Tata Teleservices, Spice Communications
Friday, August 03, 2007
Indian share prices closed up 1% on Friday on bargain-hunting as funds and investors bought benchmark stocks after sharp declines earlier in the week, dealers said.
They said local markets will continue to track global equity trends, amid concerns that overseas funds may exit emerging markets over US credit woes.
The Mumbai stock exchange benchmark 30-share Sensex index closed up 152.7 points at 15,138.4 after gaining 49.93 points on Thursday. The markets plunged 3.96 percent, their second sharpest fall for the year, on Wednesday.
Gainers led losers 1,538 to 1,002 on lower volume of Rs39.81 billion ($986 million).
The rupee gained against the dollar to 40.36 from 40.43 while it fell against the euro to 55.31 from 55.26.
Overseas funds this week led the sell-off sparked by heavy losses on Wall Street after further problems in the US home loan market while Indian banks were hurt by a rise Tuesday in their cash reserve requirement aimed at stemming credit growth.
Markets traded within a narrow range post mid-day. The overall market breadth was positive with gainers outnumbering losers in the ratio of 4 to 1 on the Nifty. Software stocks were witnessing selling pressure.
The BSE Sensex was trading up 198 points, at 15,184 (up 198 points) while the NSE Nifty is trading at 4,411, up 55 points.
Energy stocks are currently trading firm with Reliance Petro, Petronet LNG and RNRL leading the pack of gainers (each up 2%). As per a leading business daily, the seventh round of ’New Exploration and Licensing Policy’ (NELP VII) is likely to be delayed till October-November this year due to shortage of drilling units across the world.
According to the DGH (Directorate General of Hydrocarbon), the situation is pertaining to the shortage of rigs is likely to improve in a year and a half and hence it is makes much more sense to delay the auction.
Tracking the firm global trend, the Bombay Stock Exchange Index, Sensex, continued its recovery move by rising another 225 points at open on sustained buying by foreign and domestic funds.
The Sensex, which had recovered 50 points in yesterday’s (2 August) trading, spurted by 224.56 points at 15210.26 in first five minutes on trading. The key index had plummeted nearly 4% on 1 August.
Similarly, the wide base National Stock Exchange Index Nifty jumped by 65.50 points at 4421.85 points as heavy-weight stocks like ACC, Reliance Communications, BHEL, Larsen & Toubro and Infosys gained 2 per cent each. As the buying gathered momentum, all the sectoral indices lead by capital goods and realty rose smartly.
The market settled on a weak note as they posted weekly loss fir the second straight as markets across the globe were gripped under corrected. Volatility was intense throughout the week. Despite the market gaining in 4 sessions out of 5, they settled lower.
The benchmark index BSE Sensex lost 96 points or 0.63% at 15,138.40; while the S&P CNX Nifty lost 44 points or 0.96% at 4401.55, for the week ended 3 August 2007.
The BSE 30-share Sensex rose 26.34 points at 15,260.91 with shares from banking sector and select real estate stocks gained on speculative buying ahead of RBI’s monetary policy on Tuesday, 31 July 2007
On 31 July 2007, the BSE 30-share Sensex galloped 290.08 points at 15,550.99 despite the Reserve Bank of India (RBI) increasing the CRR (cash to reserve ratio) by 50 bps to 7%.
The 30-shares BSE Sensex plunged 615.22 points to settle at 14,935.77, on 1 August 2007, its third biggest single day point fall ever. It opened with a downward gap on intense selling pressure on global meltdown
Sensex gained 49.93 points at 14,985.70 on 2 August 2007, on support from global markets
Recovery continued a day later as the Sensex advanced 152.70 points at 15,138.40 on 3 August 2007, with all the sectoral indices on BSE posting gains. Shares from real estate, banking and cement were in demand.
State Bank of India (SBI), the country’s biggest commercial bank advanced 9.06% after it posted 78.6% jump in net profit to Rs 1,425.81 crore in Q1 June 2007 over Q1 June 2006. Net interest income was up 15% at Rs. 4,497.40 crore in Q1 June 2007 over Q1 June 2006.
Reliance Industries (RIL) declined 3.49% after it reported 28.1% growth in net profit to Rs 3264 crore in Q1 June 2007 over Q1 June 2006. Revenue rose 14.4% to Rs 28056 crore in Q1 June 2007 over Q1 June 2006. Gross refining margin (GRM) for the quarter was $15.4 per barrel, highest in the company’s history.
India's largest power equipment Bhel rose 3.61% as it posted 22% growth in net profit to Rs 288.9 crore in Q1 June 2007 over Q1 June 2006. At the end of Q1 June 2007, Bhel had an outstanding order book position of around Rs 62,400 crore.
India's second largest listed telecom service provider in terms of sales, Reliance Communications advanced 3.83% to Rs 561.40 after its net profit soared 76.58% to Rs 837.3 crore in Q1 June 2007 over Q1 June 2006. Total income rose 18.21% to Rs 3229.69 crore in Q1 June 2007 over Q1 June 2006.
IT stocks declined on fresh selling as the Indian rupee firmed against the US dollar. TCS, Wipro, Infosys and Satyam Computers, all edged lower.
Auto stocks suffered setback during the week on fall in monthly sales figures for July 2007. India's top bus and truck maker Tata Motors lost 3.64%. Its vehicle sales fell 6.6% in July 2007 to 42,098 units over July 2006. Sales of commercial vehicles dropped 3.8% to 20,705 units in July 2007 over July 2006. Exports fell 17% to 4,382 units.
India's top motorcycle maker Hero Honda Motors shed 3.99%. It sold 2,01,191 units in July 2007, down 14.5 % from 2,35,314 sold in June 2006. The announcement was made after trading hours.
Top utility vehicle maker Mahindra & Mahindra (M&M) declined 12.74%, despite its sales rising 46% in July 2007 to 19,163 units over July 2006. It was the top loser from the Sensex pack
However India’s top small-car maker Maruti Udyog rose 2.48%. It reported an 18% rise in sales in domestic market to 52,839 units in July 2007 over July 2006. It exported 5,070 units, up from 1,755 units in July 2006.
