[<--Jack-->]

Friday, 11th July, 2008 Closing
Steel prices on the rise...

 
Markets slipped deep into the red during the final trading hour as persistent selling activity took its toll. Sectors like software and consumer durables were among the worst hit. As regards global markets, while the Asian indices closed mixed, the European indices are trading lower currently.

The BSE Sensex closed at 13,501 (down 425 points) while the NSE Nifty closed at 4,049(down 113 points). The rupee was trading at 42.85 to the dollar.

The markets began the day on a volatile note moving within striking range of the dotted line. In the afternoon session, inflation rising to 11.89% and lower IIP (Index of industrial production) numbers dampened investor sentiments and markets moved deeper into the red. From thereon, there was no respite for the indices and at the closing bell they closed well below the dotted line. The decline to advance ratio was 1.7 to 1 on the BSE. While the Ambuja Cements (up 3%), HDFC Bank and Cipla (each up 1%) led the pack of gainers, TCS (down 7%) and Jaiprakash Associate (down 9 %) were out of favour.

Steel stocks ended in red with the major losers being Ispat (down 6%) and Jindal Steel (down 3%). As per a leading daily, Indian steel makers may hike prices going forward. Coal prices have jumped from US$ 100 to US$ 300 per tonne. Prices of ferro alloys have also moved northwards apart from the regular freight and logistics costs. The uptrend in domestic steel prices accentuated since January this year due to a strong demand in both the domestic and international markets. From January to April, prices of pig iron went up by more than 70%, while construction steel like TMT and wire rods went up by 36%. Prices of hot-rolled coils rose by over 40%.

ICICI Bank is eyeing Britain, Canada or Germany to expand its overseas business. The company is planning to acquire large consumer franchises in these regions. The bank at present offers online saving accounts to non-Indian customers in these countries. ICICI Bank has about US$ 5 bn on hand which it is planning to deploy in international acquisitions. These acquisitions will help the bank build a global brand and position itself as a potential competitor to foreign banks that are going through the credit crisis. The stock of ICICI Bank closed lower by 5%, while its peer HDFC Bank closed higher by 2%.
 
 
Markets in Motion
 
 
 
1:00 pm
Double whammy for markets...


Persistent selling activity has led the markets to tumble during the previous hour of trade on the back of reports of lower IIP growth and higher inflation. The IIP (Index of industrial production) growth slowed down to 3.8% for the month of May (10.8% a year ago) while inflation rose to 11.89%. Currently stocks from the capital goods and software space are trading weak while select stocks from the telecom and commodity sectors are trading firm. However, the overall advance to decline ratio is poised at 1.2 to 1 on the BSE. The BSE Midcap index is trading marginally lower while the Smallcap index is trading marginally higher.

The BSE Sensex is trading at 13,711 (down 216 points) while the NSE Nifty is trading at 4,107 (down 55 points). The rupee is trading at 42.9 to the dollar.

Inflation (as measured by wholesale price index - WPI) has inched up to 11.89% this week from 11.63% a week ago. This was the highest inflation witnessed since April 1995. The rise has been mainly on account of the increasing food and commodity prices. The high input costs have been taking a toll on the operating margins of companies across sectors and most of them are either passing on the costs to customers or seeking some relief from the government. The finance ministry expects the inflation scenario to be firm until 1HFY09, after which things should start to stabilise. In the meanwhile, the inflation number will be a decisive factor for the central bank's first quarter review of the monetary policy. Banking stocks are currently trading mixed with ICICI Bank (down 3%) and Federal Bank (down 2%) while Bank of Rajasthan (up 4%) and Axis Bank (up 1%) lead the pack of gainers.

Auto stocks are also currently trading lower led by Hero Honda (down 3%), Kinetic Motor and TVS Motors (both down 1%). As per a leading business daily, Bajaj Auto is likely to form a joint venture with French auto company, Renault to manufacture engines for the former's small car venture, which is expected to roll out by 2011. Bajaj Auto will hold 51% stake while Renault will hold the balance share. The company also intends to use these engines in its pick up trucks, which it plans to launch sometime in the future. The stock of Bajaj Auto is trading marginally higher.
 
