Share prices may try to rally: Friday Closing Report

On Friday, the Nifty almost touched our target of 5,350. A short bounce may be on the cards, but it may get stopped at around 5,450-5,500

The market opened with good gains on positive news from Maruti Suzuki and Tata Steel overnight, despite its Asian peers trading lower, weighed down by the Greece debt crisis. Regaining the 18,000 levels, the Sensex opened at 18,060, up 74 points from its previous close. The Nifty rose 16 points to open at 5,413 and above the 5,400 mark.

The market touched the day's high in initial trade itself and moved downward thereafter. At the intra-day highs, the Sensex touched 18,065 and the Nifty at 5,421. Worries about the slowdown in the global economy and selling by institutional investors saw the indices drift southwards. The dismal opening on key European bourses also weighed on the market.

The market fell to the day's lows in post-noon trade, with the Sensex declining 142 points to 17,844 and the Nifty losing 41 points to 5,356. However, a half-hearted recovery resulted in the market closing marginally above the lows of the day. The Sensex closed at 17,871, a loss of 115 points, and the Nifty declined 30 points to settle at 5,366.

The Nifty witnessed a gradual slide today and came close to its second support of 5,350 which we have targeted for a long time. There is a likelihood of a small gain on Monday. However, it may get stopped at around 5,450 or at best around 5,500.

The advance-decline ratio on the National Stock Exchange was a dismal 445:1241.

The broader indices underperformed the Sensex today, as the BSE Mid-cap index declined 0.83% and the BSE Small-cap index tanked 0.92%.

The sectoral gainers were BSE Consumer Durables (up 0.92%), BSE Bankex and BSE Power (up 0.12% each). The losers were led by BSE IT (down 1.94%), and BSE Oil & Gas (down 1.56%), BSE Healthcare (down 1.29%), BSE TECk (down 1.21%) and BSE Auto (down 1.07%) also lost.

Tata Steel, which announced the sale of its stake in Riversdale Mining last evening, was the top gainer on the Sensex (up 3.45%), It was followed by Bharti Airtel (up 2.58%), Reliance Communications (up 1.49%), Reliance Infrastructure (up 0.97%) and NTPC (up 0.93%). The top losers were TCS (down 3.58%), Reliance Industries (down 2.21%), Mahindra & Mahindra (down 2.02%), Hindalco Industries (down 1.96%) and Maruti Suzuki (down 1.85%).

The top Nifty gainers were Tata Steel (up 3.25%), Ambuja Cement (up 2.64%), Bharti Airtel (up 2.58%), RCom (up 1.65%) and Reliance Infra (up 0.99%). Sesa Goa, TCS (down 2.93% each) Sun Pharma (down 2.87%), Grasim Industries (down 2.78%) and Maruti Suzuki (down 2.60%) were the top losers.

The likely contagion effect of the Greek debt crisis resulted in the Asian markets finishing lower today. The developments make investors jittery throughout the world, prompting them to shift to safer assets.

Amid growing political unrest in Greece and protests against the government's austerity measures, the European Union (EU) said it has postponed a decision on a second multi-billion euro rescue package for the debt-ridden nation, at least till mid-July. However, the EU said that a bankruptcy will be averted by releasing the fifth tranche of 12 billion euros from last year's bailout package of 110 billion euros (159 billion dollars) when euro zone finance ministers meet in Luxembourg over the weekend.
The Shanghai Composite declined by 0.77%, the Hang Seng tanked 1.17%, the Jakarta Composite fell by 0.49%, the Nikkei 225 was down by 0.64%, the Straits Times lost 0.49%, the Seoul Composite settled 0.72% down and the Taiwan Weighted lost 0.21%.

Back home, foreign institutional investors were net sellers of stocks worth Rs599.52 crore on Thursday, whereas domestic institutional investors were net buyers of equities worth Rs286.10 crore.

The 13-day strike at the Manesar plant of Maruti Suzuki India (MSI) was called off late last night following a deal brokered by Haryana chief minister Bhupinder Singh Hooda.

MSI has agreed to reinstate all the 11 workers who were sacked and will take a lenient approach on the no-work-no- pay rule for the strike period. On the other hand, the workers have conceded the management's demand not to have a second union in the company. The Maruti Suzuki stock closed 1.85% lower at Rs1,167.40 per share on the Bombay Stock Exchange (BSE) today.

Tata Steel said on Thursday that it has sold its 26.27% stake in Australian coal miner Riversdale to global mining major Rio Tinto for A$1.06 billion ($1.11 billion).

