Market Mood

Bulls fall in love with stocks!

I was just guessin', At numbers and figures,
Pullin' the puzzles apart Questions of science,
Science and progress, do not speak as loud as my heart.

Love is blind and the bulls seem to be closing their eyes on any concerns coming their way. The indices are at yet another high. The news flow this week has not been very encouraging. To begin with, Infosys cut guidance. Industrial production for May dipped. Bajaj Auto results disappointed and the coming quarter is again expected to be weak. Valuations, though being questioned, are taking a back seat temporarily. FIIs have lend support to the bulls. Higher metal prices on LME added to the positives.

Tech stocks remained lackluster while metals, Real Estate, Power and Construction stocks clocked gains. Hindalco, REL, L&T, BHEL and Tata Steel were among the major gainers guiding the Sensex above the 15,200 mark. Interestingly, the markets have been changing its leaders from time to time.

The major indices recorded their fifth weekly gain with benchmark Sensex adding 308 points or 2.06% to close at 15272 and NSE Nifty advancing by 120 points or 2.75% to close above 4500 mark at 4504.

Global indices too had a good run. Hang Seng Index closed above 23,000 for the first time. Shares also rose after Fitch Ratings upgraded Hong Kong's long-term foreign-currency debt rating to AA, the third-highest ranking, from AA-. The US markets managed to shrug off disappointing earnings forecasts from the retail sector, renewed concerns about the sub-prime mortgages and rising crude oil prices. Dow Jones recorded its biggest gain since 2003 on Thursday.

Metal stocks shone brightly on Dalal Street. Talks of consolidation in the global metal industry and firm metal prices contributed significantly to the rise in metal stocks. Takeovers in the metals industry and higher commodity prices have been driving up metal stocks in recent weeks. Alcoa led the gains in US Market after Rio Tinto's plan to buy Alcan spurred expectations of more takeovers. SAIL skyrocketed by over 23% during the week. JSW Steel was another performer of the week as the scrip rallied by over 15% to Rs721. Heavyweight Tata Steel was among the major gainers advancing over 11% to Rs692. Hindalco surged by 13% to close at Rs174.

Power stocks were in the limelight on back of increase in Government spending for electricity generation. REL led the charge among the power stocks after Anil Ambani, said he could raise Rs1 trillion to invest in his energy, telecommunications and finance group to tap opportunities in the world's second-fastest growing economy. Tata Power rose by nearly 4% to Rs685 and REL advanced by 13% to Rs675.

Capital Good stocks continued its strong uptrend trend as the index yet again rose over 2.2%. BHEL led the way as the scrip advanced over 8.5% to Rs1690, L&T gained 1.5% to Rs2400, Siemens surged nearly by 5% to Rs1,476 and Punj Lloyd added 3.5% to Rs277.

IT stocks continue to be laggard again this wining week loosing by over 1% in a historic day week for the markets. Infosys reported a consolidated net profit of Rs10.79bn for Q1 FY08 versus Rs11.44bn in the previous quarter. The company also missed its revenue guidance for the first quarter. The company says its FY08 revenues will grow by 17-18% year-on-year and earnings per share (EPS) by 13-14%. FY08 EPS is now seen a t Rs78-79. TCS was down by over 2% to Rs1136, IT Bellwether Infosys slipped 1.8% to Rs1935, Wipro was declined 1.3% to Rs512 and Financial Technology declined 1% to Rs2844. However, Satyam Computer gained 1% to Rs493.

Banking and Real Estate stocks advanced further on expectations that Government may not tinker with the interest rates in RBI meet later this month. DLF, the real estate major rose nearly by 5% to Rs600, IVRCL Infrastructure surged by over 8.5% to Rs423 and Akruti Nirman added 4.2% to Rs496.

Auto stocks gained momentum this week as the index was up by over 3% led by frontline stock Tata Motor as the scrip paced ahead by over 7.5% to Rs766, followed by M&M which gained over 4% to Rs821, Maruti advanced 3.5% to Rs825 and Ashok Leyland added 2% to Rs39.

Victorious week for bulls

Well it's a long way up and we won't come down tonight
… cause tonight will be mine - up on cloud number nine

The bulls were on a rampage this week crossing the 15k mark in style. However, they failed to settle above the psychological milestone as profit booking set in at higher levels. A sudden push from the bulls in afternoon trade on Friday lifted the Sensex past the 15,000 mark. The volatile week witnessed the listing of realty major DLF. ACC, HLL, Tata Motors, L&T and Bharti Airtel were among the major gainers. Higher crude oil prices and a stronger rupee failed to have any kind of impact on the bulls. Banking, Capital Goods, Cement and Auto shares were the big movers .

Pick up in FII investment has fueled the rally in recent days after the Nifty breached the key levels of 4300 last week. The tremendous response to the recent public issues, both in local and overseas markets have made investors more confident over the growth of the Indian economy. The Sensex rose 313 points or 2.14% to close the week at a lifetime high of 14964. the NSE Nifty advanced by 1.52% or 66 points to end at 4384. The Sensex has now gained 800 points in three consecutive weeks.

IT stocks, which were underperformers in recent times saw value buying ahead of Q1 results. However, refinery stocks witnessed profit booking as crude oil price hit a 10-month high of $72 per barrel. Many frontline stocks like L&T, BHEL, ABB, SBI closed at an all time high. Impressive auto monthly numbers, hike in cement price, rally in the global market and continued FII buying boosted market sentiment.

The results will start next week with Infosys kicking off the earnings season on 11th July. Infosys results and its guidance will be a key factor to determine the market trend. Others like Hindalco, HDFC Bank, Bajaj Auto and UTI Bank will announce Q1 results next week. We are bullish on the market but some profit booking is not ruled out. Our top sectors are banking and cement. Our top picks for investment are IOB, Andhra Bank, Kesoram, Mangalam Cement and Balrampur Chini. Other stock ideas are Bharti Airtel, ONGC, HCL Tech, M&M and Maruti.

Gains were also seen across telecom stocks. Bharti Airtel rose by over 3.5% to Rs866 after the company said that India's monthly user addition would cross 7mn. It also announced that Temasek would pick up 4.99% stake in the company and signed an outsourcing pact with Nokia Siemens for US$900mn. The scrip hit week’s high of Rs882 and a low of Rs835. Reliance Communications surged 6% to Rs550. The second largest wireless operator added 1.4mn new mobile users last month. It also announced that it was in talks with Alcatel-Lucent and Huawei to buy equipment for GSM expansion worth Rs30bn. The scrip hit week’s high of Rs565 and a low of Rs519.

The BSE Capital Goods index was the top gainer, rising by 3.9%. L&T was the second biggest gainer in the of Sensex. The scrip rose over 7.5% to Rs2364. L&T announced it would set up three units for railways, power and ship building. It also declared a special dividend of Rs2 per share. The company's US$1bn infrastructure fund is expected to be operational in the next couple of months, according to Chairman and Managing Director, AM Naik.

Auto stocks made a smart comeback this week on the back of value buying. Four-wheeler makers such as Maruti and M&M clocked strong monthly sales figures. The BSE Auto index gained 3.5%. The biggest gainer among was M&M. The scrip rose by 9% to Rs787. Tata Motors paced ahead by 6% to Rs711, Maruti surged by 7% to Rs791.

IT stocks came back into the focus ahead of the announcement of their results. Barring Friday software stocks were under pressure due to nagging concerns about margin compression from rupee appreciation. The Indian rupee gained for the fourth straight week, rising 0.6% to 40.55 per dollar. The BSE IT index was up 1.6% during the week. Satyam advanced by 4.6% to Rs489. Infosys gained 2.1% to Rs1971 and Wipro climbed 0.3% to Rs519.

Cement stocks, which have been underperforming the market for the past few months, had a week to remember amid reports that cement producers hiked prices by Rs3-5 per 50-kg bag across the country. Last week, cement shares had gone up after Finance Minister P. Chidambaram said the government had not asked cement companies to freeze prices and it would not interfere in setting cement prices. ACC jumped over 11% to Rs1040. Grasim spurred by over 5% to Rs2773 and Gujarat Ambuja added 5% to Rs131.

Good start to the monsoon had a positive effect on FMCG and Agri stocks. Talks of new fertilizer policy have also been doing the rounds. The BSE FMCG index gained 1.4% during the week. HLL rose by over 5.5% to Rs199, Colgate advanced by overt 4% to Rs385 and Britannia rallied by over 8% to Rs1709.

MARKET MOOD

No Ta Ra Rum Pum, Bulls settle down

Bulls would have hoped to have yet another winning week and chill out for the weekend. However, it turned out to be a fatal Friday as the indices wiped off most of the gains for the week. Friday's fall was on account of profit booking and weak Asian markets. Next week we have a shortened trading week (Tuesday and Wednesday are holidays).

Strong global markets, short-covering of positions in the F&O segment due to settlement and encouraging Monetary Policy kept the bulls in good spirits through the week, barring Friday. Strong inflows from FIIs and good quarterly results aided the rally. The main indices managed to squeeze out some gains on a week on week basis keeping their winning streak alive for a third consecutive week.

Index heavyweights helped the indices climb higher in an action-packed week with a slew of corporate earnings, and much hyped RBI meet on credit policy. Dr. YV Reddy decided to take a pause in his long sequence of monetary tightening measures leading to a frantic buying in Bank, Real Estate and Auto stocks, which had been battered a lot over last two months.

