Weekly Newsletter

RCOM gets GSM license despite policy logjam
Even as a Government panel evaluates the enhanced subscriber base linked spectrum norms and the use of dual technology, the Department of Telecommunications (DoT) granted a pan India GSM license to Reliance Communications (RCOM). The DoT made necessary amendments to its Unified Access Service Licenses (UASL), enabling the Anil Dhirubhai Ambani Group (ADAG) company to offer GSM services in addition to its existing CDMA services. RCOM said it will, in due course, offer nation-wide GSM services in addition to its existing CDMA services. RCOM has already paid the requisite license fee of Rs16.51bn. The company had received Letters of Intent (LOI) for 20 circles at that time. However, on Dec. 6 it got licences for 14 circles only as it already offers GSM services through Reliance Telecom in the rest of the circles.

 

RCOM will now have to wait for the DoT to allot 4.4 MHz of GSM spectrum in each of the circles to launch commercial operations. The DoT has said that RCOM will be allotted spectrum only after existing licence holders such as Vodafone, Aircel and Idea, besides other existing players that have applied for a pan-India licence are granted spectrum. Leading GSM players like Bharti Airtel, Vodafone Essar and Idea have challenged the DoT policy on fresh spectrum allocation as also the move to allow use of dual technology. The matter is being examined by a panel set up by the Government in order to resolve the current stalemate in the telecom sector over spectrum allotment.

 

Separately, reports suggested that DoT was ready to issue Letters of Intent (LoIs) to 16 companies, including By Cell, Swan, Cheetah, S Tel, Parsvnath, Datacom, Unitech, Shyam, BPL Mobile and Indiabulls, for starting mobile services. All these companies had applied for licences before Sept. 25. More than 40 companies had applied for licences before the Oct. 1, deadline set by the DoT. Such marquee names as AT&T, Sterlite, Videocon, DLF, Ispat and Moser Baer, are said to have been denied the LoIs, and reports said they could go to court over the move.

 

Bush unveils subprime rescue plan

 

The Bush administration announced a rescue plan for the beleaguered housing sector that will freeze interest rates for some category of subprime mortgage borrowers for five years to stem the ongoing meltdown. "The holidays are fast approaching and this will be a time of anxiety for Americans worried about their mortgages and their homes," US President George W. Bush said. The administration's efforts, he said, are a sensible response to a serious challenge. Bush released his plan on a day the Mortgage Bankers Association reported that the number of mortgages entering the foreclosure process in the July-September period set a new record.

 

Bush insisted that the US economy's fundamentals were sound. But critics said his administration was slow in reacting to the housing crisis and that the delay had worsened the correction. Some termed Bush's plan as too narrowly focused. "The Bush plan is months late and more than a million families short," Democratic presidential candidate John Edwards said. One of Edwards' rivals, Sen. Hillary Clinton, dismissed Bush's effort as "too little, too late" and said it would exclude 400,000 families whose interest rates on their mortgages are resetting in the final three months of this year.

 

The Bush plan will only cover mortgages resetting from Jan. 1, 2008, through July 31, 2010. The freeze will be available only to homeowners who have not fallen behind on their payments at the lower introductory rates and who are living in the homes. This requirement would exclude people who bought investment properties hoping to profit from the housing boom. Also excluded are people who can afford the higher payments. The bush administration expects these people will move as soon as they can to refinance to more affordable fixed-rate loans. White House said its plan could help 1.2mn homeowners.

 

But, the Center for Responsible Lending estimated that only 145,000 homeowners would benefit because of the narrow criteria. An estimated 1.8mn homes have subprime mortgages that are scheduled to reset in the next two years. Those mortgages were initially taken out with rates of around 7-8%. Under the scheduled increases, the rates will climb as high as 11% in the coming months without the freeze. That increase could add an additional US$350 to a typical monthly mortgage payment of US$1,200.

 

Challenges increase for Indian banks: Fitch

 

Fitch Ratings has today said that the tightening bias of India's monetary policy, together with increased consumer leverage and the appreciating rupee could impact the immediate prospects of the country's banks.

 

Asset quality has come under some pressure, particularly in consumer loans that grew rapidly in the past and has now started to season, forcing banks to re-examine the loss assumptions in some parts of the business.

 

Fitch would therefore likely be increasingly cautious in its near-term outlook on the performance of Indian banks; the banks, however, will continue to benefit from the growth opportunities in the economy given their dominant status as financial intermediaries - the strong investment cycle currently underway is the new growth engine for bank credit.

 

In the report titled "Indian Banks - Annual Review and Outlook", Fitch observes that while the increase in net income of Indian banks remained strong at 25% yoy during H108 (24% in FY07), on the back of loan growth and lower mark-to-market depreciation on government securities portfolios, the rise in net interest income was more sedate at 11% in H108 reflecting the pressure on net interest margins. The slowdown in loans growth in FY08, together with any increase in loan loss provisions, could therefore affect net income.

 

NPL ratios will remain under focus, particularly in consumer loans where rising interest rates and increased consumer leverage has affected borrowers' repayment capacity, leading to growing delinquencies in the unsecured loan portfolio. Asset quality in residential mortgage loans (accounting for about half the retail loan portfolio) has held steady, but could be vulnerable if rising interest rates are accompanied by a correction in property prices. The appreciation of the rupee against the US dollar could affect the smaller exporters of textiles; banks have reportedly restructured some of their exposure to this segment in FY08.

 

The ability to raise timely capital could remain a key differentiator between banks, given that internal capital generation is unlikely to meet the requirements of growth in risk weighted assets, as well as the increased capital charge for operational risk and the need for government banks to make additional provisions for pension liabilities. The larger private banks have demonstrated greater capabilities in raising capital in a timely manner.

 

Preference shares have been added to the list of hybrid capital that banks can issue; however, credit spreads in the international markets (that have been the largest source of hybrid Tier 1 capital for Indian banks) has dramatically widened since July 2007 following the global tightening of liquidity, forcing banks to postpone their plans to issue these instruments overseas. The need to access capital may come into sharper focus if the credit cycle deteriorates, which could well provide an impetus for consolidation.

 

US adds more jobs than forecast

 

The US labor market was slightly stronger than expected in November, the government said on Friday, with the world's largest economy adding 94,000 nonfarm payroll jobs last month, the Labor Department said in a mixed report. Economists had been looking for around 70,000-85,000 new jobs.
Payrolls had risen a revised 170,000 in October while the September reading was revised lower by 52,000 jobs. Payroll growth in September and October was revised lower by a total of 48,000.

 

The unemployment rate remained at 4.7% for the third month in a row. Economists had been forecasting a rise to 4.8%. The job growth came from the service sector as manufacturing lost 11,000, while construction employment fell by 24,000.

 

Meanwhile, a separate survey of households showed the strongest job growth in nearly six years, with 696,000 more people saying they had jobs in November.

 

Ahead of the report, economists were expecting the Federal Reserve to lower its overnight lending rate by a quarter percentage point to 4.25% at its meeting on Tuesday, but some market participants are looking for a half-point cut. he Fed has cut the target rate by 0.75 percentage point over the previous two meetings.

 

Interest rates...BOE cuts; ECB holds

 

As expected, the Bank of England (BOE) slashed its key interest rate by 25 basis point while the European Central Bank (ECB) left its benchmark rate unchanged, as central bankers in the two regions remain concerned about the current turmoil in the financial markets and tightening credit standards. The BOE cut its key interest rate by a quarter-point to 5.5% after economic data in the previous few days showed a sharp slowdown in consumer confidence and in services sector growth. The rate cut is the first since August 2005 and comes after five hikes since August 2006. Meanwhile, the ECB left Eurozone rates unchanged at 4%, as the threat of slower growth in the 13-country bloc overshadows the dangers posed by higher inflation. The decision was widely expected as ECB says it needs more time to assess the fallout from the global credit squeeze. ECB President Jean-Claude Trichet threatened to raise interest rates if an oil-driven jump in inflation spurs pay increases. "There is strong short-term upward pressure on inflation," Trichet said. The ECB will not tolerate second-round effects on wages and some policy makers wanted to raise rates as early as today, Trichet said.

 

OECD slashes world growth forecast

 

The Organisation of Economic Co-operation and Development (OECD) cut its growth forecast for its 30 members, citing the ongoing correction in the housing sector and tight credit conditions. The lobby group for the world's 30 most industrialised nations also asked the US Federal Reserve, the European Central Bank (ECB) and the Bank of Japan to hold interest rates while saying that the Bank of England (BOE) could cut borrowing costs. The global economy will slow in 2008 as housing markets cool and credit conditions tighten, but the US will avoid a recession and the outlook is not that bad, the OECD said in its semi-annual "Economic Outlook" report. The government-funded economics body grouping of 30 advanced nations also warned that there are signs that China's economy is overheating, and urged the country's government that faster appreciation of its currency would be in its own interest.

 

OPEC keeps output unchanged

 

The Organisation of Petroleum Exporting Countries (OPEC) defied calls for production increases from consumer nations and left their current output levels unchanged, sending oil prices above the US$90 per barrel mark briefly. The oil cartel, which pumps more than 40% of the world's oil, will hold production for now and meet again in January. OPEC ministers met in Abu Dhabi to take a call on output ceilings. The freeze on supply met the expectations of most analysts. Crude oil was very volatile during the week, plunging and recovering sharply often during the course of a single trading session. It fell to a six-week low early on Thursday, but before the end of the session it recovered to settle 3% higher. US crude stood 1 cent up at US$90.24 on Friday, having jumped US$2.74 in New York on Thursday. London Brent was 4 cents up at US$90.22.

 

Chinese steel firms may launch rival bid for Rio Tinto

 

Shares of Chinese steel companies rose after a local newspaper reported that Baoshan Iron & Steel (Baosteel) may lead a rival bid by Chinese steel producers for acquiring Anglo-Australian mining major Rio Tinto. Baosteel may bid at least US$200bn for Rio Tinto, topping the US$142bn takeover proposal by BHP Billiton, Chairman Xu Lejiang told state-owned newspaper 21st Century Business Herald. However, the Baosteel Chairman later denied media reports that the company was considering a bid for Rio Tinto. Separately, China's largest steel company called on the Australian government to intervene to prevent BHP Billiton from taking over Rio Tinto. Rio Tinto's CEO Tom Albanese said that BHP Billiton's US $140bn takeover proposal to combine the two companies was "dead in the water". Albanese also revealed that other suitors had approached Rio Tinto since BHP Billiton's bid emerged last month, but added that it wanted to stay independent.

