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Monday, August 03, 2009
Grey Market Premium - Adani Power, NHPC, Raj Oil Mills, Excel Infoways
NHPC 30 to 36 10 to 11
Adani Power 90 to 100 7.50 to 8
Raj Oil Mills 120 4 to 5
Excel Infoways 85 7 to 8
Stocks to watch - Bharti Airtel, Reliance Communications, Unitech
Bharti Airtel and South Africa's MTN Group are reportedly likely to update the market today, 3 August 2009, on talks aimed at merging their operations.
Net profit of Reliance Communication rose 6.51% to Rs 370.00 crore in the quarter ended June 2009 as against Rs 347.38 crore during the previous quarter ended June 2008. Sales declined 5.36% to Rs 3006.13 crore in the quarter ended June 2009 as against Rs 3176.47 crore during the previous quarter ended June 2008.
Net profit of Unitech declined 52.71% to Rs 142.50 crore in the quarter ended June 2009 as against Rs 301.31 crore during the previous quarter ended June 2008. Sales declined 54.65% to Rs 335.52 crore in the quarter ended June 2009 as against Rs 739.82 crore during the previous quarter ended June 2008.
Seperately, Unitech is reportedly planning a third round of share placements with institutional investors for about Rs 1000 crore. The proceeds will be used for fresh investment.
Tata Consultancy Services (TCS) and Wipro, amongst others, are reportedly in pursuit of an up to Rs 2500 crore outsourcing contract from Indian Railways.
Financial Technologies reportedly proposes to divest 52% in the MCX Stock Exchange by September 2009-end.
Electricity traders Jindal steel and Power and GMR Energy, an unlisted subsidiary of GMR Infrastructure, have reportedly surrendered their trading licences saying a Rs 0.04 cap on their margin imposed by the electricity regulator in 2006 has made the trading business unviable.
Oil and Natural Gas Corporation (ONGC) has for the first time reportedly begun ultra deep-sea drilling off the Kochi coast in Kerala. It proposes to start another drilling operation not far from the location.
Tamil Nadu's environment authority has reportedly permitted Chemplast Sanmar to restart work on a coal-fired power plant in Mettur in southern India, reversing an earlier decision to withdraw its approval.
Net profit of GMR Infrastructure declined 91.50% to Rs 3.56 crore in the quarter ended June 2009 as against Rs 41.89 crore during the previous quarter ended June 2008. Sales declined 68.47% to Rs 17.48 crore in the quarter ended June 2009 as against Rs 55.44 crore during the previous quarter ended June 2008.
Net profit of Reliance Capital declined 68.09% to Rs 104.29 crore in the quarter ended June 2009 as against Rs 326.85 crore during the previous quarter ended June 2008. Sales declined 19.11% to Rs 606.89 crore in the quarter ended June 2009 as against Rs 750.24 crore during the previous quarter ended June 2008.
Net profit of Britannia Industries rose 17.46% to Rs 47.37 crore in the quarter ended June 2009 as against Rs 40.33 crore during the previous quarter ended June 2008. Sales rose 5.46% to Rs 731.24 crore in the quarter ended June 2009 as against Rs 693.36 crore during the previous quarter ended June 2008.
Adlabs Films reported net loss of Rs 66.10 crore in the quarter ended June 2009 as against net profit of Rs 1.15 crore during the previous quarter ended June 2008. Sales declined 72.83% to Rs 49.94 crore in the quarter ended June 2009 as against Rs 183.79 crore during the previous quarter ended June 2008.
Mahanagar Telephone Nigam reported net loss of Rs 46.85 crore in the quarter ended June 2009 as against net profit of Rs 112.54 crore during the previous quarter ended June 2008. Sales declined 16.20% to Rs 937.71 crore in the quarter ended June 2009 as against Rs 1118.94 crore during the previous quarter ended June 2008.
Net profit of Divi's Laboratories declined 94.90% to Rs 4.92 crore in the quarter ended June 2009 as against Rs 96.48 crore during the previous quarter ended June 2008. Sales declined 23.79% to Rs 202.77 crore in the quarter ended June 2009 as against Rs 266.07 crore during the previous quarter ended June 2008.
