HAPPY INVESTING ............ CHEERS !!!
Thursday, March 31, 2011
TOP PICKS FOR 1st APRIL
HAPPY INVESTING ............ CHEERS !!!
ROLLER COASTER RIDE
Indian frontline indices went through a rollercoaster ride on the settlement day of March series futures and options contracts as sentiments turned highly volatile in the second half of the session. The seven successive days of winning streak got extended for yet another day, thanks to the late short covering rally after the indices drifted to the red terrain on the back of hefty position squaring in rate sensitive and healthcare counters. The rebound in international crude prices by around a percent on the back of the ongoing turbulences in Libya and neighboring nations too weighed on the local sentiments. However, the rally in software and technology stocks capped the downside risks for the markets while the ease in inflation numbers to single digits during the week-ended March 19 after showing an unexpected increase in the previous week also supported the investor mood. The NSE's 50-share broadly followed index Nifty, settled a tad below the crucial 5,850 support level, after surging around a percent while Bombay Stock Exchange's Sensitive Index, or Sensex garnered over one hundred fifty points and closed just below the psychological 19,450 level. In the broader markets especially the mid cap stocks after a tremendous rally in last session showed some sign of fatigue but managed to hold in green. The BSE's Midcap and Smallcap indices went home with trivial gains of 0.29% and 0.21% respectively, underperforming their larger peers by quite a margin. On the sectoral front, The IT pocket grabbed the top gainer's position after garnering 1.92% on hopes that upbeat results and outlooks last week from global technology majors Oracle Corp and Accenture bode well for resurgence in tech spending. Heavyweight TCS soared 2.71%, being the top gainer on the index while stocks like Infosys and Wipro too gained 2.10% and 1.15% respectively. The FMCG counter too remained amid the thick of things and advanced 1.67% on the back of around 2.50% gains in Marico and Hindustan Unilever each. Rally in index bellwether Reliance Industries in the last too lifted local mood as it amassed almost one and half a percentage points. The paper stocks continued to remain in jubilant mood while AP Paper Mills once again got locked in upper circuit other paper stocks too traded higher. On the other hand, the Banking sector languished at the bottom of the table after slipping 0.70% as majors like SBI and Indusind Bank plummeted 3.19% and 4.87% respectively. While the Auto stocks also slipped after Maharashtra state government reportedly withdrew a sales tax exemption offered to several mega projects in state's new automobile hub Chakan-Talegaon. The incentives were offered to woo big investments to Maharashtra; with the roll back the automobile industry has expressed its concern that the government has changed the rules after the works got started.
On the global front, all the Asian equity indices barring Shanghai Composite finished the day's trade in the positive terrain on Thursday as Wall Street closed higher overnight on the back of strong jobs data from the United States that boosted hopes for the global recovery. The European markets though traded on a subdued note as France's CAC, Germany's DAX and Britain's FTSE exhibited negative trends. On the other hand, the screen trading for US index futures indicated that the Dow could open in the flat zone.
Earlier on Dalal Street, the benchmark got off to a steady start in the morning trade tracking optimistic leads from overnight Wall Street which closed higher led by good jobs data and rally in Telecom companies on reports that private companies are continuing to add workers and planned layoffs at US firms fell in March. Thereafter, the indices gradually kept gathering momentum through the first half of day's trade as they went on to touch intraday highs of 19,575.16 and 5,872.00. However hefty bouts of profit booking in counters like Bank, Auto and Realty dragged the indices even below the neutral line that too just half an hour before the closing bell. But what followed in the final moments of trade was an unexpected short covering rally that helped the bourses convalesce most of the losses and snap eighth straight session in the positive terrain settling a tad below the psychological levels of 5,850 and 19,450. The March F&O series expired on a strong note with Sensex and Nifty gaining about 8.7% and 9% respectively from the previous series. On the expected lines, markets registered extremely large volumes of over Rs 2.77 lakh crore while the turnover for NSE F&O segment too remained at the higher side at over Rs 2.54 lakh crore on the March series F&O settlement day. Market breadth turned negative by the end as there were 1444 shares on the gaining side against 1412 shares on the losing side while 95 shares remained unchanged.
Finally, the BSE Sensex surged by 155.04 points or 0.80% to settle at 19,445.22 while the S&P CNX Nifty climbed 46.10 points or 0.80% to end at 5,833.75.
The BSE Sensex touched a high and a low of 19,575.16 and 19,284.35 respectively. The BSE Mid-cap and Small-cap indices gained by 0.29% and 0.21%, respectively.
Bajaj Auto up 2.90%, ONGC up 2.76%, TCS up 2.71%, Hindustan Unilever up 2.50% and Hero Honda up 2.23% were the major gainers on the Sensex.
On the flip side, SBI down 3.19%, Cipla down 2.01%, Reliance Communication down 2.00%, Mahindra & Mahindra down 1.61% and Maruti Suzuki down 0.95% were the Major losers on the index.
Despite the Indian government looking to further ease the regulations governing the foreign direct investment (FDI), the direct capital inflows into the country declined for a second consecutive month in February to $1.2 billion. The figure is about 30% below the FDI worth $1.7 billion received in the same month a year ago.
Various agencies have been raising concerns over declining FDI amidst a widening current account deficit (CAD). Cumulative FDI into India during the first 11-months of the current fiscal year has declined by 25% to $18.3 billion, putting pressure on the government to fine-tune its policies in order to attract greater amount of overseas investment. The country had received FDI worth $24.6 billion during the corresponding period of last financial year.
The Reserve Bank of India (RBI) had said recently that it preferred greater amount of long-term and stable flows through FDI into the country rather than often short-term oriented foreign institutional investment (FII) to bridge the current account deficit (CAD) that the country faces. The Governor of the central bank D Subbarao said that while inflow of foreign capital was welcome for bridging the CAD, the RBI would always prefer the stable inflows in terms of FDI, which comes with a long term commitment, rather than volatile portfolio inflows which can reverse in case of even a small change in either domestic of global economic scenario.
The decline in FDI in India has been rather against the trend seen in other developing countries. A recent report by the United Nations Conference on Trade and Development (UNCTAD) had observed that in the last calendar year, emerging market economies (EMEs) attracted more foreign investment than developed countries for the first time in history as the global economic engine shifts to the EMEs. Despite this, the FDI into India has seen a decline.
Meanwhile, the government is set to release a revised FDI policy circular later in the day hoping to attract greater amount of foreign funds in the next financial year beginning April 1. Among other modifications, the third edition of the Consolidated FDI Policy Circular (CFPC) may contain guidelines on domestic companies issuing shares to foreign entities for considerations other than cash, a move aimed at checking possible misuse of FDI policy to engage in money laundering.
IT up 1.92%, FMCG up 1.67%, Oil & Gas up 1.44%, TECk up 1.42%, and Metal up 0.98% were the major gainers in the BSE sectoral space. Bankex down 0.70%, Health Care down 0.35%, CD down 0.22%, Capital Goods down 0.16 were the loser in the BSE sectoral space.
In a positive news for India's Information Technology (IT) industry, the global IT spending is all set to increase at a faster pace as global economy recovers from the slowdown. According to the latest estimates prepared by the Research and consultancy firm Gartner, IT spending worldwide is projected to touch $3.6 trillion in the current calendar year.
'Worldwide IT spending is forecast to total $3.6 trillion in 2011, a 5.6% increase from $3.4 trillion in 2010,' Gartner said. The forecast has been revised up from a 5.1% estimate given earlier, and reflects the overall improvement in global economy that is giving more confidence to business worldwide. This will be a second consecutive year in significant increase in IT spending after a decline seen in 2008.
