Market ekes out nominal gains amid volatility
The market pulled off an almost incredible rebound after a steep intra-day fall in mid-afternoon trade. The sharp fall came soon after the railway minister completed his budget speech in Parliament. Cement, banking, auto and steel shares were behind the Sensex’s rebound. The rise in cement and steel shares was due to a cut in rail freight rate on key raw materials in their manufacture. Index heavyweight, Reliance Industries (RIL), also recovered.
The 30-share BSE Sensex advanced 16.99 points (0.12%), to 13,649.52. It had come off the lower level after plunging 248.65 points, to 13,383.88, by 14:15 IST. The S&P CNX Nifty gained 3.05 points (0.08%), to 3,942. The Nifty March 2006 futures were at 3,969 compared to the spot Nifty closing of 3,942. On Friday (23 February), Nifty March futures had settled at a discount of 5.20 points.
The market was extremely volatile. The Sensex swung 1000 points, between some of the vital intra-day tops and bottoms of the day. The barometer index also swung 339.52 points between a low of 13,383.88 and a high of 13,723.40.
Railway Minister Lalu Prasad Yadav today announced a 5% cut in freight transportation rates for diesel-petrol, and a 6% reduction for all minerals, including iron ore and limestone. The lowering of freight rates is part of the rationalisation of tariffs announced by the minister even as he refrained from announcing any across the board increase in freight rates.
Lalu Yadav also introduced a commodity-based tariff policy, which will take effect from 1 April 2007, on an experimental basis for major commodities to provide a stronger base to the Railways' competitive capabilities. "We will introduce this new policy through an exclusive package for cement," he said.
The market-breadth evened out by the end of trading. Against 1,287 shares rising on BSE, 1,279 declined. Just 48 scrips were unchanged. In mid-afternoon trade, the ratio of losers to gainers was 1.8:1. The BSE Small-Cap Index lost 9.98 points (0.14%), to 6,894.45, while the BSE Mid-Cap Index advanced 31.82 points (0.5%), to 5,696.71.
The BSE Metal Index was the biggest gainer in percentage terms among BSE’s sectoral indices. It rose 201.61 points (2.2%), to 9,000.54. The BSE FMCG Index advanced 25.98 points (1.4%), to settle at 1,812.26. The BSE’s banking sector Index, the Bankex, advanced 42.87 points (0.6%), to 6,802.45. The BSE IT Index lost 16.42 points (0.3%), to 5,245.42.
The turnover on BSE was Rs 3793 crore, compared to Friday’s Rs 4552 crore.
Fears of nasty surprises in the Union Budget 2007-08, have caused a sharp correction on the bourses in the past few days. It plunged 723 points last week (week ended 23 February). At 13,649.52, it is off 6.8% from the lifetime high of 14,652.09 of 8 February 2007. It is down about 1% in calendar 2007 thus far.
Market men fear that short-term capital gains tax on the sale of shares may be hiked from 10% to between 12.5%-15% in the budget. The securities transaction tax (STT) may also go up further. The STT was raised in the previous budget. The removal of 10% corporate surcharge may be offset by removal of certain open-ended exemptions. On the flip side, analysts also expect the finance minister to give a big impetus to agriculture and infrastructure in the budget.
FIIs have resorted to profit-taking over the past two days. Their net outflow was Rs 225.20 crore on Thursday (22 February) compared to an outflow of Rs 40.20 crore on Wednesday (21 February 2007). An intermittent surge in inflow has been witnessed this month following an upgrade in India’s rating to investment grade by foreign rating agency, Standard & Poor's, late in January 2007. The cumulative FII inflow for February 2007 stands at Rs 3950.20 crore (till 22 February) compared to their purchases of Rs 492 crore in January 2007.
Earnings growth for India Inc remains strong. Growth in recent years has hovered near the breakneck pace of more than 20%. The long term India growth story remains intact. India’s long-term growth drivers are a favourable demography (large share of young population), robust domestic consumption and acceleration in infrastructure creation.
