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Wednesday, September 12, 2007
Sensex sheds 39 points; RIL settles above Rs 2000
The market saw trend reversal from initial strength to end in the red. The market moved between positive and negative zone throughout the day. It first slipped in negative zone in mid-afternoon trade as data showing slower growth in industrial production raised worries about economic slowdown from a robust growth in the year ended March 2007. Turnover was high today.
The market had opened firm tracking rally in US stocks on Tuesday, 11 September 2007, bolstered by confidence the Federal Reserve will cut interest rates next week.
The BSE 30-share Sensex was down 39.01 points or 0.25% to 15,503.76, as per provisional closing. It opened higher at 15,608.50 and advanced further to hit a high of 15,661.44. It also slipped to a low of 15,486.81
The Sensex had slipped 55.96 points at the day’s low of 15,486.81. It had gained 118.67 points at the day’s high of 15,661.44.
The S&P CNX Nifty was down 0.80 points or 0.02% to 4,496.15 as per provisional closing
India's industrial output rose 7.1% in July 2007 from a year earlier, sharply lower than downwardly revised annual growth of 9% in June 2007 due to slower manufacturing output, data showed on Wednesday. Manufacturing production rose 7.2% in July 2007 from a year earlier, compared with provisional annual growth of 10.6% in June 2007.
The market breadth was strong on BSE, with 1610 shares advancing as compared to 1157 that declined, while 55 remained unchanged.
Turnover surged in last one hour on trade. It amounted to Rs 5362 crore as compared to Rs 4012 crore by 14:30 IST
From 30-member Sensex pack, 23 declined while the rest of them gained.
India’s second largest listed power utility company in terms of revenue Reliance Energy (REL) hit an all time high of Rs 901.60 on BSE. It settled with a spurt of 3.59% to Rs 891 on high volumes of 15.02 lakh shares. As per reports, Supreme Court has allowed the company to bid for the Rs 2600 crore Mumbai sea link project. It was the top gainer from the Sensex pack.
Bajaj Auto, the country’s second largest bike manufacturer in terms of sales, rose 2.38% to Rs 2388. The company is reportedly targeting to sell 20,000 units of its recently lunched bike XCD in September 2007 and 50,000 in the month October 2007.
India’s top dedicated mortgage finance company in terms of sales HDFC rose 1.25% to Rs 2175, on sustained buying. It struck an all time high of Rs 2194.95. Analysts see significant value in HDFC’s insurance business, which could be unlocked in due course.
India’s top private sector entity by market capitalisation and oil refiner Reliance Industries advanced 1.30% to Rs 2012.20 on 7.52 lakh shares boosted by reports that government may approve Reliance Industries (RIL)'s pricing formula for the gas it plans to produce from July next year, with minor changes. The stock struck an all time high of Rs 2022.
The empowered Group of Ministers (eGoM) today left the decision on the gas price that RIL can charge its customers to External Affairs Minister Pranab Mukherjee. Mukherjee is likely to give his decision after his return from the South East Asian tour on 19 September 2007
NTPC, the nation’s largest power generation company by sales slumped 3.04% to Rs 189.80 on 15.36 lakh shares. It was the top loser from the Sensex pack.
Pharma counters slipped on profit booking. Dr Reddy’s Laboratories (down 0.95% to Rs 645), Ranbaxy Laboratories (down 0.49% to Rs 417.75), and Cipla (down 1.27% to Rs 175.45) were the losers from pharma sector.
Banking pivotals saw some unwinding. ICICI Bank (down 1.69% to Rs 886), and HDFC Bank (down 0.53% to Rs 1181.50) edged lower
Among side counters, Salora International (up 10% to Rs 187.90), IndusInd Bank (up 10.78% to Rs 63.20), Tanla Solutions (up 10% to Rs 530.90), and Gemini Communions (up 20% to Rs 264.15), surged
Gulf Oil Corporation (down 6.13% to Rs 1200), Simplex Castings (down 4.94% to Rs 80.75), and Phoenix Mills (down 4.57% to Rs 2130), slipped
The trend on the bourses today was similar to yesterday, 11 September 2007, when the market had opened higher but settled with losses on late selling due to political worries ahead of a key meeting of the government with left parties.
