Share prices in no man’s land: Friday Closing Report

Nifty to find its direction after Monday’s move

The market snapped a three-day winning streak on dismal global cues, after US Federal Reserve chairman Ben Bernanke gave no signal on fresh stimulus for the economy in a speech last night.

Contrary to our expectations over the last few days that the Nifty would move in the range of 5,065 to 5,200, the index today breached the lower limit of the band and closed in the negative, wiping off the gains of the past two days. The Nifty is at a level from where a fall of 60 points could make the downtrend more prominent. The 20-day moving average is 4,998. Today’s fall was on a large volume of 76.26 crore shares on the National Stock Exchange (NSE).

Defying global cues, the Indian market opened with small gains, but soon slipped into negative terrain on profit-booking. The Nifty opened eight points up at 5,161, and the Sensex resumed trade up 24 points, at 17,190. The indices rose to their intra-day highs in initial trade, with the Nifty at 5,164 and the Sensex touching 17,211.

However, selling in IT, metal, oil & gas and power stocks soon dragged the indices lower in volatile trade. A feeble recovery attempt in noon trade was shot down, as key European indices opened lower and slipped further, after a report that European Central Bank (ECB) Executive Board member Juergen Stark would step down from his post, because of a conflict over the ECB’s controversial bond-buying programme.

With no positive triggers, the domestic benchmarks slipped to the day’s low in the last few minutes of trade, the Nifty down to 5,047 and the Sensex to 16,831, and the market closed at around these levels. The Nifty closed the day at 5,059 points, a loss of 94 points from its previous close, while the Sensex ended at 16,867, down 299 points.

The advance-decline ratio on the National Stock Exchange (NSE) was a negative 490:930.

The broader indices also ended lower, although they outperformed the Sensex. The BSE Mid-cap index declined by 0.84% and the BSE Small-cap index was down by 0.75%.

Barring the BSE Consumer Durables index (up 0.37%), all other sectoral gauges ended in the red. The top losers were BSE Metal (down 3.16%), BSE Bankex (down 2.35%), BSE Oil & Gas (down 2.30%), BSE IT (down 2.29%) and BSE Realty (down 2.05%).

The key performers on the Sensex were Hindustan Unilever (up 2.52%), Hero MotoCorp (up 2.05%), ONGC (up 0.34%), Bharti Airtel (up 0.29%) and HDFC (up 0.23%). The main losers on the index were Sterlite Industries (down 5.49%), Hindalco Industries (down 5.47%), Jaiprakash Associates (down 4.58%), State Bank of India (down 3.68%) and Reliance Industries (down 3.33%).

The leaders on the Nifty were HUL (up 2.60%), Hero MotoCorp (up 2.27%), Bajaj Auto (up 0.19%), ONGC and HDFC (down 0.15% each). The major losers on the benchmark were Reliance Communications (down 6.66%), Ambuja Cement (down 6.40%), Hindalco (down 5.85%), Sterlite (down 5.61%) and SAIL (down 5.49%).

Markets in Asia, with the exception of Taiwan, closed weak on renewed fears that the US slowdown would lead to another recession. A decline in Japanese machinery orders and a slowdown in industrial production in China also added to the misery.

The Japan Machine Tool Builders’ Association said machinery tool orders fell 12.7% in August to 98.96 billion yen ($1.3 billion) from July. Industrial production in China rose 13.5% in August from a year earlier, down from a 14% increase the previous month.

The Shanghai Composite shed 0.05%, the Hang Seng fell by 0.23%, the Jakarta Composite declined by 0.17%, the KLSE Composite was down by 0.05%, the Nikkei 225 contracted 0.63%, the Straits Times tanked 1.11% and the Seoul Composite tumbled 1.83%. On the other hand, the Taiwan Weighted gained 0.82%.

Back home, foreign institutional investors were net buyers of stocks worth Rs14.18 crore on Thursday. On the other hand, domestic institutional investors were net sellers of equities worth Rs266.61 crore.

