Correction on the anvil: Friday Closing Report

Nifty to move in the range of 5,475 and 5,600

Institutional buying and strong cues from the global markets saw the indices staying in the positive zone for the entire trading session. After a monster rally, all kinds of average to poor quality stocks have now started to shoot up. From here we may see the Nifty reaching the level of 5,600 again, after which we may see the index touching 5,475. The National Stock Exchange (NSE) saw a volume of 143.76 crore shares.

Boosted by the government’s initiatives to lure overseas investments, foreign investors continued their buying in Indian equities, pushing the market higher this morning. Positive sentiments across the globe also helped the gains. After a day’s breather where the benchmarks settled with minor losses yesterday, the Nifty opened 52 points higher at 5,574 and the Sensex jumped 179 points at the opening bell at 18,331.

The market hit its day’s high around 10.30 am amid a range-bound movement after a strong opening. At the highs, the Nifty scaled 5,607 and the Sensex surged to 18,423.

The market extended its gains in noon trade following a firm opening of the European markets. However, the indices pared a small portion of their gains in a minor sell-off that began around 2pm. The market dropped to its intraday low in the post-noon session with the Nifty falling to 5,545 and the Sensex moving down to 18,235.

The market ended above the day’s lows as select buying lifted sentiments towards the end of the session. At the close, the Nifty gained 42 points to 5,564 and the Sensex finished at 18,289, up 135 points.

Despite the market settling in the positive, the advance-decline ratio on the NSE was in favour of the losers at 667:792.

The broader indices in the negative today, with the BSE Mid-cap index shedding 0.05% and the BSE Small-cap index falling 0.21%.

The sectoral gainers were led by BSE Consumer Durables (up 4.21%); BSE Power (up 2.92%); BSE Capital Goods (up 1.51%); BSE IT (up 1.42%) and BSE Bankex (up 1.41%). BSE Auto (down 0.53%); BSE Metal (down 0.11%) and BSE Healthcare (down 0.09%) settled lower.    

BHEL (up 6.53%); Tata Power (up 4.68%); Mahindra & Mahindra (up 3.29%); Sterlite Industries (up 2.98%) and State Bank of India (up 2.88%) were the top gainers on the Sensex. The top losers were Hero MotoCorp (down 3.61%); Maruti Suzuki (down 2.74%); Hindalco Industries (down 2.30%); GAIL India (down 1.21%) and Cipla (down 1.20%).

The top Nifty gainers were BHEL (up 6.48%); Tata Power (up 4.39%); Axis Bank (up 4.35%); Siemens (up 3.95%) and M&M (up 3.56%). The key declining stocks were Hero MotoCorp (down 3.93%); Sesa Goa (down 3.66%); Maruti Suzuki (down 2.57%); Reliance Infrastructure (down 2.13%) and Hindalco Ind (down 2.01%).

Markets in Asia settled higher on optimism that European policymakers will soon approve a fresh bailout for the debt-stricken nation. Positive economic data from the US, released on Thursday, also supported the gains. Meanwhile, the Japanese government on Friday approved a plan to gradually double the 5% sales tax to pay for welfare spending.

The Shanghai Composite settled flat, up 0.01%; the Hang Seng surged 1.01%; the Jakarta Composite advanced 1.25%; the KLSE Composite rose 0.43%; the Nikkei 225 jumped 1.58%; the Straits Times climbed 0.79%; the Seoul Composite surged 1.30% and the Taiwan Weighted gained 0.31%. At the time of writing, the three key European indices were trading higher and the US stock futures were mixed.

Back home, foreign institutional investors were net buyers of shares totalling Rs184.31 crore on Thursday while domestic institutional investors were net sellers of equities worth Rs390.32 crore.

Film and entertainment services provider Reliance MediaWorks (RMW) has tied up with Japan's leading broadcaster TV Asahi to produce new episodes of Ninja Hattori, the comedy action animation series. Ninja Hattori has been a very popular kids’ show since its launch on channel Nick India in August 2006. The new episodes will premier on air on Nick India from May 2012. RMW fell 1.06% to close at Rs88.60 on the NSE today.

