Turnover swells on rampant block deals

The market was highly volatile throughout the day. A whopping turnover was another marked feature of the day's trading. The aggregate turnover on BSE amounted to Rs 4190.71 crore, as compared to Rs 3093 crore on Monday (9 April). The high turnover is attributed to a series of block deals executed in a number of stocks.

The markets settled with gains, as fresh buying happened at the fag end of trading. Strength was seen in FMCG and metal stocks, while IT and banking stocks dragged the market lower.

The 30-share BSE Sensex gained 11.80 points, to settle at 13,189.54. It had opened firm, at 13,185.85, and struck a high of 13,222.14. The benchmark index also fell to a low of 13,075.48, in the afternoon session. The NSE Nifty gained 4.65 points (0.12%), at 3,848.15.

As per provisional figures, FIIs were net buyers to the tune of Rs 350 crore today.

Even as the market flattened out, its breadth remained firm. Buying kept happening in small-cap and midcap stocks. Against 1,539 advancing, 1015 had declined. Also, 76 scrips remained unchanged.

The BSE Mid-Cap Index ended at 5461.51, up 42 points (0.77%), while the BSE Small-Cap Index settled at 6656.74, a gain of 71 points (1.08%).

Among the 30-Sensex pack, 18 advanced while the rest declined.

Housing finance major HDFC was the top-gainer, up 3.83% to Rs 1615, on a volume of 1.15 lakh shares.

Tata Motors advanced 2.15% to Rs 718.50, on total volumes of 13 lakh shares. Four block deals of 2.53 lakh shares were struck in the counter for an average Rs 708.37 per share. Tata Motors, which had signed an agreement with Iveco in February, is planning to distribute its trucks through the Italian company's worldwide distribution network. As a reciprocal arrangement, dealers of Tata Motors will sell select Iveco models, especially their light commercial vehicles in India. Reports say that though a definite agreement is still a few months away, in principle, the mutual marketing arrangement will be in place shortly. "In the last fiscal, we sold 1500 Fiat branded cars and this year we hope to sell more than 3000 cars through our distribution network," said Mudit Gupta, senior manager (passenger car unit), Tata Motors.

The BSE FMCG Index gained 2.2%, to settle at 1,812.72. Cigarette major ITC gained 2.86% to Rs 159.80, while FMCG major HLL advanced 2.63% to Rs 209.

Index heavyweight Reliance Industries (RIL) was down 0.13% to Rs 1382, as 3.23 lakh shares changed hands in the counter on BSE.

Frontline IT stocks were in correction mode ahead of their March quarter results. The BSE IT Index had slipped 2.07%, and was the biggest loser among sectoral indices on BSE.

Satyam Computers was the top-loser, down 3.40% to Rs 445.95, on a volume of 6.83 lakh shares. Infosys (down 2.15% to Rs 2000), Wipro (down 2.63% to Rs 547) and TCS (down 1.50% to Rs 1198) also suffered under concerns pertaining to results.

Infosys’ FY 2008 guidance is the next major trigger for the market. The rupee’s sharp surge in late-March 2007 - early April 2007, an uncertain US economic outlook and certain client-specific risks, have raised concerns that the FY 2008 guidance by Infosys Technologies may turn out conservative. Infosys unveils the full year guidance at the beginning of the financial year along with Q4 March 2007 results, on Friday, 13 April 2007.

For Q4 March 2007, Infosys has given a guidance of income to be in the range of Rs 3789 crore and Rs 3798 crore; indicating a Y-o-Y growth of 44.4% - 44.7%. The EPS is expected to be Rs 17.88; showing Y-o-Y growth of 46.3%.

For the full year ending March 2007, Infosys’ income is expected to be in the range of Rs 13,910 crore and Rs 13,919 crore; Y-o-Y growth of 46.1% - 46.2%. EPS before exceptional items is expected to be Rs 66.63, a Y-o-Y growth of 48%.

Since 2001, when the practice of coming out with a guidance started, Infosys has disappointed every alternate year on that front. And in five of the last six times, Infosys' stock and the broader market have declined on the results' day (or in the first trading session after results, in case the markets were closed) - no matter what the guidance.

The sole exception was 14 April 2006, when Infosys beat street estimates by guiding revenue growth of 30.7% and EPS growth of 28.4% for the last financial year. But on that Friday, the market was closed for Ambedkar Jayanti. When they opened on Monday, 17 April 2007, the Infosys stock zoomed 6.93%, and the Sensex ended with a gain of 302 points (2.69%).

Another IT major, Satyam Computer’s guidance for Q4 March 2007 suggests that revenues will be in the range of Rs 1,728 and 1,736 crore, a growth 4 - 4.5% over Q3. For FY-2007, revenues are expected to be in the range of Rs 6434 - Rs 6442 crore, a growth of 34.3 -34.4% over FY-2006.

Bajaj Auto slipped 1% to Rs 2275. The bike maker announced a Rs 3000 price cut on Bajaj Platina, given the intense competition in the 100cc space. The Platina may be Bajaj Auto's last 100cc bike but still remains a large volume player. This has become possible, thanks to the opening of Bajaj Auto's new plant at Pantnagar, Uttarakhand. The plant enjoys tax-cuts and excise-sops from the state government. It has 1 million units of annual capacity, which can be scaled up to 3 million in a few years.

