Nifty settles at new peak

The market was strong throughout the day’s trading session, tracking firm Asian and European markets, on continued buying momentum in index pivotals. Oil & gas, metal and FMCG stocks were in high demand. However, selling was seen in IT and auto stocks.

The fuel for the market's rise were reports indicating India's June-September monsoon rains are expected to hit the coastline of southern Kerala state within the next three to four days.

The S&P CNX Nifty, the benchmark index of the National Stock Exchange, advanced 46.40 points, or 1.10%, at 4,260.90, an all-time closing peak. It had surged to an all-time high of 4,269.35 today, 21 May 2007, in intra-day trade, surpassing its previous all-time high of 4,245.30, which it had stuck on 8 February 2007.

The 30-share benchmark index of BSE, which crossed the 14,400 level in the opening session, settled 115.19 points, or 0.81%, higher at 14,418.6. It opened higher at 14,415.44 and surged to strike an intra-day high of 14,451.30. Its intra-day low for the day was 14,384.61

As per provisional data, FIIs were net buyers to the tune of Rs 183 crore today. Domestic institutions were net buyers to the tune of Rs 258 crore today.

The market breadth, which indicates the overall health of the market, looked strong as small-cap and mid-cap stocks also participated in the rally. Though the breadth was positive in the late afternon session, it was weaker compared with the morning session when there were 4 gainers for every loser.

The advance to decline ratio was pegged at 1.12 by the closing bell: 1,380 shares advanced as compared to 1,225 that declined, while 81 remained unchanged.

The BSE Mid-Cap index settled at 6,129.69, advancing 39.74 points, or 0.65%, while the BSE Small-Cap index rose 73.85 points, or 1.02%, to 7,294.15.

Firm global markets helped local bourses. All the Asian indices were trading higher, while a majority of European markets advanced. Hang Seng rose 0.11%, while the Nikkei 225 index gained 0.90%. The Nikkei average climbed 157.29 points to 17,556.87 on Monday, 21 May 2007, as technology exporters such as Sony Corp and TDK Corp. advanced while the yen slipped to a record low against the euro.

Chinese shares jumped 1.04% for another record finish Monday, 21 May 2007, as investors shrugged off the central bank's latest efforts to cool the economy and stocks, using early losses as a bargain-hunting opportunity instead.

The benchmark Shanghai Composite Index, closed up 41.97 points at 4,072.23 on heavy turnover of 209.60 billion yuan (27.22 billion dollars). Prices opened down more than 3% but the key index was soon back in positive territory as investors discounted Friday's (18 May 2007) moves as more of the same measures that have failed to work since early 2006.

The main Shanghai Composite Index has trebled since the start of 2006, prompting repeated warnings from officials and analysts that a dangerous bubble has formed.

In addition, to slow the pace of lending, the central bank said it would hike commercial bank reserve requirements -- the money they must set aside to cover emergencies -- by 0.5% points to 11.5%. Friday's (18 May) was the fourth interest rate hike and eighth increase in reserve requirements since the central bank ramped up efforts early last year to mop up excess cash -- all apparently to little lasting effect. The yuan ended the day at a new high of 7.6650 against the US dollar, up from a previous finish of 7.6680.

The total turnover on BSE amounted to Rs 5,559 crore, boosted by a series of block deals. Prominent among them were three block deals of 44.10 lakh shares executed on the Reliance Energy (REL) counter at an average price of Rs 513 per share in opening trade.

REL surged 8.53% to Rs 554.90 on huge volumes of 1.42 crore shares. It was the top traded counter on BSE, with turnover of Rs 736.27 crore. The three block deals resulted in roughly around 5.44% of REL's equity changing hands.

Other major block deal was executed on the Adlabs Films counter on BSE: 48.12 lakh shares at Rs 535 per share by 10:23 IST. The scrip was up 6.94% to Rs 562. It was the second top traded stock on BSE with a turnover of Rs 296.50 crore. This block deal amounted close to 11.5% equity of Adlabs changing hands.

The total marketwide turnover was Rs 46,560.99 crore as compared to Rs 44,316.68 crore on Friday (18 May).

Shares from the Reliance pack were in strong demand. Reliance Capital (up 8.45% to Rs 982), Reliance Natural Resources (up 3.12% to Rs 31.40), Reliance Petroleum (up 3% to Rs 95), Reliance Communications (up 1.76% to Rs 504.60) and IPCL (up 3.76% to Rs 349) advanced.