Tata Power, ACC, Tata Motors and SBI were major gainers in the 30 Sensex stocks. On the other hand, Cipla, BHEL, Infosys and Dr Reddy's were among the notable losers. Finally, the Sensex added 11 points or 0.08% to close at 13908.58 and the NSE Nifty closed flat at 4083.5.

Real Estate, Construction & property stocks had been on the receiving end in recent times following increase in interest rates by RBI over last two months, got some relief after RBI decided to keep key lending rates unchanged to support slowing economic growth. Also, RBI declared that they would reduce risk-weighting on individual loans to 50% from current 75%, which droved the stock prices higher over the week. Nagarjuna Construction, IVRCL Infra, Parsvnath Developers, Bombay Dyeing and Sobha Developers were among the notable gainers.

Finally, Banking stocks find some taste with the investors following heavy battering over two months across the sector. However, RBI's decision to leave the key Interest rates unchanged propelled the banking stocks higher with Index heavy weight SBI leading from front adding over 2.5% to close at Rs1101. ICICI Bank advanced by 2% to Rs935 and HDFC Bank added 2% to Rs1015. PNB, Union Bank, Indian Bank and Bank of India gained in the range of 4-18%.

Series of rate hikes by RBI had taken its toll on the Auto stocks over last two months. However, Tuesday proved to be an adventurous day for the Auto stocks, as they gained smartly after the RBI left its key overnight lending rate unchanged to spur economic growth. Maruti and Tata Motors led the fight back in Auto stocks as a pause in interest rate increase indicates vehicles would be available at lower interest rates. Tata Motors rose by over 3.5% to Rs749, Maruti added 2.2% to close at 796 and M7M raced ahead by adding 2.4% to Rs762.

Pharma stocks were a mixed bag as Cipla proved to be a major laggard for the Pharma index. The scrip plunged sharply after its Q4 profit fell by 34% to Rs1.26bn on lower earnings from the export of drug-ingredients and operations other than health-care. While Ranbaxy was among the star performers over the week after the company received U.S. approval to sell a generic version of Bristol-Myers Squibb Co.'s Pravachol cholesterol lowering drug with exclusive marketing rights. The scrip added over 7% to close at Rs370.7 and Divis Labs added 2% to end at Rs3565. While STAR, Glenmark and Aurobindo Pharma were among the major losers bring the Pharma index down.

Tech stocks continued to slide lower after Rupee advanced for a fifth day on Thursday, extending a rally to the highest in almost nine years. Concerns regarding control of inflation have led to speculation that the RBI bank will allow the Indian currency to strengthen against the Dollar. Wipro fell by 1% to Rs566, TCS lost over 1.7% to Rs1234, Satyam Computer was down by 1.9% to Rs467 and Infosys lost by 2% to close the week at Rs2007.

May-hem...That sinking feeling again!

Bulls are again getting weary regarding the month of May as it reminds them of the sinking feeling again, which caught the market in a tailspin last year. Historically, markets have peaked in the month of May, thereby giving opportunity for investors to create short positions. In 2006, the month of May saw the Sensex hit record highs and quickly came crashing. With many major results out of the way, not much is in store for the bulls. Any negative news even from the global market could have a cascading effect.

The trend of the Rupee and metal prices would be watched closely. The Rupee is headed towards its biggest monthly gain since the last three decades. While the appreciation may not be bad for the economy as a whole, it certainly spells bad news for the export-centric sectors like IT, Textiles and Gems & Jewellery.

Stay light especially on Monday and when markets open again on Thursday be strictly stock-specific

MARKET MOOD

RBI casts its spell on D-Street

Everything falls apart, even the people who never frown eventually break down…
Everything has to end, you'll soon find we're out of time left to watch it all unwind…

The surprise hike in Repo Rate and CRR last week took everyone by surprise. The impact of the RBI's offensive against inflation was seen on Monday as everything fell apart with the Sensex plunging by over 600 points, notching up its second biggest intra-day fall in history. However, with positive cues coming from the global markets, the local bulls staged a smart recovery after Monday's mayhem. Crude oil prices also fell later in the week after Iran released the 15 British sailors.

After yet another manic Monday, the main indices slowly clawed their way up, recouping some of the big losses. Interestingly, the fall in February and March is more due to the culmination of all the internal factors rather than international triggers which led to the carnage in May 2006. Despite the recovery in the last two trading sessions, key benchmarks closed lower for the second week in a row. Banking, Auto, Capital Goods, FMCG and IT stocks were the biggest losers. However, metal and sugar stocks bucked the negative trend to close higher over the week. The benchmark BSE Sensex lost 216 points or 1.6% during the week to close at 12,856 while the NSE Nifty fell by 70 points or 1.8% to close at 3752.

The tussle between the Government and cement makers got worse. In the latest saga, the Government scrapped 16% Countervailing Duty and 4% Special Additional Duty on portland cement. However, the Centre is willing to consider rolling back the dual excise duty structure. Cement stocks were mixed. Grasim was up by 2.7% to Rs2108, Gujarat Ambuja rose 1.3% to Rs105. However, ACC declined 1.7% to Rs721 and Kakatiya Cement fell 2.5% to Rs72.

Banking and real estate stocks were at the receiving end after the RBI raised the repo rate by 25 basis points to 7.75% and hiked the CRR by 50 basis points in two stages to 6.5%. The move will suck out liquidity worth over Rs150bn and would impact loan growth as well as spending. Profitability of banks would also be impacted, as cost of funds would increase. As a result, banking stocks fell sharply over the week. SBI fell nearly by 4% to Rs947, ICICI Bank dropped 2% to Rs838 and PNB declined over 6.5% to Rs440. However, HDFC Bank gained 1% to Rs943. In the real estate pack, Sobha Developers fell by over 6% to Rs750 and Parsvnath dropped over 6% to Rs149. However, Mahindra Gesco advanced by over 4% to Rs593.

Rising crude oil prices and hardening rates brought about a downfall in auto stocks. Hero Honda was the top loser in the Nifty. It was down by over 7% to Rs632, Maruti was in reverse gear during the week. The scrip fell by over 7% to Rs755, M&M lost over 5.5% to Rs713 despite the launch of the Logan. Tata Motors declined 4.2% to Rs686. Among the mid-cap stocks, Ashok Leyland, Eicher Motors and Hindustan Motors were the major losers.

IT stocks continued to get a harsh treatment after the rupee rose to the strongest in eight years against the dollar amid tight money market liquidity and lack of intervention from the RBI. Financial Technology lost by over 4% to Rs1803 and HCL-Tech was down by over 3.6% to Rs287. Among the heavy weights, TCS fell 4.2% to Rs1193, Wipro declined 2.5% to Rs551 and Satyam dropped 1.3% to Rs455.

Firm metal prices on LME and expectations of a price hike by steel makers pushed steel stocks higher. SAIL and Tata Steel were the notable gainers. Tata Steel rose nearly by 6% to Rs465, JSW Steel surged by over 5% to Rs498, SAIL advanced by 2.5% to Rs114 and Jindal Steel added 2.3% to Rs122.

BHEL was in the limelight during the week. The scrip rose by over 3.5% to Rs2359. It was among the top three gainers in the Sensex, hitting week's high of Rs2410 and a low of Rs2145. The company plans to more than double sales in the next five years by building more power stations. The PSU reported a 42% jump in provisional net profit for FY07 on revenues that grew by nearly 29%.

NTPC was another star performer of the week. The scrip was the top gainer in the Nifty. It rallied by over 9% to Rs158 hitting the week's high of Rs163 and a low of Rs146. The public sector power generation major has reported a net profit of Rs67.26bn for the year 2006-07 as against Rs58.2bn in the previous financial year. This translates into a growth rate of 15.5%. Revenues for the year ended March 2007 are up by 27% at Rs332bn versus Rs261.43bn in the year 2005-06..

MARKET MOOD

The struggle continues

Never forget the blood sweat and tears
The uphill struggle over years…

The struggle continued for the bulls even in a truncated trading week. After making a smart comeback last week, we are back in the red thanks to a big fall on Wednesday. However, the bulls did manage to rebound in the last two trading sessions on the back of short covering in the F&O segment. FII inflows too seem to be picking up of late, aiding the rally from the crash in February. After a ferocious February, which saw bulls massacred on Dalal Street, the benchmark BSE Sensex managed to gain 1% from last month. However, on a quarterly basis, the index is down 5.2%, registering its first decline in three quarters.

The rescue act of over last two days failed to help the bulls, from losses sustained at the start of the week caused by global worries. Steep rise in crude oil prices and fears of slowdown in the US had its ill-effects on Dalal Street. US light crude for May delivery jumped to $68.91 a barrel in electronic trading on the back of rising tension between Iran and the UK over the detention of British sailors by Tehran last week. Also, statement by Federal Reserve Chairman Ben Bernanke contributed to the woes.

The Sensex lost 214 points or 1.61% on the week to close at 13,072 and the NSE Nifty fell by 40 points or 1.02% to shut shop at 3822. Tata Motors, Bajaj Auto, TCS and Infosys were among the major losers. Banking, Auto and IT stocks fell sharply. While Pharma, FMCG and select Mid-Cap stocks bucked the negative trend and closed higher.

