Market Voices 18 June 2009
With the bears going on a rampage once again, the market ended with big losses for the second successive session today. Weakness in Asian and European markets amid fresh concerns about global economy weighed in once more and took the wind out of several front line stocks.
Realty and metal stocks were among the worst hit. Cement stocks too suffered heavy losses. Power, capital goods and oil stocks declined sharply. IT and pharma stocks outperformed. Midcap and smallcap stocks were battered once again. The market breadth was very weak.
ACC, JP Associates, Tata Steel, Hindalco, Grasim, NTPC, ONGC and Reliance Infra lost 4% - 8.25%. L&T, DLF, RComm, BHEL, ICICI Bank, Ranbaxy, Sterlite, Maruti, HDFC Bank and RIL also ended with sharp losses. SBI, Sun Pharma, Tata Motors and Infosys bucked the trend and closed on a firm note.
The market is likely to see some heavy buying early next week as traders are likely to indulge in hectic short-covering ahead of derivatives expiry.
But movements are likely to remain extremely volatile during that period and hence traders with a very low appetite for risk would do well to stay away at the sidelines. Those running in profits can use sharp rallies to lighten commitments.
Tata Consultancy Services has opened a deliver center in Queretaro.
With the opening of this center, TCS has expanded its presence in Mexico with the Global Delivery Center Opening in Queretaro. The company expects to hire 500 professionals during the current fiscal for its new center.
LIC Housing Finance (Rs 586) is likely to see some profit taking.
The stock, which was down at Rs 150 in early December 2008, has come a long way since then on good results and on hopes of a surge in demand for home loands. One holding the stock with a long term view can stay invested and buy more at sharp dips. Short term traders running in profits can exit the counter at rallies and re-enter later at declines.
IDBI Bank (Rs 107) can be tried for some modest returns over a short run. Those holding the stock can stay invested with a stop loss around Rs 85. A modest exposure can be tried now. More stocks can be added at declines.
Four Soft has announced that Polar Speed Distribution (UK) has selected 4S eLog to optimize its management of their temperature controlled, pharmaceutical distribution warehouses throughout the UK. The contract will be serviced through Four Soft UK., the firm's UK subsidiary. Four Soft is trading at Rs 20.25, up by around 2.25%. One can stay invested at the counter.
Realty stocks have taken a severe beating again. More selling is not ruled out in the near run. Those looking for fresh exposure in this space can wait for now and buy small quantities at sharp dips.
Bajaj Hindustan (Rs 198) can rise to Rs 218 or slightly higher. One can book some profits there as the stock is likely to face some resistance around that level. A re-entry can be made later at declines.
ABB (Rs 749) is a good stock for long term. However, one can refrain from taking fresh exposure for now. The stock can be picked up at declines. A rise to Rs 950 or even higher looks likely over the next one year.
One can pick up infrastructure stocks IVRCL Infra, PBA Infrastructure, Gammon, Reliance Industrial Infrastructure and GMR Infra at sharp declines. Though they are likely to prove highly slippery in the near run, a modest upmove looks likely in all these stocks over the next 12 - 18 months.
Tata Motors can be tried for intra-day. The stock, currently traded at Rs 325, can move to Rs 335 or even higher if it recovers to Rs 330 and sustains there for a while. Investors holding the stock with a long term view can stay invested.
One holding Educomp Solutions (cmp Rs 2986) with a long term view can stay invested with a stop loss near Rs 2300 for now. Small quantities can be picked up at sharp falls from current levels. But one with a low appetite for risk should note that this stock is likely to move in a fairly volatile manner.
Deep Industries Ltd has obtained Notification of Award from ONGC, Rajahmundry Asset for Charter Hiring one Work Over Rig of 100 Ton capacity aggregating to Contract Value Rs 296.24 Lacs. The stock is currently down by 2.4% at Rs 135.30. Earlier, on March 6 this year, the stock had tumbled to Rs 28.25, a 52-week low. It had touched Rs 157.95 in mid August 2008.
M&M has BSE that Mahindra Holidays and Resorts India Limited is entering the Capital Market with an Initial Public Offering of 92,65,275 Equity Shares of Rs 10 each for cash at a price to be decided through a 100% book-building process. The Bid/Issue opens on June 23, 2009 and closes on June 26, 2009. MHRIL has filed a Red Herring Prospectus with the Registrar of Companies. The issue would constitute 11.0% of the fully diluted post-issue paid-up capital of MHRIL.
One can stay invested in Infosys Technologies, Wipro and TCS and pick up more of them at sharp falls. There may not be a significant and sustained upmove in the near run but these stocks are among the sure winners in the long run.
Infosys Technologies has reportedly received a $10 million three-year BPO deal from Microsoft for back-end support. The IT bellwether rose to Rs 1735 on BSE this morning. The stock, despite having eased to Rs 1722 now, remains in the positive territory with a sharp gain of 0.75%.
Reliance Infra, Ranbaxy and SBI have surged higher. ACC, HDFC, HDFC Bank, Grasim, L&T, BHEL and Maruti Suzuki are down with sharp losses.
Market Outlook
The market is likely to open on a listless note amid mixed global cues. After three days of big losses, the bulls are likely to come back fairly charged up. The expiry of June series derivatives contracts is just a few sessions away and this is likely to trigger some short-covering in a host of front line stocks.
Sector Watch
Airlines stocks are likely to be in focus with most of the players in the sector deciding to hike fares by 8% - 10% from next week. Some severely battered bank and realty stocks are likely to find support. Metals are likely to remain sluggish. Information technology stocks may track overnight gains of the Nasdaq and regain some lost ground.
Scrip Watch
Wockhardt may see action following the company selling its German subsidiary Esparma to another German company, Lindopharm GmbH, a move that is in line with its plan to divest non-core businesses. Mova GmbH, a subsidiary of Lindopharm GmbH, has bought Esparma for around Rs 120 crore.
Hindalco Industries is likely to be in focus. The company is close to acquiring a coal mine in Queensland, Australia, in a deal estimated at US$ 70-80 million. The flagship of the Aditya Birla group, which has been scouting for coal mines in Queensland for some time, is learnt to have short listed one mine in the region with reserves of around 120 million tons.
Fortis Healthcare is likely to attract attention on reports that the company has emerged as the lead bidder to acquire a part of Wockhardt Hospitals. Fortis became the front-runner after the Chennai-based Apollo Hospitals Group retracted its plans to buy three of the 12 hospitals owned by Wockhardt Chairman Habil Khorakiwala and family. It is reported that the deal with Fortis, either for buying two-three hospitals or picking up a minority stake of about 25 per cent, may happen within three-four weeks. However, Fortis is more interested in an outright purchase of the hospitals, which include Wockhardt’s leading hospitals in Bangalore and Mumbai, as this would add to its stand-alone assets.
VST Tillers Tractors Ltd has informed that a meeting of the Board of Directors of the Company will be held on June 26, 2009, to consider the Audited Financial Results for the year ending March 31, 2009 and to consider a bonus issue.
Reliance Industries is likely to be in focus following the petroleum ministry directing the company to make additional allocation of natural gas from its Krishna-Godavari basin find to nine power companies from the surplus available because of no or low off-take by fertiliser units.
Macro and Market Factors
Amid mixed economic data, the Wall Street closed on a flat note yesterday. Asian markets are trading mixed today. Thus, global cues are not any positive for the market this morning. Institutional investors, believed to have sold heavily over the past few days, may look at buying again at declines and this may help halt the slide.
Showing posts with label Learn Trading. Show all posts
Showing posts with label Learn Trading. Show all posts
Friday, June 19, 2009
Brokerage Recommendations 18th June 2009
Sell India Cements with a target of Rs 137-132 and stop loss of Rs 147, says Tejas Nandu of Unicorn Investments, on CNBC Awaaz. The stock is currently trading at Rs 140, down 5.67% on the BSE.
Buy Balrampur Chini with a target of Rs 120-130, says Rahul Mohindar, technical analyst, on CNBC TV18. The stock is currently trading at Rs 103, up 3% on the BSE. He advises buying select telecom, sugar and banking stocks on dips.
Buy Satyam around Rs 60-70 for a target of Rs 90-100 in 6 months where one can exit the stock, says Deven Choksey of KR Choksey, on Zee Business. The stock is currently trading at Rs 78, up 2% on the BSE.
It was another rough session for our market that closed weak. Sensex closed at 14290, down 232 points (provisional) and Nifty at 4265, down 90 points (provisional) from the previous close. CNX Midcap index was down 2.04% and BSE Smallcap index was down 3.45%. There was selling in realty, metal and power stocks. The market breadth was negative with advances at 192 against declines of 1063 on the NSE.
Sell JP Associates with a target of Rs 175 and stop loss of Rs 200, says Prakash Gaba, technical analyst, on CNBC Awaaz, as closing market strategy.
Sell Reliance Capital with a target of Rs 850 and stop loss of Rs 900, says Nishant Jain, technical analyst, on CNBC Awaaz, as closing market strategy.
Sell Ambuja Cements with a target of Rs 90 and stop loss of Rs 85, says Prakash Gaba, technical analyst, on CNBC Awaaz, as closing market strategy.
Credit Suisse maintains buy call and outperform in Hero Honda with a target of Rs 1527, reports NDTV Profit. The stock is currently trading at Rs 1449, up 3.17% on the BSE.
BNP maintains a buy call on Marico with a target of Rs 89, reports CNBC Awaaz. The stock is currently trading at Rs 70, up 1.45% on the BSE.
Buy RNRL with a target of Rs 98-101 and stop loss of Rs 93, says Tejas Nandu of Unicorn Investments, on CNBC Awaaz. The stock is currently trading at Rs 90, down 4.67% on the BSE.
In the banking space, accumulate PNB and SBI in the portfolio for long-term gains, says P Subramanium of Venture Securities, on CNBC Awaaz. He is bullish on the cement and power space for the long term.
Bonanza Portfolio maintains a sell call on Sterlite Industries with a target of Rs 586 and stop loss of Rs 613, reports CNBC Awaaz. The stock is currently trading at Rs 590, down 2.11% on the BSE.
In the steel sector, accumulate Tata Steel, JSW Steel and Welspun Gujarat in the portfolio for long-term gains as they have excellent fundamentals, says Rajesh Tambe, market expert, on Zee Business.
Buy Balrampur Chini with target of Rs 135-140, says Ashwani Gujral, technical analyst, on CNBC TV18. It has good support at Rs 90, he adds. The stock is currently trading at Rs 100, down 0.60% on the BSE.
Nifty has strong support at 4100 and resistance at 4500, says Krishna Kumar Karva of Emkay Shares and Securities, on CNBC TV18. Nifty needs to consolidate further, he feels. Global correction is also putting pressure on our markets, he adds. Investors are being cautious ahead of the budget and taking some profits off the table, he says.
Hold Axis Bank with targets of Rs 750, 770 and then 805, says Vasudeo Kamlakant, technical analyst, on NDTV Profit. Keep stop loss of Rs 685, he adds. The stock is currently trading at Rs 740, up 2.7% on the BSE.
Hold Balrampur Chini with medium-term target of Rs 150, says PK Agarwal of Purpleline Investment on Zee Business. Keep stop loss of Rs 80, he adds. The stock is currently trading at Rs 102.70, up 2.1% on the BSE.
Buy PNB at Rs 550-575 with short-term target of 15%, says Raj Kishore Bang of Sixth Sense on CNBC Awaaz. Long-term investors can keep stop loss of Rs 500 with target of 35%, he adds. The stock is currently trading at Rs 636.25, up 3.6% on the BSE.
Buy Bajaj Hindustan at Rs 195-200 with target of Rs 235-240, says Ashwani Gujral, technical analyst, on CNBC TV18. The stock is currently trading at Rs 207.20, up 2.4% on the BSE.
The momentum has been weakened by the huge sell-off yesterday and we expect more volatility, says Shashank Khade of Kotak Securities on CNBC TV18. The bias may have turned on the negative side and we would look for more signs of weakness in the coming days, he adds.
Hold Apollo Tyres with targets of Rs 36, 42 and then 52, says Vasudeo Kamlakant, technical analyst, on NDTV Profit. Keep stop loss of Rs 28, he adds. The stock is currently trading at Rs 31.50, down 0.8% on the BSE.
