India Quarterly Review
Wednesday, August 18, 2010
Today's major news
Reliance Media World soars on joint venture with CBS Studios; the stock ends 4.96% higher
Steel Strips Wheels wins export orders; the stock closes 1.53% higher
Tantia Constructions builds on new order win; the stock ends 14.29% higher
Uncertainty continues despite strong gains for US markets
The Asian stocks ended mixed despite upbeat cues from the overnight US markets as intense volaltily in the currency markets kept the movement under check. The US Federal Reserve reported yesterday that industrial production rose 1.0% in July after having edged down 0.1% in June while factory output soared 1.1%—its biggest jump in nearly a year. This pushed up the DOW by nearly 1%, ensuring that the bulls are back into play for the risky assets. However, sell off in Chinese stocks and a massive correction in the share prices of the mining major BHP Billiton in Australia kept the gains under check, making it a fairly ordinary day for the region wide stocks.
The IPO opens for bidding on 23 August 2010
Integrated port developer and operator Gujarat Pipavav Port has fixed Rs 42-48 per share price band for its initial public offering (IPO). The IPO opens for bidding on 23 August 2010 and closes on 26 August 2010.
The key benchmark indices surged, with data showing sustained buying by foreign funds boosting sentiment. IT and metal stocks were in demand. Auto, FMCG and metal stocks also gained. Fertiliser stocks rose across the board after Australian mining giant BHP Billiton said it will take its nearly $39 billion takeover bid for Canada's Potash Corp of Saskatchewan Inc, the world's largest fertilizer maker by capacity, straight to Potash Corp shareholders after the fertilizer firm's board spurned the offer as grossly inadequate.
After trading in a narrow range for the better part of the day, market saw a sharp spike upwards after 2 o’clock which helped the benchmark indices close with gains of more than a percent. Sensex gained 208 points to close at 18257 while Nifty settled at 5479, up 65 points. BSE Mid-cap and Small-cap indices gained 0.8% and 0.7% respectively. European markets were trading lower by half a percent, led lower by oil stocks while US stock indices futures were down about a fifth of a percent.
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
18-AUG-2010,ANKURDRUGS,Ankur Drugs And Pharma Li,PRIVATBANK IHAG ZURICH AG,BUY,208913,122.76,-
18-AUG-2010,BAJAJCORP,Bajaj Corp Limited,CROSSEAS CAPITAL SERVICES PVT. LTD.,BUY,366463,764.72,-
18-AUG-2010,DCM,DCM Ltd,PRASHANTKUMAR P GUPTA,BUY,102204,99.30,-
With consistency a great soul has simply nothing to do. – RW Emerson.
Markets seem to be just reacting to daily dose of news, which fortunately or unfortunately is not consistent. So, if one day news flow is upbeat, on other days it is not so encouraging. Strangely, volatility is not all that elevated even as markets are looking for fresh catalysts to make decisive moves.
Overall, the global outlook remains uncertain with the US seeing lackluster progress, the Eurozone still not out of woods over sovereign debt issues and China gradually slowing down. The UK is dealing with twin problems of high inflation and tepid growth. Japan of course remains mired in deflation.
For India, the broad picture is bright and beautiful. Although growth does appear to have moderated slightly, fresh traction is expected in the coming months.
We expect a positive start on the back of strength in most global markets. The main indices are unlikely to witness sharp gains unless the global rally sustains for long. Non-index counters will remain abuzz but as always, let caution prevail.
Technically, the NSE Nifty is likely to find support at 5400 and at 5370 while the near-term resistance zone is around 5480. The Nifty has been struggling to cross 5500 but will need a big help from global market if it is to breach that milestone in this month. It may rise as high as 5600 on short covering led gains if it does manage to cross 5500. However, the big question is whether it can maintain the tempo beyond that level as the global situation remains precarious.
Lots of global data points are due to be released throughout the week and will have some bearing on the global sentiment. UK will release data on retail sales. Data on CPI, along with a housing report is due in the US. The latest monthly balance of payments figures for the eurozone are due to be announced by the European Central Bank. Australia will go to the polls on August 21.
Results from several big companies in the US, Europe and elsewhere will also be announced this week. Technology giants Hewlett-Packard and Dell will release their results this week.
FIIs were net buyers of Rs4bn in the cash segment on Tuesday (provisionally), according to the NSE web site. Local funds were net sellers of Rs4bn. In the F&O segment, they were net buyers at Rs10.53bn. Foreign funds were net buyers of Rs5.58bn in the cash segment on Monday, according to SEBI's web site.
Encouraging earning reports and merger news keep the momentum going
US stocks ended substantially higher on Tuesday, 17 August 2010. Dow ended its five-day losing streak boosted by stronger than expected earning reports from a couple of key Dow components. Economic data for the day checked in mixed in nature. Spate of news in the merger and acquisition area kept the momentum ongoing since the very start of the day.
The government has told Cairn Energy that its deal with Vedanta Resources will go through only after a formal proposal to the government is made and all clearances are obtained. (BS)
Mahindra Satyam has won its tax dispute with Upaid after the Supreme Court of the State of New York gave a favorable decision. (BS)
The Indian market ended flat on Tuesday at the end of a highly lackluster trading session. Banking and Realty stocks were among the top gainers. On the other hand, IT and Capital Goods stocks remained under pressure.
Prices ignore weak housing data
Copper prices ended higher on Tuesday, 17 August 2010. Lower dollar and declining LME inventories pushed the appeal of commodities as a hedge against inflation offsetting a weaker than expected housing data.
ABG Shipyard, Adhunik Metalliks, Bartronics, Cairn India, Dishman Pharma, Garware Offshore, Koutons Retail, Nitin Fire Protection, Shree Cement, SBI
ABG Shipyard, Adhunik Metalliks, Bartronics, Cairn India, Dishman Pharma, Garware Offshore, Koutons Retail, Nitin Fire Protection, Shree Cement, SBI, Tanla Solutions