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Volatility in Indian
Stock Market
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PREFACE
A project report on stock market is being prepared in attempts to interpret in-depth
study of volatility in Indian stock market. This report helps us to understand various
terminologies in stock market. This report gave me opportunity to have complete idea
about volatility in stock market. This gave me idea about technical and fundamental
analysis in stock market and how trading is being done in stock market.
This project report helps in following aspects,
Build understanding of central ideas and theories of stock market.
Develop familiarity with the analysis of stock market.
Furnish institutional material relevant for understanding the environment in
which trading decisions are taken.
This project will guide to investors for an investment in stock market. This project
deployed a lot time for collections of information from various sources. This project
will be very helpful to know volatility from January 2006 to December 2006 and
reasons for such high volatility and would be able to take decisions for investment in
volatile stock market.
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TABLE OF CONTENTS
Ser. No Content Page no.
1.0 EXECUTIVE SUMMARY 4
2.0 RESEARCH PLAN 5
3.0 INTRODUCTION 6
3.1 INDIAN CAPITAL MARKET OVERVIEW 6
4.0 STOCK MARKET ANALYSIS 12
4.1 JULY 13
4.2 AUGUST 23
4.3 SEPTEMBER 33
4.4 OCTOBER 46
4.5 NOVEMBER 57
4.6 DECEMBER 68
5.0 SENSEX MILESTONE 82
6.0 FINDINGS 85
7.0 CONCLUSION 87
8.0 RECOMMENDATIONS 89
9.0 BIBLIOGRAPHY 90
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1.0 EXCUTIVE SUMMARY
Stock market is an avenue for growth of earnings. This project includes how broking
is being done in stock market. It involves stock market analysis such as fluctuations
in sensex & nifty, reasons for fluctuations in stock market, fluctuations in stock
market and reasons for the same. Stock market has been the best avenue for
investment in securities since last 10 years. Mostly future and option trading was the
worst trading in stock market in these sessions. I have covered various sessions for
analysis from July 2006 to December 2006
In these sessions, stock market was most volatile so that I have covered various
analyses with most affected factors to the global market. Various stock indices in
BSE such as BANKEX, BSE Metal, BSE IT, BSE FMCG, BSE PSU have been most
affected due to panic market in these sessions and I have made analysis of these
indices.
In this project, I have included most gainer period and most loser period with
reasons for the same. I also included comparison between Bond yields and foreign
investments by foreign investors.
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2.0 RESEARCH PLAN
Title: Volatility in Indian Stock Market
Objectives :
ƒ To study volatility in Indian stock market while taking SENSEX of Bombay
stock exchange as a source of secondary data which broadly represent
Indian stock market along with NIFTY of National stock exchange.
ƒ To study the factors which are making Indian stock market volatile.
ƒ To furnish institutional material relevant for understanding the
environment in which stock market fluctuation are occurring.
Scope :
This study can be used by investors, traders and other professionals as a
supplement to their own research.
Hypothesis :
This is the exploratory research which tries to shows the factors which are
making stock market volatile.
ƒ Any fluctuation in foreign market has more effect on Indian stock market
than that of domestic market.
ƒ In the given volatile economic conditions, the market is efficient to any
news and information.
Sources of data :
Data used in this study is of secondary in nature. Sensex and Nifty is taken as a
source of information which widely describes Indian stock market. Here monthly
prices of both indexes are taken for the study purpose.
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3.0 INTRODUCTION
Stock exchanges to some extent play an important role as indicators, reflecting the
performance of the country's economic state of health. Stock market is a place where
securities are bought and sold. It is exposed to a high degree of volatility; prices
fluctuate within minutes and are determined by the demand and supply of stocks at a
given time. Stockbrokers are the ones who buy and sell securities on behalf of
individuals and institutions for some commission.
The Securities and Exchange Board of India (SEBI) is the authorized body, which
regulates the operations of stock exchanges, banks and other financial institutions.
The past performances in the capital markets especially the securities scam by
Harshad Mehta has led to tightening of the operations by SEBI. In addition the
international trading and investment exposure has made it imperative to better
operational efficiency. With the view to improve, discipline and bring greater
transparency in this sector, constant efforts are being made and to a certain extent
improvements have been made.
As the condition of capital markets are constantly improving, it has started drawing
attention of lot more people than before. On the career related aspects, professionals
have opportunities to choose from for a wide range of jobs available in a number of
organizations in this sector and one can expect to have good times ahead of him.
1.1 INDIAN CAPITAL MARKET OVERVIEW
1.1.1 Evolution
Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly
200 years ago. The earliest records of security dealings in India are meager and
obscure. The East India Company was the dominant institution in those days and
business in its loan securities used to be transacted towards the close of the
eighteenth century.
Thus, at present, there are totally twenty-one recognized stock exchanges in India
excluding the Over The Counter Exchange of India Limited (OTCEI) and the National
Stock Exchange of India Limited (NSEIL).
1.1.2 Trading Pattern of the Indian Stock Market
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Trading in Indian stock exchanges is limited to listed securities of public limited
companies. They are broadly divided into two categories, namely, specified securities
(forward list) and non-specified securities (cash list). Equity shares of dividend
paying, growth-oriented companies with a paid-up capital of at least Rs.50 million
and a market capitalization of at least Rs.100 million and having more than 20,000
shareholders are, normally, put in the specified group and the balance in non-
specified group.
Two types of transactions can be carried out on the Indian stock exchanges: (a) spot
delivery transactions "for delivery and payment within the time or on the date
stipulated when entering into the contract which shall not be more than 14 days
following the date of the contract”: and (b) forward transactions "delivery and
payment can be extended by further period of 14 days each so that the overall period
does not exceed 90 days from the date of the contract". The latter is permitted only in
the case of specified shares. The brokers who carry over the outstanding pay carry
over charges (cantango or backwardation), which are usually determined by the rates
of interest prevailing.
A member broker in an Indian stock exchange can act as an agent, buy and sell
securities for his clients on a commission basis and also can act as a trader or dealer
as a principal, buy and sell securities on his own account and risk, in contrast with
the practice prevailing on New York and London Stock Exchanges, where a member
can act as a jobber or a broker only.
The nature of trading on Indian Stock Exchanges are that of age old conventional
style of face-to-face trading with bids and offers being made by open outcry.
However, there is a great amount of effort to modernize the Indian stock exchanges
in the very recent times.
1.1.3 Over The Counter Exchange of India (OTCEI)
The traditional trading mechanism prevailed in the Indian stock markets gave way to
many functional inefficiencies, such as, absence of liquidity, lack of transparency,
unduly long settlement periods and benami transactions, which affected the small
investors to a great extent. To provide improved services to investors, the country's
first ring less, scrip less, electronic stock exchange - OTCEI - was created in 1992 by
country's premier financial institutions - Unit Trust of India, Industrial Credit and
Investment Corporation of India, Industrial Development Bank of India, SBI Capital
Markets, Industrial Finance Corporation of India, General Insurance Corporation and
its subsidiaries and Can Bank Financial Services.
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Trading at OTCEI is done over the centers spread across the country. Securities
traded on the OTCEI are classified into:
Listed Securities - The shares and debentures of the companies listed on the
OTC can be bought or sold at any OTC counter all over the country and they should
not be listed anywhere else
Permitted Securities - Certain shares and debentures listed on other
exchanges and units of mutual funds are allowed to be traded
Initiated debentures - Any equity holding at least one-lakh debentures of
particular scrip can offer them for trading on the OTC.
OTC has a unique feature of trading compared to other traditional exchanges. That
is, certificates of listed securities and initiated debentures are not traded at OTC. The
original certificate will be safely with the custodian. But, a counter receipt is
generated out at the counter, which substitutes the share certificate and is used for
all transactions.
In the case of permitted securities, the system is similar to a traditional stock
exchange. The difference is that the delivery and payment procedure will be
completed within 14 days.
Compared to the traditional Exchanges, OTC Exchange network has the following
advantages:
OTCEI has widely dispersed trading mechanism across the country, which
provides greater liquidity and lesser risk of intermediary charges.
Greater transparency and accuracy of prices is obtained due to the screen-
based scrip less trading.
since the exact price of the transaction is shown on the computer screen, the
investor gets to know the exact price at which s/he is trading.
Faster settlement and transfer process compared to other exchanges.
In the case of an OTC issue (new issue), the allotment procedure is
completed in a month and trading commences after a month of the issue closure,
whereas it takes a longer period for the same with respect to other exchanges.
Thus, with the superior trading mechanism coupled with information transparency
investors are gradually becoming aware of the manifold advantages of the OTCEI.
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1.1.4 National Stock Exchange (NSE)
With the liberalization of the Indian economy, it was found inevitable to lift the Indian
stock market trading system on par with the international standards. On the basis of
the recommendations of high-powered Pherwani Committee, Industrial Development
Bank of India, Industrial Credit and Investment Corporation of India, Industrial
Finance
Corporation of India, all Insurance Corporations, selected commercial banks and
others incorporated the National Stock Exchange in 1992.
Trading at NSE can be classified under two broad categories:
(a) Wholesale debt market and
(b) Capital market.
Wholesale debt market operations are similar to money market operations -
institutions and corporate bodies enter into high value transactions in financial
instruments such as government securities, treasury bills, public sector unit bonds,
commercial paper, certificate of deposit, etc.
There are two kinds of players in NSE:
(a) Trading members and
(b) Participants.
Recognized members of NSE are called trading members who trade on behalf of
themselves and their clients. Participants include trading members and large players
like banks who take direct settlement responsibility.
Trading at NSE takes place through a fully automated screen-based trading
mechanism, which adopts the principle of an order-driven market. Trading members
can stay at their offices and execute the trading, since they are linked through a
communication network. The prices at which the buyer and seller are willing to
transact will appear on the screen. When the prices match the transaction will be
completed and a confirmation slip will be printed at the office of the trading member.
NSE has several advantages over the traditional trading exchanges. They are as
follows:
NSE brings an integrated stock market trading network across the nation.
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Investors can trade at the same price from anywhere in the country since
inter-market operations are streamlined coupled with the countrywide access to the
securities.
Delays in communication, late payments and the malpractice’s prevailing in
the traditional trading mechanism can be done away with greater operational
efficiency and informational transparency in the stock market operations, with the
support of total computerized network.
Unless stock markets provide professionals service, small investors and foreign
investors will not be interested in capital market operations. And capital market being
one of the major sources of long-term finance for industrial projects, India cannot
afford to damage the capital market path. In this regard NSE gains vital importance in
the Indian capital market system.
1.1.5 Bombay Stock Exchange(BSE) - Sensex
For the premier Stock Exchange that pioneered the stock broking activity in India,
128 years of experience seems to be a proud milestone. A lot has changed since
1875 when 318 persons became members of what today is called "The Stock
Exchange, Mumbai" by paying a princely amount of Re1.
Since then, the country's capital markets have passed through both good and bad
periods. The journey in the 20th century has not been an easy one. Till the decade of
eighties, there was no scale to measure the ups and downs in the Indian stock
market. The Stock Exchange, Mumbai (BSE) in 1986 came out with a stock index
that subsequently became the barometer of the Indian stock market.
SENSEX is not only scientifically designed but also based on globally accepted
construction and review methodology. First compiled in 1986, SENSEX is a basket of
30 constituent stocks representing a sample of large, liquid and representative
companies. The base year of SENSEX is 1978-79 and the base value is 100. The
index is widely reported in both domestic and international markets through print as
well as electronic media.
The Index was initially calculated based on the "Full Market Capitalization"
methodology but was shifted to the free-float methodology with effect from
September 1, 2003. The "Free-float Market Capitalization" methodology of index
construction is regarded as an industry best practice globally. All major index
providers like MSCI, FTSE, STOXX, S&P and Dow Jones use the Free-float
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methodology.
Due to is wide acceptance amongst the Indian investors; SENSEX is regarded to be
the pulse of the Indian stock market. As the oldest index in the country, it provides
the time series data over a fairly long period of time (From 1979 onwards). Small
wonder, the SENSEX has over the years become one of the most prominent brands
in the country.
The growth of equity markets in India has been phenomenal in the decade gone by.
Right from early nineties the stock market witnessed heightened activity in terms of
various bull and bear runs. The SENSEX captured all these events in the most
judicial manner. One can identify the booms and busts of the Indian stock market
through SENSEX.
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4.0 STOCK MARKET ANALYSIS
In this stock market analysis, I have taken data of Sensex and Nifty for the period of
6 months from July 2006 to December 2006 After taking into consideration data of
stock market, I compared Nifty with Sensex through graphical presentation and also
did analysis of fluctuations in stock market week wise.
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4.1 NIFTY JULY
Date Open High Low Close
03-Jul-2006 3128.75 3160.35 3114.85 3150.95
04-Jul-2006 3151.05 3177.40 3130.30 3138.65
05-Jul-2006 3136.95 3201.20 3121.80 3197.10
06-Jul-2006 3197.50 3197.50 3138.40 3156.40
07-Jul-2006 3157.95 3193.10 3056.30 3075.85
10-Jul-2006 3077.10 3147.70 3064.10 3142.00
11-Jul-2006 3145.30 3146.00 3100.40 3116.15
12-Jul-2006 3124.95 3201.35 3078.25 3195.90
13-Jul-2006 3196.30 3208.85 3148.95 3169.30
14-Jul-2006 3166.25 3166.25 3089.55 3123.35
17-Jul-2006 3123.65 3125.10 2999.35 3007.55
18-Jul-2006 3007.15 3038.25 2967.95 2993.65
19-Jul-2006 2995.85 3045.35 2919.95 2932.75
20-Jul-2006 2943.65 3041.25 2943.65 3023.05
21-Jul-2006 3025.10 3029.10 2930.15 2945.00
24-Jul-2006 2944.90 2996.65 2878.25 2985.85
25-Jul-2006 2989.50 3046.95 2987.15 3040.50
26-Jul-2006 3040.45 3121.40 3022.70 3110.15
27-Jul-2006 3109.85 3167.10 3109.85 3156.15
28-Jul-2006 3158.00 3168.50 3109.45 3130.80
31-Jul-2006 3131.35 3179.70 3110.60 3143.20
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SENSEX JULY
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ANALYSIS OF STOCK MARKET FLUCTUATIONS AND GLOBAL MARKET
1
st
week ended on 7
th
July 2006
The market started July in negative fashion after having gained for three
consecutive weeks. The 30-share benchmark index lost 100 points amid volatile
trade. Higher crude oil prices weighed on the market sentiment and rumours that
Prime Minister Manmohan Singh may resign following a decision of not proceeding
with disinvestment in state-run firms, leading to a sell off on Friday. The prime
minister’s office denied the rumour.
For the week ended Friday (7 July), the Sensex fell 100 points to settle at 10,509.53
and the NSE Nifty lost 52.35 points, to close at 3,075.85.
The market started the week upbeat with the Sensex gaining 86 points on Monday.
On Tuesday, the Sensex witnessed some profit booking to lose 33 points, while on
Wednesday it jumped 257 points. On Thursday, it shed 152 points due to rising crude
oil prices and weakness in Asian markets. The Sensex fell sharply by 258 points on
Friday.
FIIs resumed buying this week and invested to the tune of Rs 1,025.5 crore for the
first three days of the week. In June they invested Rs 479.50 crore.
Mutual funds offloaded to the tune of Rs 233.6 crore for the first three days of the
week. In June they sold worth Rs 1,976.94 crore.
The BSE Metal index fell 1.90%, to settle at 8,293.92.
The BSE Auto index slipped 2.31% to settle at 4,643.49.
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The BSE Oil & Gas index was down 2.23% to close at 5,175.18.
Neyveli Lignite Corporation (NLC) lost 7.78%, to settle at Rs 58.05. Bowing to
pressure from its allies, the government on Thursday decided to put all divestments
on hold. The DMK, a key south Indian ally of the Congress-led government, has been
unhappy with the government’s decision to disinvest 10% stake in the Neyveli Lignite
Corporation.
