Share prices in an oversold zone: Tuesday Closing Report

The market may move lower but a short rebound is round the corner

Political developments at the Centre kept the market volatile throughout the session and resulted in the indices closing lower for the fifth straight day. The fall in the past three days was on a declining volume. Today the National Stock Exchange (NSE) saw a volume of 57.07 crore shares. Last hour panic-selling resulted in the Nifty hitting the maximum low since 21 August 2009—at 4,531. At present the market is in an indecisive zone. Further move will depend on any major events.

The market opened higher tracking a firm trend in the Asian region in morning trade. Bargain hunting amid the four-day decline helped the indices open in the positive. The Nifty started the day at 4,636, up 23 points, and the Sensex resumed trade 57 points higher at 15,436. Buying in power, healthcare, oil & gas and PSU sectors supported early gains.

The benchmarks hit their intraday high in early trade with the Nifty rising to 4,637 and the Sensex scaling 15,448. However, profit booking crept in at higher levels which pushed the market into the negative. The indices remained range-bound till noon, after increased selling pressure caused the market to venture further southward.

However, intermittent buying enabled the market venture into the green. But the recovery was short-lived as the indices entered the red once more. A huge bout of selling in the last hour pushed the market to the day’s low. At the lows, the Nifty fell to 4,531 and the Sensex tumbled to 15,136. Over selling led the Sensex and the Nifty to close at more than two year closing low of 15,175 (down 204 points,1.33%) and 4,544 (down 69 points, 1.49%).

The advance-decline ratio on the NSE was in favour of the losing stocks at 437:1268.

Among the broader indices, the BSE Mid-cap index tanked 1.86% and the BSE Small-cap index declined 1.45%.

In the sectoral space, BSE Fast Moving Consumer Goods (up 0.37%) was the lone winner. The losers were led by BSE Capital Goods (down 3.50%); BSE Metal (down 3.48%); BSE Realty (down 2.71%); BSE Power (down 2.59%) and BSE Auto (down 2.44%).

The best performing stocks on the Sensex were ONGC (up 2.39%); HDFC Bank (up 1.98%); ITC (up 1.11%); HDFC (up 0.69%) and Hindustan Unilever (up 0.16%). The top losers were Jaiprakash Associates (down 7.26%); Tata Steel (down 5.27%); Tata Power (down 5.23%); Hero MotoCorp (down 5.16%) and Larsen & Toubro (down 5.14%).

The key gainers on the Nifty were Ranbaxy (up 3.24%); ONGC (up 2.39%); HDFC Bank (up 2.32%); ITC (up 1.19%) and BHEL (up 0.90%). JP Associates (down 8.23%); Hero MotoCorp (down 6.19%); L&T (down 5.90%); Tata Steel (down 5.72%) and Tata Power (down 5.67%) emerged as the top losers on the index.

Markets in Asia closed mixed as tensions relating to North Korea eased but investors were cautious on account of the Eurozone debt crisis. Optimism in the US economy also supported investor sentiments.

The Hand Seng added 0.06%; the Nikkei 225 gained 0.49%; the Seoul Composite surged 0.91% and the Taiwan Weighted rose 0.44%. On the other hand, the Shanghai Composite shed 0.10%; the Jakarta Composite fell 0.48% and the Straits Times lost 0.14%.

Back home, foreign institutional investors were net sellers of stocks totalling Rs450.37 crore on Monday. On the other hand, domestic institutional investors were net buyers of shares amounting to Rs18.60 crore.
BEML has won an order worth Rs318 crore for the Metro rail project in Jaipur. The public sector company will supply 10 train sets of four cars each, totalling 40 cars for the project, it said on Tuesday. It is also expecting further Rs60 crore worth of orders for the Jaipur Metro project. The stock gained 1.40% to close at Rs468.50 on the NSE.

Infosys BPO, the business process outsourcing subsidiary of Infosys, has inked a definitive agreement to acquire all the outstanding share capital in Australia-based Portland Group, a leading provider of strategic sourcing and category management services. The acquisition is expected to be completed by early January 2012. The purchase consideration for the deal is AUD37 million, subject to customary post-completion adjustments.  The stock fell 0.01% to close at Rs2,676 on the NSE.

