Nifty may rally till 4,880 if today's low holds
Worries about the contraction in industrial output kept the market choppy throughout the day, but short covering in the last hour resulted in a smart recovery. Today is the fourth day when the Nifty made a lower high and lower low, however, the index broke the three-day losing streak to close in the positive. From here if the benchmark falls below today’s low, we may see it going down to the level of 4,635. However, if the index is able to hold itself above today’s low, we may see a minor rally up to the level of 4,880. The National Stock Exchange reported volume of 55.98 crore shares.
The market opened lower today on concerns over 5.1% contraction in industrial output in October, which adds to the list negative economic indicators released recently. The negative Index of Industrial Production (IIP) raises serious doubts about the government achieving the fiscal target and controlling inflation, which has been hovering over 9% since December last year. The Nifty opened 31 points down at 4,734 and the Sensex fell 91 points to start the day at 15,779.
Selling was widespread, with capital goods, metal, bank and oil & gas stocks leading the fall, dragging the market down in early trade. The indices fluctuated between red and green throughout the session. After staying range-bound till noon, select buying pushed the benchmarks into the positive in the noon session.
Selling pressure, once again pushed the market lower at around 2.30pm, with the indices touching their day’s lows. At the lows, the Nifty fell to 4,729 and the Sensex declined to 15,772. However, short-covering in the last hour of trade pushed the indices to the day’s high with the Nifty hitting 4,825 and the Sensex scaling 16,079.
The market closed marginally off the day’s high. The Nifty gained 36 points to 4,801 and the Sensex settled at 16,003, up 132 points over its previous close.
The advance-decline ratio on the NSE was a negative 570:1077.
While the benchmarks closed higher, the broader indices underperformed the Sensex today with the BSE Mid-cap index falling 0.58% and the BSE Small-cap index declining 0.71%.
The splendid recovery resulted in 11 of the 13 sectoral indices of the BSE closing higher. The leaders were BSE Metal (up 2%); BSE Oil & gas (up 1.19%); BSE Auto (up 1.04%); BSE Power (up 0.92%) and BSE Fast Moving Consumer Goods (up 0.70%). BSE Consumer Durables (down 2.01%) and BSE Capital Goods (down 0.77%) ended lower.
The top Sensex gainers were Hindalco Industries (up 4.78%); Jindal Steel (up 4.26%); Mahindra & Mahindra (up 2.38%); NTPC (up 2.18%) and Reliance Industries (up 2.02%). The key losers were Larsen & Toubro (down 1.94%); ONGC (down 0.82%); Wipro (down 0.60%); ICICI Bank (down 0.33%) and Maruti Suzuki (down 0.30%).
The top Nifty performers were Hindalco Ind (up 6.19%); Grasim (up 4.70%); SAIL (up 4.01%); Jindal Steel (up 3.7%) and M&M (up 3.20%).
Markets in Asia closed lower on fears of downgrades in European sovereign ratings as investors were unconvinced about the outcome of last week’s EU summit. Financial stocks fell on concerns that bank earnings may be impacted if the European crisis spreads.
The Shanghai Composite tanked 1.87%; the Hang Seng fell 0.69%; the Jakarta Composite declined 0.75%; the KLSE Composite slipped 0.87%; the Nikkei 225 settled 1.17% down, the Straits Times fell 0.59%; the Seoul Composite tumbled 1.88% and the Taiwan Weighted lost 0.76%.
Back home, foreign institutional investors were net sellers of shares aggregating Rs428.30 crore on Monday. On the other hand, domestic institutional investors were net buyers of equities totalling Rs166.29 crore.
Bangalore-based Strides Arcolab is in talks with foreign companies and private equity investors to sell a major part of its business. The company, with revenue of around Rs2,000 crore, will retain its injectables business while selling its other segments, both in India and abroad, at a deal size that would value the firm at Rs5,200 crore. The stock gained 0.69% to close at Rs422 on the NSE.
