|
Though the Infosys first quarter results were disappointing,
given the high expectations of a section of traders, the
markets opened the day on a strong note and sought higher
levels for the first couple of hours.
Most
frontline stocks traded firm in early trades despite the
weakness in Infosys which spread to other IT stocks as
well. Strong buying in banks, autos and consumer goods
along with a mild recovery in oil stocks helped the indices
to hold steady till noon.
The
decline came all of a sudden and the speed with which
the indices lost all of their gains and went deep into
the red surprised most traders. Within minutes, both frontline
indices were trading with losses of well over a per cent
each.
The
recovery during the last two hours of trade was equally
spectacular. Most of the gainers from morning traders
recovered fast and re-tested the earlier highs, some of
them going well past their morning levels. IT stocks stayed
weak, unable to recover on the face of heavy selling pressure.
The
indices finally managed to close flat on a day which saw
a 130 point movement on the Sensex between the highs and
lows.
Sensex closed at 7304, a loss of 3 points, and the Nifty
at 2221, a gain of 2 points. Nifty July futures discount
to the spot index narrowed to 2 points from yesterday's
9 points.
VSNL,
Tata Motors and ICICI Bank were among the major gainers
among Nifty stocks while Infosys, Zee Tele and TCS were
the major losers.
Expectations
of strong corporate performance helped the US markets
to close with gains for the third straight day yesterday.
Major companies will start announcing their second quarter
results this week and the decline in oil prices added
to the positive sentiment.
The
Dow closed the day with gains of close to three quarters
of a per cent while NASDAQ gained a per cent.
Crude
futures for August delivery declined well over a per cent
yesterday to close below $59 to a barrel. Traders resorted
to selling as Hurricane Dennis did not cause any damage
to oil production facilities.
Indian
ADR's had a spectacular day yesterday with many of them
closing with substantial gains. VSNL closed the day with
gains of close to 7 per cent. Tata Motors and MTNL gained
3 per cent each. Among the tech stocks, Satyam gained
well over 2 per cent while Wipro gained close to 2 per
cent. Infosys closed the day with marginal losses. ICICI
Bank also closed with gains of well over a per cent.
Infosys
kicked off the first quarter results season today, by
reporting numbers which were marginally better than the
guidance given earlier. Consolidated profits have increased
by 3 per cent on revenue growth of 4 per cent for the
quarter ended June '05 as compared to the previous quarter.
To
traders and investors who are accustomed to positive surprises
from Infosys on a regular basis, the results came as a
disappointment. The stock opened almost 3 per cent lower
and remained weak throughout the day. By early afternoon
the stock had lost well over 4 per cent, but recovered
later to close the day with losses of under 4 per cent.
Tata
group telecom company VSNL was the most significant gainer
among index stocks closing more than 18 per cent higher.
The stock has seen a major rally over the last couple
of weeks and has gained close to 60 per cent during this
period.
VSNL's
ADR, which has been trading at a discount to the domestic
stock price recently, surged over 6 per cent on the NYSE
yesterday. There is market speculation about a possible
domestic acquisition by VSNL, which could lead to a re-rating
of the stock. The company later denied all such rumours.
VSNL
has been facing a substantial decline in its international
telephony business after it lost its monopoly two years
back. The company has been expanding its broadband business
in the domestic market and had recently forayed into South
Africa as well.
VSNL
had acquired the undersea cable network of Tyco Global,
which is expected to contribute at least $100 million
to the company's top line during the current year.
Other
telecom stocks like MTNL and Bharti Televentures also
closed the day with good gains.
Tata
Motors was another star performer today from the Tata
group. The stock which opened strongly had gained over
5 per cent by late afternoon, before closing over 4 per
cent higher. The management had indicated yesterday at
the AGM that the company is looking at possible acquisitions
in Europe, Far East and China.
The
company's much awaited small car project is reportedly
on schedule and will be commercially launched in the next
two years. The management also mentioned that the company
would focus on the mid and low priced segments of the
passenger market for future growth.
First
quarter of the current financial year has been a lacklustre
one for Tata Motors with sales volumes remaining flat.
Sales were affected by uncertainness regarding emission
regulations and production bottlenecks at key suppliers
to the company.
