Friday, December 14, 2007
Precision Pipes and Profiles Company
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9:05 PM
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Sensex, Nifty strike record high
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9:05 PM
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Market to see volatility
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9:04 PM
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20,000 level still holds good for Sensex
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9:03 PM
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US Market manages a comeback in final hour
US Market remained under pressure for the most part of the day today, Thursday, 13 December, 2007 but at the end ended mixed with Dow and S&P 500 managing to eke out some gains. Mixed economic data ruled the market momentum for most part of the day. . Six out of ten sectors ended higher today led by utilities and industrials. Financials continued to be under pressure for the fourth consecutive day. A good guidance from Honeywell was the main reason for this turnaround. An analyst upgrade on Microsoft also contributed to the same.
Market was down by almost 85 points in the morning hours. Indices lingered in the red for almost entire day. But one hour before closing bell was to ring, indices made a turnaround. The Dow Jones industrial Average ended the day with a gain of 44 points at 13,517.96. The Nasdaq Composite Index, finished lower by 2.65 points at 2,668.49. S&P 500 finished higher by 1.82 points at 1,488.41.
Seventeen out of thirty Dow stocks ended in green today. Honeywell shares climbed almost 5% today after the manufacturer said it expects to meet or beat its earnings target for next year. Financial stocks continued to be the laggards for the day, namely Citigroup, American Express and JP Morgan.
November Producer Price Index (PPI) surged 3.2% caused by a 14% spike in energy prices. The core rate was also up more than expected at 0.4%. This is the largest jump in PPI since 1973. The reading was well above the expected 1.5% gain. The data reflected the inflation issues that the Fed noted in their last policy statement.
Among other economic data, that hit the wires today, new claims for unemployment for the week ended 8 December fell to 333,000 from 340,000 the prior week. The number remains below recessionary levels.
November retail sales were strong across the board. Total sales were up 1.2% and excluding autos the gain was 1.8%.
Crude eases a bit after yesterday's whopping gains
Barring VSNL and Dr Reddys Laboratories, all Indian ADRs ended in the red today. HDFC Bank and Infosys Technologies were the main two losers shedding 2.9% and 2.4% respectively.
Crude prices eased partly today after traders speculated that recession in the US is avoidable as Federal Reserve will inject cash in the system. Profit booking was another reason as to why prices eased today after rallying by almost 5% yesterday. Crude-oil futures for light sweet crude for January delivery closed at $92.62/barrel (lower by $1.8/barrel or 1.9%) on the New York Mercantile Exchange. Price earlier slipped by more than $2/barrel during the day.
Volume on the New York Stock Exchange hit 1.4 million and losing stocks outran those advancing 2 to 1. On the Nasdaq, more than 2.1 billion shares traded hands, and declining issues ran ahead of advancers about 3 to 1.
Tomorrow, investors will focus on economic reports to set the tone of trading. The Labor Department's influential Consumer Price Index report is expected to hit the wires at 8:30 ET, and will be followed by Industrial Production and Capacity Utilization reports, all before opening bell rings.
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10:04 AM
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Pre Market Watch
On Thursday, the US market closed mixed. The DJIA closed higher by 44.06 points at 13,517.96 along with S&P 500 index grew marginally by 1.82 points to close at 1,488.41 while NASDAQ slipped by 2.65 points to close at 2,668.49.
Indian ADRs ended in mixed territory. In technology sector, Infosys dropped 2.43% along with Satyam (0.26%) while Wipro and Patni Computers dropped by (0.73%) and (0.29%) respectively. In banking sector, HDFC bank and ICICI bank slipped by (2.98%) and (1.59%) respectively. In telecommunication sector, VSNL grew by 1.68% while MTNL decreased by (1.85%). Sterlite industries fell (2.80%).
The major stock markets in Asia are trading weak. Hang Seng is trading lower by 51.82 points at 27,692.63. Taiwan weighted is trading down by 65.41 points at 8,122.54 Singapore Strait Times is down by 10.46 points to trade at 3,468.85. While Japan''s Nikkei is trading up by 96.20 points at 15,632.72.
