Uptrend to continue: Wednesday Closing Report

Nifty to move in the range of 5,120 and 5,180

Optimism after the RBI’s CRR cut and a positive trend in the Asian region helped the local market trade in the positive for the entire session. However, the indices gave up some gains in late trade as key European markets edged lower after opening in the green. On the highest volume of 94.16 crore shares on the National Stock Exchange (NSE) in the current uptrend, the Nifty ended above the resistance of 5,150 we had mentioned in our closing report on Tuesday. The uptrend is expected to continue with the Nifty moving in the range of 5,120 and 5,180.

The Indian market will remain closed on Thursday, 26 January, on account of Republic Day.

Encouraged by the Reserve Bank of India’s (RBI) 50 basis point cut in the cash reserve ratio (CRR), the market extended its gains into the second day. A firming trend in the Asian markets in morning trade, some of which opened after the Lunar New Year holidays, also supported the gains back here. The Nifty opened 25 points higher at 5,152 and the Sensex resumed trade at 17,069, up 73 points above its previous close.

A small bout of profit booking in the first hour resulted in the benchmarks falling to their intraday lows. At the lows, the Nifty went back to 5,130 and the Sensex dropped to 17,017. The lows spurred buying interest in select blue-chips which took the indices to a higher trajectory in subsequent trade.

The upmove was marked by small bouts of profit taking, but a positive trend ensured that the indices stayed higher. The market hit the day’s high in late trade with the Nifty rising to 5,174 and the Sensex scaling 17,130.

However, the market lost some steam after the European indices pared early gains. The Nifty closed 31 points up at 5,158 and the Sensex settled at 17,077, a gain of 81 points.

The advance-decline ratio on the NSE was in favour of the gainers at 1116:557.

The broader indices outperformed the Sensex today as the BSE Mid-cap index climbed 1.25% and the BSE Small-cap index gained 1.11%.

With the exception of the BSE Capital Goods index (down 0.33%), all other sectoral gauged settled higher. The gainers were led by BSE Metal (up 1.79%); BSE PSU (up 1.24%); BSE TECk (up 1.20%); BSE Auto (up 1.15%) and BSE Consumer Durables (up 1.12%).

The toppers on the Sensex were Coal India (up 3.90%); Tata Motors (up 3.78%); Tata Steel (up 2.97%); Sterlite Industries (up 2.47%) and Maruti Suzuki (up 2.44%). The top losers on the index were Tata Power (down 2.09%); Jindal Steel (down 1.67%); Hero MotoCorp (down 1.43%); Larsen & Toubro (down 1.35%) and Hindalco Industries (down 1.08%).

The top gainers on the Nifty were Reliance Infrastructure (up 6.89%); Sesa Goa (up 5.78%; BPCL (up 4.97%); Tata Motors (up 3.83%) and SAIL (up 3.10%). The main laggards were Hero MotoCorp (down 2.48%); Jindal Steel (down 2.02%); Tata Power (down 2%); L&T (down 1.95%) and HCL Technologies (down 1.88%).

Markets in Asia settled higher on better-than-expected earnings reports from the US and lower yields of Eurozone bond auctions. On the flip side, Japan posted its first annual trade deficit in 2011 for over 30 years, as the March 2011 earthquake and tsunami pressured fuel import costs and the strengthening yen impacted exports. Japan reported a trade deficit of 2.49 trillion yen ($32 billion) for 2011, ministry of finance data showed on Wednesday, its first annual deficit since 1980.

The Nikkei 225 surged 1.12%; the Straits Times climbed 1.48% and the Seoul Composite added 0.12%. Among the losers, the Jakarta Composite declined 0.78% and the KLSE Composite lost 0.22%. At the time of writing, the key European bourses were trading lower and the US stock futures were mixed.

Back home, foreign institutional investors were net buyers of shares totalling Rs801.29 crore on Tuesday, whereas domestic institutional investors were net sellers of stocks aggregating Rs262.65 crore.

REpower Systems, a wholly-owned subsidiary of Suzlon Energy, has bagged a contract for delivering 25 wind turbines from US-based enXco. However, the company did not divulge the financial details of the order. Suzlon closed 3.01% higher at Rs27.35 on the NSE.

PBA Infrastructure has bagged contract worth about Rs54.42 crore from the Pimpri Chinchwad Municipal Corporation for improvement and development of Dehu Alandi Road. The stock soared 19.97% to close at Rs46.85 on the NSE.

IT services major TCS has obtained a nod from the government to set up a Special Economic Zone at Indore, Madhya Pradesh. The company has got green signal at a time when SEZs have lost sheen as a vehicle of investment in the wake of imposition of Minimum Alternate Tax (MAT) on the SEZ developers and units in the zones. The stock rose 0.60% to close at Rs1,095.20 on the NSE.


Granules India Q3 net profit zooms 42% to Rs7.98 crore

Granules India posted a consolidated net profit of Rs5.62 crore for the quarter ended December 31, 2010

Pharmaceutical firm Granules India reported its consolidated net profit rose by 41.99% to Rs7.98 crore during the quarter ended December 31, 2011, vis-a-vis the same period last fiscal.

The Hyderabad-based company had posted a consolidated net profit of Rs5.62 crore for the quarter ended December 31, 2010, Granules India said in a statement.

The FD (finished dosages) division grew 61% with a strong demand for Metformin in the US and European markets, and PFI (Pharmaceutical Formulation Intermediate) division 52% on the back of ibuprofen and paracetamol sales.

Shares of Granules India closed at Rs74.30, up 12.92% on the BSE today.


CCI approves amalgamation of IVRCL Assets with parent company

Shareholders of IVRCL A&H will received five fully paid-up equity shares of Rs 2 each in IVRCL for every six shares of Rs 10 each held on the record date to be fixed as per the listing agreement

The Competition Commission of India (CCI) has approved the proposed amalgamation of IVRCL Assets and Holdings with parent IVRCL and the demerger of its real estate business into a new company.

"Further, the company has informed that approval of the CCI to the aforesaid scheme has been received by way of order under Section 31(1) of the Competition Act, 2002, vide Combination Registration No. C-2011/12/13, dated January 17, 2012," IVRCL said in a filing to the BSE (Bombay Stock Exchange).

IVRCL Assets and Holdings had earlier informed the BSE that the board of directors of the company and IVRCL, at their respective meetings, accorded in-principle consent to pursue the amalgamation, subject to acceptance of a fair share swap ratio and other commercial matters.

The boards have also approved the appointment of legal advisors and merchant bankers to determine the share swap ratio and obtain a fairness opinion thereof.
IVRCL clocked a net profit of Rs 158 crore on a turnover of Rs 5,651 crore during FY11, while IVRCL Assets and Holdings suffered a net loss of Rs 47 crore on income of Rs 683 crore for the same period.

As per the scheme, shareholders of IVRCL A&H will received five fully paid-up equity shares of Rs 2 each in IVRCL for every six shares of Rs 10 each held on the record date to be fixed as per the listing agreement.

At present, IVRCL holds 75.72% of the equity share capital of IVRCL A&H.
Shares of IVRCL and IVRCL A&H closed at Rs52.20 and Rs39.50, respectively, up 4.09% and 3.54%, on the BSE today.


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