Everonn Systems India settled at Rs 478.45 on BSE, a 241.75% premium over the offer price of Rs 140, on 1 August 2007. The Everonn Systems India scrip debuted at Rs 245 on BSE and touched a high of Rs 560 and a low of Rs 245 during the day.
The central bank, on 31 July 2007 left the reverse repo rate, the rate at which it absorbs excess cash from banks, unchanged at 6%. It also kept bank rate unchanged at 6%. Reserve Bank of India (RBI) increasing the CRR (cash to reserve ratio) by 50 bps to 7% from 6.5% (100 bps is equal to 1%). The RBI said it will endeavor to contain inflation close to 5% in 2007-08 and in the range of 4–4.5% over the medium term. It also maintained its FY 2008 GDP growth forecast unchanged at 8.5%. The central bank also removed the Rs 3,000 crore cap on daily reverse repo transaction from 6 August 2007, the window through which it absorbs liquidity in a bid to check volatility in call money rates.
India's trade deficit in June 2007 widened to $7.33 billion, data released yesterday, 1 August 2007, showed. Imports surged 36.7% to $19.2 billion in June 2007, while exports rose 14% to $11.87 billion, over June 2006.
The Bank of England on 2 August 2007 left interest rates on hold at 5.75% as expected. On the same day, the European Central Bank (ECB) also has kept its benchmark interest rates unchanged at 4%.
As per the latest data released on 3 August 2007, wholesale price index stood at 4.36% in the week to 21 July 2007, compared with 4.41% the previous week The government also revised the inflation rate for the week ended 26 May 2007 to 5.15% from 4.85%
The market continued its winning trend for the second consecutive session. Today, the market opened 75 points higher tracking the positive global cues and remained above 15,200 level for the major part of the session. Sustained buying thereafter in capital goods, cement and banking stocks helped the Sensex touch the intra-day high of 15,236, up 250 points to its previous close. The index also received support from State Bank of India and ACC. The market remained firm in mid-session trades on lower inflation numbers as inflation declined to 4.36% during the week ended July 21 as compared with 4.41% for the previous week as some essential food items like pulses, fruits and eggs turned cheaper. However, the market slipped towards the close on profit bookings in select frontline stocks and ended the session at 15,138, up 153 points. The broad based Nifty closed the session at 4,401 by adding 45 points.
The market breadth was positive. Of the 2,606 stocks traded on the BSE, 1,339 stocks advanced, 999 stocks declined and 68 stocks ended unchanged. All the sectoral indices ended higher. The BSE Realty index gained 2.15%, followed by the BSE CD index (up 2.09%), the BSE PSU index (up 1.56%) and the BSE CG index (up 1.44%).
Among the heavyweights, SBI soared 2.72% at Rs1,636, NTPC advanced 2.34% at Rs166, HDFC added 2.24% at Rs1,989, ACC scaled up 2.06% at Rs1,003, Grasim rose 1.78% at Rs1,961 and Hindalco jumped 1.75% at Rs162. Tata Steel, Maruti Udyog, ICICI Bank and Bajaj Auto gained over 1% each. Among the laggards Ranbaxy dropped 1.40% at Rs366, Dr Reddy's Lab lost 1.28% at Rs623, Ambuja Cement, Bharti Airtel, Reiance Industries and HDFC Bank were marginally down.
Realty stocks registered strong gains. Indiabulls Real Estate surged 4.96% at Rs538, Peninsula Land advanced 3.94% at Rs441, Akruti Nirman gained 2.78% at Rs551 and DLF soared 2.66% at Rs602.
Over 2.66 crore IFCI shares changed hands on the BSE followed by Reliance Natural Resources (83.76 lakh shares), Simplex Projects (67.19 lakh shares), Reliance Petroleum (42.32 lakh shares) and Manglore Chemicals (38.30 lakh shares).
Reliance Industries was the most actively traded counter on the BSE with a turnover of Rs193 crore followed by Simplex Projects (Rs188 crore), IFCI (Rs158 crore), GMR Infrastructure (Rs154 crore) and Unitech (Rs146 crore).
The market edged higher for second consecutive day today, 3 August 2007, after Wednesday’s bloodbath that was triggered by setback in global markets. The market saw steady buying interest throughout the day on sustained buying demand for index pivotals. Positive cues from US and Asian markets boosted the sentiment. All the sectoral indices on BSE posted gains. Shares from real estate, banking and cement were in demand. Pharma shares were subdued.
The BSE 30-share Sensex advanced 152.70 points or 1.02% at 15,138.40. It opened with an upward gap of 75.43 points at 15,061.13 and surged to a hit an intra-day high of 15,235.51
The S&P CNX Nifty gained 45.20 points or 1.04% at 4,401.55. The Nifty August 2007 futures settled at 4357, a discount of 34.55 points as compared to spot closing.
The market breadth was strong with small-cap and mid-cap stocks seeing buying interest. On BSE, there were close to 1.5 gainers for every loser: 1,581 shares advanced as compared to 1,081 that declined, while 73 remained unchanged.
The BSE Mid-Cap index was up 89.82 points or 1.38% at 6,605.24 and the BSE Small-Cap index inched higher by 86.08 points or 1.10% at 7,891.54.
The total turnover on BSE amounted to Rs 3981 crore as compared to Rs 4,435.42 crore on Thursday, 2 August 2007
NSE’s F&O turnover amounted to Rs 44285.38 crore as compared to Rs 38,783.38 crore crore on Thursday, 2 August 2007
Among the 30-member Sensex pack, 23 advanced while 7 slipped.
India’s largest commercial bank State Bank of India (SBI) rose 2.53% to Rs 1633, on 7.05 lakh shares, after gaining 2.95% on Thursday, 2 August 2007. It was the top gainer from the Sensex pack
SBI is holding talks with potential partners for its non-life insurance venture. It is keeping options open for going alone in the general insurance business. The bank plans to set up a holding company to transfer its share holding in its insurance and asset management subsidiaries. The new holding company, valued between $5 billion to $7 billion, would eventually be listed.
