Stocks
Sensex, Nifty getting oversold: Tuesday Closing Report

If the Nifty continues to make lower lows, it may go down to the level of 5,450

 
The market pared early gains and settled in the negative for the fifth day in a row on persistent selling by foreign institutional investors. If the Nifty continues to make lower lows, it may go down to the level of 5,450. The National Stock Exchange (NSE) witnessed a volume of 56.02 crore shares and advance-decline ratio of 419:902.
 
The Indian market opened higher on supportive global cues and upgrade of ICICI Bank and Reliance Communications to ‘overweight’ by Morgan Stanley. Markets in Asia were higher in morning trades on easing of inflation in China and hopes that the Bank of Japan will continue with its growth building measures. US stocks pared early losses and ended higher on a late recovery ahead of the commencement of the earnings season.
 
Back home, the Nifty opened 26 points higher at 5,569 and the Sensex resumed trade at 18,481, a gain of 43 points over its previous close. The benchmarks were range-bound in the positive terrain for a major part of the morning session.
 
Buying support from capital goods, banking, metal and auto sectors pushed the indices to their highs at around 12.30pm. At this point the Nifty rose to 5,603 and the Sensex went up to 18,566.
 
However, the optimism was short-lived as the market soon pared its gains and edged lower on selling in heavyweights. The decline persisted in late trade as selling intensified with the benchmarks touching their lows towards the end of the trading session. The Nifty fell to 5,487 and the Sensex declined to 18,207 at their respective lows.
 
The market closed in the negative for the fifth straight day on selling by foreign institutional investors, who are concerned about the prevailing political environment in the country.
 
The Nifty finished the trading session with a loss of 48 points (0.86%) at 5,495 and the Sensex dropped 211 points (1.15%) to close at 18,226.
 
Among the broader indices, the BSE Mid-cap index dropped 1% and the BSE Small-cap index declined 0.84%.
 
BSE Auto (up 0.41%) was the only sectoral index which settled in the green. The top losers were led by BSE IT (down 2.10%); BSE TECk (down 1.88%); BSE Oil & Gas (down 1.65%); BSE PSU (down 1.57%) and BSE Fast Moving Consumer Goods (down 1.44%).
 
Six of the 30 stocks on the Sensex closed in the positive. The chief gainers were Tata Motors (up 2.26%); TCS (up 1.10%); Jindal Steel & Power (up 0.73%); NTPC (up 0.25%) and ICICI Bank (up 0.12%). The top losers were Wipro (down 12.19%); ONGC (down 2.91%); Infosys (down 2.36%); State Bank of India (down 2.30%) and GAIL India (down 2.22%).
 
The top two A Group gainers on the BSE were—Opto Circuits (up 2.46%) and Tata Motors (up 2.26%).
The top two A Group losers on the BSE were—Wipro (down 12.19%) and Motherson Sumi Systems (down 5.61%).
 
The top two B Group gainers on the BSE were—Yashraj Containeurs (up 19.98%) and Tirupati Inks (up 19.95%).
The top two B Group losers on the BSE were—Kriti Nutrients (down 19.32%) and KSE (down 19.21%).
 
Of the 50 stocks on the Nifty, 13 ended in the green. The key gainers were Cairn India (up 2.07%); Tata Motors (up 2.06%); TCS (up 1.30%); Ambuja Cement (up 0.89%) and NTPC (up 0.60%). The major losers were Reliance Infrastructure (down 3.54%); ONGC (down 3.50%); GAIL India (down 2.61%); SBI (down 2.59%) and Punjab National Bank (down 2.50%).
 
Markets across Asia closed mostly higher on easing of China’s consumer price index to 2.1% in March from 3.2 in the previous month. Speculations of fresh stimulus from the Bank of Japan also support the gains.
 
The Shanghai Composite gained 0.44%; the Hang Seng advanced 0.92%; the Jakarta Composite rose 0.28%; the KLSE Composite added 0.08%; the Nikkei 225 rose 0.15% and the Straits Times climbed 0.70%. Among the losers, the Seoul Composite declined 0.49% and the Taiwan Weighted fell 0.35%.
 
At the time of writing, the CAC 40 of France was up 0.49%; the DAX of Germany rose 0.22% and UK’s FTSE 100 was 0.40% higher. At the same time, the US stock futures were marginally higher.
 
Back home, foreign institutional investors were net sellers of equities amounting to Rs163.95 crore on Monday. On the other hand, domestic investors were net buyers of shares aggregating Rs212.72 crore.
 
Cairn India today said that it has struck fresh oil in the Barmer Block in Rajasthan. The company has made its latest oil discovery, the 26th discovery so far in the RJ-ON-90/1 block, following recent policy clarity by the Government of India to conduct exploration activity in development blocks. The stock surged 2.07% to close at Rs291.35 on the NSE.
 
Pipe maker Maharashtra Seamless said on Monday that its Board has approved Rs100 crore share buy back at a price not more than Rs300 a scrip through the open market. The shares proposed to be bought back are within 10% of the company’s paid up capital and free reserves. The stock jumped 5.27% to close at Rs225.90 on the NSE.

