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Wednesday, March 28, 2007
Bulk Deals to Watch
28-MAR-2007,PIDILITIND,Pidilite Industries Ltd,HDFC TRUSTEE COMPANY LTD.- GROWTH FUND,BUY,1761404,114.99,-
28-MAR-2007,PRITHVI,Prithvi Information Solut,DEUTSCHE SECURITIES MAURITIUS LIMITED,BUY,100000,268.06,-
28-MAR-2007,TATAINVEST,Tata Inv. Corpn Ltd.,TATA SONS LTD,BUY,500000,340.05,-
28-MAR-2007,IBREALEST,Indiabulls Real Estate Li,MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. SVB,SELL,913966,259.33,-
28-MAR-2007,IBREALEST,Indiabulls Real Estate Li,NORTHGATE TECHNOLOGIES LIMITED Ltd.,SELL,1500000,300.60,-
28-MAR-2007,BALRAMCHIN,Balrampur Chini Mills,MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. SVB,BUY,1777080,65.97,-
Market Close: Global worries weigh on markets !
Weak sentiments in global markets weighed heavy on the domestic markets as from the word go the Sensex kept on falling as the day progressed. The high positions in the FNO segment ahead of the expiry tomorrow also played its part on the market. As the sessions continued, buying was seen across a few sectors but there was caution. A bit of recovery was seen in the mid session. Indices witnessed heavy selling pressure which kept markets in red. Today was the last day of trading for the current financial year 2006-07. Trades executed from tomorrow will be considered for the financial year 2008. Selling pressure was not just restricted to index heavyweights but also the Mid and Small caps were not spared too. Excluding selective Media, Power, Sugar, Pharma and Cement stocks, selling pressure was witnessed across the board. All Asian indices closed in the red except Shanghai Composite which was up by 1%. European indices also did not leave much scope for positive.
IT stocks were the worst hit, as the Dollar fell below Rs 43.15 versus the Rupee, its lowest since June 1999. Also to add to this was the weak consumer confidence report with brought in concerns about a slowdown in the US Economy where these companies generate their maximum revenue. The report has compounded the woes of Indian IT companies just after the new found strength of the Rupee. However we expect the RBI to intervene.
As per some reports, Asian economies grew by 8.3% in 2006, the fastest since 1995. China and India accounted for about 70% of this expansion. Indian economy notched up a GDP growth rate of 9.2% in 2006 but things will cool down a bit in 2007. China too is expected to see a slowdown in GDP growth rate, from a blistering 10.7% in 2006. Reports said that the growth would slow down to 10% in 2007 and further to 9.8% in 2008.
Sensex closed down by 240 points at 12884.34. Weighing on the Sensex were losses in TCS (1201,-5 percent), Wipro (558.2,-5 percent), Tata Motors (718.8,-5 percent), SBI (974.2,-4 percent) and Satyam (455.6,-4 percent). Losses were restricted by gains in Ranbaxy (338.2,+3 percent), Dr Reddys (693.9,+2 percent), ONGC (866.3,+2 percent), Rel Energy (482.35,+1 percent) and BHEL (2281.45,+1 percent).
Satyam Computers has signed an estimated $200 million (around Rs 900 crore) five-year contract with California based Applied Materials Inc, a global leader in microchips that serves the electronics industry. Satyam will provide application development, maintenance, and support (ADMS) besides business transformation core technology services to Applied Materials through a managed services delivery model. Satyam has provided ADMS and engineering services to Applied Materials for more than five years prior to this announcement. Last year, Satyam has signed a $71 million 7-year contract with Australian airline Quantas and a $30 million 10-year contract with the Punjab and Sind Bank. The big orders are flowing. The stock had been strong for the past couple of days but the stock succumbed to profit taking. on the back of a depreciating dollar. The stock closed down by almost 3%.
IOC is planning a major expansion in Turkey which includes setting up a US$ 6 bn greenfield refinery, acquiring a majority stake in an existing petrochemical company and entering into fuel retailing. The overseas plan is part of the company's five-year expansion strategy with an investment of around Rs 430 bn. IOC will hold 51% equity stake in the 15 million tonne refinery project and may rope in Calik Energy as a partner for the same. The refinery is expected to be built by 2012 and it would export products to the US and European markets. The stock closed weak (3% lower), along with its peers HPCL (down 4%) and BPCL (down 3%).