Today, Nifty has support at 5,946 and resistance at 6,143 and BSE Sensex has support at 19,829 and resistance at 20,319.
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9:54 AM
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Market may remain choppy
The 30-share BSE Sensex slumped 271.48 points or 1.33% to 20,104.39, yesterday 13 December 2007 after striking an all time high of 20,498.11 in early trade. The S&P CNX Nifty declined 101.2 points or 1.64% to 6,058.10. It had also hit a record high of 6,185.40 in early trade.
Asian markets were trading lower today, 14 December 2007. Hong Kong's Hang Seng (down 0.19% at 27,692.63), Taiwan's Taiwan Weighted (down 0.80% at 8,122.54), Singapore's Straits Times (down 0.30% at 3,468.85), South Korea's Seoul Composite (down 0.53% at 1,905.82) declined. However, Japan's Nikkei gained 0.62% at 15,632.72.
US markets finished on a mixed note yesterday, 14 December 2007 as worries about a weakening economy and credit crunch continued. The Dow Jones Industrial Average gained 44.06 points, or 0.33%, to 13,517.96. The Standard & Poor's 500 index rose marginally by 1.82 points, or 0.12%, to 1,488.41, while the Nasdaq Composite index slipped 2.65 points, or 0.10%, to 2,668.49.
As per provisional data, foreign institutional investors (FIIs) sold shares worth a net Rs 401.76 crore, while domestic institutional investors (DIIs) were net buyers of shares worth Rs 226.65 crore on Thursday, 13 December 2007.
FIIs were net sellers of Rs 1,127 crore in the futures & options (F&O) market on Thursday, 13 December 2007. They were net sellers of Rs 1,170 crore in index futures, and Rs 291 crore in stock futures. However they bought Rs 334 crore worth index options.
Oil rose marginally in thin trade on Friday, 14 December 2007. U.S. light sweet crude futures for January delivery rose 36 cents to $92.61 a barrel. London Brent crude rose 41 cents to $92.53
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No firm plans for weekend!
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9:46 AM
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S Kumars Nationwide
Via Businessnline
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9:45 AM
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Crude eases partly
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9:44 AM
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Precious metals register fall
Gold and silver prices fell today, Thursday, 13 Decemebr, 2007, as dollar strengthened against its rivals. Gold was back trading below $800/ounce in the morning hours. It was the lowest trading price of gold in three weeks. Gold generally moves in the opposite direction of the U.S. currency.
Comex Gold for February delivery fell $14.8 (1.8%) to close at $804 an ounce on the New York Mercantile Exchange today. Last week, prices rose by more than 1.4%. On, 7 November, prices had touched $848/ounce. It was the highest price after a record $873 on 21 January, 1980.
Comex Silver futures for March delivery dropped 60 cents (4%) at $14.225 an ounce. Prices touched 26 year high on 7 November, after reaching $16.275. The metal has climbed 11% this year.
Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices. Rising crude increases inflationary pressures and vice versa. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.
In the currency market today, the dollar rose against the euro, yen and pound, after data showed bullish retail sales and wholesale inflation at a 34-year high in November reduced investors' expectations of further aggressive interest rate cuts by the U.S. Federal Reserve. The dollar index, which tracks the performance of the greenback against a basket of other major currencies, rose 0.6% at 76.595.
Yesterday, the Federal Reserve said it would inject cash into money markets through some term-auction facilities. On Tuesday, 11 December, Federal Reserve lowered the federal funds rate by a quarter-point to 4.25%. The Fed also lowered its discount rate, the interest it charges on direct loans it makes to banks, by a quarter-point to 4.75%.
In the energy market, oil prices slipped by more than $1/barrel.
Gold had climbed 26% this year till date as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Dollar is still 11% down against the euro this year.
In 2006, silver had jumped 46% while gold gained 23%.
