Sensex, Nifty strike new highs

 The market surged towards the latter part of the trading session led heavy buying in index pivotals especially for Reliance group stocks. Total turnover on BSE jumped above the Rs 8000 crore mark. Both the niche indices BSE Sensex and S&P CNX Nifty struck all time highs. IT pivotals bounced back after initial slide

 

Asian markets, which opened before Indian markets, settled on mixed note today, 21 September 2007. European markets, which opened after Indian markets, were in the green. US markets finished lower yesterday, 20 September 2007.

 

Inflation based on the wholesale-price-index rose 3.32% for the week ended 8 September 2007 as against 3.52% in the previous week.

 

The 30-shares BSE Sensex surged 216.28 points or 1.32% at 16,564.23, an all time closing high. It opened slightly higher at 16,308.09 and slipped to touch intra-day low of 16,308.09. From here it staged a solid rally to hit an all time high of 16,616.84 in late trade.

 

The market came off higher level in mid-morning trade. Before that it had recovered from lower level after it had slipped into the red in early trade.

 

From a recent low of 13,989.11 on 21 August 2007, the Sensex has surged 2557.12 points or 18.27% to 16,564.23, in just 23 trading days.

 

The S&P CNX Nifty surged up 90 points or 1.90% at 4,837.55, an all time closing high. The sharper surge in Nifty when compared to Sensex was due to rally in some of the non-Sensex constituents in the index. Nifty hit an all time high of 4,855.70. The Nifty September 2007 futures settled at 4863, a sharp premium of 25.45 points as compared to spot closing

 

A number of stocks are common in the two niche indices viz. 30-share BSE Sensex and 50-share Nifty. But Nifty being broader based index, it has more constituents and some of the Nifty constituents are not a part of Sensex.

 

The market breadth was negative on BSE with 1615 shares declining as compared to 1149 that advanced. 51 remained unchanged

 

The BSE Mid-Cap index rose 0.94% to 7,199.92 after hitting an all time high of 7,231.90. The BSE Small-Cap index gained 0.22% to 8,895.88, after hitting an all time high of 8,964.29. Both these indices underperformed the Sensex.

 

The total turnover on BSE surged above the Rs 8000 crore mark co. It amounted to Rs 8198 crore compared to Rs 7221 crore yesterday, 20 September 2007.

 

Four massive block deals of 1.62 crore shares each were struck on Ambuja Cements counter on BSE in opening trade. These deals were executed at an average rate of Rs 149.48 per share. Ambuja Cements was the top traded counter on BSE with total turnover of Rs 1053.05 crore. The scrip rose 1.95% to Rs 149 on huge volumes of 7.05 crore shares.

 

The NSE F&O turnover was Rs 75,928.77 crore as compared to Rs 58327.40 crore yesterday, 20 September 2007

 

Most of the sectoral indices on BSE posted gains. BSE Realty index (up 1.54% to 9,183.44), BSE Oil and Gas Index (up 3.55% at 9,340.05) and BSE TecK index (down 1.62% to 3,638.25) outperformed the Sensex.

 

BSE Auto Index (up 1.10% at 5,193.50), BSE PSU index (up 1.28% to 7,780.84), BSE Capital Goods Index (up 0.89% at 14,520.17), BSE Consumer Durables index (down 0.35% to 4,748), BSE FMCG Index (down 0.59% at 2,152.99), BSE Metal Index (up 0.70% at 12,812.76), BSE Health Care Index (down 0.54% at 3,654.24), BSE Bankex (up 0.59% at 8,739.84) and BSE IT Index (up 0.86% at 4,428.34) were underperformers

 

Among the 30-member Sensex pack, 19 advanced while the rest declined.

 

India's largest private sector entity by market capitalisation and oil refiner Reliance Industries (RIL) recovered sharply from its day's low of Rs 2151.10. It advanced 4.56% to Rs 2292 on 8.70 lakh shares. It hit an all-time high of Rs 2294. As per reports it has found oil in its D4 block in the Krishna Godavari (KG) Basin. The company completed the technical testing in the block KG (D4) on 8 September 2007 and is in the process of informing the Directorate General of Hydrocarbons (DGH). The company had started drilling the third well in the block from 16 July 2007.

 

State Bank of India (up 4.02% to Rs 1830), Bharti Airtel (up 3.52% to Rs 922.25), and Hindustan Unilever (up 3.13% to Rs 220.85), were the other gainers from the Sensex pack.

 

India's top private sector utility company in terms of revenue Reliance Energy (REL) gained 2.46% to Rs 1012 on 12.32 lakh shares. The stock hit all-time high of Rs 1033 in intra-day trade. It was the top gainer from Sensex pack. As per recent reports, REL is scouting for coal mines in Indonesia, Australia, Africa and Mozambique and it sees infrastructure projects such as road and rail transport as key growth drivers. It also plans to raise $12.0-$12.5 billion in debt over the next seven to eight years to expand generation capacity nearly 16 times to 15,000 mega watt

 

India's largest engineering & construction firm by revenue Larsen & Toubro climbed up 1.23% to Rs 2780 on recent reports that the company is eyeing a stake in Feedback Ventures, a leading integrated infrastructure services firm.

 

India's largest oil exploration company in terms of market capitalisation Oil and Natural Gas Corporation (ONGC) gained 2.44% to Rs 927.50. It has reportedly sought a steep hike in the price of gas to Rs 4,500 per thousand cubic metre from the present Rs 3,200 per thousand cubic metre. ONGC hopes to gain Rs 2000 crore in revenues annually if prices were raised.

 

IT stocks saw high volatility today. They declined in early trade but later staged a sharp recovery on value buying.

 

India's third largest software services exporter Wipro rose 1.70% to Rs 440.85. It had slipped to 52-week low of Rs 425 earlier during the day.

 

Satyam Computers was down 0.31% to Rs 420, off day's low of Rs 401.50. Infosys Technologies gained 1.40% to Rs 1793, off session's low of Rs 1751.50. TCS gained 1.72% to Rs 1018 after touching 52-week low of Rs 978 earlier during the day.

 

Infosys Technologies ADR slipped 4.59% to $47.02 overnight on Nasdaq. Other IT ADRs also edged lower. Wipro (down 2.74% to $ 13.83), Patni Computer Systems (down 2.33% to $ 23.28), and Satyam Computers (down 3.70% to $24.76) declined.

 

The Indian rupee was trading almost unchanged 39.89, as compared to yesterday's (20 September 2007), closing of 39.89/39.90. A rise in rupee impacts the margins of IT companies as they earn over 50% of revenues from exports

 

India's top power generation company in terms of net profit, NTPC lost 2.49% to Rs 184.40 on 62.13 lakh shares. It was the top loser from Sensex pack.

 

ITC (down 2.20% to Rs 189.65), Hindalco (down 1.33% to Rs 159.95), and Cipla (down 0.89% to Rs 167.45), were the other losers from Sensex pack.

 

Reliance Natural Resources surged 34.68% to Rs 76.50 on huge volumes of 9.44 crore shares on reports that the company has applied for a license to undertake city gas distribution business in Delhi, Mumbai, Gurgaon and Noida. It hit an all time high of Rs 79.20 on BSE

 

Reliance group stocks were in spotlight on heavy buying demand. Reliance Petroleum (up 11.10% to Rs 154.25 on 2.88 crore shares), Reliance Capital (up 1.95% to Rs 1541.30 on 8.46 lakh shares), Reliance Industrial Infrastructure (up 10% to Rs 1043.10 on 60,354 shares), Reliance Communication (up 2.22% to Rs 579.05 on 20.43 lakh shares), Adlabs Films (up 9.18% to Rs 549) and IPCL (up 5.27% to Rs 454.60) surged.

 

Jindal Steel & Power jumped 9.66% to Rs 5371.20. Earlier some reports suggested that the company is planning to diversify into coal mining in overseas markets, coal and power trading and chartered air services.

 

Mercator Lines rose 1.84% to Rs 69.35 after it on 20 September 2007 acquired a 2006 built vessel (dredger). The company made this announcement after market hours on Thursday, 20 September 2007.

 

Ashapura Minechem gained 2.85% to Rs 438 after it fixed 19 October 2007 as record date for the purpose of issue of 1:1 bonus shares. The company made this announcement after market hours on Thursday, 20 September 2007.

 

ICRA rose 0.33% to Rs 1023 after it signed a memorandum of understanding with Dena Bank for rating the bank's loans.

 

United Breweries soared 9.32% to Rs 358.50 after it said its board will meet on 28 September 2007 to consider rights issue.

 

Punj Lloyd rose 2.12% to Rs 313 on recent reports that Pipavav Shipyard is raising $125 million private equity through pre-IPO deals.

 

Sun TV Network gained 0.45% to Rs 355. Earlier this month, Sun TV had acquired 48.9% stake in Red FM, promoted by NDTV. In return (on a swap ratio basis), the Red FM promoters had picked up 35% stake in South Asia FM, the subsidiary of the company.

 

Petron Engineering Construction jumped 19.10% to Rs 267.45 after its net profit jumped 97.4% to Rs 2.29 crore on 15.8% rise in sales to Rs 63.51 crore in Q1 June 2007 over Q1 June 2006.