The government held initial talks with its communist allies yesterday, 11 September 2007 over a controversial India-US nuclear deal. External Affairs Minister Pranab Mukherjee said after the 45-minute meeting that the UPA government and its Left allies set ground rules for further talks and the committee would meet again on 19 September 2007.
European markets were trading mixed today, 12 September 2007. Key benchmark indices in United Kingdom (down 0.22% to 6,267.10) and Germany (down 0.23% to 7,440.98) slipped. However France’s CAC 40 rose 0.11% to 5,485.06
Asian markets were mixed today, 12 September 2007. Hang Seng (up 1.49% at 24,310.44), Taiwan Weighted (up 0.17% at 9,018.12) and Singapore's Straits Times (up 0.33% at 3,506.09) gained.
However, South Korea's Seoul Composite (down 1.83% at 1,813.52) and Japan's Nikkei (down 0.50% at 15,797.60), slipped
The Dow Jones Industrial Average (DJIA) rose 180.54 points, or 1.38%, to 13,308.39 on Tuesday, 11 September 2007. The Standard & Poor's 500 index rose 19.79 points, or 1.36%, to 1,471.49, while the Nasdaq Composite index rose 38.36 points, or 1.50%, to 2,597.47.
Crude oil prices held near a record high over $78 a barrel on Wednesday, 12 September 2007, after OPEC's token output increase failed to soothe consumers' worries about falling inventories. US light crude for October delivery rose 8 cents to $78.31 a barrel, after a record close yesterday, 11 September 2007 of $78.23, and within striking limit of 1 August 2007’s record high of $78.77.
As per provisional data, foreign institutional investors (FIIs) purchased shares worth a net Rs 256.59 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 444.75 crore on Tuesday, 11 September 2007.
Meanwhile, in a move that could boost FII investments in India, the Securities and Exchange Board of India (Sebi), on Tuesday 11 September 2007, permitted acceptance of foreign sovereign securities with ‘AAA’ rating by clearing members as collateral from FIIs for exchange traded derivative transactions. Currently, collateral deposited by FIIs with the clearing members for derivative transactions is in the form of cash. RBI has already given permission for the new facility.
Morning Call
Market Grape Wine :
In House :
Nifty at a supp of 4485 and 4453 with resistance at 4527 and 4550 levels.
Intraday : Buy : Rolta above 517 with target 535 S/L 509.
Buy: Bata above 172 with target 180 S/L 169.
Intraday: F & O : Buy Tata Steel above 716.50 with target 735 S/L 709.
F & O : Buy ABirlanuvo above 1435with target 1475 S/L 1420
Delivery Buy : IFCI above 80 target 88~95
Tatasteel target 750
Out House :
Markets at a support of 15454 & 15353 levels with resistance at 15695 & 15786 levels .
Buy : REL
Buy : RIL
Buy : Tisco
Buy : Hanun & Sintex delivery bullet
Buy : IBulls & IbullsReal
Buy : JpHydro , TTML , Nagarfert & IFCI
Buy : NTPC
Buy : IFCI bullet
Dark Horse : RIL , REL, NTPC , SBIN , Hanun , Aptech , Tisco , Titan & ONGC
Grey Market - Dhanus, Power Grid, Kouton, Kaveri
Power Grid Corporation 44 to 52 14.5 to 15
Dhanus Tech. 280 to 295 90 to 95
Allied Computer 12 0
Koutons Retail 370 to 415 95 to 98
Kaveri Seeds 150 to 170 12 to 14
Indowind Energy 55 to 65 Discount
Magnum Venture 30 2 to 3
Consolidated Construction 460 to 510 NA
Pre Market Watch
Indian market is likely to have a positive opening due to favoring global cues. On Tuesday, the Indian markets ended on a negative note, as BSE Sensex closed lower by 54.06 points at 15,542.77 while Nifty slipped by 10.8 points to close at 4,497.05. We expect the market to trade higher during the trading session.
On Tuesday, the US market closed in green. The Dow Jones Industrial Average grew by 180.54 points to close at 13,308.39. The Nasdaq Composite Index grew by 38.36 points to close at 2,597.47. The S&P 500 index increased by 19.79 points to close at 1,471.49.