 

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NSE to shift 51 stocks to the trade-to-trade segment from 12th April

The scrips, which would be shifted to the trade-to-trade segment include A2Z Maintenance & Engineering Services, Bartronics India, Consolidated Construction Consortium, Khaitan Electricals, KS Oils, Triveni Engineering & Industries and Uttam Sugar Mills, among others

 
The National Stock Exchange (NSE) will move as many as 51 scrips to restricted trading category from 12th April in a move to ensure market safety.
 
The scrips, which would be shifted to the trade-to-trade segment include A2Z Maintenance & Engineering Services, Bartronics India, Consolidated Construction Consortium, Khaitan Electricals, KS Oils, Triveni Engineering & Industries and Uttam Sugar Mills, among others. 
In the trade-to-trade segment, no speculative trading is allowed and delivery of shares and payment of consideration amount are mandatory.
 
The move is part of the preventive surveillance measure to ensure the market safety and to safeguard the interest of investors, NSE said in a circular.
 
“Trading in securities (51)... will be available in Trade for Trade segment at a price band of 5% with effect from 12th April 2013 (Friday),” the exchange said.
 
Also, the exchange has advised caution while trading in these scrips.
 
“Trading members should note that the transfer of scrips for trading and settlement on a trade-to-trade basis is purely on account of market surveillance measure and it should not be construed as an adverse action against the company,” NSE said.
 
“Further, this is a temporary measure and will be periodically reviewed depending on the market conditions,” the exchange added.
 

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COMMENTS

NSriramamurty

4 years ago

KS Oil,Triveni Enginerring,etc are included in Futures & Options Category early -as thogh they are very good Companies.Now They are not allowed in Cash Segment also.Traders Felt % Clear in their Minds that Money Changes Hands to the Officials authourised for effecting such Changes in the Name of Market Survillance.When Included in F&O Share Prices go up and Fall when Shifted out.Exchanges & Sebi never reveal their findings ,Reasons for such Changes -excepting terming them on Market Surveillance.When Whole India Concentrates on TRANSPARANCY and brings out RTI,etc -SEBI & Exchanges follow Outdated Survillance Reason,Playing fire with 1000s of Crores traded/invested in Markets.SEBI & Exchanges should Display all their Reports,Reasoning & Explanation for their Actions-as they are are only Custodians of Millions of Investors/Traders and not Dictators. Naturally Investors are Vanishing due to SEBI & Exchanges's Arbitrary Actions.

Indian steel demand grows just 3.3% in FY13

Indian steel stocks have been amongst the worst performing steel stocks globally during last 3-6 months on the back of weaker domestic demand environment and deterioration in profitability, says Nomura Equity Research in its Quick Note

As per JPC (Joint Plant Committee), Indian steel demand grew by 3.3% in FY13. Steel demand growth was down 4.2% year-on-year during March 2013. The demand growth has been weaker than Nomura Equity Research’s expectation (in its Quick Note on steel) of 4.5%-5% growth. Indian steel consumption in FY13 increased to 73.3million tonnes (up 3.3% year-on-year), while finished production has grown by 2.5% year-on-year to 77.5mt. While supply of steel has been impacted by iron ore issues in Karnataka, the demand has remained very weak resulting in pricing pressure faced by the steelmakers.

 

Indian steel stocks have been amongst the worst performing steel stocks globally during last three to six months on the back of weaker domestic demand environment and deterioration in profitability, according to Nomura Equity Research. Nomura believes that the valuations are factoring in the current weakness in operating environment to continue in perpetuity.

 

Tata Steel is Nomura’s top pick in the Indian steel space given that profitability should improve driven by:

(a) lower coke purchases with the ramp-up of captive coke oven batteries;

(b) commissioning of CR mills to improve product mix; and

(c) ramp-up of 2.9mtpa expansion which would improve volumes as well as reduce cost of production on stabilization.

 

India imported 7.9 mt of steel during FY13 (up from 6.9 mt in FY12), while it exported 5.2 mt of steel (up from 4.6 mt in FY12). India imported 706kt (versus 547kt in March 2012 and 619kt in February 2013) of steel during March 2013, while exports were also up to 496kt (versus 340kt in March 2012 and 613kt in February 2013). Nomura analysts have shown in the graph below that imports are higher in spite of weaker demand in the country.

 

 

Indian steel prices are currently trading at a discount of 4%-5% to import parity (from highs of 8%-10% last month). Global steel prices have come down by 5%-6% during last one month while domestic steel prices have remained largely flat resulting in discount to import parity coming down from 8%-10% to 4%-5% (Please see graph below).

 

 

Near-term weakness in steel demand is expected to continue as reflected in weaker auto volumes as well as overall industrial activity remaining slow. As a result, Nomura analysts don’t expect a major improvement in steel pricing environment in India in the near term. Nomura expects discounts to remain in the range of 3%-5% to import parity.

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