 

Vivendi to acquire Activision for US$9.8bn

 

French media giant Vivendi announced it was acquiring a majority stake in Activision for US$9.8bn to create the world's largest independent video game publisher. The new company, to be known as Activision Blizzard, will be positioned as a rival to current leader Electronic Arts. Vivendi would pay US$27.50 per share and make a cash infusion of US$1.7bn to acquire a 52% stake in Activision, valuing the combined company at US$18.9bn. Vivendi will then fold its game operations into those of Activision in the new company. The new company plans to repurchase US$4bn worth of its shares for US$27.50 each, a move the merger partners said would increase Vivendi's stake to 68%. The purchase price represents a premium of 24% over Activision's closing price on Nov. 30 of US$22.15 a share. The new entity would trade on the Nasdaq stock market. The merger is expected to be completed in the first half of 2008.

 

ArcelorMittal to make mandatory offer for Chinese firm

 

ArcelorMittal said it would make a general offer for China Oriental Group Co. to comply with the regulatory requirements in Hong Kong. The world's biggest steel maker by production capacity will offer to pay at least HK$12.9bn (US$1.7bn) for shares in China Oriental it doesn't own. ArcelorMittal said it intended to maintain China Oriental's listing after the close of the general offer, which comes after it bought a 28% stake in the Hong Kong-listed company on Nov. 7 for US$647mn. The Hong Kong Securities and Futures Commission (SFC) accused ArcelorMittal of colluding with China Oriental's Chairman Han Jingyuan in acquiring a majority stake in China's only listed steel company not under state control. It also lambasted ArcelorMittal, Jingyan and their advisers for an almost total absence of consultation. Jingyuan controls 45% of China Oriental. The offer of HK$6.12 a share is 13% higher to the last traded stock price of HK$5.40. China Oriental has been suspended from trading in Hong Kong since Nov. 7. The bid would value the whole company for at least HK$17.9bn.

 

Govt asks airlines to clarify tax on airfares

 

The Government asked all airlines to clarify as to what are the charged tax components and provide confirmation whether all the taxes shown by them in their tickets/website are deposited with the government. The airlines were also asked to submit the record of the taxes deposited with the Government at the earliest. In a letter dated Dec. 4, the Director General of Civil Aviation (DGCA) said perusal of the fares shown on the airlines' web site has revealed that the airfares have two components - basic fare and taxes. However, it is not clarified as to whether components like Passenger Service Fee and Fuel Surcharge are included in the basic fare or have been clubbed under the heading of taxes. The actual amount passed on to the Government is only the passenger service fee (PSF) of Rs225 per sector. Therefore, passengers have complained that they are forced to pay Rs2025 under the head of 'taxes and levies' while the Government charges only Rs225 as PSF.

 

OVL to join Hindujas in Iran oil & gas projects

 

Notwithstanding pressure from the Americans to reduce trade relations with Iran, India is pressing ahead with its economic interest with the Islamic nation. In line with this trend, ONGC Videsh Ltd. (OVL), in partnership with the Hinduja Group, is eyeing a 50% stake in Iran's South Pars gas field, arguably the largest in the world. The two partners are also believed to be in talks for a 50% stake in Azadegan - one of the world's biggest onshore oil blocks. OVL and the Hindujas are in talks with Switzerland-registered NICO, a subsidiary of the National Iranian Oil Co. (NICO). OVL and the Hinduja group are planning a project-specific JV restricted to the Iranian projects, a business daily said. OVL is likely to hold a majority 51% stake in the proposed JV while the Hindujas will own a 49% interest, it added. Azadegan is estimated to have 33 billion barrels of oil while the South Pars gas field contains about 50% of Iran's gas resources. South Pars is jointly shared by Iran and Qatar.

 

IFCI up as Board clears loan conversion to equity

 

IFCI allowed banks and financial institutions to convert 100% debt worth Rs14.79bn into equity. Public sector banks agreed to convert their entire holdings in Zero Coupon Optionally Convertible Debentures (ZCOCDs) into equity and the IFCI Board approved the same. LIC, GIC and associates agreed to convert a part of ZCOCDs into equity in such a way that they would retain their holding in IFCI in percentage terms at the existing level of 13.67%. IFCI also said it was in discussion with multilateral institutions to sell a stake in it. Earlier in related news, a financial daily reported that World Bank's private investment arm IFC was to take a 20% stake in IFCI. Meanwhile, of the eight short-listed bidders, only four carried out due diligence on IFCI. These were: Sterlite Industries-Morgan Stanley; WL Ross, US Capital Partners VI Fund, Standard Chartered Bank and HDFC; Cargill Financial Services Corp. and Texas Pacific Group (TPG); Shinsei Bank, PNB and JC Flowers. The remaining bidders, namely GE, IDFC, Natixis and Blackstone are yet to conduct the due diligence. The last date of submission for financial bids has been fixed as Dec 14. The IFCI Board is expected to announce the strategic investor by Dec. 20.

 

Anil Ambani to inject fresh equity into REL

 

The Board of Reliance Energy Ltd. (REL) approved a proposal for new equity capital infusion of up to Rs80bn into the company. The new equity capital infusion is proposed through a preferential offer of equity shares and/or equity related securities to Reliance-Anil Dhirubhai Ambani Group (ADAG). The preferential offer, which is subject to necessary approvals from shareholders, will be made at a price of Rs1,812 per share. Life Insurance Corporation (LIC), New India Assurance, Oriental Insurance, General Insurance, National Insurance and United India Insurance, which have been long-term shareholders of the company over the past several decades and who collectively hold about 18% of equity, will be provided an opportunity to participate in the proposed offering. The new equity capital will substantially enhance REL's net worth, and further augment its borrowing capabilities.

 

Kuwait Petro eyes refinery projects in India

 

Kuwait Petroleum Corporation (KPC), the National Oil Company of Kuwait is keen to participate in setting up grass root projects in India in the oil and gas sector. This was conveyed by Saad A. Al Shuwaib in a meeting with the Minister of Petroleum & Natural Gas Murli Deora. Saad said KPC is exploring opportunities in the refinery and petrochemical activities. KPC is in talks with Indian private and public sector undertakings to build large-scale refinery and petrochemicals projects in the country. The company is in talks with Reliance Industries (RIL) and others, including Indian Oil Corp. Ltd (IOC) for the proposed projects. "We would like to have something in India. We are looking for something either with Reliance or any other company," Saad told reporters after meeting the Petroleum Minister. He categorically stated that KPC was not looking to buy stakes in existing refineries. "It could be greenfield or joint acquisition," he said.

 

DLF to enter MF biz with Prudential Financial

 

DLF Ltd. and US-based Prudential Financial Inc. signed an agreement to establish a joint venture company in India, subject to regulatory approval. The joint venture with Prudential Financial marks DLF's entry into the asset management business. The agreement allows Prudential Financial to expand its international investments business and marks its official entry into the Indian mutual fund market. Under the terms of the agreement, Prudential Financial will be the majority shareholder in the joint venture with a 61% stake, while DLF will own the remaining 39%. The asset management joint venture will be based in Mumbai and will provide a broad array of mutual fund and investment products. The new company will be named DLF Pramerica Asset Managers Pvt Ltd. It will use Prudential Financial's distinctive Rock brand, combined with DLF's brand.

 

Eicher Motors shares up on Volvo JV news

 

Shares of commercial vehicle maker Eicher Motors jumped on Friday amid reports that it could form a Joint Venture (JV) with Swedish auto major Volvo. A business news channel reported yesterday that Volvo could move its India business into the proposed JV with Eicher Motors. Meanwhile, a financial daily reports that Eicher Motors' commercial vehicle business is up for sale and Volvo, along with German auto giant Daimler are among the interested parties. A deal is likely to be announced shortly and will be 50% higher than the current market price, it added. Later on Friday, Eicher Motors said its Board of Directors will be held on Dec. 10, to discuss a proposal for strategic partnership in relation to the company's commercial vehicle and allied business that the company has received. The news about Volvo and Daimler being in talks with Eicher Motors, as well as other CV makers like Ashok Leyland, have been floating around for a while now. But, so far neither Volvo nor Daimler have been able to strike any deals. Japanese auto maker Nissan recently announced a tie up with Ashok Leyland for making CVs.

 

Suzuki aims to keep 50% market share in India

 

Japanese auto major Suzuki Motor Corp. said it was aiming to keep its 50% market share in India forever notwithstanding the ever growing competition. The head of Japan's leading manufacturer of compact cars said that the company will launch new models and increase its dealer network to maintain 50% share of the Indian passenger car market. "We can't let newcomers break our 50% share that easily. We're going to do everything we can to keep that level for eternity," CEO Osamu Suzuki said at the Foreign Correspondents' Club of Japan. The Japanese company plans to introduce new and improved models like the Swift hatchback and SX4 crossover to ensure that it maintains its dominant position in India. Shinzo Nakanishi, soon to be Maruti Suzuki's new Managing Director said that the company would likely boost its sales outlets to about 1,000 in the next five to 10 years from about 550 now.

Change in lot size

All eyes would be on the Fed meet in the coming week. The indices are getting dizzy at heights. The pattern has been a strong start and bouts of profit booking, which appear more like select basket selling. Global cues will continue to dictate the start. The much anticipated rate cut will give a short time spurt to indices world over and India would be no exception. The announcement of a change in lot size of F&O contracts could boost sentiment in most of the F&O counters. On the flip side, its a double whammy for counters like Infosys, IVR Prime and Sun TV. On one hand their prices have fallen while on the other hand the lot sizes have increased. Retail investors would mostly choose counters with a smaller lot size. A new high is in store for the indices. But the question is, will it sustain?

