Selective stock-specific buying in a flat market

A late surge in Reliance Industries (RIL) helped the market end a tad higher today, 18 May 2007, after it moved between positive and negative zone throughout the day. Subdued Asian markets and a powerful bomb blast at Meeca Masjid near Charminar in Hyderabad that took place afternoon capped market’s gains.

With Tata Motors and Dr Reddy’s Laboratories (DRL) reporting their Q4 results today, the Q4 earnings season is nearly over and, therefore, there is lack of trigger for the market in the near term. It may,hence, take its cue from the trend in global markets.

The 30-share BSE Sensex advanced just 3.70 points to settle at 14,303.41. The market came off higher level in mid-afternoon trade after reports filtered in that three persons were killed in a powerful bomb blast at Meeca Masjid near Charminar in Hyderabad.

Just before the news of the blast, the market had firmed up. The Sensex had risen as much as 37.35 points to 14,337.06 at 13:50 IST.

In afternoon trade, the Sensex had recovered from a 60.71-point fall to 14,239 at 12:22 IST. The slide in early afternoon trade had taken place soon after inflation data hit the market. Before that the market had turned range bound in mid-morning trade after staging a solid rebound on an initial near 100-point fall.

The Sensex moved 136.05 points for the day between a low of 14,201.01 and high of 14,337.06.

The Sensex had surged 370.38 points in the past two trading sessions to 14299.71 on Thursday, 17 May 2007, from 13929.33 on Tuesday, 15 May 2007, on firm Asian markets. Rally in top banks ICICI Bank, State Bank of India (SBI) and index heavyweight RIL aided the upmove.

The S&P CNX Nifty lost 5.05 points at 4214.50. The Nifty May 2007 futures provisionally closed at 4229.70, at a premium of 15.20 points over the spot price. Nifty May 2007 futures had ended at 13.55 points premium over spot price on Thursday 17 May 2007.

BSE’s sectoral indices were mixed. Banking sector index Bankex continued its recent solid surge led by further gain in index heavyweight ICICI Bank. It advanced 65.72 points, or 0.87%, to settle at 7,603.97.

On the other hand, the fall in Tata Steel and Hindalco pulled the Metal index down 122.82 points, or 1.1%, to 10,242.01.

The Oil & Gas index rose 23.38 points, or 0.3%, to 7,603.08, led by gain in index heavyweight RIL. A sharp fall in Bajaj Auto pulled Auto index down 93.22 points or 1.8% at 4,910.46.

Small-cap and mid-cap indices which have been rising since early last month, moved slightly higher. The BSE Small-Cap index gained 7.74 points or 0.1% at 7,220.30. The Mid-Cap index rose just 1.16 points to settle at 6,089.95

The market breadth was weak: 1,491 shares declined on BSE as compared to 1,106 shares that rose, while 72 shares were unchanged. Losers outpaced gainers by a ratio of 1.34:1. The breadth turned negative from positive in early afternoon trade.

BSE clocked a turnover of Rs 4670 crore compared to average daily turnover of Rs 4521 crore in 11 trading session this month from 3 May 2007 to 17 May 2007.

Weakness in major metal and mining shares pulled Asia-Pacific stocks lower on Friday, 18 May 2007. Key benchmark indices in Hong Kong, Australia, China, Japan, Singapore, Taiwan and South Korea were down by between 0.05% to 0.79%.

European markets held firm on Friday 18 May 2007. Key benchmark indices in London, Germany and France were up by between 0.6% to 0.9%.

Foreign institutional investors made heavy purchases of Indian stocks worth Rs 1060.80 crore on Thursday 17 May 2007, the day when Sensex had surged 172 points.

In today’s trade, RIL rose 1.1% to Rs 1704.50. The stock hit a record high of Rs 1705 at the fag end of the trading session. The stock advanced for the third day in a row today.

Bajaj Auto declined 9% to Rs 2265. At the onset of the trading session, it had come off lower level after an initial neary 13% fall to Rs 2,179. On BSE, 11 lakh shares were traded. The scrip tumbled for the second day in a row on concerns of the low price at which Germany's Allianz can exercise its options to lift its stake in two insurance joint ventures.

Gujarat Ambuja Cements lost nearly 4% to Rs 118.90. The stock witnessed a sustained fall during the course of the day. ACC shed 1.4% to Rs 876, off early high of Rs 908. A block deal of 1.9 lakh shares was executed in the scrip at Rs 895 on BSE.

Tata Motors dropped 1.4% to Rs 740. Tata Motors today reported a 26% growth in net profit to Rs 577 crore in Q4 March 2007, from Rs 458 crore in Q4 March 2006.

Index heavyweight ICICI Bank was up 1.8% to Rs 953. The stock had come off the higher level in early afternoon trade from an initial 1.3% rise to Rs 948.80. It had surged in the last few days following the move by the Reserve Bank of India to allow banks to trade credit default swaps, which are used to hedge credit risk.

HDFC Bank rose 2.7% to Rs 1,065. The private sector bank said on Thursday, 17 May 2007, its board had approved raising additional share capital of $1 billion or Rs 4200 crore, whichever is higher, to meet the growing demand for loans.

SBI edged up 0.7% to Rs 1338. The stock came off the lower level after it had lost as much as 1.5% to Rs 1307.60 at 12:21 IST when inflation data had trickled in the market.

India's wholesale price index rose 5.44% in the 12 months to 5 May 2007, lower than the previous week's increase of 5.66% due to a high base the year before, data showed on Friday, 18 May 2007. The annual inflation rate was 4.37% in the corresponding week of the previous year

Dr Reddy’s Lab dropped 1.4% to Rs 668 even as the company today,18 May 2007, posted robust Q4 March 2007 results. It reported a net profit of Rs 325 crore in Q4 March 2007 versus a net loss of Rs 23.60 crore in Q4 March 2007.