Sugar stocks were back in action after a long time following the announcement of a relief package by the Government. Agriculture Minister Sharad Pawar said that the Government will build a sugar buffer and provide export incentives to mills to quell the domestic glut amid expectations of a bumper crop this year. Sugar stocks were the star performers of the week. Sakthi Sugar soared 61% in the week to Rs100, Renuka Sugar rose by a whopping 22% to Rs467, Bajaj Hindusthan rallied by over 14% to Rs195 and Balrampur Chini added 7.6% to Rs66.

FMCG stocks also gained momentum. HLL rose over 4% to Rs205, Britannia advanced 1.2% to Rs1254, Colgate gained 1.8% to Rs332 and Nestle added 1.2% to Rs934.

Pharma stocks were back in the reckoning after being under performing the key indices. Dr Reddy's was up over 6.5% to Rs727 and Ranbaxy advanced by nearly by 6% to Rs352. Others like Aurobindo Pharma jumped by over 11% to Rs679. Pfizer rallied by 10% to Rs796 and Wockhardt gained 4.6% to Rs397.

Rising crude oil prices hurt auto stocks. Tata Motors fell by over 9% to Rs727, the scrip also was the top loser, Bajaj Auto fell by over 5.5% to Rs2425, Maruti was down 1.3% to Rs819 and TVS Motors lost 5% to Rs59.

Volatility in the rupee added to the concerns of IT companies. Also, a weak consumer confidence report in the US heightened worries about a slowdown in the world's largest economy. Wipro lost over 6% to Rs558, TCS declined by over 5.5% to Rs1231 and Infosys fell 5% to Rs2012. Patni was down 2.8% to Rs386, HCL Tech fell 1.8% to Rs291 and FT declined 1.5% to Rs1827.

MARKET MOOD

Bulls snap five-week losing streak

I'm a survivor
I'm not gonna give up
I'm not gon' stop
I'm gonna work harder

Even as India prepares to take on Sri Lanka in a ' do- or- die' encounter in the Cricket World Cup, the bulls on Dalal Street managed to rebound from a month's downturn. After being on the receiving end for the past five weeks, the bulls finally got some respite this week. In a broad-based rally, the benchmark BSE Sensex surged by 6.88% or 855 points to record its biggest gain since 21st April, ending the week at 13286. Buying was seen in counters lie Telecom, Oil & Gas, Capital Goods, Banking, FMCG and Auto. Short covering of positions in the F&O segment also contributed towards this week's turnaround. Also, value buying by investors after the 15% fall from the all-time high of February powered the rally. BHEL, HLL, SBI, L&T and Bharti Airtel were the major gainers among the 30 Sensex stocks. The NSE Nifty added 7% or 252 points to close at 3861.

Markets across US and Asia provided good support after Bank of Japan and the Federal Reserve kept interest rates unchanged. The Fed also unexpectedly abandoned its tilt towards higher borrowing costs, indicating that it may well cut rates if the need arises.

Despite the uncertainty over the cement prices, cement stocks bucked the negative trend and closed higher. The Finance Minister met cement makers this week over the sticky issue of prices, but the talks didn't make much headway. Meanwhile, reports said that the Government was mulling a five-year tax holiday for cement companies putting up fresh capacity. ACC surged by over 3% to Rs745, Grasim rose 3.3% to Rs2071, Gujarat Ambuja was up by 1.4% to Rs105 and Mangalam Cement added 3.1% to Rs148.

Telecom stocks climbed after telecom regulator TRAI cut ADC on international calls. Also, the Cabinet approved revised norms for allowing 74% FDI in telecom. RCOM and Bharti Airtel were among the major gainers. Bharti surged 9.2% to Rs783, R Com rose over 11% to Rs425 and MTNL was up by 2% to Rs145. Spurred by reports of land sale, VSNL rose by over 8.5% to Rs406. However, the company denied such developments.

Banking stocks outperformed the key indices after the money market situation eased and public sector banks called of next week's big strike. Outcome of the BOJ meet and Fed's remarks on interest rates also brought the banking stocks back in action. Heavy weights led from the front. SBI was the top gainer among the Banking stocks. The scrip jumped by over 12% to Rs1027, HDFC Bank rose by over 11% to Rs1011 and ICICI Bank added 10% to Rs894. Among the mid-cap banks, UTI Bank, PNB and Kotak Bank were the major winners.

Value buying was seen in Capital Goods stocks after the recent massacre. Also, industrial production, which grew more than expected in January to 10.9%, contributed towards the gains. BHEL was the top gainer among the 50 stocks in the Nifty amid market grapevine of a big order from ONGC. The scrip rose by over 16% to Rs2279. L&T followed suit. The scrip rallied by over 12% to Rs1632, Punj Lloyd was up by 8% to Rs832 and Siemens added 6.3% to Rs1080.

Auto stocks were in top gear. Maruti paced ahead by over 7.5% to Rs839. The company hiked prices of the Swift diesel and the Government said it would sell its residual stake next year. Tata Motors was up by 5.3% to Rs789, Hero Honda surged 4.1% to Rs679 and Bajaj Auto added 1.7% to Rs2533.

ITC was the sole loser among the index heavyweights over the week after West Bengal and Maharashtra decided to levy 12.5% VAT on tobacco products. Concerns on VAT along with the excise duty increase in the budget would have a negative impact on the profit margins of the company, analysts said. The scrip lost 0.5% to close at Rs144.

Reliance Industries zoomed over 6% to Rs1380 after hitting a high of Rs1420 and a low of Rs1297. Reliance said it had tied up with Rohm & Haas Co. to build a plant in Jamnagar to make chemicals used in paints and plastics. Also, there were reports that Reliance may spend US $12bn to buy a majority stake in a venture with Dow Chemical.

BHEL was a power performer. The stock gained by over 16% to close at Rs2279. The scrip hit a week's high of Rs2315 and a low of Rs1957. The stock witnessed sustained rise in its delivery volume over the week, indicating heavy buying interest. There were reports that the company may win an order from ONGC to supply equipment for oil rigs.

Ranbaxy attracted a lot of attention over the week after the company pulled out of the bidding for the generic unit of Germany's Merck citing expensive valuation. The scrip rose over 4% to Rs330 hitting the week's high of Rs350 and a low of Rs315.

MARKET MOOD

Fifth straight weekly loss

It's easier to run
Replacing this pain with something numb
It's so much easier to go
Than face all this pain here all alone

It seems the bulls have nowhere to run as losses keep mounting. Every week there is more bad news either from the domestic market or from abroad. Sometimes it is the Chinese market crash, while sometimes its the unwinding of the yen carry trades. This week, the big worry across global markets was the rising delinquencies in the fragile US housing market. Locally too, the lingering worries continue over rising inflation and the possibility of further monetary tightening by the RBI. The pain keeps getting heightened with the key indices recording their fifth consecutive weekly drop. This week, selling was seen in Cement, Banking, Capital Goods, FMCG and IT stocks. The BSE 30-share Sensex lost 454 points or 3.53% during the week to close at 12430 and the NSE Nifty fell by 109 point or 2.94% to end at 3608. BHEL, SBI, HDFC Bank, ACC and ITC were among the major losers.

Capital Goods stocks declined with the BSE Capital Goods index down over 3%. BHEL slumped over 6.5% to Rs1955, L&T was down by 2.2% to Rs1448, Siemens slipped 2.6% to Rs1011 and ABB edged lower by 0.7% to Rs3463. Selling was also seen in Auto stocks. Hero Honda slipped .5% to Rs652, Maruti was down 1% to Rs779 despite announcing across the board price hike. Tata Motors declined 0.9% to Rs749 and Ashok Leyland lost 2.6% to Rs39.

Banking stocks fell following the disappointing advance tax figures of SBI. Also, concerns of another rate hike also weighed on the lenders. HDFC Bank fell by over 7.5% to Rs904. The scrip was the top loser in the Sensex. SBI declined by over 7% to Rs914 and ICICI Bank lost 5.6% to Rs810. Bank of India, PNB and Canara Bank were the major losers in the Mid-Cap space.

FMCG stocks continued their slide with blue chips leading the down fall. Cigarette major ITC plunged by over 6% to Rs145 amid fears that an impending VAT on tobacco products will hurt its topline and bottomline going forward. HLL declined 3.6% to Rs176, Colgate slipped 1.3% to Rs301 and Dabur slumped over 7% to Rs84.

Cement stocks continued to get pounded after producers last week decided to hold prices for a year. ACC fell by over 7.5% to Rs721, Gujarat Ambuja was down by over 5.5% to Rs103, Grasim also declined 3% to Rs2013. Mangalam Cement, Birla Corp and Prism Cement were the major losers among the Mid-Cap stocks.

MARKET MOOD

Swinging Sensex ends flat

In my place, in my place
Were lines that I couldn't change
I was lost, oh yeah

The bulls have been struggling to find some sunshine during this sun outage season. While they seemed to be in darkness for most part of the week, on Thursday they appeared out of nowhere and took the Sensex past the 13K mark, only to fall on Thursday. Amid these huge gyrations on the bourses, the bulls appear to have lost, tired and under prepared as the tussle between the Government and Cement Manufacturers kept intensifying.