National Aluminium Company (Nalco) shed 6.25% this week to end at Rs 213. Nalco
was another firm in which the government had recently decided to divest its 10%
stake.
Tata Steel shed 1.98%, to close at Rs 522.75 on profit-taking after a recent surge.
Chairman Ratan Tata said on Wednesday that Tata Group will raise its stake in Tata
Steel from 26.79% to 33.6% by way of preferential issue.
ACC rose 1.22%, this week to settle at Rs 793.50 after it announced on Monday, its
June shipments rose 4.6%, to 1.541 million tonnes from 1.473 million tonnes a year
ago. Its June production totalled 1.526 million tonnes, up from 1.445 million a year
ago.
FMCG stocks rose following the advance of the monsoon. FMCG giant Hindustan
Lever surged 3.86% to finish at Rs 237.95. Cigarette major ITC fell nearly 4% to
settle at Rs 175.30. As per reports, India's monsoon rains in the crucial sowing month
of July are likely to be 90 - 100% of the long-term average. Rural demand holds key
for FMCG companies, which derive about 40% of their revenue from rural areas.
Reliance Communications lost 0.46% to close at Rs 247.80. Mobile phone operators
have agreed to share seven transmission towers in Delhi and two in Mumbai to bring
down cost of setting up new towers by 50%.
Car major Maruti Udyog fell 2.11% to Rs 780.75. Suzuki Motor Corporation will build
a new compact car in India for Nissan Motor Co., to be sold in Europe. It may be
recalled that Suzuki had entered into an agreement with Nissan for manufacturing
compact cars at the Maruti Udyog plant in Manesar.
Engineering & construction major L&T lost 3.35%, to Rs 2,168.05. The company said
on Monday it had secured an order worth Rs 329 crore for high technology
equipment.
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Jet Airways slipped 6.05% to settle at Rs 553.55. The aviation company raised fuel
surcharge to Rs 500 from Rs 300, on premier and economy class tickets on all
domestic routes.
GE Shipping lost 1.46% to close at Rs 229.20. The shipping company has signed a
contract to sell a 1985-built crude carrier for an undisclosed sum. The private sector,
shipping firm said it had bought the single-hulled carrier in 2003 and planned to
deliver it to the buyers in the second quarter of 2006/07.
2
nd
week ended on 14
th
July 2006
The market edged higher on alternate bouts of buying and selling. Asian markets
dictated the trend on the domestic bourses for most part of the week. On
Wednesday, a strong Q1 showing by IT bellwether Infosys Technologies helped the
market shrug off the impact of bomb blasts in Mumbai's local trains on Tuesday
evening.
For the week ended Friday (14 July), the BSE Sensex jumped 169 points (1.6%), to
settle at 10,678.22. The S&P CNX Nifty rose 47.5 points (1.5%), to settle at 3,123.35.
Trading for the week began on a firm note. The Sensex jumped 175 points on
Monday (10 July) on the back of a recovery in Asian markets, fall in crude oil price
from a record high and a short-covering in the derivatives segment after Friday (7
July)’s sharp 258-point fall. Short-covering was witnessed in derivatives after a denial
by the Prime Minister’s Office (PMO), after trading hours on 7 July, about rumours of
Manmohan Singh's resignation.
The rumour had caused a sharp 258-point fall in the Sensex on 7 July. A section of
the market had gone short in Nifty futures following the rumour, in a bid to hedge
their portfolio. On Tuesday 11 July, the Sensex shed 70 points.
Software major Infosys Technologies rescued the market on Wednesday (12 July), a
day after a series of deadly bomb blasts rocked the financial capital, Mumbai, on
Tuesday evening. On the back of strong Q1 results from the IT bellwether and its
upward revision of FY 2007 (year ending 31 March 2007) earnings and revenue
guidance, the 30-share BSE Sensex jumped 316 points on 12 July.
The benchmark BSE Sensex shed 72 points on Thursday (13 July) as high oil prices,
which moved towards a record high of above $ 75 a barrel, and weak global markets,
weighed on market sentiment.
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On Friday, the Sensex fell sharply by 180 points, to settle at 10,678.22. The market
sentiment was weighed down by weak global markets and crude oil prices touching a
record high of above $78 a barrel.
Infosys surged 6.36% to settle at Rs 1,650.75 following its upward revision in
earnings and revenue guidance for FY 2007. The BSE IT sector index rose 6.88% for
the week, to settle at 3,934.59. Infosys has forecast a between 38.3 - 39.6% growth
in its FY 2007 (year ending 31 March 2007) consolidated EPS to between Rs 124.51
- Rs 125.74. The company had predicted 40.2% - 40.7% consolidated growth in FY
2007 revenue to between Rs 13,350 crore - Rs 13,400 crore.
The software major posted a 50.3% growth in consolidated Q1 June 2006 net profit
to Rs 800 crore from Rs 532 crore in Q1 June 2005. Sales rose 45.5%, to Rs 3,015
crore from Rs 2,071 crore.
Hero Honda dropped 4.14%, to close at Rs 718.15 on disappointing Q1 results. Hero
Honda’s net profit rose 16.2% in Q1 June 2006 to Rs 237.74 crore from Rs 204.45
crore in Q1 June 2005. The net profit fell below market expectations. Its sales rose
19.5% to Rs 2,364.37 crore (Rs 1,977.06 crore).
Cement shares edged higher on expectations of strong Q1 results. Cement
companies are expected to report strong Q1 results on the back of firm cement
prices and strong volume growth. Gujarat Ambuja shot up 6.79% this week to settle
at Rs 106.95. ACC appreciated 5% to finish at Rs 834 for the week. India Cements
gained a whopping 12.5% for the week to settle at Rs 185.15.
Metal shares advanced tracking firm metal prices on LME and on the back of hike in
domestic prices. On Thursday, Hindustan Zinc hiked zinc prices by Rs 8,800 per
tonne. The shares of Hindustan Zinc rose 5.77% to close at Rs 610.95. Hindalco
rose 3.64% to settle at Rs 174.90. Sterlite Industries gained 4.88% this week to end
at Rs 426.70.
Reliance Industries (RIL) gained 3.23% for the week to close at Rs 1,065.15. There
are reports that the Mukesh Ambani-controlled Reliance Industries (RIL) is charting a
new flight path for its mega retail foray. The company has set its sights on
establishing a captive cargo airline venture to meet the logistic needs - particularly for
transporting farm and dairy products - for its pan-India retail venture.
3
rd
week ended on 21
st
July 2006
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Heavy FII sales, weak global markets and concerns that the Reserve Bank of
India (RBI) may increase interest rates next week led to a sharp fall on the bourses
this week.
For the week ended Friday (21 July), the 30-share BSE Sensex lost a steep 592.31
points to close at 10,085.91. The S&P CNX Nifty lost 178.35 points, to close at 2,945.
The week started on a bleak note with the Sensex losing a hefty 385 points on
Monday (17 July) on account of soaring crude oil prices. On Tuesday, the Sensex
lost another 66 points as violence continued between Israel and Hizbollah, that
weighed down global markets. On Wednesday it plunged 219.44 points. On
Thursday, the Sensex leaped 346 points, tracking firm global markets and a positive
comment from Fed chairman Ben Bernanke indicating a possible halt in US interest
rate. The Sensex, however, fell again 267 points on Friday on worries that the RBI
may increase interest rates next week.
FIIs pressed sales in equities worth Rs 466.1 crore for the first four days of the week.
Till Thursday, they have bought shares worth Rs 106.50 crore in July.
Mutual funds sold equities worth Rs 101.97 crore for the first four days of the week.
The metal index was the worst hit in the bearish market; the index slipping 8.4% to
settle at 7,592.79.
Hindalco fell sharply by 9.98% for the week to close at Rs 157.45. Nalco slipped
3.36% to close at Rs 212.65.
The BSE Auto index fell 7.4% for the week to settle at 4,188.87.
Bajaj Auto dropped 7% for the week to close at Rs 2,459.65. The auto major reported
27.9% growth in Q1 June 2006 net profit to Rs 266.01 crore from Rs 207.95 crore.
The net profit lagged market expectations. Sales rose 34.7% to Rs 2,202.66 crore
(Rs 1634.15 crore).
Tata Motors was down 9.02% to close at Rs 673.10.
Housing finance major HDFC lost 6.27%, to Rs 1,072. HDFC reported 20% growth in
Q1 June 2006 net profit to Rs 296.82 crore (Rs 247.28 crore). The net profit growth
was within market expectations. The net interest income (NII) rose 21.4%, to Rs
444.31 crore and exceeded market expectations.
ACC lost 5.46% for the week to close at Rs 788.45, despite reporting 86% surge in
net profit for Q2 June 2006. ACC reported robust Q2 June 2006 results on the back
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of firm cement prices. ACC’s profit-after-tax (before extra-ordinary items) jumped
85.9% to Rs 259.19 crore from Rs 139.36 crore. Sales rose 29.5% to Rs 1,462.08
crore (Rs 1128.25 crore), beating expectations.
Wipro lost a sharp 8.64% for the week, to close at Rs 447.60 even as the company
reported a 44% growth in net profit for Q1 June 2006. Wipro reported a surge in Q1
net profit. Wipro’s consolidated net profit as per US GAAP has risen 44% to Rs 614
crore. Total revenue jumped 37% to Rs 3,131 crore.
TCS declined 5.77% for the week to close at Rs 1,767.25. TCS had reported strong
Q1 results and had forecast chunky outsourcing deals in the near future. India's
largest software exporter registered a 35% growth in consolidated Q1 June 2006 net
profit as per Indian GAAP to Rs 883 crore. Total income jumped 46.2%, to Rs 4,227
crore.
Index heavyweight RIL was down 9.16% to close at Rs 967.55. The company
reported 10.2% growth in Q1 June 2006 net profit to Rs 2,547 crore (Rs 2310 crore).
Net sales has risen 37.8% to Rs 24,522 crore (Rs 17784 crore). RIL said its gross
refining margin for the April-June 2006 quarter was $12.4 a barrel.
Reliance Energy (REL) fell 1.52% to close at Rs 439.30. Reliance Energy (REL)
reported a 12.7% growth in Q1 June 2006 net profit to Rs 176.61 crore (Rs 156.70
crore). The rise in net profit was primarily due to a surge in other income to Rs
171.12 crore from Rs 134.76 crore. Net sales rose 26.9% to Rs 1,154.85 crore (Rs
949.68 crore).
Ranbaxy was down 5.58% to end at Rs 353.50. The Indian drug maker reported
better-than-expected results for the quarter ended June 2006. It reported net profit of
Rs 99.83 crore for the second quarter ended 30 June compared to Rs 76.49 crore for
the quarter ended 30 June 2005. Total income increased from Rs 1,005.20 crore in
Q2 FY 05-06 to Rs 1,083.78 crore for Q2 FY 06-07.
4
th
week ended on 28
th
July 2006
The BSE Sensex recovered from the lower level, gaining 594 points for the week
on the back of strong Q1 results from major companies. The BSE 30-shares
sensitive Sensex's winning streak began on Monday and lasted till Thursday, even
taking the RBI's 25 basis points hike in short-term interest rates in its stride on
Tuesday.
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For the week ended Friday (28 July), the BSE Sensex gained 594 points, to settle at
10,680.23. The S&P CNX Nifty gained 185.8 points to close at 3,130.80.
A rally in banking and IT stocks led the Sensex to gain 129.46 points on Monday. On
Tuesday, the Sensex made no fuss about the 25 basis points hike in short-term
interest rates and advanced 200 points, taking cue from firm Asian markets.
On Wednesday, the benchmark index added another 202 points as ONGC, M&M
and Bharti Airtel unveiled results, which were above market expectations. The
Sensex moved up 124 points on Thursday in volatile trade on the back of firm Asian
markets and approval of the Indo-US nuclear cooperation by the US House of
Representatives on Wednesday. On Friday, the benchmark index relaxed after four
days of sharp rally, to lose 61 points.
FIIs invested in equities to the tune of Rs 499.3 crore for the first three days of the
week. Mutual funds resumed buying in equities, purchasing stocks worth Rs 599.92
crore for the first three days of the week.
RBI, on Tuesday, raised short-term interest rates, the repo and reverse repo, by 25
basis points each to 6% and 7% respectively. The market had already factored in a
25 basis point hike in short-term interest rates. As per reports, most banks are
expected to raise their interest rates on one-year loans to companies by a quarter
point from about 9-10% now, and on personal loans from 11-15%. RBI left the bank
rate and cash reserve ratio (CRR) unchanged at 6% and 5% respectively.
The BSE Bankex rallied 465.85 points for the week to settle at 4,652.32. ICICI Bank
gained 11.96% for the week, to close at Rs 542.75. HDFC Bank surged 12.16% for
the week to settle at Rs 795.55.
The BSE Metal index gained 210.73 points for the week to close at 7,803.42.
Hindalco Industries was up 3.18% for the week, ending at Rs 162.45. The company
posted 85% growth in net profit to Rs 601.50 in Q1 June 2006 (Rs 324.90 crore) Net
sales jumped 93.5% to Rs 4,273.70 crore (Rs 2,207.80 crore).
SAIL rose 6.32% for the week, to settle at Rs 71.45. The steel major reported 23%
growth in Q1 June 2006 net profit to Rs 1,386.41 crore (Rs 1126.48 crore). Total
income (net of excise) surged to Rs 7,567.70 crore (Rs 5772.75 crore). Nalco lost
6.98% for the week to close at Rs 197.80.
Cipla gained 5.52% for the week to close at Rs 232.30. The generics major reported
a 52.9% growth in Q1 June 2006 net profit to Rs 170.43 crore (Rs 111.40 crore),
which was as per market expectations. Net sales jumped 30% to Rs 863.58 crore
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(Rs 662.81 crore). Net sales, too, was in line with forecasts. Formulation exports
jumped 48% to Rs 318.65 crore.
ONGC surged 12.52% for the week to close at Rs 1,181.10. The oil major reported
24% growth in Q1 June 2006 net profit to Rs 4,118.99 crore (Rs 3,318.88 crore).
Total income (net of excise) has gone up to Rs 15,022.72 crore from Rs 11,168.31
crore. Surprisingly, the company’s board also approved an issue of bonus shares in
the ratio of one for every two held.
Tata Motors rose 8.10% for the week to close at Rs 727.65. The company agreed to
enter into a joint venture with Italy's Fiat to build cars, engines and transmission
systems. Tata Motors reported 40% growth in Q1 June 2006 net profit to Rs 381.85
crore compared to Rs 272.67 crore for the quarter ended 30 June 2005. The net
profit was within market expectations. Net sales rose 49% to Rs 5,783.41 crore (Rs
3,878.09 crore), also in line with market expectations.
Tractor & utility vehicles maker Mahindra & Mahindra surged 12.12% for the week to
close at Rs 575.40. The company reported 40.5% growth in net profit for Q1 June
2006 to Rs 204.17 crore (Rs 145.26 crore). Sales rose 23.4% to Rs 2,236.24 crore
(Rs 1,811.86 crore).
SBI advanced 11.26% for the week to close at Rs 796.70. SBI reported a 34.6% fall
in Q1 June 2006 net profit to Rs 798.57 crore. Net interest income declined 8.6% to
Rs 3,884.09 crore (Rs 4,253.24 crore).
Dr Reddy’s Lab shot up 12.87% for the week to close at Rs 1,402.30. The pharma
major posted a net profit of Rs 131.81 crore for the quarter ended 30 June 2006 as
compared a net profit of Rs 63.34 crore for the quarter ended 30 June 2005. Total
income (net of excise) surged to Rs 772.18 crore from Rs 536.32 crore.
