Daily Market View: It was a one-day blunder

The Sensex has moved in a narrow band over 13 trading days. It is time for a big move

The market ended lower today, taking cues from weak Asian and European markets. The Sensex stood at 17,471, down 143 points (1%) and the Nifty settled at 5,241, down 48 points (1%). The indices started the day with a plunge weighed down by weak Asian markets. Trading was range-bound till afternoon.

The market slipped further, tracking weak European markets in the afternoon session.

Asian markets ended mostly in the red on Wednesday on weak US economic data released overnight, making investors worry about global economic growth. Key benchmark indices in Hong Kong, Indonesia, Taiwan, Singapore, Japan and South Korea were down 0.2% to 1.1%. However, China's benchmark index - the Shanghai Composite - bounced back into positive territory. It was up 0.5%.

Wall Street rebounded on Tuesday. However, bearish sentiments reasserted themselves on worries over the pace of the global economic recovery. The Dow was up 57.1 points (0.6%) at 9,743.6. The S&P 500 was up 5.5 points (0.5%) at 1,028. The Nasdaq was up 2 points (0.1%) at 2,094. US president Barak Obama said that the country is expected to double exports over the next five years. The White House Council of Economic Advisers estimates that rising US exports have added more than one percentage point to US growth in the last nine months.

China has tried to clear doubts over concerns on whether it will dump its huge stock of US bonds, stating that any increase or decrease in the holding of US bonds is a normal investment operation. China held $900.20 billion in US Treasuries at the end of April, according to US Treasury data released on 15th June.

Back home, according to a monthly report of VCCEdge, the financial research platform of VCCircle.com, the mergers and acquisitions (M&A) deal value during the April-June period touched $24.8 billion, taking the total M&A kitty so far this year to $48 billion. In comparison, it was $2.8 billion in the second quarter of 2009.

The deal count also witnessed an upward trend and surged to 182 in Q2 of the 2010 calendar year, compared to 98 in the year-ago period. The period saw as many as 91 domestic deals worth $14 billion, compared to 50 deals worth $1.7 billion in the year-ago period.

In its latest analysis of the global manufacturing competitiveness index, Deloitte said that Asian giants China, India and South Korea led the current competitiveness index and were expected to retain their top three rankings over the next five years.

In contrast, the dominant manufacturing superpowers of the late 20th century are expected to become less competitive. Other Western European nations will be similarly challenged, especially the Czech Republic, the Netherlands, Switzerland, Ireland, Italy and Belgium.

Foreign institutional investors were net buyers of Rs342 crore in the equities segment on Tuesday. Domestic institutional investors offloaded stocks worth Rs84 crore.

GEI Industrial Systems (up 1.1%) has received new orders worth Rs60.82 crore. The order from the oil & gas sector is worth Rs22.37 crore for air-cooled heat exchangers from Indian Oil Corporation for its Paradip refinery project. The other orders, having a total value of Rs38.45 crore, are from the power sector for air-cooled vacuum steam condensers from ThyssenKrupp Industries India Pvt Ltd and Cethar Vessels.

Sarda Energy & Minerals (down 1.3%) has, through its wholly-owned subsidiary based in Singapore, entered into a long-term arrangement to buy coal originating from mines in Indonesia with a provision for sharing of economic benefits. The authorities in Indonesia have granted the environment clearance for the coal mines and accordingly a mining licence has been issued for mining of coal.

The board of Zodiac Clothing Company (down 2.2%) has recommended issue of fully paid-up bonus shares to the members in the proportion of one equity share for every two shares held.

Suryajyoti Spinning Mills (down 0.2%) has completed buyback of 7,000 foreign currency convertible bonds (FCCBs) worth $7 million at a discount, from internal accruals and a fresh external commercial borrowing (ECB) loan.


Heavy rains give a boost to hydropower generation in Punjab

Hydropower generation in Punjab has improved by almost 40% over the past month at its three main hydropower stations, according to Central Electricity Authority data

Northern Indian States have been witnessing heavy rainfall over the past two days. However, the heavy showers have been a blessing in disguise, with around 30% to 40% increase in electricity generation in States like Punjab and Uttarakhand.

According to Central Electricity Authority (CEA) data, cumulative energy generation from 1st July to 5th July for Bhakra, Pong and Ranjit Sagar hydro-projects has increased by 45%, 53% and 45% respectively over the same period last month.

Similarly, cumulative energy generation at Ram Ganga and Tehri reservoirs in Uttarakhand for the same period has increased by 13% and 32% respectively over the month-ago period.

In Punjab, cumulative energy generation from the Bhakra reservoir of the Bhakra Nangal dam has increased from 630.32 lakh units (LUs) between 1st June to 5th June, to 1134.25LUs for the same period in July 2010.

For the above-mentioned period, energy generation from Punjab’s Pong reservoir-based power station has increased from 73.51LUs in June to 153.96LUs in July 2010. Generation through the Ranjit Sagar reservoir has increased from 198.93LUs in June to 356.49LUs in July for the same period.

In Uttarakhand, energy generation from the Ram Ganga hydro-reservoir has increased from 22.13LUs (1st June to 5th June) to 26.48LUs for the corresponding period in July. Generation from the Tehri hydro-reservoir has increased from 330.41LUs in June to 485.59LUs in July, for the same period.

Maharashtra is another State which has enjoyed the timely onset of the monsoon. Hydropower generation at the Koyna and Bhira dams has also improved marginally. Energy generation for 1st June to 5th June compared to 1st July to 5th July has gone up by 14% at Koyna and 35% at Bhira.

Around a fortnight back, the Punjab State Power Corporation (Powercom) had decided to impose one-day power cuts on the steel-producing industry per week, in addition to 2.5 hours cuts per day in urban and rural areas. This improvement in hydropower generation should help solve the current power crisis in Punjab. As on May 2010, Punjab faced a power deficit of 8.9% or around 345 million units.

Though reservoir levels have shown signs of improvement, the present levels still need more rainfall to reach their full potential.

As on 31 March 2010, Punjab had total hydropower capacity of 2962.89MW. It plans to have around six more hydropower projects operational by the end of 2012.


GEI wins orders worth Rs60.82 crore from power, oil and gas sectors

GEI Industrial Systems said it won orders worth Rs60.82 crore from power, oil and gas industries.

In power sector, the company has received orders of Rs38.45 crore, from ThyssenKrupp Industries India Pvt Ltd and Cethar Vessels Ltd for air cooled vacuum steam condensers.

The other order is from Indian Oil Corp Ltd (IOC) worth Rs22.37 crore for providing air cooled heat exchanger for IOC’s Paradip refinery project.

On Wednesday, GEI shares closed 1.2% up at Rs133 on the Bombay Stock Exchange, while the Sensex ended at 0.8% down at 17,471 points.


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