Staggered upmove still possible: Friday Closing Report

Nifty to see some gains up to 5,200, if it holds on to the support at 5,050

The domestic market opened higher on supportive global cues, after the positive close on Wall Street overnight gave a boost to the Asian markets in morning trade. The Nifty resumed 56 points higher at 5,194, and the Sensex opened trade at 17,247, up 188 points from its previous close. The opening figures on both benchmarks were their intra-day highs.

However, the market couldn't sustain the opening gains and the indices gradually slipped into the negative, within an hour, on selling pressure. The indices ventured into the green again for a short while, in mid-morning trade, but then again succumbed to profit taking. They continued to drift further southwards and got worse as European indices gave up their initial gains.

The indices fell to their intra-day lows in noon trade, ignoring the higher industrial output data for June that showed an 8.8% growth. At the lows, the Nifty went back to 5,053 and the Sensex fell below the 17,000 mark to 16,785. The market was range-bound in late trade. At the close, the Nifty stood at 5,073, down 65 points and the Sensex fell 220 points to 16,840.

If the Nifty support at 5,050 breaks, the fall could be sharp. As long as the support holds, a move up to 5,200 is possible.

The advance-decline ratio on the National Stock Exchange (NSE) was 553:851.

In the broader market space, the BSE Mid-cap index declined 0.46% and the BSE Small-cap index lost 0.44%.

All sectoral gauges settled in the negative. The losers were led by BSE IT (down 2.44%, BSE TECk (down 2.24%), BSE Bankex (down 1.63%), BSE Realty (down 1.49%) and BSE Power (down 1.14%).

The top gainers on the Sensex were Jindal Steel (up 2.57%), Mahindra & Mahindra (up 1.82%), Hero MotoCorp (up 1.79%), ONGC (up 0.76%) and Hindustan Unilever (up 0.17%). The key losers were Tata Motors (down 5.26%), Hindalco Industries (down 4.04%), Jaiprakash Associates (down 3.28%), Tata Power (down 3.12%) and Wipro (down 2.92%).

The best performers on the Nifty were Jindal Steel (up 2.74%), M&M (up 1.72%), Hero MotoCorp (up 1.65%), GAIL (up 1.40%) and Cairn India (up 1.07%). The laggards of the index were Tata Motors (down 5.88%), Hindalco (down 4.90%), Reliance Capital (down 4.74%), JP Associates (down 3.89%) and Kotak Bank (down 3.39%).

Markets in Asia shed some of the gains to end mixed, as investors were cautious on fresh debt issues in Europe. In economic news, bank lending in China slowed in July to a seven-month low, after monetary authorities tightened policy.

The Shanghai Composite gained 0.45%, the Hang Seng advanced 0.13%, the Jakarta Composite climbed 0.55%, the KLSE Composite rose 0.49% and the Straits Times jumped 1.94%. On the other hand, the Nikkei 225 lost 0.20%, the Seoul Composite tanked 1.33% and the Taiwan Weighted slipped 0.16%.

Back home, foreign institutional investors were net sellers of stocks worth Rs59.79 crore on Thursday. On the other hand, domestic institutional investors were net buyers of stocks worth Rs266.25 crore.

The Maharashtra Electricity Regulatory Commission (MERC) on Thursday granted Reliance Infrastructure the license to transmit and distribute power in suburban Mumbai for the next 25 years. MERC has also granted it the license to transmit power in the region. The stock closed at Rs479.35 on the NSE, down 0.87% from its previous close.

Pharma major Ranbaxy Laboratories today said its over-the-counter (OTC) division has launched a two-in-one painkiller, 'Volini Duo', across the country. The product has been developed by scientists at the company's Gurgaon R&D centre, using matrix technology, which enables the regulated release of the medicine in the gastrointestinal tract, the company said. The stock declined by 1.61% to settle at Rs482.35 on the NSE.

Apparel firm Provogue India today said it will demerge its real estate business into a newly incorporated entity. As a part of a corporate restructuring plan, the company will also merge its subsidiary Prozone Enterprises with the new entity. The company's stock gained 1.16% to end at Rs30.60 on the NSE.

The domestic market will reopen only on Tuesday after the Independence Day holiday on Monday.


Tata Steel Q1 net up almost 3-fold at Rs5,346 crore

The net profit was boosted by a one-time gain on sale of its stakes in Australian mining firm Riversdale and Tata Refractories

Mumbai: Tata Steel today reported nearly three-fold jump in consolidated net profit at Rs5,346.55 crore for the quarter ended 30 June, buoyed by mainly a one-time gain on sale of its stakes in Australian mining firm Riversdale and Tata Refractories, reports PTI.