Reliance Industries (RIL) was up 1.30% for the week to close at Rs 980.15. The
government on Wednesday rejected the $ 2.34 per mmbtu price, which Reliance
Industries (RIL) had proposed for selling gas from its KG basin block to Anil Ambani’s
Reliance Natural Resources. It cited lack of price discovery and no-adherence to the
arm’s length sales criterion, required under the production-sharing contract, as
reasons for rejection.
Car major Maruti Udyog (MUL) rose 8.05% for the week to close at Rs 768.40. The
auto major clocked 63% growth in Q1 June 2006 net profit to Rs 369.57 crore (Rs
226.46 crore). Net sales grew 18.9% to Rs 3,125.47 crore (Rs 2,627.13 crore).
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4.2 NIFTY AUGUST
SENSEX AUGUST
Dat e Open Hi gh Low Cl ose
01- Aug- 2006 3128.20 3154.70 3113.60 3147.80
02- Aug- 2006 3129.45 3187.85 3127.90 3182.10
03- Aug- 2006 3182.55 3234.25 3175.15 3190.00
04- Aug- 2006 3189.70 3228.15 3161.80 3176.75
07- Aug- 2006 3176.70 3178.50 3142.55 3151.10
08- Aug- 2006 3151.55 3216.75 3151.55 3212.40
09- Aug- 2006 3211.55 3267.20 3187.85 3254.60
10- Aug- 2006 3254.60 3274.75 3229.45 3260.10
11- Aug- 2006 3260.05 3286.50 3236.95 3274.35
14- Aug- 2006 3274.95 3317.80 3269.15 3313.10
16- Aug- 2006 3314.75 3377.10 3314.75 3356.05
17- Aug- 2006 3359.70 3385.15 3328.60 3353.90
18- Aug- 2006 3354.50 3366.25 3332.20 3356.75
21- Aug- 2006 3356.80 3374.90 3332.90 3366.00
22- Aug- 2006 3369.60 3398.35 3351.50 3364.60
23- Aug- 2006 3363.60 3369.65 3325.10 3335.80
24- Aug- 2006 3336.65 3379.55 3304.85 3370.40
25- Aug- 2006 3368.55 3402.70 3368.55 3385.95
28- Aug- 2006 3386.00 3405.30 3377.75 3401.10
29- Aug- 2006 3405.05 3434.95 3396.10 3425.70
30- Aug- 2006 3425.80 3440.20 3407.75 3430.35
31- Aug- 2006 3404.50 3452.30 3403.65 3413.90
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ANALYSIS OF STOCK MARKET FLUCTUATIONS AND GLOBAL MARKET
1
st
week ended on 4
th
August 2006
The markets firmed up last week with the Sensex climbing 186.28 points. The
BSE Sensex continued the previous week’s trend, moving northwards for four
consecutive sessions from Monday to Thursday while succumbing to profit-booking
on Friday.
For the week ended Friday (4 August), the BSE Sensex gained 186 points, to settle
at 10,866.51. The S&P CNX Nifty gained 45.95 points, to close at 3,176.75.
Firm Asian markets and FII buying aided the rally. Asian markets now seem more
comfortable that US rates are at or nearing a peak. The US Federal Reserve would
be meeting on 8 August again to decide on US interest rates.
Sensex rose 63.65 points on Monday tracking firm global markets. On Tuesday, the
index managed to finish in the positive terrain, up 8 points on the back of news in
latter part of trading that international ratings agency, Fitch, had upgraded India to
investment grade.
On Wednesday, it surged 124.53 points triggered by sustained buying by FIIs. The
index ended 47 points on Thursday, crossing the 11,000 mark in intra-day trade but
ended below that psychological level. The Sensex lost 57 points on Friday after
remaining above the 11,000 mark for the first half of the trading session.
FIIs invested to the tune of Rs 653.7 crore in the equity segment for the first four
days of the week. Mutual Funds offloaded Rs 86.92 crore in equities. There are
expectations that FII inflows will pick up following the upgrade in India’s rating by
Fitch.
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The BSE IT Index gained 3.1% for the week to settle at 4,018.66. Infosys gained
3.18% for the week to close at Rs 1,680.95. TCS was up 2.37% for the week to close
at Rs 950 and Wipro advanced 5.19% to close at Rs 507.35. IT companies reported
strong Q1 June 2006 results. Infosys Technologies and Satyam Computer have
revised upwards earnings as well as revenue guidance for FY 2007 (year ending 31
March 2007).
Patni Computer shot up 25% for the week to Rs 345.65. The company reported
improved Q2 June 2006 results and also issued encouraging guidance for Q3
September 2006. Patni reported a net loss of $ 3.21 million for Q2 June 2006
compared with a net income of $ 14.44 million in Q2 June 2005. The company said,
prior years’ tax review by IRS and review by Department of Labor of Patni’s US
operations has decreased net income by $ 19.9 million. Net income adjusted for
additional provisions was at $ 16.7 million in Q2 June 2006. Revenues increased by
10.2% on a sequential basis to $ 143.03 million $ 129.85 million.
The BSE Auto index rose 3.28% for the week, to close at 4,564.57. Tata Motors rose
4.40% for the week, to finish at Rs 759.50. Tata Motors vehicle sales rose 44.5% in
July to 45,056 units from 31,173 units a year earlier. Sales of commercial vehicles
(CV) rose 54% to 21,534 units from 13,957 units, while sales of cars and utility
vehicles rose 40% to 18,238 units. Exports rose 25% to 5,284 units from 4,220 units.
Bajaj Auto gained 5.58% for the week to close at Rs 2,613.50. The company
reported strong sales for the month gone by. The auto major’s vehicle sales in July
rose 34%, to 1,99,821 units from 1,49,406 units a year earlier. It said sales of
motorcycles rose 49% to 1,71,115 units from 1,15,216 and sales of all two-wheelers
grew 37% to 1,73,158 units against 1,26,821 units a year earlier. Sales of three-
wheelers climbed 18% to 26,663 units from 22,585 a year earlier. The company said
exports jumped to 42,476 units from 14,698 units a year earlier.
Car major Maruti Udyog (MUL) advanced 2% for the week, to finish at Rs 783.80.
The auto major said on Tuesday that it had raised prices of some cars by Rs 500 -
5,000 (0.17%-1.47%) on account of higher raw material and freight costs. Earlier
during the day, MUL reported 10% growth in domestic car sales, to 44,653 units in
the domestic market, up 10% from 40,553 units a year earlier. The carmaker
exported 1,755 units in July, down 58% from 4,203 units last year.
Reliance Industries (RIL) lost 1.30% for the week to settle at Rs 967.40. As per
reports, RIL has raised petrochemical prices between 3 - 9% for August 2006.
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Cement shares rose on the back of strong despatches from cement majors. GACL
rose marginally 0.91% for the week to close at Rs 105.90. The cement major said on
Tuesday its July shipments rose 8% from a year earlier to 1.02 million tonnes from
0.95 million tonnes.
ACC gained 1.62% for the week to close at Rs 862.35. ACC said on Tuesday its July
shipments rose 11%, to 1.42 million tonnes from 1.28 million tonnes a year ago.
Housing finance major HDFC rose 5.2% for the week, to close at Rs 1,245.25. On
Tuesday, the housing finance major raised home loan rates across the board by 50
basis points.
Ranbaxy Laboratories surged 6.64% for the week to end at Rs 396.80. A US federal
appeals court invalidated a secondary Pfizer patent, paving the way for an earlier
launch of a generic form of Lipitor, the US pharma major's blockbuster cholesterol
drug.
Bhel shot up 9.26% for the week to close at Rs 2,149.75. The company board meets
on 8 August 2006 to consider an issue of bonus shares and a stock-split. The
company reported 85% surge in net profit to Rs 236.7 crore for Q1 June 2006
compared with Rs 127.9 crore in Q1 June 2005. Net sales rose 37% to Rs 2,656.3
crore (Rs 1,936.5 crore).
2
nd
week ended on 11
th
August 2006
The benchmark index, the BSE Sensex, crossed the 11,000 mark and advanced
326 points on the back of firm Asian markets and on the US Federal Reserve’s
decision to hold interest rates steady at 5.25%. Concerns of a rise in domestic
interest rates have eased after the US Federal Reserve kept US rates unchanged for
the first time in nearly two years. It is reckoned that the Fed decision to maintain US
interest rates may discourage the Reserve Bank of India (RBI) from hiking interest
rates further in the near term.
For the week ended Friday (11 August), the BSE Sensex gained 326 points, to close
at 11,192.46 on Friday. The S&P CNX Nifty gained 97.6 points, to close at 3,274.35.
Soaring global crude oil price and concerns that the US Federal Reserve may
increase interest rates, led to a fall of the market on Monday, as the Sensex lost
53.87 points. On Tuesday, the Sensex shot up 202 points, tracking firm Asian
markets.
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The Sensex gained for the second consecutive day on Wednesday, adding 130
points on US Federal Reserve’s decision to hold interest rates steady. On Thursday,
the Sensex managed to close in the positive, gaining only 4 points. The Sensex
added 43.29 points on Friday on the back of a sharp fall in crude oil prices and firm
Asian and US markets.
India's industrial production in June rose 9.6% from a year earlier, higher than market
expectations due to robust manufacturing output, data showed on Friday.
FIIs invested in equities to the tune of Rs 665 crore for the first three days of the
week. Mutual funds also purchased equities worth Rs 171 crore during the same
period.
BSE’s banking sector index, the BSE Bankex, rallied 275.38 points, to 5,048.42 as
concerns about rising domestic interest rates eased. State Bank of India jumped
6.23% to close at Rs 858.25. A Japanese investment firm and SBI Holdings agreed
to form a $100 million venture capital fund with India's largest lender.
ICICI Bank rose 6.80% to close at Rs 584.50. HDFC Bank rose 1.14% to close at Rs
809.75.
Auto shares advanced on expectations of strong sales in the current festival season.
Tata Motors rose 4.54% to close at Rs 794.15. Maruti gained 1.33% to close at Rs
794.25. Bajaj Auto rose 1.46% to finish at Rs 2,651.65.
The BSE IT Index rose 120.61 points, to close at 4,139.27. Infosys gained 3.65%, to
finish at Rs 1,742.25. India's second largest exporter has 11.3% weightage in the
benchmark index. TCS rose 1.92% to close at Rs 968.25.
The BSE Mid-Cap Index rose 258 points, to close at 4,617.42. The BSE Small-Cap
index shot up 379.74 points, to close at 5,596.61. Ind Swift laboratories gained 17%
to close at Rs 79.55, Uttam Galva rose 12.67% to close at Rs 33.35 and Wanbury
was up 12.59% to close at Rs 82.70.
The BSE Metal Index rallied 319.71 points, to finish at 8,163.63. Hindalco rose 3.72%
to close at Rs 165.80 and Nalco was up 1.58% to close at Rs 195.55.
ONGC rose 1.04% to close at Rs 1,193.90.
Index heavyweight Reliance Industries rose 4.52%, to close at Rs 1,011.10. As per
reports, RIL’s bid for the co-operative, Super Bazar, having several shops in and
around Delhi, was well above Rs 70 crore, the price offered by Indian Labour
Cooperative Society along with Indian Potash.
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Raymond surged 4.38%, to close at Rs 393.15. The company has formed a joint
venture company with UCO NV, a Belgian firm. Raymond and Belgian firm UCO NV
will invest Euro 100 million each, in a new joint venture company to merge their
denim businesses in Europe, the US and in Asia. Both firms had already signed an
agreement in February last. The merged firm will have a combined capacity of 80
million metres per annum.
i-flex solutions rose 1.56% to close at Rs 1,321.50. The Development Bank of
Mauritius selected the company’s flagship product, Flexcube, for its core banking
solution.
Hindustan Oil Exploration jumped 14.74% to close at Rs 129.60. The company
priced its rights issue at Rs 76 per share.
3
rd
Week ended on 18
th
August 2006
Firm Asian markets coupled with a fall in crude oil prices triggered an upswing in
the market, the BSE Sensex collecting 273 points. The market recorded the fourth
straight week of gains as several positive news came in during the past few weeks.
The major news that provided relief to the markets was the US Federal Reserve’s
decision to hold interest rates steady at 5.25%.
For the week ended Friday (18 August), the BSE Sensex added 273 points (2.4%), to
close at 11,465.72. The S&P CNX Nifty gained 82.4 points (2.5%), to close at
3,356.75.
The BSE Sensex added 120 points on Monday, taking cue from firm Asian and
European markets and receding global crude oil price. On Tuesday the market was
closed on account of Independence Day. The Sensex advanced 135.32 points on
Wednesday, on trigger from a rally in Asian markets due to easing concerns of
inflation in the US, and a further fall in global crude oil price.
On Thursday, the BSE Sensex added 29.17 points on the back of sustained buying
in blue chips. The benchmark index finished lower on Friday as profit-booking crept
in, losing 12 points.
Crude oil price declined sharply by about $ 4 a barrel during the week following a
truce in the Middle East that came into force from Monday (14 August).
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FIIs invested to the tune of Rs 962.6 crore in two trading sessions, on Monday and
Wednesday, while mutual funds bought Rs 59.53 crore in equities in the same
interval.
Fall in crude oil prices boosted refiners. HPCL shot up 22.5% for the week to close at
Rs 273, BPCL rose 22.6% for the week to close at Rs 374.6 and Indian Oil
Corporation advanced 17% for the week to close at Rs 467.15. Refinery firms are
incurring losses on marketing of petrol and diesel as a rise in oil price has kept pace
with the surge in crude oil price. Their losses will be reduced by a recent fall in crude
oil price, which has come down by about $4 a barrel.
The BSE Auto index rose 4.47% for the week, to close at 4,924 as global crude oil
witnessed a fall in their prices. Tata Motors rose 7% for the week to close at Rs
849.95, Maruti gained 5.80% for the week to close at Rs 840.35, Bajaj Auto rose
2.2% for the week to close at Rs 2,710.20 and Hero Honda gained 1.29% to close at
Rs 705.70.
The BSE Healthcare index, which includes pharma stocks, rose 173 points (5%) to
close at 3,556.53. Reports came in on Friday that the government has agreed to a
10-year exemption from price control for any new drug molecule emerging out of
indigenous research and development. MNC pharma stocks like Glaxosmithkline
Pharma shot up 10.2% for the week to close at Rs 1,207.85, Pfizer gained 12% to
close at Rs 800.35, Novartis advanced 12% to close at Rs 472. Ranabxy was up
3.55% to close at Rs 408, Dr Reddy's was up 3.7% to finish at Rs 1,495 and Cipla
rose 3.4% to close at Rs 249.6.
Hindustan Zinc rose 2.24% for the week, to close at Rs 559.65 despite reports that it
has cut zinc prices by Rs 8,200 per tonne.
Mahindra & Mahindra (M&M) rose 5.2% for the week, to close at Rs 645. The
company plans to introduce another new vehicle after Ingenio's launch in 2008. It will
set up its single biggest plant by FY 2010. This may have a capacity of up to 5 lakh
units. M&M inked a memorandum of understanding (MOU) with the Maharashtra
Government to set up a Rs 550 crore project code-named Ingenio. This plant will
manufacture the company's new multi-purpose vehicle.
ONGC rose 1.3% to Rs 1,210.20. ONGC is looking for stakes in "many more"
overseas oil assets in collaboration with Chinese firms, the company's chairman, R S
Sharma, said on Monday. Sharma was speaking after announcing ONGC's success
in bidding for a 50% share in Colombian oil firm, Omimex de Colombia, along with
China's Sinopec.
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Reliance Industries gained 4.3% for the week, to close at Rs 1,055.50. As per
reports, RIL will open its first retail store in September 2006 in Hyderabad. Initially,
Reliance will restrict itself to retailing food and vegetables.