"Tata Steel has decided that it would not want to hold its equity investment in Riversdale Mining, which is proposed to be delisted, without any joint venture agreement with the majority shareholder in unlisted Riversdale," the company stated. The company's stock gained 3.45% to close at Rs572.25 on the BSE today.


Wine producers enjoy spurt in sales, as drinkers shift from hard liquor that has become costlier

The big increase in prices of hard liquor and beer has given a fillip to wine sales in Maharashtra. After struggling for over two years, wine producers are seeing a 30% jump in demand, mainly from the younger generation

Hard liquor's loss is the wine industry's gain. A couple of months after liquor producers increased prices on beer and other liquors, it seems that several people, particularly youngsters, have shifted to wines, pushing up wine sales significantly.

For over two years now, the wine industry has been struggling with sluggish sales and excess supply. That seems to be changing with wine producers reporting an estimated 30%-35% jump in sales over the past three months.

Liquor companies increased prices in April, after the Maharashtra government announced a steep hike in excise duty on liquor products, including country liquor, Indian Made Foreign Liquor (IMFL) of 50% and an astonishing 100% duty hike on beer. On the other hand, wine enjoys a 100% excise duty exemption in Maharashtra. Naturally, state wineries have decided to make full use of the government largesse and cutting costs by nearly 30-35% to attract new customers.

Maharashtra has emerged as the country's leading wine producing state, with most of the processing in and around Nashik. However, the past two years have been difficult for the industry. Sales were flagging and with over-capacity globally, wine producers were stuck with excess supplies. The financial slowdown and the debacle at Indage Wines due to reckless expansion also took a toll. But since the state excise hike, things have cheered up.

Interestingly, the biggest growth has been in the cheap wines segment. Jagdish Holkar, president of the All India Wine Producers' Association told Moneylife, "Since April, wine sales have gone up by at least 30%-35%, although it is the off-season for wine consumption. This is mainly due to the hike in prices of beer and hard liquor. Wineries have also cut down their cost by around 30%-35% so they can cater to a lower segment, where consumption is as high as 60%-65%. As per the current trend, wine is preferred by people across the segments."
"Accordingly, wines with reasonable price points such as Sula's Samara Red, Vinsura's Valentino, Migo from Renaissance and Figuera by Indage, are among the leading ones which are seeing sales growth," he said.

Rajeev Samant, founder and CEO, Sula Vineyards, said, "There is definitely growth in sales. Demand has accelerated as many from the younger generation are preferring wines. Increase in the prices of beer and liquors due to the state budget has also pushed up wine sales.  Our wines, such as Samara Red, Madera Red and even wines in the premium segment, are witnessing sales growth. We are targeting 20%-plus growth for the current year over that in the previous year. And we also expect demand to increase, going beyond."

Mr Holkar also agreed that there is a lot of demand for wines from the younger generation. He explained, "The younger crowd does not prefer hard liquor for various reasons, health being the important one. This is the main reason for the sales growth in beer and that is now the case for wines."

A manager at Peekay Wines, Mumbai's oldest wine store, told Moneylife, "There is continuous improvement in the sale of wines. Lot of people are buying wines these days. Wines by Sula are the most preferred by consumers."


SEBI decision on Takeover Code likely on 30th June

An agreement seems to have emerged between the finance ministry and the capital market regulator for raising the trigger limit from 15% to 25%, as recommended by a SEBI panel but the government is not in favour of 100% open offer

New Delhi: The Securities and Exchange Board of India (SEBI) is likely to raise the trigger limit for open offer to 25% when it takes a decision on the new Takeover Code for mergers and acquisitions at its board meeting scheduled later this month, reports PTI.

“SEBI is likely to clear the Takeover Code in its board meeting scheduled on 30th June,” an official said.

An agreement seems to have emerged between the finance ministry and the capital market regulator for raising the trigger limit from 15% to 25%, as recommended by a SEBI panel but the government is not in favour of 100% open offer, sources said.

“Certainly not 100%,” the official said when asked if the open offer would be for the entire stake.

“More or less it would be between 50% and 75%,” he added.

The SEBI committee headed by C Achuthan on a new Takeover Code had suggested that the acquiring company should make 100% open offer, thus giving the exit option to all the shareholders of the target company.

Current norms mandate acquirer to make an open offer of 20% in the target company. The recommendation of 100% open offer was opposed by the industry as it would have made acquisition a very expensive proposition.

As per the SEBI panel’s recommendations made in July last year, an entity buying 25% stake in a company should make an open offer to the rest of the shareholders.


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