Index heavyweight Reliance Industries (RIL) advanced 4.45% to Rs 1,775 on 9.86 lakh shares. It struck an all-time high of Rs 1780, on market rumors that it is likely to come out with rights issue. The scrip shrugged off media reports it is likely to miss the June 2008 deadline for commercial production of gas from the Krishna Godavari basin. The delay is mainly due to late deliveries of deepwater drilling rigs by Transocean Inc. RIL is relying on these oil rigs to the start the commercial production of gas from the basin. It was the third most traded counter on BSE with turnover of Rs 134.51 crore

PSU oil exploration major ONGC advanced 2.44% to Rs 931.50 after Brent crude oil rose 28 cents to $69.70 a barrel on Monday, 21 May 2007, while US benchmark crude gained 20 cents to $65.14, boosted by concerns over supplies from major exporters Iran and Nigeria.

Led by RIL and ONGC, the BSE Oil and Gas Index surged 3.05% or 231.60 points to 7,834.68, and was the top gainer among the sectoral indices on BSE. Chennai Petroleum (up 13.44%), MRPL (up 4.53%), BPCL (up 4.54%), HPCL (up 1.50%), also gained.

The BSE Bankex rose 1% at 7,680.71, extending recent gains as inflation worries eased. Also analysts rule out any fresh interest-rate increases in the near future. In fact, they expect rate cuts.

India’s largest commercial bank State Bank of India (SBI) edged up 1.46% to Rs 1345.10 on 4.46 lakh shares. It has taken up a plan to reach 100,000 unbannked villages in the country within the next two years. It aims is to open at least one bank account for each family in these villages. SBI plans to access one lakh villages in India within the next two years. SBI’s strong Q4 March 2007 results announced on Saturday, 12 May 2007, has aided the rally.

HDFC Bank (up 2.61% to Rs 1100), Oriental Bank of Commerce (up 6.45% to Rs 242.55), Canara Bank (up 6.60% to Rs 268), Bank of Baroda (up 1.83% to Rs 286), Punjab National Bank (up 1.70% to Rs 559.50), Union Bank of India (up 3.27% to Rs 124.85 ), UTI Bank (up 3.7% to Rs 556.90), Federal Bank (up 3% to Rs 287) and Kotak Mahindra Bank (up 3.21% to Rs 577.40), advanced.

The BSE Metal Index gained 2.5% to 10,494.47. Tata Steel jumped 5.50% to Rs 623.55 on renewed buying following strong Q4 results announced late last week. Tata Steel had spurted over the past few weeks after the company last month announced attractively priced (Rs 300) rights issue in the ratio of 1:5, and also on expectation of strong fourth quarter results.

Tata Steel’s consolidated net profit had increased 41% to Rs 1103.50 crore in Q4 March 2007. Sales rose 21% to Rs 4980.44 crore in Q4 March 2007. Net profit jumped 20% to Rs 4222.15 crore in the year ended 31 March 2007. Sales increased 15% to Rs 17552.02 crore in FY 2007.

Jindal Saw (up 7.36%), Welspun Gujarat Stahl Rhoren (up 5.54%) and Sterlite Industries (up 2.22%), advanced.

State-run steel major Steel Authority of India was up 4.32% to Rs 145 after it reported a 72% growth in net profit in Q4 March 2007 during trading hours today. Sail reported a 72.3% surge in net profit to Rs 1901.88 crore in Q4 March 2007. Sales rose 12.6% to Rs 10385.08 crore in Q4 March 2007. Net profit jumped 54.5% to Rs 6202.29 crore in year ended 31 March 2007. Sales rose 21.7% to Rs 35026.21 crore in FY 2007.

Ranbaxy Laboratories moved up 0.44% to Rs 398.50 after its wholly owned subsidiary, Ranbaxy Pharmaceuticals Canada Inc. (RPCI), received approval in Canada to manufacture and market Ran® - Pravastatin Tablets, 10 mg, 20 mg, and 40 mg, from Health Canada, Therapeutic Products Directorate (TPD). Total annual market sales for Pravastatin in Canada is CAD $72.9 million.

Pravastatin is indicated as an adjunct to diet for the reduction of elevated total and low density lipoprotein cholesterol levels in patients with primary hypercholesterolemia.

Tata Motors slumped 2.63% to Rs 723.20 as selling continued after its Q4 March 2007 OPM shrank to 11.69% from 12.9% in Q4 March 2006. During trading hours on 18 May 2007, Tata Motors reported a 25.57% increase in consolidated net profit to Rs 2,169.99 crore in the year ended March 2007 compared with Rs 1,728.09 crore in FY 2006. Total income moved up to Rs 32,579.59 crore (Rs 24,012.97 crore).

The group posted a net profit of Rs 649.81 crore in Q4 March 2007 as against Rs 522.60 crore in Q4 FY 2006. Total income increased to Rs 9,790.09 crore (Rs 7,866.06 crore).

