Share prices rise, absorbing the negatives: Wednesday Closing Report

The Sensex and Nifty are on a steady uptrend. Would they surprise us on the upside?

The recovery in the Asian stock markets boosted investor sentiments in India, leading to a higher opening today. A surge in the advance tax payments for the fourth quarter also aided the gains. Oil & gas and metal counters witnessed good demand in morning trade with the boarder markets also joining the rally.

The indices touched their day's highs in post-noon trade. But news of the suicide of former telecom minister A Raja's aide Sadiq Batcha pressurised the market a bit in the last half an hour with the benchmarks paring some of the gains, but making a close in the green.

The Sensex and Nifty, after opening with a positive gap at 18,264 and 5,476, were able to maintain an uptrend. Overall, the good performance of the Asian indices helped the Indian market, as well. The day's opening was the intra-day low, too. Each dip and rise during the day was at a higher level.

Ultimately in the post-noon session, the market hit its intra-day high after which it fell. The intra-day highs were 18,444 and 5,535, respectively. The Sensex closed 191 points up at 18,359 while Nifty was up 62 points up at 5,511. The advance-decline ratio on the National Stock Exchange was positive at 1141:554. The market is slowly turning up, ignoring the negatives.

The gainers outnumbered the losers on the key benchmarks, as the Sensex closed with 24 advancing stocks and six declining stocks whereas the Nifty retired with 42 stocks in the green, six in the red while two stocks remained unchanged. Among the broader markets, the BSE Mid-cap index gained 1.37% and the BSE Small-cap index advanced 1.216%.

All sectoral indices closed in the positive zone. The BSE Realty index (up 2.47%) was the top gainer. It was followed by BSE Bankex (up 2.15%), BSE Consumer Durables (up 1.90%), BSE Public Sector Undertaking (up 1.47%) and BSE Healthcare (up 1.41%).

Reliance Infrastructure (up 5.17%), State Bank of India (3.10%), ICICI Bank (up 3.03%), DLF (up 2.44%) and TCS (up 2.36%) were the top gainers on the Sensex. On the other hand, Hindustan Unilever (down 1.15%), Hindalco Industries (down 0.56%) and Cipla (down 0.52%) were the top losers.

The Nikkei 225 that lost over 11% yesterday, its biggest one-day fall since October 2008, recouped nearly half those losses today. The gains also helped other markets in the region to close on a positive note as investors resorted to bargain-hunting after the three-day decline. Global investment firm Goldman Sachs Group opined that the effects of 11th March earthquake and tsunami on the Japanese economy would be temporary.

The Shanghai Composite gained 1.20%, the Hang Seng added 0.10%, the Jakarta Composite rose 0.20%, the KLSE Composite advanced 0.56%, the Nikkei 225 jumped 5.68%, the Straits Times was up 0.85%, the Seoul Composite surged 1.77% and the Taiwan Weighted was 1.09% higher in trade today.

Back home, institutional investors-both foreign as well as domestic-were net buyers of stocks yesterday. While foreign institutional investors pumped in Rs148.28 crore, domestic institutional investors pooled in Rs567.10 crore.

GEI Industrial Systems (up 2.27%) has secured orders collectively worth Rs 45 crore from leading Indian companies in the cement and steel sector. It has bagged an order from UltraTech Cement for supplying of air cooled vacuum steam condensers for the latter's captive power plants being set up in Andhra Pradesh.

GEI has also secured two orders from Top Worth Group companies-Top Worth Urja and Metal and Crest Steel and Power-for supply to captive power plants being set up at Nagpur in Maharashtra and Durg in Chhattisgarh, respectively.

Brahmaputra Infraproject (down 2.55%) has bagged an order worth Rs184 crore from Reliance Utility Engineers. The contract is for six-laning of the Pune-Satara Road (NH-4), Package 2B.

Kirloskar Pneumatic Company (up 3.09%) has inked an agreement with Northern Railway for haulage of RoadRailer trains, including a pilot project between Delhi and Chennai. The agreement is a continuation of the memorandum of understanding signed by the company with the Indian Railways in January 2008.

