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The Ambanis: Downward curve

From a buyer, Anil Ambani is now a seller

The magic is gone. Last week, when Anil Ambani announced to shareholders his plans to sell stakes in his telecom, asset management and general insurance businesses in order to reduce his enormous, acknowledged debt burden of Rs31,975 crore—it had all the signs of a desperate man at the end of the road.

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Share prices headed lower: Tuesday Closing Report

The next support for the Nifty is at 4,970. Volumes were sharply lower in today’s fall

Asian markets opened weak today, followed a sharp fall in the US markets on Monday, leading to a weak opening in domestic bourses. The Sensex opened 208 points below the previous close at 16,817, while the Nifty opened 69 points below at 5,049. Yesterday, we had indicated that the Nifty may move between 5,070 and 5,160. However, we had said that in case the index closes below 5,070, we may see a substantial correction. Today the Nifty made a lower high and lower low at 5,058 and 5,011 respectively and closed below 5,070 (the support level given yesterday) at 5,038 (it fell 81 points). From here, we may see the Nifty moving sideways to the level of 4,970. Over the last 62-day period, (including today), Tuesday witnessed the lowest volume of 44.93 crore shares on the NSE (National Stock Exchange).

The Sensex moved in the range of 16,825 and 16,669 to close 277 points down at 16,748. Today’s fall of 1.63% on the Sensex and 1.58% on the Nifty is the maximum loss after 4 October 2011. The advance-decline ratio on the NSE was 81:402.

All BSE sectoral indices ended in the red today— the maximum loss being seen in BSE IT (down 3.67%) and BSE TECk (3.11%). Out of the pack of 30 Sensex stocks, four ended in the positive—NTPC ended flat, while 25 stocks ended in the red, maximum loss being seen in TCS, which fell 7.71% on the back of its lesser-than-estimated results, followed by Tata Motors (down 3.64%); Hindalco Industries (3.57%); Sterlite Industries (3.48%) and Wipro (down 2.94%). The Nifty’s 50 stocks saw 10 gainers and 39 losers while Sesa Goa ended flat.

Global news continued to be negative. China's annual economic growth eased to 9.1% in the third quarter, the slowest pace since 2009, from 9.5% in the previous quarter, the National Bureau of Statistics said on Tuesday, as tight domestic monetary policy and easing foreign demand crimped activity.  There were also concerns about mounting bad-debt risks faced by local banks; high debt levels being carried by provinces and a severe cash crunch which is impacting rail & road construction in the world’s second-largest economy.

European indices were also trading in the red. Domestic indices hit their intraday low after the European market opened. Germany's finance minister cautioned against hopes for a ‘quick-fix’ to solve Europe's debt problem, reminding investors not to become “too optimistic” about a rapid development to the two-year-old crisis. On the other hand, Moody's decision to review France’s triple-A credit rating cast new doubt on Tuesday on Europe's hopes of drawing a line under its sovereign debt crisis, five days before a crucial EU (European Union) summit. The US ratings agency said late on Monday that it may slap a negative outlook on France's ‘AAA’ rating in the next three months, if the costs for helping to bailout banks and other euro-zone members like Greece stretch the country’s budget too much.

Finance minister Pranab Mukherjee said yesterday that India remains “firmly on track” to achieve annual economic growth of 8%-9% in the medium-term. But the country needs to stay alert and respond to emerging global challenges, the FM said at a conference.

India's headline inflation will remain under pressure until December and maintaining growth momentum along with price stability remains the biggest policy challenge, according to a finance ministry statement released on Tuesday.

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Share prices struggling: Monday Closing Report

Nifty is ranged between 5,070 and 5,160

The market ran out of steam today after notching up gains of 5% last week. Reliance Industries was the top loser, following reports that the company plans to suspend drilling activity till it completes a review of its exploration and production activities in view of declining oil & gas output. Although the Nifty opened in the positive, made a higher high and higher low, the index ended marginally in the red. Today’s fall has been on nine days’ low volume of 48.01 crore shares (including today) on the National Stock Exchange (NSE).

Although the global indices are showing positive signs, it is not helping the domestic market sustain the upmove. We may see the Nifty move between 5,070 and 5,160. In case the index closes below 5,070, we may see a substantial correction. On the upside, the Nifty has to close decisively above 5,170 and then 5,220.