Net profit of ICSA (India) declined 16.96% to Rs 34.02 crore in the quarter ended June 2009 as against Rs 40.97 crore during the previous quarter ended June 2008. Sales rose 26.58% to Rs 305.69 crore in the quarter ended June 2009 as against Rs 241.50 crore during the previous quarter ended June 2008.
Net profit of TVS Motor Company rose 158.12% to Rs 18.12 crore in the quarter ended June 2009 as against Rs 7.02 crore during the previous quarter ended June 2008. Sales rose 7.09% to Rs 975.62 crore in the quarter ended June 2009 as against Rs 911.07 crore during the previous quarter ended June 2008.
Net profit of McNally Bharat Engineering Company rose 98.28% to Rs 8.07 crore in the quarter ended June 2009 as against Rs 4.07 crore during the previous quarter ended June 2008. Sales rose 123.29% to Rs 269.00 crore in the quarter ended June 2009 as against Rs 120.47 crore during the previous quarter ended June 2008.
Dish TV India reported net loss of Rs 69.20 crore in the quarter ended June 2009 as against net loss of Rs 125.44 crore during the previous quarter ended June 2008. Sales rose 49.76% to Rs 246.29 crore in the quarter ended June 2009 as against Rs 164.46 crore during the previous quarter ended June 2008.
Pre Session Commentary - Aug 3 2009
Today domestic markets are likely to open positive as majority of Asian markets have opened in the positive territory. There are positive sentiments across the world markets as US second quarter GDP has contracted only by -1.0%, far better than expected -1.5% and -6.4% recorded during the first quarter. In the domestic arena benchmark indices are already at there peak level of 2009 and therefore profit booking pressures may hamper a lot of frontline stocks. There could be a range bound trade during the day’s session.
On Friday, domestic markets closed higher. The market opened with strong gains and kept on marching forward till the mid session however, selective profit booking in the late after noon trade led the market to shed most of its gains tracking the weakness in the European markets. Firmness came on last hour trading after substantial buying in index heavyweights like Hindalco, Tata Motors, ONGC and SBI that closed more than 5% each. The speculators took fresh positions on the first day of the August future and option series. World equity funds gathered $9.5 billion in the week ending 29 July 2009, as per global fund tracker EPFR Global, highest since June 2008. BRIC (Brazil, Russia, India and China) equity funds seeing net inflows for a 19th consecutive week. India equity funds took in a year-to-date high of $211 million in the most recent week, while China and Greater China stock funds reported $711 million in fresh money. The BSE Sensex ended above15,350 level and NSE Nifty closed above 4,550 mark.
The BSE Sensex closed higher by 282.35 points or (1.83%) at 15,670.31 and NSE Nifty ended up by 65 points or (1.42%) at 4,636.45. BSE Mid Caps and Small Caps closed with gains 64.62 and 1.82 points at 5,571.02 and 6,205.83 respectively. The BSE Sensex touched intraday high of 15,732.81 and intraday low of 15,449.47.
On Friday, the US stock markets closed mixed. The Q2 GDP reading was a major event before the markets opened. The advance Q2 GDP reported a contraction of -1.0%, marking the fourth consecutive quarter of decline. However the contraction was better than the expected -1.5% decline and also downwardly revised -6.4% (from -5.5%) in the first quarter. On the other hand another major economic indicator called Personal Consumption, which accounts major chunk of US GDP reported a worst than expected fall of -1.2% as against the estimated -0.5%. In sector specific, Materials took the lead with a gain of 0.9% as commodity prices rose, whereas Utilities sector underperformed with a loss of 1.1%. After a range bound trading the markets closed nearly unchanged. US light crude oil futures for September delivery closed at $69.34 per barrel up by 3.6% on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed higher by 17.15 points at 9,171.61, NASDAQ index declined by 5.80 points to 1,978.50 and the S&P 500 (SPX) closed flat at 987.48.
Today major stock markets in Asia are trading positive. Hang Seng is up by 92.61 points at 20,665.94. Shanghai Composite is up by 13.22 points at 3,425.29. Japan''s Nikkei is trading low by 28.51 points at 10,328.32. Strait Times is low by 6.69 points at 2,652.51.
