Sideways move in action

Indian markets struggled to stay in the green ahead of the Union Budget 2010-2011 and on the back of Maruti’s slump

Indian markets remained highly volatile throughout the day as investors remained highly cautious ahead of the Union Budget 2010-2011 and as index heavyweight Maruti Suzuki slumped. The Sensex gained 49 points from the previous day’s close, ending the day at 16,286; and the Nifty closed at 4,870, up 14 points.

The market is expected to remain highly volatile this week with the focus being on the derivatives expiry on Thursday, 25 February 2010. Rollover in Nifty futures from February 2010 series to March 2010 series was about 29% at the end of Monday’s trading. Rollover in Mini Nifty futures was also at the same level. We expect the market to stay sideways tomorrow.

At 12:00 hrs IST, the Sensex was trading 77 points higher from the previous day’s close at 16,314. However, at 14:00 hrs IST, the Sensex was trading at 16,274, up 37 points.

At the end of the day, Maruti Suzuki fell more than 3% after the company said it has recalled 1 lakh A-star cars to fix fuel-leakage problems.

Firstobject Technologies has signed an agreement for an incubation centre at the STPI in Kakinada, Andhra Pradesh, on lease basis. The stock was down 5%.
Steel Strips Wheels informed the stock exchanges that Renault, one of the largest manufacturers of cars in Europe and a leading manufacturer of light commercial vehicles, has nominated Steel Strips as a key supplier for High Tech Steer Wheel Rims for one of its new vehicles to be launched in early 2011. However, the stock was down 1%.

Tata Communications has announced that Tyco Telecommunications will be constructing the TGN Gulf cable system. The stock was up 1%.

CNI Research is planning to enter e-broking and distribution of insurance products through alliance partners. The stock was down 2%.

GEI Industrial Systems has bagged two orders amounting to Rs140 crore for Air Cooled Vacuum Steam Condenser from Shree Power Ltd (a subsidiary of Shree Cements Ltd) and Jaypee Group. The stock shot up 5%.

EdServ Softsystems has signed a letter of intent (LoI) to acquire Hyderabad-based SchoolMATE [School Management At Ease], a CRM and ERP software solution provider for schools. The stock fell 1%.

Religare Enterprises was up 2% after the company approved a proposal to invest up to $1 billion for acquiring a controlling stake in Northgate Capital LLC, USA and Northgate Capital, UK.

Kalpataru Power Transmission was down 2%. The board of the company has approved plans to raise up to $125 million through a QIP or some other route to support the future growth plans of the company.

The follow-on public offer of Rural Electrification Corporation (REC) was finally subscribed 3.12 times on the last day of the bidding for the issue today, as per data available on the NSE’s website.

Meanwhile, junior finance minister SS Palanimanickam said that the government has so far raised Rs12,740 crore from selling stakes in state-run companies since May 2009. The government raised Rs8,516 crore in six years to March 2009, he added.

In between, reports citing joint secretary Sidhartha Pradhan indicated that the government will not defer plans to sell stakes in State-run firms despite the poor market response to stake sales in state-run firms REC and NTPC.

The Railway Budget will be unveiled tomorrow, followed by tabling of the Economic Survey on 25th February 2010 and the Union Budget on 26th February.

As per media reports, railway minister Mamata Banerjee is expected to present a populist budget, leaving passenger fares untouched, and rationalise freight rates of certain commodities like iron ore, coal and cement. She is unlikely to tinker with the freight rates of essential commodities, including foodgrains.

During the day, finance minister Pranab Mukherjee said that the government will continue measures to tame inflation in the financial year ending March 2011.

During the day, Asia’s key benchmark indices in Hong Kong, Singapore, South Korea and Taiwan rose between 0.11%-1.09%. However, China and Japan fell 0.69% and 0.47%, respectively.

On Monday 22 February 2010, in the US markets, the Dow Jones Industrial Average declined 19 points while the S&P500 and the Nasdaq Composite slipped one point and two points, respectively.

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