India is a major player in global IT market, particularly in the IT services segment. The biggest outsourcing destination in world will benefit directly from the increased IT spending budgets worldwide. In fact, most of the India's top line IT players have shown good buoyancy in revenues in recent quarters hinting the improving global economy was bringing the IT services back towards a high growth trajectory.
The global financial crisis that started in late 2008 with crash of the US banking major Lehman Brothers had clouded the IT industry's outlook with most of the clients scrapping discretionary spending and IT budget getting stagnated or even contracted as an austerity derive was set in motion by business around the world to counter a sudden drop in demand.
However, over last 2-3 quarters, most tech companies have reported that IT spending was again beginning to increase and discretionary spending was also back in picture. Gartner said that while there could be some impact from the disaster in Japan, the current evaluation was that it will not be significant to alter the IT spending plans of major companies. The Indian IT industry is anyway not much worried from the Japan crisis as in terms of volumes, the US and EU are main markets for Indian IT vendors while only a small share of total business comes from Japan.
The S&P CNX Nifty touched a high and a low of 5,872.00 and 5,778.65 respectively.
The top gainers on the Nifty were Reliance Power up 5.25%, Reliance Infrastructure up 3.98%, DLF up 3.15%, Bajaj Auto up 3.02% and ITC up 2.90%.
The top losers on the index were SBIN down 3.29%, Ambuja Cement down 2.50%, RCOM down 1.82%, M&M down 1.68% and Sun Pharma down 1.51%.
European markets were trading in red on Thursday. France's CAC 40 drops by 0.44%, Germany's DAX declined by 0.02% and Britain's FTSE 100 falls by 0.16%.
All the Asian equity indices barring Shanghai Composite finished the day's trade in the positive terrain on Thursday as Wall Street closed higher overnight on the back of strong jobs data from the United States that boosted hopes for the global recovery. Japanese Nikkei jumped about half a percent today as weaker yen boosted exporters. However, Chinese index finished with a cut of about one percent as investors booked their profits in heavyweight stocks after recent gains and amid speculation of another interest rate hike over the weekendMARKETS CONTINUE WITH TEAM INDIA
The Indian equity markets have made a firm start tracking positive cues from global indices. The US markets extended their gains overnight supported by good jobs data, even though European concerns resurfaced with Portugal nearing a bailout. However, the Asian markets were trading on a mixed note. Back home, Nifty surged to its two and a half month high and breached its crucial 5,800 level supported by sustained buying by foreign funds which boosted investors' sentiments and India's win over Pakistan in the cricket's World Cup semi finals also aided the sentiments. Consumer durables witnessed the maximum gain in trade followed by software and capital goods with no losers on the BSE sectoral space. The broader indices were going neck to neck with benchmarks. Meanwhile, Paper stock, AP Paper Mills again touched the roof in the early trade and gained about 20% as in a surprising deal of International Paper Company, the US based paper and packaging giant, has bought 53.5% stake in Andhra Pradesh Paper Mills from its promoters for around Rs 1160 crore. Other Paper stocks viz., Tamil Nadu Newsprint, JK Papers and West Coast Paper mills were also trading with good gains. The market breadth on the BSE was positive; there were 1,119 shares on the gaining side against 467 shares on the losing side while 72 shares remained unchanged.
The BSE Sensex opened at 19,339.75; about 49 points higher compared to its previous closing of 19,290.18, and has touched a high of 19,443.48 while low remain its opening.
The index is currently trading at 19,420.49, up by 130.31 points or 0.68%. There were 20 stocks advancing against 10 declines on the index.
The overall market breadth has made a strong start with 67.49% stocks advancing against 28.17% declines. The broader indices were trading in line with benchmarks; the BSE Mid cap and Small cap indices surged 0.49% and 0.80% respectively.
The top gaining sectoral indices on the BSE were, CD up by 2.06%, IT up by 1.03%, CG up by 0.87%, Realty up by 0.86% and Bankex was up by 0.84%. While there were no losers on the index.
The top gainers on the Sensex were TCS up by 2.05%, Hero Honda up by 1.70%, ONGC up by 0.66%, Jaiprakash Associates up by 1.41% and HDFC was up by 1.25%.
On the flip side, Bharti Airtel down by 1.38%, M&M down by 1.34%, Wipro down by 0.94%, RCom down by 0.50% and Sterlite Industries down by 0.49% were the top losers on the index.
Meanwhile, Government has once again delayed a decision on levying service tax on transport of goods by rail to July 1. The move to defer the levy of tax came after Railway Minister Mamata Banerjee put pressure on the government to waive off service tax as it had done in the previous year. This is the fourth time that the government is postponing a decision on service tax on rail freight which was to be implemented from April 1, 2010.
Earlier in Budget 2009-10, the government had proposed a 10% service tax on goods carried by the railways to provide a level-playing field to transport of goods by road. However, it exempted rail freight from service tax in September 2009. However, in Budget 2010-2011, Pranab Mukherjee announced that the exemption from service tax would be withdrawn.
The service tax attracted an abatement of 70% of the gross value of freight charged on goods (other than exempted goods). This translated to a tax on only 30% of the value of transported goods. The service tax on rail would result in an increase in freight rates between 6-7%, in case the railway decides to pass it on to the consumers. With high food inflation, which has again entered double digits at 10.05% for the week ended March 12, while the overall wholesale price inflation stood at 8.31% in February, this would have further fuelled prices.
The exchequer has already lost around Rs 800 crore in 2010-11 as the finance ministry decided not to levy service tax on transport of goods through rail this fiscal. Service Tax is a form of indirect tax imposed on specified services called 'taxable services'. The objective behind levying service tax is to reduce the degree of intensity of taxation on manufacturing and trade without forcing the government to compromise on the revenue needs. The intention of the government is to gradually increase the list of taxable services until most services fall within the scope of service tax.
The S&P CNX Nifty opened at 5,803.05; about 16 points higher compared to its previous closing of 5,787.65, and has touched a high of 5,830.80 while low remain its opening.
The index is currently trading at 5,823.70, higher by 36.05 points or 0.62%. There were 36 stocks advancing against 14 declines on the index.
The top gainers of the Nifty were TCS up by 2.18%, Hero Honda up by 1.63%, ONGC up by 1.63%, Sesa Goa up by 1.32% and HDFC up by 1.27%.
M&M down by 1.50%, Bharti Airtel down by 1.34%, Wipro down by 1.03%, Sterlite Industries down by 0.64% and Power Grid was down by 0.64%, were the major losers on the index.
Asian markets were trading on a mixed note; Hang Seng was up 22.68 points or 0.10% to 23,474.11, Jakarta Composite was up 15.81 points or 0.43% to 3,656.79, KLSE Composite was up 5.36 points or 0.35% to 1,536.99 and Seoul Composite was up 2.04 points or 0.10% to 2,093.42.
On the flip side, Shanghai Composite was down 28.62 points or 0.97% to 2,927.15, Nikkei 225 was down 26.46 points or 0.27% to 9,682.33, Straits Times was down 1.42 points or 0.05% to 3,093.90 and Taiwan Weighted was down by 23.86 points or 0.28% to 8,622.45.
Wednesday, March 30, 2011
TOP PICKS FOR 31st MARCH
HAPPY INVESTING ........... CHEERS !!!