Indian ADRs ended mixed on Friday. In the banking space, ICICI Bank was up 0.93% and HDFC Bank was up 1.68%. In the telecom space, Tata Communication was down 4.68% and MTNL was also low by 3.66%. In the IT space, Satyam Computers was low by 2.33%, Infosys was up 1.94%, Wipro was up 0.90% and Patni Computers was up 2.35%. In other sectors, Sterlite Industries was flat, Tata Motors was up 0.67% and Dr Reddy''s Labs was low by 0.59%.
The FIIs on Friday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 5,071.20 Crore, while the gross equity sold stood at Rs 3,887.20 Crore and gross debt purchased stood at Rs 204.10 Crore, while gross debt sold stood at Rs 2,500.30 Crore. The net investment of equity reported was Rs 1,184.00 Crore and net debt was Rs (2,296.20) Crore.
On Friday, the partially convertible rupee ended at Rs 47.49/50, 1.92% stronger than its previous close at 48.42/43. The rupee gained strength on the back of phenomenal firm trend in local stock markets.
On BSE, total number of shares traded were 43.20 Crore and total turnover stood at Rs 6,292.49 Crore. On NSE, total number of shares traded were 95.09 Crore and total turnover was Rs 19,926.93 Crore.
Top traded volumes on NSE Nifty – Unitech with total volume traded 64945636 shares, followed by Suzlon Energy with 48848405, Hindalco with 19802427, DLF with 14815854 and Tata Steel with 12756154 shares.
On NSE Future and Options, total number of contracts traded in index futures was 687808 with a total turnover of Rs 1,5193.7 Crore. Along with this total number of contracts traded in stock futures were 618324 with a total turnover of Rs 19,288.37 crore. Total numbers of contracts for index options were 904949 with a total turnover of Rs 21,271.51 Crore and total numbers of contracts for stock options were 43547 and notional turnover was Rs 1,397.65 Crore.
Today, Nifty would have a support at 4,598 and resistance at 4,696 and BSE Sensex has support at 15,612 and resistance at 15,725.
Sideways movement may continue
The current market sentiment is mainly driven by the earning estimations and movement in global indices. The
mood of the market is expected to remain positive after Friday's solid gains and the sharp FIIs inflow in the domestic markets will also help the local indices advance further. However, subdued Asian indices in current trades may drag the market in early trades. Among the indices, the Nifty could test higher levels around 4694 and 4755 while on the downside the index has a strong support at 4600-4565 levels. The Sensex has a likely support at 15500 and may face resistance at 15800. Geomet, Indo Rama Synthics, Merck, Petronet LNG, Power Finance Corporation and TCS are expected to announce their numbers.
US indices closed mixed on Friday. While the Dow Jones gained by 17 points at 9172, the Nasdaq lost 6 points to close at 1979.
Most of the Indian ADRs barring few ended in the green on the US bourses. VSNL tumbled nearly 4% and MTNL slipped 3.66% while Satyam, Dr Reddy's Lab and Rediff lost over 1-2% each. However, Infosys, Wipro, Tata Motors, ICICI Bank, HDFC Bank and Patni Computers gained over1-2% each.
Crude oil prices in the global market extended their upward trend, with the Nymex light crude oil for September series jumping by $2.51 at $69.45 a barrel. In the commodity space, the Comex gold for December delivery moved down by $18.50 to settle at $955.80 a troy ounce.
Daily trend of FII/MF investment in equities
On July 30, 2009, FIIs were net buyers of stocks to the tune of Rs1184 crore (purchases worth Rs 5071 crore and sales of Rs3887 crore). while domestic mutual funds were net sellers of stocks to the tune of Rs49 crore (purchases worth Rs1537 crore and sales of Rs1586 crore).
Market set for a shaky start after a recent surge
The key benchmark indices set for a uncertain start today on mixed global cues. Profit taking may not be ruled out after the recent surge in indices. Auto stocks may be in action after posting robust July 2009 sales figures.