Post Market Commentary

The market closed on a positive note after struggling a lot towards the end of the session as the profit booking prevails across the counters. The market opened with a handsome gains due to he favoring global cues but unable to sustain at higher levels and pared all its gains after the mid session but buying is seen at the lower levels which led the market to closed higher. The Bankex and Realty scrips remained in the limelight as the investor''s showed more confidence towards buying these stocks. Both the BSE Mid cap and Small cap remained out of favor as they closed lower by 11.80 points and 18.46 points at 9,021.96 and 11,342.27 respectively. The BSE Sensex closed higher by 170.13 points at 19,966 and NSE Nifty closed up by 19.6 points at 5,974.30. Overall, the market breadth was strong as 1460 stocks are closed higher while 1406 stocks are closed lower.

 

BSE Realty index surged 229.27 points to close at 11,576.33. Scrips that gained are Mahindra Life (8.07%), Penland (6%), DLF (4.13%), Parsvnath (3.95%), Indiabull real (3.20%), Akruti City (1.13%).

 

BSE Bankex index closed higher by 269.68 points to close at 11,377.96. Pushed up by CENTBOP (14.14%), ICICI bank (4.02%), Oriental bank (2.31%), HDFC bank (2.09%), SBI (1.67%) and Canara bank (0.68%).

 

BSE IT index closed up by 157.42 points at 4,424.57. Pushed up by Tech Mahindra (9.93%), NIIT tech (7.03%), I-Flex (5.78%), Infosys (5.09%), TCS (2.62%) and Wipro (1.85%).

 

BSE Capital goods dropped by 158.36 points to close at 20,218.88. Scrips that fell are Crompton Greaves (3.05%), AIA Engineering (2.35%), Lakshmi machines (1.98%), BHEL (1.54%).

 

BSE Oil & Gas index closed lower by 100.50 points at 12,735.33. Pulled down by HPCL (2.54%), GAIL India (1.55%), IOCL (1.53%), Reliance industries (1.14%), RNRL (1.14%) and RPL (0.77%).

 

BSE Metal declined by 183.13 points to close at 18,738.08. Scrips that dropped are Gujarat NRE (3.55%), Bhusan Steel (3.17%), Hindalco (2.51%), Jindal Stainless (2.35%), SAIL (1.84%), Tata Steel (1.63%).

Congratulations - India is second most expensive

Indian stock market is the second most expensive after China's in the Asian region, following strong rally driven by robust economic growth, a report says.

 

"India is the second most expensive market in Asia after China. However, unlike China, its momentum has deteriorated rather than improved from October," global financial service major Citigroup said in a research report.

 

Citigroup said November was a turbulent month for Asian markets with MSCI AC Asia Pacific index ending down 8.39 per cent.

 

All constituents of this index, except Indonesia, generated negative returns in the period under review. Japan is not a part of this index.

 

The monthly report reveals that India's earning sentiment had turned negative last month, though its price momentum is still going strong.

 

"India is supported by strong momentum in expectation of its strong economic growth," the report said.

 

Rising stock prices make the market more expensive, but it also implies improving long-term price momentum and all else being equal, stronger momentum characteristics, it added.

 

Last month, the benchmark Sensex had witnessed global pressure and the index lost 361.16 points in the period.

 

The index ended at 19,363.19 points after falling to a low of 18,182.83 in November, as investors turned cautious after Foreign Institutional Investors (FIIs) pulled out sizable funds from equity.

Sensex rebounds as IT stocks outperform

The market witnessed a sharp pull-back after witnessing a slump in the afternoon. The rally was mainly triggered by the buoyancy in heavyweights, IT, banking and realty stocks. Firm openings in European markets also helped the Sensex to rally. The Sensex resumed with a positive gap of 268 points at 20,064 but slipped gradually as trading progressed and entered in negative territory by the afternoon. The Sensex touched the day's low of 19,706 on profit bookings in front-line, consumer durables and metal stocks. However, hectic buying in technology and banking stocks thereafter, saw the Sensex recover most of its losses and enter into green again. The Sensex finally closed the session at 19,966, up 170 points. The Nifty closed by adding 20 points at 5,974.

 

The breadth of the market was neutral. Of the 2,909 stocks traded on the BSE 1,460 stocks advanced, 1,406 stocks declined and 43 stocks ended unchanged. Among the sectoral indices the BSE IT Index flared up by 3.69%, the BSE Teck Index rose 2.73%, the BSE Bankex Index moved up by 2.43% and the BSE Realty Index was up 2.02%.

 

Among the Sensex stocks, Infosys flared up 5.09% at Rs1,718, DLF shot up by 4.13% at Rs1,011, ICICI Bank zoomed 4.02% at Rs1,248, HDFC moved up by 3.82% at Rs2,921, TCS scaled up 2.62% at Rs1,061, Ranbaxy surged by 2.34% at Rs407, Reliance Communication jumped by 2.17% at Rs734 and Bharti Airtel gained 2.10% at Rs960.

 

Over 3.69 crore Ispat Industries shares changed hands on the BSE followed by Centurian Bank of Punjab (2.51 crore shares), IFCI (1.79 crore shares), Tata Teleservices (1.58 crore shares) and Reliance Natural Resources (1.25 crore shares).

 

Value-wise, Ispat Industries clocked a turnover of Rs258 crore followed by Reliance Petroleum (Rs235 crore), Reliance Natural Resources (Rs221 crore), IFCI (Rs182 crore) and Reliance Industries (Rs182 crore).

Market may extend gains

The upward momentum in the stock markets is expected to continue at least till the US Federal Reserve meeting on Tuesday, 11 November 2007 since Fed is expected to cut Fed funds rate by at least 25 basis points. Recent data showing strong job creation by the US private sector in November 2007 has eased US recession worries.

 

Signs that the US economy is not ailing as much as has been thought caused investors to scale back expectations of the extent of an interest rate cut when the Federal Reserve meets next Tuesday. Yet, market men hope that a further cut in interest rates by the Fed will boost FII inflow in India.

 

Brokerage Edelweiss Securities said in a report that the benchmark index was expected to find minor resistance around 20,200-20,500 and on the lower side it had strong support around 19,200-19,000.

 

However, a sharp fall is not expected due to tremendous liquidity waiting to enter at market. FIIs had been the key drivers of the recent rally. They pumped in Rs 20,591 crore in the month of October 2007. However FIIs pulled out Rs 5,849.90 crore in November 2007. FII inflow in calendar year 2007 totaled Rs 67,521.60 crore (till 5 December 2007). Any slowdown in inflow by FIIs may put brakes on the rally.

 

Meanwhile, a slowdown in Indian economy due to high interest rates, a firm rupee, surging global oil prices and fallout of the US sub-prime crisis dented business confidence in July-September 2007, a survey said on Wednesday. The survey of 321 companies was conducted by trade body, Federation of Indian Chambers of Commerce and Industry (FICCI).

 

Reemergence of political concern arising from the Indo-US nuclear deal may impact the market. The United Progressive Alliance government expressed its firm resolve to operationalise the Indo-US nuclear deal, rejecting opposition and Left front's charges that it barred India from conducting nuclear tests and threatened the country's independent foreign policy. Replying to the nuclear deal debate in the Rajya Sabha on Wednesday 5 December 2007, the external affairs minister, Mr Pranab Mukherjee, stuck to the government view that the deal was essential for India's economic growth. The Left front continued its opposition to the deal in the debate in Rajya Sabha.

 

Annual inflation, based on the wholesale price index (WPI), dipped 3.01% in the week ended 24 November 2007 compared with a 3.21% rise in the week ended 17 November 2007. The market estimate stood at 3.20%.

IT, telecom stocks lead 170-points Sensex surge

Data showing slide in inflation helped the market end the choppy session on a firm note but fall in index heavyweight Reliance Industries capped the rise. Infosys Technologies and ICICI Bank spurted. IT, banking and realty stocks were in demand. Market breadth moved between positive and negative. 15 out of 30 stocks from the Sensex pack were in the red. European markets, which opened after Indian market, were firm in early trade.

 

The government today warned that increased capital inflows could endanger the growth process, although the economy is buoyant in tune with the trend witnessed since the last four years. "Increased capital inflows can impact macro-economic aggregates through the exchange rate, trade and monetary variables," said a half-year economic review tabled by Finance Minister P Chidambaram in Parliament today.

 

The review said increased inflows have been witnessed especially in the first half of current financial year 2007/08, while the economy's capacity to absorb it has not risen at the same pace, as indicated by the level of current account deficit. "There are short term challenges of managing inflows without endangering the growth and price stability," the review said.

 

The wholesale price index rose 3.01% in 12 months to 24 November 2007, below the previous week's rise of 3.21%, government data released today, 7 December 2007, afternoon showed. The annual inflation rate was 5.55% during the corresponding week of the previous year.

 

Some Asian markets edged lower after initial rise that was triggered by easing of US recession worries after US President George W. Bush, on Thursday, 6 December 2007, unveiled plans aimed at stemming US home loan foreclosures.

 

The 30-share BSE Sensex rose 170.13 points or 0.86% to 19,966. Sensex hit a low of 19,706.43 in afternoon trade. At day's low it shed 89.44 or 0.45%. Sensex had hit a high of 20,094.56 in early trade. At day's high, Sensex had gained 298.69 points.

 

Sensex had hit all-time high of 20,238.16 on 30 October 2007 but was not able to sustain at higher levels and it is yet to close above the physcological 20,000 level. The Sensex's all time closing high is 19,977.67 on 29 October 2007.

 

The broader S&P CNX Nifty rose 19.60 points or 0.33% at 5974.30. It touched a high of 6042.10 in early trade today, which is a new record high. Nifty had hit an all-time high of 6027.05 on Thursday, 6 December 2007.

 

The BSE Mid-Cap index fell 0.13% to 9,021.96. The BSE Small-Cap index was down 0.16% to 11,342.27. Both these indices underperformed the Sensex.

 

Market breadth was positive. On BSE, 1460 stocks advanced, 1406 stocks declined and 43 stocks remained unchanged.