TCS and Tata International which together hold 50% stake in the BPO joint venture with US based Sitel Corporation are exiting the six-year-old joint venture by selling their stake for US$ 22.2 m to Sitel Corporation. The decision to exit Sitel India is part of the Tata group's strategy to consolidate all BPO operations under TCS. TCS has also entered into a multi million Dollar agreement with GlaxoSmithKline (GSK) Plc to establish a global drug development support centre in Mumbai to help meet the demands of the growing GSK pipeline. The stock closed down by almost 5%.
Technically Speaking: Markets traded weak as Sensex touched intraday high of 13035 and low of 12861. Market turnover was decent at Rs 4008 cr. Overall breadth was in favor of Decliners, where the Advancers were 660 to Decliners of 1949. Sensex closed below its crucial support of 12900 and Nifty Futures also indicated some negatives for tomorrow as it closed below 3770 levels. Further support for Sensex lies at 12800 and 12650 levels.
Stocks across the board massacred
Stocks across the board were severely pounded, partially due to weak global markets, and partly due to unwinding in the derivatives market. The market, whcich was weak right from the word go, kept on falling with the passage of time. Volatility was the hallmark of the session, with wild swings by the benchmark index either ways.
The 30-share BSE Sensex settled 255.15 points lower, at 12,869.19. It had opened weaker, at 13,034.27, and went on to touch a low of 12,861.18. The Sensex's high for the day was at 13,035.56.
Today was the last day of trading for the current financial year 2007. Trades executed from tomorrow will be considered for the financial year 2008.
The market-breadth, which measures the overall health of the market, also ended weak. A host of stocks from the small-cap and mid-cap space tumbled. On BSE, 1,949 shares declined compared to 660 that advanced. A total of 66 scrips remained unchanged.
The total turnover on BSE amounted to Rs 4008 crore.
Among the 30-Sensex pack, while 22 declined only 8 scrips managed to gain.
Auto major Tata Motors was the top loser, down 5.02% to Rs 716, on a volume of 4.58 lakh shares, as global crude oil prices surged.
IT stocks were being offloaded heavily, as the dollar fell below 43.15 versus the Rupee, its lowest since June 1999. Also, a weak consumer confidence report heightened concerns about a slowdown in the United States, where these companies generate most of their revenue. The report has compounded the woes of Indian IT companies, already reeling from the new found strength of the rupee.
The BSE IT Index as a result was the top loser, down 3.54%, from among the sectoral indices of BSE. TCS slumped 4.86% to Rs 1200, on a volume of 6.98 lakh shares. Other frontline IT shares also finished weak. Satyam Computers (down 3.44% to Rs 456), Infosys (down 3.26% to Rs 1989.90) and Wipro (down 4.65% to Rs 558.90) were just a few of those.
IT bellwether Infosys Technologies will announce fourth quarter and annual results on 13 April 2007.
Meanwhile, Satyam Computer Services signed a five-year contract with Applied Materials Inc, the global leader in Nanomanufacturing Technology™. The company will provide application development, maintenance, and support (ADMS) plus business transformation core technology services to applied materials through a managed services delivery model.
Index heavyweight Reliance Industries (RIL) was down 1.48% to Rs 1344.95, on a volume of 5.72 lakh shares.
Select pharma scrips were in demand. Ranbaxy Laboratories was the top-gainer, up 3.53% to Rs 339.80, as 3.32 lakh shares changed hands in the counter on BSE.
Dr Reddy’s Labs gained 1.20% to Rs 690. A strong 1.02 lakh shares got transacted on BSE.
Tata Steel, fresh from its takeover of Anglo-Dutch giant Corus, lost 0.85% to Rs 438. The private sector steel behemoth has now entered into talks with the world's second-largest steelmaker Nippon of Japan for jointly producing an alloy for automakers and other companies. The two firms are reportedly said to be in the process of finalising the terms of the venture.
Going by media reports in Japan, the two companies are likely to spend about $423 million (about Rs 2,000 crore) to make thin-sheet steel chiefly used in automotives in joint venture, which will use Nippon's technology. The plant will be able to produce about one million metric tonnes of steel a year.
