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Bulls overcome drought, Swine Flu jitters

This article was posted on Aug 14, 2009 and is filed under Market News

For the week, the BSE 30-share Sensex added 1.7% and NSE Nifty added 2.2% during the week.

Deficit monsoon and H1N1 virus (Swine Flu) were ignored as the market welcomed upbeat IIP data and the draft of the new Direct Tax Code, especially the scrapping of the STT. On the global front, things are much brighter than they have been for a while now. The Fed says that economic activity in the US is leveling out. As expected, the US central bank has left key rates unchanged. Among the concerns, US retail sales unexpectedly fell in July. The recovery in American labour and housing markets too remain fragile.

Finally, the BSE 30-share Sensex added 1.7% and NSE Nifty added 2.2% during the week.

The BSE Sensex hit an intra-week high of 15,545 and low of 14,701 while, the NSE Nifty hit an intra-week high of 4,619 and low of 4,358.

The top gainers: The top gainers in the Sensex were Ranbaxy Labs (up 13.8%), Tata Motors (up 12.7%), DLF (up 7.7%), ONGC (up 7.1%) and Hindalco (up 6.9%).

The Top Losers: The top losers in the Sensex were Hindustan Unilever (down 4.7%), ACC (down 4.5%), Ambuja Cements (down 4.2%), Grasim Industries (down 3.2%) and NTPC (down 3%).

The BSE IT Index (up 1.5%): The top gainers in the IT sector were Sasken Communication (up 20.8%), Patni Computer (up 13.4%), Oracle Financial (up 3.9%), TCS (up 2%) and Wipro (up 2.3%).

Mphasis shot up by over 10% during the week. The company signed definitive agreement to acquire AIG Systems Solutions Ltd; part of American International Group Inc. AIGSS is an India-based provider of information technology services and solutions to AIG companies worldwide.

HCL Tech surged over 10% during the week. CRISIL assigned an ‘AA+ /stable’ rating to the Rs5bn Non-convertible Debentures programme of HCL Technologies.

Financial Tech lost 5.2% during the week.

The BSE Consumer Index: The top gainers in consumer durables space were Su-Raj Diamonds (up 7.8%), Titan (up 4.9%), Samtel Color (up 2.3%) and Whirlpool (up 2%).

Blue Star was the top loser in the consumer durables index during the week. The stock fell 4.4%.

The BSE Healthcare Index (up 3%): The top gainers in the Pharma space were Natco Pharma (up 38.4%) and Wockhardt Ltd (up 9.2%).

Ranbaxy Labs rose over 13% during the week. According to reports, the company entered protein supplement market with the launch of Revitalite.

Aurobindo Pharma surged over 9% during the week. The company got approval for Sumatriptan Succinate Tablets 25 mg, 50 mg, and 100 mg from the USFDA.

Cipla was up 3% during the week. The company’s Joint MD Amar Lulla said that the company has received proposals from people on behalf of countries in Latin America, Mexico and Israel. “We have the capability to supply 1.5mn dosages of the drug within 4-6 weeks,” he said.

The top losers were Emami (down 5.4%), Astrazeneca Pharma (down 2.2%), Marksans Pharma (down 1.9%), Cadila Healthcare (down 1.2%) and Dishman Pharma (down 0.7%).

The BSE Banking Index (up 2.2%): The top gainers in banking space were Yes Bank (up 8.7%), PNB (up 4.4%), Kotak Mahindra Bank (up 3.6%), and SBI (up 3.3%).

Axis Bank shot up by over 7% during the week. According to IIFL report released during the week, “Despite growing at a remarkable pace, Axis Bank has managed asset quality well, with its incremental slippage rate for the past five years being lower than that of its peers. At the same time, its profit growth and RoE have been consistently ahead of its peers. RoA has been continuously improving and is amongst the best in Asia. The bank plans to raise equity capital soon, and while this may dilute RoE in the short term, we believe Axis Bank can successfully use the new capital for balance sheet expansion as well as for entry into new business ventures.”

The top losers in were Union Bank of India (down 7.1%), Karnataka Bank (down 4.3%), OBC (down 4.3%), Bank of India (down 2.1%) and IOB (down 0.9%),

The BSE Auto Index (up 2.1%): Tata Motors was the top gainer among the auto stocks. The stock accelerated by 12.7% during the week. Reports stated that Jaguar Land Rover recalled ~60 Range Rovers its premium model. According to reports, the models were recalled due to faulty windscreen fixtures. Modifications will be made free of charge if required, added reports.