Infosys rose 1.12% for the week to close at Rs 1,761.7 as substantial buying was
witnessed in the stock.
4
th
week ended on 25
th
August 2006
The market firmed up further last week, extending its recovery that began in late
July 2006. For the week ended 25 August, the Sensex rose 106.48 points (0.9%), to
settle at 11,572.20 - its highest closing since 17 May 2006. The S&P CNX Nifty rose
29.20 points (0.8%), for the week to settle at 3,385.95.
On Monday, the market received a boost in the second half of the trading session.
The BSE Sensex rose 46 points, while losing 9 points on Tuesday despite firm Asian
markets.
On Wednesday, profit-booking gripped the market, which led to a loss of nearly 100
points in the Sensex. On Thursday, it had finished upbeat on the back of a rise in
bond prices, which hit a two-month high, and on expectations that the domestic fuel
price may not rise in the near term. The BSE Sensex advanced 125 points on
Thursday after it had lost as over 100 points in early trade that day. On Friday, the
Sensex rose 40 points in volatile trade.
Crude oil price is currently hovering around $72.73 per barrel; high oil prices remain
a concern.
FIIs invested in equities to the tune of Rs 552.1 crore for the first three days of the
week. Mutual funds sold equities worth Rs 81.49 crore during the same period.
PSU banks extended their recovery on expectations that interest rates may not rise
in the near term. The State Bank of India (SBI) received an additional boost on Friday
after the Union Cabinet on Thursday paved the way for a follow-on public issue by
the largest commercial bank, by approving the SBI (Amendment) Bill. The bill
proposes to lower the floor for RBI’s holding in SBI to 51%. RBI, currently, holds
59.73% in India's largest commercial lender. The lowering of RBI's stake will create
sufficient space for the bank to hit the capital market with its follow-on offering.
Meanwhile, the bank’s board on Thursday ratified the bank’s decision early this
month to raise prime lending rate by 25 basis points.
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Reliance Industries rose over 5%, to finish at Rs 1,110.50 on renewed buying.
But pharma major Ranbaxy lost over 4%, to Rs 388.95. Media reports on Monday
(21 August) stated that Ranbaxy Laboratories is close to acquiring Russian generic
drugs maker Akrikhin for $100 million.
Select cement shares advanced on expectation of a pick-up in demand as the
southwest monsoon nears its end. Gujarat Ambuja Cements, ACC, Grasim and India
Cements firmed up.
HCL Technologies edged slightly lower for the week to settle at Rs 574.85 even as it
reported strong Q4 June 2006 results. For the fourth quarter ended 30 June 2006,
HCL Tech reported 21% sequential growth in consolidated net profit to Rs 233 crore.
Consolidated topline expanded 12% to Rs 1,253.80 crore.
Papermaker Ballarpur Industries edged higher on the back of strong Q4 June 2006
results. Its profit before tax & exceptional items rose 37.4% to Rs 73.35 crore (Rs
53.35 crore). Gross sales rose 8.7% to Rs 571.35 crore from Rs 525.35 crore.
Auto shares moved higher on expectation of continued strong growth in vehicle
sales. Two-wheeler major Hero Honda and car major Maruti Udyog advanced on
hopes of strong sales in the forthcoming festive season.
Metal shares turned volatile, tracking volatile metal prices on the London Metal
Exchange.
Refinery shares consolidated after a solid surge in the previous week. Reports on
Friday suggested that the Indian government will issue bonds to state-run oil firms
late this month to cut losses, and these are likely to carry a coupon rate of 7.5-8%.
4.3 NIFTY SEPTEMBER
Dat e Open Hi gh Low Cl ose
01- Sep- 2006 3414.00 3439.50 3402.90 3435.45
04- Sep- 2006 3435.55 3483.10 3435.55 3476.85
05- Sep- 2006 3471.40 3488.60 3457.90 3473.75
06- Sep- 2006 3474.40 3490.70 3465.80 3477.25
07- Sep- 2006 3477.15 3478.85 3438.80 3454.55
08- Sep- 2006 3454.65 3477.95 3442.85 3471.45
11- Sep- 2006 3470.35 3486.65 3351.30 3366.15
12- Sep- 2006 3363.30 3395.05 3328.45 3389.90
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13- Sep- 2006 3389.85 3470.65 3389.80 3454.55
14- Sep- 2006 3454.60 3484.00 3454.60 3471.60
15- Sep- 2006 3471.65 3487.45 3434.55 3478.60
18- Sep- 2006 3478.65 3506.20 3478.40 3492.75
19- Sep- 2006 3493.50 3514.95 3438.80 3457.35
20- Sep- 2006 3457.85 3509.85 3419.75 3502.80
21- Sep- 2006 3506.70 3556.35 3506.70 3553.05
22- Sep- 2006 3554.05 3562.45 3525.40 3544.05
25- Sep- 2006 3545.10 3568.65 3514.85 3523.45
26- Sep- 2006 3523.70 3576.75 3517.15 3571.75
27- Sep- 2006 3571.75 3603.70 3568.40 3579.30
28- Sep- 2006 3579.95 3589.30 3560.75 3571.75
29- Sep- 2006 3572.15 3599.80 3564.70 3588.40
SENSEX SEPTEMBER
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ANALYSIS OF STOCK MARKET FLUCTUATIONS AND GLOBAL MARKET
1
st
week ended on 1st September 2006
The market’s winning streak continued last week on short covering in the
derivatives segment, strong FII-buying and on the back of firm Asian markets.
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The BSE Sensex jumped 205.82 points, or 1.7%, to a 3-½ month closing high of
11,778.02, in the week ended Friday (1 September 2006). The S&P CNX Nifty
advanced 49.50 points (1.4%), to close at 3,435.45, in the week.
Trading for the week began on a positive note, the Sensex rallying 47 points on
Monday as blue-chips firmed up towards the close. Firm Asian markets, fall in oil
price and short covering in derivatives lifted the Sensex by 87 points on Tuesday.
The Sensex rose 17 points on Wednesday in volatile trade. The barometer index
oscillated 113 points that day. The benchmark index lost 25 points on Thursday as
players chose to unwind positions in August derivatives contracts. Sentiment was
also hit by reports on that Stock Holding Corporation of India – a clearing member of
NSE - had sent letters to brokers asking them to bring cash as collateral in place of
shares. SCHIL later withdrew the circular following intervention by Securities &
Exchange Board of India (Sebi).
Renewed buying in blue-chips following a smooth rollover of August 2006 derivatives
contracts and reports that the government has decided against a rise in domestic fuel
prices helped the barometer index scale 3-½ month high on Friday. The Sensex
jumped 79 points on that day.
FIIs pumped in a net Rs 1,236.30 crore in the first four trading sessions of the week
till Thursday (31 August). Their inflow in three trading sessions between Tuesday to
Thursday was between Rs 336.90 crore and Rs 487.10 crore.
Mutual funds purchased shares worth a net Rs 175 crore in the first four trading
sessions of the week till Thursday. They were net buyers in three out of four trading
sessions.
A strong rollover was witnessed in the derivatives segment. About 72% contracts
from the August series rolled over to the September series, compared to the usual
range of 60-65%.
Oil prices remained in the $70-71 a barrel range, way off a record high of $78.40 a
barrel reached in July 2006, which also supported the global bourses.
Refinery shares edged higher in volatile trade as crude oil price remained off its
record high. These shares have underperformed the benchmarks in the last couple of
years due to earnings uncertainty arising from a disparity between crude oil prices
and domestic retail prices of petroleum products – domestic fuel price rise has
lagged a surge in crude oil price over the past few months.
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Bank shares extended their recent recovery. Buying was conspicuous in stocks like
ICICI Bank, Punjab National Bank, Canara Bank, Bank of Baroda and Bank of India.
A number of state-run banks have raised prime lending rates (PLRs) in the past few
weeks to protect their margins in a rising interest rate regime. Further, the Reserve
Bank of India’s decision allowing banks to float hybrid debt overseas to shore up their
capital base, too, has lifted bank stocks. This will help bank raise funds without equity
dilution.
Telecom software firm Tech Mahindra made a strong debut. The stock settled at Rs
552.80 on the 'd-day' (28 August), attracting a huge 51.4% premium over the IPO
price of Rs 365. Tech Mahindra (TML) is a leading provider of IT services and
solutions to the telecommunications industry. Nasscom ranked TML as the eighth
largest Indian IT services company in terms of export revenues for 2005-06.
Engineering & construction major L&T firmed up after the company set 29 September
as the record date for a liberal 1:1 bonus issue. On Friday, the company announced
a Rs 1,150 crore order from Indian Oil Corporation.
Cigarette major ITC firmed up on short covering in derivatives. The stock rose 5% for
the week, to settle at Rs 189.60. A section of the market feels that the stock is
overvalued at the current level.
TV broadcasters witnessed a sell-off on Thursday after Telecom Regulatory Authority
of India (TRAI) capped tariff for pay channels under the conditional access system at
Rs 5 per subscriber per month. But Zee Telefilms recovered on Friday. The stock
rose on heavy volumes of 97 lakh shares on Friday.
Steel shares Tata Steel and Sail dropped ahead of price cuts announced by most
steel firms from 1 September 2006. Sail has cut prices of steel by between Rs 700 -
Rs 1,500 tonne, JSW Steel has reduced prices on different grades of hot rolled coils
by Rs 750 - Rs 1,000 a tonne and Essar Steel has cut prices of hot rolled coil prices
by Rs 800 - Rs 900 a tonne effective 1 September.
Auto shares firmed up on Friday on decent-to-strong sales for August and also on
reports that the government will not hike fuel prices. Car major Maruti Udyog’s
domestic sales rose 16% in August 2006, from 41,717 units. Bajaj Auto reported 11%
growth in sales for August to 2,08,163 units. But Hero Honda reported 13% fall in
sales in August 2006 to 2.15 lakh units.
2
nd
week ended on 8th September 2006
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The markets gained for the second week in September on the back of continued
inflow from FIIs and as oil prices dipped to a 5-month low.
The BSE Sensex rose 140.63 points, to finish on 11,918.65, for the week ended
Friday (8 September 2006). The S&P CNX Nifty gained 36 points, to close at
3,471.45.
The BSE Sensex rallied on Monday, surging 136 points on the back of a strong US
and steady Asian and European markets. Another major trigger was the
government’s statement that status quo remains on participatory notes.
The market witnessed a lacklustre session on Tuesday. The overall movement of the
Sensex for the day was just about 100 points, between 11,847.93 and 11,945.53.
The BSE Sensex shed 9.60 points, that day.
On Wednesday, the BSE Sensex finished positive, gaining 28.6 points.
Heavyweights were purchased in good numbers that day. There was a spike in
turnover on BSE, indicating fresh buying interest.
The market witnessed volatility on Thursday with the BSE Sensex losing 79 points.
Weak global markets weighed down sentiments on the domestic bourses that day.
Banking, refinery and IT shares also declined.
On Friday, the market finished strong as buying emerged at lower level. The BSE
Sensex surged 65 points on the back of a rebound in Japan’s Nikkei 225 average
and as oil retreated close to a 5-month low. Nymex crude was hovering at $ 66.91 a
barrel on Friday. The Bank of Japan on Friday kept key interest rates unchanged at
0.25%.
FIIs invested in equities to the tune of Rs 816.4 crore in four trading sessions,
between Monday and Thursday while mutual funds purchased Rs 13.5 crore worth of
equities.
Tata Motors rose 4%, to close at Rs 898. The total sales for August rose 26.2%, to
45,681 units. Total commercial vehicle sales advanced 35%, to 23,069 units while
passenger car sales rose 26.4%, to 17,541 units. Sales of the mid-sized sedan,
Indica, surged 48%.
Metal stocks advanced as prices firmed up on the London Metal Exchange.
Aluminium producer Nalco rose 5%, to close at Rs 212.55. As per reports, the
company has cut aluminium prices by Rs 2,000 per tonne. Hindalco was up 6.21% to
close at Rs 184.
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Cement shares were in demand on expectations of a pick-up in demand post-
monsoon. ACC gained 3.3%, to close at Rs 945.45, Gujarat Ambuja Cements added
1.5%, to close at Rs 115.15, Grasim advanced 3.6%, to close at Rs 2,335.
United Western Bank shed 7%, to close at Rs 21. The central bank on Saturday (2
September) placed the bank under a moratorium, citing poor financials and to protect
its depositors. The private sector bank forwarded a reconstruction scheme to RBI. A
clutch of banks, including India's second-largest lender ICICI Bank, and state-run
Canara Bank, Allahabad Bank, Andhra Bank and Corporation Bank have evinced
keen interest in the bank.
Reliance Energy (REL) jumped 9.6%, to close at Rs 488.10. The company, as per
reports, plans to invest Rs 20,000 crore in the Dadri power plant.
Car major Maruti Udyog (MUL) rose 7.4%, to close at Rs 940.80. MUL aims to
increase annual car sales to 1 million units a year by 2010. MUL also plans to
introduce five new models over as many years. Managing Director Jagdish Khattar
said on Thursday (7 September) that MUL will invest an additional Rs 3,000 crore to
expand capacity. Maruti has already pledged Rs 6,000 crore to boost output. The
excess Rs 3,000 crore will be distributed between raising the diesel engine capacity
at Manesar to 3 lakh and increasing the assembly line to 3 lakh. Also, there are
reports that the heavy industries minister is awaiting a finance ministry clearance for
the sale of residual stake of the government, in the company.
Ashok Leyland advanced 4.3% to close at Rs 43.35. The commercial vehicle maker's
sales in August rose 37%, to 6,483 from 4,737 units a year earlier. Domestic sales
rose 29%, to 5,697 units from 4,406 units, while exports more than doubled to 786
units.
Infosys fell 0.90%, to close at Rs 1,794.70.
ONGC fell 0.44%, to close at Rs 1,197.70, as oil price dropped to a 5-month low.
India-dedicated funds have started receiving inflows in recent months, which has
resulted in a steady influx from FIIs in Indian stocks since late July 2006. However, a
section of the market expects correction in the near term, as there has been a sharp
rally over the past few days. From a low of 10,085.91 on 21 July, the Sensex has
jumped 1,832.74 points (18.1%), to current 11,918.65.
3
rd
Week ended on 15
th
September on 2006
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The BSE Sensex rallied for the week, breaching the 12,000 mark for the first time
since 18 May on consistent inflows from FIIs and falling crude oil prices, which
dipped to a 5-month low.
The Sensex rose 91 points, to finish at 12,009.59, for the week ended Friday (15
September, 2006). The S&P CNX Nifty gained 7 points, to close at 3,478.60.
The BSE Sensex plunged 368 points on Monday, on account of heavy selling by FIIs
in the derivatives segment. Foreign investors pulled out Rs 1,660 crore from the
derivatives segment on Thursday (7 September 2006) & Friday (8 September 2006).
In the cash segment, there was a net FII outflow, to the tune of Rs 65.20 crore during
the same sessions.
The index rose 110.10 points on Tuesday. The markets remained weak for most part
of the first half. In the second half the markets bounced back, led by a rally in
heavyweights Reliance Industries (RIL), TCS, Infosys and SBI. Strong data on
industrial production for July 2006, contributed to the rally in the latter part of the
session.
On Wednesday, the Sensex jumped 233 points, taking cue from firm Asian markets
and a further fall in global crude oil price. The fall in global crude oil price eased
worries about inflation and interest rates.
The Sensex advanced 79 points on Thursday on the back of firm US markets. The
market also welcomed Sebi’s decision to widen the scope of entities eligible to
register as an FII in India. On Friday the Sensex ended with a gain of 36.57 points
amid choppy trade and settled above 12,000 for the first time in four months.