Dollar had been witnessing a free fall since Federal Reserve cut interest rates in September. Before 11 December, Federal Reserve had cut the fed funds rate by a quarter-point to 4.50% on 31 October, 2007. Prior to that, Federal Reserve had cut interest rates by half percentage point on 19 September, 2007.
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9:43 AM
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Market may hit 21000 soon
Sensex has gained close to 450 points in the past two days and today settled above the 20,000 mark for the second consecutive day.
Wednesday's rally came on the back of a 25 basis points rate cut by US Federal Reserve last night, while marketmen said that expectation to this effect had contributed to yesterday's gain.
"The markets are going to rally from here onwards. Gain of 500 or more points is not a big thing now a days as the base of the market has increased. A level of 21,000 for Sensex and 6,500 for Nifty is quite achievable," domestic brokerage firm SMC Global vice-president Rajesh Jain said.
"Consequent to this rate cut by the Federal Reserve, there would be more liquidity in the market. However, it would be marred with volatility," Asika Stock Brokers Research Head Paras Bodhra said.
Markets have absorbed the adverse news on subprime, which was a tremendous global shock, Bodhra added.
"The Fed cut of 25 basis points is not all that bad. The markets were expecting a 50 basis points cut. But the current decision is a neutral one," Jain added.
US markets plunged after the decision that was opposed to the widely anticipated 50 basis point cut.
The Indian equity market is moving in a different orbit as against the way the Asian fraternity is progressing. Markets are showing a high level of decoupling factor, analysts added.
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9:43 AM
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Market Gossip
The stock price of Maharashtra Seamless has risen around 24% in the past one month. Market talk is that the DP Jindal Group company has bagged an export order worth Rs 160 crore from the US and Latin America. Dealers tracking the counter expect the announcement to be made over the next couple of days.
When contacted, company officials declined to comment on the issue. The stock closed at Rs 613, down 3% from the previous day. Last month, JP Morgan had initiated coverage on the stock with an overweight rating and a target price of Rs 580.
According to the broking house, margins could be under pressure during the current financial year because of high price of steel billets, which the company buys in the spot market. JP Morgan expects margins to improve in the next financial year as new orders would be booked at higher realisations.
Acquisition talk breathes life into Wockhardt stock
Until some days ago investing in pharma stocks was not considered a wise decision by market mandarins. However, over the past two trading sessions there has been sustained buying in the counter of Wockhardt.
According to market sources, domestic funds and operators are buying Wockhardt on expectations that the company will soon go in for one more acquisition in the US. The company recently acquired US-based Morton Grove Pharmaceuticals, a liquid generic and speciality dermatology company, for around $80 million.
A section of the market, however, feels while the company would be scouting for acquisitions, but it maybe some time before Wockhardt signs a deal. Wockhardt ended 2.5% higher at Rs 408 on BSE on Thursday.
Aditya Birla Nuvo gains from Rel Cap valuation
Aditya Birla Nuvo stock was in demand despite the overall weakness in the market on Thursday. The stock hit a new high of Rs 1,820 before closing at Rs 1,797.50, up 6.4% over the previous close. Dealers tracking the counter say the sudden flurry of activity on Thursday was largely sentiment driven and could have to do with the valuation assigned to Reliance Mutual Fund following Eton Park buying a 5% stake for Rs 501 crore.
Reliance Mutual Fund has been valued at Rs 10,000 crore, which works out to 13% of its total assets under management. If a similar yardstick is applied, the valuation of Birla Sun Life AMC in which Aditya Birla Nuvo holds 50% works out to around Rs 4,500 crore.
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9:42 AM
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Indian Hotels, Mahindra and Mahindra
AMCs to see a change in benchmark valuations
Asset Management Companies (AMCs) in India could see a change in their benchmark valuations after the recent deal involving Reliance Capital and Eton Park, a global investment fund. The benefit of such change in valuations is likely to impact listed players like Reliance Capital, HDFC, ICICI Bank and State Bank of India (SBI) who have AMC as subsidiaries. SBI, Punjab National Bank (PNB) and Bank of Baroda (BOB) also stand to gain as they hold 25% each in UTI AMC (likely to be listed soon).
