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Tuesday, October 20, 2009

Comfort continues!


Too often we...enjoy the comfort of opinion without the discomfort of thought.

The market is being confronted with insurmountable opportunities. The story so far is that initial quarterly numbers are encouraging; earnings are beating forecasts and revenues are topping expectations. The question is whether this a reversal of corporate fortunes?

The indices may have ended flat on muhurat trading but the comfort in the market is set to continue with bulls set to take charge at start. While the government has postponed a decision on the overall disinvestment policy, the clearance to sell Center’s 5% stake in NTPC will augur well for the stock. Besides global cues are results, the market will pay some attention to the corporate battle between the Ambani brothers as the Supreme Court will begin the final hearing on the case. RNRL is suing RIL for not honouring its commitment of 2005 for supplying 28 mscmd of natural gas from the Krishna-Godavari Basin D6 block at $2.34/mBtu.

Earnings speculation is driving Asian stocks higher this morning. The Dow crossed 10,000 hitting its one-year peak.

Though there is more money to be made in the broader market Fresh buys should be undertaken with extreme caution. If not anything, the market has often subscribed to the theory of ‘Sell on News’ even if positive.

Results Today: Apollo Tyre, Chettinad Cement,Gati Limited, Jk Paper, K Sera Sera, Munoth Cap, Nectar Life, Neuland Lab, Polaris, Polychem, Prakash Ind, Ptl, Radico Khaitan, Rane Madras, Sesa Goa, Sterlite Tech, Subex, Sunteck Realty,Tech Mah and Tvs Electron.

Among other corporate news, Sterlite Industries raised US$500mn via convertible bonds.

HCL Infosystems raised Rs4.7bn through qualified institutional placement (QIP) of equity shares. HCL Infosystems has also bagged a contract worth over Rs5bn from the Rajasthan State Electricity Board.

Tata Steel shareholders have approved an enabling proposal for raising Rs50bn through issue of securities.

Reports say the government has ordered audits of IT companies across the country on possible violations of the Software Technology Parks of India Act

Indian markets resumed the upswing after an election break. It was another noteworthy day as the NSE Nifty re-conquered the 5100 mark for the first time since May 2008. The rally was led by the Metals, Auto and the Capital Goods stocks. However, the telecom stocks continued to be under the bear attack.

The Nifty has advanced nearly 175 points while the BSE Sensex has added ~600 points in the last two trading sessions.

Technically, The Nifty has yet again managed to close above all the near term moving averages indicating the strength in the current up move. However, one has to keep an eye for the 5160-5170 levels which could turn out to be stiff resistance. Once the crucial resistance is taken out the index could further extend gains upto 5300 mark.

The BSE Sensex surged 204 points at 17,231 after touching a high of 17,274 and a low of 17,117. The index opened at 17,117 against the previous close of 17,026. The NSE Nifty advanced 64 points to shut shop at 5,118.

In Asia, the Nikkei in Japan was flat at 10,060, while Australia's S&P/ASX ended higher by 1% at 4,831. Shanghai SE Composite in China gained 1.5% and Hang Seng index in Hong Kong was up 2%.

In Europe, stocks were in the green. The FTSE in the UK gained 1.8%, The DAX in Germany was up 2% and the CAC 40 index in France added 2%.

Coming back to India, among the BSE sectoral indices, the Metal index was the top gainer, adding 5.5%, followed by the Auto index that was up 2.5% and the BSE Capital Goods index was up 2.4%.

Even the BSE Mid-Cap index advanced 2% and the BSE Small-Cap index was up 1.5%.

Among the 30-components of Sensex, 25 stocks ended in the green and only 5 ended in the negative terrain. Among the major gainers were, M&M, Hindalco, JP Associates, SBI, Sterlite and Tata Steel.

On the other hand, RCom, Bharti, Reliance Infra, ACC and ACC were among the major losers

Outside the frontline indices, the big gainers in the broader market were PTC India, GVK Power, Cadila, Essar Oil and Bank of India. On the other hand, losers included Jet Airways, Chennai Petro and TTML.

HDFC Bank announced its Q2 results with net profit at Rs6.88bn up 30.3% as against Rs5.28bn in the same period last year. The bank’s total income was at Rs50bn registering 8% increase YoY as against Rs46.3bn.

Shares of HDFC Bank slightly ended flat at Rs1702. The stock opened at Rs1719 and made an intra-day high of Rs1727 and a low of Rs1685. Total traded volumes stood at 0.19mn shares.

Suzlon Energy announced about the completion and commissioning of a 19.5 MW wind farm project for the Gujarat Mineral Development Corporation (GMDC) at the Maliya - Mivana site in Rajkot District of Gujarat.

The project comprises of 13 units of Suzlon's SS82-1.5 MW wind turbines and has been commissioned in record time, almost two months ahead of the contractual commissioning period.

Shares of Suzlon erased gains and ended lower by 1.4% to Rs85.4. The stock opened at Rs87.50 and made an intra-day high of Rs88 and a low of Rs85. Total traded volumes stood at 8.63mn shares.

Shares of Unitech advanced by 4.5% to Rs105 after the company announced that it sold property worth Rs40bn in the March to September period.

The company sold ~10.11mn square feet of space in the period. Out of 10.11mn sq ft, ~8.16mn sq ft was booked in the residential segment. It said these figures did not cover PLC, parking and club charges.

Larsen & Toubro's Metallurgical, Material Handling & Water Operating Company - a part of its Construction Division has secured Orders aggregating Rs9.66bn from Customers like Sterlite Industries India Ltd, Uttar Pradesh Jal Nigam & Gujarat Water Infrastructure Ltd. This includes Rs2.25bn order from the Metallurgical Sector and Rs7.41bn orders from the Water Sector.

Shares of L&T gained by 2% to Rs1689. The stock opened at Rs1665 and made an intra-day high of Rs1698 and a low of Rs1660. Total traded volumes stood at 0.25mn shares.

Cairn India rose over 6.5% to end at Rs280 after crude prices surged to a year’s high. The stocks also were in demand after it had won two exploration areas in India’s auction earlier this week.

Crude oil for November delivery rose as much as US$1, or 1.4%, to US$75.15 per barrel in electronic trading on the New York Mercantile Exchange today, the highest since October 21, 2008.

On the other hand, ONGC gained by 1% to Rs1258, while, Oil Indian was marginally down by 0.3% to Rs1189.

Suven Life Sciences announced that their clinical candidate SUVN-502 for Alzheimer's Disease secured several product patents granted at all the key market countries; India (218438), Mexico (257091), South Africa (2005/4043), Singapore (113104), New Zealand (540840), Korea (10-2005-7009512), Eurasia (011320), Australia (2003237599) and Europe (1581492).

The granted Product Patent for SUVN-502 in all the countries is valid until June 2023.

Shares of Suven Life Science were locked at 5% upper circuit at Rs29. The stock opened at Rs26.95 and made an intra-day high of Rs29 and a low of Rs27.3. Total traded volumes stood at 92,000 shares.

Shares of Bajaj Auto Finance surged by over 14% to Rs324 after the company announced its Q2 results with net profit of Rs216.9mn as against Rs45.7mn in the same period last year.

The stock opened at Rs288 and made an intra-day high of Rs334 and a low of Rs285. Total traded volumes stood at 0.68mn shares.