Morning Report By Mansukh at 14 June 2011

 

FIRST LIGHT HEADINGS

 

Tata Communications increases its stake in Neotel through SNOSPV FIIs stood as net sellers in equities on June 13, 2011: SEBI Indirect tax collection shows decent rise in April-May
Punj Lloyd Group bags order worth Rs 678 crore from NPCIL
7Seas Entertainment adds a social gaming platform to its online casual gaming portals Central bank to adopt ‘calibrated approach’ to ensure balance between inflation and growth

MARKET INSIGHT

On Monday 13 June 2011,Some buying interest at lower levels in the afternoon session of the trade at Dalal Street helped a modest bounce back amid negative global setup for the domestic markets that managed to close flat with a positive bias on Monday. The benchmark indices juggled between green and red in the latter part of the day. It was the bounce back of Consumer Durable, Power and Capital Goods space into green that put back on track the lost momentum of the local indices, which fell to two-week low in early trade on Monday due to persistent selling pressure by foreign funds. The main culprit being the overall drag in the commodity basket, tracking weak global cues, while the sharp fall in heavyweight Reliance Industries too weighed heavily on the markets. Reliance Industries fell by over 2 per cent in morning trade on the bourses today as investors reacted negatively to the news that CAG has said the Oil Ministry and its technical arm, the Directorate General of Hydrocarbons (DGH), bent rules for Reliance Industries. CAG said the DGH allowed Reliance to hike capital expenditure for developing Dhirubhai-1 and 3. Suggesting the company grossly overstated its development costs in India’s largest gas field, possibly causing ‘significant’ financial losses to the exchequer. But lacking any major trigger the trade turned choppy and the investors started booking profits at the higher levels. Also cautiousness crept in ahead of the WPI numbers for April to be announced tomorrow. The street expects the WPI to be 8.70% in May, up slightly from the previous month on the back of rising food and fuel prices. The annual rate of inflation, based on monthly WPI, stood at 8.66% for the month of April 2011. Rate sensitive’s too remained in cautious mood with expectation of another rate hike in the forthcoming policy meet of the RBI. Though, the laggard of the day was the metal pack that lost close to about a percent, tracking the decline in global commodity markets.

The BSE Sensex gained 13.04 points or 0.07% and settled at 18,281.58. The index touched a high and a low of 18,313.21 and 18,120.76 respectively. 17 stocks advanced against 13 declining ones on the index. The BSE Mid-cap index gained 0.27% while Small-cap index too was up by 0.27%. On the BSE Sectoral front, Consumer Durables advanced 1.63%, Capital Goods up 0.84%, Power up 0.78%, Health Care up 0.32% and Bankex up 0.17% were the top gainers. On the flip side, Metal down 1.02%, Oil & Gas down 0.79%, Realty down 0.24% and FMCG slipped by 0.21% were the losers.

India VIX, a gauge for market’s short term expectation of volatility gained 1.99% at 18.91 from its previous close of 18.54 on Friday. The S&P CNX Nifty gained 0.30 points or 0.01% to settle at 5,486.10. The index touched high and low of 5,496.70 and 5,436.95, respectively. 27 stocks advanced against 23 declining ones on the index. (Provisional)

Any correction from current level may drift indices towards 5330-5340- By Mansukh 13 June 2011

Any correction from current level may drift indices towards 5330-5340

FIRST LIGHT HEADINGS

Haryana Govt has banned the worker’s strike at Maruti Suzuki’s Manesar plant. Tata Motors gets order for 1111 trucks from a Suratl based logistics company Allahabad Bank plans to open four overseas branches Hind Aluminium Industries has incorporated its subsidiary Mahindra Satyam has launched Mobile Couponing Platform NHPC anf GMR Energy’s Uttrakhand projects rejected by environment ministry Aurobindo Phar has received approval from the USFDA to manufacture Ramipril Capsules

MARKET INSIGHT

On Friday 10 June 2011, Local equity markets for the third straight session remained in red as lower than expected April IIP data lowered the risk appetite of the investors, thereby igniting the apprehensions of the rising cost of credit and inflation slowing the economy. The newly introduced Index of Industrial Production (IIP) with an updated base of 2004-05 starting from the month of April, registered growth at 6.3% against 7.3% in March. Meanwhile, under the old series, annual industrial output growth in April was 4.4% compared with a median forecast for 5.5%. Further slothful global leads also thwarted the sentiment of the Indian equity markets, though the US markets snapping 6 days losing streak ended higher overnight, but the lower than expected Chinese trade added to investor’s gloom. Asian shares ended mixed as Chinese trade data rekindled worries about future monetary-policy tightening moves from Beijing, though bargain-hunting helped some regional stock markets. Meanwhile, the European shares headed for sixth week of losses on persistent concerns about the pace of global economic recovery.

