Thursday Closing Report: Trapped in a range between 19,800 and 20,200

The market opened steady on unsupportive global cues. Choppy trading on the futures and options (F&O) contract expiry day saw the indices dipping in and out of the red on a couple of occasions. The weekly inflation numbers pushed the market to the day's lows but a splendid recovery at the fag end of the session resulted in a close above the crucial levels.

The Indian market opened flat on ambiguous global cues. The indices touched early peaks but pared their gains to enter the negative territory amid a high degree of volatility. The benchmarks touched the day's lows on news of a rise in the weekly food inflation to 16.44% for the week ended 18th September. Selective buying pushed the market into the green albeit for a short while. The market again fell prey to profit booking in the post-noon session, but staged a splendid recovery in the dying moments of the day to close above the crucial levels.

The Sensex closed at 20,069, up 112.78 points (0.57%), off its mid-session high of 20,114. The index earlier touched a low of 19,864. The Nifty settled 38.65 points (0.65%) higher at 6,030. The benchmark oscillated between a high-low of 6,048 and 5,963, intraday.

The market breadth was negative today. The Sensex closed with 19 advancing stocks against 11 stocks in the red. The Nifty had 29 gainers and 21 losers today. The broader indices ended mixed; the BSE Mid-cap index lost 0.24% while the BSE Small-cap index added 0.11%.

The top Sensex gainers were HDFC (up 3.29%), Sterlite Industries (up 3.28%), Hindalco Industries (up 2.61%), ITC (up 2.53%) and Wipro (up 1.61%). The laggards of the index were ACC (down 1.49%), ONGC (down 1.48%), Reliance Infrastructure (R-Infra) (down 1.28%), Reliance Industries (RIL) (down 1.27%) and Reliance Communications (RCom) (down 0.85%).

The sectoral gainers were BSE Fast Moving Consumer Goods (FMCG) (up 1.40%), BSE Metal (0.82%) and BSE Bankex (up 0.76%). The sectoral losers included BSE Oil & Gas (down 1.17%), BSE Consumer Durables (down 0.89%) and BSE Auto (down 0.51%).

Food inflation increased to 16.44% in the week ended 18th September, climbing 0.98 percentage points from 15.46% in the previous week. This was the fifth consecutive week in which the rate of food prices has risen, after a spell of moderation in July and the first half of August.

The wholesale price index (WPI) based inflation for the month of August stood at 8.51%, according to the new Wholesale Price Inflation (WPI) series released by the government earlier this month. As per the old series with a base year of 1993-94, WPI inflation stood at 9.5% for the month.

Asian markets ended mixed as the ongoing financial crisis in European threatens to slow down the global recovery. Investors are opting for safer bets like precious metals instead of riskier assets like stocks. Chinese shares advanced despite Beijing taking new initiatives Wednesday to cool high property prices, ordering banks to halt lending for third and subsequent home purchases and raising the minimum down payment for all first-time home buyers.

The Shanghai Composite closed 1.72% higher, Jakarta Composite was up 0.17%, KLSE Composite was up 0.12% and Seoul Composite gained 0.34%. On the other hand, Hang Seng shed 0.09%, Nikkei 225 was down 1.99%, Straits Times was down 0.27% and Taiwan Weighted fell 0.04%.

The US market closed lower on Wednesday in the absence of any economic cues and on worries about the ongoing debt crisis in some Eurozone nations. Financial stocks were also weak as the government is getting ready to exit its investments in Citigroup and American International Group, made during the height of the financial crisis. The Dow slid 22.86 points (0.21%) to 10,835. The S&P 500 fell 2.97 points (0.26%) to 1,144. The Nasdaq fell 3.03 points (0.13%) 2,376.

Foreign institutional investors were net buyers of stocks worth Rs756 crore on Wednesday. Domestic institutional investors sold equities worth Rs835 crore on the same day.

Cadila Healthcare' joint venture (JV) company Zydus Nycomed Healthcare has commissioned the newly expanded active pharmaceutical ingredient (API) manufacturing facility at Navi Mumbai.

The company is expected to commence commercial production of APIs by December 2010. To begin with, the facility will be manufacturing Pantoprazole, Urapidil and Lornoxicam and by 2011 the company plans to produce eight additional APIs.

Cadila Healthcare settled 0.74% lower on the BSE today.

