Friday, March 30, 2007

Expectations of robust results keep the ball rolling

The market held firm for the entire session, as buying continued following the smooth rollover of open positions in the derivatives segment, from March to April. A slower-than-expected rise in inflation also brightened the sentiment. The rally is also attributed to building up of fresh positions, anticipating robust set of Q4 and FY 2007 results from India Inc.

Sensex ended up 92.44 points or 0.71% at 13072.1, and the Nifty closed up 23.45 points or 0.62% at 3821.55.

Power PSU, NTPC, was the top-gainer, up 2.86% to Rs 149.45.Pharma major Dr Reddy’s Labs advanced 2.76% to Rs 724.90, while other pharma giant Ranbaxy Laboratories edged up 2.24% to Rs 353.Cigarette major ITC surged 2.41% to Rs 150.25.Tata Motors rose 1.56% to Rs 726.Index heavyweight Reliance Industries (RIL) advanced 1.22% to Rs 1372.60, as 5.66 lakh shares got transacted. The scrip also attained a high of Rs 1373.50.IT major Wipro was the top-loser, down 1.42% to Rs 557.50.HDFC (down 1% to Rs 1520), TCS (down 1.20% to Rs 1332) and Bhel (down 1.14% to Rs 2253) were the other losers.


NTPC firms up as German bank to offer $100 mln credit

NTPC was up 2.37% to Rs 148.75, after informing about its agreement with KFW, Germany, for a term loan of $100 million.The NTPC scrip touched a high of Rs 154.45 in December 2006 and fell to a low of Rs 129 in March 2007.

The loan agreement, which state-run NTPC signed, is an unsecured facility without sovereign guarantee bearing variable interest linked to LIBOR, and has a maturity of 10 years.NTPC plans to utilise the money to part finance the expenditure on renovation and modernisation (R&M) of its power plants.

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Markets moves up

The markets have once again picked up as fresh buyng was seen in the selected scrips of auto, pharma and FMCG.The markets opened firm in the opening trade on attracting support after the smooth rollover of open positions in the derivatives segment, from March to April.

At 12.40pm the sensex is trading 100 points up above 13000 level at 13081,while Nifty is trading at 3821 23 points up.

Pharma stocks also found support. Dr Reddy’s Labs gained 2% to Rs 720, while Ranbaxy edge up 0.30% to Rs 346.20.Hero Honda (up 1.80% to Rs 692), REL (up 0.77% to Rs 492) and HDFC Bank (up 1.41% to Rs 946.25) were the other gainers.Tata Motors rose 0.98% to Rs 722.

Cellular telecom service providers Bharti Airtel (up 0.20% to Rs 762.50) and Reliance Communications (up 0.85% to Rs 422), are said to be looking at a 26% stake in Telkom Kenya. The reports value the 26% stake in $1.5 - $2 billion range. The Kenyan government said on Wednesday it wanted to rope in a strategic partner to buy a 26% stake in the state-owned landline operator. A further 34% would be sold in an initial public offering (IPO) once the strategic partner was on board.

Index heavyweight Reliance Industries (RIL) was up 0.20% to Rs 1358.FMCG major HLL was the top-loser, down 2% to Rs 200.50.HDFC (down 1.26% to Rs 1515.80), Bhel (down 1% to Rs 2258) and TCS (down 1.68% to Rs 1226.10) were the other losers.


Thursday, March 29, 2007

Markets end in green on F&O expiry day

It was yet another day of sluggish trade wherein the markets opened on a flat note and proceeded to trade rangebound amid extreme volatility. It was a quite day despite being F&O expiry date but gained some momentum during the late trade due to buying interest seen in the FMCG, Capital goods and IT stocks, however the banking, auto and metal stocks remained under pressure through the day and consequently managed to shut shop in green after three consecutive decline.

The Sensex ended at 12979 95 points up while the Nifty 50 index closed at 3798 just 10 points up.

IT major TCS was the top gainer, up 3.58% to Rs 1244.Among other IT stocks, Infosys (up 0.13% to Rs 1995) and Wipro (up 1.58% to Rs 567) also edged up.Engineering & construction major L&T advanced 3.56% to Rs 1622.Bike manufacturer Hero Honda rose 2.75% to Rs 674.Gujarat Ambuja Cements (up 3.20% to Rs 105.50), SBI (up 2.81% to Rs 1001.55) and HLL (up 2.63% to Rs 203) were the other gainers.Index heavyweight Reliance Industries (RIL) was up 0.38% to Rs 1353.80


IT shares firmed up

After being under pressure for the last few sessions, shares from the IT sector rose on renewed buying. Arresting a three-day strong rally, the rupee on Thursday fell back about 36 paise, to 43.40/43 levels, in late-morning trade on buying of dollars by banks, probably on behalf of the Reserve Bank of India (RBI). In active trade at the Interbank Foreign Exchange (forex) market, the Indian unit resumed weak at 43.30/32 per dollar from Wednesday's close of 43.04/05 a dollar and later tumbled to a low of 43.40/43 per dollar during late-morning deals.

The rupee had climbed to its highest levels in more than seven years following a strong 69 paise surge in the last three sessions due to heavy dollar sales by banks, which were facing acute liquidity crunch.

Satyam Computer gained 1.85% to Rs 464. The company said on Wednesday, it had entered into a five-year contract with Applied Materials, whereby it will provide application development, maintenance, and support plus business transformation core technology services to Applied Materials through a managed services delivery model.

Satyam Computer informed of having created a dedicated development center for Applied Materials. The facility would be part of Satyam's Electronic City campus at Bangalore. As per media reports, the deal with Applied Materials is estimated at about $200 million.

Among other IT stocks, TCS (up 3% to Rs 1237) and Wipro (up 1.20% to Rs 564.50) had also spurted.

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Reliance likely to bid for port project in Kerala

Reliance Industries moved up 0.66% to Rs 1357, on news that it is likely to join the race for the $1-billion Vizhinjam port on the Kerala coast.

The Kerala government has decided to call for fresh tenders from private players interested in developing the port.Reliance Industries (RIL) was looking at participating in a major port project on the west coast, which could rival Colombo's prominence, and hence the early interest in Vizhinjam International Seaport (VISL) that falls on the international shipping line.

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Markets recovered from day's low

Markets have recovered little bit from the days low and are trading flat amid volatility.The markets had opened firm but then slipped into red. Volatility is expected to continue till the expiry of the march 2007 derivatives contract which is today.

At 11.40pm the sensex is trading at 12909 almost 24 points up,while the Nifty 50 index is trading 10 points up at 3771.

Top gainers on the Sensex are Hero Honda at Rs 673.55 up 2.68%, Larsen at Rs 1,604 up 2.41% and HDFC at Rs 1,540 up 1.42%.

Top losers on the Sensex are ICICI Bank at Rs 841 down 1.94%, HDFC Bank at Rs 942.75 down 1.33% and Tata Motors at Rs 709.55 down 1.29%.


Wednesday, March 28, 2007

Infosys fourth quarter result.

IT bellwether Infosys Technologies will announce fourth quarter and annual results on 13 April 2007.

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Markets close in red;Uncertainity to persist

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 start, kept on falling with the passage of time.IT, auto and banking stocks were the worst hit sectors during today's trade, however almost all the key indices were in red for most of the time today and the market breadth also remained negative through the day.

Sensex ended down 239.98 points or 1.83% at 12884.34, and the Nifty was down 58.85 points or 1.54% at 3761.1.

Auto major Tata Motors was the top loser, down 5.02% to Rs 716.TCS slumped 4.86% to Rs 1200.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.Index heavyweight Reliance Industries (RIL) was down 1.48% to Rs 1344.95.

Select pharma scrips were in demand. Ranbaxy Laboratories was the top-gainer, up 3.53% to Rs 339.80.Dr Reddy’s Labs gained 1.20% to Rs 690.


Markets still weak

The markets opened weak and the BSE sensex slipped below the psychologically-important 13,000 mark, following closely the trend of weak global markets.The unwinding of positions in the derivatives segment ahead of the expiry of March 2007 derivatives contracts on Thursday (29 March 2007) may pull the market lower, and on the other hand, short covering may spark a rally.

At 12.10 pm the sensex is trading 197 points down at 12926,while the Nifty 50 index is trading 52 points down at 3767.

Today is the last day of trading for the current financial year 2007. Trades executed from tomorrow will be considered for the financial year 2008.

Index heavyweight Reliance Industries (RIL) was down 0.51% to Rs 1359.IT major Wipro was the top loser, down 4% to Rs 562.90.Other frontline IT shares also looked weak, as the dollar fell below 43.15 versus the Rupee, its lowest since June 1999. Satyam Computers (down 3.30% to Rs 456.75), Infosys (down 2% to Rs 2016), and TCS (down 2.10% to Rs 1235) declined.


Monday, March 26, 2007

Markets closed tomorrow

Markets are scheduled to remain closed tomorrow on account of a public holiday.


Markets under pressure

The market was weak throughout the day, due to selling especially in banking and auto shares. All sectoral indices on BSE settled with losses. But shares from sugar sector bucked the trend in an overall weak market.

The BSE Sensex, which turned weak in the early-afternoon, kept declining as investors exited long positions ahead of the March 2007 deriviative contracts expiry, due on Thursday (29 March 2007).

The 30-share BSE Sensex closed down 161.61 points (1.22%), at 13,124.32.The S&P CNX Nifty lost 41.10 points (1.06%), at 3,819.95.Volatility is expected to remain high ahead of the expiry of March 2007 derivative contracts.

Tata Motors was the top-loser, down 4.31% to Rs 755.45.Maruti Udyog (MUL) lost 2.83% to Rs 816, while Hero Honda lost 1.71% to Rs 668.Bajaj Auto was down 0.34% to Rs 2525.IT major Satyam Computers was the top-gainer, up 1.65% to Rs 471.80.Infosys Technologies lost 1.63% to Rs 2062.50, while Wipro declined 2.68% to Rs 584.80 on concerns arising from the rupee’s recent surge against the US dollar.


Markets off lows

The markets have bounced back on account of value buying.At 14.00 pm the sensex is trading at 13238 just 47 points down,while the Nifty index is trading at 3860 just 0.90 points down.

Satyam ,Tata Steel,ONGC and ACC were the top gainers on the Sensex while Tata Motors,HDFC bank and TCS were the top losers.


Markets dip into red

The market had opened firm in green,but soon slipped in to red as selling began at higher level.There is a lot of confusion in the minds of investors about the markets right now.They just dont know what is going to happen next.

At 12 pm the sensex is trading 60 points down at 13225,while Nifty is trading 7 points down at 3853.

Auto counters were under pressure as crude oil rose to the highest in three months on news of Iran's detention of 15 British sailors and the UN's decision to tighten sanctions against the country, heightening concern that Middle East supplies may be disrupted.Crude oil for May delivery climbed as much as 51 cents, or 0.8%, to $62.79 a barrel in after-hours electronic trading on the New York Mercantile Exchange, the highest since 26 December 2007.

Tata Motors was the top-loser, down 3% to Rs 766.Maruti Udyog (MUL) lost 0.75% to Rs 833.HDFC Bank (down 2.42% to Rs 987.40), L&T (down 1.80% to Rs 1603) and HDFC (down 1.37% to Rs 1572.50) were the other losers.