Despite sessions of occasional spurts, trading over the week was highly volatile with the Sensex hitting a peak of 13145.72 and a low of 12344.44 before settling flat at 12884.99. While, the NSE Nifty touched a peak 3795.70 and a bottom of 3554.5 before closing at 3718, down 9 points from previous week's level.

Selling was seen across the sectors with Cement stocks leading from the front. Banking, FMCG, Metal, Capital Good, Small- Cap and Mid-Cap stocks were among the other major losers.

However, IT stocks bucked the negative trend and managed to close higher. Not even stability across the global markets in last few trading sessions failed to inspire the bulls. Making things worse at the moment is the inflation, which accelerated after two weeks of slowing down, as prices of cement and other manufactured products rose. India's Inflation rate was 6.10% in week ended Feb 24 against expectation of 6.03%.

Cement stocks lost further ground after cement companies agreed to hold prices of the building material for a year. Commerce minister said, Cement makers will hold prices "even if there are increases in input prices." Both mid-cap and large cap stocks witnessed heavy selling. Index heavy weight ACC declined over 8.5% to Rs780, the scrip was the top loser among the 50-scrip's of NSE Nifty, Grasim was down 2% to Rs2071, Prism Cement fell over 6.5% to Rs32 and India Cement dropped over 9% to Rs153. However, Gujarat Ambuja rose marginally by 0.3% to Rs110.

Capital Good stocks were also on the receiving end. Punj Lloyd was down over 4% to Rs755, Siemens fell over 5% to Rs1038, ABB declined 1.5% to Rs3487 and BHEL edged lower by 0.3% to Rs2095.

Fears that rising interest rates would make Car loans more costlier brought the Auto stocks lower. Tata Motors declined over 2.5% to Rs755, Bajaj Auto fell 2.3% to Rs2489, Hero Honda was down 0.3% to Rs690. Among the Mid-Cap stocks, M&M fell over 5% to Rs732 and TVS Motors lost 5% to Rs587.

Selling continued among the mid-cap and small cap stocks with most of the scrips hitting lower circuits on regular basis. Small Cap index was the top loser among the key indices, the index fell nearly by 6% over the week. CNX Mid-Cap stocks dropped nearly by 4% during the week Hinduja TMT fell over 10% to Rs511, Patni declined over 6.5% to Rs391 Madras Cement lost over 7% to Rs2598 and Gammon India lost over 3.5% to Rs1031.

Selling was also seen across the Metal stocks after the Government asked the steel companies to roll back the prices. Tata Steel lost by over 2% to Rs433, SAIL was down by 2.2% to Rs104, JSW Steel dropped by over 4% to Rs452 and Jindal Stainless slipped over 7% o Rs119.

Selective buying was seen across the IT stocks, on optimism that new taxes would not impact earnings of the tech companies in the long term. Index heavy weights like TCS, Infosys and Satyam Computer led from the front holding off the markets from a major fall. Satyam Computer rose over 2.5% to Rs438, Infosys was up by 1% to Rs2123 and TCS added 0.4% to Rs1212. However, mid-cap stocks like Patni and Financial Technologies declined over 4% each.

MARKET MOOD

A bad budget week on D-Street

Nobody said it was easy
It's such a shame for us to part
Nobody said it was easy
No one ever said it would be this hard
Awe take me back to the start

How could it come down to this? Should we call it mayhem? Or bulls going for a bungee jumping or excessive gains over past seven months? Inflation worries, a lackluster budget and China-led sell off in global markets contributed towards a heavy fall on the bourses for the second week in a row. Indian indices recorded biggest weekly losses in seven months. Everything was looking bright and rosy at the start of 2007 with marketmen predicting 15k levels before budget. However, looking at the scary scenes on Dalal Street in February, the bulls have an uphill task to reach its previous peak.

Emerging markets were at the receiving end after a rout in China's equity market fueled concern that investors will shift their focus away from riskier assets. Higher excise duties on cement companies and proposals to tax IT and construction companies broke the back of the market. As compared to last year, the Union Budget lacked big-bang measures, which didn't enthuse the bulls. As a result, the benchmark BSE Sensex tumbled 746 points or 5.4% during the week to close at 12,886. While the NSE Nifty slumped 5.3% or 212 points to close at 3727. Selling was seen across the board with Capital Goods, Banking, Cement and Construction stocks were the biggest losers. However, Sugar stocks bucked the negative trend and closed higher after government allowed 6 lakh tons of export.

Capital Goods stocks hogged the limelight for all the wrong reasons. L&T and Punj Lloyd and others pared gains towards the end on selling across the board. L&T fell by over 9% to Rs1464. The scrip was among the top three losers of the week. BHEL lost over 7.5% to Rs2099, ABB slipped by 4.6% to Rs3541 and Punj Lloyd declined over 5% to Rs788. The proposal to withdraw tax benefits under Section 80IA with retrospective effect sent shares of construction companies into a tizzy. HCC, GCC, Gammon, IVRCL, etc. were battered out of shape

Auto stocks were in reverse gear, despite strong monthly sales and news of price increases. The BSE Auto index was the top loser, slipping 6% on the week. Bajaj Auto declined over 10% to Rs2550, Tata Motors fell nearly by 5% to Rs774, Maruti lost 3.4% to Rs833 and Hero Honda declined 2% to Rs691.

IT stocks slumped after FM's proposal to extend MAT to IT firms. The BSE IT index fell 5.8% in the week. Heavy weights led the fall with Wipro being the top loser. The scrip declined over 8% to Rs573, Infosys was down 6% to Rs2103, TCS shed over 5% to Rs1208 and Satyam slid 4.7% to Rs427. HCL Tech, Financial Technology and I-Flex were the other major losers. Despite smart recovery on Thursday, IT stocks fell sharply ending the week lower.

Banking stocks also ended lower. The BSE Banking index lost 4.6%. ICICI Bank was the top loser, falling by over 6.5% to Rs845. Other frontline stocks like SBI lost nearly by 5% to Rs1008 and HDFC Bank slipped 1% to Rs947. PNB, Bank of India and Union Bank were the other key losers.

Cement stocks lost altitude following a steep hike in excise duty on cement, sold above Rs190 per 50-kg bag. For cement priced below Rs190 a bag, the tax will be lowered. Gujarat Ambuja was the top loser, in the Nifty. The scrip plunged by over 10% to Rs109, Grasim lost by over 7.5% to Rs2096, ACC slipped 6.5% to Rs855 and Mangalam Cement declined over 6% to Rs2096.

Sugar stocks turned sweeter. Shree Renuka was the top gainer, rising by over 18% to Rs330, Bajaj Hindusthan rose over 11% to Rs179, Balrampur Chini surged by over 10% to Rs62 and Sakhti Sugar added 4.4% to Rs69.

Sesa Goa, which is the subject of a takeover battle, was extremely volatile. The scrip swung by over Rs500 in the week before ending down 13% at Rs1661. It hit a high of Rs2025 and a low of Rs1485 during the week. Sesa Goa was one of the losers in budget following a proposal to impose tax of Rs300 per ton on Iron Ore exports. The company expects to lose Rs1.5bn in FY08.

MARKET MOOD

Who let the Bears out?

The bulls have been taken by their horns by the bears as they dominated the proceedings for most part of the week. Out of five trading sessions, the market slipped on four days. It was a 'bears' week out' as they stormed the bourses. The last trading session of the week was disastrous for the bulls as the benchmark BSE Sensex plunged by nearly 400 points and the NSE Nifty tumbled nearly 100 points. Selling was seen across the board with Banking, Consumer Durables and Metal indexes leading the fall. This was the second successive down week for the market. Investors have been gradually booking profits amid high uncertainty about the direction of the market ahead of the budget.

Inflation fell to 6.63% in the week ended Feb 10 from 6.73% a week earlier. However, it was still around its two years high. Historically, we have seen markets touching new peaks in February followed by a decline post-budget. However, things have not been the same this year as concerns about inflation and its fallout on interest rates have overshadowed all other positive news. The Sensex had its biggest weekly fall in seven months. The 30-share BSE index tumbled 5% in the week to closed at to 13,632.53, its biggest weekly decline since the week ended July 21. The Nifty too dived 5% to 3938.95.

Cement majors such as Grasim, ACC and Gujarat Ambuja fell on speculation that the government may take steps to curb prices. There are reports that the government may ban cement exports and introduce curbs to check prices. Grasim plunged by over 14% to Rs2270, ACC declined over 10% to Rs915 and Gujarat Ambuja lost 10% to Rs123.

The BSE IT index fell 5.5% during the week. Index heavy weights led the downfall. Wipro declined over 7% to Rs623, Satyam was down 7% to Rs448 and Infosys lost over 5.5% to Rs2237. Financial Technology shed over 9% to Rs1995. HCL Tech and Patni were the other losers.

Mid-cap stocks also came under the bear onslaught. BEL slipped by over 10% top Rs1556 and TVS lost over 10% to Rs65, while Moser Baer fell by over 10% to Rs274.

Metals managed to escape the sell-off as metal prices on London Metal Exchange (LSE) held firm. SAIL slipped by 1.8% to Rs111 and JSW Steel was down 0.7% to Rs462. However, Tata Steel rose over 4% to Rs460. Jindal Steel was up by 1.3% to Rs122 and Bhushan Steel added 1.7% to 396.

