Tuesday Closing Report: A new push towards 20,300 is possible

The market opened sideways on dismal cues from the global markets. A sell-off in select blue-chip stocks kept the market under pressure, forcing a close with a marginal loss in a generally choppy session.

The market opened flat, tracking the Asian markets which were weak in early trade. Banking stocks were trading lower as banks announced hikes in deposit rates, which will put pressure on their interest margins. Selling in heavy-weights also contributed to the indices trading lower. Southward movement continued with the indices touching their day's low in noon trade. Recovery attempts were thwarted by bouts of profit-taking keeping the market in the red and ensuring a steady close for the third straight day.

The Sensex settled 46.67 points (0.23%) lower at 19,934.64, below its psychological level. The barometer scaled a high of 20,008.36 and dipped to a trough of 19,824.44 today. The Nifty closed at 5,976.55, a fall of 15.70 points (0.26%) over its previous close. The index touched a high of 6,001 and a low of 5,939.70, intraday.

The market breadth was tilted in favour of the gainers, with 19 Sensex stocks ending higher and 11 scrips declining. The Nifty had 30 advancing stocks while 20 stocks ended in the red. The broader markets underperformed the key benchmarks as the BSE Mid-cap index declined 1.04% and the BSE Small-cap index tumbled 1.70%.

The top Sensex gainers were Hindalco Industries (up 2.51%), NTPC (up 2.22%), Maruti Suzuki (up 1.61%), ONGC (up 1.17%) and Bajaj Auto (up 1.11%). The losers included ICICI Bank (down 3.50%), SBI (down 2.96%), DLF (down 2.95%), Jaiprakash Associates and Tata Motors (down 1.96% each).

BSE Oil & Gas (up 0.91%), BSE Metal (up 0.69%) and BSE IT (up 0.31%) were the notable gainers in the sectoral space. On the other hand, BSE Bankex (down 2.86%), BSE Realty (down 0.93%) and BSE PSU (down 0.68%) were among the sectoral losers.

Overcoming the impact of the global economic recession, the Indian economy is poised to achieve 9% growth in the current financial year itself, driven by robust performance of agriculture and industry sectors.

In its mid-year analysis of Indian economy, the government said high inflation, which was a major concern, has started declining and it hopes that it may fall to 6% by March 2011 from over 8% now.

Markets in Asia ended mostly higher on announcement of tax cuts by US president Barack Obama and on reports that the Chinese government might hike rates this weekend. This apart, the Australian central bank's decision to keep interest rates unchanged eased pressure.

The Shanghai Composite gained 0.65%, the Hang Seng surged 0.82%, the Straits Times rose 0.33%, the Seoul Composite advanced 0.45% and the Taiwan Weighted added 0.02%. On the other hand, the Nikkei 225 declined 0.26% in trade today.

Meanwhile, the Bombay High Court today stayed the environment ministry's direction to Lavasa Corporation to stop construction at the proposed hill station in Pune district.

The high court, which is hearing Lavasa's petition, directed the ministry to give the corporation a hearing on whether it could have stayed the construction at Lavasa without giving a prior hearing.

The US markets ended trade mostly in the red on Monday as investors studied the implications of the comments made by the Fed chief over the weekend, outlining plans to boost the economy. The ongoing European debt crisis also weighed on investors as Germany rejected attempts by Eurozone members to increase the size of the Euro 750 billion ($1 trillion) safety net for debt-stricken members.

The Dow declined 19.90 points (0.17%) at 11,362.19. The S&P 500 shed 1.59 points (0.13%) to 1,223.12. On the other hand, the Nasdaq added 3.46 points (0.13%) to 2,594.92.

Institutional investors were net sellers in the equities segment on Monday. While foreign institutional investors offloaded stocks worth Rs201.62 crore, domestic institutional investors liquidated stocks worth Rs313.89 crore yesterday.

Packaging material maker Jindal Poly Films (down 5.47%) today said it will invest around Rs600-Rs700 crore to put up a second manufacturing plant near the existing facility at Nashik in Maharashtra.

The proposed facility would go on steam by 2012-13 with an initial manufacturing capacity of 30,000 tonnes per annum (tpa) BoPET and 66,000 tpa BoPP. Capacity of the plant could be enhanced up to four folds in future depending on the requirement, the company said.

Engineering and construction major Larsen & Toubro (L&T) (up 0.36%) has said that the first energy-efficient equipment manufactured by the company for Jaypee Group's 1,500-MW coal fired thermal power plant at Bina, which would be commissioned in 2013.

L&T currently manufactures power equipment that can generate 4,000MW of electricity and would suitably enhance the capacity by building energy-efficient and environment-friendly ultra supercritical machinery.

Welspun Corp (up 0.65%), the second largest line pipe company in the world, has won new pipe and plate orders worth Rs1,670 crore (about 277 KMT for pipes and 57 KMT for plates), mainly from the international markets.

According to the company's filing with the Bombay Stock Exchange, the project has to be completed over a period of one year. Currently, the order book of the company stands at about Rs6,150 crore (around 925 KMT for pipes and 103 KMT for plates), excluding orders being executed in the current quarter.


Transparent, consistent policy must for further telecom growth

New Delhi: Lauding the telecom department for achieving its tele-density target ahead of schedule, the government today said a transparent and consistent policy framework would ensure further growth in the sector, reports PTI.

“With an overall tele-density achievement of 61% (137% urban and 28% rural), the sector has been a success story so far,” said the Mid-Year Analysis of the economy for 2010-11. The document was tabled by finance minister Pranab Mukherjee in Parliament

It said the sector has been highly successful in attracting private investment and generating additional revenues to the government.

Besides, the mid-year analysis also said the private players are expected to invest about 82% of the total projected investment of Rs3,45,134 crore in the sector during the 11th Plan.

Outlining several cross-cutting, regional and local level challenges, it said that there is an urgent need to create an enabling environment for the private investment and improve delivery of the public-sector projects at sub-national level.

The analysis document said the growth rate could cross 9% in the current fiscal itself and revert to the pre-crisis levels.

It is estimated that growth in 2010-11 will be 8.75% with 0.35% variation on either side.

The range indicates the possibility of crossing the 9% mark this year itself.


Hindujas in pact with French companies

The Hinduja Group has signed agreements with leading French firms for road infrastructure projects as well as development of solar energy in India.

The Group co-chairman GP Hinduja has signed a 50:50 joint venture agreement for development of road infrastructure projects with France-based Vinci Group.

The joint venture is for acquiring small, local construction companies and put them together for road construction in India, Mr Hinduja said. He, however, declined to name the companies which are on the radar for acquisition.

Mr Hinduja has also signed a pact for joint development of solar energy for rural areas with a French company whose name he declined to reveal.


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