Other banking scrips also posted gains after the release of inflation data in afternoon today, 3 August 2007. The BSE Bankex gained 101.71 points or 1.28% at 8,048.51. The wholesale price index was 4.36% in the week to 21 July 2007, compared with 4.41% the previous week The government also revised the inflation rate for the week ended 26 May 2007 to 5.15% from 4.85%.
Dena Bank (up 1.16% to Rs 52.40), Oriental Bank of Commerce (up 1.67% to Rs 231.50), Punjab National Bank (up 0.40% to Rs 498), Bank of India (up 0.52% to Rs 243.90), Bank of Baroda (up 1.53% to Rs 296), Axis Bank (up 0.25% to Rs 622) and ICICI Bank (up 1.73% to Rs 915.95) gained.
India’s largest power generation firm NTPC soared 2.50% to Rs 166.35. Chhattisgarh State Electricity Board (CSEB) has made a written offer to NTPC to set up three mega power projects in the state in a joint venture. The plants will come up at Aklatra, Lara and Godna hamlets in Raigarh district. NTPC and the CSEB will have equity ratio of 74-26% ,while the production share will be in ratio of 51-49%.
India’s largest cigarette manufacturer ITC advanced 0.63% to Rs 168.80 on follow-up buying after foreign brokerage CLSA recently raised its price target to Rs 184, and upgraded it to buy from underperformer.
Reliance Energy (REL), India's second largest power generation and distribution company in terms of sales, eased from day’s high of Rs 772, to settle 0.10% lower at Rs 751.40. The stock had gained 2% yesterday, 2 August 2007 on reports it has emerged as the sole bidder for a Damodar Valley Corporation (DVC) power project in the Purulia district of West Bengal. The REL stock has surged 23% in the past one month.
Cement stocks gained for the second consecutive day as buying continued in anticipation of firm cement prices. India’s second largest cement producer ACC surged 1.72% to Rs 1000. It gained 2% yesterday, 2 August 2007 after its cement dispatches jumped 14.68% to 16.4 lakh tonnes in July 2007 over July 2006.
Grasim gained 2.07% to Rs 2968.95 while UltraTech Cement rose 0.67% to Rs 905.10. The Aditya Birla Group said on Wednesday its cement shipments rose 13.1% to 24 lakh tonnes in July 2007 over July 2006. Grasim and UltraTech Cement belong to the Aditya Birla Group
However, Ambuja Cements lost 1% to Rs 129 on profit booking. Its cement dispatches rose 20% to 13.9 lakh tonnes in July 2007 over July 2006.
Interest-rate sensitive auto shares hardened on a view that interest rates will remain steady with inflation under control. The BSE Auto Index rose 49.57 points or 1.04% at 4796.65. Mahindra & Mahindra (up 0.44% to Rs 678.80), Bajaj Auto (up 1.63% to Rs 2330) and Tata Motors (up 0.69% to Rs 656.70) logged gains.
The country’s top small car manufacturer Maruti Udyog gained 1.40% to Rs 848 after its total vehicles sales rose 24.8% to 57,909 vehicles in July 2007 over July 2006. The company sold 52,839 vehicles in the domestic market in July 2007, a rise of 18.33% over the same period last year.
Reliance Industries (RIL), the country’s largest private sector company, slipped from day’s high of Rs 1838.90, and settled unchanged at Rs 1801.30, on 10.63 lakh shares. As per reports, the government is likely to clear the price quoted by RIL for its gas from the Krishna-Godavari basin without seeking to control the price.
IT pivotals posted modest gains, with the BSE IT index rising 55.19 points or 1.19% at 4704.30. Second biggest software services exporter Infosys rose 0.97% to Rs 1918 on reports that it has signed a multi-year agreement with Canadian Pacific (CP) to provide modular global sourcing services.
Satyam Computers (up 1.20% to Rs 471.80) and Wipro (up 1.48% to Rs 469.10) gained. However, India's largest software services provider TCS lost 0.12% to Rs 1094.
Mid-cap software stocks outperformed large-cap IT stocks. i-flex Solutions (up 6.53% to Rs 2169), MphasiS (up 5.92% to Rs 306), Financial Technologies (up 3.24% to Rs 2530) and Patni Computers (up 1.85% to Rs 438.30) advanced.
India’s biggest housing finance company HDFC rose 1.69% to Rs 1978 on reports that it has shortlisted three foreign firms for a stake in its insurance venture and will select one of them within 15 days. HDFC Chairman Deepak Parekh told shareholders last month that foreign firms were willing to pay a premium for the stake in the insurance company.
Capital goods favorites Bhel and L&T moved up. Bhel gained 0.79% to Rs 1712.20, while L&T rose 1.34% to Rs 2521.10
Pharma shares dipped on selling pressure. Dr Reddy’s was the top loser from the Sensex pack. It slipped 1.10% to Rs 624 on 89,870 shares. Ranbaxy Laboratories lost 0.93% to Rs 368.
However Cipla gained at the fag end of the day and was up 0.70% to Rs 187.15, from its low of Rs 184.
Simplex Projects settled at Rs 272.05 on BSE, a premium of 47% over IPO price of Rs 185. The stock had hit a low of Rs 266.70 and a high of Rs 323.75. On BSE, 67.19 lakh shares had changed hands in the counter on BSE. Simplex Projects IPO had received overwhelming investor response. The IPO was subscribed 85.53 times
Battered real-estate stocks, the worst hit in Wednesday, 1 August 2007's market meltdown, gained for the second straight day today on bargain hunting. The BSE Realty index was up 160.51 points or 2.15% to 7618.30. It was the top performing sectoral index on BSE. Unitech (up 0.84% to Rs 536.10), DLF (up 2.22% to Rs 599.70), Orbit Corporation (up 10.20% to Rs 369.50) and Indiabulls Real Estate (up 4.59% to Rs 536) edged higher.
Jindal Stainless rose 2.20% to Rs 157.15 on reports it is planning a foray into the Russian market by setting up a greenfield facility there. In the first phase, Jindal Stainless may invest up to $60 million in an integrated stainless steel facility in Leningrad. The plant will have a capacity to make 4 lakh tonnes of stainless steel per year.