RoadRailer is a bi-modal transport system, which facilitate transport of white goods from one destination to other by road as well as rail using the same vehicle. For this purpose, the company already obtained and developed necessary technology from US-based company for manufacturing RoadRailer.


Japan crisis: Steel supply may be choked in Asian markets, prices may go up

Japan exports around 40MT of steel every year and the production disruption will reduce its exports. Raw material prices may soften due to lower production in the country over the near term

The recent earthquake and tsunami that created havoc in Japan, the second largest steel producer in the world, may drive prices a tad higher on the back of massive demand for reconstruction activities and soften raw material prices due to lower production in the country over the near term.

The 9.0 magnitude earthquake on the Richter scale and the subsequent tsunami has devastated Japan's north coast and had forced the country's steelmakers-Nippon Steel Corporation, JFE Holdings and Sumitomo Metal Industries Limited-to shut their plants in the region.

However, the earthquake and tsunami in north Japan would not have much impact on the country's steel production as the region produces around 20 million tonnes (MT), out of its total production of 110MT per annum.

"Around 15%-20% of steel production has been affected due to the tsunami in Japan and there is still uncertainty over the resumption of operations at their plants and it's difficult to gauge the impact (now). The country would need a large amount of steel for reconstruction work; this will improve sentiments for steel prices in the near term," an analyst from a Mumbai-based research firm told Moneylife, preferring anonymity.

In a 14th March report, Morgan Stanley has said that the earthquake and tsunami may tighten steel supply in Asian markets and lift prices in the region. Japan exports around 40MT of steel every year and production disruption would reduce export of steel, adds the report.

However, on the raw material side, prices may come down in the wake of lower production of steel in Japan.

"Coking coal prices would not be impacted so much as prices of the commodity are being firmed up due to lower supply in international markets. However, iron-ore prices would slip because of lower production activities in the country, which is one of the top three iron-ore importers of the world," added the analyst.

Japan accounted for 12.8% of global iron-ore shipments in 2010.

However, an analyst from Bank of America Merrill Lynch, in a research report said, "We expect steel prices to drop in the Asia-Pacific region in the near term. The lower steel price would be driven by lower raw material prices (iron ore & coking coal) after a weaker demand from Japan in seaborne market."

"Miners are likely to move some of contracted volumes with Japanese steel mills to spot market sales, adding downward pressure to prices of steel-making raw material," added the Bank of America Merrill Lynch analyst.

Prices of iron ore have already dropped by around 15% from their highest of $200 per tonne in mid-February due to lower purchase from Chinese buyers.

However, major Indian iron-ore producers like Sesa Goa and National Mineral Development Corporation may not see any impact on export activities, as both these companies export only around 5% of iron ore out of their total production into Japan.

China and South Korea would be benefited due to a drop in shipments from Japan amid huge need of steel in the country for reconstruction and rebuilding works in Japan.

"Exports of steel products from China and South Korea are expected to rise. India would not be benefited as we are a net importer of the metal," said the analyst.

Currently, India imports around 2MT to 3MT of steel ever year and most of it comes from China.


RCom, TELibrahma to offer Cricket video updates

Reliance Communications has partnered with TELibrahma to deliver video updates and replays from the ICC World Cup Cricket matches on mobiles for all cricket lovers

Telecom service provider Reliance Communications has partnered with mobile solutions provider TELibrahma to deliver video updates and replays from the ICC World Cup Cricket matches on mobiles for all cricket lovers.

With this partnership, TELiBrahma would deploy bluetooth device in stadiums and enable consumers to receive video highlights when they are watching the match in the stadium, RCom said in a statement.

"We believe it would help consumers to catch the missing action. This opportunity will help brands to deliver what is relevant to consumers at the place where it matters and on a device that creates the impact," the TELiBrahma president, PR Satheesh, said.

The tie-up will also enable RCom consumers to view the highlights and action replays of cricket matches for free.

The solution is supported on more than 80% of the mobile phones in India and works across phone models, operators and geographies.

On Wednesday, RCom ended 1.98% up at Rs102.95 on the Bombay Stock Exchange, while the benchmark Sensex gained 1.05% to 18,358.


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