Friday, March 23, 2007

Nahar Exports, Nahar Spinning Mills plummet post restructuring

Nahar Exports (NEL) had plunged to Rs 60.75 and Nahar Spinning Mills (NSML) to Rs 149.05. A day before resumption of trading, the stock exchanges had fixed Rs 75.90 as a base price with 20% daily price band for NEL. The base price of NSML was set at Rs 186.30 with 20% daily circuit band. NSML last traded at Rs 273.15 on BSE on 23 January 2007, before it was suspended for two months. NEL last traded at Rs 101 on BSE on 23 January 2007, before being suspended for two months.

The restructuring involved the transfer of the textiles business of NEL to NSML. In consideration of that, NSML issued 55 equity shares of Rs 5 each for every 100 equity shares of Rs 10 each held by in NEL as on the record date.

The investment business of NSML was demerged into another group firm Nahar Capital and Financial Services (NCFSL). In consideration, NCFSL issued an equity share of Rs 5 each against every equity share of Rs 10 each held in NSML as on record date. NCFSL will be listed on the bourses in due course.

Post-restructuring, the equity share capital of NSML was reorganised and the paid-up value of each equity share of the company was reduced from Rs 10 each to Rs 5 per equity share by cancellation of Rs 5 per share. The issued, subscribed and paid-up capital of the company post the scheme of arrangement as above is now Rs 18.03 crore, consisting of 3.60 crore equity shares of face value Rs 5 each.

Post-restructuring, the equity share capital of NEL was reorganised and the paid up value of each equity share of the company was reduced from Rs 10 each to Rs 3.50 per share by cancellation of Rs 6.50 per share. The remaining paid up value of Rs 3.50 per equity share was thereafter reorganised into face value of Rs 5 per equity share. In a nutshell, NEL issued 70 equity shares of Rs 5 each for every 100 fully paid up equity shares of Rs 10 held prior to reorganisation of the equity share capital of the company.

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Four-day rally halts abruptly

The market snapped its four-day long dream run, to settle with modest losses due to profit-booking. The Sensex had surged a sharp 878 odd points in the past four trading sessions, on value-buying with short-covering lending support.

The 30-share BSE Sensex settled 22.10 points lower, at 13,285.93.The S&P CNX Nifty settled 14.85 points (0.38%) lower, at 3,861.05.

Rollover from the March 2007 contracts to the April 2007 contracts has already started. With the market scheduled to remain closed next Tuesday (27 March) for a public holiday, only four trading sessions are left before the expiry of the March 2007 contracts.

The important inflation data that analysts awaited today was released. India's wholesale price index rose 6.46% in the 12 months to 10 March 2007, matching the previous week's annual increase, data showed on Friday. The figure was slightly lower than a forecast of 6.51% in a poll of analysts. The annual inflation rate was 3.80% during the corresponding week of the previous year.

Cigarette maker ITC was the top loser, down 3.44% to Rs 144.Gujarat Ambuja Cements (down 1.95% to Rs 105.80), TCS (down 1.57% to Rs 1283.45) and ONGC (down 1.50% to Rs 839.50) were the other losers.Index heavyweight Reliance Industries (RIL) was up 0.28% to Rs 1378.


Markets slipped into red

The Sensex cooled a bit from the higher levels, as selling began at the higher levels.The markets are trading in the negative terrain in the afternoon session.At 14.15 pm the sensex is at 13266 41 points down,while Nifty is at 3864 ,11 points down.


HCL Tech strengthens on buzz of eyeing BPO stake

HCL Technologies rose 2.29% to Rs 303.30, in a weak market, after reports said the company was likely to bid for around 42% stake in Cambridge Solutions, a BPO firm.The reports further said that given Cambridge Solutions' enterprise value of $350 million, the deal could be worth upwards of $150 million.


ITC flops as M'rashtra to charge 12.5% VAT on cigarettes

Cigarette major ITC lost 2.4% to Rs 145.60, after the Maharashtra Government decided to levy 12.5% VAT on cigarettes.

Maharashtra levied 12.5% value added tax on cigarettes in the state budget for 2007-08, which was presented on Thursday. It became the third state after West Bengal and Bihar, to propose value added tax (VAT). In the state budget for 2007-08, the West Bengal government last week (16 March) decided to impose 12.5% VAT on tobacco and tobacco products, excluding biris.

Analysts reckon that any levy of 12.5% VAT by state governments on cigarettes would impact volumes. In the Union Budget 2007-08, the total excise duty on cigarettes was raised by 6%, which also includes 1% educational cess. ITC derives more than half its revenue from cigarettes.

The cigarette maker, with interests spread over hotels, paperboard, apparel, retail and information technology, already sells ready-to-eat foods, biscuits and confectionery.

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Market shows recovery

The markets were highly volatile in the first half of the trade.The BSE Sensex was highly volatile in the first few minutes of the opening session, in see-saw trade. It had opened slightly higher, at 13,343.57, but immediately began declining sharply on intense selling pressure. It recorded a low of 13196.90, as selling continued. But from here it again started recovery, as buying resumed at the lower levels.

At 13.25 pm the sensex is trading 34 points up at 13342 while the Nifty is trading barely 11 points up at 3887.

Cigarette maker ITC was the top loser, down 3% to Rs 144.70, on a volume of 5.55 lakh shares after Maharashtra proposed a hike in tax on cigarettes in its annual Budget.
Cement stocks bounced back. ACC was the top gainer, up 2.60% to Rs 772.70, on a volume of 1.04 lakh shares.

Grasim (up 1.88%), Gujarat Ambuja Cements (up 1.95%) and Bharti Airtel (up 1.13%) were the other gainers.Index heavyweight RIL was down 0.38% to Rs 1368, on a volume of 53,810 shares.

Indiabulls Real Estate was trading at Rs 366.70 on BSE in early trade. The stock had hit a low of Rs 359 and also a high of Rs 414.80. Exchanges have set Rs 407 as base price for the scrip with a 20% price band. A huge 11.1 lakh shares changed hands in the counter on BSE. Indiabulls Real Estate (IBREL), was formed following the demerger of the real estate business of Indiabulls Financial Services (IBFSL). The company was listed on the bourses today. The total equity capital of IBREL is Rs 35.93 crore, consisting of 17.96 crore shares of Rs 2 each.


Thursday, March 22, 2007

Markets shine today

It was extremely good day for the market wherein it opened with heavy gap up today on the back of strong global cues. US markets ended higher as the Fed kept the interest rates unchanged at 5.25%. Even the Asian indices closed in green.

The markets proceeded to trade higher and gained momentum on account of heavy buying seen across the sectors.The midcap and smallcap indices also ended higher but underperformed the broader markets.

Sensex closed up 362.15 points or 2.80% at 13308.03, and the Nifty up 111.35 points or 2.96% at 3875.9.

Banks extended Wednesday’s gains. HDFC Bank gained 5.8% to Rs 1022 and ICICI Bank rose 3% to Rs 987. Buying also happened in PSU banks. State Bank of India rose 4% to Rs 1024, Bank of India gained 11% to Rs 174, Canara Bank surged 7.5% to Rs 207 and Punjab National Bank added 7%, to Rs 485.

Oil exploration major ONGC surged nearly 5% to Rs 853.Car major Maruti Udyog (MUL) gained 4.8% to Rs 830.50, Hero Honda advanced 4.9% to Rs 683, Tata Motors gained 3% to Rs 801, and Bajaj Auto rose 3% to Rs 2576. Mahindra & Mahindra rose 3.4% to Rs 781, after the company on Wednesday set a liberal interim dividend of Rs 7.50 per share for FY 2007.

Bhel (up 6% to Rs 2231) was the to-gainer among Sensex constituents. The company is set to unveil its tentative FY 2007 (year ending 31 March 2007) results on 3 April 2007.

Engineering & construction major L&T surged 5% to Rs 1579. The company is sitting on a strong order-book.

Reliance Industries (RIL) gained nearly 3% to Rs 1378. But caution prevailed in cement shares. Grasim lost 1.2% to Rs 2080 and ACC shed 0.07% to Rs 752. Cement makers have reportedly turned down a request by the government to cut prices. A meeting was held today between the Finance Minister and cement makers, as the government wants cement makers to moderate prices in its efforts to combat inflation.


RIL's adavancement

RIL advances on roping in US partner for new project

Reliance Industries advanced 2.55% to Rs 1374.20, on reaching an agreement with US-based Rohm and Haas Company for the joint construction of an acrylic-monomer complex.The counter clocked 5.06 lakh shares on BSE. It had also surged to a high of Rs 1420 in opening trade.

Index heavyweight Reliance Industries (RIL) has a huge 11.34% weightage in the 30-member Sensex club, second only to IT bellwether Infosys Technologies, which had 12% weightage on 21 March 2007. The weights assigned to individuals are in terms of market capitalisation, which, in turn, changes on the basis of daily changes in share prices.

This proposed facility will have the capacity to make approximately 200,000 tonnes of acrylic acid and its esters annually. While the key objective would be to serve the domestic market, the complex could also export acrylic acid and derivatives.

Materials from the facility are intended to serve as building blocks for environmentally advanced products for paints and coatings, packaging adhesives, detergents, textile and construction materials. The new facility is expected to spur development of super absorbent polymers, used primarily in the manufacture of baby diapers.

The proposed acrylic acid plant is expected to be world-scale, and will be located at a site with world-class infrastructure using Rohm and Haas' technology.

Meanwhile, RIL has asked the government to convert its existing refinery at Jamnagar into an export-oriented unit (EoU). Reports add that the EoU status will mean RIL would not pay the 5% import duty on crude oil, resulting in lower cost of production of petrochemical feedstock naphtha.

This will entitle the company to various tax exemptions, including automatic duty-free import of crude oil. Also, RIL will be entitled to duty-free imports of equipment if RIL was to expand or upgrade the refinery.

Although details of the tax breaks are not fully known, it is estimated the conversion to EoU status would extend the tax holiday for the refinery. A seven-year tax holiday for refineries, which the Jamnagar refinery enjoyed, is set to end in 2007 and the conversion to an EoU will give them a tax holiday on export earnings for at least two more years.

In 2005-06, RIL exported 10.84 million tonnes of products for $5.50 billion to become the largest Indian exporter. It is estimated to export 17.84 million tonnes of petroleum products this fiscal for over $10.3 billion. A EoU enjoys 100% exemption on profits under Section 10B of the I-T Act.

RIL was eligible for tax breaks on its earnings under Section 80(i)B of the I-T Act, which grants 100% tax exemption to refineries for seven years once they start production. By morphing into an EoU, the refinery would get 100% tax exemption on its export earnings.

RIL will, however, have to pay the minimum alternative tax (MAT) as it has been extended to EoUs in the 2007-08 Budget. Moreover, RIL may stand to reap huge gains if the EoU scheme is extended beyond 2009. As of now, the EoU scheme is set to be phased out by 2009, which will bring to an end all such tax exemptions.

Earlier this month, Reliance Industries has made two new discoveries in the east coast blocks. These explorations are in the KG-D6-P2 in block KG DWN 98/3 (KG D6), and in the NEC 25 A5 in block NEC OSN 97/2 (NEC 25). The commercial viability of the above discoveries is currently under evaluation.

These recent discoveries demonstrate the further upside potential of the blocks in the Krishna-Godavari and Mahanadi basins.

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Markets surge;gains widespread

The market had surged in opening trade, tracking firm global markets.The market extended its gains from an early surge, and are trading in with hefty gains on heavy buying seen in scrips across sectors.At 12.30 pm the Nifty 50 index is trading 89 points up at 3854 while the BSE 30 sensex is trading 278 points up at 13225.

IT, banking, telecom stocks, FMCG pivotals and index heavyweight Reliance Industries (RIL) nudged higher. A strong showing by Indian ADRs on Wednesday also aided the early surge on the domestic bourses.