11:00 am
Results fail to bring optimism...


The Indian markets have opened the day's proceedings on a subdued note, as the start to the 1QFY09 results has been quite unenthusing. The overall market breadth is positive with gainers outnumbering losers by a ratio of 1.2 to 1 on the NSE. While selling pressure is being witnessed across sectors, select stocks from the metal and energy sectors are garnering investors' interest. In the US markets yesterday, the Dow Jones, the S&P 500 and the tech laden NASDAQ, ended higher by 1%. The light crude prices settled at US$ 141.7 a barrel while gold prices also ascended by US$ 13.4 an ounce to settle at US$ 944.5 an ounce. As regards global markets, the Asian markets are currently trading a mixed bag, while the European markets ended weak yesterday.

The BSE Sensex is trading at 13,843 (down 83 points) and the NSE Nifty is trading at 4,157 (down 5 points). The rupee is trading at 42.89 to the dollar.

Infosys, one of the largest software services exporters has announced 1QFY09 results. The company has reported 7% QoQ growth in net sales in 1QFY09 in line with the earlier guidance provided by the company. The higher salary and visa costs have dented operating margins by 2% QoQ in FY09. The margins have witnessed pressure despite currency movements have been in the favour of the company (rupee depreciated against the US dollar). The net profits reported growth of 4% QoQ during the quarter. The company has added 49 new clients and 3,192 employees during the quarter. The total headcount of employees stands at 94,379 employees. The stock (down 2%), along with its peers Wipro (down 2%), TCS and Satyam (each down 3%), is trading weak.

Bajaj Auto announced 1QFY09 results late in the evening yesterday. The company has reported 10% YoY growth in topline on the back of 9% YoY growth in volumes. The operating margins contracted by 150 basis points (1.5%) in 1QFY09 as compared to the same period last year. This was largely due to 14% YoY jump in raw material expenses. The company's bottomline has witnessed a steep fall of 23% YoY over 1QFY08 mainly on account of significantly higher other income of the company in the previous quarter before the demerger. The stock (down 1%), along with its peer Hero Honda (marginally down), is trading weak.
 


Pre-Open
Mall trouble, Buffett's deal & more...

The mall mayhem...
As per a leading business daily, many malls that sprung across Gurgaon over the last few years have been abandoned or been converted into commercial spaces. It is now feared that several malls in other cities will go the same way. Rough estimates indicate that around 350 malls are set to come up in India. With high levels of saturation in some areas, high property prices and rising construction costs leading to very high rentals, retailers fear that malls are becoming increasingly unviable.



Buffett backs Dow
Warren Buffett led Berkshire Hathaway will buy convertible preferred shares to the tune of US$ 3 bn in Dow Chemicals, which will help the latter acquire its rival Rohm and Haas. Dow expects synergies from Rohm's higher margin specialty chemical business when added to its own basic chemicals operations. On conversion of the securities, Berkshire will become Dow's largest shareholder. It may be noted that Berkshire helped Mars takeover Wrigley earlier this year. It is interesting to note that Buffett would get involved in a chemicals operation given his insistence on a durable economic moat. However, he has made large bets even in other areas in the past if he believes low valuations decisively change the odds of success in his favour. Just goes to show that conservative investing is not confined to one dimension only.



Also read: Lessons from Warren Buffett



Japanese nuclear forays
As per a leading business daily, Japan is being roped in to construct 12 nuclear reactors costing around 300 bn to 400 bn yen each in South Africa to address the power shortage and help economic development in the region. The plan will have the added benefit of curbing greenhouse gas emissions around South Africa and demonstrating Japanese leadership in combating global warming. An important unstated benefit for Japan is to draw level with China in its diplomatic clout in Africa and subsequently improve the chances of Japanese companies trying to enter the development of rare metals. This is an important development in the natural resources game in Africa in which developed counties as well as emerging countries are now interested. Rare metals are vital for the production of automobiles and cell phones. Interestingly, in its bid to access crude oil reserves, India is also in the race to secure better diplomatic ties in the region but often loses out to China.
 