In today’s trade, battered cement shares edged higher on bargain-hunting. ACC jumped 4% to Rs 952, Grasim gained 3.6% to Rs 2354 and Gujarat Ambuja Cements advanced 4.5% to Rs 128.40. Cement shares had tumbled over the past few days with the government keeping a close watch on cement prices. In late-January 2007, the Centre scrapped 12.5% import duty on cement to rein in domestic prices. The recovery in cement shares was also due to reduction in freight rate on limestone – a key input in cement making by 6%.
Buying was conspicuous in PSU banks after the Reserve Bank of India (RBI) said it will resume paying interest on eligible cash reserve ratio (CRR) balances it held. State Bank of India gained 4.4% to Rs 1105, Punjab National Bank gained 5.5% to Rs 459, Bank of India gained 5% to Rs 166, Canara Bank rose 3.9% to Rs 218, and Bank of Baroda rose 2.5% to Rs 219.
Auto shares recovered on expectations of an excise duty cut on cars. Tata Motors gained 3.8% to Rs 846, and Maruti Udyog rose 3% to Rs 889.50. Market expects excise duty on cars to be brought down to 16% from 24% in the Union Budget 2007-08. In the last budget, the government had slashed excise duty on small cars to 16% from 24%.
Steel shares were in demand on expectations that steel makers will raise prices by Rs 1000 per tonne after the budget due to firm global prices. Tata Steel rose 2.5% to Rs 470.95, while Steel Authority of India (Sail) gained 2% to Rs 114. The upmove in steel shares was also due to reduction in freight rate on iron ore – a key input in steel making by 6%.
Reliance Industries shed 0.7% to Rs 1402.20. The stock recovered from the lower level after losing as much as 2.7%, to Rs 1373.50, by 14:09 IST. Reliance Industries (RIL) on Saturday (24 February 2007) unveiled a plan for an integrated cracker and petrochemicals complex, with a total capacity of 2 million metric tonnes per annum in the special economic zone (SEZ) at Jamnagar.
RIL’s board also approved a preferential issue of 12 crore warrants, exercisable into equal number of equity shares of Rs 10 each, to promoters as per SEBI guidelines for preferential issues. On exercise of the rights, the paid-up capital of RIL will increase from Rs 1393 crore to Rs 1513 crore.
Iron ore exporter Sesa Goa jumped nearly 7% to Rs 2012, after freight rate on transport of iron ore was cut by 6% in the Railway Budget.
IT bellwether ended 0.2% to Rs 2232. The stock was quite volatile. It moved between a low of Rs 2161.10 and a high of Rs 2248.70. Satyam Computer Services gained 2.8% to Rs 461.45 on market talk that the company may soon announce a large outsourcing deal.
C & C Constructions settled at Rs 239.90. The stock today debuted at Rs 350 compared to the IPO price of Rs 291.
Copper producer Sterlite Industries rose 1.5% to Rs 508.05, after Shanghai futures rose by their 4% limit on Monday, following sharp gains in the metal on the London Metal Exchange (LME).
Hindustan Zinc jumped nearly 8% to Rs 668, after the company raised zinc prices by 4.2% Saturday (24 February 2007) onwards.
Gas transporter, Gujarat Gas Company, ended flat at Rs 1300. The company said on Friday its net profit jumped 67% to Rs 18.23 crore (Rs 10.90 crore). Net sales for the same quarter surged 46.5% to Rs 234.49 crore (Rs 159.96 crore).
Indiabulls Financial Services ended flat at Rs 438. The company said on Friday three Merrill Lynch units acquired 2.93 million shares in the company, raising its stake to 5.13%.
Sugar shares edged higher following reports that some sugar companies have started hedging their risks in the futures market at a time when sugar prices are falling. Bajaj Hindustan jumped nearly 6% to Rs 169.75, and Balrampur Chini Mills gained 2.3% to Rs 57.80.
IFCI rose 1.2% to Rs 28.15. Volumes in the stock were a huge 1.3 crore shares on BSE. The stock has been consistently clocking huge volumes over the past few days.
Power Finance Corporation jumped 5% to Rs 117.15. The stock debuted at Rs 105 on Friday (23 February 2007) compared to the IPO price of Rs 85.
