Tuesday, March 11, 2008

Intra-day volatility still exist

Intra-day volatility may see the market swing both ways and hold back the local players from taking fresh positions. The market may slip initially following overnight slump in the US markets and weak Asian indices in morning trades. As the overall sentiment remains bearish, the market may not overcome from early weakness. The Nifty may witness resistance at 5100 on the upside while the near-term support at 4620 is seen on the downside. The Sensex has a likely support at 15700 and could witness resistance at 16150.

Despite a sharp fall in the early trades, markets staged a stellar come back. The benchmark Sensex recovered over 500 points and Nifty index recouped over 150 points from their days low. This swift recovery was seen after the momentum stocks like RPL, Bharti, ACC, Bajaj Auto and Rcom witnessed buying interest. Also a recovery in the Hang Seng index in Hong Kong lifted to sentiments partially. Finally, the 30-share Sensex closed at 15,923 losing 51 points. While the NSE Nifty added 29 points to close at 4,800.

Overall about 753 stocks advanced, 1,910 stocks declined while 44 stocks remained unchanged. Among the BSE 30 index 16 stocks advanced while 14 stocks declined.

Among the BSE Sectoral indices; BSE Metal index (up 2.2%), BSE Oil & Gas index (up 2%) and Auto index (up 0.5%). However, the BSE Capital Good index (down 4.8%) and the BSE Power index (down 2%).

Ceat rallied by over 12% to Rs140 after the company said that it would sell Mumbai Land for Rs1.3bn and would develop 6.91 acres of land with Ashford Infotech in Mumbai. The scrip touched an intra-day high of Rs150 and a low of Rs115 and recorded volumes of over 40,000 shares on BSE.

L&T plummeted by over 8% to Rs2728 after media reports stated that the company’s overseas arm may incur a loss of rs2bn from commodity trading. The scrip touched an intra-day high of Rs2950 and a low of Rs2610 and recorded volumes of over 34,00,000 shares on NSE.

Hindustan Zinc slipped by 3.5% to Rs575. The company announced that it increased lead prices by Rs1,300, or 0.9%, to Rs149,600 per metric ton from March 8. The price of zinc was left unchanged at Rs127,300 a ton. The scrip touched an intra-day high of Rs600 and a low of Rs558 and has recorded volumes of over 1,00,000 shares on NSE.

Mastek slipped by 0.5% to Rs264 as the company on March 08, 2008 announced that it acquired Systems Task Group (STG) International Ltd. This acquisition is the second such initiative by Mastek during the current financial year, and follows the acquisition of another insurance-focused IT Company Vector Insurance Services in July 2007. The scrip touched an intra-day high of Rs264 and a low of Rs247 and recorded volumes of over 15,000 shares on NSE.

Gitanjali Gems slipped by over 6% to Rs264. The company announced that it acquired "Renaissance Retail Venture Pvt Ltd" (RRVPL) through its wholly owned subsidiary Gitanjali Lifestyle Ltd. The company announced that it set up subsidiary for gold loans. The scrip has touched an intra-day high of Rs273 and a low of Rs258 and recorded volumes of over 2,00,000 shares on NSE.

UTV Software gained by 1.5% to Rs810 after the company announced that its founder Screwvala has raised stake in the company. The scrip touched an intra-day high of Rs810 and a low of Rs785 and recorded volumes of over 77,000 shares on NSE.

BEML also recovered by almost 3% from its lows and ended down by only 1% to Rs1118 after the company said that it would set up Assembly plant in Brazil for Earthmoving gear and its German Venture will build rail coaches, equipment. The scrip touched an intra-day high of Rs1150 and a low of Rs1072 and recorded volumes of over 16,000 shares on NSE.

KEC International jumped by over 13% to Rs770 after the company said they won US$120.7mn contract from Saudi Electric. The scrip has touched an intra-day high of Rs815 and a low of Rs617 and recorded volumes of over 16,000 shares on NSE.

Dr Reddy’s Lab gained by a percent to Rs575 after the company said that it entered into drug discovery collaboration with 7TM Pharma. The scrip touched an intra-day high of Rs579 and a low of Rs476 and recorded volumes of over 1,00,000 shares on NSE.

Gujarat Fluorochemicals surged by over 8% to Rs207 after the company said that it would consider buyback of shares ion March 21. The scrip touched an intra-day high of Rs220 and a low of Rs183 and recorded volumes of over 74,000 shares on NSE.