The key benchmark indices surged for the second straight day on Friday 31 July 2009 as gains in Asian stocks, and better-than-expected Q1 June 2009 earnings of India Inc boosted sentiment. The BSE 30-share Sensex rose 282.35 points or 1.83% to 15,670.31 on Friday its highest closing since 17 June 2008.
As per the provisional figures on NSE, foreign funds bought shares worth Rs 582.12 crore and domestic funds bought shares worth Rs 316.11 crore on Friday.
The Sensex is up 6023 points or 62.43% in calendar year 2009 as on 31 July 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex has risen 7,509.91 points or 92.02% as on 31 July 2009.
With the result season over, the Q1 June 2009 results of India Inc were encouraging, with lower costs helping bottomline growth. The combined net profit of 2563 companies rose 17.2% to Rs 73243 crore on 5% fall in sales to Rs 710803 crore in Q1 June 2009 over Q1 June 2008.
But a weak monsoon remains a cause of concern. India's monsoon rains were 18% below normal in the week to 29 July 2009, having been above normal in the preceding two weeks. Total rainfall since the beginning of June was 19% below average, the India Meteorological Department said on Thursday. On the flip side, water levels in India's 81 main reservoirs rose to 35% of capacity in the week to 30 July 2009, up from 23% a week earlier and 31% a year ago, government data showed. More than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.
Meanwhile, the finances of the government showed improvement during the first quarter of 2009-10 (Q1 June 2009), with the fiscal deficit working out to be 31% of the estimates as compared to 65 % in the corresponding period last fiscal. Against the Budget estimate of Rs 4,00,996 crore for the entire financial year, the fiscal deficit stood at Rs 1,24,302 crore at the end of 30 June 2009. It is to be noted that the fiscal deficit was revised upward at Rs 4,00,996 crore in the full Budget tabled in Parliament on 6 July against Rs 3,32,835 crore projected in the interim Budget in February 2009.
Asian stocks were mixed in volatile trade after manufacturing in China expanded. The key benchmark indices in China, Hong Kong and South Korea rose by between 0.39% to 0.61%. The key benchmark indices in Japan, Singapore and Taiwan fell by between 0.27% to 1.04%.
A Chinese manufacturing index climbed to a one-year high in July as stimulus spending stoked domestic demand, countering a slump in exports.
In the Wall Street action, the Dow pulled off a modest gain on Friday, capping a rocky week and month. Markets stayed in the green for much of the day after the Q2 GDP showed a less than expected contraction. On Friday, the Dow gained 17.15 points, or 0.2%, to 9,171.61. The S&P 500 index added 0.73 points, or 0.1, to 987.48, while the Nasdaq Composite slipped 5.80 points, or 0.3%, to 1,978.50.
In economic news, the advance Q2 GDP report showed that the economy had contracted at an annualized rate of minus 1%. This marks the fourth consecutive quarter of decline. But the number was an improvement from expectations of a 1.4% decline. Personal consumption expenditures fell at an annualised rate of minus 1.2%. This was worse than the expected decline of 0.5%.
Precious metals shine on better GDP number
Gold and silver prices gain almost 3% in July
Precious metal prices rose on Friday, 31 July, 2009. Prices rose as the dollar weakened following the GDP numbers for second quarter which showed that US economy contracted at a smaller pace than expected.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.
On Friday, gold for August delivery ended at $953.7, higher by $18.8 (2%) an ounce on the New York Mercantile Exchange. It rose as high as $958.10 earlier but also fell to $932. For the week, gold ended almost unchanged. Year to date, gold prices are higher by 7.5%. Gold ended July, 2009 higher by 2.8%.
Before this, for the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.
On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (9.5%) since then.
On Friday, Comex silver futures for September delivery gained 45.5 cents (3.4%) at $13.94 an ounce. For the week, silver ended higher by 0.5%.
Silver ended 2.7% higher for July, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 25% this year. For 2008, silver had lost 24%.
In the currency market on Friday, the dollar index, a six-currency gauge of the greenback's value, fell by almost 0.9%.
