Wednesday Closing Report: Lacklustre trade until Sensex crosses 20,000

The domestic market ended its three-day winning streak today, closing lower on economic concerns arising from the Asian region and Europe. Investors are also awaiting the Reserve Bank of India’s mid-term policy review, slated to be announced on Thursday.

The market opened with a negative bias on mixed cues from the global markets and on profit-booking after three successive days of gains. Oil & gas, technology and PSU stocks were up in early trade, while banking and realty sectors were mainly responsible for keeping the market lower.

A feeble recovery attempt in late morning trade was thwarted by selling pressure from the broader markets, sending the indices to the day’s lows. The indices were range-bound in the noon session and drifted further southwards towards the end of trading, but ended off the day’s low.

The Sensex settled 151.42 points (0.76%) lower at 19,647.77. The index scaled an intraday high of 19,817.61 and a trough of 19,571.43. The Nifty stood at 5,892.30, down 51.80 points (0.87%). The index touched a high of 5,942.75 and a low of 5,865.80 during trade.

Tracking the indices, the market breadth was also negative. The Sensex ended with 22 declining stocks against eight in the advancing list. The Nifty had 40 losers and 10 gainers today. Among the broader indices, the BSE Mid-cap index declined 1.41% and the BSE Small-cap index fell 1.54%.

The top gainers on the Sensex were TCS (up 1.93%), Infosys Technologies (up 1.67%), Tata Motors (up 1.26%), Bharti Airtel (up 1.24%) and Wipro (up 0.95%). The laggards were led by Hero Honda (down 5.40%), DLF (down 5.15%), ICICI Bank (down 3.65%), State Bank of India (down 3.46%) and HDFC Bank (down 3.34%).

BSE IT (up 1.53%) and BSE TECk (up 1.27%) were the only two sectors that ended in the green. The top sectoral losers were BSE Realty (down 3.53%), BSE Bankex (down 3.18%), BSE Consumer Durables (down 2.38%), BSE Healthcare (down 1.44%) and BSE Public Sector Undertakings (down 1.21%).

The Asian pack ended mostly in the red on concerns over the economic recovery in the region. The Bank of Japan’s quarterly Tankan index of sentiment among large manufacturers slipped to 5 in December from 8 in September. A positive number means optimists outnumber pessimists. Renewed concerns about the European debt crisis after Moody’s Investors Service said it might downgrade its ratings on Spanish government debt, also weighed on investors.

The Shanghai Composite was down 0.54%, the Hang Seng tumbled 1.95%, the Jakarta Composite declined 0.85%, the KLSE Composite fell 0.10% and the Nikkei 225 shed 0.07%. Bucking the trend, the Seoul Composite gained 0.42% and the Taiwan Weighted added 0.19% in trade today.

The Andhra Pradesh assembly, late Tuesday, passed a bill seeking to protect women self-help groups from “exploitation” by microfinance institutions (MFIs), which have come under scrutiny for alleged strong-arm tactics in debt collection and steep interest rates.

The Micro Finance Institutions (Regulation of Money Lending) Bill, 2010 seeks to replace the Andhra Pradesh Micro Finance Institutions (Regulation of Money Lending) ordinance promulgated on 15th October in the aftermath of 75 suicides by borrowers in various districts of the state in recent months.

Seeking to address the issue of climate change in the farm sector, the government on Wednesday approved a Rs350 crore scheme to study its impact on agriculture with a view to bring down production losses.

The Cabinet Committee on Economic Affairs approved the scheme, to be implemented in the remaining part of the current Plan period, to address the impact of climate change on agriculture.

The US markets ended higher on Tuesday on the Federal Reserve’s reiteration that it would continue with its economy-boosting measures. The central bank kept overnight interest rates unchanged and pledged again to buy $600 billion in treasury debt through next June. This apart, November retail sales data from the Census Bureau beat analysts’ forecasts, and small-business sentiment improved to its highest level in three years, according to the National Federation of Independent Business.

The Dow gained 47.98 points (0.42%) at 11,476.62. The S&P 500 added 1.13 points (0.09%) at 1,241.59. The Nasdaq rose 2.81 points (0.11%) at 2,627.72.

Foreign institutional investors were net buyers of a mere Rs33.53 crore worth of stocks on Tuesday. Domestic institutional investors, on the other hand, were net buyers of equities worth Rs349.17 crore.

Ratings agency Crisil today reaffirmed its highest grade with a stable outlook on FMCG major Dabur’s (up 2.21%) bank facilities and debt programmes. This follows the company’s decision to go for a $100 million deal to acquire US-based Namaste Laboratories and its subsidiaries.

The agency has reaffirmed a ‘AAA/Stable’ rating on Dabur’s Rs125 crore long-term bank facilities and Rs20 crore non-convertible debenture programme. It has also reaffirmed the ‘P1+’ rating on the company’s Rs32.5 crore short-term bank facilities and Rs200 crore short-term debt programme.

Coal India (up 0.11%) is in talks with Indonesia’s Sinar Mas Group for acquiring coal mines in the island-nation, a top company official said. Indonesian conglomerate Sinar Mas Group has interests in coal mining, logging and wood—pulp production and palm oil plantations.

Besides, the fourth-largest coal firm in the US, Massey Energy is also negotiating with the Indian major for sale of some of its assets.

Bank of Baroda (down 2.43%) has informed the Bombay Stock Exchange that it has entered into a memorandum of understanding with BBVA (Banco Bilbao Vizcaya Argentaria) to form a joint venture in its credit card business. Upon securing regulatory approval, the agreement between both entities will allow BBVA to acquire a 51% stake in the existing credit card subsidiary of Bank of Baroda—Bobcards Ltd.


JSW Infra sells 10% stake to US co Eton Park

Sajjan Jindal led JSW Infrastructure Ltd, said it will sell a 10% stake in the company to the US based Eton Park for about $125 million.

“Eton Park will invest up to $125 million in our company. The proceeds will be used for expansion of JSW’s Ports business,” JSW Infrastructure’s chairman NK Jain said.

JSW Infrastructure is into the development of infrastructure for ports, airports, ship repair, shipyards, townships, rail connectivity, inland waterways, water treatment plants and pipelines.

The company currently operates two ports—one at Jaigarh in Maharashtra and the other in Goa.
JSW Ports has developed Jaigarh Port where the company has a 50 year licence on a build, own, operate, share and transfer basis.

“Phase -I of the project has been commissioned and is operational. Phase-II of the project is expected to commence shortly,” he said.

“JSW Ports is exploring various opportunities to develop ports and port-related infrastructure in various parts of the country to meet the cargo requirements of the group and external clients,” he said. 


Ashok Leyland to open assembly plant in UAE

The Hinduja Group flagship Ashok Leyland on Thursday will inaugurate a vehicle assembly plant in UAE’s Ras al Khaimah Investment Authority (RAKIA).

The plant will be inaugurated by Sheikh Saud Bin Saqr Al Qasimi, UAE’s Supreme Council Member and the ruler of Ras Al Khaimah in the presence of Srichand P Hinduja, chairman of Hinduja Group.

In October 2006, Ashok Leyland had signed a MoU with RAKIA for setting up the assembly unit, which eventually be upgraded to a vehicle assembly plant (for trucks and buses) in the second phase.

It was then announced that the new venture would involve an investment of $50 million in a phased manner.

On Wednesday, Ashok Leyland ended 3.43% down at Rs66.10 on the Bombay Stock Exchange, while the benchmark Sensex declined 0.76% to 19,647.77 points.


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