Indian ADRs ended in mixed. In technology sector, Satyam computers grew by (0.71%) along with Wipro by (0.36%) while Patni computers and Infosys slipped by (3.02%) and (0.32%) respectively. In banking sector, HDFC bank and ICICI bank advanced by (0.68%) and (0.32%) respectively. VSNL and MTNL grew by (3.37%) and (0.43%) respectively.
The major stock markets in Asia are trading higher. Japan''s Nikkei trading up by 56.69 points to trade at 15,934.36. Hang Seng grew by 229.67 points to trade at 24,181.91. Taiwan weighted advanced by 16.83 points to trade at 9,019.95. Singapore Strait times trading higher by 21.47 points at 3,516.04.
Today, Nifty has support at 4,470 and resistance at 4,565 and BSE Sensex has support at 15,460 and resistance at 15,750.
Market to head higher
The market is expected to head higher tracking firm US markets overnight. Also most of the Asian markets were trading higher today, 12 September 2007.
However some nervousness may prevail as the government which held initial talks with its communist allies yesterday, 11 September 2007 over a controversial India-U.S. nuclear deal, threatened to split the ruling coalition. As per Foreign Minister Pranab Mukherjee, the meeting framed broad issues to be taken up for discussions and the committee would meet again on 19 September 2007.
Also the Index of Industrial Production (IIP) data for July 2007 is due today, 12 September 2007. IIP was up 9.8% in June 2007 compared with 9.7% in June 2006. It edged up 11% in April-June 2007 as against 10.5% in April-June 2006. The rise in IIP was due to continuing growth in manufacturing and electricity sectors.
Most of the Asian markets were higher today, 12 September 2007, in the wake of Wall Street's strong gains overnight. Hang Seng (up 0.96% at 24,181.91), Japan's Nikkei (up 0.36% at 15,934.36), Taiwan Weighted (up 0.19% at 9,019.95) and Singapore's Straits Times (up 0.61% at 3,516.04) gained. However, South Korea's Seoul Composite slipped 0.77% at 1,833.1
US markets advanced sharply yesterday, 11 September 2007 as investors grew more confident that the Federal Reserve will lower interest rates next week, even after its chairman gave no clues about the central bank’s intentions. The Dow Jones Industrial Average (DJIA) rose 180.54 points, or 1.38%, to 13,308.39. The Standard & Poor's 500 index rose 19.79 points, or 1.36%, to 1,471.49, while the Nasdaq Composite index rose 38.36 points, or 1.50%, to 2,597.47.
Crude oil prices held near a record high over $78 a barrel on Wednesday, 12 September 2007, after OPEC's token output increase failed to soothe consumers' worries about falling inventories. US light crude for October delivery rose 8 cents to $78.31 a barrel, after a record close yesterday, 11 September 2007 of $78.23, and within striking limit of 1 August 2007’s record high of $78.77.
As per provisional data, foreign institutional investors (FIIs) purchased shares worth a net Rs 256.59 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 444.75 crore on Tuesday, 11 September 2007.
The BSE 30-share Sensex shed 54.06 points or 0.35% at 15,542.77, on Tuesday, 11 September 2007. It is now 326.08 points away from its all time high of 15,868.85 hit on 24 July 2007.
The S&P CNX Nifty declined 10.80 points or 0.24% at 4,497.05, on Tuesday, 11 September 2007
Market may witness lackluster trades
The mood of the market is expected to remain positive on the back of gains in the US markets and positive Asian indices in current trades which also help the local indices advance further. However, presence of intra-day volatility due to lack of clarity may see the market remain edgy. Among the indices, the Nifty could test higher levels around 4550 and 4620 while on the downside the index has a strong support at 4450-4410 levels. The Sensex has a likely support at 14900 and may face resistance at 15850.
US indices gained marginally on Tuesday on expectations of rate cuts in Fed meeting next week. While the Dow Jones gained by 181 points at 13308, the Nasdaq added 38 points to close at 2597.
Crude oil prices in the global market extended their upward trend, with the Nymex light crude oil for October series moved up by 74 cents a barrel at $78.23. In the commodity space, the Comex gold for December delivery jumped by $8.90 to settle at $721.10 a troy ounce.