According to an IIFL report released during the week, “Post our recent meeting with Tata Motors’s management, we reiterate our negative view on the stock. JLR volumes remain weak and there are no signs of revival in the near term. While volumes of other luxury brands are down ~20% YoY YTD CY09 in Europe, JLR’s volumes are down ~40% in the same period. The company is targeting cash breakeven in CY10. The company’s goal is to bring down employee costs by 20% and it also plans to increase JLR’s sourcing from low-cost countries (currently at ~20%). JLR’s debt is likely to increase by a further GBP425m in this quarter. On the other hand, the domestic business, especially the CV business, seems to be turning around. Management believes the strong rise in sales in July marks a reversal in trend, and with a low base going forward, it expects the CV business to exhibit handsome growth.”

Among the other major gainers were Ashok Leyland (up 12.3%), Eicher Motors (up 4.9%), Maruti Suzuki (up 4.3%) and Hindustan Motors (up 0.2%).

The top losers were M&M (down 5.4%), Bajaj Auto (down 4.5%) and Swaraj Mazda (down 2.1%).

The BSE Oil & Gas Index (up 3.2%): The top gainers in oil & gas space were Hindustan Oil (up 27.6%), GSPL (up 12.9%), ONGC (up 7.1%), Cairn India (up 4.4%) and Jindal Drilling (up 2.4%).

The top losers were Shiv-Vani Oil (down 2%) and HPCL (down 0.7%).

The BSE Capital Goods Index (up 1.6%): The top gainers in the capital goods sector were Usha Martin (up 14.1%), Aban Offshore (up 9.9%), Dredging Corp (up 5.6%), BEL (up 5%) and Carborundum Universal (up 4.7%).

The top losers were Gammon India (down 2.9%), Ingersoll Rand (down 2.6%), Kirloskar Brothers (down 2.5%), Thermax (down 1.9%) and Esab India (down 0.4%).

The Cement Sector: The top gainers in the cement sector were Kakatiya Cement (up 10.2%), Prism Cement (up 5.8%) and Gujarat Sidhee (up 0.5%).

The top losers were Binani Indus (down 5.4%), Shree Cement (down 4.8%), India Cements (down 4.8%), ACC (down 4.5%) and Ultratech Cement (down 3.2%).

According to an IIFL report released during the week, “The average cement price in Hyderabad has dropped 15% in the past 4 months to Rs205 per bag (price range is Rs180 to Rs225 now). The price decline intensified in the last one week (price declined 5%).

Poor demand growth in Andhra Pradesh and sharp increase in supplies with new capacities getting stabilised are leading to price declines. Our interaction with marketing managers and dealers across regions makes us believe that the price declines could deepen in southern region going forward and the cascading effect will be felt in West, and parts of East and Central regions.

Prices continue to be stable in North, Central and Eastern regions in August except for some marginal discounts in institutional segment in Uttar Pradesh. We maintain our positive stand on north and central based companies and negative stand on south and west based companies.”

The Telecom Sector: The top gainers in Telecom were Idea Cellular (up 6.9%), Tata Communication (up 3.4%), Himachal Futuristic (up 2.4%) and MTNL (up 1.8%)

Bharti Airtel surged by 6.5% during the week. According to reports the company may increase its offer by 5-10% for a stake in MTN.

RCom was up 1.5% during the week. The company is undertaking the nationwide commercial roll-out of Mobile Conferencing Service. The company has tied-up with US-based Kodiak Networks, as a partner for this service.

The top losers were Shyam Telecom (down 2.3%), WWIL (down 1%) and TTML (down 0.6%).

The Realty Sector (up 7.8%): The BSE real estate index was the top gainer. The top gainers were Anant Raj Indus (up 17.7%), HDIL (up 16.2%), Ansal Properties (up 12.3%), Peninsula Land (up 11.2%) and Unitech (up 8.1%).

DLF surged over 7.7% during the week. The Government of Haryana awarded the construction of a metro system in Gurgaon to consortium of DLF and IL&FS to construct and operate the system.

Peninsula Land rallied by over 11% during the week. According to reports, the company is planning to raise a QIP of Rs5bn for acquiring land in Mumbai. Peninsula Land has already identified five plots in Parel, Lower Parel, Kanjurmarg and Thane, stated reports.

Ackruti City fell over 3% during the week.

The Metals sector (up 4.8%): The top gainers in the metal space were Bhushan Steel (up 18.2%), Jindal Steel (up 14.6%), Monnet Ispat (up 13.1%), Bhuwalka Steel (up 7.7%), Sunflag Iron (up 7.1%), Hindalco (up 7%) and SAIL (up 2%).

source: IndiaInfoline

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