HLL fell over 8% to Rs187 in the week after the company announced its results. Its Q4 net profit came in at Rs5.11bn (down 1.7%), while net sales stood at Rs31.56bn (up 6.11%) missing analysts' estimates. The company's sales declined as short winter cut sales of Pond's and other skin creams. The company also announced it would pay Rs3 a share as final dividend. The scrip hit a weekly high of Rs209 and a low of Rs186.

Indiabulls rose over 4% to Rs438. The company's Board approved a plan to separate the broking business. Merrill Lynch increased its stake in the company to 5.13%. The scrip hit a weekly high of Rs467 and a low of Rs418.

Aban Offshore advanced by over 4.7% to Rs1883 after the company announced it had acquired about 97% stake in Sinvest ASA following the mandatory open offer for the Norwegian company ended on Feb 16. The scrip hit a weekly high of Rs2008 and a low of Rs1797.

MARKET MOOD

Market breaks winning streak

I tried so hard, and got so far
But in the end, it doesn't even matter
I had to fall, to lose it all
But in the end, it doesn't even matter

Last week we mentioned about the pace at which the market could fall, and how difficult it would be for traders to survive in a volatile market. Huge intra-day gyrations made it difficult for the bulls to stand tall. The CRR hike, added salt to the wounds of the battered bulls. In a surprising move RBI increased the Cash Reserve Ratio by 50bps effective in two stages from 17th February and 3rd March 2007 on concerns of rising inflation and sustained high credit growth. Banking and real estate sectors were the biggest losers following this move.

Despite resurgence of the bulls on D-street from deep abyss in last two trading sessions, the key indices eventually managed to close lower on week on week basis, snapping its seven-week winning streak. The bulls gave there all in an effort to recoup the losses, but in the end it wasn't enough as selling was seen in counters like Banking, Real Estate, Auto, Capital Good and Metal stocks. Even the Mid-Cap stocks felt the burnt of the investors losing by nearly 1%. Finally, BSE Sensex closed 183 points lower or 1.26% after touching a weekly low of 13805.36 and a high of 14529.28 before settling at 14356 and NSE Nifty lost 41 points or 0.98% to close at 4146.

Hindalco, Maruti, SBI and Ranbaxy were the major losers among the 30 Sensex scrips. While, IT stocks outperformed the key indices and stood firm in volatile market. Wipro, Bharti Airtel, ONGC and Reliance Industries were the major gainers within the Sensex. Concerns of hardening interest rates played spoilsport over the week after impressive economic growth, prompted RBI to unexpectedly increase the amount of cash lenders must keep aside to cover deposits to curb loans growth and inflation

Real Estate stocks continued its downward journey after a hike in CRR by RBI, as the move could form the much awaited trigger for drop in real estate prices, which have held on despite rising interest rates (small correction in some parts). Property prices appear to have reached their peak, according to some analysts. Concerns that loans will become more costlier proved to be an important factor behind the fall in stock prices of Real Estate stocks. Unitech fell by over 16% to Rs392, Parsvnath Developers was down 5.3% to Rs321, Akruti Nirman dropped by over 18% to Rs452 and Bombay Dyeing declined over 5% to Rs608.

Worries over rising interest rates also pulled down the auto stocks. However, much of them rebounded from a week's low after Government lowered the prices of auto fuels by as much as 4.5% on Thursday afternoon. Maruti declined by over 7% to Rs892 after hitting a low of Rs839 over the week. Tata Motors was down 2.8% to Rs869, TVS Motors slipped 4% to Rs72 and M&M fell by 1.8% to Rs901. Hero Honda bucked the negative trend and gained by over 2% to close at Rs743.

Heavy selling was seen across the Capital Good stocks. Index heavy weight BHEL slipped 5% to Rs2386 and Punj Lloyd fell by over 8.6% to Rs971. L&T slipped by 3.4% to Rs1692 and Siemens declined 2.3% to Rs1162.

IT stocks were in momentum following appreciation of Dollar against the Rupee. Major Tech firms income is in the US market in terms of US$, contributing towards the profitability of the company. US accounts for about 6% of sales of Indian software exporters. Wipro topped the charts by gaining 6.4% to Rs676, the scrip was the top gainer among the 50-scrip's of NSE Nifty and IT bellwether Infosys was up by 0.3% to Rs2374. Among the Mid-Cap stocks, Financial Technologies zoomed by over 11% to Rs2199, Mphasis BFL advanced 4.4% to Rs306 and HCL Tech added 2.1% to Rs676.

Oil & Gas exploration stocks were in limelight led by gains in ONGC after the company signed an accord with Eni SpA to swap an oil area in the country for a location in Africa's Congo Basin to get deepwater exploration technology from the Italian company. ONGC advanced 1.3% to Rs905 and Reliance Industries gained 0.9% to Rs1406. However, oil marketing stocks took a beating on Thursday after the Government cut the fuel prices in an effort to curb the inflation. IOC fell nearly by 8% to Rs427, BPCL lost over 4.5% to Rs328 and HPCL slipped 4.8% to Rs276 over the week.

Hindalco, India's biggest aluminum manufacturer, fell by over 12% in the week the most in at least 16 years after the company announced that it would buy Atlanta based Novelis Inc for more than $3.4bn. The stock fell sharply owing to worries about the high debt component of the transaction. The scrip hit the weeks high of Rs151.9 and a low of Rs138.15.

MARKET MOOD

Sensex ends slightly higher

The market was pretty choppy during the week. Still, the key indices managed marginal gains, led by Bajaj Auto, Infosys, ICICI Bank, REL and L&T. Capital Goods, Auto, IT, Banking and Power sectors were among the major gainers helping the Sensex record its seventh straight winning week. Even PSU stocks were in action after some positive announcements by the Government on disinvestment. The Cabinet this week approved plan to sell 7% in BEML and gave the go-ahead for the IPOs of three power PSUs - REC, PGCIL and NHPC.

The higher than expected estimate for FY07 GDP boosted the sentiment on Dalal Street. The CSO (Central Statistical Organization) announced a forecast of 9.2% growth for the Indian economy. However, a sharp jump in inflation prompted profit booking at higher levels on Friday. Inflation accelerated at the fastest pace in more than two years to 6.58%, raising concern that the RBI may announce more tightening measures.

Over the week, we saw Auto and Heavy Engineering Goods companies in action. FMCG stocks continued to drift lower. Telecom stocks lost some steam after last week's rally. Real Estate companies continued to bear the burnt of the investors' ire after the RBI raised interest rates, making home loans costlier. HLL, Bharti Airtel, Hindalco and Satyam were the major losers. Finally, the Sensex added 135 points or 0.9% to close the week at 14,538.9 and the NSE Nifty rose by just 4 points or 0.09% to finish the week at 4187.

Energy stocks were in momentum on expectations that the budget will provide important incentives. Healthy order book position and capacity expansion plans boosted power stocks. Reliance Energy surged by over 4% to Rs556. Anil Ambani and associates raised their stake in the company by 4.73%. Also, the Supreme Court asked rival Tata Power to deposit Rs2.27bn in a dispute pertaining to sharing of standby charges. Suzlon gained 2.1% to Rs1245 and NTPC added 2.1% to Rs145. Suzlon joined hands with Portuguese builder Mota-Engil SGPS SA to buy German windmill maker for 1.02bn euros (US$1.33bn), topping a bid from Areva. However, Tata Power lost 1% to Rs599.

PSU stocks hogged the limelight after the Government announced disinvestments of REC, PGCIL and NHPC. BEL jumped by over 16% to Rs1598 after the company signed a contract with Northrop Grumman to explore joint production opportunities in aerospace and defense electronics technology for the Indian and overseas markets. BEML rallied by over 9% to Rs1178 and SCI rose over 12% to Rs201. The Cabinet approved the plan to sell a 7% stake in BEML through the public issue route.

Capital goods and heavy engineering stocks recorded smart gains with L&T leading from the front. The scrip added over 2% to Rs1715 after the company announced plans to start concrete plant in Dubai. L&T also signed MoUs with Boeing and EADS for exploring opportunities in defence and aerospace. ABB advanced by 2% to Rs3836, Punj Lloyd rose by over 4% to Rs1064 and Siemens added 0.7% to Rs1188.

Auto stocks were a mixed bag this week. Apart from Bajaj Auto and Hero Honda, other auto stocks mostly underperformed. Hero Honda added 1.4% to Rs726. Among the losers, Tata Motors was down 0.5% to Rs905 and Maruti edged lower by 0.4% to Rs941. Metal stocks lost their shine over the week as metal prices on LME fell sharply after a heavy losses at a hedge fund was reported. Tata Steel fell by over 2% to Rs453, Sterlite Industries dropped by over 11% to Rs459, Hindustan Zinc lost 4% to Rs663 and JSW Steel declined by over 3% to Rs446.

IT stocks were up. Infosys surged by over 4.5% to Rs2361, Financial Technologies rallied by over 13% to Rs2021 and HCL Tech was up 1% to Rs660. However, Satyam slipped over 4.5% to Rs468, TCS was down by 0.9% to Rs1287 and Wipro edged lower by 0.2% to Rs642. Buying was also seen across the Banking stocks. Heavyweights led from the front, ICICI Bank rose by over 5% to Rs992, SBI was up by 1.3% to Rs1197, HDFC Bank added 0.5% to Rs1109 and Kotak Bank gained 3.3% to Rs504.