Book profits in Gujarat NRE Coke, says Ganesh Shaanbag of SMS Financials on CNBC Awaaz. The run-up for this stock is now over, he adds. The stock is currently trading at Rs 46.15, down 1.7% on the BSE.
Hold IDFC with medium-to-long term target of Rs 190-200, says PK Agarwal of Purpleline Investment on Zee Business. Fundamentally, it is a sound stock, he adds. The stock is currently trading at Rs 134.50, down 0.7% on the BSE.
Buy Balrampur Chini on dips with target of Rs 120-130, says Rahul Mohinder, technical analyst, on CNBC Awaaz. The stock is currently trading at Rs 102, up 1.4% on the BSE.
Buy Hotel Leela when it comes to Rs 23-24, says Ambareesh Baliga of Karvy Stock Broking on CNBC Awaaz. Hold for long term because it has good potential, he adds. The stock is currently trading at Rs 31, down 6.3% on the BSE.
Hold Satyam with target of Rs 150 in 12-18 months, says MB Singh, technical analyst, on Zee Business. The stock is currently trading at Rs 77.25, down 0.2% on the BSE.
Hold MindTree with target of Rs 510-520, says Rahul Mohinder, technical analyst, on CNBC Awaaz. The stock is currently trading at Rs 434.60, up 5.8% on the BSE.
Hold Tata Tea with target of Rs 950, says Ashwani Gujral, technical analyst, on CNBC TV18. The stock is currently trading at Rs 745, down 0.2% on the BSE.
Hold Unitech with stop loss of Rs 78, says MB Singh, technical analyst, on Zee Business. It has resistance at Rs 90, he adds. The stock is currently trading at Rs 82, down 2.3% on the BSE.
Buy Satyam on dips at Rs 60-70 with target of Rs 90-100, says Deven Choksey of KR Choksey on CNBC Awaaz. The stock is currently trading at Rs 77, down 0.5% on the BSE.
Hold Essar Oil with stop loss of Rs 145, says MB Singh, technical analyst, on Zee Business. It has resistance at Rs 195, he adds. The stock is currently trading at Rs 158.35, down 0.7% on the BSE.
Buy Spicejet with intra-day target of Rs 24, says Anil Singhvi, market expert, on CNBC Awaaz. Keep stop loss of Rs 19.50, he adds. The stock is currently trading at Rs 20.90, up 4.8% on the BSE.
Buy 20% of SBI shares at current levels and the rest when it is at Rs 1710, says Rahul Mohinder, technical analyst, on CNBC Awaaz. The stock is currently trading at Rs 1688, up 1.5% on the BSE.
Sell Essar Oil with targets of Rs 155, 152 and then 149, says Rajat Bose, technical analyst, on CNBC TV18. Keep stop loss above Rs 167, he adds. The stock is currently trading at Rs 156.50, down 1.8% on the BSE.
Hold Wipro which still has 7-8% upside left in it, says Rahul Mohinder, technical analyst, on CNBC Awaaz. The stock is currently trading at Rs 381.50, up 0.8% on the BSE.
Buy Zandu Pharma with intra-day target of Rs 7600, says Anil Singhvi, market expert, on CNBC Awaaz. Keep stop loss of Rs 7200, he adds. The stock is currently trading at Rs 7423, up 3.4% on the BSE.
Buy Omaxe with intra-day target of Rs 108, says Anil Singhvi, market expert, on CNBC Awaaz. Keep stop loss of Rs 101, he adds. The stock is currently trading at Rs 105.50, up 4% on the BSE. » Send to friends
Sell Idea Cellular at Rs 80.85 with target of Rs 77, says Simi Bhaumik, technical analyst, on Zee Business. Keep stop loss of Rs 82, she adds. The stock is at Rs 80.60, down 6.8% on the BSE.
Sell Aditya Birla Nuvo at Rs 896 with target of Rs 860, says Simi Bhaumik, technical analyst, on Zee Business. Keep stop loss of Rs 910, she adds. The stock is at Rs 898.75, down 5.3% on the BSE.
Buy Balrampur Chini with a target of Rs 120-130, says Rahul Mohindar, technical analyst, on CNBC TV18. The stock is currently trading at Rs 103, up 3% on the BSE. He advises buying select telecom, sugar and banking stocks on dips.
Buy Satyam around Rs 60-70 for a target of Rs 90-100 in 6 months where one can exit the stock, says Deven Choksey of KR Choksey, on Zee Business. The stock is currently trading at Rs 78, up 2% on the BSE.
It was another rough session for our market that closed weak. Sensex closed at 14290, down 232 points (provisional) and Nifty at 4265, down 90 points (provisional) from the previous close. CNX Midcap index was down 2.04% and BSE Smallcap index was down 3.45%. There was selling in realty, metal and power stocks. The market breadth was negative with advances at 192 against declines of 1063 on the NSE.
Sell JP Associates with a target of Rs 175 and stop loss of Rs 200, says Prakash Gaba, technical analyst, on CNBC Awaaz, as closing market strategy.
Sell Reliance Capital with a target of Rs 850 and stop loss of Rs 900, says Nishant Jain, technical analyst, on CNBC Awaaz, as closing market strategy.
Sell Ambuja Cements with a target of Rs 90 and stop loss of Rs 85, says Prakash Gaba, technical analyst, on CNBC Awaaz, as closing market strategy.
Credit Suisse maintains buy call and outperform in Hero Honda with a target of Rs 1527, reports NDTV Profit. The stock is currently trading at Rs 1449, up 3.17% on the BSE.
BNP maintains a buy call on Marico with a target of Rs 89, reports CNBC Awaaz. The stock is currently trading at Rs 70, up 1.45% on the BSE.
Buy RNRL with a target of Rs 98-101 and stop loss of Rs 93, says Tejas Nandu of Unicorn Investments, on CNBC Awaaz. The stock is currently trading at Rs 90, down 4.67% on the BSE.
In the banking space, accumulate PNB and SBI in the portfolio for long-term gains, says P Subramanium of Venture Securities, on CNBC Awaaz. He is bullish on the cement and power space for the long term.
Bonanza Portfolio maintains a sell call on Sterlite Industries with a target of Rs 586 and stop loss of Rs 613, reports CNBC Awaaz. The stock is currently trading at Rs 590, down 2.11% on the BSE.
In the steel sector, accumulate Tata Steel, JSW Steel and Welspun Gujarat in the portfolio for long-term gains as they have excellent fundamentals, says Rajesh Tambe, market expert, on Zee Business.
Buy Balrampur Chini with target of Rs 135-140, says Ashwani Gujral, technical analyst, on CNBC TV18. It has good support at Rs 90, he adds. The stock is currently trading at Rs 100, down 0.60% on the BSE.
Nifty has strong support at 4100 and resistance at 4500, says Krishna Kumar Karva of Emkay Shares and Securities, on CNBC TV18. Nifty needs to consolidate further, he feels. Global correction is also putting pressure on our markets, he adds. Investors are being cautious ahead of the budget and taking some profits off the table, he says.
Hold Axis Bank with targets of Rs 750, 770 and then 805, says Vasudeo Kamlakant, technical analyst, on NDTV Profit. Keep stop loss of Rs 685, he adds. The stock is currently trading at Rs 740, up 2.7% on the BSE.
Hold Balrampur Chini with medium-term target of Rs 150, says PK Agarwal of Purpleline Investment on Zee Business. Keep stop loss of Rs 80, he adds. The stock is currently trading at Rs 102.70, up 2.1% on the BSE.
Buy PNB at Rs 550-575 with short-term target of 15%, says Raj Kishore Bang of Sixth Sense on CNBC Awaaz. Long-term investors can keep stop loss of Rs 500 with target of 35%, he adds. The stock is currently trading at Rs 636.25, up 3.6% on the BSE.
Buy Bajaj Hindustan at Rs 195-200 with target of Rs 235-240, says Ashwani Gujral, technical analyst, on CNBC TV18. The stock is currently trading at Rs 207.20, up 2.4% on the BSE.
The momentum has been weakened by the huge sell-off yesterday and we expect more volatility, says Shashank Khade of Kotak Securities on CNBC TV18. The bias may have turned on the negative side and we would look for more signs of weakness in the coming days, he adds.
Hold Apollo Tyres with targets of Rs 36, 42 and then 52, says Vasudeo Kamlakant, technical analyst, on NDTV Profit. Keep stop loss of Rs 28, he adds. The stock is currently trading at Rs 31.50, down 0.8% on the BSE.
Book profits in Gujarat NRE Coke, says Ganesh Shaanbag of SMS Financials on CNBC Awaaz. The run-up for this stock is now over, he adds. The stock is currently trading at Rs 46.15, down 1.7% on the BSE.
Hold IDFC with medium-to-long term target of Rs 190-200, says PK Agarwal of Purpleline Investment on Zee Business. Fundamentally, it is a sound stock, he adds. The stock is currently trading at Rs 134.50, down 0.7% on the BSE.
Buy Balrampur Chini on dips with target of Rs 120-130, says Rahul Mohinder, technical analyst, on CNBC Awaaz. The stock is currently trading at Rs 102, up 1.4% on the BSE.
Buy Hotel Leela when it comes to Rs 23-24, says Ambareesh Baliga of Karvy Stock Broking on CNBC Awaaz. Hold for long term because it has good potential, he adds. The stock is currently trading at Rs 31, down 6.3% on the BSE.
Hold Satyam with target of Rs 150 in 12-18 months, says MB Singh, technical analyst, on Zee Business. The stock is currently trading at Rs 77.25, down 0.2% on the BSE.
Hold MindTree with target of Rs 510-520, says Rahul Mohinder, technical analyst, on CNBC Awaaz. The stock is currently trading at Rs 434.60, up 5.8% on the BSE.
Hold Tata Tea with target of Rs 950, says Ashwani Gujral, technical analyst, on CNBC TV18. The stock is currently trading at Rs 745, down 0.2% on the BSE.
Hold Unitech with stop loss of Rs 78, says MB Singh, technical analyst, on Zee Business. It has resistance at Rs 90, he adds. The stock is currently trading at Rs 82, down 2.3% on the BSE.
Buy Satyam on dips at Rs 60-70 with target of Rs 90-100, says Deven Choksey of KR Choksey on CNBC Awaaz. The stock is currently trading at Rs 77, down 0.5% on the BSE.
Hold Essar Oil with stop loss of Rs 145, says MB Singh, technical analyst, on Zee Business. It has resistance at Rs 195, he adds. The stock is currently trading at Rs 158.35, down 0.7% on the BSE.
Buy Spicejet with intra-day target of Rs 24, says Anil Singhvi, market expert, on CNBC Awaaz. Keep stop loss of Rs 19.50, he adds. The stock is currently trading at Rs 20.90, up 4.8% on the BSE.
Buy 20% of SBI shares at current levels and the rest when it is at Rs 1710, says Rahul Mohinder, technical analyst, on CNBC Awaaz. The stock is currently trading at Rs 1688, up 1.5% on the BSE.
Sell Essar Oil with targets of Rs 155, 152 and then 149, says Rajat Bose, technical analyst, on CNBC TV18. Keep stop loss above Rs 167, he adds. The stock is currently trading at Rs 156.50, down 1.8% on the BSE.
Hold Wipro which still has 7-8% upside left in it, says Rahul Mohinder, technical analyst, on CNBC Awaaz. The stock is currently trading at Rs 381.50, up 0.8% on the BSE.
Buy Zandu Pharma with intra-day target of Rs 7600, says Anil Singhvi, market expert, on CNBC Awaaz. Keep stop loss of Rs 7200, he adds. The stock is currently trading at Rs 7423, up 3.4% on the BSE.
Buy Omaxe with intra-day target of Rs 108, says Anil Singhvi, market expert, on CNBC Awaaz. Keep stop loss of Rs 101, he adds. The stock is currently trading at Rs 105.50, up 4% on the BSE. » Send to friends
Sell Idea Cellular at Rs 80.85 with target of Rs 77, says Simi Bhaumik, technical analyst, on Zee Business. Keep stop loss of Rs 82, she adds. The stock is at Rs 80.60, down 6.8% on the BSE.
Sell Aditya Birla Nuvo at Rs 896 with target of Rs 860, says Simi Bhaumik, technical analyst, on Zee Business. Keep stop loss of Rs 910, she adds. The stock is at Rs 898.75, down 5.3% on the BSE.