Sebi, on Wednesday (13 September), made amendments in the Sebi Foreign
Institutional Investors (Second Amendment) Regulations 2006 to treat overseas-
registered or incorporated pension funds, mutual funds, investment trusts, insurance
companies, reinsurance companies, international or multilateral agencies, foreign
governmental agency or a foreign central bank as an FII.
US crude oil slid to $63.02 a barrel as bulging US inventories offset geopolitical
worries. The fall in oil price raised hopes that the government may not raise domestic
fuel prices in the near term.
India's industrial production rose 12.4% in July from a year earlier, higher than
expected, due to robust manufacturing and electricity output, government data
released showed on Tuesday.
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FIIs invested in equities to the tune of Rs 985 crore for the first four days of the week
(Monday to Thursday). Mutual funds bought Rs 412.46 crore in equities for the four
days.
The BSE IT Index rose 1.9% in the week, to close at 4,357. Satyam rose 4% in a
week, to close at Rs 828.80. TCS gained 1%, to end at Rs 1,003.15. Infosys
advanced 0.79%, to finish at Rs 1,809.
The BSE’s banking sector index, the BSE Bankex, rose 5% in the week, to close at
5,635.43. HDFC Bank rose 2.8%, to close at Rs 874, ICICI Bank jumped 7.2%, to
finish at Rs 647.25. State Bank of India gained 3.8%, to close at Rs 979.7.
Auto shares extended gains on hopes that the government will not raise domestic
fuel prices in the near term due to falling global crude oil price. Maruti gained 0.90%
to end at Rs 949.25, Bajaj Auto was up 0.48% to close at Rs 2,792 and Hero Honda
advanced 4.16% to close at Rs 766.65.
Index heavyweight Reliance Industries rose 0.90%, in a week, to close at Rs
1,140.50. The company is reportedly planning a mega ethanol facility in Brazil, and
possibly a partnership with oil PSUs, or US oil giants, to bid during the latest round of
oil & gas exploration blocks.
Pharma major Dr Reddy’s Labs advanced 1.11% in a week, to close at Rs 746.30.
The company is reportedly on the look out for acquisitions in Italy and Spain, and
plans to expand into Europe.
Ranbaxy lost 0.66% in a week, to close at Rs 414. Ranbaxy Laboratories said on
Monday (11 September) that it had received approval from the US FDA to market
Loperamide Hydrochloride and Simethicone tablets. Loperamide is an anti-diarrhoeal
drug, while simethicone relieves gas.
Cement shares also firmed up last week. ACC was up 0.92% to close at Rs 954.15
and Grasim Industries surged 6.4% to close at Rs 2,486.05
4th Week ended on 22
th
September on 2006
The market surged for the third consecutive week on account of falling crude oil
price, strengthening of rupee, strong FII-buying and on expectations of robust results
from corporate India. The market moved up as the US Federal Reserve kept interest
rates unchanged at a meeting on Wednesday (21 September).
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The market also rose on expectations that the RBI may keep short-term interest rates
unchanged at its credit policy meeting next month.
The BSE Sensex gained 227.41 points, to finish on 12,236.78. The S&P CNX Nifty
rose 65 points, to close at 3,544.
The BSE Sensex rallied on Monday, gaining 62 points on the back of strong FII
inflows, and steady-to-firm Asian markets.
On Tuesday, the Sensex fell 101 points on profit-booking and on concerns over
possible sales by hedge funds after US hedge fund Amaranth Advisors said on
Monday (18 September) it may suffer billions of dollars in natural gas losses following
a steep fall in price recently. Amaranth’s woes fuelled concerns that many other
hedge funds could also have been hurt by the steep fall in crude oil and natural gas
price, and has bred concerns that such funds may book profits in Indian equities, to
make up for losses suffered in their energy related investments globally.
On Wednesday, the BSE Sensex jumped 139 points as crude oil prices fell below
$61 a barrel.
On Thursday, the benchmark index rose 165 points, as investors stocked up equities
ahead of the second quarter results and after the US Federal Reserve kept interest
rates unchanged. Buoyant direct tax collections in the current fiscal also lifted the
market as it indicated a rise in corporate profits. The centre’s gross direct tax
collections registered a 33.5% growth in April-September 2006, to Rs 87,831 crore.
On Friday, the Sensex lost 37.49 points, taking cue from weak global markets.
FIIs invested to the tune of Rs 1,296.5 crore in equities in four trading sessions, from
Monday to Thursday, while mutual funds offloaded Rs 15.76 crore worth of equities.
Engineering and construction major L&T was up 0.64% in the week, to close at Rs
2,656.75. Investors mopped up the scrip ahead of the record-date for a bonus issue.
The company will allot bonus shares on 29 September 2006.
Cipla rose 2.1% in a week to close at Rs 260.15. Recently, it received tentative FDA
approval for Lamivudine and Zidovudine, both anti-AIDS drugs.
Ranbaxy fell marginally by 0.06% in a week, to close at Rs 413.80. The pharma
major has received approval from the US Food and Drug Administration to
manufacture and market Furosemide Tablets 20 mg, 40 mg, and 80 mg.
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FMCG giant Hindustan Lever rose 5.6% in a week, to close at Rs 257.25. The
company has hiked prices by an average 3%, across portfolio over the last two
months.
ONGC rose nearly 2% in a week, to close at Rs 1,184.45. The company’s foreign
subsidiary and Sinopec, in joint venture, acquired Colombian oil assets of US-based
Omimex Resources. Omimex has oil & gas operations exclusively in Colombia,
which include onshore production and exploration areas with proven reserves of
more than 300 million barrels of oil, and a current production of approximately 20,000
oil barrels per day.
Reliance Industries rose 1.2% in a week, to close at Rs 1,155.20. The company paid
Rs 425 crore as advanced tax, in the second installment this year, compared to Rs
225 crore last year.
IT stocks were in demand this week. Satyam rose 1% in a week, to close at Rs 838,
Wipro rose nearly 2% in a week, to close at Rs 519.55 and Infosys gained 1.1% in a
week, to finish at Rs 1,830.10.
PSU power equipment manufacturer Bhel gained nearly 2%, to close at Rs 2,312.30.
There were reports that it may acquire an IT company in the west, to enhance
capacity and technological expertise. The company is reportedly said to have bagged
Rs 1,224 crore contract from Uttar Pradesh Rajya Vidyut Utpadan Nigam
(UPRVUNL).
5th Week ended on 29
th
September on 2006
Short covering in derivatives ahead of the expiry of September 2006 derivative-
contracts, expectation of strong Q2 September 2006 results, cheaper oil, and
sustained FII-buying took the market higher.
The BSE Sensex rose 217.64 points (1.7%), to end at 12,454.42, in the week ended
29 September. The barometer index is now just about 200 points away from a
lifetime high, 12,671, struck in intra-day trade on 11 May 2006. The S&P CNX Nifty
rose 44.35 points (1.2%), to settle at 3,588.40 in the week ended 29 September.
The BSE Sensex lost 63 points on Monday. On Tuesday, the barometer index
jumped 147 points riding on gains in banking, auto, IT shares and index heavyweight
Reliance Industries. Firm European markets supported the domestic bourses that
day.
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On Wednesday, the BSE Sensex rose 46 points. It was in the pink of health till late-
afternoon, but slipped suddenly as selling began in the late-afternoon, ending with
much lesser gains for the day.
On Thursday, the BSE Sensex rose 14 points amid a mixed trend in various
constituents of the barometer index. A smooth rollover from September series to the
October series, in the derivative segment, lifted the Sensex 74 points on Friday. In
the derivatives segment, the market-wide rollover of September contracts to October
was 77%. Rollover in Nifty futures was over 70%.
Bank shares hogged the limelight. The rally was across the board in private sector
and state-run banks. Most PSU banks are expected to come out with strong Q2
results, as they will not be required to make provision for a depreciation in their bond
portfolios due to rising bond prices, analysts reckon. This is in contrast to large
provisions they made over the past few quarters, when bond prices were
continuously falling.
Housing finance major HDFC surged on expectation of continued strong demand for
housing loans.
Reliance Industries (RIL) came within a striking distance of its all-time high of Rs
1,195, it had struck in early-May 2006. As per reports, RIL promoters have hiked their
stake by 2% to over 49%, to consolidate their holdings. Meanwhile, RIL has struck
gas in an exploration block off the east coast, the potential of which is yet to be
ascertained.
Infosys scaled a 52-week high of Rs 1,874.70, in intra-day trade on 28 September
2006. Infosys said it will announce Q2 September 2006 results on 11 October 2006.
The company will also consider the payment of an interim dividend along with Q2
results.
Tata Power firmed up. The company said on Wednesday it will commission the first
unit of its 1,000-Megawatt Maithon power project in eastern India by the end of 2009,
and a second unit by mid-2010. It expects to achieve financial closure for the project
by mid-2007.
Real estate developers Unitech and Mahindra Gesco Developers (MGDL) rallied on
renewed buying. Cement shares held steady-to-firm on expectation of a pick-up in
cement price post-monsoon.
FII-inflow for September 2006, to 28 September, aggregated Rs 5,424.70 crore,
compared to an inflow of Rs 4,643 crore in August 2006. Mutual funds purchased
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shares worth a net Rs 1,218 crore, in the month (till 28 September), compared to an
inflow of Rs 426 crore in August 2006.
Market regulator SEBI extended the deadline to provide a Permanent Account
Number (PAN) by demat account holders, to 31 December 2006. The watchdog had
earlier asked all demat account holders to provide PAN by 30 September 2006.
SEBI also reduced the turnover fees for brokerages with effect from 1 October 2006.
Under the new fee structure, brokerages are required to pay Rs 20 per crore worth
transactions (0.0002 per cent) in the securities market, down from the earlier Rs
1,000 per Rs 1 crore worth of transactions. In the futures & options segment, the fee
has been marginally increased to Rs 20 per crore (0.0002 per cent) from the existing
Rs 10 per crore.
Trading on the bourses was extended by 45 minutes from 25 September due to sun
outage till 16:15 IST. The revised trading time is applicable till 9 October 2006.
As per the latest economic data, GDP grew 8.9% in the April-June 2006 quarter from
a year earlier, boosted by manufacturing and services output. Agriculture which
accounts for about 23% of GDP grew at an annual pace of 3.4% in the quarter,
compared with 5.5% annual growth in January-March 2006. Manufacturing output,
which accounts for nearly 15% of GDP, expanded by an annual 11.3%, faster than
the growth rate of 8.9% in January-March.
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4.4 NI FTY OCTOBER
Dat e Open Hi gh Low Cl ose
03- Oct - 2006 3588.95 3606.20 3561.70 3569.60
04- Oct - 2006 3570.95 3580.05 3508.65 3515.35
05- Oct - 2006 3515.60 3574.95 3515.60 3564.90
06- Oct - 2006 3565.45 3583.75 3560.90 3569.70
09- Oct - 2006 3570.05 3585.35 3540.45 3567.15
10- Oct - 2006 3567.45 3597.20 3563.10 3571.05
11- Oct - 2006 3581.55 3614.50 3544.25 3558.55
12- Oct - 2006 3562.55 3626.80 3545.95 3621.05
13- Oct - 2006 3621.65 3682.35 3621.65 3676.05
16- Oct - 2006 3668.90 3729.70 3668.90 3723.95
17- Oct - 2006 3726.40 3742.50 3691.35 3715.00
18- Oct - 2006 3715.20 3727.00 3701.30 3710.65
19- Oct - 2006 3711.10 3726.95 3655.05 3677.80
20- Oct - 2006 3678.75 3714.25 3665.50 3676.85
21- Oct - 2006 3680.85 3708.40 3662.85 3683.50
23- Oct - 2006 3683.40 3690.85 3651.20 3657.30
26- Oct - 2006 3656.20 3686.85 3651.20 3677.55
27- Oct - 2006 3676.85 3747.35 3674.80 3739.35
30- Oct - 2006 3739.35 3776.05 3719.45 3769.10
31- Oct - 2006 3770.50 3782.85 3726.75 3744.10
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SENSEX OCTOBER
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ANLAYSIS OF STOCK MARKET FLUCTUATIONS AND GLOBAL MARKET
1
st
week ended on 6
th
October 2006
The market eased a bit last week as FIIs and traders resorted to profit-booking.
The BSE Sensex lost 81.42 points and settled on 12,373. The S&P CNX Nifty fell
18.7 points, to close at 3,569.70.
The market was closed on Monday on account of Dussehra. The Sensex lost 88.03
points on Tuesday as traders booked profits, taking cue from weak global markets.
The Sensex plunged 162.38 points on Wednesday as Asian markets closed weak.
Concerns over possible sales by hedge funds also added to the weak sentiment, as it
bred speculation that such funds may book profits in the Indian equity market to
make up for losses suffered in energy related investments.
On Thursday, the Sensex finished 185.40 points higher on the back of robust global
markets.
On Friday, the Sensex lost 16 points as blue-chips succumbed to profit taking.
FIIs offloaded equities worth Rs 713.7 crore for two days (Tuesday and Wednesday),
while mutual funds sold equities worth Rs 112.37 crore.
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India's wholesale price index rose 4.77% in the 12 months to 23 September, higher
than 4.56% a week earlier, due to an increase in food, mineral and manufactured
product prices.
Zinc producer Hindustan Zinc fell marginally (0.15%), to close at Rs 592.70. The
company increased zinc price by Rs 2,000 per tonne, and lead price by Rs 1,100 per
tonne.
Tractor and utility vehicle maker Mahindra & Mahindra gained 3.2%, to close at Rs
702.70. The company revealed sales figures on Tuesday. The company's sales rose
15%, to 15,976 units from 13,839 units a year earlier. Domestic auto sales, including
utility vehicles, light commercial vehicles and three-wheelers, rose 12%, and exports
climbed 96%, to 1,055 units from 539 units. Mahindra, also India's top-tractor maker,
sold 9,729 units in September, up 37% from 7,099 units a year earlier.
Tata Steel rose 0.23%, to close at Rs 536.90. It has raised spot price of galvanised
corrugated sheets by Rs 3,500 ($76.40) per tonne, and that of cold rolled steel by
between Rs 300 - Rs 500 a tonne. The price increases are effective 1 October 2006.
Index heavyweight Reliance Industries (RIL) was down 0.68%, to close at Rs
1,163.05. The company has cut retail price of petrol and diesel by a rupee, following
a fall in global crude oil price.
Maruti Udyog slipped 3.92%, to close at Rs 942.70. The auto major said on Tuesday,
that it had sold 59,420 vehicles in September, up 20.6% from 49,278 units in the
same month last year. Maruti sold 56,606 units in the domestic market, up 22% from
46,393 units a year earlier. It also exported 2,814 units in September, down 2.5%
from 2,885 units last year.
Bajaj Auto rose 3.3%, to close at Rs 3,099.20. The company reported a healthy 38%
growth in vehicle sales in September 2006.
Tata Motors gained 3.6%, to close at Rs 893.70. The company on Tuesday reported
24% growth in vehicle sales for September 2006.
Cement and IT stock witnessed a mixed trend. ACC fell 0.65%, to close at Rs
986.80. The cement major’s despatches rose 7.8% to 1.38 million tonnes for
September 2006, against 1.28 million tonnes in the same period last year. The
cumulative cement dispatches for January - September 2006 has increased 7.2%, to
13.82 million tonnes, compared to 12.88 million tonnes for the same period last year.
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Grasim was marginally up (0.05%), closing at Rs 2,520.90. Gujarat Ambuja rose
4.36%, to close at Rs 122.
Infosys rose 1.31%, to close at Rs 1,872.05. Wipro fell 2.18%, to close at Rs 513.65.
TCS fell 2.7%, to close at Rs 993.10.
Refinery shares surged on expectations of improved Q2 results. HPCL jumped nearly
8.9%, to close at Rs 304.55. The scrip rose on a heavy volume of 22.1 lakh shares
as a slew of block deals were executed in the stock on BSE.