[<--Jack-->]

[<--Jack-->]

Monday, 14th July, 2008 Closing
Axis Bank's net nearly doubles...
 
 
Markets moved deeper into the red during the final hour of trade as weakness intensified in heavyweights from the software, telecom and energy sectors. While pressure was also seen in engineering and banking stocks, select stocks from the auto, pharma and steel sectors managed to hold ground. As regards global markets, the Asian indices closed mixed, while the European markets are trading firm currently.

The BSE Sensex closed at 13,369 (down 101 points) while the NSE Nifty closed at 4,040 (down 9 points). The rupee was trading at 42.96 to the dollar.

Taking cues from its global peers, the broader markets in India opened on a subdued note. Weakness was witnessed for the larger part of the day before buying at lower levels led the indices to recoup their losses and move into the positive territory during the penultimate trading hour. However, this was short-lived as renewed selling activity in the final trading hour caused the indices to close well into the red. The overall market breadth was negative with losers outnumbering gainers by a ratio of 1.9 to 1 on the NSE. SBI and NTPC (each up 4%) led the pack of gainers on the Sensex today, while Ranbaxy (down 11%) and Satyam (down 8%) led the pack of losers.

Axis Bank announced its 1QFY09 results few hours ago. The bank has reported nearly 54% YoY growth in total income, while the net profits witnessed a quantum jump of 89% YoY. Amidst worries of retail delinquencies and derivative losses the bank has reported robust numbers as it has chosen not to concentrate its exposure to any single segment. Besides this, the bank has been altering its asset mix depending upon the industry scenario and its risk appetite. The growth has come in on the back of increased focus on fee income that reported 80% YoY growth and increased lending to companies. The stock (down 5%), along with its peers HDFC Bank (down 3%) and ICICI Bank (down 2%), closed weak.

Alok Industries, an integrated textile company, has raised US$ 25 m through overseas borrowings from the Netherlands Development Finance Co. These funds are for a period of seven years. The raised funds would be deployed to import capital goods, expand capacity including replacement of old machines and buying new equipments. The stock (up 1%), along with its peer Welspun India (up 2%), closed firm. On the other hand, Raymond closed lower by 2%.
 

[<--Jack-->]

1:00 pm
Tata Steel to acquire an ore mine...


The markets witnessed volatility on account of alternate bouts of selling and buying activity during the previous two hours of trade. Select stocks from the PSU and metal sectors are trading firm. However, stocks from the IT and banking are worst hit. The BSE Midcap index is currently trading marginally down and the Smallcap index is trading down by 1%. The decline to advance ratio is poised at 1.6 to 1 on the BSE.

The BSE Sensex is trading at 13,382 (down 87 points) and the NSE Nifty is trading at 4,060 (up 11 points). The rupee is trading at 42.83 to the dollar.

Steel stocks are trading firm. The pack is being led by Ispat Inds (up 2%) and Jindal Steel (up 1%). As per a leading daily, Tata Steel planning to acquire an iron ore mine in Western Australia. The company is making this move in order to supply iron ore to Corus' plants, which mainly imports iron ore from Brazil. The margins of Corus have been badly impacted by import of iron ore. Tata Steel is also planning to set up a company overseas for consolidating its raw material assets and raise funds in the next 6 to 12 months for acquisitions. These moves will help the company bring down its cost and improve its margins going forward.

Sugar stocks are currently trading mixed. While the pack of gainers is being led by Dhampur Sugar Mills (up 6%) and Bajaj Hindusthan (up 2%), the pack of losers is being led by EID Parry (down 2%). As per a leading daily, the draft National Biofuel Policy has been cleared by the Group of Ministers (GoM) on 9 July 2008. After the approval by the GoM it has been sent to the Union Cabinet for formal clearance. The draft recommends the creation of a biofuel development board led by the minister of new and renewable energy (MNRE) to monitor the implementation of the policy. The board's aim would be to promote the use of biofuels and ensure biofuel feedstock sustainability through a programme sponsored and monitored by the Centre. The policy will help in developing framework for the biofuel programme, which is necessary to meet the needs of energy security, reduce fossil oil import dependence and combat climate change.
 

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11:00 am
Is Ranbaxy in trouble?