Thursday, June 11, 2009
Closing Bell 11th June 2009
Closing Bell 11th June 2009
After witnessing a volatile trading session today, the Indian markets ended the day on a weak note as selling activity increased during the final minutes. The BSE-Sensex ended lower by around 60 points, while the NSE-Nifty, closed lower by about 15 points. Stocks from the mid-cap and small-cap spaces ended the day on a negative note as well, recording losses of around 0.2% and 0.9% respectively. Stocks from the metal, auto and FMCG spaces managed to garner the investors’ interest today, while stocks from the IT and energy sectors led the pack of losers.
Other Asian markets ended the day on a mixed note today. The European indices are currently trading in the green. Rupee was trading at 47.5 against the US dollar at the time of writing.
Telecom stocks ended the day on a firm note led by Spice Communication, Idea Cellular and MTNL. Telecom major, Bharti Airtel recently signed a three-year managed services contract for its value added services (VAS) with its group company Comviva Technologies. As part of the contract Comviva will manage the company’s VAS nodes from various partners. However, financials of the deal have not yet been disclosed. This is a positive development for Bharti as this would primarily allow the company to focus on its key strengths of marketing and branding. In addition to this, the company will be in a position to save costs and also roll out better and larger number of value added services. It may be noted that the company has signed deals of similar nature with Ericsson and Nokia to manage its network and IBM for IT management.
Energy stocks ended the day on a weak note led by HPCL, BPCL and ONGC. As per a leading business daily, state run oil marketing companies (OMCs) plan to approach the government for revision of retail fuel prices on account of the rise in global crude oil prices. It is believed that the OMCs are currently recording losses of around Rs 3 per litre on petrol sales and Re 1 per litre on diesel sales. On an average, OMCs are making daily losses of around Rs 1.2 bn on sale of fuel. According to one of the state run oil marketers, OMCs start making losses on fuel sales once the price of crude oil crosses US$ 65 a barrel. Currently, oil prices have been flirting with the US$ 70 per barrel mark. It may be noted that the OMCs last revised retail fuel prices in January this year when the price of crude oil was around US$ 42 per barrel.
Inflation (as measured by WPI) for the week ending May 30 stood at 0.13%. This is the lowest figure recorded in around three decades. Last week, the figure stood at 0.48%. The main reason behind this fall was the decrease in prices of manufactured products. However, prices of food items increased on a week on week basis. It may be noted that inflation during the same week last year stood at 9.32%.
Though the markets continued to trade in the negative territory during the previous two hours of trade, they have shed some of their earlier losses on account of buying activity witnessed at lower levels. Stocks from the energy and cement sectors are leading the pack of losers, while select stocks from the telecom, aluminium and auto sectors are trading firm. The overall decline to advance ratio is poised at 1.5 to 1 on the BSE.
The BSE-Sensex is trading weak, down by around 20 points, while the NSE-Nifty is trading firm, up by around 10 points. The BSE-Midcap and BSE-Smallcap indices are trading higher by around 0.3% and 0.6% respectively. The rupee is trading at 47.48 to the dollar.
Software stocks are trading mixed. While Infosys and Wipro are trading lower, Tech Mahindra is trading higher. As per a leading business daily, Indian software majors like Wipro and Infosys are set to enter the booming domestic rural outsourcing market. Wipro BPO, a US$ 395 m back office service arm of Wipro is exploring service delivery tie ups with several rural service providers to whom it already provides technology and other supports. Infosys BPO on the other hand, plans to tie up with service providers with shops in rural areas and small towns for its domestic operations. It may be noted that as per Nasscom, the Indian IT majors used to primarily cater to the global clients. However, with the fall in global demand and more focus on the domestic markets, the sector has gained some of the lost momentum. The cost of operations in rural markets are estimated to be around 60% less as compared to Tier I or II cities.
Power stocks are trading mixed. While Tata Power is trading lower, NTPC is trading higher. As per a leading business daily, Tata Power is set to enter the retail distribution business of power in Mumbai. The company already has a distribution license for Mumbai and is awaiting Maharashtra Electricity Regulatory Commission's (MERC) approval for the same. The company is planning to target new customers in all three segments viz commercial, industrial and residential spaces and will also continue with its bulk electricity supply business, which remains a major growth driver. It may be noted that Tata Power's main business has been electricity generation and bulk supply to Mumbai metropolitan area regulated by MERC. It also supplies power to distributors like Reliance Energy, Brihanmumbai Electric Supply and Transport in Mumbai and North Delhi Power in Delhi. This is a positive development for the company as the return on equity in power distribution is on the higher side as compared to the generation business.
The Indian markets continued to trade in the red as weak sentiment prevailed during the previous two hours of trade. Currently, stocks from the energy, banking and software sectors are leading the pack of losers, while select telecom and auto stocks are trading firm. The overall decline to advance ratio is poised at 1.8 to 1 on the BSE.
The BSE-Sensex and the NSE-Nifty are trading weak, down by around 50 points and 25 points respectively. The BSE-Midcap and BSE-Smallcap are also trading lower, down by around 0.1% and 0.6% respectively. The rupee is trading at 47.46 to the dollar.
As per a leading business daily, the country's largest lender, SBI plans to grow through acquisitions and will consolidate its associate banks. Besides, the bank is also planning to look for acquisition of domestic banks. SBI will decide on consolidation of its associates next month and believes that it will not take more than 3 to 6 months after the process begins. It may be noted that the bank had merged State Bank of Saurashtra in August 2008 and now it has six associate banks. The bank also has a positive view regarding the government's support for the consolidation process. Regarding lending rates, the bank expects interest rates to remain soft going forward and plans to review the rates by the end of the current month. Banking stocks are trading weak led by SBI, Corporation Bank and PNB.
Software stocks are trading mixed. While Tech Mahindra is trading firm, Infosys and Wipro are in the red. As per a leading business daily, Infosys expects its Latin American business to grow the fastest going forward. Although the segment's contribution is miniscule to its total revenues, it expects higher growth as IT operations have not expanded at a strong pace in the region. In a move to diversify its operations which are concentrated on the North American region (around 63% of the company's total revenues during FY09), Infosys has been looking to expand its operations in regions like Latin America, Brazil, Europe, Asia and the Middle East, that present immense scope going forward. In fact, the company is soon to start operating its second centre in the Latin American regions of Monterrey and Mexico.
The Indian markets have opened the day's proceedings on a cautious note. Power, telecom and metals stocks are trading firm, while software, auto and banking stocks are among the losers. The overall advance to decline ratio is skewed towards the latter in the ratio of 1.74 to 1 on the NSE. As regards global markets, the US markets ended marginally in the red as rising commodity prices raised fears of inflation which would affect the recovery effort. The European markets closed higher yesterday. The Asian indices are currently trading mixed.
The BSE Sensex is trading lower by around 10 points. The NSE Nifty is down 10 points. The BSE Midcap and BSE Smallcap index are both trading flat. The rupee is trading at 47.44 to the dollar.
Larsen & Toubro (L&T) is planning to sell its entire 11.5% stake in UltraTech Cement. The company sold 8.3% stake through a series of off-market deals yesterday for around Rs 7.6 bn. UltraTech is a group company of the Birlas. As per the agreement made between the companies in 2003, the Birla group enjoyed the right of first refusal on L&T's holding. The same agreement also made it clear that in case the Birlas do not exercise their rights, L&T had the liberty to sell its shares to financial investors through open market operations. L&T was, however, not allowed to sell the shares to strategic investors. The Aditya Birla Group waived its first right of refusal mainly because it already had a comfortable 55% stake. As per the pact, L&T had to sell its stake by the end of 2009. The move is in line with L&T's objective to pull out of cement which is not part of its core operations. Engineering stocks are trading mixed.
Mahindra & Mahindra (M&M) is planning to buy out its local partner in Mahindra South Africa (Mahindra SA). M&M holds 92% in Mahindra SA, while the remaining 8% stake is held by African Automotive Investments Corporation, a subsidiary of African Resources and Logistics Corporation. Mahindra SA sells the Bolero, Scorpio and Xylo ranges in South Africa. It had sold over 1,500 vehicles in the local market last year. M&M is also evaluating the possibility of starting a local completely knocked down (CKD) assembly unit there. The company already has an assembly plant in Egypt. Logistics costs and potential import duty benefits are the key drivers behind the decision to have a local assembly unit. The move to buy the stake is a part of its plan to build the brand and take independent decisions. The company is looking at serving the adjoining markets like Zambia, Angola, Zimbabwe and Botswana, among others. It will also give an advantage in serving the US markets through its local assembly in South Africa. The African Growth and Opportunity Act provided duty-free access to the US for a large number of products from over 35 African economies. Infact, M&M has plans to enter the US market with its Scorpio later this year. Auto stocks are also witnessing mixed sentiments.
After witnessing a volatile trading session today, the Indian markets ended the day on a weak note as selling activity increased during the final minutes. The BSE-Sensex ended lower by around 60 points, while the NSE-Nifty, closed lower by about 15 points. Stocks from the mid-cap and small-cap spaces ended the day on a negative note as well, recording losses of around 0.2% and 0.9% respectively. Stocks from the metal, auto and FMCG spaces managed to garner the investors’ interest today, while stocks from the IT and energy sectors led the pack of losers.
Other Asian markets ended the day on a mixed note today. The European indices are currently trading in the green. Rupee was trading at 47.5 against the US dollar at the time of writing.
Telecom stocks ended the day on a firm note led by Spice Communication, Idea Cellular and MTNL. Telecom major, Bharti Airtel recently signed a three-year managed services contract for its value added services (VAS) with its group company Comviva Technologies. As part of the contract Comviva will manage the company’s VAS nodes from various partners. However, financials of the deal have not yet been disclosed. This is a positive development for Bharti as this would primarily allow the company to focus on its key strengths of marketing and branding. In addition to this, the company will be in a position to save costs and also roll out better and larger number of value added services. It may be noted that the company has signed deals of similar nature with Ericsson and Nokia to manage its network and IBM for IT management.
Energy stocks ended the day on a weak note led by HPCL, BPCL and ONGC. As per a leading business daily, state run oil marketing companies (OMCs) plan to approach the government for revision of retail fuel prices on account of the rise in global crude oil prices. It is believed that the OMCs are currently recording losses of around Rs 3 per litre on petrol sales and Re 1 per litre on diesel sales. On an average, OMCs are making daily losses of around Rs 1.2 bn on sale of fuel. According to one of the state run oil marketers, OMCs start making losses on fuel sales once the price of crude oil crosses US$ 65 a barrel. Currently, oil prices have been flirting with the US$ 70 per barrel mark. It may be noted that the OMCs last revised retail fuel prices in January this year when the price of crude oil was around US$ 42 per barrel.
Inflation (as measured by WPI) for the week ending May 30 stood at 0.13%. This is the lowest figure recorded in around three decades. Last week, the figure stood at 0.48%. The main reason behind this fall was the decrease in prices of manufactured products. However, prices of food items increased on a week on week basis. It may be noted that inflation during the same week last year stood at 9.32%.
Though the markets continued to trade in the negative territory during the previous two hours of trade, they have shed some of their earlier losses on account of buying activity witnessed at lower levels. Stocks from the energy and cement sectors are leading the pack of losers, while select stocks from the telecom, aluminium and auto sectors are trading firm. The overall decline to advance ratio is poised at 1.5 to 1 on the BSE.
The BSE-Sensex is trading weak, down by around 20 points, while the NSE-Nifty is trading firm, up by around 10 points. The BSE-Midcap and BSE-Smallcap indices are trading higher by around 0.3% and 0.6% respectively. The rupee is trading at 47.48 to the dollar.
Software stocks are trading mixed. While Infosys and Wipro are trading lower, Tech Mahindra is trading higher. As per a leading business daily, Indian software majors like Wipro and Infosys are set to enter the booming domestic rural outsourcing market. Wipro BPO, a US$ 395 m back office service arm of Wipro is exploring service delivery tie ups with several rural service providers to whom it already provides technology and other supports. Infosys BPO on the other hand, plans to tie up with service providers with shops in rural areas and small towns for its domestic operations. It may be noted that as per Nasscom, the Indian IT majors used to primarily cater to the global clients. However, with the fall in global demand and more focus on the domestic markets, the sector has gained some of the lost momentum. The cost of operations in rural markets are estimated to be around 60% less as compared to Tier I or II cities.