JSW Steel lost 2.06% to Rs 679.50 despite registering a growth of 18% to 2.37 lakh tonnes in crude steel production in July 2007 over July 2006. Hot rolled (HR) coils production grew 9% to 2.14 lakh tonnes in July 2007 over July 2006. HR plates production grew 15% to 0.18 lakh tonnes in July 2007 over July 2006.
Apar Industries rose 1.12% to Rs 211.65 after it bagged large export orders for aluminium conductors used for power transmission lines from giant trunk-key operators based in North Africa and Kazakhstan. The order will be executed by its conductor division and is valued at Rs 111.50 crore.
Gitanjali Gems moved higher by 1.15% to Rs 273 after a block deal of 5.5 lakh shares was struck on the counter at Rs 272 on BSE at 12:04 IST.
Accentia Technologies jumped 5% to Rs 184 on the company bagging a first order of euro 2.10 million for its hospital process management suite. The customisation and implementation of the suite at 5 locations will take about 12 months.
Jaiprakash Associates gained 2.91% to Rs 826.45 on reports of its foray into the steel sector with the acquisition of Malvika Steel in Jagdishpur, Uttar Pradesh, for Rs 207 crore.
Era Constructions India surged 5% to Rs 521.60 after it bagged an order from NTPC for main plant and offsite civil works package for Simhadri super thermal power projects, Stage-II (2 X 500 MW), in Andhra Pradesh, on works contract basis. The value of the contract is about Rs 136.33 crore and will be executed over 43 months.
Punj Lloyd jumped 2.64% to Rs 274.40 on signing a memorandum of understanding to invest Rs 403 crore for acquiring a 25.1% stake in Pipavav Shipyard. This will provide it an access to fabrication facilities for platforms, rigs and jackets to exploit the opportunities in this sector.
Sundram Fasteners rose 1.48% to Rs 54.85 on acquiring 100% share capital of PUT Grundstucks GmbH in Peine, Germany. The investment would be around euro 30,000.
GMR Infrastructure, a Rs 1000-crore Bangalore-based infrastructure company with a focus on airports, power and roads, galloped 8.95% to Rs 836 after its unit developing a new international airport in Hyderabad selected Apollo Hospitals to set up a medical centre at the upcoming passenger terminal. Apollo Hospitals rose nearly 4% to Rs 508.40.
Deccan Aviation dropped 1.48% to Rs 139.95 after the Securities and Exchange Board of India (Sebi) raised queries regarding United Breweries (Holdings)'s open offer for Deccan Aviation. UB (Holdings) said on 25 July 2007 that the schedule for the open offer would be revised. UB (Holdings) made the public announcement for the open offer a few days after it bought 26% in Deccan for Rs 550 crore in May 2007.
Truck maker Eicher Motors rose 5.31% to Rs 385 after the company said on today, 3 August 2007, its commercial vehicle sales in rose 9% to 2,363 units in July 2007 over July 2006.
Divi's Labs settled at Rs 1304 compared to yesterday's, 2 August 2007, closing price of Rs 6368.25 after a 5-for1- stock split was effected in the counter today.
Most of the Asian indices advanced, 3 August, reacting to a US rally. Taiwan's Taiwan Weighted (up 1.20% at 9,058.23), Hong Kong's Hang Seng (up 0.42% at 22,538.44), Shanghai Composite (up 3.47% to 4,560.74) and South Korea's Seoul Composite (up 1.28% at 1,876.80) advanced.
However, and Japan's Nikkei slipped marginally by 0.03% at 16,979.86 European shares slipped after firm opening today, 3 August 2007.
Wall Street shares advanced after solid readings on corporate earnings and the job market calmed some of investors' anxiety about a tight credit market. The Dow rose 100.96 points, or 0.76, to 13,463.33. The Standard & Poor's 500 index picked up 6.39 points, or 0.44%, closing at 1,472.20, while the Nasdaq Composite index rose 22.11 points, or 0.87%, to 2,575.98.
Oil hovered near $77 a barrel on Friday, 3 August 2007 keeping in sight of this week's fresh record high after OPEC officials poured cold water on US hopes for an output rise, reiterating that the world was not short of crude supplies. US oil was unchanged at $76.86 a barrel. Prices touched an all-time high of $78.77 on Wednesday, but sharply retreated on signs of improved US refinery operations.
The market is expected to head higher tracking firm US and Asian markets. The BSE 30-share Sensex rose 49.93 points or 0.33% at 14,985.70, on Thursday, 2 August 2007, in volatile trade on alternate bouts of buying and selling.
Asian indices advanced in early trade today, 3 August reacting to a US rally. Japan's Nikkei was up 0.14% or 24.56 points at 17,008.67.
Taiwan's Taiwan Weighted (up 1.20% at 9,058.23), Hong Kong's Hang Seng (up 0.54% at 22,564.88), South Korea's Seoul Composite (up 0.75% at 1,866.89) advanced.
However, Singapore's Straits Times was down 0.14% at 3,430.59.
Wall Street shares advanced after solid readings on corporate earnings and the job market calmed some of investors' anxiety about a tight credit market. The Dow rose 100.96 points, or 0.76, to 13,463.33. The Standard & Poor's 500 index picked up 6.39 points, or 0.44%, closing at 1,472.20, while the Nasdaq Composite index rose 22.11 points, or 0.87%, to 2,575.98.
As per provisional data, foreign institutional investors (FIIs) sold shares worth a net Rs 537.37 crore, while domestic institutional investors (DIIs) were net buyers of shares worth Rs 282.57 crore on Thursday, 2 August 2007.
Asian stocks posted smart gains Friday as investor sentiment improved in the US, the regions largest export market. Auto and electronics majors led advances.
Shares of Toyota Motor rose 0.9% and Sony rose 1%. Hon Hai Precision Industry, the world's largest contract electronics manufacturer, climbed 3%.
Samsung Electronics rose 1.5% and LG Electronics advanced 2.2%.
Konica Minolta, the world's second-biggest maker of film used to make liquid-crystal displays, climbed 3.9% after the company said yesterday first-quarter net income rose 53% to $135 million.
Shares of Sumitomo Realty & Development Company jumped nearly 6% after Japan's third-largest property firm posted a 50% rise in group quarterly operating profit and revised up its first half forecast.