ANOTHER GOOD PERFORMANCE
It turned out to be yet another swashbuckling performance by Indian equity indices as the joy of closing in the positive territory this Wednesday. Unlike Tuesday's session, bulls showed vigorous buying interests in not only blue chip stocks but in the broader markets as well. Sentiments remained upbeat across the globe as investors traded with conviction supported by expectation of bright corporate earnings figures which eased concerns about nuclear issues in Japan. Meanwhile the wilt in international crude oil prices below $105 a barrel on the back of reports that Libyan rebels retook control of two key port towns and said they would restart crude exports within weeks, supported the local sentiments. Persistent buying by foreign funds in the recent past too underpinned investor mood ahead of the quarterly earnings season as they expected that most of the headwinds have been factored in by the markets and that the companies will report strong earnings for the fourth quarter. While the concerns over inflationary pressure too eased to some extent after fall in crude oil prices. The NSE's 50-share broadly followed index Nifty, settled a tad below the crucial 5,800 support level, after surging around a percent while Bombay Stock Exchange's Sensitive Index, Sensex garnered over one hundred fifty points and closed just below the psychological 19,300 level. Buying was largely seen in the broader markets as investors showed comparatively lower interests in the heavyweights given the fact that the BSE's Midcap and Smallcap indices went home with strong gains of 1.51% and 2.20% respectively. On the sectoral front, Consumer Durables pocket grabbed the top gainer's position after garnering 3.98% led by majors like Whirlpool which soared 6.72%, being the top gainer on the index while stocks like Gitanjali Gems and VIP Industries too gained 3.51% and 2.50% respectively. The rate sensitive Realty counter too remained amid the thick of things and advanced 3.14% on the back of gains in stocks like DB Realty which was up 18.79% and Unitech up 5%. All the paper stocks rallied in the session after the unexpected reports that International Paper Company, the US based paper and packaging giant, bought 53.5% in Andhra Pradesh Paper Mills from its promoters for around Rs 1160 crore, the valuation comes well over 175% from its closing in previous session. Gains in index bellwether Reliance Industries too lifted local mood as it amassed a percentage point by the end of trade.
On the global front, majority of Asian equity indices finished on an optimistic note led by Japanese Nikkei which surged more than two and a half percent as Japanese companies began resuming production and companies in China reported earnings that beat estimates. The European markets too traded on a sanguine note as France's CAC, Germany's DAX and Britain's FTSE exhibited positive trends. On the other hand, the screen trading for US index futures also indicated that the Dow could open in the green zone.
Earlier on Dalal Street, the benchmark got off to a steady start, in line with Asian peers which traded with conviction tracking optimistic leads from overnight Wall Street where equities closed higher on reports that consumer confidence dropped less than feared. Thereafter, the indices gradually kept gathering momentum through the day's trade as investors continued to aggressively pile up positions in beaten down stocks. The frontline indices hit the intraday high levels in the early hours of second half however the benchmarks came off the day's high level in the mid afternoon session as investors booked partial profits a day ahead of the March series F&O contract expiry. Eventually the bourses snapped seventh straight session in the positive terrain and settled a tad below the psychological levels of 5,800 and 19,300. The markets registered lower volumes compared to Tuesday of over Rs 1.68 lakh crore while the turnover for NSE F&O segment was at over Rs 1.49 lakh crore as India and Pakistan descended on to the battlefield and crossed swords at Mohali in the World Cup semi final, the mother of all sporting encounters in this part of the world. Market breadth remained optimistic as there were 2057 shares on the gaining side against 801 shares on the losing side while 93 shares remained unchanged.
Finally, the BSE Sensex surged by 169.38 points or 0.89% to settle at 19,290.18 while the S&P CNX Nifty climbed 51.30 points or 0.89% to end at 5,787.65.
The BSE Sensex touched a high and a low of 19,357.10 and 19,178.77 respectively. The BSE Mid-cap and Small-cap indices surged by 1.51% and 2.20%, respectively. Cipla up 5.17%, Jaiprakash Associate up 4.19%, DLF up 3.83%, Mahindra & Mahindra up 3.46% and SBI up 3.27% were the major gainers on the Sensex.
On the flip side, Hindalco Inds down 1.15%, ITC down 0.84%, BHEL down 0.47%, Tata Power down 0.30% and ONGC down 0.28% were the Major losers on the index.
In a move that will help boost the prospects of Indian textile players in an increasingly competitive global export market, the government has on Tuesday increased the allocation for modernization of the textiles industry to Rs 15,404 crore from earlier sanction of Rs 8,000 crore to be disbursed within the current Five Year Plan ending March 2012.
Not only has it increased the allocation for the Technology Upgradation Fund Scheme (TUFS) but has also restructured the same to make it more effective. A wider gamut of players and particularly the smaller players will be able to get greater benefit and improve their scale of operations from the revised and restructured scheme according to the textile ministry. A decision to this effect was cleared by the Cabinet Committee on Economic Affairs (CCEA) on Tuesday.
As per the restructured scheme, out of the fresh allocation a total of Rs 1972 crore would be available for fresh sanctions while the remaining Rs 5,432 crore will be utilized for meeting the already made commitments. Following the meeting of the CCEA, textile ministry stated that the approval from Cabinet will enable immediate lifting of the pause button imposed on the scheme by it since June 29, 2010. The scheme was put on hold last year following lack of funds.
According to the textile players, one way through which the restructuring will improve the reach of the scheme is the fact that capital ceiling under the margin money has been raised and this would encourage the weaving sector to go in for more number of looms and thus would also boost large-scale investments as well. So far, most of the investments were into second-hand looms.
TUFS was launched in 2007-08 to help the industry upgrade to advanced technology in order to improve competitiveness against other exporting countries. The scheme mainly provides for reimbursement of 5% interest charged by the financial institutions/banks for technology up gradation projects in conformity with the policy. In case of overseas loans, it gives the option of availing a cover for exchange rate erosion of up to 5% per annum instead of 5% interest support. As per the changes made in the scheme the government under the re-structured scheme, 10% capital sops would also be provided on brand new looms.
Consumer Durables (CD) up 3.98%, Realty up 3.14%, Health Care (HC) up 1.95%, Bankex up 1.67%, and Auto up 1.49% were the major gainers in the BSE sectoral space. FMCG down 0.38% was the only loser in the BSE sectoral space.
In a positive development for the coal and mining projects awaiting a nod from the environment ministry, the second meeting of the group of ministers (GoM) on coal mining in go and 'no-go' areas will be held early next months, according to the information released by the coal ministry.
The second meeting of the 12-member GoM was earlier planned to be held on March 25 but was postponed due to the extended Parliament session. The group had earlier met on February 18 but could reach a conclusion on the extent of 'no-go' areas although there were signs from the forest and environment ministry that it would not mind granting some relaxation in the overall 'no-go' areas computation.
'The second meeting of the GoM is likely to take place either on April 7 or April 8,' said the Union Coal Minister Sriprakash Jaiswa on Tuesday. He added that the first meeting of the group, despite having failed to reach a conclusion, was very productive and both the coal and environment ministries were able to narrow down on their differences on some of the crucial issues concerning coal mining in the country.
The issues between the ministry of environment on one side and ministry of coal on other started at the beginning of the last calendar year when the former approached the latter seeking a clarity on how much of India's seven big coalfields will be able to get green node. The environment ministry said that out of the total 6.50 lakh, only 3.50 lakh would be considered for mining as the rest had sensitive forests above them.
The decision was strongly protested by the coal ministry and it got good support of the power and steel ministries as well. At this point, the PMO and the finance ministry intervened and got a large chunk of the 'no go' areas back into the 'go zones'. Now, as many as six central ministries backing the coal ministry in the tussle, the latter is looking to get even greater chunk of coal beds into the 'go zone', a move that can provide a major boost to India's power sector.
The S&P CNX Nifty touched a high and a low of 5,803.15 and 5,753.90 respectively.
The top gainers on the Nifty were Ambuja Cement up 9.42%, DLF up 4.70%, PNB up 4.68%, JP Association up 4.52% and ACC up 4.03%.
The top losers on the index were Hindalco down 1.15%, Cairn down 1.14%, SAIL down 1.09%, IDFC down 0.57% and Reliance capital down 0.55%.
European markets were trading in mix on Wednesday. France's CAC 40 surged 0.90%, Germany's DAX climbed by 1.61% and Britain's FTSE 100 increased by 0.53%.