Power stocks are trading mixed. While Tata Power is trading lower, NTPC is trading higher. As per a leading business daily, Tata Power is set to enter the retail distribution business of power in Mumbai. The company already has a distribution license for Mumbai and is awaiting Maharashtra Electricity Regulatory Commission's (MERC) approval for the same. The company is planning to target new customers in all three segments viz commercial, industrial and residential spaces and will also continue with its bulk electricity supply business, which remains a major growth driver. It may be noted that Tata Power's main business has been electricity generation and bulk supply to Mumbai metropolitan area regulated by MERC. It also supplies power to distributors like Reliance Energy, Brihanmumbai Electric Supply and Transport in Mumbai and North Delhi Power in Delhi. This is a positive development for the company as the return on equity in power distribution is on the higher side as compared to the generation business.
The Indian markets continued to trade in the red as weak sentiment prevailed during the previous two hours of trade. Currently, stocks from the energy, banking and software sectors are leading the pack of losers, while select telecom and auto stocks are trading firm. The overall decline to advance ratio is poised at 1.8 to 1 on the BSE.
The BSE-Sensex and the NSE-Nifty are trading weak, down by around 50 points and 25 points respectively. The BSE-Midcap and BSE-Smallcap are also trading lower, down by around 0.1% and 0.6% respectively. The rupee is trading at 47.46 to the dollar.
As per a leading business daily, the country's largest lender, SBI plans to grow through acquisitions and will consolidate its associate banks. Besides, the bank is also planning to look for acquisition of domestic banks. SBI will decide on consolidation of its associates next month and believes that it will not take more than 3 to 6 months after the process begins. It may be noted that the bank had merged State Bank of Saurashtra in August 2008 and now it has six associate banks. The bank also has a positive view regarding the government's support for the consolidation process. Regarding lending rates, the bank expects interest rates to remain soft going forward and plans to review the rates by the end of the current month. Banking stocks are trading weak led by SBI, Corporation Bank and PNB.
Software stocks are trading mixed. While Tech Mahindra is trading firm, Infosys and Wipro are in the red. As per a leading business daily, Infosys expects its Latin American business to grow the fastest going forward. Although the segment's contribution is miniscule to its total revenues, it expects higher growth as IT operations have not expanded at a strong pace in the region. In a move to diversify its operations which are concentrated on the North American region (around 63% of the company's total revenues during FY09), Infosys has been looking to expand its operations in regions like Latin America, Brazil, Europe, Asia and the Middle East, that present immense scope going forward. In fact, the company is soon to start operating its second centre in the Latin American regions of Monterrey and Mexico.
The Indian markets have opened the day's proceedings on a cautious note. Power, telecom and metals stocks are trading firm, while software, auto and banking stocks are among the losers. The overall advance to decline ratio is skewed towards the latter in the ratio of 1.74 to 1 on the NSE. As regards global markets, the US markets ended marginally in the red as rising commodity prices raised fears of inflation which would affect the recovery effort. The European markets closed higher yesterday. The Asian indices are currently trading mixed.
The BSE Sensex is trading lower by around 10 points. The NSE Nifty is down 10 points. The BSE Midcap and BSE Smallcap index are both trading flat. The rupee is trading at 47.44 to the dollar.
Larsen & Toubro (L&T) is planning to sell its entire 11.5% stake in UltraTech Cement. The company sold 8.3% stake through a series of off-market deals yesterday for around Rs 7.6 bn. UltraTech is a group company of the Birlas. As per the agreement made between the companies in 2003, the Birla group enjoyed the right of first refusal on L&T's holding. The same agreement also made it clear that in case the Birlas do not exercise their rights, L&T had the liberty to sell its shares to financial investors through open market operations. L&T was, however, not allowed to sell the shares to strategic investors. The Aditya Birla Group waived its first right of refusal mainly because it already had a comfortable 55% stake. As per the pact, L&T had to sell its stake by the end of 2009. The move is in line with L&T's objective to pull out of cement which is not part of its core operations. Engineering stocks are trading mixed.
Mahindra & Mahindra (M&M) is planning to buy out its local partner in Mahindra South Africa (Mahindra SA). M&M holds 92% in Mahindra SA, while the remaining 8% stake is held by African Automotive Investments Corporation, a subsidiary of African Resources and Logistics Corporation. Mahindra SA sells the Bolero, Scorpio and Xylo ranges in South Africa. It had sold over 1,500 vehicles in the local market last year. M&M is also evaluating the possibility of starting a local completely knocked down (CKD) assembly unit there. The company already has an assembly plant in Egypt. Logistics costs and potential import duty benefits are the key drivers behind the decision to have a local assembly unit. The move to buy the stake is a part of its plan to build the brand and take independent decisions. The company is looking at serving the adjoining markets like Zambia, Angola, Zimbabwe and Botswana, among others. It will also give an advantage in serving the US markets through its local assembly in South Africa. The African Growth and Opportunity Act provided duty-free access to the US for a large number of products from over 35 African economies. Infact, M&M has plans to enter the US market with its Scorpio later this year. Auto stocks are also witnessing mixed sentiments.
Market Voices 11th June 2009
Metal stocks ended sharply higher thanks to a firm trend in global metal prices. Select auto and FMCG stocks closed higher. A few stocks from banking and pharma sectors too ended on a firm note.
Information technology, PSU, oil, power and capital goods stocks ended sharply lower. Realty stocks remained quite listless today.
It was a lackluster session for midcap and smallcap stocks as well. The market breadth was weak almost right through the day. Hindalco, Sterlite, Tata Steel, M&M, HDFC Bank, NTPC, Bharti Airtel, Tata Motors and ITC closed with sharp gains. JP Associates, ONGC, ACC, BHEL, SBI, Infosys, Reliance Infra, DLF, Wipro, Grasim, Tata Power and RIL ended on a weak note.
Tata Comm, Idea Cellular, RPower, Reliance Capital and SAIL ended sharply higher. Ambuja Cements, BPCL, Axis Bank, HCL Tech,Unitech, PNB, RPL, Cairn India, GAIL, Siemens and Suzlon finished with sharp losses.
RNRL (Rs 91) is likely to face some stiff resistance at Rs 105 levels. Short term traders can have a stop loss in place near Rs 80. A fall to that level and a strong breach there can result in a slide to Rs 60 and then, further down. A strong breakout at Rs 105 - 110 can lift the stock to Rs 128 - 130.
HDFC Bank (Rs 1553) hit a new 52-week high at Rs 1563 this afternoon. The stock looks set for a further upmove. Investors looking at short term can try this stock even at current levels.
However, considering global uncertainty, one would do well to restrict exposure to modest levels. More quantities can be added at sharp declines.
Investors looking at long term can try BHEL, Siemens, Punj Lloyd and L&T at dips. All these stocks are likely to face some pressure and drift lower in the near run. But their long term prospects continue to remain quite bright.
Oil stocks have taken a beating again due to rising crude oil prices. It was expected that the government would decontrol fuel prices but that has not happened as yet. BPCL,HPCL and IOC have been drifting lower over the past few sessions and a further downside looks very likely if crude prices continue to surge higher.
Cements stocks have drifted lower today. Still, most of the stocks in this space are likley to have some bright spells in the near to medium term. While traders with a good appetite for risk can try quality cement stocks even at current levels, one with little or no appetite for risk can wait for the market to cool down a bit.
Compact Disc India Ltd has signed an MoU with BBC Films to co-produce film, "Blame it On The Bhangra". This British film will be distributed by Lionsgate for UK territory. Compact Disc had informed last week that Seengal Capital Advisors Pvt. Ltd an investment arm of the promoters of CDI and iMedia Ventures Ltd. content developer to world's houses and a pioneer in Digital Entertainment have offered to buy upto 40% equity of Compact Disc India Ltd by open offer.
The price band, number of shares, merchant banker and other information are yet to be announced.
IT stocks, which had a good session yesterday, are seen struggling today on fresh concerns over the state of the U.S. economy. One holding IT majors Infosys, TCS and Wipro with a long term plan can continue to stay invested. Sharp fall in prices can be treated as opportunities to increase exposure.
ONGC (Rs 1135) can rise to Rs 1250 - 1275 is it manages to breach a resistance near Rs 1185.
Long term investors can stay invested in the counter. Those looking at the stock with a short term plan, can sell it at rallies and re-enter later at declines.
MRPL (Rs 94) is likely to see further upside in the near to medium term. One holding the stock can stay invested and look at increasing exposure at sharp falls.
One can stay invested in IVRCL Infrastructure with a stop loss near Rs 260 for now. The stock, currently traded at Rs 356, can move on to Rs 410 - 415 or even higher if the current rally in the infrastructure space sustains for a few more sessions.
Satyam Computer Services has hit the upper circuit for the third straight session. Satyam reported a net profit of Rs 160.50 crore for the October-December 2008, a period that saw the beginning of Satyam's fall from grace, and a total income of Rs 2,327.21 crore. The company was in dire straits in January with a measly profit of Rs 4 crore before showing signs of revival by recording a Rs 52 crore profit in February. This was despite losing about two dozen clients.
UCO Bank (cmp Rs 42.80) can be picked up in a staggered manner for long term. The stock is likel to face some resistance near Rs 45, its 52-week high, but a strong breakout there can result in a rise of another Rs 10 - 12. Long term investors can hold the stock with a stop loss near Rs 32.
Gitanjali Gems Ltd has informed that Gitanjali Lifestyle Ltd, the 100% wholly owned subsidiary of the Company has decided to set up a joint venture Company in India in association with Damas LLC, Dubai for retail trading of all kinds of jewelleries and related accessories. Further the Company has informed that, Damas LLC, Dubai has received necessary approval from Foreign Investment Promotion Board on June 04, 2009 for setting up the said joint venture in India.
Market Outlook
After two days of strong gains, some consolidation looks likely on the Indian bourses today. Buying is likely to remain stock specific. Though market is likely to remain rangebound, some volatility is not ruled out.
Sector Watch
Realty stocks may struggle once again though buying at lower levels is not ruled out. Metals are expected to do well. Information technology and capital goods sectors will see stock specific action.
Scrip Watch
Buoyed by strong results posted by the company, the Tata Tea stock is likely to see some strong buying today.
Shares of Larsen & Toubro and Ultratech Cement will see action today. L&T is reportedly planning to sell through block deals, 10.3 million shares of Ultratech Cement for up to $160 million.
UCO Bank will be in focus after the bank said that it sees a scope to cut interest rates by 100 basis points. While stating that A Follow-on public offer of its shares may not happen this fiscal, the bank has said that it expects a credit growth of 25% in fiscal 2009-10.
Macro and Market Factors
Stocks ended lower on Wall Street yesterday amid concerns over inflation and the slow pace of economic recovery. Asian markets are exhibiting a mixed trend. Higher crude oil prices buoyed up resource-related stocks but the broad markets are looking none too positive.
With no prominent triggers from the home front, the market will be tracking global cues for a major part of the session today.
Information technology, PSU, oil, power and capital goods stocks ended sharply lower. Realty stocks remained quite listless today.
It was a lackluster session for midcap and smallcap stocks as well. The market breadth was weak almost right through the day. Hindalco, Sterlite, Tata Steel, M&M, HDFC Bank, NTPC, Bharti Airtel, Tata Motors and ITC closed with sharp gains. JP Associates, ONGC, ACC, BHEL, SBI, Infosys, Reliance Infra, DLF, Wipro, Grasim, Tata Power and RIL ended on a weak note.
Tata Comm, Idea Cellular, RPower, Reliance Capital and SAIL ended sharply higher. Ambuja Cements, BPCL, Axis Bank, HCL Tech,Unitech, PNB, RPL, Cairn India, GAIL, Siemens and Suzlon finished with sharp losses.
RNRL (Rs 91) is likely to face some stiff resistance at Rs 105 levels. Short term traders can have a stop loss in place near Rs 80. A fall to that level and a strong breach there can result in a slide to Rs 60 and then, further down. A strong breakout at Rs 105 - 110 can lift the stock to Rs 128 - 130.