BHP Billiton, the world's largest mining company, gained 1.7%.
Australia's S&P/ASX 200 gained 0.5% to 6,040.30 and New Zealand's NZX 50 Index was little changed at 4,137.81.
In Japan, the Nikkei ended the morning session up 24.56 points at 17,008.67. The broader TOPIX Index added 0.21% to 1,672.87.
South Korea's KOSPI advanced 1.6% to 1,882.88.
The market may open on a positive note on yesterday's gains in US markets and firm Asian markets in current trades. Major Asian indices like Nikkei, Hang Seng and Kospi are trading with the gains of around 50 points each. However, caution should be maintained on account of the prevalence of a intra-day volatility. Among the local indices, The Nifty has a short-term support is at 4300 and could test higher levels around 4420. The Sensex on the upside may touch 15135 level and has a support at 14900.
US indices registered gains on Thursday, despite subprime and credit market fears. While the Dow Jones gained by 101 points at 13463, the Nasdaq advanced by 22 points at 2576.
Indian ADRs had a mixed outing on US bourses. Patni Computer fell sharply and tumbled over 3.85% while MTNL, Tata Motors, ICICI Bank, VSNL and Rediff declined over 1-3% each. However, Infosys, Satyam, Wipro, HDFC Bank and Dr Reddy's Lab ended with steady gains.
The Nymex light crude oil for September series gained by 33 cents at $76.86 a barrel. In the commodity space, the Comex gold for December delivery rose by 70 cents to settle at $676.60 an ounce.
Market Grape Wine :
In House :
Nifty at a supp of 4325 and 4285 with Resis at 4400 and 4444
Mkt to open on a positive note but volatility to remain high with profit booking at higher levels not ruled out.
Intra Day calls: Sell Orchid chem below 210 with a TGT of 202 and a SL of 214
Buy Indian Bank above 133 with a TGT of 140 and a SL of 13
F&O: Sell Parsavnath below 325 with a TGT of 315 and a SL of 329
Out House :
Markets at a support of 14858 & 14786 levels with resistance at 15181 & 15234 levels .
Buy : SBIN
Buy : RIL & RelCap
Buy : GUjambCem & ACC
Buy : Hitachi & TvToday
Buy : Sterlite & Tisco
Buy : Aban & IOLBroad
Buy : DishTV & Aptech
Buy : JP & Century
Buy : DLF & Unitech
Dark Horse : RIL , SKumar , SBIN , RelCap , Aptech , Apar , Century & DLF
TGIF : Thank God Its Friday : Markets very choppy sell high buy low call for the day .
NIFTY (4356) SUP 4320 RES 4393
Buy Mphasis (289) SL 284 Target 297, 299
Buy India Cement (217) SL 213 Target 224, 226
Buy GNFC (129) SL 125
Target 135, 137
Sell Cipla (186) SL 190
Target 179, 176
Sell R Com (542) SL 547
Target 534, 531
A truly stable system expects the unexpected, is prepared to be disrupted, waits to be transformed.
Some stability appears on the horizon with most global markets posting gains overnight and Asian markets too holding their ground. The bulls failed to hold on to their gains on Thursday amid continuing worries about the impact of global meltdown on the local market. The rally also lacked conviction due to the lower traded volumes. This probably implies that it was more of a short covering than fresh buying. The market breadth was also marginally positive. It would be wise to wait for the current weak phase to pass before taking a fresh call. Avoid fresh long positions.
The outlook for today is positive at open, but avoid fresh buying unless you are taking position for the long term. Defensive stocks like HLL and potential doublers like RPL could be accumulated for the long haul.
Though, the subprime woes in the US and trouble in the credit markets are unlikely to have a direct bearing on India, indirectly, it may affect foreign inflows. So, the writing is on the wall: Keep a close watch on the trend in FII inflows. A sharp reversal in fund flows to emerging markets could lead to a fresh carnage worldwide. Though India is insulated due to its local-centric economy, the growing integration with the global markets will ensure some pain in the short term.
Players with weak hearts and equally weak portfolio should be careful while long-term investors should cash in on the opportunity. Give yourself a much needed break after a rollercoaster ride. In fact, the movie 'Cash’ opens in theaters today. It is a story of a bunch of thieves who pull off a daring heist involving priceless diamonds. As investors, take your time identifying priceless stocks you could add to your portfolio. Avoid the 'daring' part for the time being.
Car makers like Maruti, Tata Motors and M&M may come under some pressure amid reports that the Urban Development Ministry has sought a special tax on four-wheelers, citing lack of adequate infrastructure. Deccan Aviation will also be in action as SEBI has sought details on funding from the UB Group. Petronet LNG is also likely to be in focus as the company will move the Supreme Court to vacate the stay given by the Ahmedabad High Court restraining it from adopting a new pricing formula. TV18 could also gain amid reports that it proposes to buy 50% in MTV Networks India for Rs2bn.
US stocks rallied for the third time this week after consumer and media companies reported better-than-forecast earnings. The S&P 500 added 6.39 points, or 0.4%, to 1472.2. The Dow Jones Industrial Average rose 100.96 points, or 0.8%, to 13,463.33 and the Nasdaq Composite Index increased 22.11 points, or 0.9%, to 2575.98.
The yield on the benchmark 10-year Treasury note fell 2 basis points to 4.77%. The dollar weakened 0.2% against the euro on speculation that a government report tomorrow will show US companies added fewer jobs in July.
Subprime concerns resurfaced after mortgage lender Accredited Home Lenders Holding revealed in a SEC filing it was not certain it would continue to operate. Shares of the company tumbled nearly 38%. Adding to the subprime related woes, a report stated that American Home Mortgage Investment Corp. will shut shop on Friday, just two days after the mortgage lender said it was considering liquidating its assets.
The US subprime-market rout has got a long way to go, says Jim Rogers. Further losses may be in store even as shares rebounded this week, says Rogers.
Oil prices remained near record highs reached earlier this week as US light crude for September delivery rose 40 cents to $76.93 a barrel on the New York Mercantile Exchange. The front-month contract was quoting 4 cents lower at $76.82 a barrel in extended trading in Asia.