 

BSE clocked a turnover of Rs 8598 crore compared to yesterday (6 December 2007)'s turnover of Rs 9,762.59.

 

Nifty December 2007 futures were at 5993, a premium of 18.70 points as compared to spot closing of 5974.30.

 

NSE's futures & options (F&O) segment turnover was Rs 61359.41 crore, which was lower than Rs 66472.74 crore on Thursday, 6 December 2007

 

India's largest private sector firm by market capitalization & oil refiner Reliance Industries slipped 1.14% to Rs 2841.65, off day's low of Rs 2915.

 

The BSE IT index rose 3.69% to 4,424.57. It outperformed the Sensex. India's second largest software exporter by sales Infosys Technologies soared 5.09% to Rs 1718.15.

 

Tech Mahindra soared 9.93% to Rs 1224.50, I-Flex Solutions gained 5.78% to Rs 1614, TCS rose 2.62% to Rs 1061.25, Wipro gained 1.85% to Rs 502.55 and Satyam Computers rose 1.59% to Rs 443.75.

 

Telecom stocks edged higher. India's largest listed cellular service provider by market share Bharti Airtel jumped 2.10% to Rs 959.65.

 

India's second largest listed telecom service provider by sales Reliance Communications rose 2.17% to Rs 734.30 on reports that Department of Telecommunications (DoT) on Thursday, 6 December 2007 awarded a pan-India GSM licence to the company.

 

The BSE Bankex rose 2.43% to 11,377.96. It outperformed the Sensex. India's largest private sector bank by assets ICICI Bank jumped 4.02% to Rs 1247.50.

 

Centurion Bank of Punjab soared 14.14% to Rs 55.70, Oriental Bank of Commerce rose 2.31% to Rs 276.80, HDFC Bank rose 2.09% to Rs 1721.25 and State Bank of India rose 1.67% to Rs 2436.

 

The BSE Realty index rose 2.02% to 11,576.63. It outperformed the Sensex. DLF rose 4.13% to Rs 1011.35, Mahindra Lifespace Developers soared 8.075 to Rs 797.80, Peninsula land jumped 6% to Rs 150.15, Parsvnath Developers gained 3.95% to Rs 396.95, Indiabulls Real Estate rose 3.20% to Rs 687.55, and Omaxe rose 2.44% to Rs 493.80. However, Unitech fell 0.51% to Rs 428.95, and Sobha Developers declined 1.48% to Rs 895.65.

 

The BSE Metal index fell 0.97% to 18,738.08. It underperformed the Sensex. Hindalco Industries fell 2.51% to Rs 188.15, Jindal Stainless declined 2.35% to Rs 226.65, Hindustan Zinc gave away 1.99% to Rs 806.05, Steel Authority of India fell 1.84% to Rs 274.20, and Tata Steel shed 1.63% to Rs 833.40.

 

The BSE Auto index fell 0.85% to 5,651.30. It underperformed the Sensex. MICO slumped 4.06% to Rs 4954.20, Amtek Auto declined 3.70% to Rs 443, MRF fell 3.49% to Rs 7202.55, Hindustan Motors shed 2.86% to Rs 47.60, and Tata Motors fell 0.56% to Rs 771.10. However, Maruti Suzuki was steady at Rs 1042.25.

 

Auto components maker Bharat Bharat Forge jumped 2.43% to Rs 351.60 on reports that the company is joining hands with NTPC to set up a new greenfield manufacturing facility in the country. The joint venture will look at manufacturing power plant equipment, including turbines, components and accessories, through technological tie-ups with other manufacturers. NTPC was up 0.27% to Rs 245.65.

 

Automobile tyre maker CEAT rose 2.83% to Rs 218.05 on reports that company plans to invest more than Rs 1000 crore to expand capacity and is hopefull of selling surplus land in Mumbai by March 2008.

 

United Breweries (Holdings), the flagship firm of UB Group, fell 3.36% to Rs 1085.90 after Kingfisher Airlines posted a net loss of Rs 577 crore in the financial year ended March 2007. The loss was on revenue of Rs 1,553 crore earned during the year.

 

Commercial vehicles maker Eicher Motors soared 8.22% to Rs 545.45 on reports that Swedish auto major Volvo is close to a joint venture with the company. Eicher Motors is expected to spin off its commercial vehicle unit into the venture. The valuation of the venture would be around $1 billion after the merger.

 

India's second largest iron castings manufacturer by sales Electrosteel Castings fell 2.18% to Rs 80.95 on reports that the company is planning an expansion, for which it may raise $25 million through private placement route.

 

Textile firm Modern India was locked at upper limit of 5% at Rs 952.95 after the company said on Friday, 7 December 2007 its board would meet on 17 December 2007 to consider stock split.

 

Solvent extraction firm Sanwaria Agro Oils rose 1.23% to Rs 111.45 after its board approved 2-for-1 stock split plan.

 

Infrastructure development firm GMR Infrastructure fell 6.05% to Rs 242.20 after National Stock Exchange curbed fresh positions in the derivatives contracts of the firm.

 

Speciality chemicals maker Jayant Agro Organics jumped 2.30% to Rs 104.50 after Japan's Mitsui & Company and Mitsui & Co (Asia Pacific) formed a joint venture to take a 24% stake in its speciality chemicals unit.

 

Ispat Industries clocked the highest turnover of Rs 259.06 crore on BSE. Reliance Petroleum (Rs 236.80 crore), Reliance Natural Resources (Rs 221.49 crore), IFCI (Rs 182.74 crore) and Reliance Industries (Rs 182.29 crore), were the other turnover toppers on BSE in that order.

 

Ispat Industries registered the highest volumes of 3.69 crore shares on BSE. Centurion Bank pf Punjab (2.51 crore shares), IFCI (1.79 crore shares), Tata Teleservices (Rs 1.59 crore shares) and Reliance Natural Resources (1.25 crore shares), were the other volume toppers on BSE in that order.

 

In Europe, key indices in UK, France, and Germany were up between 0.62% to 1.17%.

 

Asian markets were mixed today, 7 December 2007. Key indices in China, Japan, Singapore and Taiwan were up 0.15% to 1.13%. However, Key indices in Hong Kong and South Korea were down between 0.97% to 2.42%.

 

US markets surged on Thursday, 6 December 2007 on optimism that a plan announced by President George W Bush to stem US home foreclosures would keep the economy from sliding into a recession. The Dow Jones industrial average surged 174.93 points, or 1.30%, to end at 13,619.89. The Standard & Poor's 500 Index .SPX climbed 22.33 points, or 1.50%, to 1,507.34. The Nasdaq Composite Index soared 42.67 points, or 1.60%, to 2,709.03.

 

The Bank of England lowered its key interest rate on Thursday, 6 December 2007 citing signs of slowing growth. The Monetary Policy Committee, or MPC, voted to reduce the official bank rate paid on commercial bank reserves by 0.25 basis points to 5.5%. However the European Central Bank Monetary Policy Committee decided to keep interest rates on hold at 4% after their monthly policy meeting yesterday, 6 December 2007.

 

Crude oil was little changed in New York after rising the most in almost three weeks as U.S. inventories dropped as refiners prepared to meet heating demand. Crude oil for January delivery rose 3 cents to $90.26 a barrel on the New York Mercantile Exchange in Singapore. Brent crude oil for January settlement yesterday rose $1.69, or 1.9%, to settle at $90.18 a barrel on the London-based ICE Futures Europe exchange.

Futures at a premium

Turnover in F&O segment rises

 

Nifty December 2007 futures were at 5984, at a premium of 29.30 points as compared to the spot closing of 5954.70.

 

The NSE's futures & options (F&O) segment turnover was Rs 66,472.74 crore, which was higher than Rs 57,522.12 crore on Wednesday, 5 December 2007.

 

Reliance Energy (REL) December 2007 futures were at premium, at 1975.15, compared to the spot closing of 1946.50.

 

NTPC December 2007 futures were at premium, at 247.95, compared to the spot closing of 245.20.

 

State Bank of India (SBI) December 2007 futures were at premium, at Rs 2414, compared to the spot closing of 2395.55.

 

In the cash market, the S&P CNX Nifty gained 14.70 points or 0.25% at 5,954.70.

FIs come back

Inflow of Rs 1081.30 crore on 5 December 2007

 

Foreign institutional investors (FIIs) bought shares worth net Rs 1081.30 crore on Wednesday, 5 December 2007, compared to their buying of Rs 19.50 crore on Tuesday, 4 December 2007.

 

FIIs inflow of Rs 1081.30 crore on 5 December 2007 was a result of gross purchases of Rs 5515.50 crore and gross sales Rs 4434.20 crore. The 30-share BSE Sensex rose 208.57 points or 1.07% to 19,738.07 on that day.

 

FII inflow in calendar year 2007 totaled Rs 68,602.90 crore (till 5 December 2007).

 

There are a total of 1,180 FIIs registered with the Securities & Exchange Board of India (Sebi).

