Indian markets are moving to a different tune with negative
global cues hardly having any impact. A day after the
US markets had their worst decline in months on worries
of high oil prices affecting consumer sentiment, Indian
markets celebrated high oil prices.
The day belonged to ONGC, which was on a roll from opening
trades. The stock continued its uptrend throughout the
day and closed the day with gains of close to a massive
5 per cent. Some institutional investors and large traders
are buying into the stock, as higher oil prices would
improve its profitability.
When the stock of the most valuable company in the country
rallied, it carried other oil and oil-related stocks with
it. Reliance Industries also joined the trend and closed
with gains of over 2 per cent.
Technology was the other sector, which saw very good buying
interest today. Frontline software stocks led by Infosys
gained, adding further momentum to the markets. Infosys
closed with gains of close to 3 per cent. TCS gained over
2 per cent, while Satyam and Wirpo also managed to close
with gains.
The momentum took the indices to their lifetime highs
by afternoon. Nifty crossed the 2400 mark for the first
time ever. Both indices closed at new lifetime closing
highs.
Sensex closed at 7860, a gain of 91 points, and the Nifty
at 2403, a gain of 33 points. Nifty August futures closed
the day at a premium of 1 point to the spot index.
ONGC, Bajaj Auto and Infosys Technologies were among the
major gainers among Nifty stocks while BHEL, Glaxo and
Gujarat Ambuja Cement were the major losers.
US markets had one of the worst sessions in recent months
yesterday. Subdued forecast by Wal-Mart led to weakness
in most other retail stocks. High fuel prices are expected
to dampen consumer spending in the coming quarters. Higher
energy prices are also having an impact on consumer price
inflation, which rose more than expected.
The Dow and S&P 500 indices closed with losses of
well over a per cent each. Good results from HP could
not help the NASDAQ, which lost close to one and a half
per cent.
Crude futures for September delivery remained steady yesterday,
closing the day with marginal losses. The commodity closed
at $66.08 on the NYMEX yesterday, down 19 cents from the
previous close. Crude was trading marginally below $66
in early European trades today.
Indian ADR's could not survive the decline in US markets
yesterday. VSNL was the biggest loser closing over 4 per
cent lower. Tata Motors lost over 2 per cent while the
banking duo, ICICI Bank and HDFC Bank, also lost over
2 per cent each. Dr Reddy's lost over a per cent each
while MTNL closed marginally lower. Among the technology
ADR's, Wipro and Satyam lost over a per cent each while
Infosys lost over half-a-per cent.
ICICI Bank has acquired apnaloan.com, an online
distributor of financial products. The bank would take
over the entire operations of the company, which is one
of the best-known brands in the retail distribution space.
The acquisition would strengthen the bank's retail finance
operations. The stock closed marginally lower.
The head of Tata Motors' passenger car division, V Sumantran,
has left the company. He was instrumental in making the
Indica a success and was intimately involved in the low
cost passenger car being developed. The company had promoted
the head of its commercial vehicles division as the managing
director recently. The stock closed with gains of close
to a per cent.
VSNL has signed the agreement with the government of South
Africa to become the second telecom operator in the country.
VSNL would hold 26 per cent stake in the operations, which
would offer voice, data and limited mobility services.
VSNL would have management control and operations are
expected to start within 9 months. The stock closed flat.
ITC expects to finalise the location of its proposed Rs2,500
crore integrated pulp and paper project within two months.
The company is evaluating various locations in the states
of Andhra Pradesh, Madhya Pradesh and Gujarat. The new
plant would raise the company's capacity to over 5.5-lakh
tonnes per annum. The stock gained half-a-per cent.
Engineering and construction major L&T has won a new
order for the construction of the new Hyderabad airport.
The order is reportedly worth close to Rs500 crore. The
stock closed lower by almost a per cent.
Mid-Cap Action
Mid-caps
maintained their strength today though gains on the mid-cap
index was lower than the frontline indices. The CNX Mid-Cap
index closed the day at a new lifetime high of 3659, a
gain of 36 points.
Vivimed
Labs had a dream debut on the bourses today after its
recent IPO. Issued at Rs70 per share, the stock opened
at Rs131 on the NSE and saw a high of Rs225. The stock
closed at Rs218, a listing gain of over 210 per cent.
Mid-cap
software company Visualsoft informed the stock exchanges
that it has no information about the promoter of Satyam
Computers picking up a large stake in the company. An
investment fund has intimated the company about a stake
acquisition through open market operations.
It
was revealed later in the day that Softbank of Japan has
picked up a 14 per cent stake in the company at Rs127
per share from shareholders associated with the promoters.
Visualsoft
had gained over 15 per cent yesterday on market rumours
about the promoter of Satyam Computers acquiring a large
stake in the company. Media reports had also carried the
same news today. The stock closed with gains of close
to 4 per cent.
3i
Infotech, an associate company of ICICI Bank, denied media
reports that it is close to announcing an overseas acquisition.
The company stated that while it is considering acquisitions,
no concrete proposal is presently before the company.
The stock closed flat.
Buying
in select mid-cap technology stocks continued today as
well. HCL Infosystems, Aftek Infosys, Patni Computers
and Kale Consultants closed with good gains.
Hindustan
Construction Company, one of the largest construction
firms in the country, is planning to expand its operations
abroad. The company would focus on projects in the Middle
East and Africa and aims to achieve 15 to 20 per cent
of its revenues from overseas business. The stock closed
with gains of over 4 per cent.
Buying
continued in many other construction stocks today as well.
Gammon India, IVRCL, Simplex, Era Construction and Unitech
were among the major gainers.
Shipping
logistics company Gateway Distriparks has received permission
to start operations at its new container freight station
at Vizag. The new facility would be custom-bonded for
overseas shipments. The new facility is a joint venture
between the company and a local business group.
Textile
company Garden Silk Mills has started commercial production
of polymer chips at a new facility in Gujarat. The new
facility would have a capacity of 600-tonnes per day.
After meeting its internal requirements, Garden Silk would
sell the balance. The stock gained close to 10 per cent.
DCM
Shriram gained after the company's board approved a bonus
issue and stock split. Bonus issue would be in the ratio
of one share for every share held. Also, every Rs10 share
would be split into five shares of Rs2 each.
Auto
ancillary company Talbros Automotive will launch its public
issue to raise Rs50 crore next month. The company would
use part of the proceeds to set up a new joint venture
with a Japanese company.
Asian
Electronics would raise Rs99 crore by issuing convertible
warrants to institutional investors, promoters and employees.
Aaj
Tak has lost its position as the most popular Hindi television
news channel to Star News. TV Today, which owns Aaj Tak,
closed flat.
TVS
Motors is due to launch two new motorcycles shortly besides
an upgraded version of its small scooter. The company
expects to sell around 2.5 lakh units during the rest
of the current financial year.
The
KK Birla group is planning to invest Rs450 crore to expand
the capacity of its sugar manufacturing facilities. The
group has two listed sugar companies Oudh Sugar
and Upper Ganges.
Upper
Ganges will set up a new sugar mill in UP with a crushing
capacity of 7,000-tonnes of cane per day. The group would
also increase its ethanol production capacity as well
as co-generation power units. While Oudh Sugar closed
with gains of over 4 per cent, Upper Ganges lost 3 per
cent.
Bharat
Rasayan, Crest Animation and BSEL Infrastructure were
among the best performing stocks among mid-caps.
Kirloskar
Oil Engines, Morarjee Realty and Ginni Filaments 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.
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