Indian Oil Corporation jumped 7.34%, to close at Rs 561.95 and BPCL rose 7.55%,
to close at Rs 394.45. Following a sharp fall in crude oil price, oil marketing firms are
said to be now making profits compared to earlier losses, when the price had surged
to record highs.
2
nd
week ended on 13
th
October 2006
The market closed at a lifetime high last week on the back of robust numbers from
IT bellwether Infosys and falling global crude oil prices. The market sentiment is
positive as traders expect corporate majors to beat street expectations and post
better results.
The BSE Sensex jumped 363.42 points (2.9%), to close at an all-time high of
12,736.42. The benchmark index overtook its previous all-time high of 12,671.11, of
11 May 2006. The S&P CNX Nifty rose 106.35 points, to close at 3,676.05.
The market commenced the week on a positive note; the BSE Sensex gained 32.62
points on Monday. However, it was gripped by high volatility for the entire day.
On Tuesday, the BSE Sensex lost 2.06 points as traders turned cautious ahead of
the earnings season and resorted to profit-booking. The BSE Sensex closed 10
points lower on Wednesday despite Infosys posting better-than-expected results. In
the first half of the trading session, the market soared but declined in the second half
and finally closed weak.
On Thursday, the BSE Sensex jumped 184.49 points on the back of firm Asian and
European markets. Tracking firm global markets, the BSE Sensex surged 198.44
points on Friday, and breaking the previous records of closing. Heavyweights were
suddenly in demand at the fag end of the session.
FIIs invested in equities to the tune of Rs 1,393.4 crore (From Monday to Thursday)
while mutual funds offloaded equities worth Rs 127.73 crore.
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India's wholesale price index rose 5.16% in the 12 months to 30 September, higher
than 4.77% a week earlier due to an increase in food, energy and manufactured
product prices, data showed on Friday.
Software major Infosys jumped 11.5% in a week to close at Rs 2,088.65. The
software outfit announced Q2 September 2006 results on Wednesday (11 October
2006). The company reported a net profit of Rs 929 crore for Q2 September 2006 as
per Indian GAAP, compared to Rs 606 crore for Q2 September 2005, a growth of
53.3%. Consolidated revenue rose 50.4% to Rs 3,451 crore from Rs 2,294 crore.
Both net profit and revenue have surpassed market expectations. Infosys has revised
upwards its EPS and revenue growth guidance for FY 2007 (year ending 31 March
2007). The company has forecast revenue of between Rs 13,853 crore and Rs
13,899 crore for FY 2007, transforming into a projected year-on-year growth of 45.5 -
46%. EPS for FY 2007 is forecast at Rs 66, transforming into a projected year-on-
year growth of 46.6%
Reliance Energy slumped 3.61% in a week, to close at Rs 462.40 on reports that the
company has decided against the stiff hike in tariffs for Mumbai customers.
Tata Steel lost 4.77% in a week to close at Rs 511.30. UK's Sunday Telegraph
reported that the steel firm had lined up $ 6.5 billion to stave off any takeover bid for
the Anglo-Dutch steel maker. Earlier, Tata Steel said it may bid for the steel
conglomerate.
NTPC lost 0.46% in a week to close at Rs 130.05. There are reports that the
company has offered Qatar (government) 40% stake in a gas-fired power project in
Kerala. NTPC runs a 350-megawatt power plant in Kerala, and plans to expand it to
a 1,950-Megawatt unit by 2010-11.
Tata Motors rose 1.90% in a week, to close at Rs 910.65. The company has raised
the market price of buses and trucks by up to 2%, because of rising costs of key
inputs like steel and tyres. The company, however, kept car price unchanged.
Hindustan Zinc soared 21% in a week, to close at Rs 717.55. The company raised
zinc price by Rs 1,500 per tonne to Rs 1,82,000, since 7 October 2006. The
company raised zinc prices for the second time on 12 October by Rs 14,000 a tonne,
to Rs 1,96,000 a tonne, effective immediately. Lead prices were also raised by Rs
2,700 a tonne, to Rs 78,100 a tonne.
Maruti Udyog (MUL) was up 1.6% in a week, to close at Rs 957.85. MUL and ONGC
on Monday (9 October) inked an agreement for leasing vehicles under an end-to-end
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(N2N) scheme of Maruti. ONGC has decided to initially lease 29 vehicles through
MUL on a pilot basis, 22 for its Mumbai region and 7 for Delhi.
Index heavyweight Reliance Industries (RIL) rose 2.33% in a week, to close at Rs
1,190.15. There are reports that the company will open shutters of its first retail store
in about a week. The first such store in Hyderabad spanning 27,000 square feet of
store space will be inaugurated on 18 October 2006. The store will sell agri-produce
and dairy products. Meanwhile, RIL has cut retail prices of petrol and diesel for the
second time this month. Following the latest price cut, RIL’s prices will equal those of
state-run refineries. On Thursday (12 October) RIL overtook state-run oil exploration
major to become the top company in India in terms of market-capitalization.
i-flex solutions rose marginally 0.07% in a week to close at Rs 1,443.20. The
company formed an alliance with IBM and Oracle for offering banking solutions to
customers. The banking collaboration will combine the business and IT architectural
leadership of IBM in banks; banking-specific application solutions from Oracle; and
core banking and risk solutions from the company.
Cement stocks also firmed up last week. ACC rose 1.9% to close at Rs 1,005.85 and
Grasim shot up 6%, to close at Rs 2,672.40.
3
rd
week ended on 20
th
October 2006
The market cooled down after reaching within striking distance of 13,000 last
week.
For the week, the benchmark BSE Sensex lost 27 points to 12,709.40, on profit-
booking, after a solid spurt in the previous few sessions on the back of impressive
quarterly results from IT companies.
Trading started strong for the week, the Sensex advanced 191.76 points on Monday,
to 12,928.18. Expectations of strong Q2 results, firm Asian markets and data
showing an increased inflow from FIIs aided the rally that day.
The Sensex, however, slipped 44.35 points (0.34%), to 12,883.83 on an increase in
crude oil price. The benchmark index lost 25.35 points (0.2%), to 12,858.48, on
Wednesday amid a mixed trend in pivotals.
The market weakened on Thursday after Ranbaxy’s Q3 results, which failed to meet
expectations, plunging 134.89 points (1.05%) to settle at 12,723.59.
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On Friday, the Sensex witnessed high volatility, swinging 169 points from the day’s
high of 12,849.02, and a low of 12,679.85. The BSE Sensex finally settled at 14.19
points, at 12,709.40.
For the first time in history, the Dow Jones Industrial finished above the 12,000 mark
on Thursday.
Reliance Industries (RIL) rose 0.6% to Rs 1,203 on Friday. RIL reported 9% growth
in net profit for Q2 September 2006 to Rs 2,709 crore from Rs 2,481 crore in Q2
September 2005. Net sales rose 37.4%, to Rs 28,474 crore from Rs 20,717 crore.
ONGC shed 0.32% to Rs 1,151.70, on Friday, after its net profit rose less than 1% in
Q2 September 2006, to Rs 4,174 crore, from Rs 4,138 crore as discounts given to
refiners, staff costs and the flooding of a plant capped gains accruing from high crude
prices. Net sales rose 11% to Rs 14,068 crore from Rs 12,679 crore. Subsidy rose
78% to Rs 5,032 crore in Q2 September 2006, from Rs 2,876 crore in Q2 September
2005.
Software major TCS declined 1.60% for the week, to Rs 1,087. TCS’ consolidated
net profit as per US GAAP rose 14.9% on a sequential basis to Rs 991.50 crore in
Q2 September 2006 from Rs 862.57 crore in Q1 June 2006. Net profit beat
expectations. Revenue rose 8.15% on sequential basis to Rs 4,482.17 crore, from Rs
4,144.33 crore in Q1 June 2006. Revenue growth was also in line with market
expectations.
Kalyani Steels surged 19.50% for the week, to Rs 367.45. The steel maker said it will
buy 80% in alloy steel maker SJK Steel Plant for Rs 24 crore, and invest an
additional Rs 32 crore in the company. SJK operates an integrated plant with a
capacity of 2.5 lakh tonnes a year, in southern India. Kalyani's board also approved a
preferential issue of 1.6 million shares to an investor, at Rs 315 a share. Kalyani
Steel reported a sharp 58% fall in net profit for Q2 September 2006, to Rs 21.31
crore (Rs 50.49 crore). Net sales rose 49.20% to Rs 224.61 crore, from Rs 150.53
crore.
Tata Steel lost 0.70% for the week to Rs 507.80. On Friday, Corus Group's board
accepted Tata Steel’s takeover bid. Tata Steel has offered 455 pence per share, or
about $ 8 billion, for Corus.
Satyam Computer Services declined 3.20% on Friday, to Rs 426.75, despite an
upward, albeit marginal, revision in FY 2007 EPS guidance. On a sequential basis,
Satyam’s consolidated net profit as per Indian GAAP declined 9.6% to Rs 319.81
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crore from Rs 354.12 crore. Sales rose 11% to Rs 1,601.88 crore, from Rs 1,442.93
crore in Q1 June 2006.
HDFC Bank declined 2.35% for the week to Rs 965. On Tuesday, HDFC Bank
reported 31.7% growth in net profit for Q2 September 2006 to Rs 262.94 crore. The
net profit beat market expectations. Net interest income rose 38.1% to Rs 845.60
crore (Rs 612.30 crore).
Bajaj Auto witnessed a sell-off soon after the company announced Q2 results during
trading hours on Wednesday. Bajaj Auto’s net profit rose 10% in Q2 September
2006, to Rs 317.59 crore from Rs 289.36 crore in Q2 September 2005. Net sales
rose 30.4% to Rs 2,435.97 crore from Rs 1,866.95 crore. For the week, the stock
shed 12.11% to Rs 2,743.
IT major Wipro rose marginally for the week, to Rs 557. Wipro on Wednesday
reported 48% jump in net profit as per US GAAP to Rs 696 crore in Q2 September
2006. Total revenue rose 41% to Rs 3,514 crore. The company said Earnings Before
Interest and Tax (EBIT) of global IT services and products segment was up 48% to
Rs 665 crore. The company expects revenue from Global IT Services & Products
business at approximately $633 million for quarter ending 31 December 2006. Wipro
expects 2% impact on margins in Q3 December 2006 due to wage hike.
Glenmark Pharma jumped 18.72% to Rs 392.30, on Wednesday after a development
agreement with Merck for a diabetes drug. Under the terms of the agreement, Merck
will pay Glenmark up to Euro 190 million ($238 million), which includes an up-front
payment of Euro 25 million along with various milestone payments for the drug, GRC
8200, which is undergoing Phase II, or mid-stage, trials.
On Tuesday Gayatri Projects finished at a slight premium, at Rs 298.85, on a volume
of 46.80 lakh shares. The company had priced its IPO at Rs 295.
Tech Mahindra jumped 28.32% for the week to Rs 895 following robust set of Q2
September 2006 results. Its net profit surged 379.50% to Rs 141 crore from Rs 36.50
crore in Q2 September 2005. Total income jumped 162% to Rs 648 crore (Rs 257
crore).
L&T lost 2.56% to Rs 1,275 for the week, even as the company reported 40.6%
growth in net profit for Q2 September 2006. L&T’s net profit has risen 40.6% to Rs
201.22 crore in Q2 September 2006, from Rs 143.05 crore in Q2 September 2005.
Net profit adjusted for last year’s extra-ordinary income has risen 68%, to Rs 201.22
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crore from Rs 119.62 crore. Revenue has rose 10.8%, from Rs 3,371.60 crore to Rs
3,736.07 crore.
Hanung Toys and Textiles (HTTL) settled at a modest premium, at Rs 96.45,
compared to the IPO price of Rs 95 per share on Friday. The stock listed at 28.42%
premium, at Rs 122. It clocked 1.20 crore shares on BSE.
4th
week ended on 27
th
October 2006
The market witnessed renewed buying following a robust set of results for Q2
September 2006 and is now within striking distance of a lifetime high of 12,994.45.
For the week, the benchmark BSE Sensex spurted 197.40 points to finish above the
12,900, on strong demand for index pivotals.
On 21 October, the Sensex opened with a sharp 76-point surge at 12,785.78, on the
first day of Samvat year 2063. It, however, finished 27.42 points (0.22%) higher as
selling began in the latter part of Muhurat trading session.
Market lost 113.54 points to 12,623.28, on profit-booking on 23 October. The volatility
was ahead of the expiry of derivative contracts for October series on Thursday (26
October). The market remained closed on Tuesday and Wednesday on account of
local holidays.
The Sensex rose 75.13 points on 26 October, to settle at 12,698.41 on the back of
steady-to-firm global bourses and on the US Federal Reserve’s decision to keep US
interest rates unchanged, triggered fresh buying. Short covering in derivatives due to
expiry of October 2006 derivative contracts also aided the rally.
On 27 October, the BSE Sensex surged 208.40 points, to 12,906.81. It settled above
12,900 for the second time after 16 October 2006 as buying resumed in heavyweight
counters, taking the Sensex near to its all-time high of 12,994.45, inspired by the
smooth rollover of October derivative contracts.
FIIs invested Rs 638.90 crore in equities in three trading sessions, between 21
October and 26 October.
Tata Steel slipped 1.44% for the week, to Rs 500.50. The company last week won
approval from Anglo-Dutch firm Corus Group for its 4.3 billion pound ($ 8.04 billion)
takeover bid, creating the world's fifth-largest steelmaker.
For the week, Mahindra & Mahindra (M&M) advanced 9.45% to Rs 765, on the back
of robust Q2 results, which hit the market on 26 October. M&M net profit jumped
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70.4% to Rs 270.51 crore (Rs 158.69 crore). Net sales rose 30% to Rs 2,490.50
crore (Rs 1,914.81 crore). The company said, it expects a healthy performance in the
second half of the year. M&M’s Q2 results hit the market in afternoon trade.
Bharti Airtel surged 5.03% on 27 October 2006, to Rs 529.70 after the company
came out with better-than-expected results. It had attained a new high of Rs 530. On
a consolidated basis, the group posted a net income of Rs 933.82 crore for Q2
September 2006, compared to Rs 520.91 in Q2 September 2005. Total revenue
increased from Rs 2,709.10 crore to Rs 4,357.14 crore.
Reliance Industries (RIL) jumped 4.35% on 27 October to Rs 1,226.35 after it
clarified that it was running the 6,60,000 barrels per day Jamnagar (Gujarat) refinery
at full-capacity. The stock had lost 1.5% to Rs 1,175.20 on Thursday (26 October) as
doubts ran high that a fire at the Jamnagar refinery on Wednesday (25 October), may
impact production at the refinery. A hydrotreater, or desulphurisation unit, at the
refinery caught fire on Wednesday morning.
IFCI jumped 11.78% to Rs 13.28 for the week, on strong buying interest, after the
company came out with turnaround results.
NIIT Technologies jumped 14% to Rs 236, during the week, following robust set of
results for Q2 September 2006 declared on 20 October 2006. NIIT Technologies
reported a surge in net profit for Q2 September 2006 to Rs 21.55 crore from Rs
13.31 crore in Q2 September 2005. Net sales rose 27.20% to Rs 68.72 crore from Rs
54.02 crore.
Hero Honda shed 1.7% to Rs 740 for the week. It reported a 9.2% fall in net profit for
Q2 September 2006 to Rs 215.97 core. Net sales rose 2.9% to Rs 2,229.96 crore.
The core operating profit margin (OPM) declined sharply from 2.71% in Q2
September 2005 to 15.3%.
TVS Motors dropped 7.53% to Rs 108 during the week. It reported 22% fall in net
profit for Q2 September 2006, to Rs 24.83 crore. Net sales jumped 36.5% to Rs
1,077.89 crore. OPM declined to 5.19% from 5.81% in Q2 September 2005.