Markets started the week's proceedings on a weak note as the markets dropped into the red during the opening hour of trade. However, persistent buying activity has led the markets to shed some of its early morning losses. Currently, select stocks from the commodity space are witnessing buying activity, while stocks from the software and banking sectors are losing ground. The overall decline to advance ratio is poised at 2.1 to 1 on the BSE. As for global markets, the US and the European markets ended in the red last Friday. The Asian markets are currently trading weak.

The BSE Sensex is trading at 13,400 (down 68 points) and the NSE Nifty is trading at 4,057 (up 9 points). The rupee is trading at 42.87 to the dollar.

Pharma stocks are currently trading mixed with Sun Pharma, Dr. Reddy's and Cipla (each up by 1%) trading firm, while Wockhardt (down 2%) and Matrix Labs (down 1%) are trading weak. The stock of Ranbaxy is at the receiving end on the back of allegations raised by the US government against it. The US government has filed a motion against the company wherein it is seeking certain documents as it has doubts of the pharma company indulging in suspected malpractices to get marketing approval for its products in the US. If this motion goes against Ranbaxy, it could end up paying billions of dollars as liabilities and also cause the company problems with respect to the promoters' stake sale to Daiichi. The stock of Ranbaxy is trading lower by 10%.

Engineering stocks are trading weak led by BEML (down 3%), Crompton Greaves and Ingersoll Rand (both down 2%). As per a leading business daily, BHEL has shown interest in acquiring a locomotive manufacturing facility in Europe. BHEL has not mentioned the name of the company in target. The target company makes electrical motive units and prototype coaches. BHEL's management stated that the company was up for sale because of financial problems. BHEL currently makes locomotives (used to run trains) of upto 6,000 hp (horse power) capacity and is looking to expand to around 10,000 hp. As per the management, the company is aiming at growing its non-core business and as such, is moving in that direction with this move. The stock of BHEL is currently trading lower by 2%.
 

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Pre-Open
Credit risk, subprime and more...

India to be downgraded
Within 18 months of India being lifted to the 'investment grade' category by global rating agency Standard & Poor's (S&P), failure to respond adequately to negative macroeconomic developments and political instability has led the agency to propose a downgrading of the economy's debt rating.

India's long-term local currency debt is rated BBB- the lowest investment grade, by S&P. The rating may be reduced to 'speculative grade' if steep inflation and higher government spending ahead of next year's election impair the budgetary deficit. A one-notch drop in its ranking would place Asia's third-largest economy on par with Indonesia, El Salvador and Guatemala.

Although India's ratings were lifted to the investment grade last year for the first time since 2002, the same has been instrumental in allowing Indian corporates seek cheaper funds overseas for their expansion plans and funding inorganic growth. A lower rating may deter foreign investors and make it more expensive for Indian companies to raise money, slowing growth in the US$ 912 bn economy.


Also read - Political hypocrisy on display
Not all is bad about subprime!
According to Bloomberg, legal process outsourcing is rapidly growing and is expected to become a US$ 4 bn industry globally by 2015 with India occupying a significant chunk of it. The current value of legal outsourcing is estimated at US$ 80 m, with more than three-fourths of it based in India. Legal process outsourcing is an industry in which in-house legal departments or organisations outsource legal work from areas where it is costly to carry out. The main areas of growth are discovery and litigation support, contract and document review services, legal analytics and due diligence.

What's more, the subprime crisis in the US has added fervor to legal process outsourcing (LPO) boom. After the subprime, the subsequent defaults have given rise to a lot of litigations in the US. Further, the economic slowdown in the US and other developed economies has motivated legal departments and law firms to take a hard look at their own processes and physical functions carried out by their employees in their domestic markets. They are reviewing organisational costs and efficiencies and are expected to offer cost savings of 30% to 70% by offshoring a bulk of their requirements to India.

India sees an annual output of 80,000 law graduates. The top 3,000-4,000 graduates either go overseas or join top-notch law firms, leaving the rest of the field clear for alternative careers such as outsourcing firms. Some of the top law firms in the US plan to invest close to US$ 50 m in India over the next 5-8 years.