After a year in which the Indian economy fired on all cylinders, and notched up a GDP growth rate of 9.2%, things will cool down a bit in 2007, the Asian Development Bank (ADB) said.
Asian economies grew 8.3% in 2006, the fastest since 1995. China and India accounted for about 70% of this expansion. Asia’s “exceptional performance” in 2006 provides it with robust momentum in the years ahead, feels Imtiaz Ali, the chief economist at ADB. However, in order to stay on the high-growth path, macroeconomic stress will have to be addressed, reforms will have to be pursued aggressively, and growth will have to be rebalanced in order to generate jobs, Ali added.
China too is expected to see a slowdown in GDP growth rate, from a blistering 10.7% in 2006. Reports add that ADB expects initiatives taken by Chinese authorities to curb fixed-asset investment will take traction in 2007. As some of these cooling measures take effect, ADB estimates growth to slow to 10% in 2007, and further to 9.8% in 2008.
Asian economies (ex-Japan), on the whole, will post a robust growth of 7.6% in 2007 and 7.7% in 2008, driven by strengthening domestic demand and a broadly favourable outlook for the international economy, the ADB report said.
All Asian indices except the Sanghai Composite (up 1.09%) were trading with losses. The Nikkei was down 0.64%, while the Hang Seng Index was dented 0.78%.
European markets were also trading mixed.
US stocks and the dollar closed lower on Tuesday (27 March 2007)after a measure of US consumer sentiment dipped and a major home builder withdrew its profit outlook, reinforcing a view that the US economy is on shaky ground. The Dow Jones industrial average dropped 71.78 points, or 0.58%, to finish at 12,397.29. The Standard & Poor's 500 Index slid 8.89 points, or 0.62%, to end at 1,428.61. The Nasdaq Composite Index lost 18.20 points, or 0.74%, to close at 2,437.43.
A crisis in the US subprime mortgage sector, which issues mortgages to high-risk borrowers, has left investors wondering whether the broader housing sector, and even the world's largest economy, might be dragged down as well.
Crude oil rose for a seventh day in New York on concerns of a dispute over Iran's detention of British servicemen escalating, and leading to disruption of supplies from the Middle East.
Crude oil for May delivery gained $1.53, or 2.4%, to $64.46 a barrel in electronic after-hours trading on the New York Mercantile Exchange. It was at $63.89 in Singapore. The contract settled at $62.93 a barrel yesterday, up 2 cents. Prices jumped $5 in seven minutes, New York time, to $68.09, the highest intraday price since 6 September 2007.
In London, Brent crude oil for May settlement climbed $1.24, or 1.9%, to $65.84 a barrel in electronic trading on the ICE Futures exchange. Brent crude was trading at $65.69 at 12:47 pm Singapore time.
FIIs have been buying since the last few days. As per provisional data, FIIs were net buyers to the tune of Rs 58 crore on Monday (26 March), the day when the Sensex had lost 162 points. FIIs were net buyers to the tune of Rs 678.50 crore on Friday (23 March), the day when the Sensex had lost 22 points.
The next major trigger for the domestic bourses is Q4 March 2007 earnings, reports of which by corporates will start next month. Analysts expect Q4 results to be strong. Market men will closely watch what company managements have to say about the outlook for FY 2008.
The unwinding of positions in the derivatives segment ahead of the expiry of March 2007 derivative contracts on Thursday (29 March 2007) may pull the market lower. On the other hand, short covering may also spark a rally. The market remained closed on Tuesday (27 March) for Ram Navmi.
Market plunges on weak global cues
The market seems to be in a consolidation phase and the Sensex closed the session with losses of 240 points. The Sensex opened weak in line with the global indices at 13034, down 90 points and dipped below the 13000 mark. The unwinding of positions in the derivatives segment before the expiry day kept the market under pressure. The sustained selling in information technology, auto and telecom stocks saw the Sensex remain in negative territory. The market was range-bound with a negative bias in the afternoon. The information technology stocks were under pressure on concerns over the weak consumer confidence report indicating a possible slowdown in the US economy and the dollar hitting a low against the rupee. The sentiment was extremely bearish towards the close, which dragged the index to an intra-day low of 12861.The Sensex ended the session with losses of 240 points at 12884, while the Nifty shed 59 points and closed at 3761.