Madras Cements , Ashok Leyland

Madras Cements
Cluster: Cannonball
Recommendation: Buy
Price target: Rs4,800
Current market price: Rs4,474

 

Price target revised to Rs4,800

 

Key points

 

    *
      Madras Cements' topline grew by 23% year on year (yoy) to Rs500.12 crore. The topline rose on the back of a healthy 29% year-on-year (y-o-y) growth in realisations, which compensated for 5% y-o-y decline in volumes.
    *
      Variable costs per tonne jumped by 22.3% yoy on the back of a 27% y-o-y rise in power costs and 38% y-o-y rise in freight costs. Employee costs shot up by 38% yoy. Overall costs increased by 15% yoy translating into a per tonne rise of 21% yoy.
    *
      Higher realisations led the operating profits grow by 36% yoy to Rs214.5 crore and the operating profit margin (OPM) expand by 400 basis points to 42.9%. The earnings before interest, tax, depreciation and amortisation (EBITDA) per tonne zoomed to Rs1,548, the highest in the industry and the highest in the company's history as well.
    *
      Interest cost and depreciation provision on a sequential basis remained more or less constant at Rs8.1 crore and Rs25.7 crore respectively.
    *
      Other income doubled to Rs2.8 crore as the company deployed the surplus cash. Consequently, profit after tax (PAT) rose by 34% yoy to Rs120 crore.
    *
      The company is expanding its capacity by 4 million metric tonne (MMT) to 10MMT by FY2009, as already mentioned in previous updates. The clinker unit at Jayanthipuram was commissioned in October 2007 as per schedule, whereas the 1MMT grinding unit at West Bengal has been delayed and will come up only in FY2009. The other 2MMT capacity expansion at Ariyalur is expected to come up at the end of Q2FY2009.
    *
      Taking cognisance of the realisation growth in the current quarter, we are upgrading our FY2008 earnings per share (EPS) estimate by 5.8% to Rs390 and FY2009 EPS estimate by 12.1% to Rs497.
    *
      4MMT capacity expansion will drive the company's volume growth going ahead. Healthy realisations in the South coupled with the company's efforts on cost control will aid it in maintaining its EBITDA at an above-industry average, which in turn will drive the profitability. The company will also be able to avail tax benefits for setting up wind mills. The robust cash flow position of the company will make it well placed to withstand the downturn in the cement cycle. At the current market price, the company is trading at 9.1x its FY2009 EPS and 5.4x its enterprise value (EV)/EBITDA. With the rise in benchmark valuations, we are upgrading the price target to Rs4,800 per share.

 

Ashok Leyland
Cluster: Ugly Duckling
Recommendation: Hold
Price target: Under review
Current market price: Rs51

 

Disappointing sales

 

Key points

 

    *
      Ashok Leyland's total vehicle sales during November 2007 declined by 16.2% to 5,800 units as against 6,923 units in the same month a year ago. Sales in domestic market declined by 16.4%, whereas exports sales were also down by 13.7% for the month. Total sales declined by 15% month on month taking the year-till-date sales volume down by 3%.
    *
      Passenger or bus sales were flat year on year (yoy) at 1,465 vehicles. Orders from various State Transport Corporations, which drove the sales growth of this segment in the first half of FY2008 have slowed down in the second half.
    *
      Truck sales declined by 21% to 4,283 vehicles. Domestic sales declined by 20% yoy to 4,226 vehicles, while exports declined by 64% to 57 vehicles.
    *
      Truck sales were affected due to constrains on the availability of driver cabins and the price increase of 2-2.5% undertaken in October 2007. A new 49 tonne vehicle has been launched in the high growth tractor trailer segment with 'H' series engine.
    *
      The management has revised its guidance downwards for FY2008E to 91,000 vehicles from 100,000 vehicles. We estimate the volumes for FY2008 to be flat over FY2007 at 83,199. We also estimate a 14.4% growth for FY2009E to 95,138 vehicles.
    *
      The outlook for the commercial vehicle (CV) industry still appears to be weak. However, the company is trying to diversify itself by entering into joint ventures with Siemens VDO for infotronics and is tying-up with Nissan for the Light commercial vehicles. We maintain Hold on the stock.

UBS - Sensex - target 22,600 in 2008

Foreign brokerage UBS has raised its end-2008 target for the BSE Sensex from 19,000 to 22,600 saying economic growth, which is insulated from the global slowdown, will help companies report strong numbers.

 

In its India - Outlook 2008 report released here today, UBS said it has factored in higher valuations in an environment it believes will be characterised by both sustainable lower cost of capital and lower domestic political risk.

 

Putting aside investor concerns on excessive valuations due to the strong performance of the Indian markets in 2007, Manishi Raychaudhury of UBS's India Equity Research team said: "While a global economic slowdown and credit market dislocation could adversely affect Asian markets, the domestically-driven Indian market is relatively insulated."

 

The Sensex has surged nearly 42% from 13,942.2 to 19,795.87 today during this calendar year making several market watchers advice caution.
Says Raamdeo Agrawal, managing director, Motilal Oswal Securities: "There is all-round optimism across sectors, but this is built into the stock prices. Finding value at current prices is a difficult task."

 

Raychaudhuri sees a continuation of a strong investment cycle in infrastructure and industrial capex, the peaking of banks' lending and deposit rates - although he concedes that the central bank may not signal a peak in the cycle in the near term, and continued positive surprises in earnings and stable earnings growth as the key themes driving the market in 2008.

 

"Despite a mean reversion in earnings growth to between 20-22%, from between 30-35% in the last three years, price/earnings ratios of around 20 times are likely to be supported by earnings surprises from domestically-driven and interest rate-sensitive sectors as well as by a continuation of benign liquidity in the stock market," he added.

 

The UBS report noted that the market movement in 2007 has been narrow - driven by a small number of large stocks causing the valuation of frontline stocks in several sectors to appear steep. "We expect investors to rotate into less expensive sectors such as autos and metals as well as into cheaper stocks in those sectors that have outperformed," said Raychaudhuri.

 

On the downside, the report warns of the potential for an unexpected rise in inflation (possibly from global prices rising to a level that forces an upward adjustment in the cost of fuel domestically), and growth deceleration. In addition, increasing differences of opinion between the United Progressive Alliance and the Left parties has the potential to increase political uncertainty domestically and lead to an early general election though such concerns have receded recently.

India@Risk 2007

1) Economic impact of demographics — India is facing a demographic dividend. What must be done to ensure it does not turn into a demographic liability? Can the 'inequality trap' be overcome and inclusive growth achieved?

 

2) Loss of fresh water (quantity and quality) — How best can India cope with increasing freshwater insecurity?

 

3) Economic shocks and oil peaks — How vulnerable is India to external economic turbulence? What exogenous crises would risk derailing India's growth prospects (for instance, an oil price shock)?

 

4) Geopolitical risks: Globalisation versus protectionism — What happens if there is a backlash or retrenchment from globalisation? With the explosion of expectations, can India keep up with its own aspirations?

 

5) Climate change: The environment and challenges to India's growth — Can India balance the complex trade-offs between the environment and growth? What are the risks and opportunities for India?

 

6) Societal risks: Infectious diseases — What must be done to combat the spread of high-mortality disease and pandemics? What if India fails?

Tata Motors, Oil drilling, Cement

Tata Motors
Cluster: Apple Green
Recommendation: Hold
Price target: Rs792
Current market price: Rs772

 

Recovery still away

 

Key points

 

    *
      Tata Motors' sales for November 2007 stood at 46,947 vehicles. Total sales declined by 4.3% year on year (yoy) and 5% month on month (mom).
    *
      Commercial vehicle (CV) sales in the domestic market for the month grew by 4% to 26,895 vehicles. The sales growth of CV segment continues to be driven by the sales of light commercial vehicles (LCVs), which grew by 10% yoy. Medium and heavy commercial vehicle (M&HCV) sales were flat at 14,426 vehicles and continue to be affected by high interest rates and high base of last year.
    *
      Freight rates have started to pick up with the commencement of the festive season after remaining stagnant for last two months. Freight rates increased by 2% for the month and a further recovery is possible.
    *
      Passenger vehicle segment performed badly in November with domestic sales declining by 16% to 16,322 vehicles. Passenger car sales for the month declined by 21%. Indica sales declined by 19.6% yoy to 10,488 units, while Indigo sales fell by 29.5% yoy to 2,014 vehicles. The substantial decline in passenger car sales in November 2007 was due to the high base month of November 2006. Passenger car sales were higher in November 2006 due to full supply after the restoration of the company's paint shop, which had got damaged in a fire in late September 2006. Sales of Sumo and Safari grew by 7% yoy to 3,820 units mainly driven by the sales of the recently launched Safari Dicor VTT, which recorded a 55% sales growth with 1,775 units.
    *
      Export sales for the month declined by 1.7% yoy and 12% mom to 3,730 vehicles. Export sales as a percentage of total sales volume was down to 7.9%, the lowest in the year as compared with the highest of 12.4% in June 2007.
    *
      We continue to take a very cautious outlook of CV industry considering the high base of last year, the lower availability of finance and the delinquencies in the sector. Some momentum has been witnessed in the segment with the beginning of the festive season, but high inventory in the system would restrict the growth in the current year. In the passenger vehicle segment the company will continue to lose market share due to lack of new product launches.
    *
      The company's plans to acquire Jaguar and Land Rover is also a cause for concern, as these acquisitions would not be value accretive. The estimated acquisition price of $1.5 billion could strain the company's balance sheet in addition to its huge capital expenditure plan.
    *
      At the current market price of Rs772, the stock discounts its FY2009E consolidated earnings by 12.2x and is available at an enterprise value (EV)/earnings before interest, depreciation, tax and amortisation (EBIDTA) of 6.1x. We maintain our Hold recommendation on the stock with a price target of Rs792.

 

STOCK UPDATE

 

Oil drilling

 

Adding fuel to fire
It couldn't have been better for oil drilling companies. The charter rates for drilling rigs are already at a record high level due to a favourable supply-demand scenario. In fact, the day rates have increased by as much as 200% to 300% (depending on the asset specification) over the past three years. For instance, an offshore rig (350-feet-jack-up rig) has been contracted at day rates of over $2,00,000, up from around $75,000-80,000 couple of years back.

 

Cement

 

ACC, Ambuja Cements sales up during November
The outlook for the cement sector is buoyant. Going forward we will witness rise in volumes as construction activity catches full steam in December and continues its momentum in the fourth quarter as well. Rising cement demand will push up the prices gradually. We have already seen the first such price hike, after the resumption of construction activity post monsoon, in Maharashtra and Andhra Pradesh. We see this trend to continue across other regions going forward. Price hike and higher volumes in the coming months will be a major trigger for the cement stocks.

Post Session Market Commentary

After rising to previous peaks at the start of the session, key indices ended with marginal gains on Thursday as investors sold for profits at higher levels.

 

"Frontline stocks have been in consolidation mode over the past week, so investors used today's rise to book some profits. Technical indicators also showed the market was in an over bought zone in the morning, so the momentum eased in the latter half of the day. But the undertone remains strong; there are no signs of weakness," said Suresh Kumar Iyer, technical analyst at Asit C Mehta Investment Interrmediates.

 

The National Stock Exchange's Nifty soared to an all-time high of 6027.05 before settling at 5954.7, up 15 points or 0.25 per cent from the previous close.