Bajaj Auto gained over 9% to close at Rs 3047. A financial daily reported that the company would be split between founder Rahul Bajaj's two sons - Rajiv and Sanjiv. The paper said as part of the demerger, which has been hanging fire for quite some time, Rajiv is to get the automobile business while Sanjiv would look after the financial services & insurance business.

Sujana Metal has been in momentum attracting buying interest from FIIs. The scrip outperformed the BSE Small Cap Index, rising by over 21% to close at Rs121. The company decided to de merge both the Transmission Tower and Steel Businesses into two separate companies and is awaiting the approval from High Court. Sujana Metal also has a healthy order book. Deutsche International, Goldman Sachs and Morgan Stanley have bought the stock in huge quantity over the week. Goldman Sachs has bought over 5 lakh shares over the week. .

MARKET MOOD

Bulls overcome volatility, Tata Steel

Time grabs you by the wrist, directs you where to go
So make the best of this test, and don't ask why
It's not a question, but a lesson learned in time
It's something unpredictable, but in the end it's right.
I hope you had the time of your life

It was another volatile and eventful week on Dalal Street. The bulls bounced back with a bang after Tata Steel's seemingly expensive Corus deal upset the apple cart. Even the quarter percentage point hike in the repo rate could not deter the bulls from propelling the key indices to all-time closing highs. The bulls also chose to ignore the spike in oil prices, which rose above the US$57 per barrel mark. Strong earnings growth and firm global markets lent good support to the rally. There were impressive gains across counters like Capital Goods, Auto, Telecom, Infrastructure and Consumer Durables. L&T, R Com, Bharti Airtel, BHEL, Hindalco and REL were the major gainers in the Sensex. On the other hand, Tata Steel, ITC and HLL topped the losers' list. The unpredictable nature of the market did catch many by surprise. However, in the end the bulls had the last laugh. with the benchmark Sensex crossing the 14400 mark for the first time and the NSE Nifty closing above 4150. The Sensex added 121 points or 0.85% over the truncated week to end at 14404 and the Nifty rose 36 points or 0.86% to close at 4184.

Telecom stocks were the flavour of the week with Bharti Airtel and R Com leading from the front. The latter came out with a strong set of numbers for the third quarter and said it will list Flag Telecom globally. On the last day of trading, the Telecom Regulatory Authority of India (TRAI) cut inter-connection charges by 23% to 29%. The move could result in more and more new telecom users coming in. R Com said its Q3 net profit climbed to a record Rs9.24bn and sales rose 26% to Rs37.55bn. Bharti Airtel was the top gainer and gained over 12% to Rs771. R Com spurred by over 12% to Rs490, VSNL added 3% to Rs505.
Auto stocks were a mixed bag with Maruti and Bajaj Auto closing higher on the back of strong sales figures for January. Hero Honda was among the losers after the company announced disappointing Q3 results. Bajaj Auto paced ahead by 1.4% to Rs2777 and Maruti rose 1.3% to Rs944. However, M&M lost 1% to Rs912, Tata Motors was down by 07% to Rs910 and Hero Honda fell marginally by 03% to Rs716.

IT stocks were up during the week. The heavy weights led from the front, Satyam advanced 4.4% to Rs490, Wipro rose 1.7% to Rs643 and Infosys was up by 1.3% to Rs2259. Among the Mid-Cap stocks Patni gained 3.3% to Rs446 and Mphasis BFL surged by over 6% to Rs302.

Capital Goods stocks were among the star performers. L&T surged over 6% to Rs1677, BHEL rose over 5.5% to Rs2508, ABB was up by 4.3% to Rs3752 and Gammon India spurred over by 65% to Rs415.

Cement stocks also did well. Gujarat Ambuja spurred by 37% to Rs142, ACC was up by 1.3% to Rs1040, Grasim gained 08% to Rs2811, India Cements rose 0.9% to Rs221 and Madras Cement added 1% to Rs3420.

Pharma scrips recorded healthy gains. Orchid Chemicals rallied by over 13% toRs256, Divi's Lab rose nearly 8% to Rs3356, Strides Arcolab was up by 64% to Rs383 and Lupin advanced by 5.5% to Rs618. Among the heavy weights Ranbaxy rose nearly 3% to Rs413.

Not surprisingly, Tata Steel was the top loser in the 50-stock NSE Nifty. The scrip fell by nearly by 4% over the week to Rs462 after touching a high of Rs520 and a low of Rs451. Investors are concerned that the company may have overpaid for Corus. Also, the increased debt could put the company's finances in jeopardy.

MARKET MOOD

Earnings power Dalal Street

Impressive earnings reports continued to drive the markets forward. IT heavyweights kicked off the earnings season with a bang and other index majors followed suit. Apart from Wipro and Reliance, Siemens, Reliance Energy, Ranbaxy and Tech Mahindra all registered strong growth aiding the key indices to post their fourth straight weekly gains. Quite a few mid-cap companies, particularly in the cement pack, came out with good results.

However, a slight disappointment from Satyam brought the markets lower on Friday. Capital Goods, select FMCG, Small Cap, Oil & Gas and Banking stocks were in momentum.

The BSE 30-share Sensex added 126 points or 0.9% during the week to close at 14,183 while the NSE Nifty closed at 4090, down 38 points. L&T, Reliance, Bharti Airtel and ACC were the major gainers.

Oil & Gas stocks continued to be in the limelight, as crude oil prices fell under US$50 per barrel before rising above that level. Oil futures in New York fell as low as $49.90, the lowest intraday price since May 25, 2005. As a result, HPCL, BPCL and IOC advanced. HPCL surged by nearly 6% to Rs321.

There were also reports that Lakshmi Niwas Mittal may take stake in the company's proposed refinery project in Bhatinda. Reports also said that HPCL could offer a stake to Total SA of France in its Vizag refinery. IOC was also in the news. Reports said that it was interested in refinery projects in Nigeria. Also, Saudi Aramco might pick up a stake in its Paradip refinery. .

Cement stocks rose amid speculation that prices may rise further. Also, mid-cap firms like JK Lakshmi Cement and Shree Cement announced strong results. Prism Cement surged by over 20% to close at Rs43, Gujarat Ambuja added 5% to Rs149 and India Cements was up by over 4% to Rs248. ACC, Kesoram and Grasim were among the other major gainers.

Value buying was also seen in mid-cap stocks. With frontline stocks appearing overvalued, investors are slowly shifting their attention to mid-cap stocks. 3i Infotech rallied by over 23% to Rs296 amid reports that ICICI will sell its stake as part of RBI regulation. The company also declared good set of numbers. ABG Shipyard advanced by over 16% to Rs360 after the company received a big order from Pacific First Shipping of Singapore.

Banking stocks extended last week's rally on optimism that a rule change allowing the RBI to lower the limit on SLR holdings will free up more cash to meet demand for loans from companies and individuals. ICICI Bank gained 2% to Rs986 and Kotak Bank was up by over 6% to Rs446.

FMCG stocks recorded smart gains ahead of their results. HLL advanced by over 1% to Rs220. The company, which recently raised prices of its products, has outperformed the Sensex this week. ITC climbed nearly 3% to Rs175 and Dabur added over 10% to close at Rs168.

Reliance beat the street by a long way by posting a whopping 58% rise in profit on strong refining margins and a low base owing to the shutdown in the year-ago period. Net income rose to Rs27.99bn from Rs17.76bn a year ago. The scrip was also certainly in thick of action itself by recording gains of nearly 3% to close at Rs1380.

MARKET MOOD

Bulls find a Magic Lamp

A whole new world
A new fantastic point of view
No one to tell us no
Or where to go
Or say we're only dreaming

This Aladdin theme song seems to calmly suit if not soothe the bears who courageously fought back after a disastrous start this week. The bulls seem to have found the Magic Lamp from somewhere. How else would you describe the sudden spurt after a subdued start? That too with Infosys failing to positively surprise. Bulls appear to be floating smoothly above the magical 14k mark and surely dreaming of greener pastures for months to come. The gains were led by heavyweights like Wipro, Reliance Industries, ICICI Bank and TCS. After an overwhelming victory on a Fantastic Friday, the bulls have seem to have entered into a whole new world, where it seems like no one could stop them from marching ahead. (We know FII liquidity and profit booking could spoil the party anytime). The key indices rose to a record high, posting its third weekly gain with benchmark Sensex adding 196 points or 1.41% to close at 14057 and NSE Nifty adding 1.73% or 69 points to end the week at 4052. The markets managed to recover well from a shaky start to the week as nervousness ahead of the Infy results kept the traders on the sidelines. Despite Infosys ‘failing to positively surprise’ in its quarterly numbers the bulls rebounded after a three-day losing sequence. Lower crude oil prices and firm global markets also contributed towards the meteoric rise over last tow trading sessions.

The markets had a dream run in last two trading sessions, as stocks rose the most in almost six months on Friday, overcoming concerns of a possible price cut by Industry Finance Minister Chidambaram asked industry not to take advantage of growing demand to increase prices. Finance Minister asked India's industry to cut prices in a bid to reduce the inflation rate. Oil prices continued to slide, as they have since the start of the year, due to warm US weather and easing supply fears. US light crude oil for February delivery fell $2.14 to settle at $51.88 a barrel on the New York Mercantile Exchange, pushing the auto and Aviation stocks higher. Sugar, Cement, Bank, FMCG, Oil & Gas and Small cap stocks were among the other major gainers this week.

