Nifty, Sensex locked in a range: Monday Closing Report

A day or two of rally will be followed by a day or two of decline or vice versa

The market started the week in the green, but was choppy through the morning session due to uncertainty over the Union Budget and the widening political turmoil in West Asia and northern Africa and the key indices dipped into negative territory. The market popped up a couple of times and then was down again on strong selling pressure.

The market touched the day's low in post-noon trade, but bounced back sharply and the key indices climbed to the day's highs and closed near those levels. But the broader indices were left behind in the recovery.

The market started in the positive today, but as we had expected weakness surfaced immediately thereafter. Till around 1.30pm the indices were down. The Nifty fell to a four-day low of 5,413. The Sensex hit a low 18,083. However, the market revived strongly and the Nifty went on to hit a high of 5,526, while the Sensex hit an intra-day high of 18,457. The Sensex closed 227 points up at 18,438 and the Nifty closed 60 points up at 5,519.

In Friday's report we had mentioned that the Nifty should close above 5,520 for the rally to continue. However, although the market has gained today, this rally is weak. This is borne out by the advance-decline ratio on the NSE which was a poor 761:1102. Expect the market to trade in a range. A day or two of rally will be followed by a day or two of decline or vice versa.

The market breadth on the key barometers was positive. Of the 30 stocks traded on the Sensex, 20 ended in the green and 10 edged lower. The Nifty settled with 36 advancing stocks and 14 in the losers list. Among the broader indices, the BSE Mid-cap index shed 0.04%, while the BSE Small-cap index fell by 0.09%.

All sectors, barring autos (down 1.18%) ended in the green. The gainers were led by the BSE IT index (up 2.76%), BSE TECk (up 2.11%), BSE Consumer Durables (up 1.97%), BSE Oil & Gas (up 1.81%) and BSE Metal (up 1.31%).

The top Sensex gainers were TCS (up 4.24%), Wipro (up 4.12%), Sterlite Industries (up 3.31%), ONGC (up 2.98%) and Jaiprakash Associates (up 2.93%). The major losers were Tata Motors (down 3.33%), Hero Honda (down 1.66%), Maruti Suzuki (down 1.31%), NTPC (down 1.04%) and Tata Power (down 1%).

Deeply concerned over the impact of rising prices on the aam aadmi, president Pratibha Patil today said the government would accord top priority to fighting inflation.

The top priority of the government in 2011-12 "will be to combat inflation and, in particular to protect the common man from the impact of rising food prices," she said, in her address to Parliament, marking the beginning of the budget session.

Most markets in Asia ended lower as increased tensions in the Middle East once again put pressure on crude prices. Media reports stated that Chinese authorities also acted to halt an online call for a 'Jasmine Revolution,' detaining activists and increasing policing on the streets. The Chinese central bank's move to hike banks' reserve requirement on Friday impacted investor sentiment today.

In economic news, Thailand's economy strengthened in the fourth quarter on exports and consumer spending. Gross domestic product rose 1.2% from a revised 0.3% decline in the third quarter, the National Economic and Social Development Board said in Bangkok today.

The Hang Seng declined 0.47%, the Jakarta Composite fell 0.11%, the Straits Times was down 0.53%, the Seoul Composite ended 0.39% lower and the Taiwan Weighted shed 0.05%. On the other hand, the Shanghai Composite surged 1.14%, the KLSE Composite gained 0.55% and the Nikkei 225 added 0.14% in trade today.

Back home, foreign institutional investors were net buyers of stocks worth Rs207.67 crore on Friday. On the other hand, domestic institutional investors were net sellers of equities worth Rs189.14 crore.

Tata Steel (down 0.08%) plans to commission the first phase of its proposed six-million-tonne per annum (mtpa) Kalinganagar facility by the end of FY13. The company had earlier said it will develop the facility in two phases of 3-mtpa capacity each.

A top official of the company stated that the required funds for the project have "more or less" been tied up. Tata Steel, which raised Rs3,477 crore recently through a follow-on public offer, said a part of the FPO proceeds would be invested in the project.

Punj Lloyd (down 1.68%) subsidiary, Punj Lloyd Infrastructure (PLIL), has received a letter of award from the National Highways Authority of India (NHAI) for upgradation of the NH-31 from Khagaria to Purnea in Bihar to a two-lane, undivided carriageway with paved shoulders, under the NHDP III (National Highways Development Programme- III) on BOT annuity basis.

The estimated cost of the project is Rs735 crore. PLIL will form a special purpose vehicle, which will sign a concession agreement with NHAI for 17 years and will be entitled to semi-annual annuity of Rs56 crore.

Reliance Industries (RIL) (up 2.04%) and BP today announced a partnership that involves the overseas company taking a 30% stake in 23 oil and gas production sharing contracts that RIL operates in India, including KG D6 block, and the formation of a 50:50 joint venture for sourcing and marketing of gas in India.

The joint venture will also endeavour to accelerate the creation of infrastructure for receiving, transporting and marketing of natural gas in India.


Insurance M&A norms to be out in 2-3 months: IRDA

When the Anil Ambani group company Reliance General Insurance had expressed its readiness to take over Chennai-based Royal Sundaram Alliance Insurance earlier in the fiscal, the insurance regulator held it back as there were no M&A norms in place

Mumbai: The Insurance Regulatory and Development Authority (IRDA) will come out with guidelines for mergers and acquisitions (M&A) for the industry over the next two to three months, while the initial public offer (IPO) norms will be out in the next 15-20 days, reports PTI quoting a senior IRDA official.

"We have been examining the pros and cons of the mergers and acquisitions in the industry and we are sure to come out with the final guidelines within the next two to three months," IRDA member (actuaries) R Kannan told reporters here, on the sidelines of an international conference on actuaries.

When asked about the IPO norms for insurance companies, Mr Kannan said, "They will be out within the next 15-20 days."

Earlier this fiscal, the Anil Ambani group company Reliance General Insurance had expressed its readiness to take over Chennai-based Royal Sundaram Alliance Insurance by buying out the entire 74% stake of the domestic promoter Royal Sundaram.

But when the group approached for regulatory nod, it was held back as there were no proper regulatory systems in place on the M&A norms in the insurance space.

Royal Sundaram Alliance Insurance is a joint venture between the Sundaram Group and the England-based RSA, which owns 26% stake in the company.


Sugar output up by over 16% at 13.4 million tonnes till Feb

The government has estimated sugar output at 24.5 million tonnes in the ongoing 2010-11 crop year (October-September) against around 19 million tonnes in the previous year, while domestic consumption has been pegged at 22 million tonnes

New Delhi: The country's sugar output rose by over 16% to 13.4 million tonnes in the first four-and-half months of the 2010-11 crop year, as against 11.5 million tonnes in the year-ago period, reports PTI

"Mills have reported sugar production of 13.4 million tonnes till 15th February of this crop year. The output is higher by 16% from the year-ago period," a senior government official said.

The government has estimated sugar output at 24.5 million tonnes in the ongoing 2010-11 crop year (October-September), as against around 19 million tonnes in the previous year.  The domestic consumption has been pegged at 22 million tonnes.

The sugar crop year runs from October to September, but crushing of sugarcane normally ends in April in Maharashtra and UP, which together produces more than 60% of the country's total sugar output.

Last year, the country had to depend on sugar imports to augment domestic supplies and contain local prices, which had gone up as high as Rs50 per kg.

This year's positive production estimates have kept retail prices under control at Rs32-Rs25 per kg and has given scope for some exports.


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