All the Asian equity indices barring Shanghai Composite finished the day's trade in the positive terrain on Wednesday led by Japanese Nikkei which surged more than two and a half percent as Japanese companies began resuming production and those in China reported earnings that beat estimates. Seoul Composite gained about one percent today, taking support from gains in technology and banking stocks and continued buying by foreign investors. However, Chinese index closed lower, with lingering worries over further monetary tightening, possibly next month, keeping a lid on the market.
NIFTY OSCILLATES AROUND 5800
The Indian equity markets are trading firm in the afternoon session and it seems bulls are not going to stop, continuing their gains for seventh straight day in a row helping the benchmark scale its new nine week high. Mirroring their larger counterparts, broader markets too are trading in the green with BSE Mid-cap and Small-cap indices gaining 1.20% and 1.95%, respectively. While, the US markets closed on the higher note overnight all other Asian peers are trading in the positive terrain indicating strong investors' sentiments except Shanghai Composite which is marginally down. The market breadth on the BSE was in favour of advances in the ratio of 1980:675 while 83 scrips unchanged.
Meanwhile, In a move that will help boost the prospects of Indian textile players in an increasingly competitive global export market, the government has on Tuesday increased the allocation for modernization of the textiles industry to Rs 15,404 crore from earlier sanction of Rs 8,000 crore to be disbursed within the current Five Year Plan ending March 2012. In a positive development for the coal and mining projects awaiting a nod from the environment ministry, the second meeting of the group of ministers (GoM) on coal mining in go and 'no-go' areas will be held early next months, according to the information released by the coal ministry. All the textile companies are in jubilant mood with the decision, Arvind was up by 14.32%, Alok Industries was up by 5.19%, Abhishek Inds was up by 6.85% and Indo Rama Synthetics was up by 2.72%.
The BSE Sensex surged 183.86 points or 0.96% at 19,304.66. The index touched a high and a low of 19,340.93 and 19,178.77, respectively.
The BSE Mid-cap and Small-cap indices soared 1.20% and 1.95%, respectively.
All the sectoral indices on the BSE were trading in the green barring FMCG which is down by 0.19%. Consumer Durable up 3.64% Realty up 1.75%, Capital Goods up 1.56%, Auto up 1.43% and Health Care up 1.23% were the major gainers.
The top gainers on the Sensex were M&M up 3.34%, JP Associates up 2.26%, Cipla up 2.20%, L&T up 2.18% and DLF up 1.84%.
On the flip side, ITC down 0.78%, Bharti Airtel down 0.32% and Hindalco down by 0.07% were the only losers on the index.
Meanwhile, India's core sector, comprising of six infrastructure industries, has registered a growth of 6.8% in the month of February, raising hopes that the performance of the overall index of industrial production (IIP) will also be better in the month under review. The core sector has a weight of 26.7% in the overall IIP and includes crude oil, petroleum refinery, coal, electricity, cement and steel.
Looking at the individual performance, crude oil with a weight of 4.17% in the IIP recorded the best show with a strong growth of 12.2% in February 2011 against a growth rate of 4.0% in February 2010. Cumulative production of crude production grew 11.9% during April-February period of current financial year against 0.3% during the same period of the last fiscal.
Electricity generation (weight of 10.17% in IIP) has also been showing good performance off late and recorded a growth of 7.2% in the month under review against a growth rate of 6.9% in February 2010. On a cumulative basis electricity generation has grown 5.4% during April-February 2010-11 period compared to 6.0% during the same period of 2009-10.
Cement and steel were two better performing sectors indicating that infra activity was finally picking up in country after showing significant slowdown in second half of last year. Cement production (weight of 1.99% in IIP) recorded a growth of 6.5% in the month under review as compared with 7.9% in the same month a year ago. Production of finished steel (weight of 5.13 per cent in IIP) on the other hand recorded a growth of 11.5% in February 2011 against a negative (-) 0.2% in February 2010.The cumulative growth in the two industries stands respectively at 4.3% and 8.1%.
However, petroleum refinery production that has a weight of 2.0% in IIP continued its poor run showing a growth if just 3.2% against a growth of 0.7% in the year-ago period. In the financial year so far, petroleum refinery production has recorded a growth of 2.5% against (-) 0.4% during the same period of 2009-10.
Coal was the worst performing sector (weight of 3.2 per cent in IIP) where production recorded a negative growth at (-) 5.7% in February 2011 against a growth rate of 6.7% in February 2010. Coal production has grown just 0.1% during April-February 2010-11 against an increase of 7.9% during the same period of 2009-10. If coal production continues to remain poor in coming months as well, it can impact electricity production as well which is otherwise showing significant traction.
The S&P CNX Nifty gained 54.80 points or 0.96% at 5791.15. The index touched high of 5800.10 and a low of 5753.90, respectively.
The top gainers on the Nifty were M&M up 3.34%, Ambuja Cement up 3.32%, L&T up 2.45%, JP Associates up 2.32% and SBI up 2.20%.
On the other hand, HCL Tech down 1.25%, ITC down 0.59%, Bharti Airtel down 0.55%, Cairn down 0.45% and Hindalco down 0.34% were the major losers on the index.
The much awaited draft guidelines for giving new banking licenses would be released by the Reserve Bank of India (RBI) in the next few days itself, said the Indian government on Monday. The same will be put in public domain for comments and after taking into account the response of various stakeholders to the draft guidelines, final guidelines will be released.
All the Asian markets are trading in green barring Shanghai Composite. Shanghai Composite down 0.10%, Hang Seng advances 1.63%, Jakarta Composite up 1.16%, KLSE Composite up 0.76%, Nikkei 225 advanced 2.64%, Straits Times up 1.49%, Seoul Composite advances 0.93% and Taiwan Weighted up 0.58%.
MARKETS POWER AHEAD
Buoyed by sustained buying from overseas investors and a declining trend in global crude oil prices, domestic equity bourses have maintained their rally for the seventh consecutive day with the BSE Sensex surpassing the 19,300 mark and the NSE Nifty gyrating around its 5800 milestone. For once, the broader markets are keeping pace with their larger peers. The uptrend can also be attributed to the covering up of pending short positions by speculators ahead of tomorrow's monthly expiry in the derivatives segment. On the global front, Asian stocks tailing the overnight strong performance on Wall Street is trading comfortably in green while Japanese exporters led Tokyo too was up on the back of a weaker yen, but fears over the atomic crisis continued to weigh. The US future indices are showing mixed trend in the screen trade. Back on Dalal Street, on the BSE Sectoral front, bulls have kept their footing firm as all the sectoral indices are confidently trading in green, however, stocks from Consumer Durable, Realty and Healthcare counters are contributing prominent gains. The overall market breadth on BSE was mightily in the favour of advances which thumped declines in the ratio of 1804:497, while, 71 shares remained unchanged. Meanwhile, Shares of PTC India Financial Services were trading at about 10% discount to its issue price on debut.
The BSE Sensex is currently trading at 19,313.79, up by 192.99 points or 1.01%.The index has touched a high of 19,340.93 and a low of 19,178.77 respectively. 29 stocks were advancing against 1 decline on the index.
The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 1.13% and 1.75% respectively.
All the sectoral indices were trading in green. However, the top gaining sectoral indices on the BSE were, CD up by 2.54%, Realty up by 1.98 %, HC up by 1.39%, Auto up by 1.27% and Metal up by 1.19%.
The top gainers on the Sensex were Cipla up 2.58%, Mahindra & Mahindra (M&M) up 2.55%, DLF up 2.35%, HDFC up by 2.15% and ONGC up by 1.84%.On the other side, Bharti Airtel down by 0.40% was the sole looser on the index.