IT pivotals attracted fresh selling as rising rupee, hardening interest rates and costly inputs are taking a toll on the profit margin of Indian exporters. The rupee had hit a nine-year peak of 40.53 on 9 May 2007. It has gained more than 8% against the dollar this year to be Asia's best-performing currency.

The BSE IT Index lost 1.1% at 4,867.32, and was the top loser among the sectoral indices on BSE. TCS was down 1.34% to Rs 1235, Satyam Computers 1.93% to Rs 446.50, Wipro 1.63% to Rs 535.10, and Infosys Technologies 1.11% to Rs 1960. Infosys Technologies is to invest Rs 306 crore for setting up a development centre in Kerala.

The fall in IT stocks intensified after Britain, on 19 March 2007, suspended its online visa application facility from India after personal data of thousands of Indians was compromised, prompting the government to order a probe into the security lapse. As many as 4,70,000 Indians had applied for visa to Britain last year and around 50,000 had applied online.

TCS was down 1.34% to Rs 1235, Satyam Computers 1.93% to Rs 446.50, Wipro 1.63% to Rs 535.10, and Infosys Technologies 1.11% to Rs 1960. Infosys Technologies is to invest Rs 306 crore for setting up a development centre in Kerala.

Second line IT stocks MphasiS (down 3.37% to Rs 307.10), HCL Technologies (down 1.42% to Rs 348.35), i-flex Solutions (down 2.73% to Rs 2170) and i-Gate Global (down 0.67% to Rs 338), slipped.

Bajaj Auto slipped for the third straight day by 1.91% to Rs 2243.10, as its demerger scheme, announced during trading hours on 17 May 2007, triggered a flurry of rating downgrades by brokerage houses. Disappointment about the post-demerger structure and a lack of clarity about future business plans have been cited as the main reasons for the downgrades.

Bajaj Auto shares slumped 16% in the past two trading sessions after surprise revelation that Allianz — Bajaj’s partner in its two insurance ventures — has a ‘call option’ to buy up to 74% at a nominal price. This was the biggest disappointment in the demerger plan. Most analysts expected Bajaj Auto to remain the majority partner, while allowing Allianz to raise its stake up to 49%. They see a high possibility of the government raising foreign investment limit in insurance sector to 74% and Allianz exercising the option to hike the stake.

The insurance business of Bajaj Auto was valued at around Rs 800 per share, but going by the new structure, the value has been trimmed to Rs 300 per share. So the fall was more of a realignment to its fair value of Rs 2,250, as per an analyst.

Drug maker Dr. Reddy's Laboratories slipped 1.24% to Rs 657.50, despite posting strong March 2007 quarterly net profit on sales of generics, including a cheap version of GlaxoSmithKline Plc.'s anti-nausea blockbuster, Zofran, on 18 May 2007, during market hours. The stock fell after the company said its profit would fall this year. The company expects core businesses to grow strongly in the year ahead but sees lower profit in FY 2008.

The fiscal year that ended March 2007 saw one-time gains from a 180-day exclusivity period for Zofran's generic equivalent, and authorised generics.

Dr Reddy's Laboratories reported a total income of Rs 4,084.31 crore for the financial year ended March 2007 as against Rs 2,136.57 crore in the last year as per the Indian GAAP. It posted net profit of Rs 1,176.86 crore as against Rs 211.13 crore for the same period.

The country's biggest electricity generator NTPC slipped marginally by 0.06% to Rs 155.60. As per reports, the company is planning a foray into wind power with an investment of more than Rs 1,200 crore, seeking to diversify into the renewable energy market. It is looking at wind energy projects with a total capacity of 200-250 MW.

Balaji Telefilms soared nearly 20% to Rs 240.95 in a rally led by another content provider UTV Software last week. UTV Software had surged 28.9% in three trading sessions to Rs 435.20 on Friday, 18 May 2007, from Rs 337.50 on 15 May 2007.

Ronnie Screwvala’s UTV Software is planning to invest $200 million in launching a bouquet of eight new channels by March 2008 in India. These channels will be distributed to the Gulf region thereafter. The company is divided in various verticals including content, broadcast and new media (animation and gaming) and the channels come from the vertical of broadcast.

Meanwhile, Balaji Telefilms had reported good Q4 March 2007 results last week. Its net profit zoomed 37.25% to Rs 21.27 crore in Q4 March 2007. Income from operations rose marginally to Rs 77.38 crore from Rs 76.91 crore in Q4 March 2006.

Sun Pharma gained 5.11% to Rs 1065 after it announced the acquisition of Israel's Taro Pharmaceutical Industries before trading began on Monday, 21 May 2007. Strong Q4 March 2007 results, unveiled after trading hours on Friday, 18 May 2007, also aided the upmove in the scrip.