 

The Bombay Stock Exchange's Sensex ended up 58 points or 0.29 per cent at 19,795.87. From an intra-day high of 20,064.31, the index dipped to 19,716.57 before the close.

 

Hindalco Industries (down 3.11%), Grasim Industries (3.07%), Bajaj Auto (2.57%), HDFC Bank (2.41%) and Tata Steel (2.1%) were the biggest laggards.

 

However, heavyweights like ICICI Bank (up 3.24%), Reliance Energy (3.13%), HDFC (2.63%), Bharti Airtel (2.3%) and Infosys Technologies (1.97%) supported indices.

 

Real estate shares marched ahead despite a reversed trend in the rest of the market, adding3.58 per cent to the BSE Realty Index. Omaxe climbed 12.2 per cent, Unitech advanced 9.82 per cent Peninsula Land rose 6.62 per cent and Sobha Developers gained 2.12 per cent.

 

Stocks in the mid-cap space also ended weaker, snapping up a week-long rally. Jindal Saw shed 5.25 per cent, Godrej Consumer Products lost 4.96 per cent, Exide Indus slipped 3.96 per cent, Escorts dropped 3.88 per cent, Neyveli Lignite slipped 3.49 per cent and Arvind Mills fell 3.46 per cent.

 

The BSE Mid-cap Index ended down 0.21 per cent while the CNX Mid-cap Index finished flat.

 

The market breadth showed 1805 gainers and 1043 losers on BSE, while on NSE, 676 shares rose and 524 fell.

 

Key indices Asia ended with significant gains. The Nikkei was up 1.7 per cent, the Hang Seng up 1.1 per cent and the Straits Times up 1.08 per cent.

 

Stocks in Europe also posted gains with the FTSE, CAC and DAX trading about a per cent higher.

Post Market Commentary

The market closed marginally higher after paring most of its initial gains. The market opened on a strong note but failed to sustain all its gains and fell to close with little gains on the back of heavy selling across the sectoral indices scrips. The market lost most of its grounds towards the end of the session as selling intensified. Most buying is seen from the Realty baskets. The BSE Sensex touched an intraday high of 20,064.31 and low of 19,716.57 during the trading session. The BSE Sensex closed higher by 53.27 points at 19,791.34 and NSE Nifty closed up by 14.7 points at 5,954.70. Overall, the market breadth was strong as 1805 stocks are closed higher while 1043 are closed lower. The BSE Small Cap grew by 71.89 points 11,343.85 while BSE Mid cap slipped by 24.17 points to close at 9,028.66.

 

BSE Realty index surged 318.08 points to close at 11,271.88. Scrips that jumped are Omaxe (12.20%), Unitech (9.82%), Penland (6.62%), Anantraj (2.33%), Sobha developers (2.12%).

 

BSE Bankex index grew by 87.68 points to close at 11,108.28 as Canara Bank (3.25%), ICICI Bank (3.24%), Oriental Bank (0.99%), SBI (0.55%) and Kotak Bank (0.18%) closed higher

 

BSE Capital goods dropped by 26.02 points to close at 20,377.24. Pushed it down by Kalpataru power (1.93%), AIA Engineering (1.58%), Areva (1.95%), BHEL (1.30%) and BEML (1.26%).

 

BSE Oil & Gas index closed down by 104.16 points at 12,835.83. Scrips that fell are Indian Oil (2.66%), BPCL (1.71%), ONGC (1.15%), HPCL (1.13%) and Essar Oil (0.98%).

 

BSE Metal closed lower by 123.01 points to close at 18,921.21. Scrips that dropped are Jindal Saw (5.25%), Hindalco Industries (3.11%), SAIL (2.85%), Tata Steel (2.10%), Bhusan Steel (1.89%) and Jindal Stain (1.51%).

 

BSE IT index closed up by 34.87 points at 4,266.90 as Tech Mahindra (4.24%), Rolta India (3.25%), Moser Baer (2.12%), Infosys (1.97%), Patni computers (1%) and I-Flex (0.69%) closed in green

Sensex gains 58 points

The market showed a solid performance in today's trades. The Nifty crossed the 6,000 mark again after November 1 in the morning trades and touched the all-time high of 6,027. The Sensex also opened firm at 20,018, up 222 points, tracking global markets which were up around 1% in early trades and touched the day's high of 20,064 quickly. The market remained firm thereafter on sustained buying in realty and pharma stocks. However, the heavy bout of selling towards the close dragged the market into the red and the Sensex touched the day's low of 19,717. But, buying at lower levels helped the Sensex to recover most of its losses and enter into positive territory again. The Sensex finally closed at 19,796, up 58 points, while the Nifty ended the session at 5,955, up 15 points.

The broader market continued to remain in the green. Of the 2,887 stocks traded on the Bombay Stock Exchange (BSE), 1,805 stocks advanced, 1,043 stocks declined and 39 stocks ended unchanged. Most of the sectoral indices ended in the green. The BSE Realty index was the biggest gainer and moved up by 3.59% at 11,347 followed by the BSE HC index (up 1% at 11,950). However, the BSE CD index dropped 2.95% at 6,043 and the BSE PSU index was down 1.34% at 9,961.

Select heavyweights attracted buying support. Cipla surged 4.89% at Rs199, ICICI Bank rose 3.24% at Rs1,199, Reliance Energy jumped 3.13% at Rs1,947, HDFC added 2.63% at Rs2,813 and Bharti Airtel moved up by 2.30% at Rs940. Among the laggards Hindalco was down 3.11% at Rs193, Grasim declined by 3.07% at Rs3,680, Bajaj Auto shed 2.57% at Rs2,728 and HDFC Bank dropped 2.41% at Rs1,686.

Over 5.98 crore Ispat Industries shares changed hands on the BSE followed by Reliance Petroleum (2.29 crore shares), Tata Teleservices (2.25 crore shares), Chambal Fertilisers (1.84 crore shares) and IKF Technologies (1.82 crore shares).

Reliance Petroleum topped the value list with a turnover of Rs529 crore on the BSE followed by Ispat Industries (Rs438 crore), Reliance Energy (Rs322 crore), Reliance Natural Resources (Rs273 crore) and Unitech (Rs207 crore).

Sensex adds 58 points in volatile trade

Though the market ended in the green, it came off higher level as index heavyweight Reliance Industries slipped. Volatility on the bourses was high today. ICICI Bank edged higher. Cipla surged. Consumer durables stocks dwindled. Realty stocks were the star performers in today's trade. Market breadth was strong. 18 out of 30 stocks from the Sensex pack were in green. European markets, which opened after Indian markets, were trading firm. Key Asian indices, except China, were in green.

 

The 30-share BSE Sensex rose 57.80 points or 0.29% to 19,795.87. Sensex hit a low of 19,716.57 in late trade. At day's low, Sensex had shed 21.50 points for the day. Sensex had hit a high of 20,064.31 in early trade. At day's high, Sensex had gained 326.24 points.

 

Sensex had hit all-time high of 20,238.16 on 30 October 2007 but was not able to sustain at higher levels and it is yet to close above the physcological 20,000 level. The Sensex's all time closing high is 19,977.67 on 29 October 2007.

 

The broader S&P CNX Nifty rose 14.70 points or 0.25% to 5954.70.

 

The BSE Mid-Cap index fell 0.21% to 9,033.76. It underperformed the Sensex. The BSE Small-Cap index was up 0.79% to 11,360.73. It outperformed the Sensex.

 

Market breadth was strong. On BSE, 1805 stocks advanced, 1043 stocks declined and 39 stocks remained unchanged.

 

BSE clocked a turnover of Rs 9712 crore compared to yesterday (5 December 2007)'s turnover of Rs 9,410.33.

 

Nifty December 2007 futures were at 5984, a premium of 29.30 points as compared to spot closing of 5954.70.

 

NSE's futures & options (F&O) segment turnover was Rs 66472.74 crore, which was higher than Rs 57522.12 crore on Wednesday, 5 December 2007

 

India's largest private sector firm by market capitalization and oil refiner Reliance Industries fell 0.97% to Rs 2874.55, off day's high of Rs 2955. The company and Kuwait Petroleum (KPC), the national oil major of Kuwait, have reportedly begun the first round of discussions for scripting a mega joint collaboration across the oil and gas vertical. KPC is keen to rope in RIL as a partner in its upcoming projects in Kuwait in both refining and petrochemicals.

 

The BSE Realty index was up 3.59% to 11,347.36. It outperformed the Sensex. Sobha Developers gained 2.12% to Rs 909.15, DLF rose 1.71% to Rs 971.25 and Indiabulls Real Estate jumped 0.93% to Rs 666.25

 

Real estate developer Omaxe soared 12.20% to Rs 482.05. Omaxe today said a consortium comprising the company, GVK Power & Infrastructure and Nagarjuna Construction Company has put in a bid for development of 8-lane access controlled expressway project in Uttar Pradesh (UP). The Rs 30,000 crore project named Ganga Expressway Project would be constructed on the banks of river Ganga to connect eastern and western UP.

 

India's second largest realty firm by market capitalization Unitech soared 9.82% to Rs 431.15 on reports it may hive off its retail business i.e. the mall development business as a separate company.

 

The BSE Bankex rose 0.80% to 11,108.28. It outperformed the Sensex. India's largest private sector bank by assets ICICI Bank rose 3.24% to Rs 1199.30.

 

Centurion Bank of Punjab jumped 7.73% to Rs 48.80, Canara Bank soared 3.25% to Rs 300, Oriental Bank of Commerce gained 0.99% to Rs 270.55 and State Bank of India rose 0.55% to Rs 2396.60.

 

Consumer durables stocks fell sharply. The BSE Consumer Durables index fell 2.95% to 6,042.74. It underperformed the Sensex. Videocon Industries slumped 6.73% to Rs 572, Gitanjali Gems fell 2.15% to Rs 446.10, Titan Industries declined 1.55% to Rs 1565.40, and Blue Star shed 1.16% to Rs 469.05.