Treasury prices climbed, lowering the yield on the benchmark 10-year note at 4.77% from 4.79%. The dollar fell versus the euro and gained against the yen. COMEX gold for December gained 70 cents to $676.60 an ounce.
European shares advanced, spurred by better than expected earnings from the likes of Unilever, Nokia, France Telecom and Societe Generale. Investors also picked up shares in the beleaguered financial services sector after a raft of high-profile banks, including Credit Suisse reported strong profit growth.
The pan-European Dow Jones Stoxx 600 index rose 0.7% to 376.56. The German DAX 30 closed up 0.8% at 7,534.13, the French CAC-40 increased 0.5% to 5,682.07 and the UK's FTSE 100 advanced 0.8% to 6,300.30.
Most major Latin American equity markets rose. In Sao Paulo, the benchmark Bovespa index finished up 457 points, or 0.8%, at 54,690.02. Mexico's IPC index rose 1.2% to 30,394.81 and Argentina's Merval rose 0.4% to 2,186.64. In Santiago, the benchmark IPSA finished flat at 3,326.45. Among the other emerging markets, the RTS index in Russia gained 0.5% to 1956.
Asian markets were trading marginally higher this morning. The Nikkei in Tokyo was flat at 16,980 while the Hang Seng in Hong Kong too was static at 22,442. The Kospi in Seoul climbed 20 points to 1874 and the Straits Times in Singapore was down 7 points at 3427.
Markets ended marginally up after witnessing a seesaw trading session. After a jerky start key indices took off as Sensex gained almost 200 points touching an intra-day high of 15134. However, later as the session progressed selling pressure in the heavyweights like Infosys, ONGC, Tata Motors and HDFC Bank dragged the benchmark Sensex to hit a low of 14896. Shares of Auto and Technology witnessed profit booking while Realty and Banking stocks were in the limelight.
Finally, BSE 30-share Sensex gained 50 points to close at 14985 hitting an intra-day low of 14896. NSE-50 added 10 points to close at 4356 touching an in intra-day high of 4399 and a low of 4327.
IFCI surged by over 7% to Rs56 amid reports that the Board of Directors of the company would meet on August 4 to consider inviting bids from the interested strategic investors. Among the prominent names doing the rounds are Barclays, Citigroup, Lehman Brothers, BNP Paribas and Deutsche Bank. The scrip touched an intra-day high of Rs57 and a low of Rs53 and recorded volumes of over 8,00,00,000 shares on NSE.
Gujarat Ambuja advanced by 1.3% to Rs130 after the company’s July sales rose 20% to 1.39mn tons. The scrip touched an intra-day high of Rs135 and a low of Rs127 and recorded volumes of over 5,00,000 shares on NSE.
Hindustan Dorr was locked at 5% upper circuit to Rs113.75 after the company announced that it has secured Rs700mn order from Bharat Oman refineries. The scrip touched an intra-day high of Rs113.75 and a low of Rs106 and recorded volumes of over 16,000 shares on NSE.
Bharati Shipyard slipped by 1.5%to Rs552 after the company announced that it secured a repeat order worth Rs1.77bn from UP Offshore (BAHAMAS) Ltd. The scrip touched an intra-day high of Rs569 and a low of Rs533 and recorded volumes of over 82,000 shares on NSE.
Nitin Fire spurred by over 2.5% to Rs409 after the company announced that it has secured Rs5mn order from Indraprastha. The scrip touched an intra-day high of Rs418 and a low of Rs398 and recorded volumes of over 1,00,000 shares on NSE.
Auto stocks further lost ground on back of fall in monthly sales figures. Hero Honda dropped by 2.4% to Rs652 after the company’s July sales fell 15% to 201191 units, Tata Motors was down by 2.4% to Rs651 after the company’s sales figures dropped 6.6% in July to 42,098 units. However, M&M slipped by 2.5% to Rs675 despite posting strong growth in its July sales. The company sold 19163 units in July posting 45.8% growth.
IT stocks also were on the receiving end as selling pressure dragged them lower. Wipro lost by over 3% to Rs462, TCS was down by 2% to Rs1095, Infosys slipped by 1.6% to Rs1899 and Satyam Computer ended 1% lower to Rs465.
Metal stocks shined brightly led by gains in index heavyweight Tata Steel as the scrip gained by 2.6% to Rs639; Hindalco was up by 0.5% to Rs159 and Hindustan Zinc added 0.5% to Rs707. However, SAIL lost by 0.5% to Rs143.
Power stocks perked up led by gains heavyweight, REL gained by 2.1% to Rs752, Suzlon was up by 2.3% to Rs1230, NTPC advanced by 1.6% to Rs162. However, Tata Power lost 1% to Rs693.
Banking stocks ended with strong gains. Frontline stock SBI surged by 3% to Rs1592, ICICI Bank was up by 1.2% to Rs901 and PNB added 1.7% to Rs494. OBC, Corp Bank and Syndicate Bank were the top gainers among the Mid-Cap stocks.
FIIs were net sellers of Rs5.38bn (provisional) in the cash segment on Thursday. At the same time, local institutions were net buyers of Rs2.83bn. In the F&O segment, FIIs were net buyers at Rs11.78bn.
On Wednesday, FIIs offloaded Rs9.83bn from the cash segment. Mutual Funds were net sellers of Rs1.48bn.
Major bulk Deals:
Goldman Sachs has bought Gitanjali Gems; Citigroup has purchased Karuturi Networks; Principal MF has sold SRF Polymers.
UTV Software Communications Limited: FMR Corp. and its direct and indirect subsidiaries and Fidelity International Limited (FIL) and its direct and indirect subsidiaries has purchased from open market 50490 equity shares of the company on 30th July, 2007.
Shringar Cinemas Limited: Mr. Balkrishna Shroff, Director has purchased from open market 10000 equity shares of the
company on 1st August, 2007.
KEC International Limited: SBI Mutual Fund under its various schemes has purchased from open market 122350 equity
shares of the company on 30th July 2007.
Rama Pulp, IID Forgings, Tanla, IOL Broadband, Easun Reyrolle, Hindustan Oil Exploration, Murli Industries and BF Utilities.