Tata Steel dropped 1.1% to Rs 590.75. During trading hours on Thursday, 17 May 2007, Tata Steel reported a 41% growth in net profit to Rs 1,103.50 crore in Q4 March 2007 over Q4 March 2006.

Copper and aluminium major Hindalco shed 1.5% to Rs 146.75 taking cue from weak global copper prices. Worries about oversupply in China, the world's top metals consumer, had knocked copper to a six-week low on Thursday, 17 May 2007.

GTC Industries jumped 5% to Rs 182.30 after it reported today, 18 May 2007, a surge in net profit to Rs 51.80 crore in the year ending March 2007, from Rs 19.87 crore in FY 2006. Net sales rose to Rs 199.74 crore from Rs 178.47 crore.

Development Credit Bank jumped 10% to Rs 109.75 on high volume of 68 lakh shares on BSE.

Private sector bank Federal Bank rose 3.5% to Rs 280 after it reported today, 18 May 2007,a 30% growth in net profit to Rs 292.73 crore in Q4 March 2007, from Rs 225.21 crore from Q4 March 2006. Total income surged to Rs 2104.04 crore, from Rs 1653.48 crore

IL&FS Investsmart came off higher level. The stock was up 6.4% to Rs 200.90. It had risen as much as 13.6% to Rs 214.45 in mid-morning trade. On BSE, a large block deal of 14.35 lakh shares was executed in the stock at Rs 205 on BSE today, Friday, 18 May 2007. A block deal of 14.6 lakh shares was executed in the scrip at Rs 205 per share on BSE on Wednesday, 16 May 2007. Foreign fund Capital International had bought the shares from another foreign fund CLSA Mauritius on Wednesday, while the buyers and sellers of today's block deal are yet not known.

Indraprastha Gas rose 4.6% to Rs 108.80 after a deal of 6.49 lakh shares at Rs 107 was executed on NSE today.

Moser Baer surged 7.6% to Rs 464.50. Speculators are on a rampage in the scrip following the stock’s entry into the derivatives segment from the start of this week. From Rs 380.10 on 11 May 2007, the stock has gained 20.4% in the past five trading sessions.

Another recent entrant in derivatives Rolta India gained 5.4% to Rs 465. On BSE, 17.2 lakh shares got traded in the stock.

Bhagwati Banquets & Hotels lost 2.3% to Rs 49.45. Volumes in the stock were a huge one crore shares on BSE. The stock had settled at Rs 50.65 on Thursday, 17 May 2007, on the day of its debut, attracting a 26.6% premium over the IPO price of Rs 40. It had clocked a massive volume of 4 crore shares on that day.

Kamat Hotels India rose to touch its maximum daily limit of 10% at Rs 165.05 after the company said today, 18 May 2007, its board would meet on 30 May 2007 to consider a stock split.

Cement maker OCL India dropped almost 5% to Rs 160 after the company reported today, 18 May 2007, a surge in net profit to Rs 25.02 crore in Q4 March 2007, from Rs 11.56 crore in Q4 March 2006.

UTV Software Communications surged 10.6% to Rs 434. The stock had spurted 20% to Rs 405 on Wednesday 16 May 2007, on high volume of 23.1 lakh shares on BSE. It had slipped to Rs 391.50 on Thursday, 17 May 2007.

London Brent crude rose to an eight-month high and was hovering around $70 a barrel. The oil price rise weighed on shares of oil marketing firms. BPCL lost 1.1% to Rs 375.25, Indian Oil Corporation shed 2% to Rs 504 and HPCL shed 1.8% to Rs 300.

Budget airline operator Deccan Aviation was down 3.4% to Rs 140.35 on profit taking after a sharp rise on Thursday, 17 May 2007. The stock had jumped 22% on Thursday on market talk that the Anil Dhirubhai Ambani Group was close to picking up a major stake in the company.

Escorts advanced 1.4% to Rs 130.50 after it said on Friday, 18 May 2007, its subsidiary had signed a deal with Japan's IHI Construction Machinery to market their crawler cranes in India. In a separate deal, Escorts said it would market tower cranes of Weihai Huata Building Machinery Company of China.

ABB rose 1.1% to Rs 4320, hitting a lifetime high of Rs 4357. On BSE, 19,059 shares were traded in the stock.

United Spirits gained 5.8% to Rs 1066. The stock rose for the third day in a row today after the UB group company acquired Scottish spirits maker Whyte & Mackay for 595 million pound sterling

BSE said on, Friday 18 May 2007, it had completed the sale of 51% of equity shares to 19 domestic and overseas investors, including 10% sold to two foreign exchanges. The BSE's member-brokers tendered their shares in the exchange at Rs 5,200 per share. "With the new ownership structure in place, BSE is well poised to pursue growth opportunities aggressively," said Rajnikant Patel, BSE’s Managing Director and CEO.

Substantial money will be raised from IPOs of top banks and from property developer DLF in the coming months.

Meanwhile, China on Friday 18 May 2007 raised interest rates for a second time this year. The one-year benchmark lending rate will be raised to 6.57%, the highest in more than eight years, from 6.39%, starting tomorrow, the People's Bank of China said today on its Web site. The one-year deposit rate will be increased to 3.06% from 2.79%

In another major development, China's central bank said on Friday, 18 May 2007, it would widen the daily trading band for the yuan against the dollar by 0.5% effective from 21 May 2007.