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Monday Closing Report: No man’s land: Watch out for 20,000

Boosted by a slew of positive corporate earnings reports over the weekend and firm cues from across the globe, the market opened higher. However, selling pressure after the indices touched their day's highs resulted in the indices paring some of their early gains.

The Indian market opened firm this morning tracking global cues and positive reports from local companies that have declared their quarterly earnings numbers so far. Early gains were supported by across-the-board buying. The market traded in a narrow range after touching the day's peak in late morning trade. However, investors resorted to profit-booking at higher levels, resulting in the indices giving up part of their morning gains but ending the day in the positive zone.

The Sensex ended 137.26 points (0.68%) higher at 20,303 after scaling an intraday high of 20,452 and a low of 20,199. The Nifty closed at 6,106, up 39.75 points (0.66%). The benchmark swung between a high-low of 6,151 and 6,094 during the session.

The overall market breadth was tipped in favour of the gainers. The Sensex settled with 23 stocks in the green while seven ended in the declining list. Of the 50 Nifty stocks, 39 were in the gainers' list while 11 ended lower. Among the broader indices, the BSE Mid-cap index rose 0.77% while the BSE Small-cap index advanced 0.77% - outperforming the key indices.

The top Sensex gainers were Hindalco Industries (up 4.32%), ACC (up 4.04%), Tata Motors (up 2.80%), Sterlite Industries (up 2.47%) and Cipla (up 2.34%). The losers were led by Wipro (down 4.04%), Infosys Technologies, ITC (down 1.11% each), HDFC Bank (down 0.45%) and Tata Power (down 0.32%).

The sectoral space was led by BSE Consumer Durables (CD) (up 2.37%), BSE Auto (up 1.23%) and BSE Metal (up 1.09%). The sectoral losers were BSE IT (down 0.37%), BSE Fast Moving Consumer Goods (FMCG) (down 0.20%) and BSE TECk (down 0.08%).

Asian markets, with the exception of Japan's Nikkei, ended with decent gains on news that the Singapore Exchange (SGX) has submitted a bid to acquire Australian Securities Exchange (ASX), Australia's key exchange. Sentiments received an early boost with the Group of Twenty (G20) leaders asserting that they would chalk out ways to end the currency imbroglio. Meanwhile, analysts opine that investors will be on the lookout for the outcome of the US Federal Reserve meeting, due next week.

The Shanghai Composite jumped 2.57%, Hang Seng was up 0.47%, Jakarta Composite advanced 1.27%, KLSE Composite added 0.05%, Straits Times rose 0.27%, Seoul Composite was up 0.97% and Taiwan Weighted surged 1.70%. On the other hand, Nikkei 225 tanked 0.27% at the end of the session.

India's exports shot up by 23.2% year-on-year to $18.02 billion in September this fiscal, while faster import expansion increased concerns over the widening trade gap. Imports for September grew by annual 26.1% to $27.14 billion, commerce secretary Rahul Khullar said today.

For the first half of fiscal 2010-11, exports stood at $103.30 billion while cumulative imports went up to $166.5 billion leaving a large trade gap of $63.2 billion. The trade deficit for September alone was $9.12 billion, the secretary said.

The US market ended mixed on Friday as investors took a breather after the recent gains on good earnings reports. Meanwhile, an economist at Goldman Sachs on Sunday opined that the Federal Reserve might purchase $2 trillion of assets to stimulate the US economy in its meeting on 3rd November.

The Dow fell by 14.01 points (0.13%) to 11,132. The S&P 500 added 2.82 points (0.24%) 1,183. The Nasdaq rose by 19.72 points (0.80%) 2,479.

Foreign institutional investors were net buyers of Rs584 crore on Friday. Domestic institutional investors were net sellers of Rs327 crore on the same day.

Bharti Airtel (up 1.14%) today said it will launch the much-awaited third generation (3G) services before the end of this year, making it the third private operator in the country after Tata Teleservices and Vodafone to unveil plans for offering mobile broadband services.

Airtel had paid the highest amount (Rs12,295.46 crore) for bagging 3G spectrum (radio waves) in 13 telecom circles.

State-run NTPC (up 1.35%) today said that it will invest about Rs20,000 crore for setting up a coal-based power project in Madhya Pradesh.

NTPC has executed a Memorandum of Understanding (MoU) with Madhya Pradesh and MP Power Trading Company for setting up a 3,960MW thermal power project at Barethi in the state, the company informed the National Stock Exchange. The project is likely to be commissioned during the XII Five-Year Plan Period (2012-17).

Engineering, procurement and construction (EPC) company BGR Energy Systems has bagged a Rs2,168-crore balance of plant (BoP) contract from Hyderabad-based Thermal Powertech Corporation of India Ltd, BGR Energy (up 1.34%) said today.

The project, which will set up a 2x660MW supercritical thermal power greenfield project, including a large coal handling plant, is the 16th BoP contract to be executed by BGR Energy Systems.
 

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PM recommits to reforms; pegs growth at 9% for next year

Tokyo: Prime Minister Manmohan Singh has committed to carrying out reforms to facilitate higher investment flows and expressed the hope that the Indian economy will revert to a high growth path of 9% from the next fiscal, even achieve double digit expansion in coming years.

“It is my expectation that we will return to a 9% growth path in 2011-12. I am confident that the strong fundamentals of the Indian economy will enable us to achieve our objective of double digit growth in the coming years,” Dr Singh said at business luncheon hosted by Nippon Keidanren, the federation of Japanese businesses and associations, PTI reports.

Though the global financial crisis did not have a direct impact on the Indian economy, a ripple effect saw growth slowing to 6.7% in 2008-09, against 9% in the previous three years. The stimulus provided by the government through tax cuts and increased expenditure pushed up growth to 7.4% in 2009-10. Growth further rose to 8.8% in the first quarter of this fiscal. The government has pegged growth at 8.5% this fiscal.

The prime minister admitted that there were challenges to recording such a high economic growth. “I do not underestimate the many challenges we face in achieving such high levels of growth,” Dr Singh said.

He said that his government is reforming both the direct and the indirect tax systems. Reforms are being carried out in the financial sector, capital markets, education and the development of skills, to create a favourable climate for investment. “We are determined to continue the process of economic reforms that will create a favourable investment environment and facilitate higher investment flows,” the prime minister said.

Dr Singh also hoped that there would be robust rebound in Indo-Japanese trade, to over $20 billion by 2012, from $10.3 billion in 2009-10. He said that currently trade between the two countries is low and unbalanced. India had a trade deficit of over $3 billion in 2009-10 with Japan.

On specific reform issues, Dr Singh said, “We are continuing the process of reforms of both direct and indirect taxes and hope to unify in due course all indirect taxes into a single Goods and Services Tax (GST). We are pursuing reforms in the financial sector, capital markets, higher education and skill development.”

The Centre plans to introduce GST some time next fiscal. In this connection, state finance ministers will meet with Union finance ministry officials in Goa later this week.

The government has also tabled the Direct Taxes Code Bill in parliament to replace the archaic Income Tax Act from 1 April 2012. It is also considering legislation to reform the pension system as well as the private banking space. 

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