STOCK UPDATE
Indian Hotels Company
Cluster: Apple Green
Recommendation: Buy
Price target: Rs180
Current market price: Rs150
On the right(s) track
Result highlights
- Indian Hotels Company Ltd's (IHCL) Q2FY2008 revenues grew by 15.7% year on year (yoy) to Rs341.4 crore. Room revenues continued to grow robustly and grew at 19% yoy for H1FY2008, as the average room rate (ARR) grew by 17.7% yoy to Rs8,581. The growth in room revenues appears strong considering the fact that a fair proportion of room inventory was under renovation in H1 (off season) and the fact that weak dollar adversely impacted the revenues.
- Stringent cost controls and operating leverage due to higher ARR's improved the operating profit margin (OPM) by 420 basis points yoy to 29%. The net interest charge was up by a hefty 64.4% yoy to Rs25.7 crore as proceeds from foreign currency convertible bond (FCCB) were fully deployed for recent international acquisitions. Incremental debt raised during the quarter also contributed to a rise in interest cost.
- Profit before tax (PBT) increased by 25.7% yoy to Rs77.7 crore, however a higher tax incidence at 31.5% in Q2FY2008 against 25.7% in Q2FY2007 led the net profit rise by 16% to Rs53.2 crore.
- IHCL acquired an 11.01% stake in Orient Express Hotels Ltd during the quarter and has further raised its stake to 11.5%. IHCL seeks a strategic alliance with the later, however Orient Express has rejected IHCL's offer for such a strategic alliance.
- We believe IHCL's strategy of expansion both in domestic and overseas markets and better profitability of its international operations would ensure that IHCL maintain the growth momentum. At the current market price of Rs150, IHCL trades at 20.9x its consolidated earnings per share (EPS) of Rs7.2 (post dilution on account of the rights issues) for FY2009E. We maintain Buy recommendation on the stock with a price target of Rs180.
Mahindra & Mahindra
Cluster: Apple Green
Recommendation: Buy
Price target: Rs900
Current market price: Rs794
New launches to drive growth
Key points
- A diversified play in the auto sector Mahindra & Mahindra (M&M) aims to become a speciality player and continue its domination in the utility vehicle (UV) segment.
- In the current year, the automotive segment has grown by 22% year till date (ytd). The growth was driven by UVs other than Scorpio (such as Bolero and Maxx Maxi Truck) and revenues from exports.
- Farm equipment contributing 35% to sales has under performed in the current year. Year-till-date (y-t-d) volumes were down by 5% as compared with 6% decline witnessed by the auto industry as a whole. The focus of integration of recently acquired Punjab Tractors Ltd (PTL) is recovery of outstanding dues.
- The new UV platform code named Ingenio is slated for launch in August 2008. A new Sports UV is planned to be launched from its Chennai facility. The joint venture (JV) with International Truck for manufacturing medium and heavy commercial vehicles (M&HCV) is expected to start by CY2009.
- The management continues to unlock value in its various subsidiaries and group companies. We have estimated value of Rs40 per share from its subsidiary Mahindra Holiday Resorts which is to be listed in 2008. Any higher value on listing would further add to its holding.
- All new product launches would commence from FY2009 onwards, triggering good growth.
- At the current market price of Rs794, the stock quotes at 11.4x its FY2009E consolidated earnings. We continue to value M&M on the sum-of-the-parts basis and maintain Buy with a price target of Rs900.