Taro Pharmaceutical is a multinational generic manufacturer with established subsidiaries, manufacturing and products across the US, Israel, Canada. North America represents more than 90% of Taro's sates. The acquisition will be funded through internal accruals and proceeds from its earlier $350 million foreign currency convertible bond (FCCB) issue.

Sun Pharma’s consolidated net profit surged 48% to Rs 212.08 crore in Q4 March 2007 over Q4 March 2006. Sales rose 34% to Rs 544.19 crore. Net profit jumped 35% to Rs 774.08 crore in the year ending March 2007 over FY 2006. Sales surged 30%to Rs 2132.06 crore in FY 2007.

Cigarette company GTC Industries jumped 5% to Rs 191.40 after reporting blockbuster earning for Q4 and FY ended March 2007 on 18 May. With this, it has gained 15% in three trading sessions.

GTC Industries posted a 713.80% spurt in net profit to Rs 40.04 crore in Q4 March 2007 as compared to Rs 4.92 crore in Q4 March 2006. Net sales rose 15.10% to Rs 57.66 crore (Rs 50.09 crore). The company posted a whopping 222.70% rise in net profit to Rs 51.80 crore in the year ended March 2007 as compared to Rs 16.05 crore in FY ended March 2006. Net sales rose 12% to Rs 199.74 crore (Rs 178.26 crore).

Marico advanced 5% to Rs 61 after blocks deals were executed in the stock on BSE and NSE. Block deals of 35.1 lakh shares on BSE and 30 lakh shares on NSE were struck at Rs 60 per share today. Details of the buyers and sellers were not known immediately.

Pharmaceuticals packaging firm Ess Dee Aluminium surged 6.66% to Rs 357 after disclosing its intentions of a domestic acquisition to strengthen its position. The target company has been identified and negotiations are under way, Ess Dee Aluminium's management had said at an analyst meet held on 16 May 2007 to discuss their financial results for Q4 March 2007 and the year ended March 2007, progress of their expansion projects and future plans.

Surging for the fourth day in a row after acquiring Scottish spirits maker Whyte & Mackay for 595 million pound sterling, United Spirits jumped 11.27% to Rs 1,188. The acquisition of Whyte & Mackay (W&M) allows the new owners to promote the company's Whyte & Mackay Scotch and Jura single malt brands in India and China, the focus of operations of United Spirits and the world's two fastest-growing major markets for Scotch.

At the time of the acquisition last week, UB Group chairman Vijay Mallya had said W&M's spread of brands across the spectrum from "value" to "super premium" made it the ideal vehicle with which to penetrate the well-segmented Indian market. Whyte & Mackay's inventory of 155 million litres of spirits has been valued at between £350m and £400m, and United Spirits a "captive supply" of whisky for blending with Indian whiskies.

JP Associates, which announced its results on Saturday, 19 May 2007, slipped 0.75% to Rs 666 after its net profit surged to Rs 131 crore in Q4 March 2007 as compared to Rs 70 crore in Q4 March 2006. Net sales rose to Rs 886 crore (Rs 855 crore).

India's National Stock Exchange (NSE) will offer futures and options trading on CNX Nifty Junior and CNX 100 from 1 June, the exchange said late on Friday. The exchange already offers futures and options trading in S&P CNX Nifty index, Bank Nifty and CNX IT index.

Foreign institutional investors (FIIs) bought shares worth a massive Rs 1060.80 crore on Thursday, 17 May 2007. The large inflow came after they had pulled out Rs 470 crore in two trading sessions from Tuesday, 15 May 2007, to Wednesday, 16 May 2007. But their inflow was muted Rs 56.64 crore on Friday, 18 May 2007, as per provisional figures.

Domestic institutions were net buyers of Rs 58-crore equities on Friday, 18 May 2007.

Meanwhile, in a major development, the Indian government late on Friday, 18 May 2007, tightened overseas borrowing rules, making it harder for less creditworthy and smaller local companies to raise funds, a measure seen aimed at curbing soaring capital flows and calm the hot real-estate sector.

The finance ministry said in a statement late on Friday that the ceiling has been lowered to 150 basis points (bps) over six-month Libor from the earlier 200 bps for overseas borrowings by Indian companies for maturities between three and five years.

For maturities over five years the ceiling has been reduced to 250 bps over six-month Libor from 350 bps. It said the ceilings had been revised in view of the upgrading of the country's sovereign credit ratings

Wall Street was boosted on Friday, 18 May 2007, by fresh takeover activity and after a gauge of consumer sentiment rose more than expected in May 2007, reassuring investors about the strength of the US economy. Dow Jones Industrial Average gained 79.81 points, or 0.59%, to a record closing high of 13,556.53. The Nasdaq Composite Index gained 19.07 points, or 0.75%, to 2,558.45.