The breadth of the market was exceedingly negative. Of the 2,641 stocks traded on the BSE, 1,926 stocks declined, 653 stocks advanced and 62 stocks ended unchanged. All the sectoral indices ended in the red. The BSE IT Index dropped 3.54% at 4832 followed by the BSE Teck Index (down 2.91% at 3486), the BSE Auto Index (down 2.63% at 4820), the BSE Bankex (down 2.27% at 6535) and the BSE CD Index (down 2.23% at 3565).
Out of the 30 Sensex stocks, 22 stocks closed in negative territory. Among the major losers TCS slumped 4.78% at Rs1,201, Wipro tumbled 4.77% at Rs558, Tata Motors plunged 4.65% at Rs719, SBI declined 3.89% at Rs974, Satyam Computer dipped 3.53% at Rs456, HDFC slipped 3.51% at Rs1,519, Infosys lost 3.15% at Rs1,992, L&T shed 3.08% at Rs1,566, Maruti fell 2.47% at Rs799 and Hindalco was down 2.36% at Rs130. However Ranbaxy bucked the downtrend and advanced 3.05% at Rs338. Dr Reddy's gained 1.83% at Rs694. ONGC, Reliance Energy, BHEL, ITC, HLL and ACC closed with marginal gains.
Information technology stocks continued to reel under sustained selling pressure. HCL Technology plummeted 4.75% at Rs288, Patni Computers tumbled 4.47% at Rs373, Financial Technologies dropped 3.07% at Rs1,917, Tech Mahindra shed 3.06% at Rs1,427 and Mphasis declined 1.77% at Rs275.
Over 20.64 lakh SAIL shares changed hands on the BSE followed by Gujarat Ambuja (18.63 lakh shares), Idea Celullar (18.42 lakh shares), Reliance Petroleum (17.63 lakh shares) and Reliance Communications (13.50 lakh shares).
Value-wise Infosys registered a turnover of Rs127 crore on the BSE followed by TCS (Rs85 crore), Reliance Industries (Rs78 crore), Reliance Communications (Rs56 crore) and BHEL (Rs47 crore).
Indiainfoline - Intra Day Stock Ideas
NIFTY (3819) SUP 3783 RES 3849
SELL MPHASIS (280.7) @ 283 SL 287 T 274, 271
SELL POLARIS (180.55) @ 182 SL 185 T 174, 172
SELL PRAJIND (372.20) @ 375 SL 379 T 365, 363
BUY MATRIXLAB (172.35) SL 168 T 180, 182
BUY SATYAMCOMP (472) SL 467 T 481, 483
Indiainfoline - Market Watch
Insider Trades:
Titan Industries Ltd: Mr. Rakesh Jhunjhunwala and persons acting in concert with him has purchased from open market 50000 equity shares of Titan Industries Ltd on 22nd March, 2007.
Market Volume:
The turnover on NSE was down by 21% to Rs67.53bn. BSE Bank index was the major loser and lost 1.98%. BSE Auto index (down 1.78%), BSE Capital Good (down 1%), BSE Technology index (down 0.97%) and BSE FMCG index (down 0.53%) were among the major losers.
Volume Toppers:
IFCI, ITC, SAIL, Idea, R Com, Gujarat Ambuja, Bajaj Hindusthan, HLL, Page Industries, Satyam Computer, IPCL, India Cement, Tata Steel, Hindalco, Tata Motors and MTNL.
Lower Circuit:
GMR Industries, Unitech, Goldstone Technology, Nahar Exports, McLeod Russel, Atlanta, PSTL, Mefcom Agro and HOV Services.
Brokers Recommendations:
Crompton Greaves – Buy from Kotak with target of Rs245
Colgate – Buy from Citigroup with target of Rs413.