Reliance Industries (RIL) rose 1.5% to Rs 1360. Reliance Industries and Rohm and Haas Company have entered into a memorandum of understanding (MoU) to explore the joint construction of a world-scale, acrylic-monomer complex in Jamnagar, Gujarat. This proposed facility will have the capacity to make approximately 200 thousand tonnes of acrylic acid and its esters annually. Materials from the facility are intended to serve as building blocks for environmentally advanced products for paints and coatings, packaging adhesives, detergents, textile and construction materials. The new facility is expected to spur development of super-absorbent polymers, used primarily in the manufacture of baby diapers.

Top gainers on the indices are BHEL, Maruti, ONGC.


Wednesday, March 21, 2007

Happy ending to the markets

The market advanced throughout the day, except the odd blip in early afternoon trade, as buying coupled with short-covering in the derivatives segment, continued.

The 30-share BSE Sensex surged 241.38 points, to settle at 12,947.32, while the S&P CNX Nifty gained 1.8%, to settle at 3,764.10.

There was renewed buying for shares from the banking space.ICICI Bank surged 5.35% to Rs 868, and was the top gainer.While state-run State Bank of India gained 3.31% to Rs 984.15. HDFC Bank rose 1.35% to Rs 967.Other gainers from the banking pack included Centurion Bank of Punjab (up 7.30% to Rs 36.90), Bank of Baroda (up 7.20% to Rs 214), Punjab National Bank (up 3.91% to Rs 452.20), UTI Bank (up 3.37% to Rs 478) and Bank of India (up 3.29% to Rs 156.85).

Reliance Energy advanced 3.12% to Rs 491, on reports that the company was pursuing tie-ups with US companies. The firm plans to get into the nuclear energy market. The Indo-US civil nuclear deal calls for massive investment, as India can add up to 20,000 - 40,000 Mw of nuclear generation capacity, which Reliance Energy does not want to miss out on. Apart from nuclear energy, the company has also chalked out aggressive growth plans for wind energy.

Index heavyweight Reliance Industries (RIL) advanced 1.59% to Rs 1342.
Cement major Gujarat Ambuja Cements was the top loser, down 4.20% to Rs 106.25.


Tariff reduction spells gain for telecom shares

Telecom pivotals of the Sensex and Nifty were up between 0.7 - 2%, after the latest order of the telecom regulator slashing tariffs for users.

VSNL rose 2% to Rs 386.50, Reliance Communications gained 1.3% to Rs 405.50, Bharti Airtel gained 1.1% to Rs 747 and MTNL gained 0.7% to Rs 146.25, boosted by news of the Telecom Regulatory Authority of India (TRAI) cutting access deficit charges.

Reliance Communications (RCL) had bounced back in the past two days after the company announced on Monday (19 March) that it had got the court's nod for demerger of its two business in favour of a separate company. It had risen to Rs 400.30 from Rs 376.90 on 16 March 2007. Earlier, the RCL stock had tumbled on concerns of increased competition from Vodafone after the British mobile services provider, on 15 March, reached a partnership agreement with Essar. From Rs 398.55 on 14 March 2007, RCL retreated to Rs 376.90 by 16 March 2007.

VSNL had recovered from the lower level after a setback in early February - early March 2007. From Rs 355.25 on 5 March 2007, VSNL's scrip had firmed up to Rs 377.70 by 20 March 2007.

The total amount of access deficit charge (ADC), the fee paid by all telecoms users to fund loss-making rural network expansion by state-run Bharat Sanchar Nigam (BSNL), has been reduced to approximately Rs 2000 crore from the existing level of Rs 3200 crore for the financial year 2007/08, TRAI informed.

Apart from the cut in the annual charge firms pay, the regulator also abolished the ADC on all outgoing international calls from a previous 80 paise per minute. The charge on incoming calls from overseas was cut by 38%. The new fee structure will be applicable from 1 April 2007.

Market men are also awaiting announcement regarding annual licence fees and spectrum charges for wireless telephony. In the Union Budget 2007-08, the finance minister proposed setting up a committee to consider reduction in annual licence fees and spectrum charges for wireless telephony, in order to align them with international rates. At the moment, wireless companies pay 6-10% of net revenues as license fee and 2-6% as spectrum charges based on the circle and the spectrum used.

The Department of Telecom (DoT) favours a 6% annual license fee compared to the existing 6 - 10%, and is likely to recommend a cut. But the final call on this will be taken by the finance ministry.

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Markets strengthen after some relapse

With no definite trend in the Asian markets, which were trading mixed, the Sensex moved between positive and negative in opening trade. IT shares were subdued due to the rupee’s surge over the past two days.The market had opened positive but had soon slipped into the red. It came off the lower level later.

At 12.50 pm nifty is trading 12 points up at 3709,while the sensex is trading 67 points up at 12773. ICICI Bank,ITC,Reliance Energy and Hero Honda are the top gainers on the sensex and HDFC,TCS and Ranbaxy Labs are the top losers. Apart from the above mentioned Jet airways and PNB are the top gainers on the Nifty 50 index.

The Fed's policy-making Federal Open Market Committee began its two-day meeting on Tuesday. The Fed is expected to hold its benchmark federal funds rate steady at 5.25%, but investors will focus on its statement on the outlook for the economy and future interest rate policy.

The undercurrent on the bourses remains cautious due to high inflation and rising interest rates. Strong industrial production data released early last week makes a strong case for the Reserve Bank of India (RBI) to raise interest rates at its annual policy review for FY-2008 on 24 April 2007. Industrial output rose 10.9% in January 2007 from a year earlier. The wholesale price index rose 6.46% in the 12 months to 3 March 2007, up from the previous week's annual increase of 6.10% due to higher edible oil and naphtha prices.


Tuesday, March 20, 2007

Markets end with small gains

The markets ended in green but near the lowest point of the day after a strong start. Select cement, energy, tea, pharma, bank stocks saw good buying interest. Global equity markets ended higher.

The sensex closed at 12706 with a gain of 60 points while the Nifty 50 index closed at 3698 just 18 points up.

Bank shares edged up on short-covering in the derivatives segment. HDFC Bank gained 2.8% to Rs 953 and State Bank of India rose nearly 3% to Rs 955. Traders had built short positions in leading bank counters last week.The rupee’s rise weighed on IT shares. Infosys shed 1.6% to Rs 2052. Wipro shed 1.3% to Rs 571.25 and TCS shed 0.8% to Rs 1250. TCS and Wipro moved fluctuated between positive and negative territory during the day. IT shares derive a lion’s share of their revenue in dollar terms. A higher rupee, therefore, may lead to a fall in their revenue and profits to that extent.Ranbaxy surged 5.6% to Rs 334.60, on a report that the company had pulled out of the bidding war for Merck's generic-medicines unit, citing high valuations.


MindTree Consulting top traded on BSE

IT firm MindTree Consulting was the turnover topper, grossing Rs 69.72 crore on BSE.

The MindTree Consulting stock was up 0.54% at Rs 905.50, on a volume of 7.67 lakh shares.The MindTree Consulting stock witnessed a sharp surge on high volumes early last week, thanks to pent-up buying in the scrip, as its IPO had received an overwhelming response. The public offer of MindTree Consulting had attracted bids for 57.76 crore shares, 103 times the issue size of 55.9 lakh shares.


Markets range bound

The markets had surged in opening trade tracking firm Asian markets.But the markets are range bound in the afternoon trade.Markets have given up some of the early gains due to selling pressure in IT and Auto stocks, but are still trading in the green.At 13.05 pm the sensex is at 12689,44 points up,while Nifty is trading 11 points up at 3691.

Debutante Astral Poly Technik,was another firm to list meekly on the bourses.Cement shares were in demand following a report that the government may offer a five-year tax break to cement plants set up after 1 April 2007. Grasim Industries gained 3% top Rs 2106, Gujarat Ambuja Cements rose 3% to Rs 110.75 and ACC gained 1.9% to Rs 754.

The Bank of Japan (BoJ) today kept interest rates unchanged at 0.5%. BoJ also left its assessment of the economy unchanged in a monthly report on Tuesday. "Japan's economy is expanding moderately," the central bank said in its report for March. The BoJ also maintained its outlook that the economy will continue expanding moderately.


Monday, March 19, 2007

Market ends in green;sensex jumps over 200 points

The Sensex kept on strengthening as the day progressed, barring that odd blip in the early-afternoon session, as buying continued unabated during the session. That markets around the globe were firm, also boosted sentiment. Some short-covering in the derivatives segment provided the much-needed shot of adrenaline to the market.

The 30-shares BSE Sensex settled 214.37 points (1.72%) higher, at 12,644.77.The Nifty 50 index closed 70 points up at 3678.90.

State-run Bharat Heavy Electricals (Bhel) surged 6.46% to Rs 2082.Reliance Communications (up 5.56% to Rs 397.85), ONGC (up 3.90% to Rs 791.90) and Gujarat Ambuja Cements (up 3.71% to Rs 107.50) were the other gainers.

Tata Motors edged up 3%, to Rs 772, for the second day in a row today. Managing Director, Tata Motors, Ravi Kant said on Thursday its small car project coming up at Singur, Kolkata, was on track and would be completed by the middle of next year.

Hindustan Lever rose 1.84% to Rs 180.05, on news that the company had hiked prices of its detergent brands, Surf Excel Blue and Surf Excel Quick Wash.

Car maker Maruti Udyog (MUL) rose 1.40% to Rs 790.35, after the Indian government said it will sell its remaining 10.27% stake in the former PSU in the next financial year, beginning 1 April 2007. The cabinet has approved the plan for a stake sale in the firm, which is restricted to participation from banks, financial institutions and Indian mutual funds. MUL is 54.2% owned by Japan's Suzuki Motor Corp. It was an equal joint venture between the Indian government and Suzuki, when the previous NDA-led regime at the Centre began selling the holding as part of efforts to exit non-core sectors of the economy.

Index heavyweight Reliance Industries (RIL) was up 0.96% to Rs 1312.25.

The next major trigger for the bourses is Q4 March 2007 earnings, reports of which by corporates will start next month. Market men will closely watch what company managements have to say about the outlook for FY 2008. Global liquidity still remains strong, and may provide the trigger for a recovery.

An important event being keenly awaited are the meetings this week of the central banks in Japan and the US, to decide on interest rates. The Bank of Japan’s two-day meeting ends on Tuesday (20 March 2007), while the US Federal Reserve’s two-day meeting ends on Wednesday (21 March 2007). The Fed is expected to keep interest rates unchanged. Analysts will eagerly hunt for cues for the US economic outlook in the Fed’s accompanying statement.


ITC overturns as Lok Sabha okays VAT levy bill for tobacco

ITC lost 1.7% to Rs 142.40, after the Lok Sabha on Monday passed the bill that allows more than 4% VAT on tobacco.

The ITC scrip has been tumbling in the past few days due to concerns that the government may bring cigarettes under the Value Added Tax (VAT) net. From Rs 172.50 on 1 March 2007, ITC tumbled to Rs 142.85 by 14 March 2007. The ITC stock had surged 3.1% on 15 March 2007, to Rs 147.35 boosted by media reports that its food unit was likely to bid for Patak's, UK, which is valued at about 200 million pounds. The recovery proved short-lived and the stock slipped to Rs 145 on Friday (16 March).

The Taxation Laws (Amendment) Bill of 2007 passed by Lok Sabha paves the way for states to levy more than 4% value added tax (VAT) on cigarettes.