 

The BSE IT index rose 0.83% to 4,267.15. It outperformed the Sensex. India's second largest software exporter Infosys Technologies gained 1.97% to Rs 1634.90.

 

Patni Computers gained 1% to Rs 328.95, and TCS rose 0.25% to Rs 1034.20. However, Wipro fell 1.12% to Rs 493.40 and Satyam Computers declined 0.44% to Rs 436.80.

 

The BSE Power index was up 0.41% to 4,560.10. It outperformed the Sensex. Reliance Energy jumped 3.13% to Rs 1946.60, Gujarat Industries Power gained 1.67% to Rs 112.30, and NTPC rose 0.35% to Rs 245. Tata Power was steady at Rs 1311.05.

 

Power generation and supply firm GVK Power & Infrastructure surged 6.17% to Rs 840.90 after its board approved a 10-for-1 stock split.

 

Direct-to-home broadcast service provider Dish TV declined 0.32% to Rs 93.95, off day's high of Rs 102.10 after the company said after market hours on Wednesday (5 December 2007) that Kishore Biyani's Indivision Capital, the private equity arm of Future Capital, would buy 4.9% in in the company for Rs 250 crore.

 

Maharashtra Seamless (MSL), the flagship company of DP Jindal Group, rose 0.31% to Rs 581.70 after the company said it is acquiring a seamless pipes plant in Romania having a capacity of 2 lakh tonnes per annum.

 

Drug maker Glenmark Pharmaceuticals jumped 3.98% to Rs 503.80. The company reportedly plans to acquire a distribution and marketing company in Indonesia, in a bid to increase its foothold in Asia's emerging markets.

 

Steel maker JSW Steel rose 3.31% to Rs 1166.85 after the company said on Wednesday, 5 December 2007, its crude steel production rose 16% in November 2007 over November 2006.

 

Apparel firm House of Pearl soared 5.60% to Rs 276.30 after it acquired UK fashion retailer FX Imports.

 

Essar Steel, part of the Essar Group, was locked at upper limit of 20% at Rs 71.10 following an order passed by Securities Appellate Tribunal prohibiting the firm from delisting.

 

Pharmaceutical packaging material maker Essar Steel fell 2.76% to Rs 1282, off day's high of Rs 1398 after the company signed a deal to set up a Rs 88.40 crore clinical supplies unit in Wales.

 

Reliance Petroleum clocked highest turnover of Rs 529.63 crore on BSE. Ispat Industries (Rs 438.36 crore), Reliance Energy (Rs 322.51 crore), Reliance Natural Resources (Rs 273.25 crore) and Unitech (Rs 207.29 crore), were the others turnover toppers on BSE in that order.

 

Ispat Industries registered the highest volumes of 5.98 crore shares on BSE. Reliance Petroleum (2.29 crore shares), Tata Teleservices (2.25 crore shares), Chambal Fertilisers and Petrochemicals (1.84 crore shares) and IKF Technologies (1.82 crore shares), were the others volume toppers on BSE in that order.

 

In Europe, key indices in UK, France and Germany were up between 0.37% to 1.01%.

 

Asian markets climbed today, 6 December 2007. Key indices in Hong Kong, Singapore Ssouth Korea, Taiwan and Japan were up by between 0.20% to 1.70%. However, China's Shanghai Composite fell 0.15%.

 

US markets surged on Wednesday, 5 December 2007, led by rally in large-cap tech and financial stocks. Data that showed that US companies added staff in November 2007 at the fastest pace in a year, and worker productivity rose at the strongest rate in four years in the third quarter, helped ease recession fears, which boosted the bourses. The Dow Jones industrial average jumped 196.23 points, or 1.48%, to 13,444.96. The S&P 500 index gained 22.22 points, or 1.52%, to 1,485.01, while the Nasdaq Composite index advanced 46.53 points, or 1.78%, to 2,666.36.

 

Oil prices fell for a third straight day in New York, hitting a six-week low, boosted by an unexpected surge in US stockpiles. Crude oil for January 2008 delivery dropped as much as 96 cents, or 1.1%, to $86.53 a barrel in after-hours electronic trading on the New York Mercantile Exchange.

 

European Central Bank and Bank of England meet today, 6 December 2007, seperately to consider interest rate. The US Federal Reserve will meet on 11 December 2007 to consider interest rates. Fed is likely to reduce Fed funds rate by 25 basis points to 4.25% as the country's economy is slowing down and money markets are strained. It has already cut the Fed funds rate two times in the last three months.

Sensex may retest 20,000 mark

 The Sensex may retest 20,000 mark today, on the back of strong global cues. It hit an all time high of 20,238.16 on 30 October 2007 but was not able to sustain at higher levels and is yet to close above the physcological 20,000 level. The Sensex's all time closing high is 19,977.67 on 29 October 2007.

 

The 30-share BSE Sensex surged 208.57 points or 1.07% to 19,738.07, on Wednesday 5 December 2007. On the same day, the broader based S&P CNX Nifty gained 81.65 points or 1.39% to 5940, a record closing high. It had struck all-time high of 6011.95 on 1 November 2007.

 

The European Central Bank's and Bank of England meet today, 6 December 2007 to consider interest rate. While the US Federal Reserve will meet on 11 December 2007. It is likely to reduce Fed funds rate by 25 basis points to 4.25% as the country's economy is slowing down and money markets are strained. It has already cut the Fed funds rate two times in the last three months.

 

Asian markets climbed today, 6 December 2007. Hang Seng (up 1.66% at 29,833.93), Japan's Nikkei (up 1.50% at 15,842.92), Taiwan's Taiwan Weighted (up 0.92% at 8,757.13), Singapore's Straits Times (up 1.05% at 3,597.60) and South Korea's Seoul Composite (up 1.09% at 1,959.23) all edged higher.

 

US markets surged on Wednesday, 5 December 2007, as large-cap tech stocks led the gains on analyst reports that demand for computers and software will increase. The Dow Jones industrial average jumped 196.23 points, or 1.48%, to 13,444.96. The S&P 500 index gained 22.22 points, or 1.52%, to 1,485.01, while the Nasdaq Composite index advanced 46.53 points, or 1.78%, to 2,666.36.

 

As per provisional data, foreign institutional investors (FIIs) purchased shares worth a net Rs 480.18 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 159.71 crore on Wednesday, 5 December 2007, in cash market.

 

FIIs were net buyers of index futures to the tune of Rs 202.73 crore while they were net buyers of index options worth Rs 65.82 crore. They were sellers of stock futures to the tune of Rs 1051.89 crore and sold stock options worth Rs 16.43 crore.

 

Oil prices fell for a third straight day in New York, hitting a six-week low, boosted by an unexpected surge in U.S. stockpiles. Crude oil for January delivery dropped as much as 96 cents, or 1.1%, to $86.53 a barrel in after-hours electronic trading on the New York Mercantile Exchange.

Pre Market Watch

The Market is likely to have positive opening on the back of strong global cues. The market yesterday closed on a strong note as a result of selective buying across the sectoral indices scrips. However, the BSE Small cap outperformed the benchmark indices as most buying is seen from these baskets. On Wednesday, the BSE Sensex surged 208.57 points to close at 19,738.07 and NSE Nifty closed higher by 81.65 points at 5,940. We expect that the market to gain some grounds during the trading session.

 

On Wednesday, the US market closed in positive territory. The DJIA closed up by 196.23 points at 13,444.96. The S&P 500 index grew by 22.22 points to close at 1,485.01 and NASDAQ advanced by 46.53 points to close at 2,666.36.

 

Indian ADRs ended in positive territory. In technology sector, Infosys gained 2.80% along with Satyam by 2.69% , Patni computers by 2.40% and Wipro by 0.48%. In banking sector, HDFC bank and ICICI bank advanced by (4.46%) and (2.51%) respectively. In telecommunication sector, MTNL and VSNL grew by (6.15%) and (4.76%).

 

The major stock markets in Asia are trading firm. Hang Seng is trading up by 488.48 points at 29,833.93. Japan''s Nikkei is trading higher by 234.04 points at 15,842.92. Taiwan Weighted advanced by 80.18 points to trade at 8,757.13. Seoul Composite is trading at 1,959.23 up by 21.03 points. Singapore Strait Times inched up by 37.55 points to trade at 3,597.60.

 

The FIIs stood as the net buyer on Wednesday both in equity and Debt. The gross equity purchased was Rs3,974.10 Crore and the gross debt purchased was Rs369.50 Crore while the gross equity sold stood at Rs3,954.60 Crore and gross debt sold stood at Rs107.60 Crore. Therefore, the net investment of equity was Rs19.50 Crore and net debt was Rs262 Crore.

 

Today, Nifty has support at 5,892 and resistance at 6,028 and BSE Sensex has support at 19,586 and resistance at 20,019.

Market may add gains

Most of the leading Asian indices are currently trading with a gain of over 1% each. The surge in the US markets on the back of strong economic news and hoping that the Fed may cut interest rates again in its next policy meeting may help the market log gains. FIIs turning net buyers in equities and fall in the oil prices may boost the market sentiment. Among the key local indices, the Nifty has a strong support at 5750, while on the upside the index could test higher level around 6200. The Sensex has a likely support at 19300 and may face resistance at 21000.

 

The Dow Jones soared about 200 points on Wednesday, on a mix of strong economic news and hopes that the Federal Reserve will cut interest rates again at its policy meeting next week. While the Nasdaq surged by 47 points at 2666.

 

Indian ADRs witnessed strong buying support on US bourses. MTNL notched up significant gains and soared over 6% . The other Indian floats, Tata Motors, HDFC Bank and VSNL surged over 4% each. while Infosys, Satyam, Patni Computer and Dr Reddy's were up around 1-2% each.

 

Crude oil prices slipped marginally. The US light crude oil for January series declined by 83 cents at $87.49 a barrel. In the commodity space, the Comex gold for February delivery slipped by $3.90 to settle at $803.70 an ounce.

20K.World is our strength!

The world breaks everyone, and afterward, some are strong at the broken places.