Meanwhile, Capital controls were a legitimate response to a surge in volatile capital inflows and India's central bank will resort to the same if and when the need arises, said D Subbarao, Governor of the Reserve Bank of India (RBI) on Tuesday, adding that global perception of capital controls as an economic tool had improved.
Subbarao said that there was a broad consensus among most central banks about making capital controls a legitimate component of the policy response to surges in capital flows. While delivering a speech in Colombo on the occasion of the 60th anniversary celebrations of Central Bank of Sri Lanka, the Governor said the multi-speed recovery around the world and the consequent differential exit from accommodative monetary policy have triggered speculative capital flows into emerging market economies (EMEs).
'The most high profile problem thrown up by capital flows, in excess of a country's absorptive capacity, is currency appreciation which erodes export competitiveness,' he said adding that ideally capital inflows to EMEs should be stable on a medium term basis to benefit the host country and also be roughly equal to the economy's absorptive capacity.
He noted that while multilateral institutions like the International Monetary Fund (IMF) used to see capital controls as a form of protectionism, the views of most economists even in the developed world has changed since the financial crisis of 2008. 'The crisis has changed the terms of that debate. It is now broadly accepted that there could be circumstances in which capital controls can be a legitimate component of the policy response to surges in capital flows,' Subbarao said.
India has so far not imposed any capital inflows, but some other countries including Brazil had resorted to such restrictions. Capital controls are generally in form of some Tobin Tax, named after James Tobin, who was first to propose that cross boarder capital movement should attract a small tax to discourage volatile flows. Since India runs a significant current account deficit (CAD) of around 2.5-3% of its gross domestic product (GDP), it has been following a wait and watch policy on inflows so far.
While there was a surge in capital inflows by middle of the current financial year, off late, foreign funds have been on the sell mode due to concerns including a high inflation and potential slowdown. Recovery in advanced regions has also lead to slowdown in inflows into emerging economies in recent months. Subbarao stressed that there was a need for economists from both developing and rich world to develop consensus on how temporary surge in inflows or outflows should be handled so as to bring more stability in global financial system.
The S&P CNX Nifty is currently trading at 5,792.15, higher by 55.80 points or 0.97%. The index has touched a high of 5,799.15 and a low of 5,753.90 respectively. There were 47 stocks advancing against just 3 declines on the index.
The top gainers of the Nifty were DLF up 2.55 %,M&M up 2.54%, Dr Reddy up by 2.29%, HDFC up 2.14% and Ambuja Cement up 1.98%.
Bharti Airtel down 0.71%, HCL Technologies down 0.38% and Axis Bank was down by 0.36 %, were the only losers on the index.
Hang Seng gained 1.71%, Jakarta Composite added 0.93%, KLSE Composite rose 0.59%, Nikkei 225 surged 1.90%, Straits Times soared 1.28%, Seoul Composite expanded 1.21% and Taiwan Weighted increased 0.71%.On the flip side, Shanghai Composite down by 0.48% was the lone looser in the Asian pack.
Tuesday, March 29, 2011
TOP PICKS FOR 30th MARCH
HAPPY INVESTING........... CHEERS !!!
EXHILARATION CONTINUES
Investors' exhilaration is showing no signs of waning any time soon in the Indian stock markets as the joy of closing in the positive territory got sextupled this Tuesday, that too on a day when major stock markets across the globe shriveled by quite a margin. Foreign institutional investors are showing renewed vigor in Indian equities following the wilt in international crude oil prices after Libyan rebels advanced against Gaddafi's troops ahead of the quarterly earnings season as they speculated most of the headwinds have been factored in by the markets and that the companies will report strong earnings for the fourth quarter. While the concerns over inflationary pressure too eased to some extent after fall in crude oil prices thereby supporting local sentiments. The NSE's 50-share broadly followed index Nifty, reclaimed the 5,700 mark, an important psychological level, after surging around a percent while Bombay Stock Exchange's Sensitive Index, Sensex garnered over one hundred fifty points to regain the crucial 19,000 level after almost nine weeks. It largely remained a large cap kind of play in the domestic markets as investors showed little interest in the broader markets given the fact that the BSE's Midcap and Smallcap indices went home with losses of 0.02% and 0.44% respectively. On the sectoral front, rate sensitive Auto pocket managed to cling on to the top gainer's position after garnering 1.53% led by heavyweights like Maruti Suzuki which soared 3.12%, being the top gainer on the index while stocks like Tata Motors and Hero Honda too gained 1.55% and 3.02% respectively ahead of the March month sales numbers which are expected to be reported on Friday. Technology counter too remained amid the thick of things and advanced 1.35% on the back of gains in majors like Bharti Airtel which was up 3.36% and Reliance Communication up 4.18%. PSU oil marketing companies like HPCL, BPCL and IOC spurted between 2-3.50% in the day's trade on the back of factors like wilt in international crude oil prices. Index bellwether Reliance Industries remained highly unstable in the session and it slipped marginally by the end of trade after trading in the positive territory for most part of the day.
On the global front, majority of Asian equity indices finished on a somber note led by Chinese stocks which declined more than half a percent. Japanese Nikkei edged lower in the trade as country struggled to contain a meltdown at a nuclear power plant and investors remained worried over the crippled nuclear plant and the impact of the natural disaster on corporate earnings. The European markets too traded on a cautious note as France's CAC, Germany's DAX and Britain's FTSE exhibited negative trends. On the other hand, the screen trading for US index futures also indicated that the Dow could open on a flat note.
Earlier on Dalal Street, the benchmark got off to a soft start tracking subdued leads from across Asia where investors remained on the sidelines due to the weakness in overnight US markets which withered despite some good economic reports as traders remained apprehensive over Japan's nuclear crisis and violence in the Middle East and North Africa. Thereafter, the indices gradually kept gathering momentum through the day's trade as investors continued to aggressively pile up positions in beaten down blue chip stocks. The frontline indices hit the intraday high levels in the late hours of second half however the benchmarks came off the day's high level in dying hours of trade as investors booked partial profits two days ahead of the March F&O series expiry. Eventually the bourses snapped sixth straight session in the positive terrain and sailed well beyond psychological levels of 19,000 and 5700 just below the psychological levels of 5,700 and 19,000. Being into the F&O expiry week, the markets registered strong volumes, on the expected lines, of over Rs 1.93 lakh crore while the turnover for NSE F&O segment was at over Rs 1.76 lakh crore. Market breadth remained negative as there were 1243 shares on the gaining side against 1724 shares on the losing side while 86 shares remained unchanged.
On charts : The S&P SNX Nifty may face strong resistance around 5753 and 5802 (61.80% retracement ) mark while its near term support will be around 5,683.75 and 5610. However, Nifty should not close below 5586 level.
Finally, the BSE Sensex surged by 177.66 points or 0.94% to settle at 19120.8 while the S&P CNX Nifty climbed 49.10 points or 0.86% to end at 5736.35. The BSE Sensex touched a high and a low of 19,226.21 and 18,944.82 respectively. The BSE Mid-cap and Small-cap indices fell by 0.03% and 0.36%, respectively.
Reliance Communication up 4.13%, Maruti Suzuki up 3.61%, DLF up 3.26%, Bharti Airtel up 2.88% and Tata Power up 2.37% were the major gainers on the Sensex.
On the flip side, BHEL down 1.48% and ICICI Bank down 0.03% were the only losers on the index.
The Indian government cleared on Monday that even as the global crude prices continue to remain at highly elevated levels, it was not considering an immediate increase in retail fuel prices. This however will lead to surge in under-recoveries of the publically controlled fuel retailers.
India's fuel subsidy bill in the current fiscal is now likely to be around Rs 85,000 crore from Rs 70,000 crore as global crude prices have been at elevated levels for a large part of the March quarter. Further, if prices do not come down soon, or remain at current levels for a large part of next fiscal, the subsidy bill can surge further to beyond Rs 1 lakh crore easily in FY12. This can lead to substantial impact on government's finances.