Last Friday (16 March 2007), West Bengal became the second state after Bihar to propose value added tax (VAT). In the state budget for 2007-08, the West Bengal government decided to impose 12.5% VAT on tobacco and tobacco products, excluding biris.

Analysts reckon that any levy of 12.5% VAT by state governments on cigarettes would impact cigarette volumes. In the Union Budget 2007-08, the total excise duty on cigarettes was raised by 6%, which also includes 1% educational cess. ITC derives more than half its revenue from cigarettes.

The cigarette maker, with interests spread over hotels, paperboard, apparel, retail and information technology, already sells ready-to-eat foods, biscuits and confectionery.The current price of Rs 142.40 discounts its April-December 2006 annualised EPS of Rs 7.30, by a PE multiple of 19.5.

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Markets gain further ground

The market remained firm, as buying continued at the higher level.At 14.45 pm the sensex is trading 139 points up 12570 while nifty is trading 44 points up at 3653.

Reliance Communications, up 3.81% to Rs 391.25, on a volume of 16.98 lakh shares. It was the top gainer.

State-run Bharat Heavy Electricals (Bhel) advanced 3% to Rs 2015, on reports that the company was in talks with two overseas firms for nuclear technology deals. Bhel also informed BSE that tentative performance for FY 2007 will be announced on 3 April 2007, at a press conference to be addressed by the chairman & managing director.


Markets trading in green amid volatility

The markets opened firm tracking the Asian markets.The trading has resumed after sun outage and the markets are trading in green.At 12.45 pm the sensex is trading 134 points up at 12565,while Nifty is up 51 points at 3659.

All members of the Sensex pack, except ITC (down 1% to Rs 143.20), had advanced.HDFC Bank was the top gainer, up 1.75% to Rs 920, on a thin volume of 1,272 shares.Satyam Computers (up 1.33% to Rs 435), ONGC (up 1.26% to Rs 771) and Wipro (up 1.41% to Rs 573.90) were the other gainers.Index heavyweight RIL was up 0.30% to Rs 1302.20, on a volume of 33,353 shares.Abhishek Mills was trading at Rs 81.80, a discount over the IPO price of Rs 100. The scrip had listed at Rs 94, hit a low of Rs 79.40 and a high of Rs 94.80.


Friday, March 16, 2007

Another weak day for the markets

The market drifted lower today, as a surge in inflation reignited worries of interest rates rising further. Caution on bourses around the globe, ahead of key US inflation data, also weighed on the sentiment. Nevertheless, it finished above the lower level due to recovery by index heavyweight Reliance Industries and some IT pivotals. Telecom, cement and banking shares edged lower.

The 30-share BSE Sensex lost 113.45 points (0.9%), to settle at 12,430.40.The S&P CNX Nifty shed 35.05 points (0.96%), to end at 3,608.55.

Today, Reliance Industries (RIL) firmed up. The stock was up 1.1% to Rs 1298.Banks fell but pared intra-day losses. HDFC Bank shed 1.3% to Rs 905, but was off the session’s low of Rs 890. The State Bank of India shed 0.8% to Rs 914, and was off the session’s low of Rs 845. ICICI Bank was down 1.8% to Rs 807, up from the session’s low of Rs 802. The Lok Sabha today passed the Banking Regulation (Amendment) Bill, 2007. The Banking Regulation (Amendment) Bill is aimed at allowing more operational flexibility to the Reserve Bank of India (RBI)in the conduct of monetary policy. The bill seeks to amend Section 24 of the Banking Regulation Act, 1949 to enable the RBI to specify the statutory liquidity ratio without any floor rate. At present banks are required to invest a minimum of 25% of their deposits in government securities, as dictated by the statutory liquidity ratio (SLR).

Reliance Communications dropped 4% to Rs 374.50.


Markets pulled down

The markets surged in the early trade ,but came off the higher levels and slipped into red.The markets have resumed trading after sun outage and they continue to trade weak at the lower levels. On the macroeconomic front, the inflation numbers came in high at 6.46%. Due to higher than expected inflation numbers the markets have further lost ground.

At 12.45 pm sensex is down 104 points at 12440,while Nifty is trading 31 points down at 3612.Two firms listed at a discount to their IPO prices, extending a recent trend of new scrips getting listed below their IPO prices.Page Industries was trading at Rs 279.60 on NSE. The stock debuted at Rs 329 compared to the IPO price (Rs 360). A strong 9.4 lakh shares changed hands in the counter on NSE.Raj Television Network was trading at Rs 210 on NSE. The stock debuted at Rs 225 compared to the IPO price of Rs 257. As many as 8.8 lakh shares changed hands in the counter on NSE.

Reliance Industries shed 0.2% to Rs 1280.25. Reliance Industries is close to signing a deal for a 59% stake in a $20 billion joint venture with US-based Dow Chemical Company, a newspaper report said on Friday.


Thursday, March 15, 2007

Market ends on a disappointing note

The markets ended on a disappointing note giving up all their gains it had posted during the earlier part of day despite a strong bounce back in markets across Asia. Asian markets ended with gains of around 1-1.5%. The European markets also opened in the positive terrain.

Sensex closed up 14.23 points or 0.11% at 12543.85, and the Nifty up 2.50 points or 0.07% at 3643.6.

Larsen & Toubro (L&T) gained 0.08% to Rs 1487, after the company said on Thursday a consortium, including the firm, had secured a contract of Rs 1400 crore for the expansion of the Vizag Steel plant of Rashtriya Ispat Nigam. L&T's share of the project is around Rs 810 crore.State Bank of India dropped 2.5% to Rs 923.80, on reports suggesting that India's largest commercial lender had paid substantially lesser fourth installment towards advance tax.

FIIs pressed heavy sales on Wednesday, the day when the Sensex had plunged 453 points. As per provisional data, FIIs were net sellers to the tune of Rs 541 crore on that day. They were net sellers to the tune of Rs 84 crore on Tuesday (13 March 2007), the day when the benchmark Sensex had risen 80 points.

Mutual funds continued selling equities on Tuesday (13 March 2007). However, the outflow of Rs 13.48 crore by domestic funds on Tuesday, was much lower than Monday (12 March)’s Rs 146 crore. The outflow was still higher at Rs 384 crore on Friday (9 March 2007).


Sensex relents; falls below 12,700

The BSE Sensex eased a bit, to slip below the 12,700 mark after a strong showing earlier in the trading session. Some profit-booking at higher levels is behind the climb-down.All members from the Sensex pack, except HDFC Bank (down 0.85% to Rs 925.50) and ICICI Bank (down 0.80% to Rs 823.90), had advanced.At 14.10 pm the sensex is up 129 points at 12659, while Nifty is up 37 points at 3678.


Markets steady ,smallcaps midcaps outperform

As compared with yesterday, the markets opened today with a sharp upward gap,tracking the firm global markets.The markets are trading firm in resumed trade after sun outage.
At 12.55 pm the sensex is up 236 points at 12766,while Nifty is up 62 points at 3703.

ITc,Dr. Reddy's and Infosys are among the top gainers.Cigarette major ITC jumped 5.46% to Rs 150.65, on high volumes of 9.98 lakh shares, and was the top gainer. The stock surged on reports that its food unit is likely to bid for Patak's, UK, which is valued at about 200 million pounds ($387 million). Patak's, a 50-year-old family-owned company, makes a range of ready-to-eat Indian foods, cooking sauces, snacks, spices and pickles, and is a supplier to shops and restaurants worldwide.

Reliance Industries (RIL) rose 1.3% to Rs 1320, on reports in a section of the media that it had inched closer to signing a memorandum of understanding (MoU) with the $49 billion US-based Dow Chemicals, to set up a joint venture (JV) company for the latter to transfer assets from its commodity plastics and chemicals business to the JV.


Wednesday, March 14, 2007

MindTree Consulting skyrockets

After trading weak for most part of the day, MindTree Consulting surged 13.30% to Rs 995, as buying in the scrip began all of a sudden.The stock of MindTree Consulting was trading weak till the late-afternoon. It had also touched a low of Rs 825.

The stock was finished up nearly 5% to Rs 921.50. However, the stock came off sharply from an intra-day surge of as much as 14.3%, to Rs 1005. Volumes in the scrip were a huge 90.1 lakh shares on BSE. The stock of Mindtree Consulting has spurted on high volumes in the past three days. From Rs 651.80 on 9 March 2007, it has vaulted 41.3% in the past three trading sessions, to the current Rs 976.50.

Marketmen say that the sharp surge in the stock price can be due to some large funds, who may have placed an order to get a piece of action in the stock. According to them, in highly successful IPOs, QIBs and FIIs fail to bag shares and then just place an order for, say, up to 3% of the share capital to begin building up. The same phenomenon was also noticed in Tech Mahindra, they inform. Thus, some large funds eyeing a piece of the action in MindTree Consulting may be a reason for the sudden interest of late.


Markets down and out

The markets ended in deep red, near the day's low, slumping under the weight of extremely weak global equity markets. The sharp crack in the market was in line with some of its Asian peers such as Nikkei and Hang Seng.The 30-share BSE Sensex plunged 453.36 points (3.4%), to settle at 12,529.62.The S&P CNX Nifty lost 129.45 points (3.4%), to settle at 3,641.10.

Wipro lost 4.6% to Rs 555, Infosys shed 4% to Rs 2017 and TCS lost 4.3% to Rs 1210. Bank shares edged lower. ICICI Bank plunged nearly 6% to Rs 825.60, State Bank of India lost 3.7% to Rs 944.10 and HDFC Bank lost 2.6% to Rs 934.Telecom shares drifted lower. Reliance Communications dropped 4.7% to Rs 396.80, and Bharti Airtel shed nearly 5% to Rs 727.20.Reliance Industries dropped 3.3% to Rs 1282.ONGC lost 3% to Rs 782.


Markets plunge even deeper

The crack is getting deeper on account of heavy selling witnessed across the board. All the key indices are trading in deep red, however the realty sector is holding up despite all odds. The markets breadth is miserable.

At 14.30 pm the sensex is down 447 points at 12535 while Nifty is at 3646 down by 124 points.Reliance Industries shed nearly 3% to Rs 1288.ONGC lost nearly 4% to Rs 775.50. Cement shares were in the red. ACC lost 3% to Rs 727.45, Grasim shed 2% to Rs 2011 and Gujarat Ambuja Cements dropped 2.7% to Rs 103.ITC weakened in the afternoon. The stock was down 3.6% to Rs 143.60. From a high of Rs 172.50 on 1 March 2007, the scrip has lost 16.7%.


Markets trade in deep red.

The markets plunged in the very opening trade following the trend in the global markets.The markets continued weak,and the sensex was down almost 400 points at break for sun outage. At 1.00 pm the sensex is down 393 points at 12590,while Nifty is 111 points down at 3659.Equity markets across globe cracked due to concerns over rise in default customers in the sub prime mortgage market, suggesting a slowdown in US and the yen carry trade unwinding.

Top losers on the Sensex are Wipro, ICICI Bank and Tata Motors.While Wipro ,SAIL and ICICI Bank were the top losers on the Nifty.


Tuesday, March 13, 2007

Market ends in positive!!

The markets ended in green with decent gains after swinging between the positive and the negative territory during the day.Real estate stocks rebounded after their severe pounding, which had eroded 25 - 50% value of such stocks.

The 30-share BSE Sensex settled 80.35 points higher, at 12,982.98.The S&P CNX Nifty gained 35.95 points to finish the day at 3,770.65.FMCG major HLL was the top loser, down 2.68% to Rs 180.05.Bharti Airtel (down 1.14% to Rs 761), Infosys (down 0.67% to Rs 2101) and REL (down 1.82% to Rs 465.50) were the other losers.