Jai Corp, Prism Cement, Shree Precoated, Karuturi Networks, DMC International, Anant Raj Industries and Hindustan Dorr
Delivery Delight (Rising Price & Rising Delivery):
Birla Corp, Prism Cement, IOB, Gujarat NRE Coke and GTC Industries.
Pfizer, UB, Corporation Bank, Balaji Telefilms and Divi's Labs.
Major News & Announcements:
Nitin Fire gets Rs5mn order from Indraprastha Gas
Punj Lloyd to acquire 25.1% in Pipavav Shipyard for Rs4.03bn
Punj Lloyd wins order worth Rs6.66bn
ACC July sales at 1.64mn tons (up14.6%)
JSW Steel July production at 237,000 tons (up 18%)
Sundaram Fastener acquire Germany’s PUT Grundstucks for Euros 30,000
Hindustan Dorr gets order from Bharat Oman Refineries
GMR Infrastructure selects Apollo for medical centre at Hyderabad airport.
Simplex - Rs 160.
Alpa Labs - (Discount. The IPO was subscribed only 1.1 times.)
Omaxe - Rs 100.
Omnitech Info - Rs 100.
Zylog - Rs 330.
IVR Prime Urban - Rs 14.
Central Bank - Rs 38.
SEL - Rs 5.
Asian Granito India - Rs 10.
Purvankara - Rs 40.
Take Solutions - Rs 220.
KPR Mills - Rs 25.
Refex - Rs 18.
Disclaimer: The prices may just be a indicator and may not be the actual price on the listing date.
Cluster: Emerging Star
Price target: Rs425
Current market price: Rs355
Results beat expectations
- The total operating income of Cadila Healthcare (Cadila) increased by 28.4% year on year (yoy) to Rs572.2 crore in Q1FY2008, driven by a 19.7% growth in the domestic business and a 49.9% rise in the exports. The sales growth was ahead of our expectations.
- The domestic business was driven by an 18.2% increase in the sales of branded formulations, a 44% rise in the sales of active pharmaceutical ingredients (APIs) and a 52.4% jump in the consumer business. The improved performance of the French business (a growth of 49.8% yoy) and the US business (a growth of 122.6% yoy) contributed largely to the robust growth in the exports.
- The operating profit margin (OPM) shrank by 70 basis points to 19.4%, largely due to a 245-basis-point decline in the gross margin due to lower realisation on exports and a changing product mix. Consequently, the operating profit grew by 23.8% to Rs111.2 crore.
- Despite a jump in the interest expense, the depreciation charge and the tax provision, the net profit rose by an impressive 38.1% to Rs73.9 crore. The profit growth was aided by a foreign exchange (forex) gain of Rs9.1 crore (on translation of outstanding foreign currency loans) recorded during the quarter as compared with a forex loss of Rs1.3 crore in the corresponding quarter of the previous year. The net profit surpassed our expectations.
- In order to incorporate the impact of the recent acquisitions and the appreciation of the rupee against all the other major currencies (on account of which the realisations on exports have reduced), we are revising our estimates for Cadila. We have upgraded our revenue estimates by 5.2% and 5.1% to Rs2,241.0 crore and Rs2,600.8 crore for FY2008E and FY2009E respectively. Further, we have reduced our FY2008 and FY2009 earnings per share (EPS) estimates by 2.1% each to Rs21.6 and Rs26.1 respectively.
- At the current market price of Rs355, the company is trading at 16.4x its FY2008 and at 13.6x its FY2009 estimated earnings. With all the growth drivers in place and on track, we reiterate our Buy recommendation on Cadila with a price target of Rs425.
Cluster: Apple Green
Price target: Rs1,975
Current market price: Rs1,650
Price target revised to Rs1,975
- In Q1FY2008, Bharat Electronics Ltd (BEL) reported a decline of 16.3% in its net sales to Rs404.4 crore. Given the fact that the company had a record order backlog of Rs9,100 crore at the beginning of the fiscal, the revenues in Q1 were much below street expectations.
- The performance at the operating level was even more disappointing with an operating loss of Rs4.6 crore during the quarter. In addition to the lower than expected execution in Q1, the operating profit was dented by the provision of Rs25.7 crore made for wage hikes and additional increments to its employees (of which Rs6.4 core pertains to the previous year).
- However, the other income component for the quarter jumped by 71% to Rs65.6 crore (as against Rs38.4 crore in Q1FY2007) which enabled the company to report a profit after tax (PAT) of Rs26.3 crore. The PAT for the quarter was, however, down by 56.4% as compared with Rs60.3 crore reported in Q1FY2007.
- Though the performance has been disappointing in Q1, the management expects the growth to pick up in the coming quarters on the back of a robust order book executable in the current year. Consequently, we are not revising our estimates and would review the same depending on the performance in Q2FY2008.
- Along with the results, the company announced a final dividend of 140% (or Rs14 per share) for the year 2006-07. Including the interim dividend of 40%, the total dividend for the year stands at 180% (or Rs18 per share).
- At the current market price the stock trades at 11.8x FY2008 and 9.3x FY2009 estimated earnings (multiple adjusted for estimated free cash on its books). We maintain Buy recommendation on the stock with a revised price target of Rs1,975 (12x FY2009E earnings plus estimated free cash of Rs545 per share on its books).
Mahindra & Mahindra
Cluster: Apple Green
Price target: Rs900
Current market price: Rs694
Price target revised to Rs900
- The Q1FY2008 results of Mahindra & Mahindra (M&M) were below our expectations. The stand-alone net sales of the company grew by 16.8% to Rs2,612.8 crore in the quarter led by an overall volume growth of 13.6%. The estimated impact on sales due to strengthening of the rupee is at Rs18-20 crore.
- On segmental basis, the automotive revenues rose by 21% to Rs1,504.5 crore, whereas the FE division's revenues grew by 9.7%. The profit before interest and tax (PBIT) margin in the automotive segment declined by 110 basis points due to the strengthening of the rupee. The appreciation in rupee led to lower export realisation and lower profitability during the quarter. The FE division maintained the PBIT margin at 13.4%. Consequently, the overall operating profit margin (OPM) declined by 150 basis points to 10.6%, causing the operating profit to grow by only 2.5%.