However, for the moment the government is neither considering a hike in retail prices, nor the finance ministry is looking to tweak the duty structure for the oil products. Union Oil and Gas Minister S Jaipal Reddy on Monday said that despite the surge in under-recoveries of oil marketing companies (OMCs) and increase in subsidy outgo, the government would not increase fuel prices at the moment.
In case of petrol however, he stated that it was totally deregulated and OMCs will take a view on when to increase its prices. State-run Indian Oil, Hindustan Petroleum and Bharat Petroleum currently sell petrol at a discount of about Rs 4.50 a litre despite the fact that government deregulated it completely in June last year. Diesel on the other hand, whose price continues to be dictated by the government, is being sold at a loss of Rs 15.79 a litre.
'As far as petrol is concerned, there is no doubt it is decontrolled... Oil companies must be watching global markets and will take studied decision on raising prices,' he said. On diesel he however, added that it was probably not the right time to talk either about deregulating the key fuel or even increasing its sale price. Hs said it was also too early to call a meeting of the Empowered Group of Ministers (EGoM) on oil sector, which is headed by finance minister Pranab Mukherjee, as everyone was busy with the forthcoming state assembly elections.
The government is unlikely to tinker with fuel prices until the crucial state assembly elections are out of the way. Meanwhile, crude prices have been on the upswing owing to political unrest in some countries in Middle East and Africa and implied apprehensions of a shortage. Average cost of India's crude basket has increased to $110.61 a barrel this month as against $72-73 a barrel about couple of quarters ago. Clearly the situation is no less than alarming though given the election constraint the government is not going to make any move for now.
Auto up 1.53%, TECk up 1.35%, Metal up 1.08%, IT up 1.06%, and Realty up 0.86% were the major gainers in the BSE sectoral space. There were no losers in the BSE sectoral space.
The Indian government has received 74 bids for 33 oil and gas exploration blocks which were on offer under the ninth round of New Exploration and Licensing Policy (Nelp-IX), with majority of the blocks going to state-owned companies such as ONGC. There were hardly any bids from global energy players.
While the ONGC managed major chunk of the blocks on offer, its share has nonetheless come down compared with last few rounds. The company has won 10 blocks, while another state-owned company Oil India (OIL) won three. Together, the two PSUs had placed bids for a total of 29 blocks. In the last round of NELP, ONGC had got nearly two-thirds of the blocks on offer.
Private sector major Reliance Industries, which had skipped last round of NELP, has won two of the six blocks it bid for in the latest round. Another private player Deep Industries has won four blocks. Sankalp Oil and Natural Resources and Ishar Gas Oil too were awarded three blocks each.
The final award of the rights to explore the blocks will be given by the oil ministry in about 3-4 months after it scrutinizes the 33 winning bids. So far, NELP rounds have generated 87 oil and gas discoveries in 26 exploration blocks with proven hydrocarbon reserves of at least 642 million tonne of crude oil equivalent.
A total of 37 companies, comprising eight foreign companies and 29 Indian, had bid either on their own or as part of a consortium. The government contended that its policy to enhance the number of players in the exploration sector had been achieved as was evident from the fact that 10 new companies (two foreign and eight Indian) had bid. "Evaluation of the bids received under NELP-IX will be undertaken by the Government and the blocks are expected to be awarded within three months. The entire process, including signing of contracts, is expected to be completed in four months," said the Union Oil and Gas Minister S Jaipal Reddy.
The S&P CNX Nifty touched a high and a low of 5,770.35 and 5,680.70 respectively.
The top gainers on the Nifty were RCOM up 4.37%, Sesagoa up 4.31%, BPCL up 3.47%, Maruti up 3.35% and Dr. Reddy up 3.24%.
The top losers on the index were IDFC down 1.72%, Grasim down 1.38%, BHEL down 1.38%, Reliance Capital down 1.10% and Cairn India down 0.38%.
European markets were trading in mix on Tuesday. France's CAC 40 declined 0.60%, Germany's DAX plunge by 0.74% and Britain's FTSE 100 fall by 0.22%.
Asian equity indices finished the day's trade on the mixed note on Tuesday. Japanese Nikkei edged lower in the trade as country struggled to contain a meltdown at a nuclear power plant and investors remained worried over the crippled nuclear plant and the impact of the natural disaster on corporate earnings. However, Taiwan Weighted surged more than half a percent led by cement and oil counters, offsetting a second successive limit-down finish for computer maker Acer Inc. Banking shares also gave a lift to the main share index. Among Asian indices, Seoul Composite and Taiwan Weighted led the gainers list while Shanghai Composite, Jakarta Composite and Nikkei 225 edged lower in the trade.
HOLDING ON THE GAINS
Local bourses after surging to their two month highs in the early morning session are now gyrating around that level. The Indian markets seem in no mood to relent and have buckled under pressure as investors extended their buying spree for sixth straight session with crude oil prices seemingly under control and the street inclined to believe that tensions in Middle East may be easing. Moreover, there are some good news trickling in from corporate India ahead of the earnings season which will kick off in mid-April. The fact that crude oil prices haven't gone up in the last few days and that prices of other commodities too seem to be correcting may be signaling investor's that the worst may be over thereby, prompting them to indulge in some serious buying. Further, data showing stepping up of buying by foreign funds has also underpinned sentiment. According to data released by the Securities and Exchange Board of India (SEBI), the FIIs on Monday were the net buyers in equities with gross buying of Rs 3329.90 crore against gross sell of Rs 1812.00 crore. On the global front, Asian shares were trading lower tracking overnight losses in the US markets, which fell on clouded corporate outlook ahead of earnings amidst continued uncertainty which crept in from abroad.
Back home, Sensex is calmly trading above its 19k mark, while Nifty too was comfortable above its 5700 level. The broader indices though were in green but were underperforming their larger peers. On the BSE sectoral front, stocks from TECk, Power and Auto counters added to the market enthusiasm, while, stocks from Realty counter were the only spoil sports. The overall market breadth on BSE was in the favour of declines which thrashed advances in the ratio of 1237:1035, while, 96 shares remained unchanged.
The BSE Sensex is currently trading at 19,073.62, up by 130.48 points or 0.69%. The index has touched a high of 19,116.25 and a low of 18,944.82 respectively. There were 24 stocks advancing against just 5 declines on the index, while 1 share remained unchanged.
The broader indices were trading in green; the BSE Mid cap and Small cap indices surged 0.34% and 0.33% respectively.
The top gaining sectoral indices on the BSE were, TECk up by 0.93%, Power up by 0.80%, Auto up by 0.70%, Metal up by 0.66% and IT up by 0.65%. While Realty down by 0.69% was the lone loser on the index.
The top gainers on the Sensex were Reliance Communication up by 2.90%, Hero Honda up by 2.80%, Bharti Airtel up by 2.42%, Tata Power up by 2.33% and Reliance Infra up by 1.78%.
On the flip side, DLF down by 1.24%, Jaiprakash Associates down by 0.96%, Tata Motors down by 0.31% and ITC down by 0.08% were the only losers on the index.
Meanwhile, the much awaited draft guidelines for giving new banking licenses would be released by the Reserve Bank of India (RBI) in the next few days itself, said the Indian government on Monday. The same will be put in public domain for comments and after taking into account the response of various stakeholders to the draft guidelines, final guidelines will be released.
"RBI has indicated that by the end of the month they will come out with draft guidelines," said the secretary in the department of economic affairs of the ministry of finance R Gopalan on Monday. The government had earlier in the General Budget for 2011-12 said that the central planned to issue guidelines for the grant of new banking licenses before the close of this financial year.