Ranbaxy dropped 0.96% to Rs 320.70, after Pfizer, the world's biggest drugmaker, sued Ranbaxy to block a generic form of the cholesterol and blood pressure medicine Caduet. Ranbaxy seeks US FDA approval to sell a low-cost version of Caduet, which combines Pfizer's blood pressure drug Norvasc with the cholesterol treatment Lipitor, the world's best-selling medicine.

Grasim was the top gainer, up 2.26% to Rs 2059.85.Software stocks rose on renewed buying. Satyam Computers (up 1.67% to Rs 449.80), Wipro (up 1.47% to Rs 581.45) and TCS (up 2.10% to Rs 1264) edged ahead.


Markets in the green again

The markets had sunk into red during the afternoon trade but are again back in to green as buying emerged at lower levels.At 15.50 pm the sensex is trading 56 points up at 12960,while Nifty is trading 23 points up at 3758.

Satyam was the top gainer on the sensex as well as nifty.While HLL and Reliance Energy were the top losers on the sensex and nifty.


Unusual trading in ACC on NSE

ACC rose as much as 19.2 % to Rs 890, in intra-day trading on NSE, in what seems to be a punching error.At 11:45 IST, when trading on the bourses was halted for 45 minutes for sun outage, the stock was up 2.1% to Rs 763. The stock’s average price by that time was Rs 776.23 on NSE.And now again the stock is trading at Rs 742 which is lower than previous days closing at Rs 746.70.

Today Acc has shown such erratic behaviour and also Mindtree which is still trading around Rs 897-900 levels.Analysts are trying to gauge the reasons behind this behaviour,but caution is advised.

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MindTree's phenomenal rise

After an impressive debut on the bourses, MindTree Consulting, an international IT and R&D Services Company, is up about 28% in the first half-an-hour of trade.

After generating a demand of over Rs 23,300 crore through its through IPO, the shares of the Mindtree Consulting made a dream debut at Rs 662 with 56% premium on Dalal Street.Today, the stock has soared to 900 levels. It is indeed one of the buzzing stocks this morning and is continuing to move up. What is the trigger for this sudden rise in the stock - is there some news on the anvil?

Analysts feel that the stock heavily overpriced and investors should happily exit from the stock by booking profits.


Market gives up gains but still in green

The markets opened firm in the morning as buying was seen among index pivotals. Also the Sensex crossed the psychological 13,000 level, which technical analysts feel is a strong resistance.But the markets retreated later giving up some of the gains.But the markets are still trading in green.

At 11.45 pm when the trading is halted temporarily due to sun outage till 12.30 pm, the sensex was trading 53 points up at 12596.The Nifty 50 index was up 20 points at 3755.

Cement stocks rebounded from their lower levels, as buying resumed. ACC was the top gainer, up 2.82% to Rs 769.80, on a volume of 5.62 lakh shares. Gujarat Ambuja Cements (up 1.90% to Rs 107.20) and Grasim (down 1.53% to Rs 2045) also advanced.

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Monday, March 12, 2007

India: Will it be the next big travel destination

I came across this interesting post about Indian Tourism and the problems it faces.Check it out on this blog.


Market ends with marginal gains

The market slipped into the red by mid-afternoon as index heavyweights Reliance Industries, Infosys Technologies and ICICI Bank pared gains. Selling was, however, conspicuous in cement shares.Cement shares flopped for the second day in a row.The sensex ended 17 points up at 12903,while Nifty ended 16 points up at 3735.

Gujarat Ambuja Cements dropped 5% to Rs 104.35, ACC lost 4% to Rs 747 and Grasim shed 2.6% to Rs 2015.Cigarette major ITC dropped nearly 4% to Rs 148.50.Reliance Industries ended flat at Rs 1318. The stock came off the session’s high of Rs 1334.50. As per reports, the company had made two more gas discoveries off the country's east coast. The discoveries were made in gas-rich KG DG block in the Krishna-Godavari basin, and in NEC 25 block of the Mahanadi basin.

Software bellwether Infosys shed 0.4% to Rs 2114, whereas IT major TCS rose 2.3% to Rs 1240. Wipro had gained 1.8% to Rs 575.ICICI Bank was up 2% to Rs 877. ICICI Bank has no plans for a stock-split, Chief Executive Officer KV Kamath said on Monday responding to market speculation.

Mutual funds are sitting on cash, thanks to collections from some of the recent new fund offers, and may step up purchases at declines. However, the latest data shows that mutual funds are in selling mode. They were net sellers to the tune of Rs 40 crore on Thursday (8 March 2007), the day when the Sensex had surged 470 points. They had pressed sales worth a net Rs 379.56 crore on Wednesday (7 March 2007), the day when the Sensex had lost 177 points in volatile trade.

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Sensex slackens on infirmity in cement scrips

The market was sharply off the higher level in mid-afternoon trade. Cement shares lost further ground, while IT shares and select telecom stocks held firm.At 15.40 pm the sensex is trading just 17 points up at 12902,while Nifty is barely 7 points up at 3725.

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Dodging the DDT(Dividend Distribution Tax)

The FM may have announced a hike on the DDT (Dividend Distribution Tax) from 12.5 % to 15 %.But companies have found out the way to eluding it.Over 200 companies have already announced interim dividend payouts before the proposed hike in levy comes into effect. Companies are also rushing in with announcements for allotment of shares under the employee stock option plan (Esop).

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IPCL Slips

The market was buzzing with the news of the merger of RIL with IPCL and the possible swap ratios,but RIL announced the 1:5 swap ration on saturday(10 March 2007).So shareholders will get a share of Reliance Industries (RIL) for every five they hold in IPCL.

The IPCL scrip had spurted over the past two days on expectations of a favourable ratio of merger with Reliance Industries. From Rs 231.65 on 7 March 2007, it had spurted 15.9% to Rs 268.60 by 9 March 2009 after RIL announced after trading hours on Wednesday (7 March 2007) that it was considering a merger of IPCL with itself.
For more news click here

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Market firm after halt due to sun outage

The market was firm in morning trade. Cement shares pared gains with Gujarat Ambuja Cements slipping into the red. IT and auto pivotals, construction and real esate firms nudged higher.

At 12.35 pm the sensex was up 138 points at 13024,while Nifty was up 52 points at 3770.
Telecom shares edged higher. Bharti Airtel gained 3.3% to Rs 775. Newly listed Idea Cellular rose nearly 3% to Rs 88.05.But Reliance Communications dropped 1.4% to Rs 416.80.Recently-listed Mindtree Solutions was the top-traded counter on BSE with a total turnover of Rs 57.22 crore. The Mindtree Solutions stock was up 2.80% to Rs 670, on a volume of 8.55 lakh shares.

The top gainers on the sensex and the nifty were Bharti Airtel,Wipro ,TCS.While the top losers were ITC,Gujarat Ambuja Cements and Reliance Comm.

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Friday, March 09, 2007

Markets slip further

The markets have lost further,due to heavy selling across many sectors.FMCG,cement and auto sectors were the foremost to lose.The markets are volatile ,with wild swings making an odd appearance here and there.At 14.55 pm the Sensex is down 235 points at 12814,while Nifty is trading 70 points down at 3691.

Three cement pivotals ACC, Grasim and Gujarat Ambuja Cements were down between 2.4 - 6.4% after the manufacturers agreed not to raise prices for one year, today onwards.
The decision was announced by Commerce Minister Kamal Nath after a meeting with the cement industry on Friday (9 March 2007). Nath also said that cement makers have committed to absorb all input costs and levies

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Where is the market going?

Now all of us like a peak into the future and so all the analysts keep on predicting as to where the markets are headed based on fundamental ,technical and all sorts of analysis.

Here is a article from ET "Markets giving everyone the ride of life which is a bit funny on how the predictions keep on going the other way round. When the crash does come, no one knows.Thus, it is time for prediction machines to be given a rest and let the market do what they are best at doing: giving every one the ride of their lives. Happy investing!!

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Market dips below 13,000 on inflation data

The markets opened on a positive note today in the morning,but slipped into red as the selling began.Right now the markets are extremely volatile.The Sensex extended its losses after re-opening from a halt due to sun outage. Inflation data, which missed street estimates, weighed on the sentiment. At 1.00 pm the Sensex is down 94.54 points at 12955,while Nifty is down 41 points at 3720.

Annual inflation for the week ended 30 December 2006 was revised to 5.89% from 5.58%. It stood at 4.18% in the corresponding week a year ago.

Idea Cellular commands modest premium after debut.Idea Cellular was trading at Rs 85.05 in early trade on NSE, a premium of 13.4% over the IPO price of Rs 75.The stock debuted at Rs 85, hit a low of Rs 84.40 and also a high of Rs 92.

The top gainers on the sensex were NTPC,Tata Steel and the top losers were Bhel ,Guajarat ambuja,ACC and Tata Motors. HPCL,Oriental Bank,Tata Steel,Sun Pharma were the top gainers on the Nifty and Bhel ,Gail,Mtnl,ACC were the top losers.

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Thursday, March 08, 2007

Sensex pierces 13,000 mark

The Sensex surged over 500 points by late trading, and crossed the psychological 13,000 level in what was the biggest single-day rise in points in months. Strong Asian markets triggered the rebound on the domestic bourses, which had seen a huge value erosion over the past few days.

The Sensex closed at 13,099.83, with a gain of 520.08 points,while Nifty closed at 3762 with a gain of 135 points.PSU power equipment major Bhel surged 7% to Rs 2165, Gujarat Ambuja Cements gained 8% to Rs 112.65, HDFC Bank vaulted 7.7% to Rs 987, Ranbaxy surged 6.9% to Rs 331, Dr Reddy’s Lab rose 6.4% to Rs 675, Grasim advanced 6.9% to Rs 2250 and L&T rose 5% to Rs 1527.

Telecom shares rose for the second day in a row on the eve of the listing of Idea Cellular on Friday (9 March 2007). Reliance Communications surged 5.8% to Rs 434.90, and Bharti Airtel gained 5.8% to Rs 764. Reliance Industries (RIL) advanced 3.6% to Rs 1336.85, and IPCL jumped 11.8% to Rs 259.

FIIs were net buyers to the tune of Rs 749 crore in index-based futures on Wednesday. They were net buyers to the tune of Rs 335 crore in individual stock futures on the same day.

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Markets rallying in the afternoon trade

Bulls seems to be in full swing as heavy buying was witnessed across the sectors.The Sensex had surged over 300 points, with big contribution from pivotals.At 14.30 pm the sensex was up 346 points at 12926 while Nifty was up 111 points at 3738.

Reliance Industries (RIL) advanced 2.6% to Rs 1323, and IPCL jumped 16% to Rs 268.70.
HLL,Dr Reddys Lab,Grasim and Guajrat Ambuja Cements were the top gainers on the sensex, while IPCL,Sail,HLL and Gujarat Ambuja Cements were the top gainers on the Nifty. Dabur was the top loser on the Nifty.

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Something quite amusing!!

Slightly off the track,but again the news is not related to Stock markets but to the CRICKET STOCK MARKET.So the news comes just before the world cup is about to start.So what is the news?
"Ever imagined what if Sachin Tendulkar had a scrip listed on stock markets? You can find out if he had fared better than Infosys Technologies - on "India's first virtual stock exchange where you can trade in stocks of your favourite cricketers".

A group of student from IIT & IIM have used the corporate and cricket worlds by launching a 'Cricket Stock Exchange' on the Internet.