GEI Industrial Systems has bagged a contract totalling Rs37 crore from Nuclear Power Corporation of India (NPCIL). The contract is for engineering, procurement and construction (EPC) of heavy water upgrading plant and waste management plant 2x700 MW PHWR type Rajasthan Atomic Power Project -7 and 8. The stock declined 2.02% to close at Rs124 on the NSE.
Venus Remedies has been adjudged winner of Emerging Company of the year 2011 in the 4th annual Pharmaceutical Leadership Summit & Award 2011.The company won the award among five nominated for this particular award category. The stock added 0.09% at Rs165.15 on the NSE.
Maruti Suzuki India chairman RC Bhargava said they would initiate work at the Gujarat plant only when the capacity of its Manesar plant would be fully utilised
Maruti Suzuki India expects to complete land acquisition for a plant in Gujarat in a month but has no immediate plan to start construction work there, a company official said.
Maruti Suzuki India chairman RC Bhargava said they would initiate work at the Gujarat plant only when the capacity of its Manesar plant would be fully utilised. "The land acquisition process is on and we hope it will be concluded in this month. I don't think we will start work on it at least two to three years," Bhargava said on the sidelines of a seminar at Indian School of Business.
"We will need Gujarat plant when the Manesar plant capacity is fully utilised. So, that depends on how the market grows. So, I can't give a date on this," he added.
The company has two facilities at Gurgaon and Manesar, both in Haryana, with a collective capacity to manufacture 1.2 million vehicles annually.
According to a senior official of the Gujarat government, the initial land requirement of MSI was indicated to be 1,000 acres. The MSI board had also given the nod to purchase of up to 1,500 acre of land in Mehsana district, Gujarat. The auto major had stated in June that along with its vendors, it could invest Rs18,000 crore in the state as it looks to manufacture nearly 20 lakh units a year in Gujarat.
"We have to see how the market goes. It takes three years to build a new plant. So, if I need to take production from Gujarat plant in 2016, then I will have to start work in 2013. Nobody can create capacity when market does not require. We create capacity to make and sell cars. So if there is no demand for cars I don’t have to create that capacity," Bhargava said.
On the automobile industry, Bhargava said now the outlook for the industry is not bright. Maruti this year may end up less than last year's sales. "I cannot tell in terms of percentage because there are four more months to go. Lets see how these four months to go. Chances are will be less than last year," he said. Till November this year, MSI sold 6,81,200 units down by 17.8 per cent over last year same period. Exports declined by 24.4% to 73,783 units till November.
In the late afternoon, Maruti was trading at around Rs955.10 per share on the Bombay Stock Exchange, 0.33% down from the previous close.
Tata Power has inked a power purchase agreement for the project with Gujarat Urja Vikas Nigam Ltd
Tata Power has tied up funds for its 25-MW solar project in Gujarat, which is to see an investment of about Rs365 crore. The solar photovoltaic (PV) power project at Mithapur will be funded through a debt equity mix of 70:30. The plant is expected to start power generation by end-December.
“The project financing comprises equity of Rs110 crore and rupee term loans of Rs255 crore,” Tata Power said in a statement. The Mithapur project is being developed by Tata Power Renewable Energy Ltd, a subsidiary of Tata Power.
“Tata Power Renewable Energy Ltd has successfully tied up the entire debt requirement through a consortium of domestic lenders, namely State Bank of India and Export Import Bank of India with SBI Capital Markets Ltd acting as the sole financial advisor and arranger,” the statement said.
According to the company, the first loan disbursement was received on December 8.
“The signing of the financing agreements is a significant milestone for the project... We look forward to participating in many such initiatives in solar power,” Tata Power Managing Director, Mr Anil Sardana, said.
Tata Power has inked a power purchase agreement for the project with Gujarat Urja Vikas Nigam Ltd.
In the late afternoon, Tata Power was trading at around Rs90.50 per share on the Bombay Stock Exchange, 1.57% up from the previous close.