The advance Q2 GDP report showed the economy contracted at an annualized rate of -1%, marking the fourth consecutive quarter of decline. That was much improved from a downwardly revised -6.4% (from -5.5%) in the first quarter and it was also better than the expected -1.5% decline.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
Friday's gains erase weekly losses for crude
Crude ends marginally lower in July
Crude prices ended substantially higher on Friday, 31 July, 2009. Prices rose as the dollar weakened following the GDP numbers for second quarter which showed that US economy contracted at a smaller pace than expected.
On Friday, crude-oil futures for light sweet crude for September delivery closed at $69.45/barrel (higher by $2.51 or 3.7%). For the week, crude ended higher by 2.1%.
For the month of July, 2009, crude ended lower by a marginal 0.6%. For the second quarter, crude ended higher by 40%. Crude prices had rallied 11.3% in the first quarter of 2009.
Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 47% since then. Year to date, in 2009, crude prices are higher by 45.4%.
In the currency market on Friday, the dollar index, a six-currency gauge of the greenback's value, fell by almost 0.9%.
The advance Q2 GDP report showed the economy contracted at an annualized rate of -1%, marking the fourth consecutive quarter of decline. That was much improved from a downwardly revised -6.4% (from -5.5%) in the first quarter and it was also better than the expected -1.5% decline.
Also at the Nymex on Friday, August reformulated gasoline rose 5.37 cents, or 2.7%, to $2.0448 a gallon and August heating oil added 2.51 cents, or 1.4%, to $1.7938 a gallon.
September natural-gas futures fell 9 cents, or 2.4%, to $3.653 per million British thermal units. Natural gas has fallen 4.7% this month.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
Daily News Roundup - Aug 3 2009
Hedge fund DE Shaw may retain a partial stake in DLF Assets.(BS)
Bharti Airtel and South Africa’s MTN are likely to announce the fate of their negotiations today.(TOI)
TCS and Wipro apart from several others are in pursuit of Rs25bn outsourcing contract of the railways. (ET)
Financial Technologies plans to divest 52% in the MCX-SX bourse by September-end. (ET)
Hindustan Unilever drops plan to sell South Mumbai headquarters. (ET)
SAIL registers 14% growth in steel production at 1.08mt in July over the year-ago period. (ET)
Maruti Suzuki posts 33% yoy growth in car sales in July.(BL)
Hero Honda reports sales of 0.37mn units in July.(BL)
TVS Motors reports 20.4% yoy fall to 42,998 units in motorcycle sales in July.(BS)
Bajaj Auto plans to launch its second new motorcycle for the year creating a new category or segment in the motorcycle market. (BS)
DLF plans to launch 16mn sq ft of residential space in the current fiscal.(ET)
Unitech to raise Rs10bn via QIPs for fresh investment.(FE)
Ranbaxy secures an approval from the Himachal Pradesh government to build a new drug manufacturing facility in Baddi.(BS)
JP Associates plans to invest Rs10.5bn for setting up a Greenfield cement plant in Assam. (BS)
Lanco Infratech to mop up US$100-150mn through QIP route. (ET)
Bank of India cuts deposit rates by 0.25-0.5% across various tenures, effective from today.(BS)
JK Tyre plans to set up radial unit in Tamil Nadu for an investment of Rs16bn. (ET)
Tata Steel plans to produce half the iron ore and coking coal for Corus by 2012. (BS)
Tata Motors edges closer to signing a financial aid package with the British government for its struggling UK subsidiary Jaguar Land Rover. (BS)
Dabur India has forayed into the premium skincare market by launching a new product range.(BS)
Air India is mulling canceling delivery of six Boeing-777 long-haul aircraft.(BS)
Essar Oil acquires 50% stake in a 4mn tonnes oil refinery in Kenya. (BS)
Hindalco plans to raise funds through GDR issue. (BS)
ONGC gets government approval to partner L N Mittal for buying 25% stake in Kazakhstan’s prospective Satpayev oilfield in the Caspian Sea.(BS)
Power Finance Corporation to approach banks and financial institutions to raise Rs900bn as part of the National Electricity Fund. (BS)
Andhra Pradesh government seeks to blacklist IVRCL.(DNA)
TVS group commences manufacturing tubes from its new plant at Pantnagar in Uttarakhand, from July.(BS)
IOC raises jet fuel prices marginally by 1.6%.(BS)
JSW Energy may go for an IPO to raise funds for its plans to step up power generation capacity to 12,000 Mw from the present 800 Mw. (BS)
Foreign exchange reserves rose by US$1.5bn to $268bn for the week ended July 24.(BL)
DoT proposes to EGoM to auction all the spectrum available in one go but to limit the number of operators to four.(BS)
DoT suggests WiMax base price at 25% of 3G reserve.(BL)
Government mulling incentives for services sector in the Foreign Trade Policy, expected to be announced in mid-August.(BS)
RBI has further extended interest subsidy to exporters by another six months.(ET)
Power Ministry to move SC on KG-D6 basin gas.(FE)
DoT rejects TRAI call on spectrum management.(FE)
The government may levy a 10% royalty on iron ore on ad valorem basis. (BS)
Union government to extend duty-free import of raw sugar for another eight months.(ET)
The Federation of Indian Airlines calls off its decision to suspend domestic operations on August 18. (BS)
The government withdraws tax concessions enjoyed by consortiums of foreign and Indian engineering firms that undertake infrastructure projects. (ET)
A ride on the wild side!