HDFC Bank (Rs 1553) hit a new 52-week high at Rs 1563 this afternoon. The stock looks set for a further upmove. Investors looking at short term can try this stock even at current levels.
However, considering global uncertainty, one would do well to restrict exposure to modest levels. More quantities can be added at sharp declines.
Investors looking at long term can try BHEL, Siemens, Punj Lloyd and L&T at dips. All these stocks are likely to face some pressure and drift lower in the near run. But their long term prospects continue to remain quite bright.
Oil stocks have taken a beating again due to rising crude oil prices. It was expected that the government would decontrol fuel prices but that has not happened as yet. BPCL,HPCL and IOC have been drifting lower over the past few sessions and a further downside looks very likely if crude prices continue to surge higher.
Cements stocks have drifted lower today. Still, most of the stocks in this space are likley to have some bright spells in the near to medium term. While traders with a good appetite for risk can try quality cement stocks even at current levels, one with little or no appetite for risk can wait for the market to cool down a bit.
Compact Disc India Ltd has signed an MoU with BBC Films to co-produce film, "Blame it On The Bhangra". This British film will be distributed by Lionsgate for UK territory. Compact Disc had informed last week that Seengal Capital Advisors Pvt. Ltd an investment arm of the promoters of CDI and iMedia Ventures Ltd. content developer to world's houses and a pioneer in Digital Entertainment have offered to buy upto 40% equity of Compact Disc India Ltd by open offer.
The price band, number of shares, merchant banker and other information are yet to be announced.
IT stocks, which had a good session yesterday, are seen struggling today on fresh concerns over the state of the U.S. economy. One holding IT majors Infosys, TCS and Wipro with a long term plan can continue to stay invested. Sharp fall in prices can be treated as opportunities to increase exposure.
ONGC (Rs 1135) can rise to Rs 1250 - 1275 is it manages to breach a resistance near Rs 1185.
Long term investors can stay invested in the counter. Those looking at the stock with a short term plan, can sell it at rallies and re-enter later at declines.
MRPL (Rs 94) is likely to see further upside in the near to medium term. One holding the stock can stay invested and look at increasing exposure at sharp falls.
One can stay invested in IVRCL Infrastructure with a stop loss near Rs 260 for now. The stock, currently traded at Rs 356, can move on to Rs 410 - 415 or even higher if the current rally in the infrastructure space sustains for a few more sessions.
Satyam Computer Services has hit the upper circuit for the third straight session. Satyam reported a net profit of Rs 160.50 crore for the October-December 2008, a period that saw the beginning of Satyam's fall from grace, and a total income of Rs 2,327.21 crore. The company was in dire straits in January with a measly profit of Rs 4 crore before showing signs of revival by recording a Rs 52 crore profit in February. This was despite losing about two dozen clients.
UCO Bank (cmp Rs 42.80) can be picked up in a staggered manner for long term. The stock is likel to face some resistance near Rs 45, its 52-week high, but a strong breakout there can result in a rise of another Rs 10 - 12. Long term investors can hold the stock with a stop loss near Rs 32.
Gitanjali Gems Ltd has informed that Gitanjali Lifestyle Ltd, the 100% wholly owned subsidiary of the Company has decided to set up a joint venture Company in India in association with Damas LLC, Dubai for retail trading of all kinds of jewelleries and related accessories. Further the Company has informed that, Damas LLC, Dubai has received necessary approval from Foreign Investment Promotion Board on June 04, 2009 for setting up the said joint venture in India.
Market Outlook
After two days of strong gains, some consolidation looks likely on the Indian bourses today. Buying is likely to remain stock specific. Though market is likely to remain rangebound, some volatility is not ruled out.
Sector Watch
Realty stocks may struggle once again though buying at lower levels is not ruled out. Metals are expected to do well. Information technology and capital goods sectors will see stock specific action.
Scrip Watch
Buoyed by strong results posted by the company, the Tata Tea stock is likely to see some strong buying today.
Shares of Larsen & Toubro and Ultratech Cement will see action today. L&T is reportedly planning to sell through block deals, 10.3 million shares of Ultratech Cement for up to $160 million.
UCO Bank will be in focus after the bank said that it sees a scope to cut interest rates by 100 basis points. While stating that A Follow-on public offer of its shares may not happen this fiscal, the bank has said that it expects a credit growth of 25% in fiscal 2009-10.
Macro and Market Factors
Stocks ended lower on Wall Street yesterday amid concerns over inflation and the slow pace of economic recovery. Asian markets are exhibiting a mixed trend. Higher crude oil prices buoyed up resource-related stocks but the broad markets are looking none too positive.
With no prominent triggers from the home front, the market will be tracking global cues for a major part of the session today.
Wednesday, June 10, 2009
Closing Bell 10th June 2009
Closing Bell 10th June 2009
Although the Indian markets pared some gains during the final hour of trade, they managed to end the day well above the dotted line. The BSE-Sensex ended higher by around 340 points, while the NSE-Nifty closed higher by about 105 points. Stocks from the mid-cap and small-cap spaces ended the day on a positive note as well, recording gains of around 1.6% and 0.3% respectively. Barring stocks from the realty sector, buying activity was witnessed in stocks across the board, led by power, capital goods and consumer durables.
Other Asian markets ended the day on a firm note today. The European indices are currently trading in the green. Rupee was trading at 47.3 against the US dollar at the time of writing.
Pharma stocks ended the day on a strong note led by Dr. Reddy's, Ranbaxy, Glenmark Pharma and Cipla. The stock of Dr. Reddy's was amongst the top gainers amidst its peers on the announcement of it receiving the USFDA's (US Food and Drug Administration) approval for its Abbreviated New Drug Application (ANDA) for Omeprazole Mg OTC. This drug is used for treating heartburns. It may be noted that the company's filing for this product was under litigation and in March, the US had ruled in favour of Dr. Reddy's granting it the exclusivity period. 'Omeprazole OTC' generated annual sales of approximately US$ 362 m in the US as of July 2008.
Software stocks ended the day on a firm note led by NIIT, Tech Mahindra, HCL Tech and Wipro. As a fallout of the downturn, the BPO space is likely to see an increased globalisation with BPO companies fishing for newer verticals and geographies. To spur growth it has become important to move up the value chain by providing more sophisticated services to the customer. The Indian BPO industry, growing at a CAGR of 37% over the last seven years, clocked in revenue of almost US$ 15 bn during FY09. But most of the revenue came from the US and was concentrated in the BFSI segment. As the US economy is worst hit by the global recession, it is high time that the sector starts looking at newer pastures. It is also altering its onshore-offshore mix for better bottom-lines. Nasscom President, Mr. Som Mittal has predicted the US$ 50 bn Indian IT-ITeS industry will reach US$ 225 bn by 2020 with 80% of the growth coming from non-traditional geographies and markets like telecom, government sector, amongst others. The sector also saw an effort to rationalise cost-structures which will boost the operating efficiency. There are also challenges from countries like China and Brazil as traditional cost-arbitrage is no longer the key driver for success. A better value-proposition is all that counts.
In a recent meeting with the banking industry, Finance Minister Pranab Mukherjee has pushed for commercial banks to cut interest rates, adding that the measures announced by the central bank were not getting adequately reflected. As per a leading business daily, public sector banks have agreed to consider reducing interest rates. However, the FM declined to comment on the extent of the potential reduction in borrowing costs.
The Indian markets continued to trade firm during the previous two hours of trade on account of sustained buying activity. Stocks from the energy, power and software sectors are leading the pack of gainers, while select stocks from the construction, engineering and auto sector are trading lower. The overall advance to decline ratio is poised at 1.2 to 1 on the BSE.
The BSE-Sensex and the NSE-Nifty are trading firm, up by around 350 points and 75 points respectively. The BSE-Midcap and BSE-Smallcap indices are also trading firm, up by around 1.2% and 0.5% respectively. The rupee is trading at 47.26 to the dollar.
As per a leading business daily, HDFC plans to raise up to Rs 40 bn through qualified institutional placement (QIP) of secured redeemable non convertible debentures (NCDs) and warrants in order to grow its loan book. It has received an in principle approval from the board regarding the same. Interestingly, the NCDs are likely to come with detachable warrants and will likely dilute up to 3.5% equity share capital if all warrants were fully exchanged for equity. These debt instruments have tenure of 3 years with rates of around 7.25%-7.5%. It may be noted that HDFC has disbursed loans worth Rs 300 bn in FY09. With these additional funds coming in, the company expects to grow its loan book at a faster rate at the time when the demand for housing loans is reviving. HDFC's net interest margins stood at 3.3% during FY09, while Gross NPA (non-performing assets) levels were at 0.8%. The stock of HDFC is trading higher along with its peer LIC Housing.
FMCG stocks are trading mixed. While HUL and Colgate are trading higher, Gillette and Marico are trading lower. As per a leading business daily, Hindustan Unilever (HUL) has decided to put on hold the sale of its leather business as it failed to find a suitable buyer. The business is run by HUL's wholly-owned subsidiary Pond's Exports. It may be noted that HUL had decided to disinvest its leather business and concentrate on its core business activities. In fact, HUL had notified its workers at the Puducherry unit about its intention to offer a voluntary retirement scheme as far back as October 2008. Also the company has deferred its divestiture of 49% stake in Capgemini Business Services (India) by end of FY10 on account of business and strategic interest of both HUL and Capgemini. In 2006, HUL had sold 51% of Capgemini (India) to Capgemini SA for Rs 520 m.
The Indian markets continued to trade in the green during the previous two hours of trade on the back of sustained strong cues from the Asian markets and heavy buying in the index heavyweights. Currently, stocks from the software, banking and power sectors are leading the pack of gainers, while select realty and energy stocks are trading weak. The overall advance to decline ratio is poised at 1.3 to 1 on the BSE.
Auto stocks are trading firm led by M&M, Ashok Leyland and Tata Motors. As per a leading business daily, Ashok Leyland has reported a 64.5% YoY decline in overall sales volumes during the month of May this year. The fall in exports sales was lower at 33% YoY during the period, as compared to the domestic market witnessed a huge fall of almost 67% YoY. It may be noted that Ashok Leyland has a strong presence in the TIV (Tornado Intercept Vehicle), tractor and MAV (Multi Activity Vehicle) segments of medium and heavy commercial vehicles, which are supposed to be the company's strong suit and these have been witnessing decline in sales in the domestic market.
Hotel stocks are also trading firm led by Indian Hotels and TAJ GVK. As per a leading business daily, the domestic hotels industry continues to face challenging times. The terror attacks coupled with swine flu and economic slowdown continue to hamper the industry's prospects. Thus, to cope with a fall in demand and occupancy levels, Hotel Leela has cut room rates by around 25% YoY in its properties in Mumbai and Bangalore. The company's Bangalore property contributes to almost 38% to total revenues. It may be noted that the industry's occupancy levels have fallen to around 63% in the first four months of 2009 from 78% a year ago. The stock is currently trading firm.
Australian phone firm Telstra has awarded US$ 1.2 bn outsourcing contracts to Infosys along with EDS and IBM. Infosys Australia has been chosen by Telstra as a key strategic partner to support its five-year US$ 450 m application development and maintenance contracts. In addition to the base spend for maintenance and support, the Infosys-Telstra agreement covers a sizable discretionary spend over the next five years. The contract from the telecom firm is the second win in Australia for the Indian IT major in the last few months. Rio Tinto had earlier selected Infosys over Accenture for a US$ 50 m application development deal announced in October last year. This would further aid the company in increasing its presence in the Australian region. Also, it will reduce Infosys' dependence on the US, which currently accounts for 63% of its revenues. Software stocks have opened the day's proceedings on a positive note.
As per a leading business daily, the Netherlands-based ING Group NV is looking to sell its India operations. However, ING officials have not commented on this. ING officials in Amsterdam had made a presentation recently that the bank is looking to exit from 10 out of the 48 countries in which it has operations, without naming the nations. ING owns 43.8% of ING Vysya Bank. It is the only foreign-owned bank to be treated like an Indian bank as it does not face any restrictions in opening branches, unlike other foreign banks. Its deposits at the end of March 2009 stood at Rs 248 bn, while advances stood at Rs 168 bn. The domestic company is struggling to catch up with its peers in India such as Citibank NA and the Hongkong and Shanghai Banking Corp. Ltd. Further, on account of lack of focus by the parent company, ING Vysya's growth has been slow. Despite the parent's infusion of capital by way of perpetual bonds in FY09, ING Vysya continued to have one of the lowest capital adequacy ratios of 11.7% at the end of FY09. Its net NPAs also increased from 0.7% to 1.2% in FY09. Banking stocks are trading firm.
