A reversal will be signalled by Nifty closing below its previous day’s low
The smart recovery in the last hour saw the market close an otherwise unexciting session, with modest gains, making it the fifth positive close in a row. Yesterday we had mentioned that if the Nifty closes decisively above 5,720 we may see it heading to a new yearly high. Towards the close of the trading session today the Nifty hit its intraday high of 5,731, which was the highest in the last 20 days (including today), and settled near the day’s high. If the index again manages to close in the positive, we may see it finding its first resistance at 5,750. The National Stock Exchange (NSE) saw a lower volume of 55.16 crore shares and an advance decline ratio of 939:803.
The market witnessed a lower opening as the world watches the largest democracy voting for a new president later tonight. The outcome of the US presidential election is expected to end the uncertainty in the global markets seen in the last few days.
The Nifty opened 10 points down at 5,694 and the Sensex resumed trade at 18,740, down 23 points. Volatility since the opening bell kept the benchmarks on both sides of the previous closing levels in early trade.
Meanwhile, the rupee fell by 17 paise to touch a fresh two-month low of 54.78 against the dollar in early trade due to increased demand for the greenback from oil importers. The Indian unit had plunged by 80 paise on Monday to close at over eight-week low of 54.61 on massive dollar demand from banks and importers amid a sharp rise in the American currency overseas.
The market gained strength at around 10.00am on buying interest in realty, power and healthcare stocks. The gains helped the benchmarks stay in he green in the morning session.
However, some profit taking resulted in the benchmarks paring part of their gains in subsequent trade. Increased selling pressure from auto, capital goods and oil & gas stocks kept the market near the neutral line in noon trade.
While the opening figure of the Nifty was its intraday low, the Sensex touched its low at around 2.00pm with the index falling to 18,727.
A fresh bout of buying in realty and healthcare stocks saw the indices stage a smart recovery form their lows. The benchmarks went on to hit their highs towards the end of the trading session. At the highs, the Nifty rose to 5,731 and the Sensex climbed to 18,829.
The last hour bounce-back helped the market settle near the day’s high. The Nifty gained 20 points (0.35%) to 5,724 and the Sensex ended the session above the 18,800 level mark at 18,817, up 55 points (0.29%).
The broader indices outperformed the Sensex today. The BSE Mid-cap index closed 0.56% up and the BSE Small-cap index gained 0.35%.
Among the sectoral indices, BSE Realty (up 2.05%); BSE Healthcare (up 0.95%); BSE Power (up 0.71%); BSE Bankex (up 0.60%) and BSE PSU (up 0.60%) were the top gainers. BSE Auto (down 0.51%), BSE Capital Goods (down 0.21%) and BSE IT (down 0.01%) were the losers.
Seventeen of the 30 stocks on the Sensex closed in the positive. The chief gainers were Cipla (up 4.18%); GAIL India (up 1.85%); HDFC (up 1.75%); Jindal Steel (up 1.43%) and State Bank of India (up 1.39%). The main losers were Hindalco Industries (down 1.87%); Maruti Suzuki (down1.70%); Tata Motors (down 1.06%); Hero MotoCorp (down 0.72%) and Bajaj Auto (down 0.60%).
The top two A Group gainers on the BSE were—Jammu & Kashmir Bank (up 7.81%) and HDIL (up 5.90%).
The top two A Group losers on the BSE were—Voltas (down 2.94%) and Jubilant Foodworks (down 2.41%).
The top two B Group gainers on the BSE were—R* Shares Banking Exchange Traded Fund (up 27.46%) and Jolly Board (up 20%).
The top two B Group losers on the BSE were—Vinayak Polycon International (down 18.69%) and Relaxo Footwears (down 10.18%).
Out of the 50 stocks listed on the Nifty, 33 stocks settled in the positive. The key gainers were Cipla (up 4.23%); Asian Paints (up 3.61%); Ambuja Cements (up 2.71%); ACC (up 2.68%) and Ranbaxy Laboratories (up 2.51%). The losers were led by IDFC (down 2.34%); Maruti Suzuki (down1.89%); Hindalco Industries (down 1.83%).Reliance Infrastructure (down 1.72%) and Tata Motors (down 1.07%).
Markets in Asia settled mixed on fresh concerns about Greece’s ability to get a consensus for its harsh austerity measures. Cautiousness ahead of the US presidential elections also kept the gains in check.
The Shanghai Composite declined 0.38%; the Hang Seng fell 0.28%; the KLSE Composite dropped 0.51%; the Nikkei 225 slipped 0.36% and the Straits Times lost 0.41%. Among the gainers, the Jakarta Composite rose 0.26%; the Seoul Composite surged 1.05% and the Taiwan Weighted climbed 0.71%.