The BSE Sensex tanked 116.36 points or 0.63% and settled at 18,268.54 and NSE Nifty loses 35.25 points or 0.64% to 5485.80. Broader market indices also ended in negative zone, The BSE Mid-cap index lost 0.34% while Small-cap index was down by 0.46% respectively. On the BSE Sectoral front, Consumer Durables up by 0.47% was the lone gainer. On the flip side, Capital Goods down 1.08%, FMCG down 1.04%, Realty down 0.80%, Metal lower by 0.73% and Bankex down 0.65% were the major losers. The gainers on the Sensex were Hindalco up by 0.60%, TCS up by 0.59%, ONGC gained 0.38%, Wipro up 0.23% and Infosys up 0.03%. (Provisional) On the flip side, DLF down 2.15%, ITC down by 1.74%, L&T down by 1.74%, Reliance Infra down 1.67% and Tata Steel down 1.55% were the top loser on the index. (Provisional).

Meanwhile, Index of Industrial Production (IIP) in April 2011 rose by 6.3% from a year ago; on the other hand the growth was measured at mere 4.4% in comparison to 7.3% in the month of March as per the old series, while IIP in April 2010 stood at 16.7%. This time it was a new series of IIP data with an updated base of 2004-05 and with inclusion of more components, the total number of items under the series has gone up to 695 from 538 earlier. The IIP for manufacturing, mining and electricity sectors for month of April 2011 grew by 2.2%, 6.9% and 6.4%, respectively. The annual growth for these three sectors for 2010-11 were 5.2%, 8.9% 5.5% respectively. According to the old series the IIP for manufacturing, mining and electricity sectors for month of April 2011 was recorded at 2.1%, 4.4% and 6.4%, respectively.

Equity Research And Analysis On Indian Stocks And Stock Market Updates

FIRST LIGHT HEADINGS
CBI on Wednesday summoned Anil Ambani (ADAG Group) over 2G probe
Government sets up panel for direct transfer of subsidy
Jain Irrigation inaugurates micro-irrigation unit in Bhavnagar, Gujarat
iramal Glass to invest Rs 260 crore over next 2 years for expansion of capacities
RCom to kick off multi-lingual mobile portal
Opto Circuits’ foray into US, Japan stent market meets regulatory hurdles
Jindal Steel and Power gets MoEF’s nod for steel project in Orissa
Supreme Infrastructure secures three prestigious work orders worth Rs 238.95 crore

MARKET INDISE

On Wednesday 16 Feb 10, 2011, Indian equity markets witnessed quiet session of trade today. Benchmark equity indices after swaying in and out of the green territory snapped the fourth successive day of trade on somewhat optimistic note. However, the trade remained quite listless today with investors not showing any interest in building up positions, but, instead were seen using small rallies to lighten commitments. Impressive results from Tata Steel and short covering of position from speculators and commendable reversal trend of Realty sector followed by the smart gains of stocks from Metal, Consumer Durable and Capital Goods space held the equity markets momentum in green as the 30 share index--Sensex--on BSE clocked in gain of 40 points while the widely followed 50 scrip index--Nifty--on NSE ended flat but yet on a affirmative note.

The BSE Sensex gained 27.10 points or 0.15% to settle at 18,300.90 and NSE 50-share Nifty closed almost flat at 5481.70 with 0.70 pints or 0.01%.Broader indices ended in a good shape. The BSE Mid-cap and Small-cap indices garnered a gain of 0.53% and 1.01%, respectively. In BSE sectoral space Realty up 2.12%, Metal up 1.49%, Consumer Durables (CD) up 1.02%, Capital Goods (CG) up 0.56% and Bankex up 0.17% and were the major gainers. On the other hand, Healthcare down 0.58%, Auto down 0.37%, PSU down 0.20% and Oil & Gas down 0.11% were the only losers on the BSE sectoral space..

European markets were trading in the green. FTSE gained 0.58%, CAC-40 advanced 0.77% and DAX climbed 0.27 %. Majority of the Asian markets made a positive close on Wednesday, though the trade remained choppy but most of the indices were able snap the session in green. The Chinese markets moved higher supported by the spike up in the steel stocks while the Japanese markets surged to touch their fresh nine months high helped by a softer yen against the dollar, the dollar climbed against the yen to its highest in eight weeks on Tuesday. On the other hand, the Korean market was worst performer of the day as the major indices there were pressured by a second straight session of foreign selling and fall in automakers and crude refining stocks.

Meanwhile, the government has kick-started the deliberations for the much talked direct subsidy transfer mechanism. It has set up a high-level task force under Nandan Nilenkani, the UID chairman, to explore the possibility of directly transferring subsidy being provided in domestic cooking gas, kerosene and fertilizers to consumers. At present, the biggest criticism of the subsidy policy of the government is its untargeted nature. For instance, the subsidy given in diesel is meant for public transportation and farm use, but the same is also availed by rich people driving multi-utility vehicles. Clearly, there is a need to target the subsidies in a better way so that only the needy ones are the beneficiaries while market prices of products is charged from other people.

MARKET OUTLOOK- CAUTIOUSLY OPTIMISTIC

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