I think the thing to do is to enjoy the ride while you're on it.
A topsy-turvy ride is on the cards though freefalls are not an immediate fear. Today, we see a cautious start and a choppy day ahead as global markets are throwing mixed signals.
One will think the market will weigh valuations against earnings. Results, both in India as well as abroad, have largely been encouraging. But, dig deeper and one may find it was mostly due to reduced costs rather than rising topline. The classic revenue-driven growth will take a while to materialise. And, so will the overall economic activity.
On the whole the undertone is expected to remain cautiously optimistic. The news flow and a whole host of data points will mostly be positive. The markets could rally further if they turn out to be stronger than anticipated. However, selling pressure at higher levels can only be expected.
A big concern is the deficient monsoon, and its possible adverse fallout. Farm output could get hit, which in turn will push the already high food prices. What could add to the inflationary woes is the Centre’s bloated fiscal deficit.
A Chinese manufacturing index climbed to a one-year high in July as the government's stimulus spending stoked domestic demand, countering a slump in exports. Australian manufacturing sector contracted in July at the slowest pace since September.
The dollar traded near the weakest level in two months versus the euro as investors shifted toward higher-yielding currencies before a report that is forecast to show that US manufacturing output touched the highest level in almost a year.
The July jobs report will be keenly followed for more clues about an economic recovery in the US. The Obama administration will report on the July labor market on Friday. Economists expect that only 275,000 jobs were lost in July on a seasonally adjusted basis, the fewest since last August and significantly lower than the 467,000 lost in June. The unemployment rate is expected to rise to 9.7% from 9.5%, the survey says. It would be the highest unemployment rate in 26 years.
Top US officials said on Sunday it may be necessary to extend jobless benefits to firm up an economic recovery unlikely to create jobs until next year and declined to rule out future tax increases to tame massive budget deficits. Although output in the US economy will begin to turn positive in the second half of this year, job growth will take longer, White House economic adviser Lawrence Summers told Sunday morning talk shows.
Meanwhile, Former Fed Chairman Alan Greenspan said on Sunday that signs of stabilization and increased confidence in the US economy could be dashed if home prices were to take another turn downward.
Iran's OPEC governor expects crude prices to reach $80 a barrel by January, the oil ministry website, SHANA, reported on Sunday. Commodity prices may rise further in 2010 as the global recession abates, said Nouriel Roubini, the New York University economist who predicted last year's worldwide financial meltdown.
FIIs were net buyers of Rs5.82bn in the cash segment on Friday on a provisional basis while the local funds too pumped in Rs3.16bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers at Rs6.6bn. On Thursday, the foreign funds were net buyers of Rs11.84bn in the cash segment. With this, their net purchases of Indian stocks have crossed $7.3bn.
The latest government report showed on Friday that the US economy contracted at a 1% annual pace in the second quarter, a better-than-expected showing and the strongest signal to date that the recession, the longest since World War II, is finally winding down.