Tech stocks were a buzz over the week following Q3 numbers by Infosys. Infosys recorded a sequential revenue and net profit growth, which was in line with market expectations at 5.9% and 5.8% respectively. TCS and Wipro were among the other major gainers across the sector ahead of their results on Monday. TCS jumped nearly by 5% to Rs1325 and Wipro rose by 4.5% to Rs626. Among the Mid-Cap stocks HCL Tech advanced 2.8% to Rs633, Patni gained 2.6% to Rs412 and i-Flex was up by 2.4% to Rs2019.

Auto stocks were up during the week as crude continued to slide lower, the sentiments also got a lift after India announced that Government would review diesel and gasoline prices on 31 January, 2007. A possible cut in fuel prices should augur well for the auto stocks. M&M paced ahead by over 4% to Rs933, Tata Motors gained by 0.9% to Rs940 and Ashok Leyland rose 2.5% to Rs46.

Oil & Gas stocks rose over the week as crude oil fell sharply. BPCL rose over 4.5% to Rs368, HPCL advanced 2.2% to Rs304 and IOC added 1.4% to Rs482. Oil exploration majors also gained during the week. ONGC rose 3.2% to Rs924 and Reliance Industries was up by 4% to Rs1339.

FMCG stocks returned to action yet again ahead of the announcement of Q3 results. HLL led the rally by recording an advanced of over 3% to Rs219. The company has recently raised prices of its several products, which should do well in its earnings. ITC advanced 3.5 % to Rs171; Nestle surged over 6% to Rs1245, Marico spurred by over 4% to Rs565 and Dabur gained 1.1% to Rs153.

Banking stocks managed to reverse losses on Friday on optimism a rule change allowing the RBI to lower the limit of government bonds lenders must hold, will free up more cash to meet demand for loans from companies and individuals. Private Bank major ICICI Bank was among the major gainer and gained 6.5% to Rs970 and HDFC Bank was up by 0.9% to Rs1063. Among the Mid-Cap stocks UTI Bank spurted over 5.55 to Rs499 and PNB added 1% to Rs516.

Finally, Sugar stocks turned sweeter over the week as the ban on exports was lifted. Bajaj Hindusthan Ltd. and Dwarikesh Sugar were among the major gainers after the removal of a six-month ban on exports of the commodity-boosted chances of a recovery in domestic sweetener prices. Bajaj Hindusthan gained 2.3% to Rs209, Oudh Sugar rose nearly by 6% to Rs88, Sakhti Sugar was up by 1.4% to Rs99 and Dwarikesh Sugar added 3.2% to Rs90.

IFCI: IFCI was the star performer of the week. The scrip skyrocketed over 67% to Rs21 touching a high of Rs23.5 and low of Rs13.31 during the week. The stock was in the limelight after selling its 7% stake for Rs7.8bn in the NSE to a group of investors led by NYSE Group. Market buzz that the company has called for bids for its 750 acres land at Sultanpur, is likely to be just a rumor.

Tech Mahindra: The scrip rose 12% to Rs1845 after hitting a high of Rs1871 and a low of Rs1637 during the week. The Indian software venture of BT Group Plc set up a software development center in Hyderabad, to employ 3000 workers. We may continue to see further action in the counter as the company declares its earnings on 18th January.

Indiainfoline MARKET MOOD

No hang over for bulls

Think about it all the time
Never let it out of my mind
cause I love you
I've got the sweetest hangover
I dont wanna get over
Sweetest hangover

The bulls started the New Year from where they had left in 2006, pushing the Sensex past the 14k mark yet again. No hangover effect was visible on the bulls, as the New Year party continued on Dalal Street. The bulls continued their shopping spree with market players putting aside all concerns like hardening interest rates, uncertainty over FII flows, slowdown in the US, etc.

The main indices turned volatile in the middle of the week after crossing key levels. In choppy trading, the bulls managed marginal gains on the back of sustained buying in IT, Auto and Mid-Cap stocks. The benchmark BSE Sensex closed above 14k, but profit booking in heavyweights brought it below 13900 by the end of the week. Finally, it added 0.5% or 74 points to close at 13861 and the NSE Nifty gained 0.43% or 17 points to end at 3983.

Bajaj Auto, L&T, Satyam, Tata Motors and ONGC were the major gainers in the Sensex. Refinery stocks rose after a steep fall in crude oil prices. Crude in New York trading fell under US $56 per barrel due to mild weather in the US and rising stockpiles. HPCL surged by over 6.5% to Rs297, BPCL was up 4.4% to Rs351 and IOC added 5.7% to Rs476. Auto stocks advanced after yet another month of strong volume growth in December. Bajaj Auto gained 5.5% to Rs2783, Maruti was up 1.3% to Rs935 and Tata Motors rose 3% to Rs933.

IT stocks were in action ahead of the quarterly results to be announced next week. Infosys rose 1.2% to Rs2274, TCS put on over 4% to Rs1262 and Satyam added 2.4% to Rs501. Among the Mid-Caps Sasken jumped over 10% to Rs584, Polaris climbed over 11% to Rs192 and Moser Baer rose 10% to Rs338.

ONGC was in the news following reports that it may announce details of the new discovery in the Krishna Godavari Basin in two weeks. Reports also said that ONGC was close to buying up to 33% in two Caspian sea blocks offshore of Turkmenistan. The scrip added over 2.1% to Rs895. Reliance Industries rose 1% to Rs1288.

Buying was also seen in select banking stocks. ICICI bank was up 1.2% to Rs910 and SBI gained 1% to Rs1244. Among the Mid-Caps Canara Bank was up 2.4% to Rs283 and Kotak Mahindra Bank added 2.9% to Rs411.

Cement stocks lost ground after heavy weights like ACC and Gujarat Ambuja announced disappointing dispatch numbers for December, ACC lost over 1.7% to Rs1055, Gujarat Ambuja slipped by over 4% to Rs138 and Birla Corp was down 1% to Rs331. However, Grasim, Prism Cement and Mangalam Cement were among the major gainers

Sugar stocks continued to be in the news after Agriculture Minister Sharad Pawar said the Government may end a ban on export of sugar in three weeks. Also, reports that Ethiopia will open a tender for 40,000 metric tons of sugar on Jan. 6, for delivery between April and June boosted sugar stocks. Renuka Sugars rose by over 6% to Rs463. Bajaj Hindusthan fell by over 6.5% to Rs203, Balrampur Chini slipped 4.1% to Rs81, Sakhti Sugar was down 3.5% to Rs98 and Dhampur Sugar edged lower by 0.9% to Rs93.

Nissan Copper had a dream debut on Dalal Street as the stock surpassed everyone's expectations and touched a peak of Rs135.70 after making a debut at Rs42.80. However, the scrip came under pressure following news that market regulator SEBI was all set to probe its unprecedented rise. The scrip was later shifted to the Trade-to-Trade category. The scrip closed at Rs 98.85 on Friday.

Sesa Goa skyrocketed by over 22% to Rs1727 on speculation that Japan's Mitsui & Co. is set to sell its controlling stake in the company. Reports said that Arcelor Mittal, Tata Steel and OP Jindal Group were eyeing a controlling stake in the iron ore producer.

MARKET MOOD

Bulls bid cheerful good buy to 2006

The markets recovered well from last week's fall to close higher, led by gains in Wipro, TCS, ACC, Grasim and HDFC Bank. Despite churning of portfolios on account of December F&O expiry and overall choppiness in the market, the indices closed the last trading week of the year with gains. The rally could be attributed to a smooth roll over in the derivate segment of the market and short covering. Nifty rollover was to the tune of around 75.84%, while market wide rollover to January F&O series was around 83.65%. Buying was seen across-the-board, but counters like Auto, Capital Goods, Cement, Bank, IT and select mid-cap stocks stood out. The benchmark BSE Sensex closed 2006 at 13787, recording a weekly gain of 2.34% or 315 points and the NSE Nifty added 2.46% or 95 points to close at 3966.4. Both the indexes recorded their fifth yearly advances.

Capital Goods stocks rose on the back of value buying. L&T rose over 3% to Rs1442, while Siemens gained 1.2% to Rs1134. Punj Lloyd surged over 4% to Rs1029 after the company won contract by Horizon Terminals worth Singapore US $49.7mn and BHEL was up by 0.9% to Rs2289.

Auto stocks were in top gear during the week ahead of the proposed price increases in January. Hero Honda raced ahead by over 4.5% to Rs762, Tata Motors rose by over 4% to Rs900. Bajaj Auto was up 2.3% to Rs2618 and Maruti edged higher by 0.2% to Rs927.

Short covering boosted IT stocks ahead of their results. Index heavy weights led from the front, with Wipro adding over 8% to Rs604, TCS climbed over 7% to Rs1218. Satyam was up 3.8% to Rs483 and Infosys added 3.6% to Rs2240. Among the Mid-Cap stocks i-flex rallied over 10% to Rs1947 and Mphasis BFL was up 4.6% to Rs303.