 

Financial Technologies (India) rose 0.51% to Rs 2705.25 after it won regulatory approval to set up India's first national power exchange, The Indian Energy Exchange, an electronic bourse.

 

PTC India surged 6.94% to Rs 90.15 after it agreed to take on 26% stake in IEX and Tata Power Company, Reliance Energy and Rural Electrification Corp have also agreed to a stake in IEX. Adani Enterprises and IDEC will also take part in the consortium, the release added.

 

Tezpore Tea Company jumped 10% at Rs 42.60 after it said it had entered into a deal to sell its Merryview tea estate to Dalmia Tea Plantations & Industries for an undisclosed amount.

 

Meanwhile, foreign institutional investors' net inflow in the country crossed $10 billion so far in this year with an investment of $5.75 billion in the month of July 2007, highest ever in a month. FIIs made a net purchase worth about $10.5 billion in equity and debt markets since the beginning of 2007, topping the total net investment of $8.87 billion in the entire year 2006. Total FII inflow so far in the country is $61 billion. The number of FIIs registered with the market regulator has increased to 1,063 in July 2007 from 934 last year.

 

European markets, which opened after Indian markets, extended early gains. Key benchmark indices from United Kingdom (up 0.82% to 6,481.60), Germany (up 0.90% to 7,804.69), and France (up 0.40% to 5,711.25), advanced

 

Asian markets which opened before Indian markets, settled on mixed note today, 21 September 2007. Taiwan Weighted (up 1.36% at 9,105.28), Hang Seng (up 0.56% at 25,843.76), and South Korea's Seoul Composite (up 0.54% to 1,919.26), rose

 

Singapore's Straits Times (down 0.29% to 3,542.22) and Japan's Nikkei (down 0.62% or at 16,316.74), slipped

 

US stocks retreated yesterday, 20 September 2007 impacted by mixed earnings reports, a tumbling dollar and surging oil prices. The Dow Jones Industrial Average fell 48.86 points, or 0.35%, to 13,766.70. Broader stock indices also declined. The Standard & Poor's 500 index fell 10.28 points, or 0.67%, to 1,518.75, and the technology-dominated Nasdaq Composite index fell 12.19 points, or 0.46%, to 2,654.29.

 

Crude oil prices held near $82 a barrel on Friday, 21 September 2007 after hitting a record of $84.10 the previous day, 20 September 2007 as a tropical depression forced the shutdown of Gulf of Mexico output and sparked supply fears ahead of peak winter fuel demand. US crude for November delivery, the new front month, dipped 6 cents to $81.72 a barrel. London Brent November crude rose 3 cents to $79.12 per barrel.

US Market ends lower on disappointing earning reports

A disappointing guidance from Fed-Ex and weakening dollar weighs on investor sentiment

 

US Market closed lower today, Thursday, 20 September, after two days of good rally. A couple of weak earnings from Bear Stearns and Circuit City coupled with the congressional hearing on the fallout in the sub-prime mortgage market, weighed on investor sentiment. Seven out of ten economic sectors posted losses today.

 

The Dow Jones industrial Average closed lower by 48.9 points at 13,766.7. The Nasdaq Composite Index, finished lower by 12.19 points at 2,654.29. S&P 500 finished lower by 10.28 points at 1,518.75.

 

Twenty out of thirty Dow stocks ended in red today. Home-Depot led the group of Dow laggards. Citigroup and Mercian Express followed Home-Depot. Boeing, Johnson & Johnson and AT&T led the group of Dow winners.

 

A disapponting guidance from FedEx regarding its full-year outlook served as the main profit-taking catalyst. Better than expected initial claims data and a stronger than expected Philly Fed Index, which is a regional manufacturing report, could not come to market's saviour.

 

Weakness in the dollar took a heavy toll on the Treasury market

 

When market opened in the morning, all the indices were trading lower. CircuitCity and Bear Sterns came out with disappointing results. But Bear Sterns results traded higher in the morning hours.

 

The weekly initial claims report was better than expected. But the dollar remained under pressure in the wake of the Fed's rate cut. Gold prices continued their upward journey, tacking on 2% today to $744.20/oz.

 

On Capitol Hill, central bank chief Ben Bernanke and Treasury Secretary Henry Paulson testified before a House panel on the mortgage markets situation. Bernanke warned that more delinquencies and foreclosures can be expected in the subprime, adjustable-rate mortgage market.

 

Goldman Sachs also reported its third quarter results, and it beat analysts' estimates by a huge margin. Shares of Goldman rallied on the news but lost momentum in the afternoon.

 

The weakness in the dollar took a heavy toll on the Treasury market where the 10-year note dropped more than a point, bringing its yield up to 4.70%.

 

Except for WNS Holdings, all Indian ADRs closed lower today. Infosys Tech was the biggest loser shedding 4.6% followed by Satyam who dropped 3.7%.

 

Crude crosses $83

 

Crude oil prices soared today and closed above $83/barrel for the first time today in New York. Prices rose to a record after the U.S. said that production in the Gulf of Mexico was shut in because of a storm threat. The Gulf is expected to shut down 28% of its total production. The Gulf accounts for about 25% of U.S. oil production.

 

As per the U.S. National Hurricane Center, a weak low-pressure system with the potential to become a subtropical storm as early as today has formed in the eastern Gulf. Crude-oil futures for light sweet crude for October delivery closed at $83.32/barrel (higher by $1.39/barrel or 1.7%) on the New York Mercantile Exchange. Futures touched $83.90, the highest intraday price till date. Prices are up 38% from a year earlier.

 

Trading volume hit nearly 1.3 million at the New York Stock Exchange, where declining stocks topped advancing issues more than 2 to 1. At the Nasdaq, almost 1.8 billion shares were traded, and declining stocks edged ahead of those advancing by 9 to 5.

 

Tomorrow investors will have no economic releases on the schedule.

Take Solutions

 The stock price of TAKE Solutions (TAKE) was down by about 8% today (September 20, 2007) to close at about INR 1003.

We see several fundamental differentiators operating in this company that should serve to give stock returns of ~35% over a 12 month horizon with a moderate risk only thus marking it out as our top pick (we do not have official coverage yet). We highlight our key thoughts as follows:

(a) Business momentum in robust in both segments (SCM and life sciences). The company is closing out on deals and also in the final stages of fairly impactful potential deals at a frenetic pace. For a company such as TAKE Solutions, such a strong revenue momentum can have a dramatic impact on profits given its modest revenue base (expected revenues of about USD 70-75 mn expected in FY08E).

(b) The INR-USD equation poses little threat to TAKE for three reasons:

§ At a growth rate of 50%+ per year in revenues, the company is unlikely to feel the pinch of the appreciating INR as the robust growth can absorb this impact.

§ The company has discretionary pricing power for its products (license fees and maintenance fees) and we believe that margins can comfortably absorb the initial dilutive impact of acquisitions. No other company in the Indian IT-Sector in our universe of coverage enjoys comparable discretionary pricing power.

§ Over 60% of the company's USD exposure (billing) is neutralized by natural costs incurred in USD, hence, the natural vulnerability to the USD is low. For services players,

§ Non-linear business model provides a powerful margin lever as several existing accounts expand with little incremental operating expenses.

(c) TAKE could grow ~50% in FY08 over FY07 in EPS ( i.e. posts EPS of INR 48); in doing so it would be the best performer in the whole IT pack. The company could thus see its valuation sustain at 20-22x FY09E based on the potential it can further extrapolate to FY09E over FY08 performance. This we believe will help it establish its clear differentiation in quality growth at a time like this in the current environment. Further, we expect FY09E to be at least INR 60 with an upside risk (note that FY09E reflects the full impact of the acquisitions made in FY08).

(d) Management incorporates the contribution from future acquisitions, certainly of one more company which they are likely to announce in Q3-Q4 of this fiscal (FY08). We cannot and hence have not anticipated this in our future projections.

TAKE Solutions can continue to trade in the same valuation zone as Infosys, if not at a slight premium for two reasons.

1. TAKE's 3-year CAGR EPS growth trajectory over FY07-10E is likely to be at least 15% higher than that of Infosys (35%+)

2. Incremental ROCEs are on an upward trend.

We believe both these factors should sustain P/Es and size will be a relatively minor criterion in setting P/E.

Should we see Subex's downgrade of its outlook as indicative of risk in TAKE? Not really, because unlike Subex, TAKE's customer concentration is low and the largest customer contributes less than 5% of revenues. In addition, Subex has largely a single vertical exposure (telecom) which we believe is significantly riskier in case the vertical itself turns sour. TAKE's SCM line of business is well distributed across several verticals such as hi-tech, FMCG, pharma and food. Also, a powerful driver for TAKE's life sciences vertical is regulation mandated by the FDA - there is no discretionary element about this spend which pharma firms are bound to incur.

To round out, we met the expanded management team recently (including the team from their acquired company ClearOrbit) and we believe that they have added depth and quality of their management team with relevant domain and product experience. The team in place has the wherewithal to significantly grow the company from current levels.