The Commerce Department said the slippage in gross domestic product for the April to June period came after the economy was in a free fall, tumbling at a 6.4% pace in the first three months of the year, worse than the earlier estimate of 5.5%. That made the first quarter the worst for the economy in nearly three decades.
The BSE Sensex rose to its highest level in 2009 led by positive earnings reported by India Inc. Also, FM’s announcement of additional stimulus measures to accelerate pace of economic growth and RBI’s forecast for GDP growth at 6.5% in the current fiscal boosted the sentiments on Dalal Street. Finally, the Sensex rose 1.9% and NSE Nifty rose 1.5% during the week.
On Friday, the BSE Sensex advanced 282 points or 1.8% at 15,670 after touching a high of 15,733 and a low of 14,449. The index opened at 15,449 against the previous close of 15,387. The NSE Nifty advanced 65 points or 1.4% to shut shop at 4,636.
In Asia, the Nikkei in Japan ended up by 1.9% at 10,356, while Australia's S&P/ASX ended higher by 1.2% at 4,244. The Hang Seng index in Hong Kong gained by 1.7% to end at 20,573. Shanghai index in China gained 2.5% to end at 3,412.
In Europe, stocks were mixed. The FTSE in the UK was down 0.2%. The DAX was down 0.5% and the CAC 40 was down 0.3%.
Coming back to India, among the BSE sectoral indices, the FMCG index was the top gainer, gaining 3.1%, followed by the Oil & Gas index that was up 2.6%. The BSE Bankex index up 2% and the BSE IT index was up 1.8%.
The BSE Mid-Cap index gained 1.1% and the BSE Small-Cap index ended flat.
Within the Sensex, the major gainers were Hindalco, Tata Motors, ONGC, SBI, HUL, Reliance Industries, ITC and Sterlite Industries. Among the major losers were Bharti, RCom, Hero Honda, DLF and NTPC.
Outside the frontline indices, the top gainers included Bharat Forge, Max India, Mundra Port, Nestle and Bajaj Holdings.
Among the big loser in the broader market were CESC, Ackruti, LITL, Divis Lab, Chambal Fert, GMDC and HCL Tech.
The BSE IT Index (up 4.9%): The top gainer in the IT sector was Patni. The stock shot up by over 30% during the week. The company’s Q2 revenues were up 3.3% at US$161.9mn while Net Income increased 91.7% sequentially to US$28.7mn.
Oracle Financial rose over 15% during the week. The company posted a net income of Rs1.86bn for the quarter ended June 30, 2009 as compared to Rs1.06bn for the quarter ended June 30, 2008. Total Income has decreased from Rs6.81bn for the quarter ended June 30, 2008 to Rs6.70bn for the quarter ended June 30, 2009.
Among the other major gainers were Mphasis (up 12.5%), TCS (up 9.1%) and Wipro (up 6.4%).
The top losers were Sasken Communication (down 3%) and Mahindra Satyam (down 0.1%).
Financial Technologies fell 1.2% during the week. The company posted a net profit of Rs205.37mn for the quarter ended June 30, 2009 compared to Rs1.7bn for the quarter ended June 30, 2008. Total income has decreased to Rs649.57mn for the quarter ended June 30, 2009 from Rs2.54bn for the quarter ended June 30, 2008.
The BSE Consumer Index: The top gainers in the consumer durables space were Mirc Electronics (up 9.7%) and Su-Raj Diamonds (up 6.1%).
The top losers in the consumer durables space were Titan (down 7%), Videocon Industries (down 2.3%) and Samtel Color (down 2%).
The BSE Healthcare Index (down 1.6%): The top losers in the Pharma space were Marksans Pharma (down 7.4%), Divi Labs (down 5.4%) and Morepen Labs (down 4.2%).
Sun Pharmaceutical declined by 5% during the week. The company posted a net profit after minority interest of Rs1.63bn for the quarter ended June 30, 2009 as compared to Rs5.01bn for the quarter ended June 30, 2008 thereby posting a decline of 67% decline YoY.