Trading Calls
Nifty (4497) Sup 4471 Res 4531
Buy IDFC (133) SL 130
Target 139, 141
Buy Colgate (403) SL 398 Target 411, 414
Buy PNB (493) SL 488
Target 504,504
Sell Wipro (457) SL 462
Target 447, 445
Sell Deccan Chronicle (234) SL 238 Target 224, 223
Something to cheer about
Small cheer and great welcome makes a merry feast.
Bulls may be welcomed in style after a mixed week so far. The US market rallied overnight after two days of declines. Buoyed by the gains on Wall Street, stock benchmarks across Europe, Latin America and other emerging markets too ended higher. Asian markets have also opened up this morning. So, its quite natural that the Indian bulls will also resume their buying spree and lift the key indices close to their previous lifetime highs. Investors should do well to use the rally to exit weak stocks and move into better quality scrips or wait with cash for buying towards the end of the month. The big question is whether the merry feast will last beyond lunch time.
There is no panic as of now, with the market having bounced back smartly from late August. Still, with chances of the US economy slipping into a recession (or has it already done so?) growing by the day, one will have to keep oneself abreast with the global events. The standoff between the Congress and the Left also seems to continue, and various parties have already started preparing for the impending mid-term polls. We are all set for a good day ahead. The near-term outlook remains sluggish amid concerns about the economic downturn in the US and its wider global fallout, including that on India.
US stocks rallied the most this month on growing evidence that consumer spending was holding its own amid an economic slowdown and that corporate profit growth remained good.
General Motors posted the biggest advance in the Dow Jones Industrial Average after saying demand is strong. McDonald's climbed on sales that topped some analysts' expectations. Western Digital shares had its best gain in two weeks after the world's second-largest maker of hard-disk drives increased its profit forecast.
The Standard & Poor's 500 Index added 19.79 points, or 1.4%, to 1,471.49. The Dow surged 180.54 points, or 1.4%, to 13,308.39. The Nasdaq Composite Index rose 38.36 points, or 1.5%, to 2,597.47. Each index posted its biggest gain since Aug. 29.
Wall Street is betting that the Fed will lower the benchmark lending rate for the first time in four years to keep credit market losses from slowing economic growth. Fed fund futures contracts show a 72% chance the central bank will reduce its target rate for overnight bank lending by half a percentage point, up from 54% a week ago and down from 76% yesterday.
Speaking to the German central bank in Berlin, Fed chairman Ben Bernanke said the global saving glut was still helping to keep interest rates low, and borrowing costs may not rise much even if the pool of excess capital dwindles in coming decades. He didn't comment on interest rate policy or the economic outlook.
The National Association of Realtors reduced its home sales forecast for the ninth time this year and said the housing slump will extend into 2008. In other news, the July trade deficit narrowed to $59.2bn from an upwardly revised $59.4bn in the previous month. Economists expected a reading of $59bn.
Treasury prices fell, raising the yield on the 10-year note to 4.37% from 4.32% late on Monday. In currency trading, the dollar fell versus the euro and rose against the yen. COMEX gold for December delivery rose $8.90 to settle at $721.10 an ounce.
US light crude oil for October delivery rose 73 cents to settle at $78.22 a barrel on the New York Mercantile Exchange, an all-time high. OPEC agreed to boost its crude output by 500,000 barrels a day. The surprise move would take effect Nov. 1, the cartel said.
European stocks gained ground as hopes for US interest-rate cuts boosted some of the hardest-hit companies over the last month. The pan-European Dow Jones Stoxx 600 index rose 1.7% to 368.41. The UK's FTSE 100 closed up 2.4% at 6,280.70, while the German DAX 30 gained 1.1% to 7,457.90 and the French CAC 40 advanced 1.7% to 5,478.94.
Emerging markets too closed higher. The Bovespa in Brazil jumped 2.4% to 53,921 while the IPC index in Mexico gained 1% to 30,191. The RTS index in Russia added 0.7% to 1911 and the ISE National-30 index in Turkey climbed 1.6% to 61,949.