Civil engineering firm, McNally Bharat Engineering, jumped 5% to Rs 168.90 after the company said on Monday it had secured a Rs 556 crore order from Rashtriya Ispat Nigam, to construct a new sinter plant at Visakhapatnam.
The 30-share BSE Sensex advanced 16.99 points (0.12%), to 13,649.52. It had come off the lower level after plunging 248.65 points, to 13,383.88, by 14:15 IST. The S&P CNX Nifty gained 3.05 points (0.08%), to 3,942. The Nifty March 2006 futures were at 3,969 compared to the spot Nifty closing of 3,942. On Friday (23 February), Nifty March futures had settled at a discount of 5.20 points.
The market was extremely volatile. The Sensex swung 1000 points, between some of the vital intra-day tops and bottoms of the day. The barometer index also swung 339.52 points between a low of 13,383.88 and a high of 13,723.40.
Railway Minister Lalu Prasad Yadav today announced a 5% cut in freight transportation rates for diesel-petrol, and a 6% reduction for all minerals, including iron ore and limestone. The lowering of freight rates is part of the rationalisation of tariffs announced by the minister even as he refrained from announcing any across the board increase in freight rates.
Lalu Yadav also introduced a commodity-based tariff policy, which will take effect from 1 April 2007, on an experimental basis for major commodities to provide a stronger base to the Railways' competitive capabilities. "We will introduce this new policy through an exclusive package for cement," he said.
The market-breadth evened out by the end of trading. Against 1,287 shares rising on BSE, 1,279 declined. Just 48 scrips were unchanged. In mid-afternoon trade, the ratio of losers to gainers was 1.8:1. The BSE Small-Cap Index lost 9.98 points (0.14%), to 6,894.45, while the BSE Mid-Cap Index advanced 31.82 points (0.5%), to 5,696.71.
The BSE Metal Index was the biggest gainer in percentage terms among BSE’s sectoral indices. It rose 201.61 points (2.2%), to 9,000.54. The BSE FMCG Index advanced 25.98 points (1.4%), to settle at 1,812.26. The BSE’s banking sector Index, the Bankex, advanced 42.87 points (0.6%), to 6,802.45. The BSE IT Index lost 16.42 points (0.3%), to 5,245.42.
The turnover on BSE was Rs 3793 crore, compared to Friday’s Rs 4552 crore.
Fears of nasty surprises in the Union Budget 2007-08, have caused a sharp correction on the bourses in the past few days. It plunged 723 points last week (week ended 23 February). At 13,649.52, it is off 6.8% from the lifetime high of 14,652.09 of 8 February 2007. It is down about 1% in calendar 2007 thus far.
Market men fear that short-term capital gains tax on the sale of shares may be hiked from 10% to between 12.5%-15% in the budget. The securities transaction tax (STT) may also go up further. The STT was raised in the previous budget. The removal of 10% corporate surcharge may be offset by removal of certain open-ended exemptions. On the flip side, analysts also expect the finance minister to give a big impetus to agriculture and infrastructure in the budget.
FIIs have resorted to profit-taking over the past two days. Their net outflow was Rs 225.20 crore on Thursday (22 February) compared to an outflow of Rs 40.20 crore on Wednesday (21 February 2007). An intermittent surge in inflow has been witnessed this month following an upgrade in India’s rating to investment grade by foreign rating agency, Standard & Poor's, late in January 2007. The cumulative FII inflow for February 2007 stands at Rs 3950.20 crore (till 22 February) compared to their purchases of Rs 492 crore in January 2007.
Earnings growth for India Inc remains strong. Growth in recent years has hovered near the breakneck pace of more than 20%. The long term India growth story remains intact. India’s long-term growth drivers are a favourable demography (large share of young population), robust domestic consumption and acceleration in infrastructure creation.
In today’s trade, battered cement shares edged higher on bargain-hunting. ACC jumped 4% to Rs 952, Grasim gained 3.6% to Rs 2354 and Gujarat Ambuja Cements advanced 4.5% to Rs 128.40. Cement shares had tumbled over the past few days with the government keeping a close watch on cement prices. In late-January 2007, the Centre scrapped 12.5% import duty on cement to rein in domestic prices. The recovery in cement shares was also due to reduction in freight rate on limestone – a key input in cement making by 6%.