Lanco Infratech has said that more than 5,000 MW of its planned and existing generation capacities would get a boost from Coal India’s decision to sign fuel supply pacts for power projects. Lanco Infratech zoomed 11.08% to close at Rs22.55 on the NSE.

Pipe manufacturer MAN Industries has bagged an export order worth Rs500 crore from West Asia for supply of large diameter pipes for oil and gas sector. With this new order, the company’s order book stands at nearly Rs1,600 crore. The order is to be executed over a period of next nine to 12 months. The stock climbed 2.83% to close at Rs112.60 on the NSE.


Market highly overbought: Thursday Closing Report

Nifty to move in the range of 5,460 to 5,625

The market, which opened in the red on selling pressure and weak global cues, saw a good recovery in post-noon trade. But the upmove lacked strength, resulting in the benchmarks snapping their three-day rally. Yesterday’s panic buying was followed by short selling today. The Nifty moved in a narrow range with a downward pull. However, the index made a smart recovery ending with a marginal loss of 10 points. The benchmark should cross high of 5,542 made on 15th February to reach the level of 5,625 else we may see it moving sideways and down to the level of 5,460. The National Stock Exchange (NSE) saw a massive volume 120.12 crore shares.

After having notched 2% gain yesterday, profit booking resulted in the market taking a breather today. Fresh worries about Greece pushed the Asian pack lower in morning trade, which hurt investor sentiments here. The Nifty, which closed at 5,532 on Wednesday, opened 18 points down at 5514. Similarly, the Sensex saw a cut of 39 points as it resumed trade at 18,163.

Trading in a narrow range, the market extended its losses and touched its intraday low at around 11.30am. At the lows, the Nifty touched 5,484 and the Sensex fell to 18,043.

The indices witnessed a slow climb in subsequent trade on select buying in realty and power stocks. The gains saw the market touch its intraday high in late trade where the Nifty rose to 5,531 and the Sensex went up to 18,183.

However, benchmarks came off the highs and closed with marginal losses. The Nifty finished 10 points down at 5,522 and the Sensex closed at 18,154, down 48 points from its previous close.

The advance-decline ratio on the NSE was 826:623.

The broader indices underperformed the Sensex today, as the BSE Mid-cap index declined 1.04% and the BSE Small-cap index dropped 0.96%.

The key sectoral gainers were BSE Realty (up 1.53%); BSE Power (up 1.37%); BSE Capital Goods (up 0.65%); BSE IT (up 0.49%) and BSE Auto (up 0.34%). The losers were led by BSE Metal (down 1.63%); BSE Oil & Gas (down 1.53%); BSE Consumer Durables (down 0.92%) and BSE Fast Moving Consumer Goods (down 0.02%).

Jindal Steel (up 4.94%); Hero MotoCorp (up 4.57%) State Bank of India (up 4.38%); Maruti Suzuki (up 4.10%) and Bajaj Auto (up 3.81%) were the main advancers on the Sensex. Coal India (down 5.44%); Hindalco Industries (down 4.71%); Sterlite Industries (down 4.16%); Tata Motors (down 3.67%) and Tata Steel (down 3.23%) were the main trailing stocks.

Hero MotoCorp (up 4.34%); Jindal Steel (up 4.27%); SBI (up 4.10%); Maruti Suzuki (up 4.10%) and Cairn India (up 3.17%) topped the Nifty chart today. The laggards were led by Coal India (down 5.84%); Hindalco Ind (down 5.14%); Tata Motors (down 4.12%); Sterlite Ind (down 3.86%) and Tata Steel (down 3.77%).

Markets in Asia settled in the negative as European policymakers deferred an announcement of a fresh bailout for Greece, as the leaders still doubt the beleaguered nation’s commitment towards spending cuts.  Prospects of more ratings downgrades for 17 global and 114 European banks also weighed on the sentiments.