On 21 October, JHS Svendgaard Laboratories ended at Rs 57.05, a marginal discount to the
IPO price of Rs 58. The equity capital of the company is Rs 12.50 crore. Face value per share
is Rs 10. Development Credit Bank ended at a sharp premium of 82.7%, at Rs 47.50, over
the IPO price of Rs 26 on 27 October. It clocked a huge volume of 5.76 crore shares on the
day of debut
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4.5 NIFTY NOVEMBER
Dat e Open Hi gh Low Cl ose
01- Nov- 2006 3744.10 3777.70 3737.00 3767.05
02- Nov- 2006 3769.40 3805.50 3761.90 3791.20
03- Nov- 2006 3793.05 3809.65 3771.00 3805.35
06- Nov- 2006 3804.75 3822.40 3798.25 3809.25
07- Nov- 2006 3812.15 3840.45 3789.40 3798.75
08- Nov- 2006 3799.20 3809.95 3737.20 3777.30
09- Nov- 2006 3777.80 3808.20 3769.80 3796.40
10- Nov- 2006 3796.05 3842.40 3785.40 3834.75
13- Nov- 2006 3834.80 3862.05 3834.00 3858.75
14- Nov- 2006 3862.00 3883.00 3850.75 3865.90
15- Nov- 2006 3865.95 3888.80 3838.25 3876.30
16- Nov- 2006 3876.40 3900.40 3863.85 3876.85
17- Nov- 2006 3877.00 3891.85 3835.70 3852.80
20- Nov- 2006 3852.65 3866.95 3794.30 3856.15
21- Nov- 2006 3859.50 3921.70 3856.75 3918.25
22- Nov- 2006 3918.30 3960.00 3909.60 3954.75
23- Nov- 2006 3955.30 3976.80 3933.70 3945.45
24- Nov- 2006 3945.45 3965.80 3935.30 3950.85
27- Nov- 2006 3974.95 3974.95 3948.85 3968.90
28- Nov- 2006 3966.00 3966.00 3911.55 3921.75
29- Nov- 2006 3922.50 3952.40 3920.00 3928.20
30- Nov- 2006 3929.40 3973.00 3929.40 3954.50
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SENSEX NOVEMBER
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ANALYSIS OF STOCK MARKET FLUCTUATIONS AND GLOBAL MARKET
1
st
week on 2
nd
November 2006
Market continued its winning streak to settle at lifetime high on strong demand for
index pivotals.
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The Sensex rose 223.98 points or 1.73% for the week ended 3 November 2006 to
13,130.79. Nifty gained 66 points or 1.76% for the week to settle at 3,805.35.
Sensex rose 117.45 points on Monday to settle at 13,024.26, as investors mopped
up heavyweights and scrips that have reported strong Q2 results. Sensex declined
62.36 points to 12961.90 on Tuesday, on selling pressure throughout the day.
The benchmark index advanced 71.14 points on Wednesday, to settle at 13,033.04
as investors bought blue chip shares. On Thursday, the Sensex finished 58 points
higher to 13,091.12. Sensex rose 39.67 points on Friday to settle at 13,130.79, a
lifetime closing high, as shares staged a rebound in later part of the day.
The total inflow of FIIs in the Indian equity market was Rs 1848.60 crore in the first
four days of the week till Thursday (2 November).
On 31 October, Reserve Bank of India in its mid-term review of annual policy kept
Reverse Repo rate unchanged at 6%, while the Repo rate was raised by 25 basis
points to 7.25%.
Bank rate was kept unchanged at 6% while the Cash Reserve Ratio (CRR) was kept
steady at 5%. The central bank also raised 2006/07 economic growth forecast to
"around 8%" from a previous 7.5-8% estimate. The central bank said inflation would
be driven by demand conditions rather than supply-side effects. It said keeping
inflation in 5.0-5.5% range needed monitoring, appropriate policy response.
PSU oil exploration major ONGC surged 12.06% to Rs 884.50 for the week. The
stock was boosted by news on Thursday that Norway's Norsk Hydro had offered it
stake in two exploration blocks. Also there were reports, that it plans joint ventures
with Russian oil companies to acquire oil and gas assets. The joint ventures would
look for properties in Russia and other countries but not India. ONGC once again
regained its numero uno slot in terms of market cap displacing Reliance Industries
from that slot.
Reliance Industries rose 5.41% for the week to Rs 1289. It had surged to a lifetime
high of Rs 1298.50 on Thursday. RIL kickstarted its retail initiative by opening its first
retail store in Hyderabad. Also there were on reports that it will invest $5.2-billion to
double the output from its D6 block in Krishna Godavari basin to 80 million standard
cubic meters per day (mmscmd). RIL had earlier proposed investment of $2.47 billion
to produce 40 mmscmd from discoveries - Dhirubhai 1 and 3 (in the D6 block) - out of
a total 34 wells. RIL plans to raise up to $2 billion overseas to fund its oil & gas
exploration and production business.
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FMCG major, Hindustan Lever (HLL) advanced 4.15% to Rs 236 for the week. The
company posted 60% rise in September quarterly earnings on strong demand for
soaps, shampoos and packaged foods, as well as one-off gains from stake sales.
Net profit rose to Rs 520.74 crore for the quarter ended 30 September 2006 where
as the same was Rs 325.96 crore for the quarter ended 30 September 2005. The net
profit included exceptional items such as gains from sale of stakes in some firms.
Total Income rose to Rs 3162.82 crore (Rs 2816.42 crore).
Bharti Airtel rose 3.78% to Rs 547 for the week. It reported 79% growth in net profit
to Rs 934 crore for the quarter ended September 2006, from Rs 521 crore in the
corresponding period of the previous year. The company's net sales jumped 61% to
Rs 4,357 crore from Rs 2,709 crore.
Colgate surged 11.44% for the week, to Rs 419.30. It reported 25% fall in net profit
for Q2 September 2006 due to a huge VRS outgo of Rs 58.80 crore. Colgate’s net
profit in Q2 September 2006 declined 24.9% to Rs 23.18 crore (Rs 30.88 crore). Net
sales rose 15% to Rs 320.01 crore (Rs 278.12 crore).
Jaiprakash Associates surged 30.73% to Rs 596 during the week, after the cabinet of
state government of Uttar Pradesh gave clean chit to a land development project
which was earlier awarded to the company by the state government.
Cummins India rose 5.88% to Rs 270.70 during the week, after it reported 66% surge
in net profit for Q2 September 2006 to Rs 62.69 crore (Rs 37.76 crore). Net sales has
surged 30.8% to Rs 467.44 crore (Rs 357.29 crore).
KPIT Cummins Infosystems jumped 24.70% during the week, to Rs 619. The
company’s board would meet on 08 November 2006 to consider a 1 for 1 bonus
issue and splitting its 5-rupee share into shares of 2 rupees face value each.
AIA Engineering jumped 23.48% to Rs 1145, during the week, after it reported a
122.4% surge in net profit for Q2 September 2006 to Rs 14.81 crore (Rs 6.66 crore).
Net sales rose 35.1% to Rs 95.51 crore.
The latest economic data showed infrastructure sector output grew 9.9% in
September 2006 from a year earlier, much faster than revised annual growth of 5.7%
in August 2006. Output rose an annual 6.3% in September 2005. It was up an annual
7.3% in the April-September 2006 period compared with 6.1% during the same
period a year earlier.
2
nd
week on 10
th
November 2006
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The market continued its winning streak on the back of sustained buying for blue-
chips.
The BSE Sensex rose 164.57 points (1.25%), for the week had settled at a lifetime
high of 13,295.36, while the S&P CNX Nifty rose 36.30 points (0.95%), also to settled
at a lifetime high of 3,841.65. On 10 November, the Sensex struck an all-time high of
13,303.85, while the S&P CNX Nifty touched a high of 3,842.40, in intra-day trade.
The Sensex rose 56.10 points, to 13186.89 on 6 November following buying demand
for index pivotals. Profit-taking struck and the benchmark Sensex declined 30 points
to 13,156.66 on 7 November. Sensex lost 84.15 points on 8 November and ended at
13,072.51, on selling pressure in index pivotals. Concerns over Indo-US relations
following Democrats wresting control of the House of Representatives from President
George W Bush's Republican Party in Congressional elections, hit the Indian market
that day.
Sensex resumed its winning streak, gaining 64.98 points on 9 November, to
13,137.49 as buying resumed. The Sensex surged 145.42 points, to 13,295.36, on
10 November, on strong buying demand in banking and oil & gas stocks. Strong
industrial output data and benign inflation figures boosted the market that day.
ICICI Bank advanced 7.89% to Rs 834 for the week.
HLL gained 7.21% to Rs 252.50 for the week, on reports that the company is gearing
up for a price hike for the fourth time in the year, and is to increase product prices by
4 - 10%.
Reliance Industries (RIL) rose 0.11%, during the week to Rs 1,288.25. RIL’s board
had approved raising up to $2 billion through loans and bond issues, or a
combination of fund-raising instruments.
Bajaj Auto lost 9.43% to Rs 2,595. It ventured into the $ 6 billion Indonesian bike
market with its flagship model, the 180 cc Bajaj Pulsar. The company also plans to
set up a regional production base in Indonesia by investing $50 million over the next
three years in a production base and distribution network.
Software major Infosys rose 3.56% to Rs 2,149, after its shareholders approved an
issue of up to 30 million American Depositary Receipts.
Car major Maruti Udyog lost 7.53% to Rs 906, after Nissan Motor Company
terminated talks with Japanese compact car maker Suzuki Motor Corp, for a project
in which Suzuki was to build a Nissan model in India for sale in the local market.
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Following a recent tie-up between the two, MUL was to make cars in collaboration
with Nissan Motor Company at Manesar, India. Also, there were reports that the
Ministry of Commerce and Industry had rejected the automaker’s application for
granting special economic zone (SEZ) status for its manufacturing facility being
developed at Manesar, in collaboration with Nissan.
Mahindra & Mahindra gained 8.15% to Rs 830, after Renault said on Thursday it was
expanding its existing joint venture with Mahindra & Mahindra to manufacture more
models for the Indian market.
UTV Software surged 31.52% to Rs 367.40. The stock surged to a 52-week high of
Rs 261.35. There were reports that Rupert Murdoch's News Corp is eyeing a
sizeable stake in the company, which was later denied by the company.
Indiabulls Financial Services advanced 9.56% to Rs 509, after its unit received in-
principle approval from the central government, to develop a multi-product special
economic zone (SEZ) in Maharashtra.
Solectron Centum Electronics jumped 31.38% to Rs 247.05 after the company
decided to separate services business into a separate company effective from 1
October 2006. The new company will be called Solectron EMS India (SEIL). At
present, the company has two businesses, products business and services business.
The services business comprises of electronic manufacturing services (EMS). The
products division makes hybrid microcircuits.
FII-inflow for the first four days of the week (from 6 to 9 November) amounted to Rs
1,279.10 crore.
Mutual fund outflow for the first three days of the week (from 6 to 8 November)
amounted to Rs 125.60 crore.
India's wholesale price index rose 5.09%, in the 12-months to 28 October, lower than
the previous week's 5.41% due to a fall in the prices of manufactured products, data
showed on Friday. India's industrial production rose 11.4% in September from a year
earlier due to robust manufacturing and electricity output, government data showed
on Friday. Output had grown at 9.9% in August. Manufacturing production rose 12%
in September from a year earlier, compared with 11.1% in August.
On Tuesday, 7 November, National Council for Applied Economic Research
(NCAER) revised up its 2006/07 economic growth forecast from 7.9% to 8.1%,
previously due to good monsoon rains, robust exports and foreign investment
inflows. It expects GDP to expand by an average annual rate of 8.2% in the next five
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years. Finance Minister P Chidambaram said on Tuesday the economy can sustain 8
- 10% growth in the coming years with more reforms.
3
rd
week ended on 17
th
November 2006
The Sensex maintained its winning streak, as buying continued at higher levels.
Strong FII-inflows and revision in earnings estimates by brokerages have fuelled the
latest bull-run on the bourses.
For the week ended Friday (17 November), the Sensex gained 147 points (1.10%), to
settle at 13,429.48
The S&P CNX Nifty advanced 18 points (0.47%) for the week ended Friday (17
November), to settle at 3,852.80.
On 13 November, the Sensex jumped 116.09 points to 13,399 as select blue-chips
were in demand. It gained 26.50 points to 13,425.50 on 14 November, as buying
continued. On 15 November 2006, the Sensex has gained 43.87 points, settling at
13,469.37 on demand for banks and cement makers.
On 16 November 2006, the Sensex finished 36.52 points higher, at 13,505.89, on
buying interest for banking and cement stocks.
Sensex lost 76.41 points on 17 November to settle at 13,429.48 on profit booking. It
had struck an all time high of 13,678.04 in opening trade on that day.
Reliance Industries lost 2.35% to Rs 1,258.10 for the week, after two brokerages
downgraded the stock to `underperform’ from market performer citing stretched
valuations and weakening fundamentals.
TCS rose 1.91% for the week to Rs 1,091, amid reports that it had bagged a $100
million contract in the US. On 14 November 2006, block deals for an aggregate 85.05
lakh shares were executed in the scrip on BSE, at an average Rs 1,059 in early
trade, constituting 0.8% of TCS’ equity capital of Rs 97.86 crore (face value Re 1 per
share). Foreign fund HSBC Global purchased the shares from promoters, who hold
84% in the company.
Cellular services major Bharti Airtel advanced 6.89% during the week, to Rs 582.20.
It had hit Rs 586.95, an all-time high on 17 November. Bharti Airtel said on Monday it
was roping in Microsoft Corporation, to offer software and other services to small and
medium scale businesses in India. On 15 November, it replaced TCS as the fifth
largest company in terms of market-cap.
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Gujarat Ambuja Cements rose 1.37% for the week to Rs 135.65. On 16 November,
two big deals of 2.5 crore shares each were struck in the counter, at an average Rs
138.75 per share. Swiss cement maker Holcim, which presently holds 15.6% in
Gujarat Ambuja Cements, acquired an additional 3.6% stake from the promoter
group. The block deals with a turnover of Rs 694 crore, constituted 3.6% (5 crore
shares, 2.5 crore shares each) of its equity capital of Rs 272.02 crore (face value Rs
2 per share).
Bank shares surged on easing interest rate worries. RBI on Tuesday said the recent
fall in global crude oil prices should help ease inflation pressures.
HDFC Bank gained 8% for the week, to Rs 1,122.10. On 16 November, it struck an
all-time high of Rs 1,150. ICICI Bank rose 4.63% to Rs 877. On 16 November, it
struck an all-time high of Rs 925 on Reserve Bank of India's permission for new
branches and ATMs. SBI jumped 7.86% during the week to Rs 1,229. It had also
surged to an all-time high of Rs 1,241 on 17 November.
Airliners rose on reports that they are to raise airfares between 3 - 5%. Reports also
add that the number of low-priced tickets available on each flight is also likely to be
reduced as a cost-cutting measure. Jet Airways rose 4.82% to Rs 652.10, while
Deccan Aviation jumped 38.23% to Rs 149.35, during the week.
Thermax rose 5.15% to Rs 367 during the week following strong Q2 results. The
company reported 38.6% growth in net profit for Q2 September 2006 to Rs 35.08
crore (Rs 25.31 crore). Total income has risen 57.6% to Rs 491.05 crore (Rs 311.43
crore). The company has a robust order-book position with a order backlog of Rs
2,973 crore on a consolidated basis as on 30 September 2006, which is 142% higher
from that of last year.
FIIs have been the key drivers of the recent rally. They were net buyers to the tune of
Rs 2,302 crore for the first two days of the week.
Mutual funds made an inflow of Rs 150.59 crore in the first three days of the week.