Buying was conspicuous in PSU banks after the Reserve Bank of India (RBI) said it will resume paying interest on eligible cash reserve ratio (CRR) balances it held. State Bank of India gained 4.4% to Rs 1105, Punjab National Bank gained 5.5% to Rs 459, Bank of India gained 5% to Rs 166, Canara Bank rose 3.9% to Rs 218, and Bank of Baroda rose 2.5% to Rs 219.
Auto shares recovered on expectations of an excise duty cut on cars. Tata Motors gained 3.8% to Rs 846, and Maruti Udyog rose 3% to Rs 889.50. Market expects excise duty on cars to be brought down to 16% from 24% in the Union Budget 2007-08. In the last budget, the government had slashed excise duty on small cars to 16% from 24%.
Steel shares were in demand on expectations that steel makers will raise prices by Rs 1000 per tonne after the budget due to firm global prices. Tata Steel rose 2.5% to Rs 470.95, while Steel Authority of India (Sail) gained 2% to Rs 114. The upmove in steel shares was also due to reduction in freight rate on iron ore – a key input in steel making by 6%.
Reliance Industries shed 0.7% to Rs 1402.20. The stock recovered from the lower level after losing as much as 2.7%, to Rs 1373.50, by 14:09 IST. Reliance Industries (RIL) on Saturday (24 February 2007) unveiled a plan for an integrated cracker and petrochemicals complex, with a total capacity of 2 million metric tonnes per annum in the special economic zone (SEZ) at Jamnagar.
RIL’s board also approved a preferential issue of 12 crore warrants, exercisable into equal number of equity shares of Rs 10 each, to promoters as per SEBI guidelines for preferential issues. On exercise of the rights, the paid-up capital of RIL will increase from Rs 1393 crore to Rs 1513 crore.
Iron ore exporter Sesa Goa jumped nearly 7% to Rs 2012, after freight rate on transport of iron ore was cut by 6% in the Railway Budget.
IT bellwether ended 0.2% to Rs 2232. The stock was quite volatile. It moved between a low of Rs 2161.10 and a high of Rs 2248.70. Satyam Computer Services gained 2.8% to Rs 461.45 on market talk that the company may soon announce a large outsourcing deal.
C & C Constructions settled at Rs 239.90. The stock today debuted at Rs 350 compared to the IPO price of Rs 291.
Copper producer Sterlite Industries rose 1.5% to Rs 508.05, after Shanghai futures rose by their 4% limit on Monday, following sharp gains in the metal on the London Metal Exchange (LME).
Hindustan Zinc jumped nearly 8% to Rs 668, after the company raised zinc prices by 4.2% Saturday (24 February 2007) onwards.
Gas transporter, Gujarat Gas Company, ended flat at Rs 1300. The company said on Friday its net profit jumped 67% to Rs 18.23 crore (Rs 10.90 crore). Net sales for the same quarter surged 46.5% to Rs 234.49 crore (Rs 159.96 crore).
Indiabulls Financial Services ended flat at Rs 438. The company said on Friday three Merrill Lynch units acquired 2.93 million shares in the company, raising its stake to 5.13%.
Sugar shares edged higher following reports that some sugar companies have started hedging their risks in the futures market at a time when sugar prices are falling. Bajaj Hindustan jumped nearly 6% to Rs 169.75, and Balrampur Chini Mills gained 2.3% to Rs 57.80.
IFCI rose 1.2% to Rs 28.15. Volumes in the stock were a huge 1.3 crore shares on BSE. The stock has been consistently clocking huge volumes over the past few days.
Power Finance Corporation jumped 5% to Rs 117.15. The stock debuted at Rs 105 on Friday (23 February 2007) compared to the IPO price of Rs 85.
Civil engineering firm, McNally Bharat Engineering, jumped 5% to Rs 168.90 after the company said on Monday it had secured a Rs 556 crore order from Rashtriya Ispat Nigam, to construct a new sinter plant at Visakhapatnam.
posted by SY at 6:44 PM
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