Hospital chain Fortis Healthcare (India), owned by billionaire brothers Malvinder and Shivinder Singh, is set to close the acquisition of Singapore-based group firm Fortis Healthcare International by end-December. Last month, Fortis Healthcare (India) had announced that it would buy the overseas firm for $665 million. The stock closed 0.30% down at Rs90.45 on the NSE.


RIL writes on oil ministry on development of additional gas fields

RIL’s $1.529 billion plan for bringing four satellite fields around the flagging D 1&D 3 gas fields to production has been awaiting approval since 2009 and now the ministry and DGH want the costs to be reworked in view of changed prices

New Delhi: Reliance Industries (RIL) has sought oil secretary GC Chaturvedi’s help to get stalled approvals for development of additional gas fields and price approval for sale of gas produced from coal seams (CBM), reports PTI.

RIL late last month had written to Mr Chaturvedi on his ministry and its technical arm Directorate General of Hydrocarbons (DGH) withholding approvals for satellite and R-Series fields in KG-D6 block that would help offset the decline in output of the flagging main fields.

It highlighted the KG-D6 oversight committee, made up of representatives of the oil ministry and the DGH, withholding nod for three gas finds in KG-D6 block and two in Orissa offshore NEC-25 area by wrestling powers to declare a gas find as commercially viable when the contract provides the panel the role of only ‘review’.

“While concern is being repeatedly expressed about the fall in production from the D 1and D 3 fields (in KG-D6 block), we find that all our proposals for augmenting production from other finds do not seem to be making much headway,” RIL executive director PMS Prasad wrote.

RIL’s $1.529 billion plan for bringing four satellite fields around the flagging D 1&D 3 gas fields to production has been awaiting approval since 2009 and now the ministry and DGH want the costs to be reworked in view of changed prices.

The ministry and DGH have also refused to give nod to a $73 million pre-development work in limited weather window available in Bay of Bengal from December to March 2012, for gathering more data to make an informed development plan.

Stating that such a cost can be adjusted against the final development plan, Mr Prasad said despite the Production Sharing Contract (PSC) as well as past precedent providing for such work, “government nominees on the Management Committee (that overseas operations of KG-D 6 block) are now insisting that pre-development activities are not covered in the PSC.”

If the approvals don’t come, the company would lose the four-month weather window and would then be forced to wait for one full year to begin work.

RIL said Declaration of Commerciality of discoveries D 29, D 30 and D 31 in KG-D6 block and D 32 and D 40 in NEC-25 have been pending with Management Committee since February 2010 over tests used to ascertain the finds.

Mr Prasad said RIL had submitted price formula for sale of coal bed methane (CBM) gas from Sohagpur (East) and Sohagpur (West) blocks in Madhya Pradesh blocks in September but approval has not come in spite of completion of 60 day mandated period.

RIL wants the price at which RasGas of Qatar sells liquefied natural gas (LNG) to India on a long-term contract saying it is an arms-length price.

“They delay in the approval impacts project schedules and our ability to bring CBM gas to production,” he added.


HCL Tech to provide data centre services to AstraZeneca

HCL will be responsible for managing AstraZeneca's entire data centre environment across over 60 locations globally

IT major HCL Technologies said it has been selected as a strategic partner to provide infrastructure outsourcing services to bio-pharmaceutical firm AstraZeneca.

However, no financial details of the deal were disclosed.

As part of the five-year engagement, HCL will be responsible for managing AstraZeneca's entire data centre environment across over 60 locations globally, including hosting and migration of some of the existing large data centers, HCL Technologies said in a statement.

In addition, HCL will manage AstraZeneca's global collaboration environment including email, messaging and collaboration services for users worldwide.
HCL will also deliver transformational projects including server virtualisation, storage and backup transformation and implementation of the hybrid cloud.

"In today's economic environment, organisations across the world are facing unique challenges of rising operational and input costs, demanding customers and changing regulatory environment," HCLT executive vice president and head (global infrastructure services) HCL ISD R Srikrishna said.

On Tuesday, HCL Tech ended at Rs392.90 per share on the Bombay Stock Exchange, 4.57% down from the previous close.


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