9% GDP growth could still be achieved
If Dr. Manmohan Singh, India's prime minister is to be believed, India is capable of growing by 8%-9%, even after the recent global financial meltdown. And the reason it can do so is because of its high savings rate. "Since our savings rate is as high as 35%... if all work together, we can achieve a growth rate of 8%-9%, even if the world economy does not improve", is how the man, who many consider as the architect of India's modern reforms, chose to put it across. He further added that the country is expected to log in a growth rate of 7% this fiscal, a number which is good enough given the turmoil the rest of the world, especially the developed world is into.
Indeed, with a savings rate of such a magnitude, India has to rely very little on external sources of capital and can thus, undertake big ticket projects on its own, without worrying about the global economic environment. Although the ability to do the same has been impaired a bit on account of the high fiscal deficit, Mr. Singh is of the opinion that there is still considerable scope for increasing public expenditure, particularly on infrastructure projects. Are we in for some big bang announcements during the upcoming budget? Well, only time will tell.
China may overtake US sooner than imagined
Jim o'Neill, Chief economist of Goldman Sachs and the one who became famous for coining the term BRIC has now made another bold prediction. He believes that the Chinese economy could become bigger than the US in 20 years, much before the earlier prediction of 30 years. Speaking to a leading business daily, he also opined that the current crisis has actually done China some good in the sense that it has made the Chinese authorities realize that it cannot rely on an export driven model alone if it were to chart its next stage of growth. And the country has already started taking measures as it unveiled a huge stimulus package of the magnitude of US$ 586 bn to offset the slump in demand from exports. Little wonder, experts are still gung ho about the Chinese economy and believe that it will sustain a growth of 9%-10% well into the distant future.
The US on the other hand may be undergoing a structural downward shift in its economic growth. Years of excesses has left both its government as well as its citizens knee deep in debt and thus, it could see economic pain for years to come as its citizens cut back on spending and the government becomes frugal. Infact, Bill Gross, one of the world's foremost bond experts has gone to the extent of saying that the era of 3% economic growth in the US could be a thing of the past and growth of 1%-2% is likely to be the new standard. Thus, with US economic growth contracting and that of China remaining constant and may be even increasing, it looks quite possible that China could overtake US earlier than expected
Although the Indian markets pared some gains during the final hour of trade, they managed to end the day well above the dotted line. The BSE-Sensex ended higher by around 340 points, while the NSE-Nifty closed higher by about 105 points. Stocks from the mid-cap and small-cap spaces ended the day on a positive note as well, recording gains of around 1.6% and 0.3% respectively. Barring stocks from the realty sector, buying activity was witnessed in stocks across the board, led by power, capital goods and consumer durables.
Other Asian markets ended the day on a firm note today. The European indices are currently trading in the green. Rupee was trading at 47.3 against the US dollar at the time of writing.
Pharma stocks ended the day on a strong note led by Dr. Reddy's, Ranbaxy, Glenmark Pharma and Cipla. The stock of Dr. Reddy's was amongst the top gainers amidst its peers on the announcement of it receiving the USFDA's (US Food and Drug Administration) approval for its Abbreviated New Drug Application (ANDA) for Omeprazole Mg OTC. This drug is used for treating heartburns. It may be noted that the company's filing for this product was under litigation and in March, the US had ruled in favour of Dr. Reddy's granting it the exclusivity period. 'Omeprazole OTC' generated annual sales of approximately US$ 362 m in the US as of July 2008.
Software stocks ended the day on a firm note led by NIIT, Tech Mahindra, HCL Tech and Wipro. As a fallout of the downturn, the BPO space is likely to see an increased globalisation with BPO companies fishing for newer verticals and geographies. To spur growth it has become important to move up the value chain by providing more sophisticated services to the customer. The Indian BPO industry, growing at a CAGR of 37% over the last seven years, clocked in revenue of almost US$ 15 bn during FY09. But most of the revenue came from the US and was concentrated in the BFSI segment. As the US economy is worst hit by the global recession, it is high time that the sector starts looking at newer pastures. It is also altering its onshore-offshore mix for better bottom-lines. Nasscom President, Mr. Som Mittal has predicted the US$ 50 bn Indian IT-ITeS industry will reach US$ 225 bn by 2020 with 80% of the growth coming from non-traditional geographies and markets like telecom, government sector, amongst others. The sector also saw an effort to rationalise cost-structures which will boost the operating efficiency. There are also challenges from countries like China and Brazil as traditional cost-arbitrage is no longer the key driver for success. A better value-proposition is all that counts.
In a recent meeting with the banking industry, Finance Minister Pranab Mukherjee has pushed for commercial banks to cut interest rates, adding that the measures announced by the central bank were not getting adequately reflected. As per a leading business daily, public sector banks have agreed to consider reducing interest rates. However, the FM declined to comment on the extent of the potential reduction in borrowing costs.
The Indian markets continued to trade firm during the previous two hours of trade on account of sustained buying activity. Stocks from the energy, power and software sectors are leading the pack of gainers, while select stocks from the construction, engineering and auto sector are trading lower. The overall advance to decline ratio is poised at 1.2 to 1 on the BSE.
The BSE-Sensex and the NSE-Nifty are trading firm, up by around 350 points and 75 points respectively. The BSE-Midcap and BSE-Smallcap indices are also trading firm, up by around 1.2% and 0.5% respectively. The rupee is trading at 47.26 to the dollar.
As per a leading business daily, HDFC plans to raise up to Rs 40 bn through qualified institutional placement (QIP) of secured redeemable non convertible debentures (NCDs) and warrants in order to grow its loan book. It has received an in principle approval from the board regarding the same. Interestingly, the NCDs are likely to come with detachable warrants and will likely dilute up to 3.5% equity share capital if all warrants were fully exchanged for equity. These debt instruments have tenure of 3 years with rates of around 7.25%-7.5%. It may be noted that HDFC has disbursed loans worth Rs 300 bn in FY09. With these additional funds coming in, the company expects to grow its loan book at a faster rate at the time when the demand for housing loans is reviving. HDFC's net interest margins stood at 3.3% during FY09, while Gross NPA (non-performing assets) levels were at 0.8%. The stock of HDFC is trading higher along with its peer LIC Housing.
FMCG stocks are trading mixed. While HUL and Colgate are trading higher, Gillette and Marico are trading lower. As per a leading business daily, Hindustan Unilever (HUL) has decided to put on hold the sale of its leather business as it failed to find a suitable buyer. The business is run by HUL's wholly-owned subsidiary Pond's Exports. It may be noted that HUL had decided to disinvest its leather business and concentrate on its core business activities. In fact, HUL had notified its workers at the Puducherry unit about its intention to offer a voluntary retirement scheme as far back as October 2008. Also the company has deferred its divestiture of 49% stake in Capgemini Business Services (India) by end of FY10 on account of business and strategic interest of both HUL and Capgemini. In 2006, HUL had sold 51% of Capgemini (India) to Capgemini SA for Rs 520 m.
The Indian markets continued to trade in the green during the previous two hours of trade on the back of sustained strong cues from the Asian markets and heavy buying in the index heavyweights. Currently, stocks from the software, banking and power sectors are leading the pack of gainers, while select realty and energy stocks are trading weak. The overall advance to decline ratio is poised at 1.3 to 1 on the BSE.
Auto stocks are trading firm led by M&M, Ashok Leyland and Tata Motors. As per a leading business daily, Ashok Leyland has reported a 64.5% YoY decline in overall sales volumes during the month of May this year. The fall in exports sales was lower at 33% YoY during the period, as compared to the domestic market witnessed a huge fall of almost 67% YoY. It may be noted that Ashok Leyland has a strong presence in the TIV (Tornado Intercept Vehicle), tractor and MAV (Multi Activity Vehicle) segments of medium and heavy commercial vehicles, which are supposed to be the company's strong suit and these have been witnessing decline in sales in the domestic market.
Hotel stocks are also trading firm led by Indian Hotels and TAJ GVK. As per a leading business daily, the domestic hotels industry continues to face challenging times. The terror attacks coupled with swine flu and economic slowdown continue to hamper the industry's prospects. Thus, to cope with a fall in demand and occupancy levels, Hotel Leela has cut room rates by around 25% YoY in its properties in Mumbai and Bangalore. The company's Bangalore property contributes to almost 38% to total revenues. It may be noted that the industry's occupancy levels have fallen to around 63% in the first four months of 2009 from 78% a year ago. The stock is currently trading firm.
Australian phone firm Telstra has awarded US$ 1.2 bn outsourcing contracts to Infosys along with EDS and IBM. Infosys Australia has been chosen by Telstra as a key strategic partner to support its five-year US$ 450 m application development and maintenance contracts. In addition to the base spend for maintenance and support, the Infosys-Telstra agreement covers a sizable discretionary spend over the next five years. The contract from the telecom firm is the second win in Australia for the Indian IT major in the last few months. Rio Tinto had earlier selected Infosys over Accenture for a US$ 50 m application development deal announced in October last year. This would further aid the company in increasing its presence in the Australian region. Also, it will reduce Infosys' dependence on the US, which currently accounts for 63% of its revenues. Software stocks have opened the day's proceedings on a positive note.
As per a leading business daily, the Netherlands-based ING Group NV is looking to sell its India operations. However, ING officials have not commented on this. ING officials in Amsterdam had made a presentation recently that the bank is looking to exit from 10 out of the 48 countries in which it has operations, without naming the nations. ING owns 43.8% of ING Vysya Bank. It is the only foreign-owned bank to be treated like an Indian bank as it does not face any restrictions in opening branches, unlike other foreign banks. Its deposits at the end of March 2009 stood at Rs 248 bn, while advances stood at Rs 168 bn. The domestic company is struggling to catch up with its peers in India such as Citibank NA and the Hongkong and Shanghai Banking Corp. Ltd. Further, on account of lack of focus by the parent company, ING Vysya's growth has been slow. Despite the parent's infusion of capital by way of perpetual bonds in FY09, ING Vysya continued to have one of the lowest capital adequacy ratios of 11.7% at the end of FY09. Its net NPAs also increased from 0.7% to 1.2% in FY09. Banking stocks are trading firm.
9% GDP growth could still be achieved
If Dr. Manmohan Singh, India's prime minister is to be believed, India is capable of growing by 8%-9%, even after the recent global financial meltdown. And the reason it can do so is because of its high savings rate. "Since our savings rate is as high as 35%... if all work together, we can achieve a growth rate of 8%-9%, even if the world economy does not improve", is how the man, who many consider as the architect of India's modern reforms, chose to put it across. He further added that the country is expected to log in a growth rate of 7% this fiscal, a number which is good enough given the turmoil the rest of the world, especially the developed world is into.
Indeed, with a savings rate of such a magnitude, India has to rely very little on external sources of capital and can thus, undertake big ticket projects on its own, without worrying about the global economic environment. Although the ability to do the same has been impaired a bit on account of the high fiscal deficit, Mr. Singh is of the opinion that there is still considerable scope for increasing public expenditure, particularly on infrastructure projects. Are we in for some big bang announcements during the upcoming budget? Well, only time will tell.
China may overtake US sooner than imagined
Jim o'Neill, Chief economist of Goldman Sachs and the one who became famous for coining the term BRIC has now made another bold prediction. He believes that the Chinese economy could become bigger than the US in 20 years, much before the earlier prediction of 30 years. Speaking to a leading business daily, he also opined that the current crisis has actually done China some good in the sense that it has made the Chinese authorities realize that it cannot rely on an export driven model alone if it were to chart its next stage of growth. And the country has already started taking measures as it unveiled a huge stimulus package of the magnitude of US$ 586 bn to offset the slump in demand from exports. Little wonder, experts are still gung ho about the Chinese economy and believe that it will sustain a growth of 9%-10% well into the distant future.