The article ends stating "Given the performance of the Indian team ahead of the game's most prestigious tournament, few will be surprised if the Indian player-stocks will end up mirroring unpredictable behaviour of Indian equities".And i feel thats very true.


Markets climbing higher

The markets opened firm today in the morning tracking the recovery in Asian markets.The markets were closed for a brief period of time due to sun outage. After re opening at 12.50 pm the sensex is trading 280 points up at 12860,while Nifty is 87 points up at 3714.

The most talked about news today is the Reliance IPCL merger.IPCL advanced 6.58% to Rs 246.90, after Reliance Industries said its board will meet on 10 March 2007 to consider a proposal for merging subsidiary IPCL with the company. Much talk is there regarding the swap ratio of RIL-IPCL.Also the argument if the IPCL shareholders will benefit from this merger or not.Here are some interesting articles about the news of the day of RIL-IPCL merger.

RIL to fold in IPCL to bolster net worth.The move is aimed at strengthening RIL’s balance sheet at a time when the company is seeking to raise funds.Swap ratio of between five and six shares of IPCL for every share of RIL. (Source:livemint)

No positive sentiments for IPCL shareholders.The article says given the ratio of promotors' holding in RIL and IPCL, the merger may not be in favour of IPCL shareholders.Swap ratio of two shares of Reliance Industries for every eleven shares of IPCL.(Source:Moneycontrol)

IPCL merger with Reliance Industries likely to add more than Rs 11,000 crore to RIL's balance sheet.The article states that "Analysts also said the merger may help Reliance increase its revenue from chemicals by as much as 4 per cent to 48 per cent of the total".Based on the price to earnings method, analysts said one share of Reliance could fetch four shares of IPCL. On the other hand, by using the book value formula, the swap ratio would come to 1:2. But the market was abuzz over a swap ratio of 1:6.(Source:Business standard)

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Wednesday, March 07, 2007

Sensex finishes 117 points behind

The Sensex, which had opened firm, kept on declining as the day progressed. Adamant investors refused to desist from selling. But the final loss was surprisingly much short of the showdown expected at one point of time. Value-buying at the lower levels pulled the Sensex out of the woods, albeit partially, in the late-afternoon session.

The 30-share BSE Sensex settled 117.34 points (0.92%) lower, at 12,579.75.The S&P CNX Nifty slipped 28.80 points (0.79%), to finish at 3,626.85.Gujarat Ambuja Cements (GACL) plunged 8.52% to Rs 104.10, on a volume of 32.74 lakh shares.Reliance Industries (RIL), was down 0.57% to Rs 1292.


Markets slip into red

The markets have slipped into red,on account of selling pressure seen in cement shares.
At 13.07 pm the sensex was down 75 points at 12622 and the nifty was down 28 points at 3628.

The latest news from capitalmarket quotes that"The government said it will review the increase in cement prices after companies passed on higher excise duties to customers. Commerce Minister Kamal Nath said he will hold meetings with officials in his ministry to ensure there is “no profiteering” by cement makers.While the government cannot ask cement companies not to pass on the increase in levy, it is trying to find a “way out” of the situation, he added."

Gujarat Ambuja has plunged 5% to Rs 108, and ACC has crashed 4.5% to Rs 816.

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MindTree Consulting debuts with 47.5% premium

MindTree Consulting, an international IT and R&D Services Company that delivers business and technology solutions through global software development, has listed with good premium of 47.5% over its offer price of Rs 425 per share on the NSE, which was as per the analyst expectations. Analysts were expecting the stock's listing price should be more than Rs 600.The stock debuted at Rs 627, fell to a low of Rs 590 and attained a high of Rs 668.80 .

The company entered capital market with an initial public offering, IPO of 5,593,300 equity shares of Rs 10 each at a price band of Rs 365 to Rs 425 per equity share. It oversubscribed 103.28 times with the strong support from FIIs and HNIs.

The current price of Rs 660.90 discounts its April - December 2006 annualised EPS of Rs 23.40, by a PE multiple of 28.2. The post-issue equity of the company is Rs 37.28 crore and the face value per share is Rs 10.(Source:Moneycontrol)

But if Mindtree Consulting debuted with a huge premium of 47.5 % this was not the case for Broadcast Initiatives.The stock debuted at Rs 140, which is also its high so far. The scrip had also dropped to a low of Rs 96.60.Broadcast Initiatives was trading at Rs 98.25 on NSE, a discount of 18% over the IPO price of Rs 120.For detail news about Broadcast Initiatives click here.

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Market gives up early gains

BSE, NSE have resumed trading after sun outage.The markets opened firm in the morning,tracking the Asian markets and buying continued.The sensex spurted 282 points in the opening trade.At 12.34 pm the sensex is up 47.89 points at 12745,and the Nifty is barely 6 points up at 3662.

All the Asian indices were trading with gains except the Nikkei share average, which slipped into negative territory on Wednesday as investors sold Canon Inc and other major contributors to the benchmark ahead of Friday's settlement of Nikkei futures and options. The market is often hit by volatility in the days leading up to the settlement, known in Japan as the "SQ" or "special quotation". The Nikkei was down 0.33%, at 16,788.47.

Reliance communications,Cipla,Dr Reddys labs were the top gainer on the sensex,while Gujarat ambuja cements,ACC,ITC, and TCS were the top losers.

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Tuesday, March 06, 2007

Dividends,Record dates,Bonus

MICO board to consider interim dividend
Motor Industries Company (MICO),board of directors will consider a resolution to declare interim dividend for year ended Dec.31, 2006. The record date for payment of interim dividend, when declared, will be Mar. 23, 2007.

Shipping Corporation board to consider interim dividend
Shipping Corporation of India informed that a meeting of the board of directors of the company will be held Mar. 16, 2007 to consider declaration of interim dividend for the year 2006-07.

Bajaj Electricals fixes record date for interim dividend
Bajaj Electricals has fixed Mar. 20, 2007 as the record date for the purpose of payment of interim dividend.

Television Eighteen fixes record date for interim dividend
Television Eighteen India said Tuesday that it has fixed Mar. 23, 2007 as the record date for the purpose of payment of interim dividend.The board of directors of the company at its meeting held Mar. 05, 2007 has declared an interim dividend of 40%, that is, Rs 2 an equity share of Rs 5 each.

Crompton Greaves Board to consider third interim dividend
Crompton Greaves Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on March 21, 2007, to consider declaration of third interim dividend for the financial year 2006-07.

Further the Company has informed that, March 26, 2007 has been fixed as the Record Date for the purpose of payment of third interim dividend. The dividend payment date will be April 05, 2007.

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Markets end with a bang

After yesterdays almost 500 points fall the markets recovered sharply today and ended on a cheerful note.IT stocks were the star performers leading the uptrend followed by banking and capital goods.The sensex closed at 12679.09,with a gain of 282.05 points,while Nifty closed at 3655.65,with a gain of 79.15 points.

Wipro led the rally in IT shares. The Wipro stock jumped 8% to Rs 582. IT bellwether Infosys gained 6% to Rs 2130, Satyam Computer gained 5% to Rs 435.50 and TCS advanced 3% to Rs 1198.Reliance Industries (RIL) rose 3.5% to Rs 1304.05.ICICI Bank surged 4% to Rs 854.Cement shares came off the lower level in volatile trade. ACC surged 5.9% to Rs 861.50, Grasim gained 1.4% to Rs 2133 and Gujarat Ambuja Cements gained 1.7% to Rs 113.80.Bharti Airtel gained 4.7% to Rs 724. The near-term trigger for the scrip is the number of new subscriptions for February 2007.

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L&T up on buzz of possible tie up with toshiba

Larsen & Toubro surged 3.16% to Rs 1427.50, after reports that the company was talking with Japan's Toshiba for a power plants & equipment joint venture.

At the current market price of Rs 1427.50, L&T trades 42.48 times its FY-2006 EPS of Rs 33.60.Post-Budget 2007-08, L&T is seen benefiting from the government’s thrust on infrastructure creation. The Budget document also offers a strong push to infrastructure, with increased outlays for several flagship programmes such as Bharat Nirman, Accelerated Irrigation Benefit Programme (AIPB), Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) and National Highway Development Programme.

Looking at the valuations of L&T ,the stock is trading 40 times it estimated FY-07 EPS of Rs 35. The valuation seems a bit stretched and the stock is trading above its maximum PE.So Reapreturns recommends a sell on the stock and book partial profits.


Tech stocks push market higher

Markets regained the strength and moved higher.Buying is seen in scrips across sectors. Leading the uptrend are IT majors.At 15.21 IST the Sensex was up 332points, at 12,747.25,while nifty was up 79 points at 3655.30.

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Can the Common Investor understand?

"One day they are speaking about China. And the other day about Japanese Yen. Today, they are speaking about margin money call and derivative market. Suddenly, it seems, the stock market has become a very complicated place for the individual investor? What is happening? "
What the article "should retail investors bet?" says seems very true for the common investor.

But the retail investor should take the fall as a oppurtunity to invest in the stocks with a long term perspective.Invest in small amount in the scripts which some days ago seemed to be highly valued.Follow a Systematic Investment plan and invest when the scrips are down.

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Investors lose Rs 6 lakh cr in one month

The Recent fall in the equity market was due to a lot of factors,but how it has affected the common investor.The article takes a look at it.

While the article states that " What would you do if you are an investor in this market? Stay put and wait for the fever to pass. And if you have surplus money to invest, put in no more than 25% of your surplus in the market. Sit on the remaining cash and at the first sign of the tide turning, invest in good stocks. But not now — remember, it is foolish to try and catch a falling knife."

But we feel that the investors should take advantage of the correction and average out their positions.They should enter into stocks which had been highly valued previoulsy.


Market losing the early gains

The market had surged in the opening trade,tracking recovery in the Asian markets.But as trading progressed market started losing the early gains.At 13.30 pm Nifty was up 42 points,at 3618.40.The sensex was trading 125 points up at 12540.52.The sensex had settled at 12,599.49 at 11:45 IST, when trading was halted temporarily from 11:45 IST to 12:25 IST due to sun outage.Trading time has been extended by 45 minutes till 16:15 IST.

Wipro,Infosys,Satyam and ICICI Bank were the top gainers on the sensex,while BPCL,Wipro ,Gail and Maruti Udyog were the top gainers on the Nifty.The losers on Nifty were Sail,Tata Power,Hindalco and Hero Honda,while that on the sensex were Hindalco,Hero Honda,Tata Steel and NTPC.

As per provisional data, FIIs were net sellers to the tune of Rs 732 crore on Monday (5 March 2007), the day when the Sensex had tumbled 471 points. FIIs were net buyers to the tune of Rs 324.90 crore Friday (2 March 2007), the day when the Sensex had lost 273 points.

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Monday, March 05, 2007

Dividends,record dates,Bonus issue

Dabur India Board to consider interim dividend
Dabur India Ltd has informed that a meeting of the Board of Directors of the Company will be held on March 13, 2007, to consider the interim dividend on equity shares of the Company.March 20, 2007 has been fixed as the Record Date for the purpose of payment of interim dividend. The Company will pay the aforesaid interim dividend on March 28, 2007.

Sumeet Industries Board approves bonus issue
Sumeet Industries Ltd Board of Directors of the Company at its meeting held on March 05, 2007, has decided to issue "Bonus Share" at the ratio 1:10 (One equity share for every Ten equity share held by the shareholder).

Aditya Birla Nuvo fixes Record Date
Aditya Birla Nuvo Ltd has fixed March 21, 2007, as the Record Date for the purpose of payment of interim dividend.Further the Company has informed that, the Interim Dividend declared, if any, shall payable on and from March 26, 2007.