Most Asian markets were trading up this morning. The Nikkei in Tokyo advanced 56 points to 15,934 while the Hang Seng in Hong Kong shot up by 254 points to 24,206. The Straits Times in Singapore gained 21 points to 3516 while the Kospi in Seoul fell by 15 points to 1831.
The Morgan Stanley Capital International Asia-Pacific Index added 0.7% to 151.43 at 10:50 a.m. in Tokyo, with all 10 of the benchmark's industry groups advancing. Australia's S&P/ASX 200 Index rose 0.5%. South Korea and New Zealand were the only markets open for trading to decline.
Swinging market ended in red as benchmark Sensex swung nearly 200 points and Nifty swung over 50 points during the day. After opening with a positive bias key indices lost ground throughout the session as selling pressure in the IT and Auto stocks dragged the markets to close in negative territory. Mid-Cap and the Small-Cap indices also witnessed profit booking. On the other hand Power and Metal stocks were in demand. Finally, BSE 30-share benchmark Sensex slipped 54 points to close at 15542. NSE Nifty slipped 10 points at 4497.
Shares of Motilal Oswal Financial Services Ltd rose on debut. The scrip started trading at Rs938 on BSE against the issue price of Rs825 and finally ended on a premium of 18% at Rs973 touching an intra-day high of Rs997 and a low of Rs911 and recorded volumes of over 62,00,000 shares on NSE.
Idea gained by 1% to Rs123 after the local mobile-phone operator’s board approved a plan to put its wireless towers and other infrastructure into a separate company. The scrip touched an intra-day high of Rs125 and a low of Rs122 and recorded volumes of over 36,00,000 shares on NSE.
IFCI surged by over 5% to Rs77 following reports that Blackstone Group LP and Citigroup Inc. are among contenders to buy a 26% stake in IFCI. The scrip touched an intra-day high of Rs78 and a low of Rs75 and recorded volumes of over 7,00,00,000 shares on NSE.
Rallis spurred by over 3% to Rs325 following reports that the agrochemicals company belonging to the Tata group plans to bid for Japan's Arysta LifeScience Corp., the world's largest privately held crop-protection company. The scrip touched an intra-day high of Rs335 and a low of Rs320 and recorded volumes of over 11,000 shares on NSE.
Kinectic Engineering was frozen at 20% upper circuit following reports that the company has secured order from Tata Motors. The scrip touched an intra-day high of Rs138 and a low of Rs114 and recorded volumes of over 35,000 shares on NSE.
Gammon India after slipping nearly by 10% in the previous trading session ended 0.5% higher at Rs423. The stock yesterday fell following reports that the company faced criminal charges after a flyover being built by the company in the southern Indian city of Hyderabad collapsed. The scrip has touched an intra-day high of Rs439 and a low of Rs420 and recorded volumes of over 6,00,000 shares on NSE.
Rajesh Exports advanced by 2.5% to Rs698 amid reports that it is looking at buying jewellers in South India. The scrip touched an intra-day high of Rs709 and a low of Rs682 and recorded volumes of over 3,00,000 shares on NSE.
Cairn gained by 1.8% to Rs159 after the company announced that it has secured Government approval to build pipeline. The scrip touched an intra-day high of Rs161 and a low of Rs156 and recorded volumes of over 37,00,000 shares on NSE.
Power stocks sparked off. Suzlon surged by 3.8% to Rs1326, PFC was up by 2.2% to Rs195, NTPC gained 2.6% to Rs196 and APIL added 1.8% to Rs772.
IT stocks ended lower as rupee further strengthened against the USD. TCS was down by 2.2% to Rs1023, Infosys slipped by 2.6% to Rs1822, Wipro lost by 2% to Rs455 and Satyam Computer shed by 2% to Rs433.
Auto stocks were in reverse gear as selling pressure dragged them lower. Tata Motors slipped by 2% to Rs689; Maruti was down by 1.5% to Rs861, M&M slipped by 0.6% to Rs697 and TVS Motors declined by 2.5% to Rs71.
Banking stocks also were under pressure. SBI dropped by 1% to Rs1622, ICICI Bank was down by 1% to Rs901 and HDFC Bank edged lower by 0.7% to Rs1187. Bank of India, Bank of Baroda and Syndicate Bank were the major losers among the Mid-Cap stocks.