All of the above should explain why TAKE Solutions should currently be our top pick in the IT sector

Market News - Pyramid Saimira

 Pyramid Saimira may acquire theatre chains

Likely to be announced on Sep 24 2007

Indices end flat while realty outperforms

The bulls took a breather after catapulting Sensex and Nifty to all-time highs on Wednesday. The benchmarks were stuck in a range as capital goods and auto stocks advanced, technology declined and the rest were rather passive. Frontline stocks lacked fresh buying interest.

"Traders are reluctant to buy with the absence of a short-term trigger. The next big event will be the announcement of quarterly earnings from India Inc. Till then, I expect the market to consolidate," said Suresh Kumar Iyer, technical analyst at Asit C Mehta Investment Interrmediates.

The National Stock Exchange's Nifty finished just 15 points or 0.32 per cent higher at 4747.55. The index traded within the band of 4721.15-4760.85.

"The Nifty faces major resistance in the 4760-4790 region. Only if the index closes above these levels on two consecutive sessions, will we see a further rise," Iyer said.

The Bombay Stock Exchange's Sensex ended up 25 points or 0.15 per cent at 16,347.95. From a low of 16,261.36 in early trade, it made a new high of 16,415.88.

The gains were backed by Reliance Energy (up 4.4%), Mahindra& Mahindra (3.93%), ITC (3.77%), Larsen & Toubro (2.87%), and Hindalco Industries (1.66%).

But the real action was from the real estate space. With a hope that the Reserve Bank of India will follow the US Federal Reserve and cut interest rates, realty shares surged. The BSE Realty Index ended 6.85 cent higher. Unitech shot up 12.43 per cent, DLF added 5.13 per cent, Indiabulls Realty gained 9.42 per cent and Sobha Developers was up 3.8 per cent.

The technology pack, on the other hand, took a bad knock as money flows from foreign investors pushed the rupee to a high of 39.88 to the US dollar. The BSE IT Index ended 2.24 per cent lower. Wipro was down 3.27 per cent, Infosys Technologies shed 2.89 per cent, Tata Consultancy Services lost 2.12 per cent and Satyam Computer ended 1.91 per cent lower.

The derivatives segment saw a build up of long positions. Nifty September futures ended almost at par with the spot index after trading at a premium earlier in the session. Open interest in the contract stood at 3.55 crore (provisional).

Going forward, Iyer advises traders to book profit at current levels and be choose about the stocks one buys. "For the medium term, one could buy selective power stocks and PSU banking stocks," Iyer added.

Sensex ends up 25pts; ITC surges 4%

Following the huge 654-pt rally yesterday, the Sensex opened marginally (19 points) higher at 16,342, but soon slipped into red to a low of 16,261. Fresh buying at lower levels helped the index erase losses and rebound into the positive zone.

The index touched a new intra-day peak at 16,416 - up 155 points from the day's low. The Sensex, thereafter, exhibited range bound movement before settling with a gain of 25 points at 16,348.

The BSE Realty index zoomed nearly 7% to 9044. While the IT index dropped over 2% to 4391, the FMCG index gained 1% at 2166.

The market breadth was negative - out of 2,855 stocks traded, 1,589 declined, 1,212 advanced and 54 were unchanged today.

INDEX MOVERS....

Reliance Energy soared 4.4% to Rs 988, Mahindra & Mahindra zoomed 4% to Rs 770.

ITC surged 3.8% to Rs 194. Larsen & Toubro gained 3% at Rs 2,746.

Hindalco and Grasim moved up 1.6% each to Rs 162 and Rs 3,380, respectively. Tata Motors added 1.4% to Rs 732.

...AND THE SHAKERS

Wipro and Infosys plunged around 3% each to Rs 433 and Rs 1,800, respectively. TCS and Satyam dropped 2% each to Rs 1,001 and Rs 421, respectively.

Maruti slipped 1.7% to Rs 910. ACC, Hindustan Unilever and Ranbaxy declined 1.3% each to Rs 1,138, Rs 214 and Rs 408, respectively.

Dr.Reddy's and Ambuja Cements were down 1% each at Rs 639 and Rs 146, respectively.

VALUE & VOLUME TOPPERS

DLF topped the value chart with a turnover of around Rs 372.70 crore followed by Wipro (Rs 230 crore), Magnum Ventures (Rs 161.40 crore), Indiabulls Realestate (Rs 137.50 crore) and Reliance Natural Resources (Rs 136.50 crore).

Magnum Ventures led the volume chart with trades of around 2.91 crore shares followed by Reliance Natural (2.48 crore), IKF Technologies (1.90 crore), Tata Teleservices (1.29 crore) and Ispat Industries (1.12 crore).

IPO Note: CCCL: constructing India

VISIT http://ipoanalysis.blogspot.com/

Realty stocks rally in a volatile market

The mood was extremely bullish in the first hour of the trading session as the Sensex recorded a new high of 16,416 on continued optimism regarding foreign investment inflows. However, IT companies suffered a setback on the rising rupee, as the rupee breached its nine-year high of 39.90 against US dollar. Despite registering new high, the market exhibited weak trend as the trading progressed. A negative open in European markets saw the Sensex touch the day's low of 16,261 by the afternoon. Exhibiting sharp volatility thereafter, the Sensex recovered on sustained buying in capital goods and metal stocks. Although action in the frontline stocks was subdued, realty stocks stole the show as the BSE Realty index rose over 6% on the back of solid gains in Unitech, Indiabulls Realestate and DLF, which appreciated by more than 4-12% each. The Sensex finally ended the session marginally above its previous close at 16,348, up 25 points, while the Nifty gained15 points to close at 4,748.

Among the sectoral indices, the Realty index led the upsurge with gains of 6.85% at 9,044 followed by the BSE CG index (up 1.98% at 14,392), the BSE Metal index (up 1.41% at 12,723) and the BSE FMCG (up 1.16% at 2,166). However, the BSE IT index slipped 2.24%. The market breadth was negative. Of the 2,855 stocks traded on the BSE, 1,589 stocks declined 1,212 stocks advanced and 54 stocks ended unchanged.

Out of the 30 Sensex stocks, 12 managed to end in the green while 18 stocks ended with losses. Reliance Energy was the leading gainer and soared 4.40% at Rs988. M&M jumped 3.93% at Rs770, ITC shot up by 3.77% at Rs194, L&T advanced 2.87% at Rs2,746, Hindalco moved up by 1.66% at Rs162, Grasim added 1.56% at Rs3,380 and Tata Motors gained 1.36% at Rs732. Among the laggards Wipro dropped 3.27% at Rs434, Infosys shed 2.89% at Rs1,799, TCS declined by 2.12% at Rs1,001, Satyam fell 1.91% at Rs421 and Maruti Udyog slipped 1.71 at Rs910.

Over 2.90 crore Magnum Ventures shares changed hands on the BSE followed by Reliance Natural Resources (2.48 crore shares), IKF Technologies (1.90 crore shares), Tata Teleservices (1.29 crore shares) and Ispat Industries (1.12 crore shares).

DLF registered a turnover of Rs372 crore on the BSE followed by Wipro (Rs230 crore), Magnum Ventures (Rs161 crore), Indiabulls Realestate (Rs137 crore) and Reliance Natural Resources (Rs136 crore).

Supreme Infrastructure

VISIT http://ipoanalysis.blogspot.com/

All-time closing highs for Sensex and Nifty

The market posted small gains after moving in and out of positive zone since mid-morning trade. It had opened on a firm note, but immediately slipped in the red on selling pressure. The market rebounded from lower level in mid-afternoon trade. Turnover on BSE remained high for the second day in a row.

Key Asian markets, which opened before Indian markets, settled with gains today, 20 September 2007. However, European markets, which opened after Indian market, were trading weak today, 20 September 2007.

The 30-shares BSE Sensex was up 25.20 points or 0.15% at 16,347.95, an all time closing high. It opened slightly higher at 16,341.55 and advanced further to hit an all-time high of 16,415.88. It also slipped to a low of 16,261.36

At the day's high of 16,341.55, Sensex had risen 93.13 points for the day. At the day's low of 16,261.36, the Sensex had lost 61.39 points for the day. Sensex oscillated 154.52 points in the day.

The S&P CNX Nifty was up 15.20 points or 0.32% at 4,747.55, an all time closing high. It struck an all-time high of 4759.55 earlier today. The Nifty September 2007 futures settled at 4,749.50, a premium of 1.95 points as compared to spot closing

The market breadth was negative on BSE as small and mid-cap shares came under selling pressure. 1574 shares declined as compared to 1196 that advanced. 56 remained unchanged. This was in contrast to strong breadth in early trade when 1230 shares had risen, 787 had declined and 49 were unchanged.

The BSE Mid-Cap index was up 0.23% to 7,132.71. It hit all-time high of 7,177.65 today. The BSE Small-Cap index also hit an all time high of 8,962.81. It settled 0.06% higher to 8,876.07.

BSE clocked a turnover of Rs 7033 crore as compared to Rs 7486 crore yesterday, 19 September 2007

The NSE F&O turnover was Rs 58327.40 crore as compared to Rs 68643.65 crore yesterday, 19 September 2007

Most of the sectoral indices on BSE posted gains. BSE Auto Index (up 0.84% at 5,136.85), BSE PSU index (up 0.52% to 7,682.63), BSE FMCG Index (up 1.16% at 2,165.71), BSE Metal Index (up 1.41% at 12,723.31), BSE Capital Goods Index (up 1.98% at 14,392.46), The BSE Consumer Durables index (up 0.43% to 4,764.10), BSE Realty index (up 6.85% to 9,044.40), BSE Oil and Gas Index (up 1.07% at 9,019.56), outperformed the Sensex.