Long Term investment:
R Com
Major News Headlines:
Glenmark concludes agreement to acquire Medicamenta
DCM Shriram Consolidated plans to sell, lease some of its land
SBI expected to get Singapore Banking License
Gateway Distriparks forms JV with Container Corp
BSEL Infra gets new projects at Gujarat
Hindujas purchase land in Dubai's Waterfront project
R Com plans overseas share plan for unit - Reports
Punj Lloyd to construct residential community in Bahrain, contract valued at Rs 5.42bn
Nagarjuna Constructions gets orders worth Rs3.02bn
Jindal Stainless to pay Rs1.6 per share as mid-year dividend
BPL to consider plan to sell securities to select investors
STRATEGY INPUTS FOR THE DAY
Bigwigs could swing with less volume
Big doors swing on little hinges.
Some index stocks have been witnessing wild swings, especially before close. With a day left for F&O expiry, expect more swings especially towards the end of trade. After a day's break, the market will resume trading amid some weak global cues. Oil prices surged overnight amid rumors that Iran fired on US Navy warships. However, oil cooled off as there was no conformation of the report. US stocks slumped after weak earnings from the biggest homebuilder and a big drop in consumer confidence. Indian ADRs Stocks are also down in Asia, with only the Nikkei in Japan holding firm.
Coming to the domestic market, market players will have to deal with the derivative settlement tomorrow. As usual, there will be wild intra-day swings due to the F&O expiry. But, on the whole we should be okay. Post F&O expiry, the market is likely to be rangebound and dull. The next big event will be the quarterly earnings and the annual monetary policy at the end of April.
The bulls have managed to rebound smartly from last month's crash. The big question is whether they can sustain this trend. Today, we expect a cautious to lower opening given the weakness in some regional markets. Thereafter, we expect choppiness.
TCS is going to be in focus as it has bagged an order from GlaxoSmithKline. Also, the company and the Tata Group have sold their stake in a BPO JV with US-based Sitel Corporation for US$22.2mn. Shree Precoated Steels Ltd. is likely to attract some attention as it will present the details on its future business mix between real estate and steel later today. Man Industries could see some action. The pipe maker is expected to make an announcement on Thursday pertaining to the demerger of Man Aluminium.
US stocks posted their biggest drop in two weeks after falling home prices and weaker consumer confidence deepened concern that the housing crisis will hurt economic growth.
The S&P 500 slipped 8.89, or 0.6%, to 1428.61. The Dow Jones Industrial Average decreased 71.78, or 0.6%, to 12,397.29, leaving it with a 2007 loss of 0.5%. The Nasdaq Composite Index fell 18.20, or 0.7%, to 2437.43. All three benchmarks had their steepest drop since March 13.
US light crude for May delivery jumped $5.18, or about 8%, to $68.91 a barrel in electronic trading before giving back most of those gains to trade at $64.40 a barrel, $1.47 above Tuesday's settle price on the New York Mercantile Exchange. The front-month contract was quoting 86 cents higher at $63.79 a barrel in extended trading in Asia.
COMEX gold for April delivery fell $1.40 to $662.50 an ounce. Treasury prices crept lower, raising the yield on the 10-year note to about 4.61% from 4.6% late on Monday. Bond prices and yields move in opposite directions. In currency trading, the dollar fell versus the euro and the yen.
European stocks ended mixed on Tuesday. The pan-European Dow Jones Stoxx 600 index ended 0.1% lower at 372.46. The German DAX Xetra 30 closed 0.4% higher at 6,858.34. The FTSE 100 closed nearly flat at 6,292.60 and the French CAC 40 rose 0.2% at 5,587.06.
Stocks in Latin America lost ground. In Brazil, The broader market as measured by the Ibovespa index closed down 438 points, or 1%, at 45,206.53. In Mexico, the IPC index of 35 leading issues closed down 35 points, or 0.1%, at 28,124.33.
In Asia most markets are in the red. The Nikkei was down 47 points at 17,317 while the Hang Seng declined 132 points to 19,574 and the Kospi in Seoul shed 11 points to 1441. The Straits Times in Singapore lost 35 points to 3198.
HOW MARKET FAREDBulls tire out
Unlike last week the first day of the week turned out to be reverse as bulls were on the receiving end. The BSE Bank, Auto, technology and Capital Good indexes led the down fall dragging the benchmark index Sensex to hit a low of 13090.80. Sugar stocks particularly were the star performers following reports that government would provide some incentives to sugar exporters. Finally, the 30-share benchmark Sensex declined 161 points to close at 13124. NSE Nifty fell 41 points to close at 3819. Tata Motors, HDFC Bank and Dabur were the major losers and Britannia, Colgate and MTNL were the major gainers among the 50-scrip'sof NSE Nifty.