ICICI
Bank continued its spectacular run for the third straight
day and posted a new lifetime high. The stock has seen
considerable buying interest on reports of a possible
restart to the Dhabhol power project. The bank is one
of the principal lenders to the project and is carrying
large provisions for the money lent to Dhabhol.
There
are also reports that the government has invited ICICI
Bank also to bid for UTI Mutual Fund. The bank's mutual
fund subsidiary, ICICI Prudential, is the second largest
fund house in the country. If it is successful in acquiring
UTI Mutual Fund, the fund house will become the most dominant
player in the industry with over $9 billion of assets
under management.
There
is also speculation that ICICI Bank is in negotiations
to divest part of its stake in Federal Bank. ICICI holds
over 20 per cent of Federal Bank and is the single largest
shareholder in the Kerala-based private bank. ICICI Bank
closed with gains of over 3 per cent.
Pharma
major Ranbaxy is keenly evaluating acquisition opportunities
in Germany and the US. The company is reportedly willing
to spend up to
$1-billion to fund its acquisitions. The management is
confident of achieving the revenue target of $2 billion
by the year 2007. The stock closed a per cent lower.
ITC
Limited was another star performer of the day, gaining
close to 3 per cent to post a new life time high. The
stock has attracted a lot of institutional buying recently.
Metal
stocks were weak for most of the day. SAIL lost over 2
per cent by afternoon before recovering and closing with
losses of over a per cent. Tata Steel lost under a per
cent.
Oil
stocks had a decent opening in the morning when they appeared
to be recovering from the losses of last couple of weeks.
The gains could not be sustained and most of them declined
when the markets dipped early in the afternoon. Only ONGC
managed to recover from the losses and close with gains
of over a per cent.
Construction
equipment manufacturer BEML is planning a public issue
to raise Rs400 crore to fund its expansion plans. The
proposal is expected to be discussed at the company's
general meeting scheduled later this week.
Mid-Cap Action
Mid-caps
also saw considerable volatility today in line with the
movements in larger stocks. After opening strong and surging
to a new life time high, the mid-cap index declined by
early afternoon and went into the red before recovering
and closing with gains. The CNX Mid-Cap 200 index closed
at a new life time high of 3196, a gain of 6 points.
Mid-cap
IT services company Mphasis BFL reported a close to 30
per cent decline in first quarter profits. Total revenues
were also lower by close to 8 per cent. The company's
BPO division had a difficult quarter but the company is
hopeful of better performance for the rest of the year.
Mphasis
BFL has been in the news recently as private equity firm
Barings, which holds a sizeable stake in the company,
is trying to sell its holdings. Domestic IT majors and
other private equity firms are reportedly interested in
the stake. The stock closed lower.
Yes
Bank, the newest private bank in the country which had
completed its IPO recently, made its entry on the bourses
today. Issued at Rs45, the stock opened on the NSE at
Rs66.
The
bank's operations are presently limited only to Mumbai.
It is planning to expand its branch network to other parts
of the country shortly. The stock closed at Rs60.85.
Centurion
Bank gained over 4 per cent in early trades after the
bank reported good numbers for the first quarter ended
June '05. Profits soared over 250 per cent on an income
growth of over 30 per cent. The growth in income on a
very small base is disappointing when compared to much
larger competitors who had reported much better growth
rates.
The
bank has announced its merger with Bank of Punjab, which
will be effective from this financial year after the necessary
regulatory approvals. The results of Bank of Punjab are
expected today.
Liberty
Shoes saw considerable buying interest after the company
proposed a bonus issue. The company is a major manufacturer
of shoes and other related accessories and is a supplier
to many large retail chains in the US and Europe. The
stock closed 20 per cent higher.
 RPG
Transmission, RPG Telecom and Coromandel Fertilizers were
among the best performing stocks among mid-caps.
RPG
Life Sciences, Geodesic Info and BlueDart were among the
significant mid-cap losers.
*Disclaimer:
The author does not have any position in the stocks specifically
mentioned
above at the time of writing this article. This analysis
/ report is only for the purpose of information and is
not an investment advice. Readers are advised to consult
a certified financial advisor before taking any investment
decisions. While efforts have been made to ensure the
accuracy of the information provided in the content the
author or publisher shall not be held responsible for
any loss caused to any person whatsoever.
