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Wednesday, February 24, 2010

Populism on track, prosperity could derail!


One who walks in another's tracks leaves no footprints.

Though Railway Minister Mamata Banerjee could chart her on course, she is unlikely to replicate the success of her predecessor, who brought back glory to the Railways and earned plaudit for himself. With an eye on West Bengal polls, ‘Didi’ might be inclined to play to the gallery. Too much populism and less emphasis on revenue generation could mar the sentiment further. A ‘Peace Train’ may be in the offing between Kanyakumari to Kashmir.

As for the markets, there is no peace or happiness at start. We expect a soft start owing to weak global markets. By itself, the Railway Budget is not expected to swing the mood on the bourses. That might happen when the Union Budget is out on Friday. But, even that might not be able to do so, given the concerns on local as well as global front. In short, the choppy consolidation phase may prevail for a while before the market breaks out of the current rangebound activity. The best way to overcome near-term uncertainty is to stay put and not do anything adventurous.

FIIs were net buyers in the cash segment on Tuesday at Rs5.5bn on a provisional basis while the local funds were net sellers of Rs1.8bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers of Rs2.38bn. On Monday, FIIs were net buyers of Rs396mn in the cash segment, while Mutual Funds were net buyers at Rs889mn, according to SEBI web site.

Results Today: Alfa Laval, Aventis Pharma, Bata India, HeidelbergCement, Mphasis and Strides Arcolab.

The BSE Sensex ended with marginal gains on Tuesday amid lackluster trade. With no major triggers emerging domestically and cues from the global markets also not that encouraging traders and investors remained guarded ahead of the mega event – The Railway and Union Budget 2010.

The Realty, Metals and Pharma stocks were among the major gainers, while the Auto and the Consumer Durables stocks were under pressure. The broader markets i.e the Mid-Cap and the Small-Cap indices under performed the benchmark indices, both the indices ended lower by 0.5% each.

The BSE Sensex added 49 points to end at 16,286 it hit an intra-day high of 16,325 and intra-day low of 16,179. While the NSE Nifty added 14 points to end at 4,870.

Among the 30-components of Sensex, 18 ended in the positive terrain and 12 ended in the red. Sun Pharma, DLF, ICICI Bank, Sterlite Industries and HDFC were among the top gainers. On the other, major losers were Maruti, Reliance Infra, M&M, Hero Honda and Tata Motors.

Outside the frontline indices, the big gainers in the broader market were Bajaj Holdings, KSK Energy, Cadila Healthcare and United Phos. On the other hand, losers included RCF, Jet Airways, Chambal Fert, Renuka Sugars and Madras Cement.

The markets breadth was negative, about 906 shares advanced, 1996 shares declined, and 270 shares unchanged.

Rural Electrification Corp.’s (REC) share sale got bids for 1.25 times the shares offered for sale. Shares of REC slipped by 1.5% to end at Rs213. The scrip opened at Rs212 it touched an intra-day high of Rs213 and a low of Rs210 and recorded volumes of over 2.4mn shares on NSE.

Shares of Maruti declined by over 3.6% to end at Rs1335 after reports stated that the company recalled ~1000,000 A-Star cars to replace faulty fuel pump gaskets. The company issued a statement saying that it had started recalling the car including the overseas markets from December 2009 itself. The statement further said that the company has had no complaints from the customers and the recalling step was a proactive one.

The scrip opened at Rs1369 it touched an intra-day high of Rs1389 and a low of Rs1317 and recorded volumes of over 0.48mn shares on NSE.

Infinite Computer Solutions announced that its wholly owned subsidiary, Infinite Convergence Solutions Inc. (Infinite) has entered into a strategic alliance with Motorola, to further develop and support Motorola's software enabled short message service (SMS) and multi-media messaging service (MMS) messaging solutions.

Shares of Infinite Computers Sol shot up by over 7% to end at Rs203. The scrip opened at Rs189 it touched an intra-day high of Rs205 and a low of Rs187 and recorded volumes of over 2.6mn shares on NSE.

Aqua Logistics, engaged in the business of freight forwarding services, started trading at Rs225 per share on its debut on Tuesday. Finally, the stock advanced to Rs244.6 as compared to its issue price of Rs220 per share translating into a premium of Rs11.2%.

Aqua Logistics had extended the offer period for its IPO to February 2, 2010 and had also lowered the price band for the shares to Rs200-225. The firm had initially proposed to end the IPO offer period, and had offered the shares for Rs220-230 each.

The company intends to utilize the issue proceeds for purchasing of specialized equipments as well as expansion and establishment of offices, funding proposed acquisition and additional working capital requirements.

Shares of Monsanto India shot up by over 4% to end at Rs1757 after 6.1% of its equity changed hands in a single transaction.

Monsanto Holding Pvt. bought ~0.525mn shares from the founders of Bretco Holdings Mauritius Ltd. by way of share transfer. ~0.525mn equity shares of the company were traded on BSE. The transaction was at an average price of Rs1749 per share on BSE.

Steel Strips Wheels announced that Renault, have nominated the copmany as key supplier for the supply of High Tech Steer Wheel Rims for one of its new vehicles to be launched in early 2011.

SSWL is likely to start supply of the said High Tech Steel Wheels to Renault from last quarter 2010 and expected to supply 0.30 million wheels over 5 years period generating foreign exchange to the extent of nearly Euro 4.7mn. SSWL have already developed the said Wheels for supplies to another location of Renault plants.

Shares of Steel Strips erased all the gains and ended at Rs98. The scrip opened at Rs98 it touched an intra-day high of Rs107 and a low of Rs97 and recorded volumes of over 54,000 shares on NSE.

Shares of Venus Remedies’ gained by 1% to end at Rs231 after the company’s German arm received approval to market carbapenem injection in Portugal. The scrip opened at Rs236 it touched an intra-day high of Rs240 and a low of Rs230 and recorded volumes of over 28,000 shares on NSE.