CALS REFINERIES

The report “See No Evil” (Moneylife, 12 August 2010) warned investors to stay away from the Cals...

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Thursday Closing Report: Firm uptrend, subject to dips

Supportive cues from across the globe helped the key indices scale crucial levels in early trade. However, a minor sell-off in the mid-morning session resulted in the market staying range-bound for the rest of the session, although it ended modestly higher, in the green for the fourth day in a row.

The market opened strong on the back of supportive cues from across the globe with the key indices breaching their crucial levels on the bell. Mid-cap and small-cap stocks supported early gains. In the noon session, the indices gave up some gains and traded in a narrow range despite the Asian and European benchmarks trading with decent gains. Side-ways movement continued till the end of the session with no major triggers, except for the sharp fall in weekly inflation figures that failed to enthuse investors.

The Sensex settled 142.70 points (0.72%) higher at 19,992.70, a tad below the 20,000 mark. The index touched a high of 20,084.25 and a low of 19,917.77 today. The Nifty gained 50.80 points (0.85%) at 6,011.70, above its psychological level of 6,000. The index touched an intraday high of 6,029.05 and a low of 5,980.60.

The market breadth was tilted towards the gainers, with the Sensex ending with 17 advancing stocks and 13 in the red. The Nifty had 32 gainers and 18 declining stocks. The broader markets continued to show strength. The BSE Mid-cap index gained 1.07% while the BSE Small-cap index surged 1.12%.

The top gainers in the Sensex were Reliance Communications (3.32%), Sterlite Industries (up 3.13%), Wipro (up 2.57%), Tata Motors (up 2.50%) and Hindalco Industries (up 2.25%). The losers included Hero Honda (down 7.27%), NTPC (down 1.77%), Mahindra & Mahindra (down 1.45%), Bharti Airtel (down 1.42%) and Jaiprakash Associates (down 1.06%).

BSE Realty (up 2.23%), BSE Metal (up 1.48%), BSE IT, BSE Oil & Gas (up 1.47% each) and BSE Consumer Durables (up 1.35%) were the main gainers in the sectoral space. The sectoral losers were BSE Auto (down 0.30%) and BSE Capital Goods (down 0.26%).

Asian markets settled in the green for the second day in a row as positive economic news boosted investor confidence. Marketmen hope that the news will also spur the global economic recovery, which faced some setbacks on account of the lingering debt issues in Europe. Despite the gains, investors are still wary about the Chinese government's move to tighten monetary policy.

The Shanghai Composite gained 0.71%, the Hang Seng rose 0.86%, the Jakarta Composite jumped 2.09%, the KLSE Composite advanced 1.20%, the Nikkei 225 rose 1.81%, the Straits Times added 0.50%, the Seoul Composite was up 1.09% and the Taiwan Weighted increased by 0.77%.

Food inflation fell to a four-month low at 8.6% for the week ended 20th November from 10.15% in the previous week, as prices of vegetables, wheat and pulses declined on increased output and arrival of kharif crop in the market.

This is the seventh consecutive week of decline in the food inflation as availability of food commodities improved after the end of the monsoon season.

Wall Street closed higher on Wednesday on firm economic data and on signs of easing of the debt crisis in Europe. The ADP Employer Services report showed that businesses added 93,000 workers to payrolls in November, more than the 70,000 expected by analysts. The Institute for Supply Management said its factory index, a gauge of manufacturing, was little changed at 56.6 last month after a five-month high of 56.9 in October. The Fed's "beige book" also indicated the recovery is strengthening in several key regions of the US. Gains were also supported by positive economic data from China, Germany and the UK.

The Dow jumped 249.76 points (2.27) to 11,255.78. The S&P 500 gained 25.52 points (2.16%) to 1,206.07. The Nasdaq climbed 51.20 points ((2.05%) to 2,549.43.

Foreign institutional investors were net buyers of stocks worth Rs491.88crore on Wednesday, while domestic institutional investors were net sellers of equities worth Rs199.85 crore on Wednesday.

The Hero Group has agreed to hike royalty payments to Japan's Honda Motor Company to 8% of overall annual sales in return for a technology makeover and a stake-sale. Hero Honda (down 7.27%) is expected to make the increased payments till 2014, when the present technology sharing agreement would expire and be renegotiated. Under the proposal, Japan's Honda Motor Company would supply Hero Honda Motors with technology for three new products, and the existing product portfolio would be retained.

In return, the Japanese partner would reduce its stake in the joint venture to 20% from 26% through a sale to the Hero Group's Munjal family at a discount to the current market price. A final decision is awaited.

Healthcare major Apollo Hospitals Enterprise (up 4.54%) has said that it is in talks with Malaysian sovereign fund Khazanah for healthcare education in the country.

"We are in talks with Khazanah for the entire education space as there is a need for capital for this," the Apollo Hospitals Group executive director-operations, Ms Sangita Reddy said. Khazanah holds nearly 12% stake in Apollo Hospitals.

Hyderabad-based construction company Ramky Infrastructure (up 1.14%) has earmarked capex of Rs1,000 crore across business segments over the next three years, a top company executive said.

"We plan to invest Rs1,000 crore over the next three years. This will be over and above the Rs400 crore, which we have already invested," Ramky Group executive director M Goutham Reddy said.

The company is at present involved in five industrial projects, five road projects, three integrated and one transport terminal. Ramky Infrastructure, which had a stand-alone revenue of Rs2,000 crore in the last fiscal, eyes a 50% growth this fiscal, he said.

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Way To Go With IPO

The Sensex is back at 20,000. India’s largest initial public offering (IPO) has just closed, and...

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