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Markets end in deep red

The markets closed in deep red as heavy selling continued throughout the day.The global markets were also in a state of meltdowm.

Sensex closed down 471.09 points or 3.66% at 12415.04, and the Nifty down 150.25 points or 4.03% at 3576.5. Gujarat ambuja cements(up 0.35% to Rs 110) and grasim (up 0.31% to Rs 2105) were the top gainers on Nifty as well as the sensex.

The Nikkei average fell 3.34% on Monday, marking its biggest one-day tumble in nine months and a new low for 2007, as investors continued to dump shares in exporters such as Toyota Motor Corp. and Canon Inc. following the yen's rise. The Nikkei tumbled 575.68 points, to 16,642.25, its lowest closing since December and its biggest one-day percentage loss since June 2006.The Hong Kong’s Hang Seng Index tumbled 751.85 (3.87%), to 18,690.16.All European and Asia/Pacific markets were trading with sharp losses.

Index heavyweight Reliance Industries (RIL) was down 4.43% to Rs 1259. A huge 11.49 lakh shares had changed hands in the heavyweight counter. The RIL scrip had also slipped to an intra-day low of Rs 1257.50.

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Weakness Persists in the Market

The market is weak in the aftenoon session and selling continued. At 14.32 pm the Nifty was at 3590.40 ,136 points down and the sensex was at 12462.10 ,almost 424 points down.

Gujarat Ambuja cements was the only top gainer on the Nifty as well as Sensex trading at Rs 110.50, just a small difference to the closing price of Rs 109.80 on friday.

Ranbaxy labs,Maruti Udyog,NTPC were the top losers on the sensex,while Jet Airways,Sail,M&M and Oriental bank were the top losers on the Nifty.We expect the market to slide further in the late afternoon trade.

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The New Funds:ART Funds

Here is an article "Trading in Colours" from livemint which warns you before investing in the new art funds.

The article says that"It’s not an investment that’s likely to be affected by a Fed rate hike. But do your homework before you invest in art funds", which i must say is very true. The art funds have entered the market recently and many more are likely to do so in the coming years.

A Word of caution the article offers is "The art-investment market is new with no proven track record. There is also a concern that since most art funds are close-ended for between three and four years, the market may be flooded with artworks at the same time. This swell in supply might push prices down". So do your research thoroughly before you invest in Art Funds.


ICICI Bank Tumbles

ICICI Bank lost 5.3% to Rs 814 even as it decided to consider the transfer of investments in insurance and mutual fund businesses to a wholly-owned subsidiary.

ICICI Bank plans to transfer investments in four subsidiaries to a new wholly-owned unit, ICICI Holdings, whose shares may be listed next year. ICICI Bank said in a statement it plans to transfer its investments in ICICI Prudential Life Insurance Co., ICICI Lombard General Insurance, Prudential ICICI Asset Management Co. and Prudential ICICI Trust.

According to Reapreturns,estimated EPS for ICICI Bank for FY07 is to be Rs 36.So at the current price of Rs 814 the stock is trading at a PE of 22 which is above the average extimated PE of 18.So looking at the current slide in the stock it still remains a good script to buy with a estimated target price of Rs 1100 within a 6 months time frame.


Market in a downward spiral

The market plunged in opening trade,the reasons for which are stated as weakness in Asian markets and scared by data showing sustained FII-sales in the past few days.At 11.45 pm,the Nifty is at 3610.10 which is almost 118 points less than fridays closing.
The sensex is at 12492 ie 395 points down.

The other factors which analysts think have triggered the fall are lack of inflows at higher levels, the surprise CRR-hike, high valuations, rising inflation and rising interest rates, fears of an earnings slowdown in the coming quarters, defeat of the Congress in Uttarakhand and Punjab, weak global markets and profit-taking at higher levels.

Trading has been has been extended by 45 minutes till 16:15 IST from today due to sun outage. The extended trading hours are till 19 March 2007. Trading on NSE will be stopped from 11:45 IST to 12:25 IST daily during the same period.

We feel that the recent fall in the markets is a good oppurtunity for long term investors to enter into some stocks. We recommend Dabur,Reliance communications,Gujarat ambuja cements as some of the stocks which have consolidated and investors can buy these stocks.

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Friday, March 02, 2007

Making Investments

As march draws near most of them must have started to look for investing their money to save tax.A article to caution the investors while investing in equity-linked saving schemes(ELSS).

The highlights of the article
1. Check the past performences of the schemes.
2. The period for which the schemes have been around.


Few sops on tax front

Now at first i didnt understood the tax exemption the Fin Min has offered,but here is a article from livemint which explains it.

The article states that "While, the income tax limit has not been changed, the threshold limit has been raised by Rs 10,000 giving every assessee a relief of Rs 1,000."

At least the tax payers will have some relief.


Mystery of ESOP's

Economic times has a interesting article on ESOP's.

The article quotes that " The Budget provisions provide that the value of the fringe benefit would be the difference between the fair market value of the share on the date of exercise of the option and the amount actually paid by the employee towards such shares." As is to be expected the language is vague to the extreme.

We can understand Finance Ministers inclination to earn more money (Without bothering about how well the money is spent) through participating in gains that ESOP holders get but we also think that this point is more likely to misused.

Now it is also our fervent hope that Fin Min clarifies the guidelines for once & all. For average employee though, this is a cruel blow. Companies shall now be even more reluctant to offer ESOP's as the the tax they have to pay will increase with their success.

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Hero Honda on a high

Hero Honda has advanced 4.29% to Rs 696.25. Hero Honda said on Thursday it sold 280,515 units in February, up 12% from 250,695 units reported a year earlier(Source: Capital Markets). Hero Honda continues to show strong performances Q-o-Q in sales.

According to Reap Returns, estimated EPS for Hero Honda for FY 07 is likely to be app Rs 47 which will be less then its FY 06 EPS of Rs 48.64. Market seems to be betting on Hero Honda continuing the sales resurgence while improving its margins. The share is still a good long term buy with a target price of Rs 950.


Sensex Rangebound

After firming up in early afternoon trade, markets seems to be again on a downward spiral. At 1:14 PM, the Nifty is at 3806.55 which is around 5 basis points less then yesterdays closing. During mid afternoon trade the markets had firmed up to 3841 but have again spirelled down.

We think that there might be another sell off in the afternoon taking the Nifty to even lower levels.


Thursday, March 01, 2007

Market puts Budget behind

All's well that ends well. The Sensex, which had been on a downtrend ever since striking an all-time high (14,723.88) on 9 February 2007, rebounded with great force today. Bargain-hunting for battered index pivotals and short-covering in the derivatives segment helped to reverse the downtrend.

The 30-shares BSE Sensex settled 221.46 points higher, at 13,159.55. It had also surged to a high of 13,193.13. Most of the gains came in the second half of the day’s trading session, triggered by short-covering. Volatility was also at its best today.

The S&P CNX Nifty surged 65.90 points, to 3,811.20.

The total turnover on BSE amounted to Rs 4097 crore as compared to Rs 5826 crore on Wednesday (28 February).The market-breadth, which had turned weak, kept on recovering as the day progressed. On BSE, 1,435 shares were in the red, and 1140 ended in the green, while 67 scrips remained unchanged. The BSE Small-Cap Index closed at 6,712.86, up 7 points (0.1%), while the BSE Mid-Cap Index ended at 5,522.59, 14 points (0.25%) higher.Among the 30-Sensex pack, 19 advanced while the rest declined.

Private sector HDFC Bank was the top gainer, up 5.10% to Rs 980, on a volume of 1.34 lakh shares.

IT stocks made a solid comeback after Wednesday (28 February 2007)’s meltdown, under the reckoning that their earnings will be impacted only to a small extent following an increase in their tax burden.

While Satyam Computer rose 4.24% to Rs 430, Wipro gained 4.16% to Rs 584. Top software firm TCS added 5% to Rs 1248, and heavyweight Infosys gained 3.40% to Rs 2149.

In Budget 2007-08, the Union Government has extended minimum alternate tax (MAT) to income in respect of which deduction has been claimed under sections 10A and 10B, to the IT sector.

Currently, tax exemption under section 10A is available for units set up in software technology parks (STP). The benefit under this sector expires in 2009. Effective tax rates for IT companies as a result will go up and impact earnings. However, those companies paying tax outside India will get some respite on account of a double taxation avoidance treaty. Such firms can set off the tax paid outside India against the MAT.

To top it, the government also brought employee stock options (ESOPs) under the fringe benefit tax (FBT). FBT will now be charged on the difference between market price and exercise price of the option. This will, consequently, increase the tax outgo of companies that have an ESOP scheme.

CLSA has forecast a small cut in its projected FY-2008 EPS of three IT firms: TCS, Wipro and Satyam Computer, by 1 - 1.5%. It kept the projected EPS of Infosys for FY-2008 unchanged at Rs 88.10.

The outlook for the IT sector remains bright due to strong demand for outsourcing. Indian IT firms are increasingly getting large outsourcing deals. The IT services industry is expected to achieve 31% growth in FY-2007, of which exports alone are expected to grow by more than 33%, to $31 billion.

Meanwhile, Satyam Computer Services’ BPO subsidiary, Nipuna Services, established its fourth facility at Hyderabad. The Hyderabad facility will provide integrated service delivery across industries and processes, and will accommodate three shifts. Its current capacity is 1,730 seats, but is designed for scalability.

Reliance Communications surged 4.5% to Rs 426, on hope of a cut in annual license fees for wireless services in the coming months. The finance minister proposed setting up a committee to consider reduction in fees and spectrum charges for wireless telephony, in order to align them with international rates. At the moment, wireless companies pay 6-10% of net revenues as license fee and 2-6% as spectrum charges, based on the circle and the spectrum used. The Department of Telecom (DoT) favours a 6% annual license fee compared to the existing 6-10%, and is likely to recommend a cut. But the final call on this will be taken by the finance ministry.

Bharti Airtel gained 1.13% to Rs 726.85, on similar expectations.

L&T rose 3.25% to Rs 1535, as the company will not be impacted by withdrawal of tax benefit to civil construction firms. The L&T stock had tumbled on Wednesday (28 February) due to a broad decline in construction shares after a clarification that tax benefit under section 80 IA will not be available for companies engaged only in civil construction work. But since L&T pays corporate tax at the regular rate for its construction business, it has nothing to lose from withdrawal of tax exemption for civil construction firms. The stock surged today after this fact dawned upon the market. L&T is also seen benefiting from the government’s thrust on creating infrastructure.

Shares from the cement sector, which have borne the brunt of the market's wrath of late, continued to fare badly despite news reports that producers had raised cement prices. While Gujarat Ambuja Cements dropped 2.37% to Rs 113.20, Grasim lost 0.60% to Rs 2200 and ACC shed 2.67% to Rs 876.

ACC saw cumulative volume of 13.80 lakh shares, after two block deals of 2.70 lakh shares each, were struck in the counter at an average Rs 902.50 per share in opening trade.

Cement scrips had tumbled on Wednesday (28 February 2007), after the government announced a differential excise duty structure for the commodity based on retail prices. Cement makers hiked prices as the differential excise duty raised the excise duty burden for cement makers by Rs 12 per 50 kg bag. The excise duty has been raised to Rs 600 per tonne against a retail price of above Rs 190 per bag.

On Wednesday (28 February 2007), ACC had lost 6.3% to Rs 900.05, Grasim 5% to Rs 2212.60 and Gujarat Ambuja Cements 7.7% to Rs 115.95.