Other
articles by Rex Mathew
List
of general reports on markets List
of general reports on finance
Market:
Indices
National
Markets
Gain (+) / Loss (-)
|
SENSEX
|
7,303.95
|
-
2.79 |
| NIFTY
|
2,220.80
|
+
1.95 |
Last
Update : 12 July, 2005, 16:13 PM
Market
Counters
Figures in Rupees
BSE
30
| Scrip
Name |
Open |
High |
Low |
Last
Price |
| TATA
MOTORS |
450.00
|
471.40
|
448.00
|
466.60 |
| ICICI
BANK L |
454.50
|
468.40
|
450.60
|
466.85 |
| HEROHONDA
M |
594.00
|
610.00
|
581.10
|
607.55 |
| I
T C LTD |
1,698.90
|
1,775.00
|
1,698.90
|
1,743.85 |
| ASSOCIATED
CEMENT COMPANIES LT |
413.00
|
423.90
|
409.20
|
421.25 |
| CIPLA
LTD. |
319.25
|
327.00
|
318.10
|
325.65 |
| MARUTI
UDYOG |
449.95
|
460.85
|
448.10
|
456.45 |
| ONG
CORP LTD |
927.00
|
945.00
|
920.15
|
941.10 |
| GUJARAT
AMBUJA CEMENTS LTD. |
63.00
|
64.35
|
61.80
|
63.10 |
| BHARTI
TELE |
259.00
|
262.90
|
249.25
|
258.90 |
| RELIANCE*
|
632.00
|
643.50
|
630.55
|
638.20 |
| GRASIM
INDUSTRIES LTD. |
1,088.50
|
1,105.00
|
1,070.00
|
1,092.10 |
| STATE
BANK OF INDIA |
718.90
|
727.00
|
707.00
|
717.65 |
| NTPC
LTD |
90.75
|
90.75
|
89.20
|
90.35 |
| HINDUSTAN
LEVER LTD. |
160.00
|
161.90
|
158.10
|
158.65 |
| LARSEN
& TOUBRO LTD. |
1,230.10
|
1,263.70
|
1,200.20
|
1,248.95 |
| INFOSYS
TECHNOLOGIES LTD.-ORDI |
2,222.35
|
2,310.00
|
2,197.25
|
2,219.95 |
| TCS
LTD |
1,310.00
|
1,320.00
|
1,274.00
|
1,285.50 |
| HOUSING
DEVELOPMENT FINANCE CO |
934.00
|
934.00
|
876.00
|
901.00 |
| DR.REDDY'S
LABORATORIES LTD. |
781.10
|
782.00
|
752.00
|
758.20 |
| WIPRO
LTD. |
715.10
|
718.00
|
696.10
|
701.85 |
| BAJAJ
AUTO |
1,396.90
|
1,396.90
|
1,376.30
|
1,380.05 |
| HDFC
BANK LT |
663.00
|
669.00
|
650.00
|
657.60 |
| SATYAM
COMP |
498.00
|
512.95
|
488.35
|
496.25 |
| RANBAXY
LABORATORIES LTD. |
1,066.50
|
1,070.00
|
1,040.10
|
1,051.90 |
| RELIANCE
ENR |
630.00
|
635.00
|
617.20
|
622.85 |
| TATA
IRON AND STEEL CO. LTD. |
370.00
|
370.00
|
355.10
|
359.40 |
| BHEL |
885.00 |
887.90
|
860.25
|
874.45 |
| TATA
POWER |
393.95
|
401.00
|
373.50
|
395.60 |
| HINDALCO
IN |
1,258.00
|
1,272.00
|
1,218.00
|
1,231.15 |
Last
Update : 12 July, 2005, 16:02PM
S&P
CNX Nifty
| Symbol |
Open |
High |
Low |
Last
Price |
| INFOSYSTCH
|
2320.00
|
2320.00
|
2195.35
|
2221.25 |
| RELIANCE
|
634.90
|
644.00
|
630.55
|
638.30 |
| VSNL
|