BHEL pared its intra-day gains on back of selling pressure the scrip was down 0.8% to Rs2254. According to reports the company is planning to produce defense products for the Indian defense industry. The scrip touched an intra-day high of Rs2299 and a low of Rs2242 and recorded volumes of over 6,00,000 shares on NSE.
GAIL edged lower by 0.6% to Rs270. The Company announced that they would buy a natural gas terminal being built near a power plant formerly owned by Enron Corp. The scrip touched an intra-day high of Rs279 and a low of Rs269 and recorded volumes of over 2,00,000 shares on NSE.
ICICI Bank fell 1.8% to Rs875. Reports stated that Temasek Holdings Pte and Government of Singapore Investment Corp will get approval to each own up to 10% in the company. The scrip touched an intra-day high of Rs907 and a low of Rs870 and recorded volumes of over 15,00,000 shares on NSE.
Glenmark Pharma surged by over 4.5% to Rs619 after the company purchased more than 90% of Medicamenta a.s, a Czech drugmaker, to gain access to the market in Europe. The scrip touched an intra-day high of Rs643 and a low of Rs590 and recorded volumes of over 12,00,000 shares on NSE.
GDL gained 1.3% to Rs162 after the company formed joint Venture with Container Corp. The scrip touched an intra-day high of Rs165 and a low of Rs158 and recorded volumes of over 4,00,000 shares on NSE.
Sugar stocks were the star performers as reports stated that government has planned to give incentives to companies that export sugar. Renuka Sugar rose by over 8.5% to Rs429, Sakhti Sugar jumped by over 8% to Rs68, Balrampur Chini was up by 3.9% to Rs64 and Bajaj Hindusthan added 4% to Rs175.
Oil & Gas exploration stocks recorded smart gains as crude oil rose sharply above the $62 per barrel. ONGC gained 1% to Rs850, however Reliance Industries was down 1% to Rs1364. The Oil refinery stocks also were in momentum HPCL and IOC were among the major gainers.
Metal stocks also pared its intra-day gains as selling pressure dragged them lower. Nalco was down by 2% to Rs225, Hindalco slipped 1.8% to Rs133, SAIL fell 1.5% to Rs110 and Sterlite Industries declined 0.6% to Rs484. However, Hindustan Zinc was up 1.8% to Rs560 and Tata Steel gained 0.8% to Rs441.Edelweiss - Daily Market Outlook 28th March, 07
Market Snapshot
On Monday, the Sensex opened with a positive gap of 60 points at 13,346, but profit-taking at higher levels saw the index slip into negative zone in early deals. The index drifted to low of 13,091 on account of weakness in auto, banking and technology stocks. The Sensex finally settled with a loss of 162 points at 13,124.
The NSE and BSE cash volumes were lower compared to the previous day at INR 67 bn and INR 32 bn respectively. The F&O volumes were a touch higher at INR 343 bn.
Sentiment Indicators
The Implied Volatility (IV) across Nifty strikes has increased to 28-29% levels. The WPCR of Nifty Options decreased to 0.94 compared to the previous day while the 5 day average is 1.05.
Outlook
We expect markets to open marginally negative on the back of weak US housing data and flattish cues from Asian indices. The 3900 Nifty level continues to provide a strong resistance as we see fresh shorts coming in at this level. Volatility will continue in the markets today due to expiry of contracts tomorrow.
Nifty rolls have been lower than previous months at 38%. Roll levels will not expand below -3 though they might go to -7 levels. We recommend short rollers to be aggressive at this level and rollover their positions. The Banking sector saw good rollovers (rising from 22% to 40%) on Monday and we expect the trend to continue today.
The 3900 level acted as an important resistance for the Nifty. Not only because the Nifty index is the 50% retracement level of the February correction but also because it is the 13 WMA resistance. We believe that weakness is slowly creeping in the market and this could be the beginning of another round of south bound journey.
The Nifty now has a support 3768 near its 13 DMA followed by 3707, while the resistance levels are at 3881 followed by 3900.
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