The domestic market opened higher, tracking its Asian peers which were in the positive in morning trade. The Nifty opened at 5,156; 21 points higher from its previous close and the Sensex rose 93 points to resume trade at 17,176. The indices touched their intraday highs in initial trade itself with the Nifty going up to 5,160 and the Sensex rising to 17,189.

However, the sharp fall in the Reliance Industries’ stock price despite positive quarterly results pulled down the oil & gas sector and resulted in the market venturing into the red at around 10.50am. The benchmarks continued to trade in the negative, with the market falling to its day’s low around noon. At the lows, the Nifty went down to 5,085 and the Sensex to 16,928.

Minor recovery attempts were shot down by selling pressure, keeping the market lower. The indices witnessed sideways movement in the post-noon session, ignoring the good set of quarterly numbers declared by mortgage lender HDFC. Finally, the market closed lower with the Nifty down 14 points at 5,118, and the Sensex settling at 17,025, a fall of 58 points.

The advance-decline ratio on the NSE was almost balanced at 813:869.

The broader indices had a mixed closing with the BSE Mid-cap index down 0.01% and the BSE Small-cap index settling with a gain of 0.22%.

The top sectoral gainers were BSE Auto (up 1.58%), BSE Consumer Durables (up 1.50%), BSE Bankex (up 0.60%), BSE Realty (up 0.52%) and BSE Fast Moving Consumer Goods (up 0.19%). The major losers were BSE Oil & Gas (down 2.29%), BSE Capital Goods (down 1.37%), BSE Power (down 1.18%), BSE PSU (down 0.69%) and BSE TECk (down 0.55%).

The Sensex leaders were Tata Motors (up 4.50%), Maruti Suzuki (up 2.39%), DLF (up 1.53%), Sterlite Industries (up 1.51%) and Bajaj Auto (up 1.27%). The key losers on the index were Reliance Industries (down 3.88%), NTPC (down 2.63%), Jaiprakash Associates (down 2.17%), BHEL (down 2.11%) and Larsen & Toubro (down 1.98%).

Tata Motors (up 4.42%), Cairn India (up 3.73%), Ambuja Cement (up 2.65%), Maruti Suzuki (up 2.38%) and DLF (up 2.12%) were the main gainers on the Nifty. The top five Nifty losers were RIL (down 3.90%), BPCL (down 3.03%), SAIL (down 2.96%), NTPC (down 2.89%) and BHEL (down 2.43%).

Markets in Asia settled higher on expectations of good earnings reports and hopes that the debt crisis in Europe will ease as the Group of Twenty (G-20) leaders last weekend endorsed part of the emerging plan to avoid a Greek default, boost banks and prevent the contagion from spreading.

The Shanghai Composite gained 0.37%; the Hang Seng surged 2.01%; the Jakarta Composite climbed 1.76%; the KLSE Composite advanced 1.59%; the Nikkei 225 rose 1.50%; the Straits Times gained 1.27%, the Seoul Composite jumped 1.62% and the Taiwan Weighted settled 1.40% higher.

Back home, institutional investors—both foreign and domestic—were net sellers in the equities segment on Friday. Foreign institutional investors offloaded stocks worth Rs94.04 crore and domestic institutional investors pulled out Rs237.85 crore from stocks.

The country’s largest two-wheeler maker Hero MotoCorp today said it will soon start selling the first ‘Hero’ branded bike to be launched after the break-up of Hero Honda last year—Impulse—in the Indian market at Rs66,800 (ex-Delhi showroom). The company is positioning the new 150-cc bike as a dual-purpose bike that can be used for both normal commuting as well as off-road adventure. The stock lost 0.04% to close at Rs1,993 on the NSE.

JSW Energy has started commercial operations of the fourth 300MW unit at its power plant at Jaigad in Maharashtra’s Ratnagiri district from Sunday. The entire 1200MW power plant is now fully operational and supplying power to the state grid, the JSW group company said Monday. The stock jumped 2.20% to close at Rs51.20 on the NSE.

J Kumar Infraprojects has bagged various work orders aggregating Rs183.39 crore. The first work order worth Rs145.69 crore is from CIDCO. The company has bagged the second work order from Pune Municipal Corporation worth Rs24.70 crore. It has also bagged piling work orders from various parties worth Rs13 crore. The stock fell 0.60% to end trade at Rs148.40 on the NSE.

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