Global cues will again play an important role for the markets. The equity markets across the globe are now awaiting the outcome of the FED meet on September 18. Investors may well stay on the sidelines before the all-important announcement by Ben Bernanke. Also, one needs to be cautious with fresh concerns of inflation emerging from China. The ongoing consolidation will continue with intra-day gyrations and stock specific movement due to the lack of immediate triggers. Although stock specific activity will continue depending on the flow of news, the market is expected to consolidate at higher levels.
Stocks In News
Essel Propack could gain as a financial daily reports that it is in talks with Alcan for buying the latter's packaging unit. Hanung Toys might be another gainer amid reports that it has won a Rs6bn order from a Swedish company. Top IT companies may attract some attention as a newspaper report says they are among the suitors for bagging the $125mn deal from Dutch financial giant ING.
IDFC and Sintex Industries will advance as the RBI has increased the investment limit for FIIs in the two companies. General Atlantic has opted to exercise their conversion option of 1,055,570 preference shares into unregistered ADRs, represented by 10,555,700 equity shares @ Rs142.10 per share. General Atlantic had invested Rs 300 crores in Hexaware through a preferential allotment in early 2006.
Fund Activity:
FIIs were net buyers of Rs2.57bn (provisional) in the cash segment on Tuesday and the local institutions pulled out Rs4.45bn. In the F&O segment, foreign funds were net buyers of Rs4bn.
On Monday, FIIs were net sellers to the tune of Rs629mn in the cash segment. Mutual Funds were net sellers of Rs1.88bn on the same day.
Major Bulk Deals:
ABN Amro Bank has bought Deccan Chronicle while Fidelity Investment has sold it;
Macquarie Bank has sold GIC Housing Finance; Merrill Lynch has picked up GTC Industries; Blackstone Asia has sold HBL Power Systems; Morgan Stanley has purchased HTMT Global; Franklin Templeton MF and Goldman Sachs have bought
Motilal Oswal; CLSA Mauritius has sold OBC; Bear Stearns has sold Simplex Infra; Morgan Stanley has sold Sujana Tower; Sundaram MF has picked up Time Technoplast; Credit Suisse has purchased Vijaya Bank while Merrill Lynch and HSBC Financial have sold it.
Upper Circuit:
Usher Agro, ABG Heavy, Jayant Agro, Marksons, Kinetic Engineering, IID Forgings,
Shree Precoated, Time Techno, ION Exchange, Manali Petro.
Major News & Announcements:
SBI approves $800mn - $1bn loan to Tata Steel
RBI allows Foreign Funds to buy up to 74% in IDFC and Sintex
EKC to consider plan to sell Rs1bn of shares
Kinetic Engineering secures order from Tata Motors – Reports
Bhagyanagar Board to consider Preferential issue warrants
Sonata Software to spend Rs1bn to develop facility
Areva secures multimillion Euro contract
Wipro to make fresh investments in Mexico, says Premji
HCL Tech to offer IT Management service to Awalnet of Saudi Arabia
Classic Diamonds to open 4 outlets in UAE by 2007, ties up with retailer at UAE
Godawari Power board to consider raising funds on September 25
Venus Remedies secures approval to sell drug in Ukraine
Nagarjuna Construction secures order worth Rs2.72bn
Cairn gets Government approval to build pipelineTata Steel September 2007 futures most active
Futures settle at discount
The Nifty September 2007 futures settled at 4488.20, a discount of 8.85 points as compare to spot closing of 4,497.05.
The NSE F&O turnover was Rs 41739.52 crore as compared to Rs 37333.48 crore on Monday, 10 September 2007.
Tata Steel September 2007 futures settled at premium, at 714, compared to the spot closing of Rs 709. It was the most active contract with turnover of Rs 1810.75 crore.
Reliance Industries September 2007 futures settled at premium, at 1985.60, compared to the spot closing of Rs 1992.
IDBI September 2007 futures settled at premium, at 138.25, compared to the spot closing of Rs 137.45.
In the cash market, the S&P CNX Nifty was down 10.80 points or 0.24% at 4,497.05.
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