The company had reported a net profit of Rs1,825.26 crore during the corresponding quarter of last fiscal.

Net sales of the company also rose by 21.58% to Rs32,839.90 crore during the quarter under review compared to Rs27,010.06 crore, the company said in a filing to the Bombay Stock Exchange.

It added that in the April-June quarter, the company realised Rs4,942.07 crore (A$1,060 million) by selling its entire 26.27% stake in the Riversdale to Rio Tinto.

Of this, the company included Rs2,879.29 crore as one time profit in its results from the sale of its stake in Riversdale, the filing further said.

Besides this, the company also made a profit of Rs511.01 crore by selling its stake in Tata Refractories to Krosaki Harima Corporation, an associate firm of Nippon Steel of Japan.

Tata Steel, in May, had offloaded 51% stake in group company Tata Refractories to Krosaki Harima and inducted the Japanese firm as a strategic partner. The deal was valued at Rs576.30 crore, going by the Tata Refractories' (TRL) valuation at Rs1,130 crore.

During the quarter, the company's cost on raw materials increased by 43.84% at Rs11,227.73 crore, while its interest payments also went up by 23.43% to Rs737.66 crore, the filing said.

On standalone basis, the company reported a net profit of Rs2,219.43 crore, registering a growth of 40.52% during the April-June quarter vis-à-vis Rs1,579.39 crore it had reported in Q1 of FY10-11, the filing added.

Standalone net sales of the company also went up by 20.41% during the quarter under review at Rs7,792.20 crore as compared to Rs6,471.27 crore of the corresponding period of last fiscal.

Shares of the company closed at Rs476.35 apiece on the Bombay Stock Exchange, down 1.69% from the previous close.


IDBI Federal’s Dreambuilder ULIP—multiple options, flexibility; but can it fulfil your dream?

IDBI Federal Wealthsurance Dreambuilder ULIP has many good features with appreciable flexibility, although high mortality charges is a drawback

IDBI Federal Wealthsurance Dreambuilder is a regular premium ULIP that offers a range of fund options, with flexibility and benefits bundled together, at charges that are largely in line with the trend for ULIPs in the market.

Dreambuilder gives freedom to pick the premium in the range of Rs25,000 to Rs1 lakh;  a choice of 13 fund investment options; the sum assured with no limit (subject to underwriting); and from riders covering 17 major diseases.

The scheme also offers hospital cash benefit, cover for disability and accidental injuries, and a policy term that can extend from 10 years up to the age of 75 years where the minimum premium payment term is five years.

The flexibility on premium, optional riders and choice of duration are the selling features.

IDBI has a premium allocation charge of 3.15% of the annual premium for Dreambuilder in the first year, but there is no charge from the second year onwards. The policy administration charge is 6.30% for the first five years and 3.15% from the sixth year onwards, till the end of the policy term.

The charges are in line with other ULIPs in the market, but the rates are on the higher side over a period of five years or more. For a long-term investor, paying 3.15% till the end of the policy term is high, considering that some ULIPs prior to the regulatory changes (effective 1 September 2010), had total charges of 1% after the lock-in period.

The mortality charges on Wealthsurance Dreambuilder are certainly on the higher side and this is a drawback. While LIC's standard mortality rate, used as a benchmark by the insurance industry, has a mortality factor of 1.42 for investments at the age of 25, IDBI has decided on a factor of 1.87 at age 25 for Dreambuilder. Insurers are permitted to charge according to their experience in the life insurance business, and Aegon Religare has a mortality factor of 1.083 for age 25.

The Wealthsurance Dreambuilder insurance plan boosts your funds through guaranteed loyalty additions at the end of the 10th policy year and every five years thereafter, as a reward for long-term investments.

Guaranteed loyalty additions will be made as a percentage of the average fund value (corresponding to regular premiums) in the 36 months preceding the loyalty unit allocation date.

The flexibility that IDBI affords, allows an individual to invest according to his/her individual risk-return profile. There is a choice of assured returns, variable returns linked to market performance, and returns linked to the market, but with protection of capital. The market-linked product has self-managed and expert-managed options. There are no charges for switches.
The plan has optional insurance benefits, like comprehensive health and accident cover. It also has major diseases and serious illness benefits, with payment of lump-sum cash, as well as hospital cash benefit through a daily cash allowance. The accident benefit has an accidental death and disablement benefit.

On the unfortunate demise of the person (whose life is insured), prior to maturity, the insurer shall pay the nominee the basic sum assured, or the fund value as of the date of intimation of death. The death benefit will be at least 105% of the total premiums paid.


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