Real estate major IVRCL Assets & Holdings (down 0.89%) has successfully raised Rs250 crore from IFCI by subscribing to compulsorily convertible debentures (CCDs) for funding its subsidiaries.

These CCDs are non-dilutive at the holding company (IVRCL Assets and Holdings) and will be treated as equity at the project company level, reducing the need for investment by the company. The instrument has a coupon rate of 9% per annum.

The country's largest car-maker, Maruti Suzuki India (up 0.74%), today said it will ramp up production by about 10% to nearly 1.1 lakh units every month from October, taking its annual output to 13 lakh units in 2011-12.

The company expects to notch up its highest-ever monthly sales in September, with a growth of 32%-33% per cent compared to the same month last year. In the entire 2010-11 fiscal, it aims to sell 12 lakh units.


Food inflation to ease after monsoon: FM

New Delhi: Food inflation shot past 16% for the week ended 18th September, the fifth straight week of steady climb, prompting finance minister Pranab Mukherjee to express concern over the rising prices of essentials, reports PTI.

"Inflation has increased and particularly the number of food items like jawar or bajra and pulses, fruits, vegetables, meat, eggs... All these food items prices have increased. This is an area of concern," Mr Mukherjee said.

Food inflation climbed 0.98 percentage points to 16.44% during the week ended 18th September, from 15.46% in the previous week, on higher prices of vegetables, milk and pulses.

Mr Mukherjee said, however, "I do feel that after the monsoon period is over, and I do feel it would (be) over in a few days, there would be some moderating influence and the monetary policy, which we have adopted, will also mop up the excess liquidity from the market."

Economists too said the prices would ease as rains recede and Kharif output comes to the market. They said once supply disruptions stop, prices of fruits and vegetables will come down, which is expected after October.

"Once Kharif output arrives in the market post October and supply constraints are lessened as rain recedes, inflation will come down," Crisil chief economist D K Joshi said.

Many parts of the country including Delhi, Haryana, Punjab, Uttar Pradesh, Himachal Pradesh, Assam and the desert state of Rajasthan have been witnessing torrential rains and floods that have disrupted supplies of staples. Eastern and north-eastern regions are, however, facing drought conditions.

On an annual basis, cereals prices rose by 6.11%, driven mainly by higher prices of pulses, rice and wheat.

While prices of pulses rose 5.94% on a yearly basis, wheat and rice became costlier by 9.14% and 4.05%, respectively.

Fruit and vegetable prices rose by 15.13% and 5.87%.

Among other food items, milk prices soared by 24.32% during the week compared to the same period last year, and onion prices went up by 1.39%. However, potato prices declined by 50.48%, continuing the trend of the last few weeks.

Experts said if food prices continue to rise unabated, the Reserve Bank of India (RBI) will tighten its lending and borrowing rates in the next policy rates review in November.

Earlier this month, to tame inflation, the RBI raised key policy rates by up to 50 basis points for the fifth time this year in order to curb consumer spending.

It upped short-term lending (repo) rate by 25 basis points and borrowing (reverse repo) rate by 50 basis points to 6% and 5%, respectively.


Ahluwalia Contracts wins orders worth Rs476 crore for civil works

Ahluwalia Contracts (India) Ltd said it won orders worth around Rs476 crore for various civil works.

The company won an order worth Rs235 crore from Logix Infratech for civil and structural works for Logix-Blossom Green residential project. It has also won an order worth Rs55.2 crore from Ultra Space Developers, Mumbai, for civil and finishing works for residential project 'Insignia', said the company in a regulatory.

The orders worth Rs60 crore and Rs90 crore are from Sheth Developers, Mumbai, for construction of commercial building E-Zone IT Part at Thane and for construction of two residential towers' block at Vasant Lawns, Thane.

The company received another order for Rs51.9 crore from NBCC, New Delhi, for construction of National Press Centre at Raisina Road, while it had received an order for Rs77.4 crore from Samundra Developers for civil and finishing works for residential tower 'The Address' in Bandra, Mumbai.

The company received orders worth Rs26.8 crore from Guru Ashis Developers, Mumbai, for civil and structural works for residential towers in Sec-R9, re-development project at Siddarth Nagar, and an order worth Rs11.3 crore from Infinity BNKe Infocity for civil construction works in proposed IT Part at Salt Lake, Kolkata.

On Thursday, Ahluwalia Contracts shares gained 2% to Rs206 on the Bombay Stock Exchange, while the benchmark Sensex closed 0.6% up at 20,069 points.


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