Banking stocks were in the limelight with frontline stocks leading the way. HDFC Bank rose 5.8% to Rs1069, ICICI Bank advanced 4.1% to Rs890 and SBI gained 2.8% to Rs1245.

Select sugar stocks advanced after the Government allowed companies to export sugar as production reached peak. Shree Renuka Sugar was up by over 5.5% to Rs446, Bajaj Hindusthan advanced by over 2.6%. The company reported a 36% increase in net profit at Rs1.91bn for the financial year ended Sept 30, 2006. Total revenue stood at Rs14.87bn for the year 2005-06 versus Rs8.55bn in the previous year. However, Simbhaoli Sugar lost over 5% to Rs58 and Sakhti Sugar fell 3.3% to Rs98.

Value buying was also seen in mid-cap stocks. These set of shares have lagged the large caps in recovering from the lows seen in May and June. Now with frontline stocks appearing overvalued, investors are slowly shifting their attention towards the mid-cap stocks. Indiabulls rallied over 13% to Rs659, Polaris rose 4.9% to Rs172, BEML jumped over 9% to Rs1015 and Thermax was up 6.5% to Rs387.

MARKET MOOD

Bulls die another week

The market consolidated during the week amid high volatility as investors were not prepared to take a fresh after the recent carnage. However, the Indian market did well to recover from another big crash on Tuesday. Stock markets across Asia fell sharply after Thai regulators imposed severe capital controls to cap gains in its currency, the baht, against the dollar. Thai stocks plunged by 16%, prompting the central bank there to relax the rules partially. The rollback lifted the spirits of the bulls yet again, though lack of buying support, especially from FIIs meant that the key indices could not make much headway. The market witnessed sharp intra-day swings due to the lack of any major positive triggers. Inflows from overseas investors remained volatile.

Capital Goods, FMCG, Banking and Sugar stocks declined. However, new discoveries in the KG basin by ONGC and Reliance provided some cheer to the bulls, preventing the indices from a major fall. ONGC, Tata Steel, Maruti and Reliance were the major gainers. The benchmark BSE Sensex lost 1% or 143 points to close at 13471.74 and the NSE Nifty closed the week at 3871.15, down 17.5 points or 0.45% after touching a high of 3934 and a low of 3768.8.

Auto stocks were in top gear, reversing last week's losses. Value buying was seen in auto stocks, led by Maruti. The scrip added 2% to Rs925 after the Cabinet approved the sale of the Government's remaining stake in the country's leading carmaker. M&M also surged by over 7% to Rs870. The company, through its subsidiary agreed to acquire 90.47% stake in Schoeneweiss & Co. GmbH, Germany. Others like, Hero Honda paced ahead by 2.6% to Rs749, Bajaj Auto gained 0.7% to Rs2590 and Tata Motors was up 0.2% to Rs859. Tata Motors entered into a JV with Thailand's Thonburi Automotive Assembly Plant Co. to manufacture, assemble and market pickup trucks.

Capital Good stocks continued to slide lower led by BHEL. The scrip fell by over 7% to Rs2310, L&T dropped 1.3% to Rs1004, Punj Lloyd dipped 2.3% to Rs987 and Siemens was down 1% to Rs1120. Oil & Gas stocks outperformed the key indices. ONGC led from the front. The scrip surged 6.5% to close at Rs869 on reports that it had found new reserves of natural gas and oil. Reliance was up 1.4% to Rs1031. The company is also said to have struck oil in the KG basin. Among the other oil stocks IOC advanced 2.1% to Rs444.

Profit booking dragged the IT stocks down. Index heavy weight Infosys lost 2.7% to Rs2171, Satyam declined 3.1% to Rs462 and TCS edged lower by 0.5% to Rs1151. Among the Mid-Cap stocks i-flex slumped over 10% to Rs1803, Financial Technology slipped 8.5% to Rs1732 and HCL Tech was down 2.5% to Rs605 despite winning a US$200mn order.

Banking stocks were also on the receiving end. HDFC Bank slipped 4.8% to Rs1005, SBI dipped by 3.9% to Rs1214, ICICI Bank fell over 1.5% to Rs856. Among the Mid-Caps, Bank of Baroda lost 5.2% to Rs233, Punjab National Bank was down 2.3% to Rs495 and Bank of India fell 1.355 to Rs189.

Sugar stocks pared early gains towards the end of the week with Renuka Sugar, Bajaj Hindusthan and Oudh Sugar among the leading losers. Earlier in the week, sugar stocks regained some momentum amid reports that the Government had partially lifted a ban on exports. Sugar companies with advance licenses will be permitted to release sugar as a matter of export. Renuka Sugar lost over 12% to close at Rs418, Uttam Sugar fell 4.7% to close at Rs129 and Mawana Sugars declined by over 5% to close at Rs49.

Tech Mahindra was clear the star performer of the week. The scrip hit its maximum limit on Dec 21 and soared further to close at Rs1654, advancing by a whooping 46.7% during the week. The scrip received a huge boost after the company won an order valued in excess of US $1bn from its UK-based partner, BT Group.

Indiainfoline - MARKET MOOD

It could have been worse

The beginning of the week wasn't as rosy as the end. All the euphoria of the past five months seemed to be gone in just two trading sessions. After being on a dream run, the markets were looking for an excuse for correction. The Reserve Bank of India's announcement of a hike in the CRR became a trigger. Also, lower-than-expected industrial production data contributed to the bulls' misery. Industrial output growth for October slowed to a 10-month low, much lower than estimated. Production at factories, utilities and mines grew by just 6.2% from a year earlier, after gaining 11.4% in September. Capital Goods stocks were the worst hit as growth in Capital Goods was sharply down from last year. The surprisingly weak data raised questions over the growth of the Indian economy. BHEL, Tata Steel, ITC and SBI were the major losers in the Sensex. While, Satyam and Dr Reddy's were among the notable gainers.

Selling was seen in Auto, Sugar, Capital Goods, Metal, Mid-cap and Oil & Gas stocks. While IT stocks bucked the negative trend and closed with gains led by Satyam. Finally, the Sensex closed the week at 13614.52, down 1.3% or 185 points after hitting a low of 12,801.65 and a high of 13,801.98. The NSE Nifty fell by 1.85% or 73 points to close at 3888.56 as the indices recorded their second consecutive weekly decline.

Banking stocks bore the brunt of the selloff after the RBI unexpectedly raised the CRR by 50 basis points. The action will drain Rs135bn from the banking system, at a time when the demand for credit is pretty strong. Index heavyweight SBI lost by over 6.5% to Rs1264, while HDFC Bank dropped 2.5% to Rs1057 and ICICI Bank edged lower by 0.7% to Rs870. Among the Mid-Cap stocks, PNB lost over 8% to Rs507 and Bank of Baroda slid 5.8% to Rs246.

Selling was also seen in FMCG stocks. Index heavy weight ITC declined 5.5% to Rs174, HLL dipped 1.5% to Rs230 and Nestle slipped by over 1.9% to Rs1063. However, Colgate bucked the negative trend and surged 2% to close at Rs381. Among the auto stocks Bajaj Auto fell by over 2.9% to Rs2571, Maruti shed 2.8% to Rs905. Hero Honda was down 1.7% to Rs730 and Tata Motors dropped 1% to Rs857.

Capital Goods stocks were on the receiving end following lower than expected growth in IIP. Companies across the sector managed to recoup some of the losses, as the long term view on the sector remains positive with increasing infrastructure activity and expansion in capacities by the companies. BHEL declined by over 5% to Rs2496, Punj Lloyd dropped by over 1% to Rs1011, Siemens was down 2.9% to Rs1132. However, L&T gained 0.5% to Rs1459.

Sugar stocks attracted interest as reports stated that the Government may lift a ban on sugar exports between December 18-21. The ban was introduced in July to curb rising prices due to tight supplies, and was due to run until the end of the financial year in March. But, given the selling across the board, most of the sugar scrips ended in red. Renuka Sugar plunged by over 10% to Rs476, Bajaj Hindusthan dropped 8.3% to Rs234, Uttam Sugar fell .6% to Rs35, Balrampur Chini was down 7.2% to Rs3 and Sakthi Sugar lost 6% to Rs105.

Among the telecom stocks, Reliance Communications performed exceptionally well and managed to close at a record high of Rs466, adding over 4%. The company is planning to acquire Hutch Essar, one of the leading GSM service providers in a bid worth up to US$14bn. However, other telecom stocks fell sharply with Bharti Airtel losing 2.7% to Rs616 and VSNL dropping 5% to Rs404. Cement stocks lost ground on the back of profit booking. ACC lost by over 4% to Rs1058, Mangalam Cement declined 4.4% to Rs197. Kakatiya Cement slipped 4.6% to Rs106, Grasim fell 1% to Rs2728 and India Cements was down 1% to Rs228.

SpiceJet zoomed by over by 5% to Rs56. New Delhi-based low cost carrier announced that it plans to raise US$118.5mn through a preferential allotment of equity shares to a clutch of foreign and domestic investors, including the Tatas. Airline stocks were also a buzz with reports that the Government may ease rules on local airlines that want to start international flights.

Aurobindo Pharma climbed by 2.5% to Rs696 after the company's Board approved a proposal to merge APL Sciences and Senor Organics, two wholly subsidiaries with itself. The company also received MEB Netherlands' approval for Simvastatin.