Stock Market

Sensex Visits Mount 12K
Bulls were Unstoppable for the third successive session on Thursday. After a sedate start equities gained momentum, with the bench mark BSE Sensex crossing the psycological12000 mark intra-day. Bears retaliated towards the close of the session and can take solace from the fact that they did not allow the index to close above the 12000 mark. The sensex ended up 79 points at 11973,while the NSE Nifty rose 17 points to a at 3472 in another choppy session.

It will be for the market to sustain the 12000 level in the near future.” We believe the correction in the Market is not yet over”,said Pawan Agarwal,manager,equity sales,Sharekhan securities.

Dealers say the main reason for the volatility in the recent day has been the low volume in the market. Due to this, any small amount of shares sold or bought leads to an exaggerated response in the indices. Volumes in the cash segments were the highest in
Recent times, though volumes in FZO market were below average on Thursday.Traded Turnover in the cash segment on both exchanges combined was Rs 12492 crore-the highest for the week so far.

Market participants cheered sebi’s decision to widen the scope of entities eligible to register as an FII in India. On Wednesday,sebi introduced amendments to the Sebi Foreign Institutional Investors Regulation ’06 to treat overseas registered or incorporated pension funds,mutual funds,investment trutsts,insurance companies,reinsurance companies,forgein central banks as FII.

The market breadth which was positive in the first half of the trading session turned Negative as selling in small-cap sand multi-caps began. For 1116 shares that advanced on BSE,1380declined and 72 shares were unchanged. The BSE mid-cap and small-cap funds were up by half and quarterbacked on BSE,1380declined and 72 shares were unchanged. The BSE mid-cap and small-cap funds were up by half and quarter cent respectively, at the end of the day.

Forex reserves dip $1,3 billion on strong $ demand

Foreign exchange reserves dipped $ 1,3 billion in the week to September 8 as the RBI intervened amid strong dollar demand cording to the figures released by the RBi in the weekly statistical supplement(WSS),total foreign exchange reserves including gold and SDR fell $ 1,3bn during the week to touch $ 165.13bn.While foreign currency assets dipped $ 1317 million, the reserve Tranche position with the IMF dipped $3 million. The value of the gold and SDR in reserves remained unchanged.

Banks have continued to record a robust business growth in the latest fortnight. Aggregate deposits mobilized by scheduled commercial banks amounted to Rs 2251701cro, on September 01,up to Rs 15510 crore over the previous fortnight. While demand deposits rose to Rs 2513 crore,term deposits went up to Rs 12,942 crore.Investment in government securities went up to Rs 8515crore,that in the other approved securities went up to Rs 8515 crore,that in the approved securities dipped by Rs 1,813 crore.

Southern Ispat gains on Kerala investment plan

Southern Ispat gained 4.78 per cent to close at a high of Rs. 17.55. Nearly 1.16 lakh shares were traded on the BSE. The stock has gained 3.4 per cent in the last one month. The company has declared that it plans to set up an integrated steelplant at kannur in Kerala at an investment of Rs. 500 crore. This plant will produce 1, 000 metric tonne of sponge iron, 800 metric tonne of steel billet, 50 Mw power through waste recovery and one structural and TMT rolling mill. While, 40 per cent of the funds required for the same will be raised through a public issue, 38 per cent would be through financial institutions. The production is supposed to start in stages from April 2008. The company posted a net profit growth of 33.3 per cent to Rs. 8 lakh for Q1 FY07 from Rs. 6 lakh in the corresponding prvios quarter. Net sales declined 13.6 per cent to Rs. 4.69 crore from Rs. 5.43 crore during the same period.

Financial Tech gains ground on MCX foreign deals

The stock gained 4.6 per cent on Monday to close at Rs. 1, 632.45, after touching a high of Rs. 1, 652. Over 33, 000 shares were traded on the BSE. The stock has gained 11 per cent in the past week and by 30 per cent over the past month. The company’s subsidiary – MCX – has signed an MoU with Zhengzhou Commodity Exchange for mutual cooperation. Earlier in March, MCX had signed a MoU with Bursa Malaysia Derivatives Berhad for similar cooperation. Financial Technologies posted a net profit growth of 170 per cent for FY07 to Rs. 27.23 crore compared with Rs. 10.26 crore in the corresponding previous quarter. During the same period, net sales rose to 212 per cent to Rs.70.43 crore from Rs. 22.59 crore. The company has declared a final dividend of 260 per cent for FY06, which took the total dividend declared during the year to 300 per cent. The company develops software solutions for online trading terminals.

Traded volumes hold the key to uptrend

The markets opened on a steady note and proceeded to trade higher through the day. The benchmark indices gained approx. 0.5 per cent at close as bulls managed to prevail over the bears.
Traded volumes were lower than the previous session as the rally was greeted with skepticism by retail traders who were conspicuous by their absence. The market breadth was marginally positive as the BSE and NSE combined figures were 1778:1585 and the capitalization of the breadth was negative as the figures on a BSE and NSE combined basis were Rs. 3366 crore : Rs. 5537 crore. The derivatives data show a build-up of short positions at higher levels as bears have been pressing sales in the Nifty segment.

INDIAN CAPITAL MARKET

Dell choose Chennai for its $60- million India unit:

Dell, the largest global manufacturer of computers, has choosen Chennai for its first manufacturing facility in India and its 6th in the world. The company has committed an investment of $ 60 million, including $ 30 million expected to come in the next five years at the Sriperumbudur SEZ (special Economic Zone) near the city. Dell which entered India in September 2001, has reported sales of Rs 1800 crore and a growth rate of 60% per annum.Dell will invest Rs 280 crore in its manufacturing facility near Chenni.

Hyundai to invest $700 million more in Tamil Nadu:

South Korea’s Hyundai motor company (HMC) is set to invest an additional $700 million directly into its Indian perations based in Tamil Nadu .The fresh investments will be used for expansion of Hyundai Motors Indias passenger car capacity to 6th lakh unit per annum,from the present three lakh,as well as in a new engine and transmission unit.
HMC will be making an additional direct investment of over $ 700 million.However the total fresh investments including that of the vendors, will be close to $1 billion.
The Hyundai chairman chung mong koo said the company has investment plan of about $700 million (Rs. 3220 crore) in Tamil Nadu.

Sensex regains 12,000 peak:

The Bombay stock exchange’s 30-share sensitive index(sensex) today recaptutred the 12,000-peak which it had first climbed on April 20 but had to beat a retreat after the market meltdown in May.The sensex had closed above the 12,000 level last on May 12.”There is not much of euphoria among investors as they are more careful about the ricks at this levels,” said Andrew Holland,head of strategic risk group,DSP-merrill Lyunch.
There will be hiccups in the short-to-medium term term but the long term India story continues.For the long term, the best returns to the investors,”said S Muhnot,managing director&CEO of IDBI capital.
In intra day the sensex swung by 194 points –between a low of 11,848 and high of 12,042-before settling 12009.59 at the end of the day.

Reliance takes ethanol plunge in Brazil:

Reliance Industries is gearing to start a global scale ethanol facility in Brazil.Former IPCL hand R.C.Sharma who is headings reliance expansion into Brazil,said that plans are only in the preliminary stage.India currently has to import upto 30% of its reqirement of industrial alcohol.However all talk of blending Alcohol with petrol to reduce dependence on expensive petro products is more high minded and with little material besis which can be built up in Brazil.Brazil offers plentiful availability of land that is two billon hectares of developed agricultural land at a price of $1000 a.ha.

Source:The Economics Times(14th,18th and 19th September 2006)
Business Standard(16th September)