ICICI Bank, India’s largest private lender will recruit up to 6,000 people this fiscal to help its growth and expansion, the bank’s managing director and chief executive Chanda Kochhar said today. Most of the recruitment will be at the entry level and will be done either directly or through institutes training graduates in banking and insurance, where the bank has tie-ups. The stock lost 2.61% to settle at Rs895 on the NSE.

Expanding its footprint in Africa, Bharti Airtel will operate 2G and 3G mobile services in Rwanda for which it has announced an investment of $100 million in the next three years. The move follows receipt of licences to operate mobile services by the Rwanda government. Bharti Airtel added 0.05% to close at Rs399.70 on the NSE.

Prime Focus Technologies (PFT), part of the global visual entertainment services company Prime Focus, has launched new enterprise-class iPad application. PFT will showcase the application at International Broadcasting Convention (IBC) 2011 from 9 to 13 September in Amsterdam.  Specifically developed to augment CLEAR, the application is an indispensable resource for creative work involved with content, as it provides a complete creative toolkit that can be used anywhere. Prime Focus tanked 4.27% to close at Rs60.55 on the NSE.



Tata Motors global CEO steps down

Carl-Peter Forster has ceased to be the Tata Motors group CEO and MD, with immediate effect, due to his unavoidable personal circumstances

Tata Motors Ltd announces that Carl-Peter Forster has ceased to be the group CEO and MD, with immediate effect, due to his unavoidable personal circumstances. However, at the request of the Board, Mr Forster will continue to serve the Board of Tata Motors Ltd as a non-executive member. Prakash Telang, MD of India Operations, and Dr Ralf Speth, CEO of Jaguar Land Rover, will represent their respective operations on the Board.

Ratan N Tata, Chairman of the Board of Tata Motors, noted: "The Board respects Carl-Peter's personal circumstances that led to this move. We would like to thank him for his contributions to the successful development of our company in his role as Group CEO and MD. We are looking forward to continue to working with him as a non-executive member of the Board."

Carl-Peter Forster stated: "I deeply regret that my personal circumstances make it difficult for me to continue to perform the challenging duties of managing the thriving global activities of the Tata Motors Group with its main activities in India and the UK and increasingly in additional overseas markets. I am glad to continue my association with Tata Motors."


India Inc M&A deals worth $2.1 billion in August: Grant Thornton

According to Grant Thornton's latest Dealtracker report, there were as many as 49 merger and acquisition transactions worth $2,181 million in August, while in the year-ago period there were 42 deals worth $401 million

Mumbai: Corporate India announced merger and acquisition (M&A) deals worth $2.1 billion in August, taking the total value of M&A activities in the country in 2011 till date to over $30.5 billion, reports PTI quoting a report by consultancy firm Grant Thornton.

"The M&A activity has shown some improvement compared to the last two months," Srividya CG, partner and practice head, valuations, at Grant Thornton India said.

According to Grant Thornton's latest Dealtracker report, there were as many as 49 merger and acquisition transactions worth $2,181 million in August, while in the year-ago period there were 42 deals worth $401 million.

Outbound deals, wherein Indian companies acquired businesses outside the country, were the flavour of the month, with 11 M&A deals worth $0.89 billion, as against 29 transactions valued at $0.29 billion in 2010.

Meanwhile, the total value of inbound deals in August 2011, wherein foreign entities merged with or acquired Indian businesses, amounted to $0.47 billion by way of 11 deals, as compared to seven deals worth $0.02 billion in 2010.

The total value of domestic deals in August was $0.82 billion (27 deals), compared to $0.09 billion (19 deals) in the corresponding month of 2010.

A sector-wise analysis shows that telecom was the sector that accounted for the maximum deal value, mainly driven by Piramal Healthcare's acquisition of a stake in Vodafone-Essar.

The other key sectors include mining, pharma & healthcare, oil & gas and infrastructure.

The other major deals of the month were GMR Energy's 30% stake acquisition in PT Golden Energy Mines for $550 million and Group Danone's acquisition of Wockhardt Group's nutrition business for $355 million.

The top five deals accounted for 84% of the total M&A deal value in the month of August.

On the private equity front, there were 29 deals worth $0.36 billion in August compared to 19 transactions worth $0.09 billion in the same period last year.


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