BSE Health Care Index (down 0.81% at 3,674.19), BSE Bankex (down 0.03% at 8,688.68), BSE IT Index (down 2.24% at 4,390.75), and BSE TecK index (down 1.10% to 3,580.26) were underperformers

Among the 30-member Sensex pack, 17 declined while the rest advanced.

IT pivotals kept on declining as the day progressed on fresh selling as a steep interest rate cut by the US Federal Reserve on 18 September 2007, set the rupee on fire and it hit nine-year high above 40 per US dollar. Three out of top 4 losers in Sensex were IT pivotals.

India's third largest software services exporter Wipro lost 3.22% to Rs 433.70 on huge volumes of 53.45 lakh shares. Two block deals of 25.25 laklh shares each were struck in the counter on BSE at an average price of Rs 432.50 per share by 13:17 IST. It was the top loser from Sensex pack.

Other IT pivotals Satyam Computers (down 1.75% to Rs 422), Infosys Technologies (down 2.88% to Rs 1799.90), and TCS (down 2.17% to Rs 1000.30), also edged lower.

The rupee was trading at 39.69 against the dollar, stronger than Wednesday (19 September 2007)'s closing of 40.20/40.21. The spot rupee had closed at 40.20 in May 1998. A firm rupee impacts the margins of IT companies, as they derive over 50% of their revenues from exports.

Ranbaxy Laboratories (down 1.43% to Rs 407), Maruti Suzuki India (down 1.93% to Rs 908), and ACC (down 1.56% to Rs 1135) were the other losers from Sensex pack.

India's top private sector utility company in terms of revenue Reliance Energy (REL) surged 4.76% to Rs 991.15 on 11.25 shares. The stock hit an all time high of Rs 998.60. It was the top gainer from Sensex pack. As per reports, REL is scouting for coal mines in Indonesia, Australia, Africa and Mozambique and it sees infrastructure projects such as road and rail transport as key growth drivers. It also plans to raise $12.0-$12.5 billion in debt over the next seven to eight years to expand generation capacity nearly 16 times to 15,000 mega watt

Mahindra & Mahindra (up 2.57% to Rs 760), Hindalco Industries (up 1.80% to Rs 162.30) and ITC (up 3.48% to Rs 193.35) were the other gainers from Sensex pack.

India's largest private sector entity by market capitalisation and oil refiner Reliance Industries (RIL) advanced 1.02% to Rs 2195 on 5.96 lakh shares. It struck an all time high of Rs 2200 on BSE in late trade. The Mukesh Ambani-led RIL on Wednesday, 19 September 2007 became the first company to attain a market capitalisation of Rs 3,00,000 crore.

India's largest engineering & construction firm by revenue Larsen & Toubro climbed up 2.89% to Rs 2747 on reports that the company is eyeing a stake in Feedback Ventures, a leading integrated infrastructure services firm.

India's largest oil exploration company in terms of market capitalisation Oil and Natural Gas Corporation (ONGC) rose 0.39% to Rs 905. It slipped from its day's high of Rs 924.90. It has reportedly sought a steep hike in the price of gas to Rs 4,500 per thousand cubic metre from the present Rs 3,200 per thousand cubic metre. ONGC hopes to gain Rs 2000 crore in revenues annually if prices were raised.

Meanwhile, ONGC Videsh, the overseas investment arm of ONGC won three exploration blocks in Columbia.

DLF was the top traded counter on BSE with total turnover of Rs 372.22 crore followed by Wipro (Rs 231.32 crore), Indiabulls Real Estate (Rs 137.38 crore), Reliance Natural Resources (Rs 136.54 crore) and Reliance Industries (Rs 130 crore).

Real estate shares surged for the second straight day on expectation of softer interest rates after US Federal Reserve cut the rate by half percentage point. Soft interest rates would raise demand for real estate properties. Unitech (up 12.38% to Rs 329), Indiabulls Real Estate (up 10% to Rs 577), IVR-Prime Urban Developers (up 6.78% to Rs 414.30) and Sobha Developers (up 4.01% to Rs 827.90) surged.

DLF moved higher by 4.16% to Rs 742.90 on recent reports that the company is getting into the retail of luxury brands and is in talks with some well-known retail chains, including Georgio Armani, Versace and Dolce Gabbana. DLF is in talks with 10-12 brands. Also another set of reports stated that DLF will tie up with a foreign major Carrefour for the supermarket business at a later stage.

Shipping Corporation of India gained 1.38% to Rs 210 on reports that firm has floated four joint venture companies for its proposed foray into four different ventures.

SREI Infrastructure Finance rose 0.10% to Rs 113.40 after it approved to issue up to 2.50 crore preferential warrants to promoters.

Punj Lloyd rose 0.80% to Rs 305.80 on reports that Pipavav Shipyard is raising $125 million private equity through pre-IPO deals.

IndusInd Bank soared 8.24% to Rs 77.50. As per reports it plans to set up an insurance broking subsidiary which will help the bank to create a separate subsidiary for wealth management services. Both subsidiaries will be set up in this fiscal, even as the bank expands its partnerships with mid-sized overseas banks, in locations with sizeable chunks of high net worth NRIs

Sun TV Network jumped 6.24% to Rs 354.20. Earlier this month, Sun TV had acquired 48.9% stake in Red FM, promoted by NDTV. In return (on a swap ratio basis), the Red FM promoters had picked up 35% stake in South Asia FM, the subsidiary of the company.

Mangalore Refinery and Petrochemicals vaulted 5.42% to Rs 51.50. The company is reportedly foraying into retail marketing of petroleum products under the brand name HiQ. The first three retail outlets would be in Karnataka followed by fifteen such outlets in various parts of South India including Kerala.

Tata Chemicals edged higher by 5.42% to Rs 281.90. The company had raised $100 million through a private placement in the United States in August 2007, a few days before India tightened rules on foreign borrowing. The private placement was led by the Bank of America, and the proceeds would be used for purposes including acquisitions.

Ashapura Minechem galloped 6.35% to Rs 427.90 after its shareholders approved issue of 1:1 bonus shares.

Simplex Infrastructures rose 2.88% to Rs 397 after it said it had secured orders worth Rs 802 crore.

Tulip IT Services rose 0.98% to Rs 870 after it bagged the West Bengal state wide area network project worth Rs 53 crore.

Britannia Industries rose 1.62% to Rs 1540. As per reports, Groupe Danone is ready to quit Britannia Industries. Danone has recently sold its biscuit business in all markets worldwide, except India, to Kraft Foods. Groupe Danone and Wadia together hold 50.96% in Britannia through Associated Biscuits International, which is a subsidiary of UK-registered ABI Holdings. ABI Holdings is 50:50 JV between Groupe Danone and Wadia group.

Bharat Petroleum Corporation rose 3.69% to Rs 322 after its board approved the proposal to form a joint venture company in Singapore in association with Matrix Marine Fuels LLC (USA). Both the companies will hold an equal participation in the venture.

Meanwhile, after discussing the nuclear deal for two hours yesterday, 19 Seoptember 2007, neither the UPA nor the Left budged an inch from their earlier position on the contentious Hyde Act. The government repeated that once the 123 Agreement had been ratified in the US Congress, national laws including the Hyde Act would become irrelevant. The Left, led by CPI (M) General Secretary Prakash Karat, rejected this argument and reiterated that the Hyde Act would supersede the 123 Agreement.

The discussions will continue further at the next meeting of the committee scheduled to be held on 5 October 2007

European markets, which opened after Indian markets, were trading weak, with key benchmark indices in United Kingdom (down 0.60% to 6,421.20), Germany (down 0.53% to 7,709.96) and France (down 0.70% to 5,690.03) declining.

Key Asian markets settled with gains today, 20 September 2007. Japan's Nikkei (up 0.20% at 16,413.79). Hang Seng (up 0.57% at 25,701.73), Taiwan Weighted (up 0.63% at 8,983.03), and Shanghai Composite (up 1.39% to 5,470.06) gained.

However Singapore's Straits Times slipped 1.17% at 3,552.46

US stocks posted steady gains overnight, 19 September 2007 building on a huge rally the previous day as markets cheered the US Federal Reserve's cut in key interest rates. The Dow Jones Industrial Average climbed 76.17 points or 0.55% to 13,815.56. The tech-heavy Nasdaq Composite index rose 14.82 points or 0.56% to 2,666.48 while the broad-market Standard & Poor's 500 index gained 9.25 points or 0.61% to 1529.03

NYMEX crude for October delivery held near $82 a barrel, aided by a bigger than expected drawdown in US crude inventories, after hitting an all-time intraday high of $82.51 on Wednesday, 19 September 2007.

National Stock Exchange (NSE) has decided to launch a new index comprising of 50 stocks from the mid-cap segment. The index will be called Nifty Midcap 50. The index will be launched from 25 September 2007. Nifty Midcap 50 index has a base date of 1 January 2004 and a base value of 1000, NSE said in a circular today.

