1% pace last quarter after a 10.4% rate in the previous quarter, fueling concerns that Beijing could hike interest rates to cool down the red hot economy.
European shares lost ground. The pan-European Dow Jones Stoxx 600 index declined 0.4% to 3824.40. The German DAX Xetra 30 was down 0.5% at 7,242.73, the French CAC-40 lost 0.1% to 5,829.04 and the UK's FTSE 100 shed 0.1% to 6,440.60.
In Brazil, the broader market as measured by the benchmark Ibovespa stocks index closed up 52 points, or 0.1%, at 48762.13. In Mexico City, stocks bounced back to post a modest gain, ending three straight losing sessions. The IPC index climbed 55 points, or 0.2%, to 29614.05.
Asian shares have rebounded this morning from their biggest drop in a month yesterday. The Nikkei in Tokyo was up 87 points at 17,459 while the Hang Seng in Hong Kong surged 234 points at 20,534. The Kospi in Seoul gained 15 points to 1529 and the Straits Times in Singapore jumped 56 points to 3347.
Trend unclear
Weak Asian Markets compelled the domestic bourses to open in deep red dragging the benchmark index Sensex to hit a low of 13423.64. Heavy sell off was witnessed in Chinese Shanghai index due to rate hike concerns further dampening the sentiments of the investors on Dala Street. However, the key indices recovered from its days low as buying interest in the Banking and FMCG stocks and index heavy weights like SBI, ITC RIL and Bharti Airtel lifted the markets to close on a flat note. Finally, the 30-share benchmark Sensex slipped 52 points to close at 13619. NSE Nifty was down 13 points to close at 3997.
Advanta India had an excellent debut on the bourse today, likewise ICRA the scrip out performed the frontline indexes. The scrip rose by 32% finally to close at Rs845 hitting an intra-day high of Rs1000 and low of Rs585.35. The Company is an international agronomic seed company with principal operations in India, Australia, Thailand and Argentina, and a subsidiary of United Phosphorus Limited.
Cadila pared its intra-day gains by 0.6% to Rs331. The company announced that they purchased Nippon Universal. The scrip touched an intra-day high of Rs343 and a low of Rs330 and recorded volumes of over 15,000 shares on NSE.
Praj Industries gained 1% to Rs462 after the Company announced that they would set up Europe Venture with Aker Kvaerner. The scrip touched an intra-day high of Rs464 and a low of Rs401 and recorded volumes of over 22,00,000 shares on NSE.
ACC fell lower by 3.3% to Rs788. The company announced its Q1 result with net profit at Rs3.64bn (up 54.8%) and net sales at Rs16.75bn (up 24.8%). The scrip touched an intra-day high of Rs818 and a low of Rs782 and recorded volumes of over 17,00,000 shares on NSE.
IVRCL Infrastructures dropped 1.1% to Rs285. According to reports the company is planning to buy an oil explorer and may spend as much as $500 million for the purchase. The scrip touched an intra-day high of Rs286 and a low of Rs277 and recorded volumes of over 13,00,000 shares on NSE.
Select Capital Good stocks also were on the receiving end. BHEL was down 2% to Rs2446 and Siemens declined 1% to Rs1051. However, Punj Lloyd gained 1.2% to Rs184 after the company secured contract for USD44.90mn and ABB gained 1% to Rs3754.
Pharma stocks also were a mixed bag. Glenmark gained by2.7% to Rs681, Sterling Biotech advanced 3.7% to Rs172 after the company posted a net profit of Rs381mn for the quarter ended March 31, 2007 up 26% and total Income has risen from Rs1.3bn for the quarter ended March 31, 2006 to Rs1.8bn up 38% and Sun Pharma edged higher by 0.6% to Rs1157.
Banking stocks were firm in a volatile. Heavy weight ICICI Bank gained 0.7% to Rs905 and HDFC Bank was up 0.3% to Rs982. Syndicate Bank, PNB, Bank of India were the major gainers among the Mid-Cap stocks.
Technology stocks witnessed profit booking. Frontline stocks Infosys slipped 1.8% to Rs2039, Satyam Computer was down by 3% to Rs447 and Wipro dropped 1.7% to Rs575. However, Mid-Cap stocks like HCL Tech and i-Flex were major gainers.
Insider Trades:
Mercator Lines Limited: Mr. Harish Kumar Mittal, Chairman & Managing Director has sold in open market 250000 equity shares of Mercator Lines Limited on 17th April, 2007
Market Volumes:
The turnover on NSE was down by 4.7% to Rs81.94bn. BSE Technology index was the major loser and lost 0.94%. BSE Auto index (down 0.69%), BSE PSU index (down 0.67%) and BSE Consumer Durable index (down 0.45%) were among the other major losers. However, BSE Bank index gained 0.56%.
Volume Toppers:
IFCI, TTML, Dish TV, SAIL, Advanta, ITC, Aptech, Bank of India, Satyam Computer, NTPC, Tata Steel, R Com, Unitech, Sterling Biotech and Parsvnath.
Upper Circuit:
Deccan Aviation, Tanla, Donear Industries, Zenotesh Labs and Ruby Mills.
Results Today:
India Cement, KM Sugar, Sasken Communications, IDBI, LML, Satyam, Wipro, Vakrangee Software and Shree Renuka Sugar.
Delivery Delight:
Avaya Global, Bharat Forge, CEAT, EXIDE Industries, Glenmark Pharmaceuticals, ICICI Bank, IDBI, Larsen & Toubro, Matrix Laboratories, Ranbaxy and SBI.
Abnormal Delivery:
Mahindra & Mahindra Ltd, Polaris Software Lab Ltd, Bajaj Auto, Videsh Sanchar Nigam Ltd, Reliance Industries Ltd, Nicholas Piramal India Ltd, Federal Bank Ltd and Dr Reddys Laboratories Ltd.
Stock Futures with Largest Increases in OI:
Indian Bank, Andhra Bank, Satyam Computer, Bank of Baroda, Zee Telefilms, TTML, Balrampur Chini, Bank of India and Bajaj Hindusthan.
Stock Futures with Largest Decreases in OI:
Jindal Stainless, SCI, Crompton Greaves, Indian Hotels, Corp Bank, Shree Renuka Sugar, Tata Steel, Jet Airways, JSW Steel and Divi's Laboratories.
Results Corner:
Biocon Q4 profit at Rs607mn (up 27%) and net sales at Rs2.78bn (up 30%)
Sterling Biotech Q1 profit at Rs380.56mn (up 26%), revenue at Rs1.76bn (up 30%)
ACC Q1 profit at Rs3.64bn (up 54.8%), net sales at Rs16.75bn (up 24.8%).
Brokers Recommendations:
Aban Offshore – Buy from Citigroup with target of Rs2850.
UTI Bank – Outperform from Macquaire with target of Rs621.
Long Term Investment:
GE Shipping.
Major News Headlines
FM asks banks to slow loans to stocks, real estate
India to get above normal rainfall this year, according to MET
Zydus Cadila buys Nippon Universal
Kirloskar Brothers gets Rs3.36bn order
HCL Tech to partner with Saudi Arabian Company
Praj Inds to set up Europe Venture with Aker Kvaerner and also plans to acquire Company in Brazil
Punj Lloyd gets contract for USD44.90mn
Simplex Infrastructure gets orders of Rs7.08bn.