Union Finance Minister Pranab Mukherjee had in FY11's Budget announced that the Reserve Bank would consider giving traditional banking licenses to private sector players in order to increase the penetration of banking services in the country. Since then, granting new banking licenses has been part of the debate on how to best approach the financial inclusion which is a key agenda for the UPA-II government.
The RBI had earlier floated a discussion paper in August, 2010, on giving out new banking licenses to business houses and non-banking finance companies. It had then raised a number of issues in this context including who should get the license, what should be the threshold capital requirement, should the new banks have complete freedom in branching like existing Indian banks, and should the new banks have FDI ceiling at par with the current private sector banks etc. At present, the country has 26 public sector banks which include 19 nationalized banks, the State Bank of India and its seven subsidiaries; seven new private sector banks; 15 old private sector banks and 31 foreign banks. Besides there are a number of regional rural and local area banks as well as various cooperative banks. However, the commercial banks enjoy a lion's share in financial services. This is reason why the finance ministry is keen in expanding the reach of commercial banks rather than focusing on regional rural or cooperative banks.
The S&P CNX Nifty is currently trading at 5,719.75, higher by 32.50 points or 0.57%.The index has touched a high of 5,732.50 and a low of 5,680.70 respectively. There were 38 stocks advancing against 12 declines on the index.
The top gainers of the Nifty were Reliance Communication up by 2.94%, Sesa Goa up by 2.89%, Hero Honda up by 2.85%, Bharti Airtel up by 2.54% and Dr Reddy Lab up by 2.18%.
DLF down by 1.24%, JP Associates down by 1.02%, IDCF down by 1.00%, Ranbaxy down 0.84% and Tata Motors was down by 0.63%, were the major losers on the index.
Shanghai Composite was up by 0.32%, Hang Seng inched up 0.10%, KLSE Composite gained 0.11%, Seoul Composite added 0.47% and Taiwan Weighted was up by 0.26%.
On the flip side, Straits Times declined 0.02%, Nikkei 225 was down by 0.06% and Jakarta Composite lost 0.62%. Monday, March 28, 2011
TOP PICKS FOR 29th MARCH
HAPPY INVESTING ........ CHEERS !!!
UPTREND CONTINUES
Stock markets in India extended the uptrend on the first day of the F&O expiry week, after vivaciously rallying over two percent on Friday, and managed to finish a choppy session of trade on an optimistic note as the joy of closing in the positive territory got quintupled. The benchmarks displayed resilience as they traded firmly in the green for most part of the day's trade on the back of heavy buying in rate sensitive counters like Auto and Baking and managed to touch two month high levels. Investors traded with some conviction as growth concerns over Europe weighed on crude oil prices. However, the frontline indices met with stern resistance at the psychological levels of 5,700 and 19,000 as investors took profits off the table around those levels after reports of fierce retaliation between Western forces and forces loyal to Col Gaddafi emerged. The bourses climbed over half a percent in the session despite tepid leads from markets across the globe as investors speculated most of the headwinds have been factored in by the markets and that the companies will report strong quarterly earnings for the fourth quarter. Meanwhile, local sentiments also took cues from CII Survey which opined that the ongoing high inflation and resulting rapid increase in costs has so far been unable to significantly dent the performance of India Inc. The NSE's 50-share broadly followed index Nifty, receded after claiming 5,700 mark, an important psychological level, and settled a tad below the level while Bombay Stock Exchange's Sensitive Index, Sensex surged by over a hundred points and conquered the crucial 18,900 level. The broader markets too traded on healthy note but failed to perform in tandem with their larger peers nevertheless the BSE's midcap index went home with gains of 0.42% while the smallcap index rose 0.12% points. On the sectoral front, rate sensitive Auto pocket surged by 1.52% led by heavyweight Tata Motors which zoomed 3.25%, being the top gainer on Sensex while stocks like Maruti Suzuki and Cummins India too gained around 1.50% each. The Capital Goods index too remained amid the thick of things and advanced 1.27% on the back of gains in majors like L&T which was up 2.56% and Alstom Projects up 2.25%. On the other hand the Healthcare index languished at the bottom of the table with losses of 1.17% as massive sell-off in stocks like Aurobindo Pharma and Jubilant Life Sciences which respectively shaved off 5.84% and 3.74% dragged the counter. Index bellwether Reliance Industries remained highly unstable in the session and slipped marginally by the end of trade after rallying in the initial moments of trade on reports of forming a financial JV with D E Shaw Group to build a leading financial services business in India.
On the global front, majority of Asian equity indices finished in the negative led by Japanese stocks which declined more than half a percent on fresh concerns over a stricken nuclear power complex as radioactive water slowed repair work at the plant. The European markets traded on a cautious note as France's CAC, Germany's DAX and Britain's FTSE exhibited mixed trend. On the other hand, the screen trading for US index futures indicated that the Dow could open on a flat note.
Earlier on Dalal Street, the benchmark got off to a soft start as fresh worries over high levels of radiation in Japan emerged which delayed efforts to stabilize a crippled nuclear power plant and shoddier than expected earnings reported by some blue chips companies weighed on cautious investor mood. After hitting intraday lows in the early hours, the frontline indices rose to higher levels on the back of buying in blue chips and fertilizer stocks. However, the session largely remained characterized by choppiness as investors seemed reluctant to pile up hefty positions after the recent over five percent rally. Eventually the bourses snapped fifth straight session in the positive territory and just below the psychological levels of 5,700 and 19,000. The markets registered strong volumes of over Rs 1.75 lakh crore while the turnover for NSE F&O segment was at over Rs 1.59 lakh crore. Volumes were large on expected line as the markets have entered the F&O expiry week. Market breadth remained negative as there were 1243 shares on the gaining side against 1724 shares on the losing side while 86 shares remained unchanged.
Finally, the BSE Sensex surged by 127.50 points or 0.68% to settle at 18,943.14 while the S&P CNX Nifty climbed 33.00 points or 0.58% to end at 5,687.25.
The BSE Sensex touched a high and a low of 19,024.18 and 18,799.57 respectively. The BSE Mid-cap and Small-cap indices increased by 0.42% and 0.12%, respectively.
Tata Motors up 3.25%, Bharti Airtel up 2.57%, L&T up 2.56%, Reliance Infra up 1.76% and Maruti Suzuki up 1.69% were the major gainers on the Sensex.
On the flip side, Jaiprakash Associate down 2.16%, Reliance Communication down 1.50%, Sterlite Industries down 0.89%, Infosys down 0.71% and DLF down 0.66% were the major losers on the index.
After nearly two years of delay, the ministry of civil aviation finally seems set to get the new ground-handling policy implemented. It has asked all airport operators in the country to initiate steps to implement the new policy from April 1 in an effort to enhance safety and improve quality of services.
The move comes even as the airlines continue to protest the new policy. All the private airlines have been opposing the new policy citing various reasons from causing unemployment among the current ground handling staff to potential losses that will accrue to them. The government did defer the implementation of the policy on airlines' plea at least thrice. Now however, the government has rejected any further delays and the Delhi high court too has recently rejected a plea by airlines to get a stay on implementation of the policy.
The new policy requires that the airlines outsource the ground handling operations at the airports to other operators selected for the job. Under the new policy, only the government owned Air India, the airport operator and a third private operator selected through the competitive bidding will be allowed to provide ground handling services. All private carriers will have to tie up with one of these to provide services. Obviously, this will hike the costs of ground services for airlines.
The civil aviation ministry had announced the new policy in 2008 and was expected to put in place the new ground-handling norms from January 1, 2009. However, the downturn in the economy following the global financial crisis and resulting substantial negative impact on civil aviation industry forced it to defer the implementation thrice as the move was strongly opposed by the airlines which were then struggling with declining air-traffic.