Minister for petroleum and natural gas Murli Deora today, 20 September 2007, ruled out immediate hike in price of petroleum products, including petrol and diesel. Though international crude prices are going up, the government's view is that the subsidy on petroleum products should continue as in the case of food and fertilisers, Deora said

Market to scale further ground

The market is expected to scale further ground on global cues. Asian stocks advanced today, 20 September 2007 tracking gains on Wall Street overnight, 19 September 2007. Japan's Nikkei (up 0.08% at 16,395.22), Hang Seng (up 0.40% at 25,656.20), Taiwan Weighted (up 1.42% at 9,052.73), gained. However Singapore's Straits Times declined 0.28% at 3,584.37.

US stocks posted steady gains overnight, 19 September 2007 building on a huge rally the previous day as markets cheered the US Federal Reserve's cut in key interest rates. The Dow Jones Industrial Average climbed 76.17 points or 0.55% to 13,815.56. The tech-heavy Nasdaq Composite index rose 14.82 points or 0.56% to 2,666.48 while the broad-market Standard & Poor's 500 index gained 9.25 points or 0.61% to 1529.03

NYMEX crude for October delivery held near $82 a barrel, aided by a bigger than expected drawdown in US crude inventories, after hitting an all-time intraday high of $82.51 on Wednesday, 19 September 2007.

As per provisional data, foreign institutional investors (FIIs) purchased shares worth a net Rs 2457.62 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 328.15 crore on Wednesday, 19 September 2007

The 30-shares BSE Sensex posted biggest single-day point gain rallying 653.63 points or 4.17% at 16,322.75, on Wednesday, 19 September 2007. It also hit an all-time high of 16,335.30.

Sensex has surged 2,333.64 points or 16.68% to 16,322.75 from a recent low of 13,989.11 on 21 August 2007, in just 21 trading sessions.

The S&P CNX Nifty jumped 186.15 points or 4.09% at 4,732.35, on that day. It also struck an time high of 4,739.

The global rally was triggered after the US Federal Reserve announced a higher than expected 50 basis points cut in fed funds rate to 4.75% from 5.25% on Tuesday, 18 September 2007, easing concerns about housing slump driving the world's largest economy into recession. Prior to this, it had hiked rates for 17 consecutive times in the span of four years.

Meanwhile, after discussing the nuclear deal for two hours yesterday, 19 Seoptember 2007, neither the UPA nor the Left budged an inch from their earlier position on the contentious Hyde Act. The Left, led by CPI(M) general secretary Prakash Karat, rejected this argument and reiterated that the Hyde Act would supersede the 123 Agreement.

The discussions will continue further at the next meeting of the committee scheduled to be held on 5 October 2007

US Market continues with its joyride

 Rate-cut rally continues at Wall Street in spite of crude touching $82/barrel

US Market continued with its joyful journey today, Wednesday, 19 September 2007, a day after, Federal Reserve Chairman, Ben Bernanke mesmerised US market by cutting fed fund interest rate by 50 basis points from 5.25% to 4.75%. This was the first rate cut since June 2003. The Fed had also cut its discount rate from 5.25% to 4.75%. All ten sectors once again closed higher today.

The Dow Jones industrial Average closed higher by 76.17 points at 13,815.56. The Nasdaq Composite Index, finished higher by 14.82 points at 2,666.48. S&P 500 finished higher by 9.25 points at 1,529.03.

Twenty-four out of thirty Dow stocks ended in green today. Merck was the top gainer today as shares soared by more than 2%. GM was the main laggard as the company is still continuing its discussion with United Auto Workers. Shares of GM slid more than 2%.

Financial stocks were once again in the forefront. But today's rally was led by telecom services sector and was followed by utilities and basic materials. Energy sector also provided notable support with crude prices rising. The financial sector ignored a disappointing earnings report from Morgan Stanley.

Consumer price report offsets negative news from housing report

When market opened in the morning, all the indices were trading strongly higher. Stocks were trading with previous day's enthusiasm. Yesterday it was Producer Price Index report and today it was Consumer Price Index report that provided good support to the market.

At the top of the hour, Labour Department reported that consumer prices unexpectedly fell in August by 0.1%. It was the first decline in the Consumer Price Index (CPI) since October of last year. The CPI had risen 0.1% in July.

The core CPI, which takes out volatile food and energy prices, rose 0.2% from July, and was up 2.1% year over year, the lowest level in more than 2½ years.

The Commerce Department reported that U.S. housing starts and permits fell to a 12-year low in August, dropping 2.6% to an annualized rate of 1.331 million, slightly under the 1.35 million forecast by the market.

Indian ADRs closed mixed today. Infy, Wipro Tech, WNS and VSNL registered loss today. Sify and Patni were the two top gainers gaining more than 4.6% each. HDFC Bank and ICICI Bank gained 2.7% and 2.2% respectively.

Crude almost touches $82

Crude oil closed above $81/barrel for the second time today in New York after an Energy Department report showed a larger-than-expected U.S. inventory decline. As per today's weekly inventory report by the Energy Dept, crude supplies fell 3.8 million barrels during the week ended 14 September. This was more than analysts' expectation of 2 million barrels.

Crude-oil futures for light sweet crude for October delivery closed at $81.93/barrel (higher by $0.42/barrel or 0.52%) on the New York Mercantile Exchange. The contract had climbed as high as $82.50 to set an all-time high level for a front-month contract on the exchange.

Volume hit nearly 1.7 billion shares at the New York Stock Exchange, with advancing stocks ahead of decliners 2 to 1. At the Nasdaq, more than 2.2 billion shares were exchanged, and advancing issues overtook those declining, also by a 2-to-1 count.

Tomorrow investors will again look for economic data to help set the tone of trading. Initial Claims will be out at 8:30 ET, followed by Leading Indicators at 10:00 ET. The Philadelphia Fed Index, meanwhile, will hit the wires at 12:00 ET. On the earnings front, financial companies like Bear Stearns, Goldman Sachs, and AG Edwards will report their earnings before the bell.

Dollar Update

 Dollar falls below Rs 40, 9 year high

After Wonderful Wednesday, Tired Thursday!

On the day of victory no one is tired

The bulls batting on the bourses more or less resembled Yuvraj Singh smashing 36 runs (6x6) in an over. The bears, like the beaten bowler Stuart Broad had to look over the covers to find the ball. For the market, it was by far the best day for the bulls in recent memory. The Sensex surged past the 16k mark in the initial trades itself and made a new all-time high. The Nifty too crossed its own lifetime peak, as did some other indices. The fact that the trend has reversed in favour of the bulls after the carnage last month made it even better. The market's ability to bounce back after a brief correction has improved considerably. The main indices are taking less time now to stage a turnaround from an intermediate downtrend. This should be music to the ears of the bulls.

Today could be a tired Thursday as bulls may run out of energy. Expect indices to drop in the red. The bears will look at staging a comeback sooner or later. Liquidity in terms of FII inflows will be the key. We may have a situation of domestic funds booking profits even as FIIs may look at putting in fresh money.

The rate cuts by the Fed will boost inflows towards emerging markets where returns are better. India, with its strong economic fundamentals and earnings momentum, should get a big slice out of this. So, the outlook remains upbeat, though one needs to be careful as valuations may just be getting a little bit expensive.

A stock centric approach always pays rich dividends in every market cycle. Its no different today. While the global response to the Fed rate cuts so far has been positive, the question is what happens after investors get over the euphoria. Locally, we have to grapple with the developing political situation with mid-term polls a certainty. Oil is also on the boil again. And, of course how the RBI copes with the deluge of foreign money and what it does with interest rates remains a mystery.

IT stocks should be under pressure as the Rupee has risen past the 40 per dollar mark this morning.

Also keep an eye on Magnum Ventures, which gets listed on the bourses today.

US stocks extended their biggest rally in four years on hope that the interest rate cuts will help contain the housing sector mess and boost earnings growth.

AT&T helped lead the Dow Jones Industrial Average to within 1.4% of a record after saying sales of Apple's iPhone have increased. Freeport-McMoRan Copper & Gold, the world's second-largest copper producer, climbed to a new high.

The Standard & Poor's 500 Index rose 9.25 points, or 0.6%, to 1,529.03. The Dow gained 76.17 points, or 0.6%, to 13,815.56. The Nasdaq Composite Index added 14.82 points, or 0.6%, to 2,666.48. All 10 S&P 500 industry groups gained for a second day.

Ten-year Treasury notes fell for a third day as investors bet that rate cuts will fuel inflation, even after the government said consumer prices fell in August. The dollar rose from an all-time low against the euro and gold gained.

Thursday brings earnings reports from Bear Stearns, Goldman Sachs and Circuit City. Thursday also brings several economic reports after the start of trading, including the leading economic indicators and the Philadelphia Fed index - a regional manufacturing reading.

Fed chief Ben Bernanke is due to testify on Capitol Hill as part of a hearing on the subprime mortgage crisis. Treasury Secretary Henry Paulson is also due to testify.

The day's economic news seemed to support the Fed decision. Housing starts fell to a 12-month low in August, according to a government report that also showed a big drop in building permits, a measure of builder confidence. But another government report was more positive, showing a surprise drop in consumer prices in August, versus forecasts for a flat reading.

