Share prices directionless: Thursday Closing Report

Nifty hit the suggested resistance of 5,650 today. A close below 5520 below would signal a downtrend

Yesterday we mentioned that the Nifty may rally up to 5,650, which it did. The Nifty hit an intra-day high of 5,654, before crashing and closing at 5,600, up 14 points. The market is now moving in an indecisive area. Tomorrow's move will help us decide the further direction.

The market overcame initial weakness to trade in the green for most part of the noon session, but a sharp sell-off in late trading led the market to a flat close. Headline inflation data for June and weekly food inflation figures for the week ended 2nd July were the economic indicators that were announced by the government today.

The market opened lower this morning on nervousness among investors following the triple bombings in Mumbai last evening. Also, a mixed opening on the Asian bourses, after Moody's Investor Services threatened to downgrade the credit rating of the US, kept investors on the sidelines. The Nifty opened at 5,569, down 16 points, and the Sensex resumed trade 32 points lower at 18,564. The indices touched their intra-day lows in the first 30 minutes, as the Nifty dipped to 5,542 and the Sensex slipped back to 18,449.

Selective buying pushed the indices gradually upwards around noon, but choppiness saw the indices popping in an out of the red a couple of times. Comments from Planning Commission deputy chairman Montek Singh Ahluwalia stating that acts of terror should not impact market sentiment, gave a firm push to the market in noon trade.

The indices touched their intra-day highs a little past 2.30pm, when the Nifty touched 5,654, up 112 points from the day's low, and the Sensex climbed to 18,803, a gain of 354 points from the low point of the day. However, the gains were short-lived, as massive selling took over and dragged the indices into the red in late trading. Nevertheless, the Nifty closed in the green up 14 points at 5,600 and the Sensex added 22 points from its previous close to end at 18,618.

The advance-decline ratio on the National Stock Exchange (NSE) was a positive 1025:673.

Among the broader indices, the BSE Mid-cap index gained 0.38% and the BSE Small-cap index rose 0.18%.

BSE Realty (up 2.26%), BSE Bankex (up 1.04%), BSE Healthcare (up 0.80%), BSE Metal (up 0.69%) and BSE Capital Goods (up 0.40%) were major sectoral gainers. BSE IT (down 1.47%), BSE TECk (down 1.01%) and BSE Fast Moving Consumer Goods (down 0.27%) dragged the index lower in trade.

DLF (up 3.15%), Tata Motors (up 1.95%), Cipla (up 1.84%), ICICI Bank (up 1.40%) and State Bank of India (up 1.39%) were the top performers on the Sensex. On the other hand, TCS (down 2.23%), Infosys (down 1.55%), Reliance Communications (down 1.42%), Bajaj Auto (down 1.25%) and ONGC (down 1.18%) settled at the bottom of the index.

The top Nifty gainers were IDFC (up 3.53%), Ambuja Cements (up 2.96%), Sesa Goa (up 2.93%), ACC (up 2.73%) and DLF (up 2.55%). The main losers on the index were TCS (down 2.60%), RCom (down 2.09%), GAIL (down 1.85%), Siemens (down 1.82%) and Power Grid (down 1.72%).

Markets in Asia settled mixed on a warning by Moody's that it plans to review the US' credit rating, which saw some caution in the export-driven economies of the region.

The Shanghai Composite added 0.03%, the Hang Seng was up 0.06%, the Jakarta Composite rose 0.42%, the Straits Times was up 0.01% and the Seoul Composite rose 0.02%. On the other hand, KLSE Composite declined 0.05%, the Nikkei 225 fell by 0.27% and the Taiwan Weighted lost 0.08%.

Back home, foreign institutional investors were net buyers of stocks worth Rs315.95 crore on Wednesday, while domestic institutional investors were net sellers of stocks worth Rs368.91 crore.

Repro India has acquired the India printing operations of Macmillan Publishers India (MPIL), the subsidiary of well-known UK-based publisher. The deal also entails servicing the print requirements of MPIL in India. Under the arrangement, MPIL will outsource the printing of its education books to Repro, translating into a business of over Rs250 crore over the next five years for Repro in this period. The acquisition of this printing operation in Chennai would strengthen Repro's foothold in the south India market, bringing it closer to its clientele. Repro India rose 9.49% to close at Rs161 on the NSE today.

Tech Mahindra, a global systems integrator and business transformation consulting organisation, has entered into a global partnership agreement with Redknee, a leading provider of business-critical billing and charging software and solutions for communications service providers, to jointly deliver software and services to the communications service providers market.

The partnership aims to deliver benefits for both the entities through a wider scope of business opportunities and greater depth of solutions delivered for service providers globally. The stock rose 1.43% to close at Rs751 on the NSE.

Zicom Electronic Security Systems is launching a new innovative business called Zicom SaaS. The company plans to invest about Rs80 crore in the project in the next two years. The objective of the new initiative is to provide a holistic security package to the customer, taking care of all his requirements based on security assessment and to give him the complete package of hardware, software, monitoring. The Zicom stock surged 7.42% to Rs42 on the NSE today.


Commodity trends


Global rice production is expected to touch 713 million tonnes (MT)—about 476MT...

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EPFO appoints SBI, 3 others to manage Rs3.5 lakh crore corpus

Besides SBI and ICICI Securities, the Central Board of Trustees, the high decision making body of the EPFO, also approved the names of Reliance Capital and HSBC Asset Management Company

New Delhi: The Employees Provident Fund Organisation (EPFO) today decided to appoint four fund managers including SBI and ICICI Securities to managing its corpus of Rs3.5 lakh crore for three years beginning 1 September 2011, reports PTI.

Besides SBI and ICICI Securities, Central Board of Trustees (CBT), the high decision making body of the EPFO, also approved the names of Reliance Capital and HSBC Asset Management Company (AMC).

The CBT, however, dropped the name of ICICI Prudential which was recommended by the EPFO's Financial Advisory Council (FIC) earlier in the day, sources said.

The decision to appoint fund managers for the EPFO was taken by the CBT which was presided over by labour and employment minister Mallikarjun Kharge.

As many as ten companies had shown interest in managing the corpus of the EPFO.

The other companies which were in the race for managing the EPFO funds were Kotak Mahindra AMC, Securities Trading Corporation of India, UTI AMC, Birla Sun Life AMC and Franklin Templeton AMC.

Among those companies approved by the FIC, ICICI Securities quoted the lowest rate of 3 paise per annum for managing Rs10,000, sources said.

Reliance Capital quoted a rate of 4 paise per annum for managing Rs10,000, HSBC AMC 36 paise and SBI Re1.

The EPFO had appointed multiple fund managers for the first time in July 2008 for earning better rate of return on deposits for its 4.72 crore subscribers.

Before that, SBI was the sole fund manager for the retirement fund body since its inception in 1952.


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