 

After going through a topsy turvy ride for most part of November, stocks have begun the last month of the calendar year on a better note. Despite the nagging worries over the US housing sector and slowing FII inflows, the Sensex seems headed towards the 20k mark yet again. It needs another 260-odd points to reach the milestone. Given the bullish global cues this morning and renewed buying yesterday by the FIIs, it may well make new lifetime high today itself.

 

Over the past few weeks we have seen that the small- and mid-cap stocks have taken the limelight away from the large caps. Though the same trend may well continue for a while, one should not write off the frontline shares. Fresh buying may emerge in these scrips, especially today when world equity markets are smiling again.

 

There is a growing feeling that the Fed and the US Government will oblige the markets and will announce measures to bailout the ailing housing sector. If this indeed materialises, there is a strong case for a fresh rebound in equities across the world.

 

For the day you can ignore concerns of any unforeseen events, particularly in the US. The bulls will largely remain in command today. We see a gap-up opening and possibly a new high for the Sensex today or tomorrow.

 

US stocks rallied on Wednesday, with the Dow Jones rising by nearly 200 points, spurred by strong economic news and continuing bets that the Federal Reserve will cut interest rates again at its policy meeting next week.

 

Microsoft, Oracle and Intel led technology shares higher for the first time in four days on analyst reports that demand for computers and software will increase. Freddie Mac gained as the Treasury Department agreed on an agreement with lenders to stem subprime defaults by freezing rates.

 

AIG jumped after saying its investments linked to the housing market are manageable.

 

The Standard & Poor's 500 Index added 22 points, or 1.5%, to 1,485.01, the highest in a month. The Dow gained 196 points, or 1.5%, to 13,444.96. The Nasdaq Composite Index rose 47 points, or 1.8%, to 2,666.36.

 

Market breadth was positive. Four stocks gained for every one that fell on the New York Stock Exchange.

 

The Labor Department said worker productivity rose the most since 2003 in the third quarter while labor costs posted the biggest drop in four years. A report from ADP Employer Services showed companies last month added 189,000 jobs, more than triple the average forecast

 

October factory orders rose 0.5% from an upwardly revised 0.3% in the previous month, the government reported. However, the ISM index on the service sector fell to 54.1 in November from 55.8 in October. Economists had been looking for a reading of 55.

 

Thursday brings the latest interest-rate policy decisions from the Bank of England and the European Central Bank, as well as the US weekly jobless claims report.

 

Crude oil futures erased earlier gains and closed below $88 per barrel after the Organization of Petroleum Exporting Countries (OPEC) opted to keep production ceilings unchanged and crude inventories in the US fell to near two-year lows.

 

Treasury prices eased, boosting the yield on the 10-year to 3.94% from 3.89% late on Tuesday. In currency trading, the dollar gained versus the euro and the yen. COMEX gold for February delivery fell $3.70 to settle at $803.70 an ounce.

 

Across the Atlantic, stock benchmarks in Europe ended a two-session losing streak as shares of commodity firms rebounded and many economists predicted an imminent rate cut for the UK as well as Europe. The pan-European Dow Jones Stoxx 600 index climbed 1.7% to 369.60.

 

The UK's FTSE 100 posted its biggest one-day gain since August, up 2.8% at 6,493.80, while the German DAX 30 rose 1.7% to 7,944.77 and the French CAC-40 advanced 2% to 5,659.07.

 

The emerging markets also closed with solid gains. The Bovespa in Brazil jumped 2.3% to 64,927 while the IPC index in Mexico advanced 2.5% to 30,761. The RTS index in Russia gained 2.6% at 2262 and the ISE National-30 in Turkey surged 3.1% to 70,556.

 

Most Asian markets were trading strong this morning, gaining between 1-2%. The Nikkei was up 234 points to 15,842 while the Hang Seng in Hong Kong jumped 438 points to 29,783. The Kospi in Seoul gained 22 points to 1960 and the Straits Times in Singapore was up 42 points to 3602.

 

Samsung Electronics led gains among exporters after reports showed that US productivity and jobs rose. Mitsubishi UFJ Financial advanced among banks on expectations that US regulators and lenders have agreed on measures to contain subprime-mortgage losses that threaten global growth.

 

The MSCI Asia Pacific Index added 1.1% to 164.17 as of 10:15 a.m. in Tokyo, heading for its highest close since Nov. 7. Most other markets open in the region advanced.

 

Bulls closing in on 20k again

 

It was a strong session as bulls rebounded and ended the day with healthy gains, shrugging off weak cues from the US markets. After positing a strong start key indices turned range bound till the mid noon session. Although, bulls marched ahead as strong close in the Asian markets and firm cues from the European markets lifted the sentiments.

 

Mid-Cap steel stocks shined scrips like Uttam Galva, Sunflag Iron and Essar Steel were among the major gainers. Ispat Industries, Apar industries, Hindustan Motors and WWIL were among the stocks in limelight.

 

Finally, 30-share Sensex ended 208 points higher to close at 19,738 and Nifty closed at 5,943 adding 81 points.

 

HDFC ended flat at Rs2739 after the Indian mortgage lender partly owned by Citigroup Inc., announced loans grew at 28-29% in the last two months. The scrip touched an intra-day high of Rs2754 and a low of Rs2720 and recorded volumes of over 13,00,000 shares on NSE.

 

IOC surged by over 3% to Rs617 after the company announced that the crude oil in Cairn India's Rajasthan block may be waxy, but it has found it to be sweet. The scrip touched an intra-day high of Rs632 and a low of Rs600 and recorded volumes of over 19,00,000 shares on NSE.

 

Gujarat Ambuja also ended flat at Rs154. Holcim increased its stake in the company to ~46% by buying 5% through an open offer. The scrip touched an intra-day high of Rs155 and a low of Rs152 and has recorded volumes of over 15,00,000 shares on NSE.

 

Sintex Industries marginally slipped by 0.2% to Rs454. Reports stated that the company is likely to raise over Rs18bn through issue of securities in Domestic as well as International Markets. The scrip touched an intra-day high of Rs463 and a low of Rs440 and recorded volumes of over 1,00,000 shares on NSE.

 

Bajaj Auto gained 1.5% to Rs2803 after reports stated that the company is considering picking up majority stake in Austria KTM. The scrip touched an intra-day high of Rs2825 and a low of Rs2740 and recorded volumes of over 2,00,000 shares on NSE.

 

REL marginally slipped 0.5% to Rs1889. Reports stated that the company would raise funds through FCCBs at a premium to current market rates. The scrip touched an intra-day high of Rs1925 and a low of Rs1875 and recorded volumes of over 17,00,000 shares on NSE.

 

Indian Hotel gained 4.5% to Rs143 after Ginger Hotel a chain of The Indian Hotel Company earmarked an investment of Rs220cr by March 2008. The scrip touched an intra-day high of Rs144 and a low of Rs137 and recorded volumes of over 23,00,000 shares on NSE.

 

Pharma stocks were back in action amid reports stated that Government plans to cap trade margins on all medicines sold in the country. Divi's lab surged by over 8.5% to Rs1793, Nicholas Pharma advanced 4% to Rs319, Pfizer rose over4.5% to Rs708 and Glenmark Pharma added 4.6% to Rs484.

 

What the FIIs are doing

 

FIIs were net buyers of Rs4.8bn (provisional) in the cash segment on Wednesday while the local institutions pumped in Rs1.6bn. In the F&O segment, foreign funds were net sellers of Rs12.05bn on the same day.

 

On Tuesday, FIIs were net buyers to the tune of Rs195mn in the cash segment. Mutual Funds were net sellers of Rs341mn on the same day.

 

Stocks in News:

 

Activists to boycott Novartis drugs and plan a nationwide campaign. (Mint)

 

Novartis to start selling four new cancer drugs by 2011. (BL)

 

Novartis withdraws Exelon patent suit against Sun Pharma. (BL)

 

Reliance Industries may make an acquisition in the energy sector for up to US$15bn. (Mint)

 

Reliance Industries plans solar power projects in Bengal, Rajasthan and Maharashtra. (FE)

 

Danone's stake in Avesthagen violates norms according to the FIPB. (FE)

 

Air Deccan forms consortium with Mumbai International Airport (MIAL), Rahejas and IDFC for developing four low cost airports in Karnataka. (FE)

 

Arunachal Pradesh Government scraps two hydel-power projects by NTPC. (FE)

 

Aegis Logistics to set up 300 auto LPG stations. (FE)

 

Reliance Retail in talks with the Essel group to set up outlets at Fun Republic mall across India. (FE)

 

Air Deccan and Kingfisher merger may take another 2-3 months. (BL)

 

Reliance Industries, Tata Chemicals, Bharti Enterprises' Fieldfresh and Indian Oil are among several companies that have evinced interest in leasing closed sugar mills in Bihar. (BS)

 

Indivision Capital, the private equity arm of Future group, will buy 4.9% in Dish TV for Rs2.5bn. (BS)

 

Securities Appellate Tribunal (SAT) has kept the delisting of Essar Steel from the stock exchanges in abeyance. (ET)

 

Kuwait Petroleum and Reliance Industries have kicked off discussions for a mega joint venture across the oil and gas vertical. (ET)

 

ICICI group plans to mobilize US$8bn for private equity investments in India. (ET)

 

Tata Motors, M&M and private equity player, One Equity submitted their final bids for Jaguar and Land Rover. (ET)

 

Biocon to launch oral insulin drug by 2010. (ET)

 

Glenmark Pharma plans to acquire a distribution and marketing company in Indonesia. (ET)

 

Post Citi Venture Capital picking up 7% stake in Shiv-Vani Oil for Rs1bn Merrill Lynch and GMO also purchase minority stakes. (ET)

 

Unitech plans to hive off its retail business as a separate company which may be listed at a later date. (ET)

 

Railways hike freight charges for iron ore exports by increasing the surcharge to 60% per ton. (BL)

 

The Government will obtain parliament's approval on the Indo-US nuclear deal after the process of implementing the agreement is complete. (BS)

 

The Government is likely to announce a new fertilizer policy within one month. (BS)

 

The Government asks airlines to either deposit tax component or refund the same to the customers in case of cancellation. (ET)

 

RBI allows banks to give ailing sugar companies a second chance to restructure their loans. (ET).