The Shanghai Composite declined 0.42%; the Hang Seng dropped 0.41%; the Jakarta Composite fell by .64%; the KLSE Composite slipped by 0.69%; the Nikkei 225 fell by 0.24%; the Straits Times tanked 1.14%, the Seoul Composite lost 1.38% and the Taiwan Weighted settled 1.69% down. At the time of writing, the key European indices were trading with losses of 0.75% to 1.15% and the US stock futures were lower.

Back home, foreign institutional investors were net buyers of shares totalling Rs1,838.85 crore on Wednesday. On the other hand, domestic institutional investors were net sellers of equities amounting to Rs313.47 crore.

Telecom services major Reliance Communications (RCom) today said it has received RBI approval for the refinancing for redemption of its outstanding FCCBs (Foreign Currency Convertible Bonds) worth Rs5,825 crore. The outstanding FCCBs of $1,182 million (approximately Rs5,825 crore at the prevailing dollar exchange rate of Rs 49.30) will be redeemed on the due date of 1 March 2012. The stock fell by 2.39% to close at rs102.05 on the NSE.

Wyeth has claimed $960 million from Sun Pharmaceutical Industries for alleged patent violation in launching a generic version of acid reflux drug Protonix in the US. The original patent relating to Protonix, known chemically as pantoprazole sodium, is held by Swiss drugmaker Nycomed and was licensed to Wyeth, which is now owned by Pfizer. Wyeth lost 0.16% and closed at Rs870 on the NSE today.

Union Bank of India is likely to raise up to Rs955 crore through the preferential route. The bank has received the board’s approval to issue up to 2.6 lakh crore shares to LIC on a preferential allotment basis. This works to 5% of the bank’s equity share capital and is expected to mop-up to Rs600 crore. It will also raise nearly Rs355 crore by issuing shares to the government. The banking stock fell 1.28% to close at Rs255.05 on the NSE.




6 years ago




Does a parabolic rise in most expensive stocks indicate a market peak?

What is common between Microsoft’s steep rally in 2000, Petorchina’s rise in 2008 and Apple’s vertical move in 2011?

Apple made news recently when it was valued more than Microsoft and Google combined, when its market capitalisation was valued at an eye-popping $461 billion. It became the most expensive company in the world. However, what is more interesting than this little fact is the recent ‘parabolic’ rise in its share price while emerging as the largest company in the world by market capitalisation. For the uninitiated, a parabolic rise simply means sudden upwards rise in the share price that resembles a mathematical parabolic curve. What happens when the most expensive stock also records a parabolic rise?

Before we delve into Apple, we take a look at two other examples in the past. Microsoft, in 2000, was the world most valued company then, with market capitalisation of $586 billion. It came to occupy this perch with a parabolic rise in its share price during the dotcom boom. Similarly Petrochina was the world’s most valuable company in 2008, following a similar rise in its share price with crude oil prices hitting almost $150 a barrel. Now we have Apple’s parabolic rise to the top of the charts.

What do these three companies have in common? Well, according to Market Anthropology blog, there seems to be a correlation between the steep run up in the share prices of these companies, and what happened after. The steep or ‘parabolic’ rise in its share price made them the world most valuable companies. Immediately after this phenomenon, the entire market tanked and what followed was an overall bear market. In Microsoft’s case, it was the dotcom bust that followed its parabolic rise. In case of Petrochina, it was the sub-prime crisis and a crash in oil price speculation. And now we have Apple. The manner at which Apple became the most valued company is similar to the two examples above. Is Apple’s parabolic rise telling us something? Has the market peaked? We’ll get to know in a matter of time. In the meantime, investors can decide for themselves whether to sell their holdings or smell an incoming opportunity when the market falls.

The chart below, courtesy of Market Anthropology, tells the story:





6 years ago

Hello Ed,

Interesting thoughts you have voiced here. Thank you! I am not an expert but it would be worthwhile to look at what the PE ratios were at such times. AAPL trades at an incredibly low 14-15 and has maintained that for a long time (& I keep wondering why others are higher).

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