283.50
|
332.50
|
281.00
|
328.60 |
| SATYAMCOMP
|
495.00
|
512.40
|
488.25
|
496.15 |
| SBIN |
718.90 |
727.00
|
707.00
|
717.90 |
| TATAMOTORS
|
449.00
|
472.40
|
449.00
|
467.70 |
| ONGC |
939.00 |
946.90
|
925.00
|
943.10 |
| TCS
|
1318.60
|
1321.00
|
1272.30
|
1285.90 |
| TISCO
|
363.00
|
365.00
|
355.00
|
360.35 |
| ICICIBANK
|
430.00
|
469.75
|
430.00
|
468.05 |
| WIPRO
|
716.00
|
718.00
|
696.20
|
702.35 |
| BHARTI
|
258.00
|
263.00
|
249.10
|
258.45 |
| ITC
|
1708.00
|
1774.00
|
1695.00
|
1744.20 |
| MARUTI
|
448.35
|
461.25
|
448.05
|
456.60 |
| HINDLEVER
|
159.00
|
162.00
|
158.00
|
158.75 |
| IPCL
|
174.40
|
176.20
|
173.00
|
175.45 |
| ACC
|
412.50
|
423.90
|
408.15
|
421.25 |
| ZEETELE
|
172.00
|
178.80
|
166.15
|
167.30 |
| RANBAXY
|
1071.90
|
1071.90
|
1042.95
|
1053.35 |
| PNB
|
393.40
|
398.25
|
391.05
|
394.20 |
| SAIL
|
52.90
|
53.00
|
51.35
|
52.25 |
| BAJAJAUTO
|
1398.00
|
1398.00
|
1377.10
|
1392.60 |
| LT
|
1240.00
|
1264.90
|
1200.00
|
1250.50 |
| MTNL
|
133.40
|
136.25
|
129.20
|
135.55 |
| HDFC
|
930.00
|
932.00
|
875.00
|
899.40 |
| GUJAMBCEM
|
63.00
|
64.15
|
61.80
|
63.15 |
| M&M
|
608.00
|
608.00
|
592.00
|
593.95 |
| HDFCBANK
|
663.00
|
670.00
|
648.15
|
658.05 |
| TATAPOWER
|
394.00
|
401.70
|
390.90
|
395.75 |
| REL
|
625.00
|
635.90
|
617.30
|
624.15 |
| ORIENTBANK
|
261.90
|
263.50
|
257.50
|
260.55 |
| GRASIM
|
1081.00
|
1106.00
|
1055.00
|
1091.50 |
| CIPLA
|
319.90
|
327.40
|
318.00
|
326.00 |
| HINDALC0
|
1246.00
|
1256.00
|
1220.00
|
1230.50 |
| BHEL |
880.00 |
887.90
|
863.20
|
873.65 |
| HEROHONDA
|
592.80
|
610.00
|
590.25
|
607.90 |
| HCLTECH
|
384.25
|
389.50
|
379.00
|
383.20 |
| TATATEA
|
654.00
|
654.00
|
637.00
|
645.25 |
| GAIL
|
221.80
|
224.40
|
219.10
|
220.45 |
| NATIONALUM
|
147.50
|
149.80
|
145.75
|
148.05 |
| DRREDDY
|
777.00
|
780.95
|
753.80
|
757.00 |
| TATACHEM
|
173.60
|
177.70
|
172.85
|
174.20 |
| HINDPETRO
|
303.00
|
307.25
|
300.10
|
301.40 |
| BPCL
|
354.10
|
360.00
|
346.00
|
349.10 |
| ABB
|
1520.00
|
1539.00
|
1476.00
|
1485.80 |
| SUNPHARMA
|
614.00
|
614.00
|
596.25
|
602.70 |
| GLAXO
|
856.95
|
869.70
|
837.00
|
854.00 |
| COLGATE
|
243.15
|
249.95
|
241.50
|
245.65 |
| DABUR
|
132.00
|
136.40
|
126.65
|
134.45 |
| SCI
|
144.50
|
144.90
|
142.30
|
143.35 |
Last
Update : 12 July, 2005, 16:00PM
| 