US light crude oil for October delivery rose 42 cents to settle at $81.93 a barrel on the New York Mercantile Exchange, briefly hitting a fresh record trading high of $82.50 after a report showed a negligible rise in weekly crude oil and gas inventories.

Treasury prices tanked, pushing the yield on the 10-year note to 4.53% from 4.47% late on Tuesday. In currency trading, the dollar slumped against the euro and was little changed versus the yen. COMEX gold for December delivery rallied $5.80 to $729.50 an ounce.

European shares ended higher. The broad pan-European Dow Jones Stoxx 600 index rose 2.7% to 377.61, putting in its best one-day gain this year. The UK's FTSE 100 index closed up 2.8% at 6,460.00, the German DAX 30 added 2.3% to 7,750.84 and the French CAC-40 climbed 3.3% to 5,730.82.

In the emerging markets, the Bovespa in Brazil rose 1% to 57,264 while the IPC index in Mexico was down 0.3% at 30,512. The RTS index in Russia shot up by nearly 4% to 2015 and the ISE National-30 index in Turkey soared by 7.4% to 68,691.

Asian markets were trading mixed this morning. The the Hang Seng in Hong Kong was up 0.5% while the rest of the markets were more or less flat.

Markets further extended its rally and the benchmark Sensex not only tested the 16k levels but managed to breach it as bulls were overjoyed after Federal Reserve announcement that it had cut its benchmark interest rate by 50 basis points. The Banking and the Realty stocks were the leading gainers on hopes that the Fed's decision might also prompt the RBI to relax its hawkish stance on the monetary policy going forward.

The index heavyweights partied hard as RIL, SBI, DLF, BHEL, SAIL, Tata Steel and RPL hit their respective lifetime high. Further announcement from the government it may allow mills to make Ethanol directly from Cane juice lifted the sugar stocks from their lows and Cement stocks also recorded concrete gains after cement manufacturers increased prices by Rs3 a bag in the largest markets of Maharashtra and Gujarat across both wholesale and retail segments.

Reliance Communication surged by over 5% to Rs564 after the company's owned Flag Telecom signed a five year contract with UK based virtual network operator Vanco to share their networks. This agreement provides Flag and its customer's access to further 81 countries. The scrip has touched an intra-day high of Rs584 and a low of Rs545 and has recorded volumes of over 58,00,000 shares on NSE.

Bharti Airtel jumped by over 6.5% to Rs886 after reports stated that the company has awarded $150mn contract to Chinese vendor Huawei for building and managing GSM mobile infrastructure for its Sri Lankan operations. The scrip touched an intra-day high of Rs894 and a low of Rs845 and recorded volumes of over 11,00,000 shares on NSE.

Crompton Greaves advanced 2.2% to Rs316 following reports that the won bid to distribute and bill power in three major divisions in Nagpur. The scrip has touched an intra-day high of Rs325 and a low of Rs314 and recorded volumes of over 9,00,000 shares on NSE.

Hotel Leelaventure shed by 0.5% to Rs47. According to reports the company has earmarked Rs22bn in next three years for developing hotel properties spanning the major cities in the country. The scrip touched an intra-day high of Rs49 and a low of Rs47 and recorded volumes of over 25,00,000 shares on NSE.

BPCL ended flat at Rs310. Reports stated that the company has planned to submit a US$350mn non-binding bid to acquire 10% interest in a Congo oil field. The scrip touched an intra-day high of Rs315 and a low of Rs306 and recorded volumes of over 2,00,000 shares on NSE.

ITC gained by 4% to Rs187 following reports that the company is planning to set up a third food factory in Bangalore. The scrip touched an intra-day high of Rs189 and a low of Rs180 and recorded volumes of over 85,00,000 shares on NSE.

Sugar stocks turned sweeter as government would allow mills to make Ethanol directly from Cane juice. Renuka Sugar jumped by over 24% to Rs683, Bajaj Hindustan surged by over 20% to Rs176, Sakhti Sugar was locked at 20% upper circuit to Rs92.80.

Cement stocks recorded concrete gains after cement manufacturers increased prices by Rs3 a bag in the largest markets of Maharashtra and Gujarat across both wholesale and retail segments. ACC surged by over 3% to Rs1155, Kesoram Industries advanced by 2.8% to Rs549 and India Cement added 3% to Rs284.

Banking stocks rallied after the Fed's decision to cut interest rates by 50 basis points. HDFC Bank surged by over 7.5% to Rs1324, ICICI Bank surged by over 5% to Rs973 and SBI added 4.4% to Rs1769. Union Bank, Bank of Baroda and PNB were the major gainers among the Mid-Cap stocks.

Realty stocks also were among the major gainers. DLF surged by over 8.5% to Rs713, Parsvnath advanced by 5.4% to Rs337, Sobha gained by 4.5% to Rs797, Akruti added 3.2% to Rs718 and Peninsula land added 2.6% to Rs586.

Tata Motors is planning to replace its existing range of 100-180hp trucks with the 'world truck' by September 2008 to meet competition from Volvo, Man and others.

The PMO has asked the Jharkhand Government to renew SAIL's Chiria mines lease.

Bharti Airtel is the only Indian company left in the fray for bagging the second mobile license in Qatar.

Shipping Corporation of India has floated four joint ventures to enter into shipbuilding, container terminal operation, dredging and offshore services.

Titan Industries has entered into a five-year tie-up for exclusive marketing-cum-distribution of Hugo Boss watches in India with MGI Luxury.

HCL Infosystems plans to set up a major systems integration hub in Kolkata over next 8-12 months.

L&T is close to acquiring a stake in Feedback Ventures.

ONGC Videsh, the overseas investment arm of ONGC, has won three exploration blocks in Colombia in the latest round of auctions.

The Carlyle Group and Citigroup Venture are in the race to acquire 15% stake in Pyramid Saimira.

Britannia will take legal action against Group Danone for unauthorized use of the Tiger biscuit brand in other countries.

SREI Infrastructure Finance has proposed a preferential issue of up to 25mn warrants to the promoter group at Rs100 per share.

The government is planning to allow manufacturing of ethanol directly from sugarcane.

Production of kharif foodgrains during FY08 will touch 112.24mn tons. This is 1.72mn tons more than that of last year.

The Ministry of Information & Broadcasting may cut the entertainment tax.

The Telecom Regulatory Authority of India has suggested that telecom operators can offer mobile television services to subscribers without licence.

Fund Activity:

FIIs were net buyers of Rs24.58bn (provisional) in the cash segment on Wednesday and the local institutions pulled out Rs3.28bn. In the F&O segment, foreign funds were net buyers of Rs42.55bn.

On Tuesday, FIIs were net sellers to the tune of Rs1.38bn in the cash segment. Mutual Funds were net sellers of Rs190mn on the same day.

Major Bulk Deals:

Macquaire Bank has sold Atul; Merrill Lynch has bought Dwarikesh Sugar while HSBC Global has sold it; Emerging Capital Advisors has sold Evinix and has purchased Gremac Infra; Deutsche Bank has sold Karuturi Networks; BNP Paribas has picked up Megasoft while Sundaram BNP Paribas Select Mid-Cap Fund has sold it; Deutsche Securities has bought Unity Infra.

Upper Circuit:

RIIL, Mawana Sugar, Rana Sugar, Tourism Finance, KM Sugar, Bombay Burmah, Goldstone Tech, Uttam Sugar, Jai Corp and Prakash Industries.

Lower Circuit:

Hindo SPG and Shree Precoated Steels.

Market Close : 16k conquered with aplomb !

It took 53 days for the journey from 15k to 16k for the Sensex. .The magical figure of 16k was crossed early in the morning as the indices zoomed like a rocket sparked by a rally across global markets. The US Fed slashed benchmark interest rates by half a percent. As the day started markets were on a rampage as major stocks cutting across sectors rose sharply for the day. The Reality stocks sang their way as the reality index moved up by almost 6%. But Sugar shares were stars as the Agriculture Minister Sharad Pawar said the government plans to give more fiscal incentives to sugar mills and that it would decide on monetary sugar sops in 8-10 days.

Tech stocks started positive but soon were the weaker of the lot. The Rupee attempted its highest levels in more than nine years after it rose by 0.7% to 40.20 per Dollar. The appreciating Rupee would put more pressure on the Tech stocks. The Banking and financial sectors saw action as they felt that the Fed move to cut the rates would put pressure on RBI to loosen its monetary policy. Buying was witnessed across the board with Auto, Banking, and Energy stocks leading the way. BSE Oil & Gas Index and the BSE Bank advanced by 5% and 4.8% respectively. Mid & Small caps also joined the rally with the frontline stocks.

Sensex ended the day up by 653 points at 16322 helped up by gains in HDFC (2367,+9 percent), HDFC Bk (1322,+7 percent), ONGC (899,+6 percent), Maruti (923.2,+5 percent) and Bharti Tele (874.5,+5 percent). There were no drags on the Sensex components.