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9:42 AM
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Bulk Deal Watch
13-DEC-2007,EVERONN,Everonn Systems India Lim,MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. SVB,BUY,107000,737.59,-
13-DEC-2007,ISPATIND,Ispat Industries Limited,B R INTERNATIONAL/BHARATKUMAR RADHAKRISHNA RUIA,BUY,10058514,77.10,-
13-DEC-2007,PHILIPCARB,Phillips Carbon Black,GMO EMERGING MARKET,BUY,139898,278.96,-
13-DEC-2007,ESABINDIA,Esab India Ltd.,PRUDENTIAL ICICI MUTUAL FUND,SELL,243300,470.04,-
13-DEC-2007,ADHUNIK,Adhunik Metaliks Limited,BSMA LIMITED,SELL,500000,215.02,-
13-DEC-2007,SHIV-VANI,Shiv-Vani Oil & Gas Explo,FORTIS INVESTMENT MGT ASIA A/C FORTIS L FUND EQUITY BEST SEL,SELL,200030,612.24,-
13-DEC-2007,MARKSANS,Marksans Pharma Limited,UTI INDIA TECHNOLOGY VENTURE UNIT SCHEME,SELL,500000,192.80,-
13-DEC-2007,VISAKAIND,Visaka Industries Ltd.,DEUTSCHE SECURITIES MAURITIUS LIMITED,SELL,180000,106.24,-
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1:35 AM
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Market tanks 271 pts
The 30-share BSE barometer, after beginning the day on a promising note, fell back to close at 20,104.39, lower by 271.48 points, as stocks in oil and gas, capital goods and banking segments declined sharply.
The key-index rose to the day's high of 20,498.11 and a low of 20,065.63 points.
The National Stock Exchange index Nifty also dipped by 101.20 points to 6,058.10, after touching the day's high of 6,185.40 and a low of 6,040.40 points.
Trading sentiments were partly influenced by reports of weak trend in Asian stock markets, traders said.
European and Asian stock markets were down after the Wall Street ended higher, following major central banks seeking to soothe the global credit squeeze, they added.
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1:35 AM
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Industrial Outlook positive
"My outlook is always positive," Chidambaram replied to a query about his outlook on the Index for Industrial Production (IIP) numbers.
He was talking to reporters after a meeting of the Cabinet Committee on economic affairs.
The Finance Minister had yesterday said the government has to wait for IIP numbers for November to reach any conclusion.
He had said April-October figure is still slightly lower than last year's numbers for the same period.
According to the official figures, the industrial production during October grew by 11.8 per cent from 4.5 per cent in the corresponding month last year.
However, for April-October period the growth worked out to be 9.7 per cent, marginally lower than 10.1 per cent recorded in the same period last year.
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1:32 AM
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Sensex ends down 270pts, ITC gains 4%
A heavy bout of selling towards the close saw the index tumble to a low of 20,066 - an intra-day swing of 432 points.
The Sensex finally closed with a huge loss of 271 points (1.3%) at 20,104.
The BSE FMCG index gained nearly 2% (42 points) at 2232. The BSE Midcap and Smallcap indices also finished with gains at 9376 and 12,007, respectively.
The market breadth was positive - out of 2,928 scrips traded today, 1,843 logged gains and 1,059 declined.
INDEX LOSERS....
Bharti dropped over 6% (Rs 66) to Rs 988. ICICI Bank declined nearly 4% (Rs 48) to Rs 1,242.
Maruti slipped 3.5% (Rs 37) to Rs 1,038. Reliance was down nearly 2% (Rs 54) at Rs 2,833.
ONGC, Satyam, NTPC and BHEL also finished on a weak note today.
....AND GAINERS
ITC closed with a gain of over 4% at Rs 197. Tata Steel moved up 3% to Rs 889.
Cipla, Hindalco, Bajaj and HDFC also closed with gains today.
KOLTE PATIL ENDS DAY ONE WITH 25% GAIN
Kolte Patil was listed at a premium of 52% at Rs 220 as against the IPO price of Rs 145. The stock hit a high of 224 and low of Rs 175 before closing with a gain of 25% (Rs 36) at Rs 181.
MOST ACTIVE COUNTERS
Ispat was the most active counter with a turnover of Rs 365 crore followed by IFCI (Rs 275 crore), Mundra Port (Rs 268 crore), Lanco (Rs 199 crore) and Kolte Patil (Rs 198 crore).
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1:31 AM
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