The US on the other hand may be undergoing a structural downward shift in its economic growth. Years of excesses has left both its government as well as its citizens knee deep in debt and thus, it could see economic pain for years to come as its citizens cut back on spending and the government becomes frugal. Infact, Bill Gross, one of the world's foremost bond experts has gone to the extent of saying that the era of 3% economic growth in the US could be a thing of the past and growth of 1%-2% is likely to be the new standard. Thus, with US economic growth contracting and that of China remaining constant and may be even increasing, it looks quite possible that China could overtake US earlier than expected
Sunday, June 7, 2009
1 - 5th June 2009 Week Review
Key benchmark indices surged to multi-month highs, extending gains for the thirteen straight week in anticipation of a strong push for economic reforms by the newly-elected United Progressive Alliance (UPA) government. The barometer index BSE Sensex raced past the psychological 15,000 mark. Besides strong inflow from foreign funds, positive global cues and further signs of recovery in domestic and global economy boosted the sentiment further. Strong buying momentum was seen in small and mid-cap stocks
There are signs of recovery in the Indian economy. Manufacturing activity in India expanded for a second straight month in May 2009 to its highest in eight months, a survey showed, reflecting a revival in domestic demand but export orders remained weak. The Market Purchasing Managers' Index (PMI) based on a survey of 500 companies, rose to 55.7 in May 2009 from April's 53.3, well above the threshold of 50 that separates expansion from contraction.
The manufacturing index was boosted mainly by the new orders index, which rose to 59.1 in May 2009 from 54.9 in April 2009. Manufacturing makes up about 15% of India's gross domestic product. Although domestic demand improved, the pricing power of manufacturers was hurt by intense competition, while higher commodity prices also pushed up input prices, Market economist Gemma Wallace said.
President Pratibha Patil addressed to a joint session of both houses on 4 June 2009 formally disclosing the agenda of the UPA coalition government. She said that the government would aim to revive economic growth with higher investments in sectors such as infrastructure, while adhering to fiscal prudence. Patil said steps would be taken to encourage foreign investment inflows, list shares of state-run firms and infuse more capital in banks. The government's immediate priority must be to focus on management of the economy that will counter the effect of the global slowdown, she added.
Patil said the new regime will develop a roadmap for listing public sector units, co-ordinate with other countries to bring back illegal money stashed in secret bank accounts, recapitalise public sector banks, and bring in the pension reforms bill.
On the economic front, the government's immediate focus would be on sectors that are adversely hit, especially small and medium enterprises, exports, textiles, commercial vehicles, infrastructure and housing.
Hopes of market friendly measures propelled key benchmark indices in the week ended Friday, 5 June 2009. The BSE Sensex advance 478.30 points or 3.27% to 15,103.5512, its highest closing since 12 August 2008. The S&P CNX Nifty gained 137.95 points or 3.1% to 4586.90 its highest closing since 11 August 2009.
The BSE Mid-Cap index gained 353.04 points or 6.98% to 5,409.78 and the BSE Small-Cap index advanced 471.83 points or 7.88% to 6,458.65 in the week ended Friday, 5 June 2009. Both these indices outperformed the Sensex
Trading for the week started on an upbeat note with markets advancing on Monday, 1 June 2009 in anticipation of a strong push for economic reforms by the newly-elected United Progressive Alliance (UPA) government. The BSE 30-share Sensex gained 215.38 points, or 1.47%, to 14,840.63 and the S&P CNX Nifty rose 80.95 points, or 1.82%, to 4,529.90
Key benchmark indices saw divergent trend on Tuesday, 2 June 2009 with the BSE Sensex logging small gains and Nifty ending slightly lower in what was a highly choppy trading day. The BSE 30-share Sensex rose 34.28 points, or 0.23%, to 14,874.91. However the S&P CNX Nifty fell 4.65 points, or 0.10%, to 4525.25
Indices continued to see divergent trend for the second running day on Wednesday, 3 June 2009 as the Sensex ended with marginal loss while the S&P CNX Nifty settled slightly higher. The BSE 30-share Sensex fell 4.01 points, or 0.03%, to 14,870.90 after surging past the psychological 15,000 mark, the level it reached for the first time in nearly 9 months in intra-day trade. However, the S&P CNX Nifty rose 5.45 points, or 0.12%, to 4,530.70, its highest closing since 12 August 2008.
Buying frenzy in late trade helped indices reverse early losses caused due to weak global cues and log decent gains on Thursday, 4 June 2009. The BSE 30-share Sensex rose 137.78 points, or 0.93%, to 15,008.68 and the S&P CNX Nifty shot up 41.95 points, or 0.93%, to 4,572.65
Market extended gains on Friday, 5 June 2009 on the back of firm global cues and continued buying demand for index pivotals. The BSE 30-share Sensex rose 94.87 points, or 0.63%, to 15,103.55 and the S&P CNX Nifty rose 14.25 points, or 0.31%, to 4,586.90
India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) slipped 2.28% to Rs 2211.85 after its German unit Trevira, a specialty polyester manufacturer, went bankrupt. Reliance Industries had acquired Trevira five years ago for Rs 440 crore. This acquisition in 2004 had propelled Reliance to the position of the world's largest polyester fibre and yarn producer
Meanwhile, the Directorate General of Hydrocarbons has also reportedly contested the authenticity of claims of gas reserves at Krishna Godavari basin blocks D-3 and D-9 by Hardy Oil & Gas Plc. UK-based Hardy Oil, late last month, said RIL may have an estimated 20 trillion cubic feet of natural gas reserves in two areas off the east coast, more than double the quantity of its biggest field. The D-3 and D-9 fields may hold as much as 9.5 trillion cubic feet and 10.8 trillion cubic feet of gas, respectively, it had said. Hardy Oil & Gas Plc has 10% stake each in the two blocks where RIL is the operator with 90% interest.
Metal shares advanced on strong domestic demand and firm prices on the London Metal Exchange (LME). Steel Authority of India (up 1.71%), Hindalco (up 9.68%), Sterlite Industries (up 7.95%), and Hindustan Zinc (up 9.55%), edged higher.
The world's sixth largest steel maker by sales Tata Steel jumped 14.18% to Rs 463.90 after its unit, Tata Steel UK, won approval from banks to ease conditions on a 3.7 billion pounds loans it took to buy Anglo-Dutch Corus. The announcement was made on Saturday, 30 May 2009.
India's top small car maker by sales Maruti Suzuki gained 5.99% to Rs 1082.25 after total sales rose 15.7% to 79,872 units in May 2009 over May 2008.
India's top truck marker by sales Tata Motors jumped 15.55% to Rs 389.05 after global credit rating agency Moody's on Tuesday, 2 June 2009 revised upwards outlook for its low investment grade rating on from negative to stable after the company successfully refinanced a bridge loan for Jaguar and Land Rover acquisition. Despite the sharp rise, the stock is off day's high of Rs 378.70
India's second largest listed cellular services provider by sales Reliance Communications (RCom) surged 10.81% to Rs 338.85 on the company's plans to raise funds through the qualified institutional placement route.
RCom will seek shareholders' approval to garner funds from qualified institutional investors, either through a share sale or an issue of a variety of instruments including fully convertible, partly convertible or non-convertible debentures with warrants or any other security. Although the company did not say how much it planned to raise reports suggested it may be around $500 million and will be used to strengthen financial position for a planned participation in the upcoming auction for nationwide 3G and Wi-Max spectrum allocation by the Indian government.
India's largest cellular services provider by sales Bharti Airtel rose 0.63% to Rs 824.80, on fears that the merger deal with MTN would lead to dilution in earnings per share. On 25 May 2009, Bharti Airtel said it is in talks to buy 49% of Johannesburg-based MTN, the first step in a potential $23 billion merger. The deal may also see MTN, Africa's largest mobile-phone company, buy 36% of Bharti Airtel
Infrastructure shares gained on hopes the Congress-led UPA government may boost spending on infrastructure sector. GVK Power & Infrastructure (up 1.86%), GMR Infrastructure (up 3.79%), Bhel (up 5.17%), IVRCL Infrastructures & Projects (up 11.21%), surged
Realty stocks rose on expectations that stability at the Centre will attract more money from foreign investors into the sector which in turn will boost growth. DLF (up 1.18%), Housing Development & Infrastructure (up 7.13%), and Unitech (up 22.63%), gained.
In the last six weeks, three realty firms Unitech, DLF and Indiabulls Real Estate, have together raised Rs 8000 crore through qualified institutional placements (QIPs).
India's largest bank by net profit and branch network State Bank of India (SBI) fell 2.74% to Rs 1817.90 on profit booking after the recent rally. Reportedly the bank hopes to earn more profit than the landmark figure of Rs 10,000 crore in the current fiscal
India's second largest bank by net profit ICICI Bank rose 1.41% to Rs 751.15 after it said on 4 June 2009 it will cut lending rates by 50 basis points from Friday, 5 June 2009. The benchmark advance rate, or the rate that it charges its top customers, will drop to 15.75% from 16.25%. It also cut floating reference rate (FRR) applicable to floating rate retail loans (including floating rate home loans) by 50 basis points. The revised FRR will be 12.75% from 13.25%. All the existing floating rate customers to benefit from the cut.
Shares of public sector firms gained on speculation the UPA government may revive disinvestment programme. Shipping Corporation of India (up 5.86%), HMT (up 4.87%), Hindustan Copper (up 26.55%), MMTC (up 24.09%), rose
The Congress party had in its manifesto released before polls promised to go ahead with disinvestment while retaining a majority holding in the state-run companies. Disinvestment programme was earlier put on the back burner due to stiff opposition from the Left front which provided support to the previous government for most part of the five-year term.
India's largest cement manufacturer by sales ACC gained 9.57% to Rs 857.95 after cement production rose 1.11% to 1.81 million tonnes and cement dispatches rose 1.11% to 1.82 million tonnes in May 2009 over May 2008.
India's second largest software firm by sales Infosys Technologies gained 5.53% to Rs 1690.55 on reports the firm is looking at three to four companies with annual revenue of $100 million to $200 million in the U.S. and Europe for a potential acquisition.
Wholesale price index rose 0.48 % in the 12 months to 23 May 2009 lower than previous week's annual rise of 0.61%, government data showed on Thursday, 4 June 2009. The annual inflation rate was 8.9% during the corresponding week of the previous year.
The National Stock Exchange (NSE) after trading hours on 29 May 2009, announced a reduction in the lot size of a number of derivatives contracts as a part of a periodic review to meet a previously set value of the contract at Rs 2 lakh. For most of the stocks, the changes will be applicable from July 2009 derivative contracts. The reduction in lot size may result in increased participation from retail investors.
Thus, the lot size of Maruti Suzuki has been slashed to 200 from 800 and that of Steel Authority of India (Sail) has been reduced to 1350 from 5400. The lot size of Axis Bank has been halved to 450 from 900 and for Reliance Industries also the lot size has been halved to 150 from 300. State Bank of India's lot size too has been halved to 132 from 264.
India's infrastructure sector output grew 4.3% in April from a year earlier, government data showed on Tuesday, 2 June 2009. Output had risen 2.3% in the same month last year, and climbed 2.7% in the fiscal year ended March 2009 compared with 5.9% growth in 2007/08. The infrastructure sector accounts for 26.7% of India's industrial output.
Data during trading hours on Monday 1 June 2009 showed that the Market Purchasing Managers' Index (PMI) based on a survey of 500 companies, rose to 55.7 in May 2009 from April's 53.3, well above the threshold of 50 that separates expansion from contraction.
The manufacturing index was boosted mainly by the new orders index, which rose to 59.1 in May 2009 from 54.9 in April 2009. Manufacturing makes up about 15% of India's gross domestic product. Although domestic demand improved, the pricing power of manufacturers was hurt by intense competition, while higher commodity prices also pushed up input prices, Market economist Gemma Wallace said
Globally, China's official purchasing managers' index, a key economic indicator, slipped slightly in May 2009, but stayed above the 50 reading indicating manufacturing activity continued to expand for the third consecutive month. The Purchasing Managers Index slipped to 53.1 in May 2009 from 53.5 in April 2009 but held over the expansionary 50 mark, the China Federation of Logistics & Purchasing said.
US Treasury Secretary Timothy Geithner today, 1 June 2009 said that the global recession seemed to be losing force but that it will be critical for the United States and China to institute major economic reforms to put the world on a more sustained footing. Geithner said that a successful transition to a more balanced and stable global economy will require substantial changes to economic policy and financial regulation around the world and especially in the world's largest and third largest economies.