At the time of writing, the key European indices were up between 0.61% and 0.81% and the US stock futures were trading higher, indicating a firm opening for the US markets on Election Day.
Back home, inflows from foreign institutional investors (FIIs) into stocks on Monday were offset by withdrawals by domestic institutional investors (DIIs). While FIIs were net investors of stocks totalling Rs373.93 crore, DIIs were net sellers of shares aggregating Rs344.41 crore.
Watch maker Titan Industries, a joint venture between Tata Group and Tamil Nadu Industrial Development Corporation (TIDCO), has drawn up plans to expand its accessories division. The company, which has seen a good demand for its men’s apparel segment, is set to venture into belts and handbags for women. The stock gained 0.09% to close at Rs290.20 on the NSE.
Glenmark Pharmaceuticals today said it has settled litigation with Janssen Pharmaceuticals Inc over patent actions regarding generic oral contraceptive Norgestimate and Ethinyl Estradiol tablets.
Under the terms of the settlement agreements, Glenmark will be able to market and distribute its generic tablets under a royalty bearing licence from Janssen on 31 December 2015, or earlier under certain circumstances. The stock declined 1.42% to close at Rs431.55 on the NSE.
Vacation ownership company Mahindra Holidays and Resorts India (MHRIL) is looking to expand its base overseas in locations such as Dubai, Sri Lanka and Malaysia. The company recently added a resort in Bangkok, Thailand. The new property called “Mac Boutique Suites” is a 77-room resort located centrally in the Bangkok business district. The stock dropped 1.39% to close at Rs281 on the NSE.
Madras Cements managed to put in a solid quarter despite vagaries of the monsoon due to better cost control and slightly increased offtake
Madras Cements, part of the Ramco group, has posted solid results despite a delayed monsoon which usually slows down cement companies’ offtake. Net sales for the quarter ended 30 September 2012 was Rs1005.69 crore, higher by 22% year-on-year (y-o-y), when compared to Rs825.69 crore for the corresponding period last year. Its operating profit rose 17% to Rs320.16 crore. The positive results were due to better cost control despite higher inflation.
Read about other company results here.
Madras Cements was earlier implicated by the Competition Commission of India (CCI) for forming a cartel and colluding with other cement manufacturers in order to artificially manipulate demand and supply and keep prices high. The CCI had imposed a penalty against Madras Cement to the tune of Rs258.63 crore. The company had mentioned, in the results release, that it had filed an appeal before the Competition Appellate Tribunal and an interim order was passed that no coercive steps should be taken for recovery of the penalty.
Despite the verdict, Madras Cements has been performing consistently in the last two quarters. Its net sales growth for the current quarter is little less than its three-quarter y-o-y average growth rate of 28%, but this is expected as cement companies have slack sales during the monsoons. Whether Madras Cements can push sales from now remains to be seen. Likewise, Madras Cements’ operating profit growth rate for the last three quarters was 22%, of which it grew 17% in the latest quarter. Due to the recent CCI verdict, its valuations have been driven down all the way to low single digits. Its market capitalization is 3.83 times operating profit while its return on equity an impressive 21%. The reason for the good performance is slightly increased offtake.
For the six months ended 30 September 2012, the sale of cement including self-consumption and exports have increased to 41 lakh tonnes as compared to 36 lakh tonnes of the corresponding period of the previous year, showing an increase of 16%. The wind farm division generated 2,758 lakh units for the six months ended 30th September 2012 as compared to 2410 lakh units of the previous year. The income during the period from the division was Rs95.04 crore as against Rs81.78 crore in the previous year.
The company’s interest cost has increased to Rs105 crore for the six months ended 30th September 2012 as compared to Rs90.10 crore of the corresponding period of the previous year, showing an increase of 17%. Long-term borrowings have decreased from Rs1,500.75 crore to Rs1,113.05 crore in the last six months.
We had recommended when Madras Cements share price was Rs150.70 in May 2012. The share price, at time of writing this piece, is Rs210.45 on the Bombay Stock Exchange (BSE), up 39.28%.
Read more about Madras Cements here.
The Nifty must close decisively above 5,720 to head to a new yearly high
The market closed flat in the absence of any local triggers and weak global cues. On Friday we had mentioned that if the Nifty manages to make a higher high and close above 5,710, we may see the upmove continuing. Today although the index couldn’t make a higher high, it reached almost the level of resistance and ended in the positive for the fourth consecutive day. From here even if the index manages to close in the positive tomorrow, we may see the upmove continuing only for a day or two. However, if the benchmark closes decisively above 5,720 we may see it heading to a new yearly high. The National Stock Exchange (NSE) saw a volume of 47.42 crore shares and an advance decline ratio of 779:933.