Sugar was the story for the day. The sugar stocks rallied and most sugar stocks locked in upper circuit. This was on the back of the news that government will decide on monetary sops in 8-10 days. If this goes in line with the market expectations it would be a big positive for the sugar industry. There were other rules allowing them to manufacture Ethanol and that was seen as a profitable initiative. Integrated players like Shree Renuka Sugars and Balrampur Chini in particular would be benefited the most by the impending government move. And on the Ethanol blending issue sugar industry will need to increase ethanol production capacity by 40%. With this even the bigger market for ethanol will improve the sugar market. Currently a price of Rs 21.50 for ethanol translates to a price of Rs 14.50 for sugar. This is seen fairly attractive in the ethanol market. Requirement is for yet another 1 bn litre of ethanol production capacity for the current demand. Another report said that the sugar mills may be allowed to produce ethanol directly from cane juice instead of molasses to lower dependence on sugar prices. It was a sweet day.

DLF reported that the company plans to raise about $2 bn and list as a real estate investment trust in Singapore. The company also plans to enter the business of retail of luxury brands and is in talks with well-known retail chains including Georgio Armani, Versace and Dolce Gabbana. DLF may tie up with a foreign major for the supermarket business at a later stage. However, its first priority would be to partner with luxury brands. DLF is looking at franchising as well as joint ventures through the single brand FDI route. On real estate front the company continues to be in talks with international firms for investing in DLF projects. It had also tied up with Prudential for insurance, Hilton for hospitality segment, Nakheel group for SEZ's. This move is a part of the company's strategy to diversify its area of operations. All Reality stocks ended the day on a high note following DLF which ended the day up by 9%.

It was a rally of the Sensex stocks and the Index rallied. The current actions of the US and Europe will see their economies slow. Asia is seen as the haven for equities and the the rally reflects that. Asia is suddently becoming hot and thats the reason.

Technically Speaking: Sensex scaled up to 16000 levels and sustained above this levels. Indices made a high of 16335 and low of 16192. Whooping Turnover of Rs 7405 Cr for the the day. Sensex has done our target of 16100+ which we have been advocating for long. The rally is strong and 16600 is the next target for Sensex..

Brokerage Recomendations

TCS an outperformer; target of Rs 1453: Macquarie
12-month price target: Rs 1,453.00 based on a PER methodology. �� Catalyst: US listing or an acquisition to penetrate Europe/Japan or winning a couple of large deals (>US$100m).
We reaffirm our Outperform rating on TCS given its strong focus on the software products business (providing much-needed non-linear growth) as well as traction in large emerging countries such as India and China.

 

Accumulate Bajaj Auto, target Rs 2424: HDFC Sec
BAL is working to bring down its inventory to 15 – 20 days. We believe, the inventory position will take some time to correct, as interest rates have begun to impact lower segment customers. We expect the 3- wheeler sales to be sluggish for a few more months. BAL has announced the closure of its Akurdi plant, which currently produces around 2,500 – 2,700 units/ month of Crystal (scooter). As the contribution of the scooter segment is negligible in terms of profitability, we do not see any negative impact on its core earnings. The success of the new bike launched recently will hold the key to volume growth for the company. We maintain our "Accumulate on Dips" rating with a target price of Rs.2,424 on the stock.

 

 

 

Buy Tata Motors, target Rs 792: Sharekhan
At the current market price of Rs696, the stock discounts its FY2009E consolidated earnings by 10.7x and is available at an enterprise value/earnings before interest and depreciation tax and amortisation of 5.4x. We maintain our Buy recommendation on the stock with a price target of Rs 792.

 

 

 

Buy TV18, target Rs 967: Sharekhan
Sharekhan is bullish on TV18 and has maintained buy rating on the stock with target price of Rs 967.

Farm minister: Govt to decide on monetary sugar sops in 8-10 days; Govt to OK direct ethanol manufacture from cane

VISIT

http://www.indianstocknews.blogspot.com/

Re ends at 9-yr high on Fed rate cut

The rupee hit a nine-year high on Wednesday as a sharp cut in interest rates by the US Federal Reserve increased appetite for emerging market assets and a surging stock market attracted capital inflows.

 

Dealers said the rupee's gains were capped by heavy dollar-buying intervention by the central bank. The rupee ended at 40.20/21 per dollar, having risen to 40.18 during trade, its highest since May 1998.

 

The rupee gained more than half a percent from Tuesday's close of 40.48/49, and has risen more than 10 percent this year. The currency's previous high of 40.20 was hit in July.

 

"Exporters got panicky and were selling their dollars throughout the day, and inflows are expected to be robust as evident by the soaring stock markets," said V Soundarajan, a currency trader at UCO Bank.

 

"I expect the rupee to break past the 40 per dollar mark before the end of this month," he said. The stock market rose 4.2 percent, its biggest gain in 15 months, to a record-high close on hopes that the US rate cut would help steady global credit markets and see foreigners return to emerging markets such as India.

 

As well, Tuesday's cuts in US interest rates raised India's interest rate premium over the United States to 300 basis points, which traders said would attract more capital inflows and add to the rupee's momentum. But those inflows complicate policy for the Reserve Bank of India, which has been intervening as the rupee rose this month and stepped in again as the currency neared its highs.

 

"They bought at every level. I think they are going to protect it," a chief dealer with a foreign bank said. A Reserve Bank of India spokeswoman said the central bank did not comment on the day-to-day movements on the exchange rate. Data this month showed the central bank bought $11.4 billion in intervention in July, when the rupee was last near current levels, taking its dollar purchases in 2007 to 38.1 billion.

 

The US Federal Reserve lowered its benchmark federal funds target rate by 50 basis points to 4.75 per cent to shore up the world's largest economy against a housing slowdown and credit market turmoil. It also cut the discount rate it charges for direct loans to banks by a half-point to 5.25 per cent.

Lehman Brothers: Asian banks attractive enough than global banks, eyes Indian chemical companies

 

 

Lehman says that Fed cut is less to do with economic growth, dealing with credit issues. It further said that it would not damage to Asia despite global Collateralised debt obligation, all one could see is structured investment problems. Genuine demand and under owned Asia will spur markets in short term. Genuine demand & under ownership triggers are for Asian markets.

 

Lehman pulls out cash from china & invests in hongkong since property stocks are looking attractive. At the same time they are looking at Thailand and Malaysia. They are eyeing some Indian chemical companies and are going to invest in food. Some signs of inflation are coming in US, but Asia has cash. Lehman pulls cash out of china and has moved money to Hong Kong and less to Singapore, Thailand and Malaysia

 

It further said that era of raising rates may be over, except in china. Asian Banks will outperform. No more Rate hikes by central banks could be seen. Asian banks will out perform the western banks. Asian banks are very attractive than global banks. Thus one may see short covering in US markets to chase this rally.

Lanco Infratech leads gainers in 'A'group

 Hyderabad-based infrastructure firm Lanco Infratech advanced 12.05% to Rs 370.05 and it topped gainers in the BSE's A group shares. The company recently entered into a memorandum of understanding with UAE-based Gulftainer Company to co-operate on a variety of port and transportation projects. Gulftainer Company is a leading port developer and operator.

 

Real estate major DLF galloped 8.76% to Rs 713.25. It was the second biggest gainer in A group. Some reports suggest that the DLF group is planning a retail foray and is in talks with some well-known retail chains, including Georgio Armani, Versace and Dolce Gabbana. DLF may also tie up with a foreign major for the supermarket business at a later stage, it added.

 

Mortgage lender Housing Development Finance Corporation (HDFC) sprinted 7.94% to Rs 2354.15 and came third among top gainers in A group. Its net profit rose 25.60% to Rs 372.81 crore on 46.66% rise in total operating income to Rs 1826.95 crore in Q1 June 2007 over Q1 June 2006.

 

Commercial lender HDFC Bank went up 7.83% to Rs 1326.30. It was the fourth biggest gainer in A group. Bank stocks were up today on hopes that the Reserve Bank of India will ease monetary stance and cut interest rates taking cue from the US Federal Reserve which cut fed funds rate by 50-basis point on Tuesday, 18 September 2007.

 

State-owned engineering firm Engineers India hopped 7.65% to Rs 626.30 and came fifth among top gainers in A group. The stock is on an upmove since past nine trading sessions. The Engineers India stock flared up on market talk that it is expected to bag a contract related to oil exploration.

IKF Technologies tops volume on BSE

 1.84 crore shares were traded in IKF Technologies counter on BSE today. The scrip topped volumes on BSE. The share price was flat at Rs 7.30.

 

On 1 August 2007, the board of IKF Technologies approved the joint venture agreement with VOIP Telesystems Inc. to give a platform for hosting the services for the calling card.

 

Net profit of IKF Technologies declined 65.15% to Rs 0.84 crore on decline of 60.24% in sales to Rs 8.52 crore in Q1 June 2007 over Q1 June 2006.

 

Ispat Industries clocked the second highest volume of 1.82 crore shares on BSE.The share price rose 1.99% to Rs 23.05.

 

As per recent reports, Ispat Industries is planning to invest about Rs 10,000 crore within five years to ramp up domestic production. It is also planning to expand in overseas through capacity expansion and backward integration.

 

Balrampur Chini Mills clocked the third highest volume of 1.08 crore shares on BSE. The share price surged 23.79% to Rs 83.25.

 

Agriculture Minister Sharad Pawar said today, 19 September 2007 that the government plans to give more fiscal incentives to sugar mills amid a slump in prices caused by a record harvest.