- On account of an increase in the interest expenditure and higher depreciation, the adjusted net profit grew by 6.8% to Rs192.75 crore. After taking into account the extraordinary items (voluntary retirement scheme expenses, special dividend income) the profit after tax (PAT) declined by 6.4% to Rs191.16 crore.
- On consolidated basis, the gross revenues grew by 40.7% to Rs5,879.2 crore in Q1FY2008 while the profit before tax (PBT) and exceptional items grew by 11.7% to Rs535.7 crore.
- We expect FY2008 to be the year of consolidation for the company as new product launches would take place only in FY2009. We are downgrading our consolidated earnings per share (EPS) for FY2008 by 13% to Rs61.8 and for FY2009 by 15% to Rs69.7.
- We have a sum-of-parts price target for M&M. In view of the downgrade in earnings we lower our price target to Rs900, where the core business is valued at Rs490 and 50% of the value is derived from its subsidiaries.
Cluster: Apple Green
Price target: Rs792
Current market price: Rs699
Results below expectations
- Tata Motors’ Q1FY2008 results were below our expectations due to lower than expected margins. However, the bottom line was buttressed by a higher foreign exchange (forex) gain on account of strengthening of the rupee during the quarter.
- The net sales of the company grew by 5.3% to Rs6,056.8 crore during the quarter on the back of a 1.3% growth in volumes and a 3.9% growth in realisations.
- However a high raw material cost and lower volumes particularly in the commercial vehicle (CV) segment adversely affected the margins (excluding the forex gain/loss), which declined to 9% from 11.9% in the same quarter last year. Hence, the operating profit declined by 19.9% to Rs546.3 crore.
- A little higher interest and depreciation charges caused the adjusted net profit for the quarter to drop by 39.4% to Rs259 crore. After accounting for the forex gain of Rs205.9 crore, the net profit for the quarter grew by 22.4% to Rs466.76 crore.
- Looking at the consolidated performance, the company’s sales grew by 13.3% to Rs7,631.3 crore while the profit excluding the forex gain declined by 27.7% to Rs308.2 crore. The profit after tax, extraordinaries and forex adjustments grew by 35.7% to Rs516.1 crore.
- We continue to take a cautious outlook on the CV industry, considering the high interest rates and lower availability of finance. We expect the lacklustre trend to continue for another quarter at least. Things are, however, expected to improve somewhat in the third quarter as freight demand may receive a boost with the advent of the festive season.
- In view of the lower than expected profit margins, we are downgrading our consolidated FY2008 earnings by 10% to Rs54.5 for FY2008 and by 5% to Rs62.9 for FY2008. At the current levels, the stock trades at 11x its FY2009E consolidated earnings and is available at an enterprise value (EV)/earnings before interest, depreciation, tax and amortisation (EBIDTA) of 5.9x. We maintain our Buy recommendation on the stock with a price target of Rs792.
Cluster: Apple Green
Price target: Rs280
Current market price: Rs201
Results above expectations
- The Q2CY2007 results of Hindustan Unilever Ltd (HUL) were above our expectations. The net revenues of the company grew by 12.9% year on year (yoy) on the back of an 11.5% year-on-year (y-o-y) growth in the home and personal care (HPC) segment, which comprises the soap and detergent, and personal care businesses.
- The soap and detergent business grew by 14.6% whereas the personal care product business grew at a lower rate of 6%. The growth in this segment was lower due to the pipeline clean-up in the skin care segment prior to the relaunch of Fair & Lovely. The beverage business grew by 20.8% yoy whereas the processed food business grew by 37.4% yoy.
- The profit before interest and tax (PBIT) margin showed an expansion of ten basis points to 16.2%. The expansion in the PBIT margin is attributable to the improved margins in the HPC segment, which showed an increase by 118 basis points. The PBIT margin was slightly depressed by the losses in the nascent water business excluding which the PBIT margin stood at around 17%.
- The operating profit margin (OPM) of HUL expanded by 126 basis points to 14.7% on a y-o-y basis due to a lower advertising spend and a stable raw material cost. The selling and administrative expenses as a percentage of sales decreased by 155 basis points which improved the margin. Moreover HUL has been able to maintain its market share in such a competitive market which is quite commendable.
- The operating profit grew by 23.5% to Rs512 crore in Q2CY2007 from Rs414.7 crore in Q2CY2006. Excluding the losses from the water business, the growth in the earnings before interest, tax, depreciation and amortisation (EBIDTA) had been at 30%, which is quite commendable. The net profit grew by 29.5% to Rs493.1 crore in Q2CY2007.
- HUL has announced buy-back of shares from the market at a price of Rs230 per share for a total amount of Rs630 crore, which will reduce its equity capital upto 1.2%. This is likely to begin in September 2007 and we expect the impact of this buy-back to be neutral on the earnings but to positively affect the sentiment of the stock.
- At the current market price of Rs201, the stock is quoting at 23.5x its CY2007E earnings per share (EPS) of Rs8.5 and 21x its CY2008E EPS of Rs9.6. We maintain our Buy recommendation on the stock with a price target of Rs280.
- In Q1FY2008, the revenues of Tata Steel grew by 7.6% year on year (yoy) due to a 15% year-on-year (y-o-y) increase in realisations to Rs40,324 per tonne. However the sales volume dropped by 7% yoy to 1.04 million tonne. Sequentially, the realisations grew by 2%, whereas the volumes declined by 17%. The reduction in volume was mainly due to the shut down of LD2 furnance for upgradation and the delay in the cold rolled shipment of 27,000 tonne.
- The operating profit per tonne improved by 15% yoy and 8% quarter on quarter (qoq) to Rs16,323 per tonne mainly due to increased realisations and improving efficiency. The operating margins during the quarter were stable at 40.5%. The other income included sale of a cold rolling mill for a consideration of 67 crore.
- The profit after tax (PAT) grew by 28% yoy to Rs1,222 crores largely driven by the forex gain of Rs553 crore due to exchange gain from foreign currency borrowing. The adjusted PAT declined by 10% yoy to Rs669 crore on account of a sharp increase in the interest cost (due to increased borrowing for Corus acquisition) and the increase in one time wage expense.