The Indian market opened flat with a negative bias, tracking its weak Asian peers on nervousness ahead of the US presidential elections on Tuesday. The Nifty opened five points down at 5,693 and the Sensex resumed trade at 18,749, a cut of six points over its previous close.
Range-bound trade kept the benchmarks near their previous closing levels in morning trade.
The market its intraday high at around 10.30am with the Nifty rising to 5,709 and the Sensex climbing to 18,795.
Selling pressure in banking, metal and auto sectors led the indices into the negative terrain in noon-trade. The weak opening of the key European indices also added to the woes.
The benchmarks slipped to their day’s low around 2.00pm wherein the Nifty went down to 5,680 and the Sensex contracted to 18,683.
The market was directionless for almost the entire session and managed to close with a positive bias. The Nifty rose seven points to 5,704 and the Sensex also added seven points to finish trade at 18,763.
While the Sensex managed a flat close, the broader indices settled lower. The BSE Mid-cap index declined 0.26% and the BSE Small-cap index fell 0.10%.
The sectoral gainers were BSE Fast Moving Consumer Goods (up 1.08%); BSE Healthcare (up 0.37%); BSE Consumer Durables and BSE Bankex (up 0.11% each). The key losers were BSE Power (down 0.52%); BSE Metal, BSE Auto (down 0.48%); BSE IT (down 0.33%) and BSE TECk (down 0.25%).
Twelve of the 30 stocks on the Sensex closed in the positive. The chief gainers were ITC (up 1.64%); Dr Reddy’s Laboratories (up 1.36%); Maruti Suzuki (up 0.89%); Cipla (up 0.87%) and BHEL (up 0.76%). The main losers were Hindalco Industries (down 2.55%); Jindal Steel (down 2.04%); Bajaj Auto (down 2.02%); Tata Power (down 0.94%) and Tata Steel (down 0.93%).
The top two A Group gainers on the BSE were—Jet Air India (up 4.19%) and Marico (up 3.18%).
The top two A Group losers on the BSE were—Crompton Greaves (down 8.35%) and Godrej Consumer Products (down 4.94%).
The top two B Group gainers on the BSE were—Jolly Board (up 19.99%) and Span Diagnostics (up 19.97%.
The top two B Group losers on the BSE were—Koa Tools (down 18.52%) and Vadilal Industries (down 17.10%).
Out of the 50 stocks listed on the Nifty, 20 stocks settled in the positive. The key gainers were Kotak Mahindra Bank (up 2.08%); ITC (up 1.75%); ACC (up 1.72%); Asian Paints (up 1.63%) and Dr Reddy’s (up 1.26%). The main losers were Hindalco Ind (down 2.85%); Bajaj Auto (down 2.31%); Jindal Steel (down 2.30%); Jaiprakash Associates (down 1.69%) and DLF (down 1.36%).
Markets across Asia closed with losses on cautiousness ahead of the US presidential elections and as the Chinese Communist Party set to make changes in its key leadership.
The Shanghai Composite fell 0.14%; the Hang Seng declined 0.47%; the Jakarta Composite dropped 0.83%; the KLSE Composite slipped 0.13%; the Nikkei 225 declined 0.48%; the Straits Times contracted by 0.30%; the Seoul Composite lost 0.55% and the Taiwan Weighted settled 0.35% lower.
At the time of writing, the key European benchmarks were down between 0.60% and 0.81% as investors kept their eyes on the US presidential polls. However, the US stock futures were trading marginally higher, ahead of the closely-fought elections in the world’s largest democracy.
Back home, foreign institutional investors were net buyers of shares totalling Rs382.20 crore on Friday while domestic institutional investors were net sellers of equities aggregating Rs298.57 crore.
Japan’s largest oil firm Inpex Corp has acquired 26% stake in Oil and Natural Gas Corporation’s (ONGC) Krishna Godavari basin deepsea block, KG-DWN- 2004/6 block, in the Bay of Bengal. No financial details of the transaction were provided. ONGC gained 0.28% to settle at Rs266.50 on the NSE.
Fluid management company Kirloskar Brothers has set up its first warehouse for spare parts at Kirloskarvadi. The modern facility which involves an investment of Rs1.5 crore is equipped with storage and handling equipment such as a Cardex machine (vertical storage racks) and modern packing equipment and can stock over 2,200 components. The stock climbed 1.13% to close at Rs156.85 on the NSE.
IL&FS Engineering and Construction Company has bagged contract worth Rs135.50 crore from Emaar-MGF in Gurgaon. The project involves the civil structure, finishing and low-side services works of the residential towers (G+9 to G+13 storey buildings), basements, compound wall, and other miscellaneous works. The contract has to be completed in 27 months. IL&FS Engg rose 0.33% to Rs60.70 on the NSE.