Indian Hotels surged 3.35% to Rs 149.75, on high volumes of 23.53 lakh shares, after a block deal of 20 lakh shares was executed in the counter at Rs 148 per share.

Shares from the metal pack, saw fresh buying after reports that steel companies have hiked Hot Rolled (HR) coil prices by Rs 1000 per tonne. The BSE Metal Index closed at 9000.01, up 1%. JSW Steel (up 5% to Rs 534.40), Tata Steel (up 0.66% to Rs 469.55), Jindal Stainless (up 2.70% to Rs 127.50), Sesa Goa (up 2.40% to Rs 1757), Jindal Steel & Power (up 2.54% to Rs 2489) and Hindustan Zinc (up 1.74% to Rs 679.35) edged higher.

Everest Kanto Cylinder surged 11.64% to Rs 974.30, on renewed buying, due to strong growth prospects for the firm. Everest Kanto Cylinder is on a major expansion spree to cater to the lucrative Chinese market even though its China project has been delayed. The company is setting up a plant in China, having an initial annual capacity of 2 lakh cylinders. The project is slated to start production in the third quarter of the current financial year. The plant was earlier scheduled to begin production by July 2007.

Educomp Solutions rose 2.85% to Rs 1208, after acquiring 76% stake in ThreeBrix E-Services, a high-quality tutoring service provider in the Middle East. ThreeBrix e-Services owns "The Learning Hour" tutoring service and was started in 2005. The acquired company provides high quality tutoring service in the Middle East and Dubai markets. The partnership between the company and ThreeBrix will leverage the company's large content library and pedagogical materials, to provide tutoring in several ways, online, offline and through learning centers, and will mainly focus on Indian students.

ABG Shipyard surged for the second day in a row on the eve of the scrip’s listing on the National Stock Exchange (NSE). The stock of ABG Shipyard was up 2.50% to Rs 364. ABG Shipyard also secured a major order for constructing four 54,000 DWT Supramax bulk carriers, worth $ 139 million (Rs 618 crore) from Essar Shipping & Logistics, Cyprus, as a part of its ship acquisition programme. Following the order, the order-book position of ABG Shipyard, as on date, stands at about Rs 40,737.7 Mio (US$ 915.5 Mio).

Suzlon Energy dropped 0.13% to Rs 986, on concerns of a bidding war, for acquiring Germany's REpower. The stock had slipped to a low of Rs 961.05. Suzlon Energy has raised the bid for acquiring the German wind-turbine maker. Suzlon Energy today said it had acquired 6,27,000 shares, constituting 7.7% of the share capital of REpower at a price of up to Euro 150 per share. As a result of this acquisition, the voluntary offer for acquiring up to 100% stake in Repower stands revised upwards, to Euro 150 per share.

Balaji Telefilms jumped 11.3% to Rs 142.15, on reports that NDTV was in talks with television content providers, including Balaji Telefilms, for content. NDTV is negotiating with production houses for entertainment-related content to be aired on their upcoming channel, NDTV Imagine.

Moser Baer vaulted 10.4% to Rs 332.70, on renewed buying. It ushered in Telugu films in the home video market, with the launch of 101 popular Telugu titles on 7 April 2007.

iGate Global Solutions soared 5.6% to Rs 402.55. The stock surged for the second day in a row on expectation of strong FY 2007 (year ended 31 March 2007) results. iGate’s board meets tomorrow to consider FY 2007 results.

Construction firm Subhash Projects & Marketing jumped 5% to Rs 193, on bagging orders worth Rs 309 crore for various power projects in Karnataka.

The Nikkei Average fell 0.45% on Tuesday, after US stocks failed to rise despite a strong jobs data, prompting investors to sell recent gainers such as Advantest Corp after the benchmark logged its highest close in nearly six weeks in the previous session. The Nikkei 225 index was trading down 79.07 points, at 17,664.69. On Monday, the benchmark booked its highest closing since 27 February 2007.

Hong Kong’s Hang Seng Index was up 138.16 points (0.68%), to 20,347.87.

Oil prices bounced back slightly on Tuesday, as Asian traders reacted to a slide the day before pulling prices down by $3. Light, sweet crude for May delivery rose 30 cents to $61.81 in mid-morning Asian electronic trading on the New York Mercantile Exchange.

US stocks closed flat on Monday (9 April), as news that billionaire investor Warren Buffett had purchased stakes in the railroad sector and strong jobs data offset worries about earnings and subprime loans. The Dow Jones Industrial Average rose 8.94 points, or 0.07%, to end at 12,569.14. The Standard & Poor's 500 Index gained 0.85 of a point, or 0.06%, to finish at 1,444.61. But the Nasdaq Composite Index dipped 2.16 points, or 0.09%, to close at 2469.18.

The Bank of Japan kept interest rates unchanged for a second month after consumer prices fell and recent data signaled US economic growth may slow. Governor Toshihiko Fukui and his policy board colleagues voted unanimously to hold the key overnight lending rate at 0.5%, the lowest among major economies, the bank said in a statement today in Tokyo.