R-factor in the markets
For the markets, the R-factors include Reliance and Randomness. Both will come into play. Over the weekend, Reliance disclosed that it has sold RPL shares to broad base the shareholding. Reports caution that when an ‘insider’, quietly offloads shares it’s time to think whether the share price has become over-valued. The real story may be its just a move to get it off the F&O curb and increase the floating stock. Then there is the other R, which is Reliance Power. Reports say Anil Ambani group has sought SEBI's nod to float Reliance Power's IPO at a face value of Rs 10 a share instead of Rs 2. This may be yet another attempt to speed up the IPO process.
The outlook for today is a positive open on the back of buying witnessed on Friday. With F&O expiry this week wild swings could set in anytime. While FIIs have been covering their shorts, they were net sellers in the cash segment. Domestic Mutual Funds on the other hand turned net buyers.
Expect some action in Hexaware today. R-Com could gain on reports of further stake sale in its tower business. Videocon is another counter which could see gains in the near term. Besides buzz of a placement at higher levels, reports say the company is in the fray to acquire London-based Burren Energy. UCO Bank could remain in action on reports that it plans to raise Rs4.5bn through a follow on public offer. Kalindee Rail could gain on reports that the company could bag some major orders soon. Nucleus Software could be in action on reports that it could benefit from the subprime crisis thanks to its loan originating software.
Japanese stocks gained on speculation consumers will be prepared to spend more in the holiday season after a U.S. report said retail sales increased on Black Friday, the day after Thanksgiving.
While US stocks rose on Friday, November has been one of the worst months for the US indices. The hope for December is another rate cut from the Fed or some positive data.
Following are reports from the various media:
Indian companies raised US$12bn through external borrowings in first five months of fiscal 2008.
Inflation falls to 3.01% on decline in food prices for week ended November 10th.
Government plans to reduce assured return on equity on negotiated projects for power generation companies.
Container train operators request railway ministry to lower the access fee charged for usage of container terminals by 10-15%.
Government approves 22 FDI proposals worth Rs5.1bn.
Investments to the tune of Rs380bn planned in the cement sector over the next three to five years.
Government likely to reduce 16% central excise duty on ethanol and classify it as a declared good in a move to impose a uniform levy on the product across the country.
MARKET...
Bulls seems to continue momentum!
Markets ended their six day losing streak as bulls were back on bourses led by gains in the index frontrunners like Reliance Industries, L&T, HDFC and Reliance Energy. Key indices almost lost their gains as markets reacted sharply to blast which took place in the U.P. region. But showed strong resilience as benchmark Sensex recovered almost 300 points from its day’s low finally closing at 18,852 and the Nifty closed 89 points higher at 5,608.
DS Kulkarni gained 2% to Rs276 after the company announced that it would develop 250Acre of SEZ along with GTC Real Estate. The scrip touched an intra-day high of Rs300 and a low of Rs268 and recorded volumes of over 99,000 shares on NSE.
Reliance Industries surged by 3% to Rs2811 after reports stated that the company completed the purchase of the assets of Hualon Corp. of Malaysia. The purchase amount would be announced next week by the company. Reliance, India's biggest company, would pay $250mn to buy Hualon's assets. The scrip touched an intra-day high of Rs2833 and a low of Rs2720 and recorded volumes of over 24,00,000 shares on NSE.
NTPC advanced 4.5% to Rs236 after the company announced that it formed a subsidiary Company under the name and style of "Bhartiya Rail Bijlee Company Ltd" on November 22, 2007 for setting up a captive power plant of 1000 MW (2X250MW) at Nabinagar, Bihar.
The company would be establishing and operating 2X660 MW coal based thermal power project at Meja Tehsil or any other suitable site in Allahabad district in the state of Uttar Pradesh subject to establishment of techno-commercial viability and other clearances. The scrip touched an intra-day high of Rs238 and a low of Rs229 and recorded volumes of over 1,00,00,000 shares on NSE.
Siemens advanced over 2.5% to Rs1978 after the local unit of Europe's biggest engineering company announced profit more than doubled in the quarter ended September 30. Profit rose by 125% to Rs3.09bn in the fourth quarter a year earlier. The board of Directors of the company also announced that it had recommended bonus at ratio of 1:1 and would also pay dividend of Rs4.80 per share. The scrip touched an intra-day high of Rs2285 and a low of Rs19580 and recorded volumes of over 1,00,000 shares on NSE.
Hindustan Copper was locked at 5% lower circuit to Rs475.2. The company announced that it was considering entering into two joint ventures with overseas partners, according to reports.
The reports added that the company applied for licences of prospecting and have decided to look for foreign partners to enter into copper prospecting and exploration in India. The scrip touched an intra-day high of Rs475.2 and a low of Rs475.2 and recorded volumes of over 5,000 shares on BSE.
XL Telecom slipped 2% to Rs335. The company declared that the company secured Rs658mn export order. The scrip touched an intra-day high of Rs357 and a low of Rs330 and recorded volumes of over 46,000 shares on NSE.
ICRA was marginally up by 0.5% down 939. The company announced that the company signed MoU with United Bank of India. The scrip touched an intra-day high of Rs965 and a low of Rs912 and recorded volumes of over 19,000 shares on NSE.
PTC India is frozen at 10% upper circuit to Rs149.05 following reports that the company’s arm would sell 40% stake to two FIIs. The scrip touched an intra-day high of Rs149.05 and a low of Rs135 and recorded volumes of over 15,00,000 shares on NSE.
Simplex Infrastructure dropped by over 2% to Rs601. The company declared that they secured a contract worth Rs5.87bn from DP World. The scrip touched an intra-day high of Rs647 and a low of Rs583 and recorded volumes of over 68,000 shares on NSE.
The markets may have bounced back on Friday in yet another volatile session dominated much by 3 blasts in UP. However, for the week, Sensex closed at 18853, down by 4.3% or 845 points and Nifty fell by 5% or 298 points to shut shop at 5609. One needs to understand, that much will depend on movement of the overseas market as the trouble in the subprime mortgages and credit market is far from over. So, one should not get carried away by Friday’s rebound as there could be some more bad news in the offing in days to come. We also have expiry of the derivatives of the current month next week, which will contribute further to the current volatility. Short-term traders will continue to be the worst hit if the current situation doesn't change much while long-term players should grab this opportunity with both hands, as most of the index heavyweight stocks are available at attractive price.