US GDP decreased at an annual rate of 5.7% in the first quarter of 2009, according to preliminary estimates from the Bureau of Economic Analysis. Although a significant contraction, the fall was smaller than the 6.3% drop in the fourth quarter of last year, and also beat advance estimates which had suggested a decline of 6.1%.
Source : capitalmarket
There are signs of recovery in the Indian economy. Manufacturing activity in India expanded for a second straight month in May 2009 to its highest in eight months, a survey showed, reflecting a revival in domestic demand but export orders remained weak. The Market Purchasing Managers' Index (PMI) based on a survey of 500 companies, rose to 55.7 in May 2009 from April's 53.3, well above the threshold of 50 that separates expansion from contraction.
The manufacturing index was boosted mainly by the new orders index, which rose to 59.1 in May 2009 from 54.9 in April 2009. Manufacturing makes up about 15% of India's gross domestic product. Although domestic demand improved, the pricing power of manufacturers was hurt by intense competition, while higher commodity prices also pushed up input prices, Market economist Gemma Wallace said.
President Pratibha Patil addressed to a joint session of both houses on 4 June 2009 formally disclosing the agenda of the UPA coalition government. She said that the government would aim to revive economic growth with higher investments in sectors such as infrastructure, while adhering to fiscal prudence. Patil said steps would be taken to encourage foreign investment inflows, list shares of state-run firms and infuse more capital in banks. The government's immediate priority must be to focus on management of the economy that will counter the effect of the global slowdown, she added.
Patil said the new regime will develop a roadmap for listing public sector units, co-ordinate with other countries to bring back illegal money stashed in secret bank accounts, recapitalise public sector banks, and bring in the pension reforms bill.
On the economic front, the government's immediate focus would be on sectors that are adversely hit, especially small and medium enterprises, exports, textiles, commercial vehicles, infrastructure and housing.
Hopes of market friendly measures propelled key benchmark indices in the week ended Friday, 5 June 2009. The BSE Sensex advance 478.30 points or 3.27% to 15,103.5512, its highest closing since 12 August 2008. The S&P CNX Nifty gained 137.95 points or 3.1% to 4586.90 its highest closing since 11 August 2009.
The BSE Mid-Cap index gained 353.04 points or 6.98% to 5,409.78 and the BSE Small-Cap index advanced 471.83 points or 7.88% to 6,458.65 in the week ended Friday, 5 June 2009. Both these indices outperformed the Sensex
Trading for the week started on an upbeat note with markets advancing on Monday, 1 June 2009 in anticipation of a strong push for economic reforms by the newly-elected United Progressive Alliance (UPA) government. The BSE 30-share Sensex gained 215.38 points, or 1.47%, to 14,840.63 and the S&P CNX Nifty rose 80.95 points, or 1.82%, to 4,529.90
Key benchmark indices saw divergent trend on Tuesday, 2 June 2009 with the BSE Sensex logging small gains and Nifty ending slightly lower in what was a highly choppy trading day. The BSE 30-share Sensex rose 34.28 points, or 0.23%, to 14,874.91. However the S&P CNX Nifty fell 4.65 points, or 0.10%, to 4525.25
Indices continued to see divergent trend for the second running day on Wednesday, 3 June 2009 as the Sensex ended with marginal loss while the S&P CNX Nifty settled slightly higher. The BSE 30-share Sensex fell 4.01 points, or 0.03%, to 14,870.90 after surging past the psychological 15,000 mark, the level it reached for the first time in nearly 9 months in intra-day trade. However, the S&P CNX Nifty rose 5.45 points, or 0.12%, to 4,530.70, its highest closing since 12 August 2008.
Buying frenzy in late trade helped indices reverse early losses caused due to weak global cues and log decent gains on Thursday, 4 June 2009. The BSE 30-share Sensex rose 137.78 points, or 0.93%, to 15,008.68 and the S&P CNX Nifty shot up 41.95 points, or 0.93%, to 4,572.65
Market extended gains on Friday, 5 June 2009 on the back of firm global cues and continued buying demand for index pivotals. The BSE 30-share Sensex rose 94.87 points, or 0.63%, to 15,103.55 and the S&P CNX Nifty rose 14.25 points, or 0.31%, to 4,586.90
India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) slipped 2.28% to Rs 2211.85 after its German unit Trevira, a specialty polyester manufacturer, went bankrupt. Reliance Industries had acquired Trevira five years ago for Rs 440 crore. This acquisition in 2004 had propelled Reliance to the position of the world's largest polyester fibre and yarn producer
Meanwhile, the Directorate General of Hydrocarbons has also reportedly contested the authenticity of claims of gas reserves at Krishna Godavari basin blocks D-3 and D-9 by Hardy Oil & Gas Plc. UK-based Hardy Oil, late last month, said RIL may have an estimated 20 trillion cubic feet of natural gas reserves in two areas off the east coast, more than double the quantity of its biggest field. The D-3 and D-9 fields may hold as much as 9.5 trillion cubic feet and 10.8 trillion cubic feet of gas, respectively, it had said. Hardy Oil & Gas Plc has 10% stake each in the two blocks where RIL is the operator with 90% interest.
Metal shares advanced on strong domestic demand and firm prices on the London Metal Exchange (LME). Steel Authority of India (up 1.71%), Hindalco (up 9.68%), Sterlite Industries (up 7.95%), and Hindustan Zinc (up 9.55%), edged higher.
The world's sixth largest steel maker by sales Tata Steel jumped 14.18% to Rs 463.90 after its unit, Tata Steel UK, won approval from banks to ease conditions on a 3.7 billion pounds loans it took to buy Anglo-Dutch Corus. The announcement was made on Saturday, 30 May 2009.
India's top small car maker by sales Maruti Suzuki gained 5.99% to Rs 1082.25 after total sales rose 15.7% to 79,872 units in May 2009 over May 2008.
India's top truck marker by sales Tata Motors jumped 15.55% to Rs 389.05 after global credit rating agency Moody's on Tuesday, 2 June 2009 revised upwards outlook for its low investment grade rating on from negative to stable after the company successfully refinanced a bridge loan for Jaguar and Land Rover acquisition. Despite the sharp rise, the stock is off day's high of Rs 378.70
India's second largest listed cellular services provider by sales Reliance Communications (RCom) surged 10.81% to Rs 338.85 on the company's plans to raise funds through the qualified institutional placement route.
RCom will seek shareholders' approval to garner funds from qualified institutional investors, either through a share sale or an issue of a variety of instruments including fully convertible, partly convertible or non-convertible debentures with warrants or any other security. Although the company did not say how much it planned to raise reports suggested it may be around $500 million and will be used to strengthen financial position for a planned participation in the upcoming auction for nationwide 3G and Wi-Max spectrum allocation by the Indian government.
India's largest cellular services provider by sales Bharti Airtel rose 0.63% to Rs 824.80, on fears that the merger deal with MTN would lead to dilution in earnings per share. On 25 May 2009, Bharti Airtel said it is in talks to buy 49% of Johannesburg-based MTN, the first step in a potential $23 billion merger. The deal may also see MTN, Africa's largest mobile-phone company, buy 36% of Bharti Airtel
Infrastructure shares gained on hopes the Congress-led UPA government may boost spending on infrastructure sector. GVK Power & Infrastructure (up 1.86%), GMR Infrastructure (up 3.79%), Bhel (up 5.17%), IVRCL Infrastructures & Projects (up 11.21%), surged
Realty stocks rose on expectations that stability at the Centre will attract more money from foreign investors into the sector which in turn will boost growth. DLF (up 1.18%), Housing Development & Infrastructure (up 7.13%), and Unitech (up 22.63%), gained.
In the last six weeks, three realty firms Unitech, DLF and Indiabulls Real Estate, have together raised Rs 8000 crore through qualified institutional placements (QIPs).
India's largest bank by net profit and branch network State Bank of India (SBI) fell 2.74% to Rs 1817.90 on profit booking after the recent rally. Reportedly the bank hopes to earn more profit than the landmark figure of Rs 10,000 crore in the current fiscal
India's second largest bank by net profit ICICI Bank rose 1.41% to Rs 751.15 after it said on 4 June 2009 it will cut lending rates by 50 basis points from Friday, 5 June 2009. The benchmark advance rate, or the rate that it charges its top customers, will drop to 15.75% from 16.25%. It also cut floating reference rate (FRR) applicable to floating rate retail loans (including floating rate home loans) by 50 basis points. The revised FRR will be 12.75% from 13.25%. All the existing floating rate customers to benefit from the cut.
Shares of public sector firms gained on speculation the UPA government may revive disinvestment programme. Shipping Corporation of India (up 5.86%), HMT (up 4.87%), Hindustan Copper (up 26.55%), MMTC (up 24.09%), rose
The Congress party had in its manifesto released before polls promised to go ahead with disinvestment while retaining a majority holding in the state-run companies. Disinvestment programme was earlier put on the back burner due to stiff opposition from the Left front which provided support to the previous government for most part of the five-year term.
India's largest cement manufacturer by sales ACC gained 9.57% to Rs 857.95 after cement production rose 1.11% to 1.81 million tonnes and cement dispatches rose 1.11% to 1.82 million tonnes in May 2009 over May 2008.
India's second largest software firm by sales Infosys Technologies gained 5.53% to Rs 1690.55 on reports the firm is looking at three to four companies with annual revenue of $100 million to $200 million in the U.S. and Europe for a potential acquisition.
Wholesale price index rose 0.48 % in the 12 months to 23 May 2009 lower than previous week's annual rise of 0.61%, government data showed on Thursday, 4 June 2009. The annual inflation rate was 8.9% during the corresponding week of the previous year.
The National Stock Exchange (NSE) after trading hours on 29 May 2009, announced a reduction in the lot size of a number of derivatives contracts as a part of a periodic review to meet a previously set value of the contract at Rs 2 lakh. For most of the stocks, the changes will be applicable from July 2009 derivative contracts. The reduction in lot size may result in increased participation from retail investors.
Thus, the lot size of Maruti Suzuki has been slashed to 200 from 800 and that of Steel Authority of India (Sail) has been reduced to 1350 from 5400. The lot size of Axis Bank has been halved to 450 from 900 and for Reliance Industries also the lot size has been halved to 150 from 300. State Bank of India's lot size too has been halved to 132 from 264.
India's infrastructure sector output grew 4.3% in April from a year earlier, government data showed on Tuesday, 2 June 2009. Output had risen 2.3% in the same month last year, and climbed 2.7% in the fiscal year ended March 2009 compared with 5.9% growth in 2007/08. The infrastructure sector accounts for 26.7% of India's industrial output.
Data during trading hours on Monday 1 June 2009 showed that the Market Purchasing Managers' Index (PMI) based on a survey of 500 companies, rose to 55.7 in May 2009 from April's 53.3, well above the threshold of 50 that separates expansion from contraction.
The manufacturing index was boosted mainly by the new orders index, which rose to 59.1 in May 2009 from 54.9 in April 2009. Manufacturing makes up about 15% of India's gross domestic product. Although domestic demand improved, the pricing power of manufacturers was hurt by intense competition, while higher commodity prices also pushed up input prices, Market economist Gemma Wallace said
Globally, China's official purchasing managers' index, a key economic indicator, slipped slightly in May 2009, but stayed above the 50 reading indicating manufacturing activity continued to expand for the third consecutive month. The Purchasing Managers Index slipped to 53.1 in May 2009 from 53.5 in April 2009 but held over the expansionary 50 mark, the China Federation of Logistics & Purchasing said.
US Treasury Secretary Timothy Geithner today, 1 June 2009 said that the global recession seemed to be losing force but that it will be critical for the United States and China to institute major economic reforms to put the world on a more sustained footing. Geithner said that a successful transition to a more balanced and stable global economy will require substantial changes to economic policy and financial regulation around the world and especially in the world's largest and third largest economies.
US GDP decreased at an annual rate of 5.7% in the first quarter of 2009, according to preliminary estimates from the Bureau of Economic Analysis. Although a significant contraction, the fall was smaller than the 6.3% drop in the fourth quarter of last year, and also beat advance estimates which had suggested a decline of 6.1%.
Source : capitalmarket
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