The top gainers in the Pharma space were Cadila Healthcare (up 19.4%), Torrent Pharma (up 15.1%), Ipca Labs (up 14.7%) and Panacea Biotec (up 13.2%).
Target 4,900 with resistance at 4,700
The July settlement ended with a breakout that kept the Nifty on target for a rise till the 4,900 level. The Nifty closed on Friday at 4,636 points for a gain of 1.5 per cent. The Sensex was up 1.9 per cent week-on-week, closing at 15,670. The Defty gained 1.8 per cent as the rupee strengthened.
FIIs and DIIs were net buyers. Advances comfortably outran declines. Volumes were excellent with expansions in both cash and F&O. The BSE 500 was ahead by 2 per cent and the Bank Nifty, Midcaps-50 both outperformed the major indices. The standout return came from the CNXIT which rose by 6 per cent.
Outlook: Chart formations and the backing volumes suggest that the market has the legs to touch targets in the 4,850-4,900 range. There is resistance at current levels and up until the 4,700 zone, however. The apparent uptrend will only be confirmed by a crossing of the 4,693 level and a close above that level.
Rationale: We have seen a pattern of rising peaks and troughs since mid-July when the market bottomed at 3,918. The 2009 high is 4,693 which must be beaten to confirm this uptrend. The strong volumes and concerted institutional support make this likely. Volatility is likely to rise with the breakout.
Counter-view: The market could get stuck in a consolidation pattern between 4,450-4,700 for an indeterminate period since there is a pattern of previous heavy trading in that range. A drop below 4,450 would suggest an intermediate trend reversal.
Bulls & bears: Trading is likely to get more stock-specific as the June quarter results are disseminated and absorbed. Banks picked up after the RBI policy review maintained status quo; private banks continue perform better in technical terms. IT has seen a re-rating with large, mid-sized and small counters being backed by serious buying.
Real estate plays surged but the effect was more pronounced in smaller counters.
The metals sector continued to generate a lot of trading interest but the trend was difficult to decipher. The engineering and construction sector looks set for an upmove. There also appears to be some interest reviving in pharma with counters like Lupin and Aurobindo seeing backers.
MICRO TECHNICALS
HINDALCO
Current Price: Rs 100.3
Target Price: Rs 112
The stock has cleared resistance in the mid 90s on the back of rising volume. It has a potential target of Rs 112 with some resistance visible at Rs 101-102. Keep a stop at Rs 98 and go long. Add to the position when it closes above Rs 103. Book profits above the Rs 111 level.
AUROBINDO PHARMA
Current Price: Rs 590.2
Target Price: NA
The stock has shot up from a base at around Rs 545. It is difficult to project a target since it is in a new zone for 2009. Keep a trailing stop at Rs 580 and go long. Move the stop up by 10 points for every 15-point move.
Book some profits at Rs 650 if that price is reached.
PATNI COMPUTER
Current Price: Rs 361.7
Target Price: NA The stock has shot up from Rs 293 to Rs 360 plus in the last two sessions on strong institutional buying. Quite impossible to set targets with a nearly vertical trendline. Set a trailing stop at Rs 355 and go long. Raise the stop 15 points for every 15 point rise.
If the stop is broken at Rs 355 (not higher), go short with a target of Rs 325.
FINANCIAL TECHNOLOGIES
Current Price: Rs 1,412
Target Price: Rs 1,510
Strong volumes are backing a price rise from a recent bottom in the Rs 1.330 zone. There is resistance at Rs 1,445- Rs 1,455 but if that is overcome a target in the range of Rs 1,510- Rs 1,520 should be reached. Keep a stop at Rs 1,390 and go long. Increase the position if the stock closes above Rs 1,455.
RELIANCE POWER
Current Price: Rs 169
Target Price: Rs 178
The stock is at a key support.
If it consolidates and moves up, it has a minimum target of Rs 178 and a likely upside till Rs 185. If it closes below Rs 165, it is likely to drop till the Rs 155 level. A bounce seems slightly more likely. Keep a stop at Rs 165 and go long. Book 75 per cent profit at Rs 178. If the Rs 165 stop is broken, go short with a target of Rs 155 and a stop at Rs 167.
via Business Standard
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