Also read - Subprime pain may prolong
Indian airlines to takeoff by 2011
According to a recently published KPMG report, Indian airlines are expected to become profitable once again by FY11. This however, would be after posting aggregate losses of around US$ 2 bn (Rs 87 bn) in FY09, and assuming that oil prices would continue to stay at the current levels.

The KPMG report comes at a time when most airlines are ridden with significant losses, and spiraling ATF (aviation turbine fuel) prices are only adding to their woes. ATF constituted 45% of the operating cost of airlines in FY08, against 25% in FY06. KPMG believes that though ATF will continue to be a critical factor, airlines can post break-even by adopting strict cost-cutting measures.

India's largest private airline Jet Airways recently said that the industry is losing at least US$ 20 per passenger, signifying close to a 20% oversupply or imbalance, which has led to route and capacity rationalisation. The estimated fuel cost per passenger carried (for Jet) is US$ 85. As against this, the average yield per passenger is only US$ 150. Jet estimates the industry seat capacity to grow at 18% and passenger growth rate to be 11% in FY09.
 

[<--Jack-->]

If index is in positive from yesterday and the share you are holding is in minus then it should be cut and if intraday trend of index is in buy then one should buy a stock in which is in plus.

If index is in minus then one should look to short stocks which are minus and not stocks which are in plus.

It is not necessary that a stock which is weak today during intraday trading might be weak tomorrow also, simultaneously if a stock is strong today might not be strong tomorrow

If US Markets have gone up overnight, the markets here in all probability will open strong, so one should be quite careful when buying stocks as the general psychology of public is to buy when good news is there.

Being a contrarians is very important while trading intraday.

Stop loss is a must while trading intraday.

Always trade in very liquid stocks i.e. which have very high volume because as entry and exit can be very fast in such stocks.

Do paper trading before you actually start trading so that when you start making paper profits, then shift to actual trading.

Keep your volume constant e.g.: if you trade in five lots of nifty future then trade in five lots only. This position can be increased only when you are satisfied with your trading for a month. It should not be that one day you buy five lots and next day you trade in ten lots and third day you get a loss and stop trading for two days.

Fear and Greed are at maximum levels while trading intraday so always have less position when you are new to intraday trading as otherwise you will be mostly under tension.

[<--Jack-->]

The Sensex opened with a positive gap of 123 points at 13,235. Profit-taking in morning trades following yesterday's smart rally saw the index slip into red for a brief while to a low of 13,093.

 

The index, soon, rebounded and displayed positive bias for most part of the trading day. Aggressive buying in banking, oil and realty stocks led the index surge to a high of 13,684 - up 591 points from the day's low. The Sensex finally ended with a gain of 523 points at 13,635.


The BSE Bankex soared 8% (461 points) to 6,189. The Realty index surged 5.5% (242 points) to 4,670, and the Oil & Gas index rallied 4.3% (380 points) to 9,232.


The NSE Nifty moved up 145 points to settle at 4,092.


INDEX MOVERS...


ICICI Bank zoomed 12% to Rs 618. HDFC soared 9.5% to Rs 2,068. HDFC Bank rallied nearly 8% to Rs 1,034, and SBI surged 6% to Rs 1,300.


Jaiprakash Associates gained 7.7% at Rs 161. DLF moved up 7% to Rs 457, and Reliance Infrastructure added 6% to Rs 856.


Bharti Airtel advanced over 7% to Rs 802. BHEL, ITC and NTPC surged around 5.3% each to Rs 1,530, Rs 176 and Rs 173, respectively.


Reliance rallied 4.8% to Rs 2,113. ONGC and Larsen & Toubro added 4.3% each to Rs 943 and Rs 2,545, respectively.


Reliance Communications and Maruti were up 4% each at Rs 435 and Rs 624, respectively.


Tata Motors, TCS and Hindalco ended with gains of 2% each at Rs 420, Rs 795 and Rs 142, respectively.


...AND THE SHAKERS


Satyam slumped 7.5% to Rs 383. Wipro plunged 3.8% to Rs 366, and Infosys slipped 2.2% to Rs 1,548.