Now, however, things have changed sharply in the aviation space. The industry has enjoyed more than a year of surging air traffic, and air fares have already crosses the peaks seen in the pre-crisis period. The industry, though still under somewhat pressure by accumulated substantial and rising cost of aviation turbine fuel, is certainly in much better position to cope with the small financial burden that it will face with the new policy.
Nonetheless, the implementation of the new ground handling norms will have some impact on the profitability of airlines. That is the reason that carriers have been looking to get yet another postponement for the policy. However, this looks difficult now as the civil aviation ministry feels that with surging demand for air-travel demand, it was the best time to implement the new policy and is keen to get the same kick-started on April 1.
Auto up 1.52%, Capital Goods up 1.27%, Bankex up 1.21%, FMCG up 0.86%, and Consumer durables up 0.61% were the major gainers in the BSE sectoral space.
On the other hand Health Care (HC) down 1.17%, Realty Down 0.56%, Metal down 0.29%, IT down 0.18% and Oil & Gas down 0.04% were the major losers in the BSE sectoral space.
Following the substantial increase in export duty on iron ore, the price of the key raw material has been coming down in the country. According to the steel makers and miners, iron ore prices have gone down by around 10% in the last few weeks. Going forward, there is expectation of a further decline as demand remains soft.
The Union Government had increased export duty on iron ore fines by four-fold to 20% in the General Budget for 2011-12 in a bid to discourage exports and conserve the material for use by the steel makers within the country. While this has been a major demand of steel players for quite some time and will take pressure off the cost side of steel makers, the increase in duty will certainly hit the prospects of miners.
According to the industry insiders, percentage drop from mid February to mid March in iron ore prices range between 10-15%, depending on the grades, where lower grades have got a bigger hit than the higher grades. However, it is difficult to say where the ore will bottom out because there have been global developments too that can significantly impact the contract prices at international level.
Iron ore prices have come down significantly in China as well in recent days following apprehension of slowdown in demand because of the double natural calamity in Japan and the following nuclear crisis that is still continuing. Japan is second largest steel maker in world after China and decline in production there can have substantial impact on demand and hence prices of iron ore.
Though most of India's iron ore is shipped to China, the demand slump in Japan is expected to have significant impact on international contract prices. These in turn will serve as benchmark for spot prices and most analysts expect spot iron ore prices to come down further once the next quarterly agreements are signed. An additional factor in case of India is that domestic steel capacity is significantly low compared with iron ore output and as the surplus increase at home due to higher export duty; the fall in prices can be greater than global softening in the key raw material.
The S&P CNX Nifty touched a high and a low of 5,709.10 and 5,643.20 respectively.
The top gainers on the Nifty were Tata Motors up 3.43%, Bharti Airtel up 2.37%, IDFC up 2.31%, L&T up 1.85% and Maruti up 1.65%.
The top losers on the index were Sun Pharma down 3.48%, GAIL down 2.14%, JP Associate down 2.10%, RCOM down 1.73% and Sesa Goa down 1.67%.
European markets were trading in mix on Monday. France's CAC 40 gained 0.10%, Germany's DAX fall by 0.19% and Britain's FTSE 100 surged by 0.05%.
Asian equity indices finished the day's trade mostly in the negative terrain on Monday led by Japanese Nikkei which declined more than half a percent on fresh concerns over stricken nuclear power complex as radioactive water slowed repair work at the plant. The Fukushima Dai-ichi complex has been leaking radiation since it was severely damaged on March 11, 2011 following a massive earthquake and tsunami that ruined the country's northeastern coast. However, Seoul Composite ended flat-to-positive on taking support from gains in steelmakers like POSCO.
MARKETS CONTINUE TO TRADE HIGHER
The Indian benchmark equity indices continue to trade higher in late afternoon session due to strong global cues, European markets were trading mostly in green and US index futures were also trading higher, adding positive sentiments to the domestic markets. On the other hand, most of the other Asian markets settled in red. Back home, in BSE sectoral front Capital Goods, Bankex, Auto and CD indexes gained more than one percent and are witnessing strong buying, while profit booking was seen among the IT shares after two consecutive sessions of gains last week. The BSE IT index was down 0.40%. However, the broader indices are holding on to modest gains; the BSE Mid-cap and Small-cap indices soared 0.51% and 0.34%, respectively.
The Overall market breadth on BSE was negative; decliners outnumber the advances in the ratio 1580:1294, while, 109 shares remained unchanged.
The BSE Sensex surged 145.68 points or 0.77% at 18,961.32. The index touched a high and a low of 19,024.18 and 18,799.57, respectively.
The BSE Mid-cap and Small-cap indices soared 0.51% and 0.34%, respectively.
In the BSE sectoral indices Capital Goods up 1.71%, BANKEX up 1.46%, Auto up 1.40%, CD up 1.34% and FMCG up 0.74% were the major gainers. While Health Care down 1.17%, Realty down 0.49% IT down 0.40%, Metal down 0.30% and TECk down 0.05% were the major losers.
The top gainers on the Sensex were L&T up 3.23%, Tata Motors up 2.89%, Reliance Infra up 2.21% Bharti Airtel up 2.03% and ONGC up 1.85%.
On the flip side, JP Associates down 1.77%,Reliance Communication down 1.36%, Infosys down 0.92%, Sterlite industries down 0.92% and Cipla down 0.84% were the only losers on the index.
Following the substantial increase in export duty on iron ore, the price of the key raw material has been coming down in the country. According to the steel makers and miners, iron ore prices have gone down by around 10% in the last few weeks. Going forward, there is expectation of a further decline as demand remains soft.
The Union Government had increased export duty on iron ore fines by four-fold to 20% in the General Budget for 2011-12 in a bid to discourage exports and conserve the material for use by the steel makers within the country. While this has been a major demand of steel players for quite some time and will take pressure off the cost side of steel makers, the increase in duty will certainly hit the prospects of miners.
According to the industry insiders, percentage drop from mid February to mid March in iron ore prices range between 10-15%, depending on the grades, where lower grades have got a bigger hit than the higher grades. However, it is difficult to say where the ore will bottom out because there have been global developments too that can significantly impact the contract prices at international level.
Iron ore prices have come down significantly in China as well in recent days following apprehension of slowdown in demand because of the double natural calamity in Japan and the following nuclear crisis that is still continuing. Japan is second largest steel maker in world after China and decline in production there can have substantial impact on demand and hence prices of iron ore.
Though most of India's iron ore is shipped to China, the demand slump in Japan is expected to have significant impact on international contract prices. These in turn will serve as benchmark for spot prices and most analysts expect spot iron ore prices to come down further once the next quarterly agreements are signed. An additional factor in case of India is that domestic steel capacity is significantly low compared with iron ore output and as the surplus increase at home due to higher export duty; the fall in prices can be greater than global softening in the key raw material.
The S&P CNX Nifty gained 40.50 points or 0.72% at 5,694.75. The index touched high of 5,709.10 and a low of 5643.20, respectively.
The top gainers on the Nifty were L&T up 3.59%,Tata Motors up 2.99%, IDFC up 2.38%,Reliance Infra up 2.085 and HUL up 2.05%.
On the other hand, Sun Pharma down 3.72%, JP Associates down 1.83%, GAIL down 1.68%, Sesa Goa down 1.63% and Reliance Communication down 1.50% were the major losers on the index.
On the other hand ,most of the other Asian markets settled in red. Hang Seng down 0.39%, Jakarta Composite declined 0.12%, KLSE Composite down 0.09%, Nikkei 225 down 0.60%, Taiwan Weighted down 0.67% and Straits Times declined 0.44%, while Seoul Composite advances 0.11% and Shanghai Composite surged 0.21%,
Most of the European markets trading positive; FTSE advanced 0.25% and CAC 40 surged 0.11% while DAX decreased 0.06%.
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