Daily Market View: More gains on the cards

The index is now headed for a short-term high, probably around 18,300

The market continued its upmove today following the Chinese move on the yuan, after taking a breather on Friday. The Sensex ended at 17,876, up 305 points (1.7%). The Nifty settled at 5,353, up 90 points (1.7%). The indices started the day with sharp gains, taking cues from the Asian markets. The government's announcement on Unit-linked Insurance Plans (ULIPs) also provided a boost to the market, which was at a two-month high in intraday trade today.

Asian stock markets were up Monday, after the People's Bank of China signalled over the weekend that it would end the yuan's de-facto peg to the US dollar. The Shanghai Composite index was up nearly 3% while Hong Kong's Hang Seng surged more than 3%. Key benchmark indices in Japan, South Korea, Indonesia, Taiwan and Singapore were up by 0.3% to 2.4%.

The People's Bank of China hinted that it will allow the yuan to take the market way. The yuan soared on Monday to close at its highest level against the dollar since its July 2005 revaluation. It closed at 6.7 against the dollar on Monday, up 0.42% from Friday's close of 6.8.

Back home, the monsoon is likely to be weak in the soybean areas in the next three days. However, soybean growing would not be hit due to good soil moisture after recent pre-monsoon showers in the region. The annual July-September rains were passing through the central city of Indore, western Rajkot and Ahmedabad, among other places. Annual monsoon rains were 8% below normal in the week to 16 June, the India Meteorological Department (IMD) said.

The government has ended the row over ULIPs by promulgating an ordinance, stating that unit-linked insurance plans with investment component are insurance products, which will come under the regulatory jurisdiction of the Insurance Regulatory and Development Authority (IRDA) and not the Securities and Exchange Board of India (SEBI).

The European Central Bank (ECB) has pressed governments in the region to follow stricter budget rules. The ECB has called for a new system of incentives and sanctions to shore up fiscal rules for the 16-nation eurozone.

Foreign institutional investors were net buyers on Friday, purchasing stocks worth Rs779 crore. Domestic institutional investors were net sellers of Rs499 crore. 

The board of Shree Ganesh Forgings (down 4.9%) has decided to increase its share capital by Rs14 crore by creation of 140,00,000 preference shares of Rs10 each; to issue (optionally) convertible cumulative redeemable preference shares up to the amount of Rs15.65 crore to the consortium lenders at par on a preferential basis and issue equity shares to the promoters up to a sum of Rs6 crore, in terms of the reworked Corporate Debt Restructuring (CDR) package. The directors also decided to make a reference to the Board for Industrial and Financial Reconstruction (BIFR) in view of the erosion of the net worth of the company.

Dewan Housing Finance Corporation (up 0.3%) and its subsidiary DHFL Vysya Housing Finance Ltd have promoted a housing finance company called 'Aadhar Housing Finance Pvt Ltd'. The promoters have entered into a transaction agreement with International Finance Corporation (IFC), whereby the latter has agreed to subscribe up to 2,00,00,000 equity shares of Rs10 each aggregating to Rs20 crore of Aadhar on a fully-diluted basis i.e., 20% of the paid-up capital. Aadhar initially plans to focus on retail housing loans in the low-income segment in certain States.

Ashoka Buildcon has filed a Draft Red Herring Prospectus (DRHP) for an Initial Public Offering (IPO) of equity shares of Rs10 each for cash at a price to be decided through a 100% book-building process. The issue comprises a net issue of Rs 225 crore to the public and a reservation of Rs4.50 crore for its employees.

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Astec LifeSciences signs contract to supply herbicide

Astec LifeSciences Ltd said it signed a long term, mutually exclusive and confidential contract to supply an herbicide to a multinational agrochemical major. No other details were provided but the company, in a regulatory filing said the agreement will have a substantial positive impact on its agro-chemical business in the coming years.

On Monday, Astec LifeSciences shares ended 3.8% higher at Rs68 on the Bombay Stock Exchange, while the benchmark Sensex closed 1.7% up at 17,876 points.

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