 

IFCI clocked the fourth highest volume of 89.72 lakh shares on BSE. The share price rose 0.5% to Rs 80.

 

Ten bidders have lined up for acquiring 26% strategic stake in IFCI. These include IDFC, Kotak Mahindra Bank, GE Capital, Cargill (FS), Newbridge Asia, Blackstone, French bank Natixis, and a consortium led by Japan's Shinsei Bank with Punjab National Bank and JC Flowers. Besides, a Sterlite and Morgan Stanley consortium, and a group led by Wilbur Ross with Standard Chartered Bank and HDFC and Goldman Sachs are also in the race.

 

IFCI will now follow a two-stage process for the selection of a strategic investor by end of January 2008. The names of the shortlisted candidates from among those responding to the expression of interest (EoI) will be announced by 25 September, 2007. In August 2007, IFCI had invited expressions of interest for the 26% stake.

 

IFCI is seeking a strong partner, be it an Indian entity or from overseas, which can add value to the company. The 26% stake sale is part of IFCI's aim of being a world-class term-lending institution and not converting itself into a bank.

 

Meanwhile, the Reserve Bank of India said on Friday, 14 September 2007, foreign funds can resume buying shares of state IFCI through the secondary market in India. The share holdings of such investors have gone below the caution limit of the paid up capital of IFCI, the central bank said in a statement.

 

Himachal Futuristic Communications (HFCL) clocked the fifth highest volume of 86.97 lakh shares on BSE. The share price rose 1.98% to Rs 20.60.

 

HFCL reported a net loss of Rs 15.63 crore in Q1 June 2007 as against net profit of Rs 17.87 crore in Q1 June 2006. Sales fell 50.5% to Rs 110.77 crore in Q1 June 2007 over Q1 June 2006.

Experts on the Markets

The Sensex closed above 16,000-mark for the first time, and market experts feel more gains will follow with some hiccups on the way. Though nobody is taking a call on where the index will be in the near-term, experts, across-the-board, continue to be bullish on Indian equities.

Nimesh Kampani, chairman, JM Financial

"The basic issue is that the way the markets have gone up. The flow of FII money will increase in India and that is the expectation of the market. With the interest rates being cut, the appreciation of rupee, and looking at the rise in Asian markets today, it can be assumed that there has been a flow of FII money into the Asian markets. Sectors such as infrastructure, cement, steel and power look good, as we expect growth in these sectors.

Rakesh Jhunjhunwala, billionaire investor and stock trader

I'm and I have been bullish on the Indian markets. There is no change in my view

S Ramesh, COO, Kotak Investment Banking

Markets will be driven by liquidity, and money will move into markets like India where the growth story remains intact. The rise from this level will be driven by sectors like banking, construction and engineering. We are just coming out of a global meltdown, and the rise from here will be sector-specific and global-event driven.

Krishnamurthy Vijayan, CEO, JP Morgan Asset Management

We believe that since India is one of the best investment opportunities in the next few years, we will continue to attract investments - onshore and offshore. We have been consistently overweight on sectors that capture the Indian growth story, and have been underweight on auto and downstream oil.

Vijai Mantri, CEO, Deutsche AMC

We are very positive on India. The Indian growth story is completely driven by domestic demand. While there may be some bouts of volatility, I don't see any constraint on corporate earnings growth. We are very bullish on capital goods, engineering and power. I think Indian markets are fairly valued but India may see a rate cut taking cues from FOMC.

Alok Vajpayee, CEO, Dawnay Day AV

The Indian market is following the global trend. I will not be surprised to see it at a much higher level. Some ups and downs will be there, but we will continue to see markets moving up. There could be a rate cut in India. There is lot of momentum in liquidity in Indian markets and I think they are at a fair valuation. Investors should look at specific companies rather than across-the-board buying. Second quarter results will be in line with our expectations.

Ramesh Damani, member, BSE

Markets have clinched 16,000 with a huge bang. Bulls are going to be in command. It reflects the strength of the Indian economy. We can say that it is India's time under the sun. The road from here onwards looks very good. India's domestic story is being driven by corporate fundamentals and earnings that are very strong. I am bullish on domestic sectors like logistics, cement, banking and underweight for the time being on technology. May be by Diwali this year, we can expect a rate cut.

Amar Ambani, Vice President (research), India Infoline

The 50bps rate cut by the Fed, the first in over four years, has keyed up global markets as well as Indian equities with investors breathing a sigh of relief. Talking about Indian markets in particular, the Fed cut, along with control over inflation and an improved political situation, has helped boost enthusiasm. A look at the advance tax figures also suggest that quarterly numbers are likely to be healthy. The feel-good factor of the Fed verdict will continue for some more time with increasing inflows in India where there are some very good investment opportunities.

Suyash Choudhary, Fund Manager, StanChart Asset Management

By delivering a 50 bps cut in the federal funds rate yesterday, the Fed has aimed at countering the detrimental effect on the broader economy arising from the tight credit conditions. The move has been accompanied by a cut by 50 bps on the discount window, which will further facilitate liquidity transmission into the financial system. While bonds world-wide are still cautious, equities have reacted very positively to the Fed move. Given that the move will help in restoring global financial stability, it is likely to positively affect domestic asset markets as well.

Ritesh Jain, Fund Manager (Debt), Principal Mutual Fund

The change in the Fed policy reinforces our near-term view on the benign interest rate environment. Inflation risk should continue to subside in this environment and will lend an element of flexibility to policy. The foreign flows in emerging markets may look up putting pressure on the domestic currencies to appreciate. The central bank may have to intervene aggressively to stem the uptrend in local currencies adding to domestic liquidity. While equity flows into emerging markets are likely to be good, the markets will also be watching for the corporate earnings in the current quarter. We expect the markets to remain strong. With the global interest rate environment turning benign and with most of the prominent central banks changing their stance in favor of growth than their concern on inflation, we may see even the domestic yield curve shifting lower over a period of time.

Kaushal Sampat, Chief Operating Officer, Dun & Bradstreet India

The cut in the Fed rate is likely to have some impact on the Indian economy. The widened interest rate differential between India and the US could result in a further surge of capital inflows (especially FIIs), which may lead to an appreciation of the rupee. The RBI may be under pressure to intervene in the forex market to preclude appreciation of the rupee beyond its comfort zone. The RBI could consider a decline in interest rates given the recent dip in the growth rate of industrial production and inflation being at a 17-month low thereby allowing the excess liquidity to flow into the economy through increased credit off take.

Sandeep Nanda, executive vice president (research), Sharekhan

The 50bps rate cut by the US Fed was ahead of expectation and thus a positive surprise. This prompt action has allayed concerns about a slowdown and will be positive for equities across the world including India. We expect cyclical and interest rate sensitive sectors such as banks, autos, metals to do well. There will now be greater pressure on the RBI to cut interest rates in India, which should boost earnings growth in FY2009.

Kunj Bansal, CIO (portfolio management services), Religare

With the FOMC announcing a 0.5% cut in the rate, the debate of an impending slowdown in the US has only increased. Moreover, the exact magnitude of the subprime crisis is yet to play out. Signals from Europe and Japan are not as salutary as they were in July. Crude has resumed its relentless pursuit of a three-figure price after a brief pause. These developments portend a steady increase of lows to those economies, which are essentially growing due to the domestic demand factor.

Therefore, India would stand to benefit as a consequence. That does not mean that everything is fine in the domestic space and that we are likely to see an out performance across sectors. The political undercurrents are far from positive. Further, the latest set of IIP numbers has revived the talk of a possible slowdown in the industrial growth going forward. The performance of the monsoon, on the other hand, has given sufficient reason for cheer.

In essence, what we are saying is that whereas directionally there is nothing much to worry as far as the way forward is concerned, and the markets shall continue their northward journey. However, intermittent blips cannot be ruled out.

Market Gossip - Patni Computers

 We are hearing that Patni management is playing some fun and games with their shareholders. They want to sell or not ?

We are hearing that deal might happen at around Rs 700 but looks like they don't want to give out any statements or make as if nothing is happening

Disclaimer: This is just gossip, so you need not believe it.

Fed Cut Impact, Positive, Negative Sectors

Impact of fed rate cut

• Overall positive for emerging equity market due to increase in foreign institutional flows

- Liquidity concerns that emerged due to sub-prime crisis will get offset

• India to be among the out performers in the emerging markets

- Lower dependency on exports

- Domestic consumption growth remains intact (more so backed by good monsoon)

- High real interest rates

- RBI is in good position to counter any adverse developments with contained inflation

• Rupee to strengthen following dollar weakness

- Positive for FII in view of higher dollar return

- Negative for export oriented sectors

• Fed action more aggressive than the expectation highlights risk of US slowdown which will adversely affect global demand

- Commodities likely to see correction on the base of demand slowdown

We continue to recommend overweight on domestic consumption and infrastructure related plays and underweight on export oriented plays.

Our top picks are ITC, SBI, PNB, Bharti, L&T and DLF among large caps.

Positive for sectors

• Industrials/Infrastructure
• Financial services
• Real estate
• Telecom
• FMCG

Negative for sectors

• IT
• Textiles
• Auto components
• Metals

Neutral

• Health care
• Consumer discretionary
• Cement