Cement scrips have turned bearish with the government keeping a tab on spiralling cement prices. In late-January 2007, the Central Government had abolished 12.5% import duty on cement, in a bid to rein in domestic cement prices.

As per media reports, cement makers have raised product prices. Prices in western and northern India have been raised by Rs 12 per 50 kilogram bag from 1 March 2007. The average wholesale price of cement in Mumbai, after the increase, will be Rs 233 per 50 kg bag, and the retail price Rs 245 per bag.

Just before the latest hike, the average retail cement prices in India hovered at Rs 210 per bag, necessitating a price rise following the hike in excise duty. The current demand-supply situation distinctly favours the cement sector. While no major supply is expected for some time, demand remains strong.

The passing of the additional excise duty burden to customers will protect margins, which are currently quite high due to firm year-on-year cement prices, but may not be enough to bring down inflation. This may force the government to take more stringent steps such as a ban on exports, analysts reckon.

Analysts also opine that the Budget's thrust on farming and infrastructure augurs well for cement firms. Moreover, the abolishing of customs duty on import of coking coal will lower cost of power for cement companies. It will thus enhance the efficiencies of cement companies.

Maruti Udyog (MUL) slipped sharply from the day’s high of Rs 870, and closed 0.32% lower to Rs 837. The car maker suffered on Wednesday (post-Budget). The company had struck an intra-day high on reporting robust sales for February 2007.

MUL said on Thursday it sold 62,999 vehicles in February 2007, up 53% from 41,095 units in the same month a year earlier. Maruti sold 59,095 units in the domestic market in February 2007, up 61% from 36,608 units in the same month a year earlier. However, MUL's exports fell 13% to 3,904 units in Feb 2007 from 4,487 units in the same month a year earlier.

MUL said after trading hours on Wednesday, it will raise prices of vehicles from 15 March 2007, after the government imposed an additional cess to raise funds for education. As per the Budget, for the fiscal year starting 1 April 2007, the government will levy 1% cess on all taxes to fund secondary and higher education, in addition to the existing 2% cess, which raises funds for basic education.

MUL added it was not raising prices immediately and consumers could buy cars at pre-Budget prices, but did not specify the extent of the increase, or specify which models the hike would apply to. "In the run-up to the Budget, there was speculation that certain taxes or duties may come down," MUL explained in a statement, referring to the expectation of an excise duty cut on passenger vehicles.

Index heavyweight Reliance Industries (RIL) recovered smartly from the day’s low of Rs 1319.40. It settled 0.87% higher, at Rs 1366.35, on a volume of 15.09 lakh shares. The counter was marred by high volatility, and moved in a wide range (Rs 1319.40 - Rs 1400).

Ranbaxy Laboratories gained 1.90% to Rs 344. The Delhi-based generic drugs giant announced that PPD had acquired a worldwide license to develop, manufacture and market Ranabxy's novel statin for the treatment of dyslipidemia.

Under the terms of the agreement, Ranbaxy will be entitled to receive milestone payments upon the occurrence of specified clinical events. In the event of approval for a drug product, the Indian firm will be entitled to royalties on sales of the drug and sales-based milestones. PPD will be responsible for all costs and expenses associated with the development and commercialisation of the compound, including preclinical and clinical studies.

Bajaj Auto was the top loser, down 4.47% to Rs 2500, after reporting a 2% decline in vehicle sales for February 2007. BAL said on Thursday vehicle sales in February 2007 fell 2% to 202,212 units from 205,776 units in the same month a year earlier. The company said sales of motorcycles fell 2% to 171,780 units in February 2007 from 175,256 units, and sales of all two-wheelers fell 3% to 174,220 units from 179,880 units in the same month a year earlier.

Sales of three-wheelers rose 8% to 27,992 units in February 2007 from 25,896 units in the same month a year earlier. The company said exports rose 46% to 38,228 units in February 2007 from 26,237 units in the same month a year earlier.

BAL has been continuously gaining in share in the motorcycle market for the last five years. This gain became more pronounced in the last 18 months, and the market share today stands at 34.3%.

Hindalco Industries slipped 2.10% to Rs 136.75, after it announced that its board of directors will meet on 2 March 2007 to consider an issue of equity shares / equity linked instruments on a preferential basis.

Indian Bank settled at Rs 98.30 on BSE, a decent premium over the IPO price of Rs 91. The stock debuted at premium at Rs 105 on BSE, also its day's high. The scrip also fell to a low of Rs 77.

The Indian Bank counter saw high volumes of 3.08 crore shares. Indian Bank had priced its IPO at Rs 91, the upper end of the Rs 77 - Rs 91 price band. The issue had received strong investor response, and had been subscribed over 30 times. The face value per share is Rs 10 and the equity capital is Rs 429.77 crore. Indian Bank also entered the F&O segement from today with a lot size of 2,200 shares.

Sops extended to the food processing sector saw Britannia Industries firm up 0.50% to Rs 1242, Nestle India rising 0.14% to Rs 959.70. These stocks came-off from higher levels though.

The finance minister, in the Union Budget 2007-08, offered sops to the food processing industry such as full exemption of excise duty on biscuits whose retail price does not exceed Rs 50 per kilogram, lifting of excise duty on all kinds of food mixes, including instant mixes, such as idli and dosa mixes, while cutting duty on food processing machinery from 7.5% to 5%, and slashing customs duty on plastics and PTA/MEG from 10% to 7.5%.

The exemption of excise duty on biscuits will have no effect on biscuits whose MRP exceeds Rs 50 per kilograms. Thus, low-end biscuits like Parle-G brand of Parle and Tiger brand of Britannia, which cost Rs 4 per 100 gms (Rs 40 per kg), and some of ITC’s biscuits will benefit.

Further, this will give cost advantage to small players, including the unorganised ones in the industry.

While customs duty on crude sunflower oil has been reduced from 65% to 50%, that on refined sunflower oil has been reduced from 75% to 60%. This should lead to reduction in cost of sunflower oil, and hence a reduction in cost of fats and oils used in biscuits.

Also, a reduction in the peak customs duty of plastics from 10% to 7.5%, should facilitate reduction in packaging costs.

The food-processing sector has been given the right push in the current Budget. A growing population, powered by rising disposable incomes and rising popularity of processed foods point to a better future for the food processing industry.

Construction firm Gammon India slipped 2.12% to Rs 311, after Franklin Templeton Mutual Fund sold off 0.85% stake in the company. Post-sales, Franklin Templeton's holding in the company came down to 2.63%.

Patel Engineering plunged 10% to Rs 312.80, after the finance minister withdrew the 10-year tax exemption on firms engaged in civil construction. Construction companies are exempt from paying tax for 10 years. However, the finance minister chose to revoke this benefit for companies engaged only in civil construction.

State-run IFCI surged 11.40% to Rs 30.55, on huge volumes of 4.96 crore shares, after a substantial raise in non-plan allocation in the Union Budget. The amount for non-plan allocations has risen from Rs 225 crore in 2006/07 to Rs 1300 crore in 2007/08. The Budget document said the support will help in meeting restructuring liabilities.

Sesa Goa plunged 7.48% to Rs 1650, hit by reports that the Rs 300-export duty on iron ore will become effective immediately. It however recovered, after plunging to a low of Rs 1485.

CMC jumped 10.7% to Rs 1221.80, as the company is seen benefiting from the Budget’s emphasis on e-governance. The allocation for e-governance in the Union Budget presented on Wednesday (28 February 2007) was increased from Rs 395 crore in 2006-07 to Rs 719 crore in 2007-08.

Wockhardt jumped 8.6% to Rs 385.25, following government’s focus on the pharma sector in the Budget. The weighted average deduction of 150% under section 35 (2AB) of the income tax act for expenditure relating to in-house research and development (R&D), has been extended by five years up to 31 March 2012. This will encourage companies to focus on R&D. Excise duty exemption on life saving vaccines will benefit manufacturing companies, Wockhardt being one of them.

Mphasis BFL surged 7.7% to Rs 278.90, on value-buying after a recent steep fall in the counter. Also the open-offer from EDS met with poor response. Hence a section of the market expects a fresh open-offer at a much higher price, as compared to the ruling market price, from EDS shortly.

GMR Infrastructure gained 6.6% to Rs 379.15, under the reckoning that it being an developer of infrastructure projects, will continue to get the 10-year tax benefit under section 80 IA.

Neyveli Lignite surged 6.41% to Rs 57.25, as the Budget raised total outlay for the company to Rs 2007 crore from Rs 945 crore in 2006/07.

Kothari Products surged 3.48% to Rs 566.10, as excise duty on tobacco-free pan masalas has been reduced from 66% to 45% in the Union Budget presented on Wednesday. Kothari Products, the flagship company of the Kothari Group, is a top player in pan-masala and gutkha. The company manufactures and exports ‘Pan Parag’ pan masala, gutkha and parag zarda in India.

The market sell-off on Wednesday was not only due to the Budget. Global factors also played a big role. Moves by the regulator to curb ‘excesses’ triggered a sell-off in global markets. If the global markets stabilise, and there is no big delivery-based selling by FIIs, a sharp short covering rally is on the cards.

The market had come down steeply after presentation of the Union Budget 2007-08 on Wednesday. A hike in dividend distribution tax from 12.5% to 15%, added to the general gloom. That equities worldwide were weak also did not help. Nifty March futures settled at 3,726 on Wednesday, a discount of 19.30 over the spot Nifty closing of 3,745.30.

A recovery in key Indian ADRs, and a recovery in the US market may support the market today. However, the upside may be capped due to FII-sales. Among key Indian ADRs, HDFC Bank's ADR jumped 5% to $66.36 and ICICI Bank's ADR rose almost 5% to $38.36. Infosys' ADR gained 1.4% to $54.26, while Tata Motors' ADR gained 2.5% to $18.51.

Meanwhile, Chinese stocks, which have been extremely volatile this week, fell modestly on Thursday morning amid heavy trading, hit by profit-taking and weak performances by other key markets.

The benchmark Shanghai Composite Index fell 2.91%, to 2,797.19. On Tuesday, the Shanghai Index tumbled nearly 9%, triggering a sell-off in global markets, before rebounding almost 4% on Wednesday.

The Hang Seng Index was down 1.55%, while the Japanese Nikkei 225 Index was down 0.86%.

As per provisional data, FIIs pressed huge sales to the tune of Rs 1932 crore on Wednesday, the day when the Sensex tanked 541 points. They were net sellers to the tune of Rs 415.70 crore on Tuesday (27 February 2007) compared to an outflow of Rs 582.10 crore on Monday (26 February 2007).

US stocks bounced back on Wednesday. Their recovery on Wednesday hit its stride after Federal Reserve Chairman Ben Bernanke told Congress there did not appear to be a single trigger for Tuesday's global stock slump. The Dow Jones industrial average rose 52.39 points, or 0.43%, to end at 12,268.63. The Standard & Poor's 500 Index gained 7.78 points, or 0.56%, to finish at 1,406.82. The Nasdaq advanced 8.29 points, or 0.34%, to close at 2,416.15.

Crude oil fell from a two-month high in New York, as traders sold contracts to book profits from the past week. Crude oil for April delivery declined as many as 36 cents, or 0.6%, to $61.43 a barrel in after-hours trading on the New York Mercantile Exchange. Crude Oil Futures closed at $61.79 a barrel yesterday, the highest since 22 December 2006.

In London, Brent oil for April settlement declined as many as 37 cents, or 0.6%, to $61.52 a barrel in electronic trading on the ICE Futures Exchange.