Aban Offshore was down by over 5% to Rs3461. The company said that it would raise Rs1.94bn selling shares. The scrip touched an intra-day high of Rs3612 and a low of Rs3399 and recorded volumes of over 1,00,000 shares on NSE.

Whats In

Private oil Companies, Reliance Industries, Essar Oil and Shell India, have filed a joint petition against the PSU oil companies for indulging in unfair and restrictive trade practices in the sale of transportation fuels.

Bajaj Auto Finance may spin off two-wheeler financing business as a subsidiary of Bajaj Auto.

Aban Offshore plans to raise funds to the tune of Rs1.94bn through issue of securities under private placement basis.

Videocon Industries is making an initial investment of Rs60bn for rolling out GSM services.

JSW Steel will issue one equity share for every 22 held in Southern Iron and Steel Co. for their merger .

Tata Chemicals plans to borrow US$850mn to fund purchase of US based General Chemical Industrial Products Inc.

Sobha Developers plans to take up 12 million square feet of development during fiscal 2008-09 for about Rs22bn.

The Mukesh Ambani-controlled Navi Mumbai SEZ has been charged with indulging in illegal land-filling activity.

Cals Refineries is in talks with BP for a crude supply and product offtake deal.

Triton Corp is close to acquiring a UK based IT &Telecom services firm for a consideration of ~Rs4.8bn.

TVS Motor has re-launched Flame, a 125cc motorbike, with a single-spark plug ignition system.

Reliance Energy's Board has approved the change of the company’s name to Reliance Infrastructure Ltd.

The move to withdraw tax holiday to new refineries will result in lowering of profitability of IOC’s Rs240bn Paradip refinery.

Shah Alloys is reported to be in talks with Posco’s Indian subsidiary, Posco India, for a possible tie-up.

Ferro Silicon and Indsil Electrosmelts have entered into a JV with GoodEarth Group of companies to operate a mine in Indonesia.

M&M group is close to finalizing a JV with an international fresh produce supply-chain heavyweight through Mahindra ShubhLaabh Services.

Electrotherm, an Ahmedabad-based manufacturer of steel and electric bikes, is embarking on a Rs3bn expansion plan.

Ceat expects to hike raise tyre prices by 2-3% in April to offset higher raw material prices.

Maruti Suzuki India has inked a pact with Shriram City Union Finance.

Country Club India is contemplating merging or acquiring its associate companies

Royal Orchid Hotels is all set to open the first Ramada hotel brand in India next month.

RCF plans to earn carbon credits from phospho-gypsum, a by-product of its manufacturing process.

Reliance General Insurance, the third largest player in terms of gross premium, clocked a 125% growth in business last year.

Taj-GVK Hotels would open a star hotel in Chennai, fifth for the Group, in May.

Congnizant has signed a US$05mn agreement with AstraZeneca.

Economic News

The amount of loans to small and marginal farmers that commercial banks, cooperatives and regional rural banks have been asked to waive is likely to be slightly over Rs230bn less than half that estimated by Finance Minister P Chidambaram in his Budget speech.

Tractor manufacturers in north India have decided to increase prices in the next financial year.

The petroleum ministry has asked the finance ministry for clarification on the proposal to withdraw the 7-year income tax holiday on production of oil and gas with effect from April 1.

Telecom Minister A Raja has told Parliament that there is no “contractual agreement” between government and telecom operators to allot spectrum beyond 6.2 MHz.

The RBI has directed banks to permit customers of one bank free use of ATMs of other banks for all transactions from April 1, 2009.

Japan has extended a Rs70.7bn long-tenure loan at low-interest to fund India’s infrastructure investments.

New consumer price index is likely to be launched by May 2009.

Finance Minister P Chidambaram has said he will inform the Parliament on Friday how the government would compensate banks for the losses incurred on account of the farm loan waiver worth Rs600bn.

The Government has postponed the last date of bidding for oil and gas blocks offered under the latest round of Nelp to April 25.

The Government is planning to fund the farm loan waiver package over the next 24 months and at least 25% of the total Rs600bn package will be met through government borrowings.

India's leading GSM-based mobile operators added 5.9mn users in February 2008.

tax holiday for software technology parks is unlikely to be extended beyond March 2009.

Sugar production during Oct-Feb’08 remained almost flat at 16.9mn tons.