Ranbaxy dropped 3.3% to Rs 437. Tata Steel shed 2.5% at Rs 593.


VALUE & VOLUME TOPPERS


Reliance Capital topped the value chart with a turnover of Rs 323.70 crore followed by Reliance (Rs 291.50 crore), Reliance Petroleum (Rs 193 crore), ICICI Bank (Rs 185 crore) and Satyam (Rs 177.70 crore).


Reliance Natural Resources led the volume chart with trades of around 1.67 crore shares followed by IFCI (1.45 crore), Reliance Petroleum (1.28 crore), IDFC (1.05 crore) and Chambal Fertilisers (90.25 lakh).

 

[immi22_80]

Indian IT majors Wipro, Satyam Q1 beats forecast

Mumbai, July 18: India’s third and fourth largest software firms have come out with their Q1 results on Friday.

IT major Wipro Ltd on Friday announced a net profit of Rs 907.80 crore for the first quarter ended on June 30, 2008, against Rs 725.60 crore in the year-ago period. The consolidated total income rose to Rs 6,087.10 crore in the latest quarter, from Rs 4,303.20 crore in the same period of FY'08. The software major Satyam Computer Services announced a consolidated net profit of Rs 547.70 crore for the quarter ended June 30, a growth of 44.77 percent over the corresponding period last year. The company had a net profit of Rs 378.32 crore in the first quarter of FY'08, Satyam said in a filing to the Bombay Stock Exchange. The June quarter results does not include the effects of the merger between Wipro Infrastructure Engineering, Quantech Global Services, Wipro Healthcare IT, mPower Software Services India, mPact Technology Service and cMango India, which was effective fr om April 1, 2007. The current quarter numbers are not comparable with those of the year-ago period, Wipro added.

Wipro reported a standalone Q1 net profit of Rs 546 crore, against Rs 671.40 crore in the previous year. The total income rose to Rs 4,807.4 crore in the latest quarter, from Rs 3,776.8 crore in the same quarter last year. During the quarter, the company added 31 new customers to their existing USD 100 million customer list. The total income of Satyam rose to Rs 2,653.95 crore, from Rs 1,893.39 crore in the same quarter in FY'08.

Satyam reported a standalone Q1 net profit of Rs 575.91 crore, a 48 percent growth over the previous year. The firm had a net profit of Rs 389.14 crore in the June quarter of FY'08.

The total income rose to Rs 2,556.52 crore in the latest quarter, from Rs 1,820.93 crore in the year-ago period.

"During the first quarter of FY'09, Satyam achieved an annual revenue run rate of Rs 10,000 crore. In Q1, we grew by 8.5 percent," Satyam chairman B Ramalinga Raju said.

While, Wipro expects IT Services revenue to be about USD 1,089 million in the September quarter, the filing stated, Satyam has stated about reaching its consolidated revenue is expected to grow between 32-34.1 percent. Shares of Wipro were trading at Rs 382.50, 0.71 percent up and Satyam’s were at Rs 417, up by 0.40 percent on the BSE.

[immi22_80]

OBC hikes PLR by 50 bps to 13.75%

New Delhi, July 18: Oriental Bank of Commerce (OBC) Friday said it has increased its prime lending rate (PLR) by 50 basis points to 13.75 percent to maintain its margin.

The Asset Liability Committee (AlCO) decided to increase the PLR from 13.25 percent to 13.75 percent to maintain its net interest margin, said a senior official of OBC.

Besides, the bank has also revised deposits rates up to 50 basis points for some maturities.

The new rates would be effective from July 15.

In addition, OBC also launched special deposit scheme, which offers to pay 9.55 percent and 10.05 percent for the senior citizens.

The scheme called Oriental Bank Akshay Kiran Deposit Scheme is for 500 days.

The decision to hike PLR comes in the wake of RBI increasing short term lending (Repo) rate by 0.75 percent to 8.5 percent and increased the mandatory cash requirements for banks by 0.50 percent to 8.75 percent, to squeeze money supply for taming inflation.

Major public sector lenders, notably State Bank of India, Punjab National Bank and Canara Bank, has already hiked their benchmark prime lending and deposit rates.