On 16 November, the Bank of Japan left its monetary policy unchanged on Thursday
as widely expected.
India’s wholesale price index rose to 5.30% for 12 months ended 4 November, higher
than the previous week's 5.09% due to an increase in the prices of food articles and
manufactured products.
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The blue-chip Dow average achieved its longest winning streak since August, rising
54.11 points on Thursday to finish at a record 12,305.82.
4
th
week ended on 24
th
November 2006
Market continued to head higher, on consistent buying support from FIIs.
For the week ended 24 November, the BSE Sensex gained 273.85 points or 2.04%
to settle at 13,703.33. The S&P CNX Nifty rose 98.05 points or 2.54% to 3,950.85
On 20 November, the Sensex staged a solid intra-day reversal, from its lows of
13,200.36, to settle 1.23 points higher, at 13,430.71. The Reserve Bank of India
(RBI's)'s draft circular prescribing tighter guidelines for banks’ capital market
exposure had resulted in Sensex tumbling over 200 points in intra-day trade on that
day.
Renewed buying in blue-chips helped the Sensex surge 186.06 points to 13,616.77
on 21 November. The Sensex rose 89.76 points on 22 November to settle at
13,706.53, an all-time closing high, backed by firm Asian markets.
The BSE Sensex ended 25.70 points lower at 13,680.83 amid a mixed trend in
various constituents of the barometer index on 23 November after surging to a life
high of 13,790.82 in early trade.
Sensex finished with a modest 22.50-point gain on 24 November at 13,703.33 as
buying support continued.
Telecom services provider Bharti Airtel rose 5.56% to Rs 614.20 after hitting a
lifetime high of Rs 644.90 on 23 November. There are reports that the Department of
Telecom (DoT) will make available, additional radio frequency for cellular service
providers.
On 21 November, shares in Info Edge (India), which runs web sites for job search
and matrimony, closed at Rs 593.20, a premium of 85.3% over the IPO price (Rs
320). The scrip clocked a massive volume of 78 lakh shares on BSE.
Tata Steel 1.61% to Rs 483.55. On Friday, it denied media reports about a
sweetened bid for Corus Group, to stall the counter-bid by a Brazilian company.
Soon after Brazil’s CSN on 17 November launched a counter bid for Corus, the Tata
Steel stock started languishing with investors worrying that the steel maker will over-
pay in a bidding war.
NTPC advanced 7.87% to Rs 149.95 after striking 52-week high of Rs 150.70.
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Siemens lost 1.71% to Rs 1,172.50, after the company reported 32% growth in net
profit for Q4 September 2006 to Rs 137 crore (Rs 104 crore). It along with its
consortium -Siemens AG, Germany, also bagged a contract worth Rs 4,000 crore
from the Qatar General Electricity and Water Corporation (KAHRAMAA) in which
Siemens' share was pegged at Rs 3,600 crore.
Aditya Birla Nuvo rose 3.20% to Rs 1,107, after the company’s board decided to
issue 2 shares for every 17 held on a rights basis, at Rs 793 per share. Following the
rights issue, the equity will go up to Rs 93.32 crore from Rs 83.50 crore.
United Phosphorus surged 13% to Rs 329.90, after it bought the global propanil
herbicide business of DowAgroSciences, for about $25 million. The total turnover of
this product in 2005 was $18.9 million. Propanil is a global product with more than
100 registrations in over 30 countries in North America, Latin America, Europe, Africa
and Asia-Pacific.
Deccan Aviation lost 3.35% to Rs 142.75, amid reports that it had suffered a fall in
market share in recent months. As per latest reports, Air Deccan’s market share has
been declining despite the low-cost airline offering a large number of tickets at
nominal prices of Rs 3 and Rs 9. After touching a high of 21.2% in June, the airline’s
share registered an average of 19.3% in the second quarter of the current financial
year, and further dropped to 18.1% in October 2006.
Development Credit Bank (DCB) advanced 19.65% to Rs 61.80, after its board
approved a hike in Foreign Institutional Investors (FII) ceiling from the existing 24% to
49%. They also approved an issue of equity shares of an aggregate amount up to Rs
225 crore to Qualified Institutional Buyers (QIB).
Mutual Funds were net sellers worth Rs 434.56 crore for the first four days of the
week.
FIIs were net equity buyers for the first two days of the week to the tune of Rs 700.30
crore.
On 21 November, Sebi directed 2 depositories and 8 depository participant to pay Rs
116 crore as compensation to retail investors who suffered opportunity loss in the
IPO scam that came to light last year.
India's wholesale price index rose 5.29% for the year ended 11 November,
marginally lower than the previous week's annual rise of 5.30% due to lower energy
and milk prices, data showed on Friday (24 November). The annual inflation rate was
at 4.09% during the corresponding week of the previous year.
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4.6 NIFTY DECEMBER
Dat e Open Hi gh Low Cl ose
01- Dec- 2006 3955.70 4001.30 3953.95 3997.60
04- Dec- 2006 4002.40 4015.25 3991.55 4001.00
05- Dec- 2006 4001.25 4033.20 4001.25 4015.75
06- Dec- 2006 4016.00 4036.20 3982.50 4015.95
07- Dec- 2006 4015.00 4027.70 4001.40 4015.35
08- Dec- 2006 4015.75 4046.85 3948.70 3962.00
11- Dec- 2006 3961.90 3965.05 3798.30 3849.50
12- Dec- 2006 3849.10 3861.25 3661.60 3716.90
13- Dec- 2006 3716.75 3777.60 3657.65 3765.20
14- Dec- 2006 3765.70 3855.05 3763.50 3843.05
15- Dec- 2006 3849.60 3908.45 3845.45 3888.65
18- Dec- 2006 3888.20 3934.00 3828.15 3928.75
19- Dec- 2006 3928.85 3931.90 3783.45 3832.00
20- Dec- 2006 3832.15 3886.10 3787.55 3815.55
21- Dec- 2006 3814.75 3851.20 3768.80 3833.50
22- Dec- 2006 3834.90 3880.15 3823.40 3871.15
26- Dec- 2006 3871.30 3946.10 3870.45 3940.50
27- Dec- 2006 3942.75 3986.75 3937.70 3974.25
28- Dec- 2006 3974.20 3997.35 3961.95 3970.55
29- Dec- 2006 3971.65 3991.60 3960.45 3966.40
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SENSEX DECEMBER
Date Open High Low Close
29-Dec-06 13,873.03 13,929.10 13,770.06 13,786.91
28-Dec-06 13,893.29 13,960.39 13,819.77 13,846.34
27-Dec-06 13,734.01 13,911.59 13,734.01 13,859.69
26-Dec-06 13,501.44 13,726.62 13,490.77 13,708.34
22-Dec-06 13,398.13 13,493.88 13,362.11 13,471.74
21-Dec-06 13,313.91 13,441.36 13,182.35 13,384.86
20-Dec-06 13,452.69 13,568.09 13,232.56 13,340.21
19-Dec-06 13,737.36 13,748.62 13,237.39 13,382.01
18-Dec-06 13,695.60 13,744.17 13,416.40 13,731.09
15-Dec-06 13,545.60 13,669.65 13,545.60 13,614.52
14-Dec-06 13,256.81 13,524.77 13,239.79 13,487.16
13-Dec-06 13,039.02 13,223.00 12,830.38 13,181.34
12-Dec-06 13,413.61 13,492.21 12,801.65 12,995.02
11-Dec-06 13,783.00 13,801.98 13,261.73 13,399.43
8-Dec-06 14,007.67 14,009.56 13,756.86 13,799.49
7-Dec-06 13,962.94 14,002.72 13,915.74 13,972.03
6-Dec-06 13,951.09 14,035.30 13,847.67 13,949.00
5-Dec-06 14,028.47 14,028.47 13,905.65 13,937.65
4-Dec-06 13,846.71 13,912.54 13,828.90 13,874.33
1-Dec-06 13,729.67 13,857.81 13,725.78 13,844.78
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ANALYSIS
1
st
week on 1
st
December 2006
The market kept its rally intact as investors continued to mop-up shares at higher
levels. The BSE Sensex advanced 141.45 points (1.03%) during the week ended 1
December, to 13,844.78, a record closing high. The S&P CNX Nifty rose 46.75 points
(1.18%), to settle at 3,997.60, an all-time closing high.
Trading for the week began on a firm note. On Monday (27 November), the Sensex
jumped 70.26 points, to 13,773.59, a record closing, partly on steady-to-firm Asian
markets and partly due to short covering in the derivatives segment.
The Sensex plunged 171.64 points, to 13,601.95, tracking weak global markets on
28 November 2006. The BSE Sensex rose marginally by 14.78 points, to 13,616.73
on 29 November, amid a mixed trend in its constituents. On 30 November 2006, the
Sensex finished with a gain of 79.58 points, at 13,696.31.
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Sensex jumped 148.47 points to 13,844.78 on Friday (1 December), a record closing
following a smooth rollover of November contracts and the sunsequent build up for
December series, coupled with robust GDP figures.
Tata Power rose 1.32% to Rs 598.10. The company reported 61% growth in net
profit for Q2 September 2006, to Rs 202.32 crore (Rs 125.67 crore). Total revenue
rose 16.5% to Rs 1,279.17 crore, from Rs 1,097.21 crore.
Software major TCS rose 2.85% to Rs 1,183.30. TCS signed a 7-year deal worth $65
million for reorganising Somerfield's IT services. Somerfield is a leading UK-based,
small-format food retailer.
Oil & refinery stocks slipped after the government announced a cut in retail prices of
diesel and petrol by Re 1 and Rs 2, respectively, on Wednesday. Also crude oil
prices moved near $62 per barrel, leading to a further fall in these stocks. Indian Oil
Corporation (down 11.10% to Rs 445.50), Hindustan Petroleum Corporation (down
7.30% to Rs 289.75) and Bharat Petroleum Corporation (down 9.15% to Rs 342)
declined.
Punj Lloyd jumped 15.46% to Rs 1,112. Punj Lloyd Group, a global infrastructure
services provider, has bagged the order through Simon Carves, UK, a group
company. The order is from PTT Polyethylene Company (PTT PE), a wholly-owned
subsidiary of PTT Chemical Company, jointly with its partner Toyo Thai Corporation.
Ranbaxy Laboratories rose 0.10% to Rs 385.60. The company on Friday announced
the acquisition of Be-Tabs Pharmaceuticals, the fifth largest generics company in
South Africa, for $70 million.
Car major Maruti Udyog added 4.45% to Rs 952.60. In early-trade on Friday, the car
major reported selling 55,033 vehicles in November, a 16.1% rise from a year earlier.
The company said domestic sales rose an annual 20.7%, to 52,574, but exports fell
35.7% to 2,459 units.
Godfrey Phillips surged 42.49% to Rs 1,449.05, even as company denied rumours of
a bonus issue and stock-split.
On 28 November 2006, Torrent Power (TPL), the umbrella company of the newly
amalgamated generation, transmission and distribution businesses of the Torrent
Group, settled at Rs 70.70 on BSE after listing at Rs 60 on BSE. Three companies,
Torrent Power AEC (TPAL), Torrent Power SEC (TPSL) and Torrent Power
Generation (TPGL), were merged into TPL giving shape to a scheme of
arrangement.
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GE Shipping re-listed on 27 November at Rs 264.65, and settled at Rs 222.70 that
day, compared to the last trading price of Rs 336.70 of 7 November 2006. The scrip
was relisted after giving effect to a restructuring scheme, whereby its offshore
services division has been demerged into a separate company, and will be listed
separately at a later date.
On 27 November, Lanco Infratech closed at Rs 241.40 on BSE, a marginal premium
compared to the IPO price of Rs 240. Its public issue was oversubscribed nearly 12
times.
On 30 November, Parsvnath Developers settled at Rs 526.30, compared to the IPO
price of Rs 300 per share. The company's paid-up equity capital is Rs 181.60 crore.
Mutual funds were net sellers for the first four days of the week, to Rs 262.48 crore,
while FIIs purchased shares worth Rs 265.40 crore during the same period.
The domestic economy grew by 9.2% in the July-September quarter from a year
earlier, higher than market expectations of 8.90%, data released earlier today
showed. The annual growth rate in the second quarter of the 2006/07 financial year
was higher than the April-June rate of 8.9%.
India's wholesale price index rose 5.45% in the 12 months to 18 November, higher
than the previous week's annual rise of 5.29% due to a rise in mineral and
manufactured product prices, data showed on Friday
2
nd
week ended on 8
th
December 2006
The market kept its rally intact as investors continued to mop-up shares at higher
levels. The BSE Sensex advanced 141.45 points (1.03%) during the week ended 1
December, to 13,844.78, a record closing high. The S&P CNX Nifty rose 46.75 points
(1.18%), to settle at 3,997.60, an all-time closing high.
Trading for the week began on a firm note. On Monday (27 November), the Sensex
jumped 70.26 points, to 13,773.59, a record closing, partly on steady-to-firm Asian
markets and partly due to short covering in the derivatives segment.
The Sensex plunged 171.64 points, to 13,601.95, tracking weak global markets on
28 November 2006. The BSE Sensex rose marginally by 14.78 points, to 13,616.73
on 29 November, amid a mixed trend in its constituents. On 30 November 2006, the
Sensex finished with a gain of 79.58 points, at 13,696.31.
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Sensex jumped 148.47 points to 13,844.78 on Friday (1 December), a record closing
following a smooth rollover of November contracts and the sunsequent build up for
December series, coupled with robust GDP figures.
Tata Power rose 1.32% to Rs 598.10. The company reported 61% growth in net
profit for Q2 September 2006, to Rs 202.32 crore (Rs 125.67 crore). Total revenue
rose 16.5% to Rs 1,279.17 crore, from Rs 1,097.21 crore.
Software major TCS rose 2.85% to Rs 1,183.30. TCS signed a 7-year deal worth $65
million for reorganising Somerfield's IT services. Somerfield is a leading UK-based,
small-format food retailer.
Oil & refinery stocks slipped after the government announced a cut in retail prices of
diesel and petrol by Re 1 and Rs 2, respectively, on Wednesday. Also crude oil
prices moved near $62 per barrel, leading to a further fall in these stocks. Indian Oil
Corporation (down 11.10% to Rs 445.50), Hindustan Petroleum Corporation (down
7.30% to Rs 289.75) and Bharat Petroleum Corporation (down 9.15% to Rs 342)
declined.
Punj Lloyd jumped 15.46% to Rs 1,112. Punj Lloyd Group, a global infrastructure
services provider, has bagged the order through Simon Carves, UK, a group
company. The order is from PTT Polyethylene Company (PTT PE), a wholly-owned
subsidiary of PTT Chemical Company, jointly with its partner Toyo Thai Corporation.
Ranbaxy Laboratories rose 0.10% to Rs 385.60. The company on Friday announced
the acquisition of Be-Tabs Pharmaceuticals, the fifth largest generics company in
South Africa, for $70 million.
Car major Maruti Udyog added 4.45% to Rs 952.60. In early-trade on Friday, the car
major reported selling 55,033 vehicles in November, a 16.1% rise from a year earlier.
The company said domestic sales rose an annual 20.7%, to 52,574, but exports fell
35.7% to 2,459 units.
Godfrey Phillips surged 42.49% to Rs 1,449.05, even as company denied rumours of
a bonus issue and stock-split.
On 28 November 2006, Torrent Power (TPL), the umbrella company of the newly
amalgamated generation, transmission and distribution businesses of the Torrent
Group, settled at Rs 70.70 on BSE after listing at Rs 60 on BSE. Three companies,
Torrent Power AEC (TPAL), Torrent Power SEC (TPSL) and Torrent Power
Generation (TPGL), were merged into TPL giving shape to a scheme of
arrangement.
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GE Shipping re-listed on 27 November at Rs 264.65, and settled at Rs 222.70 that
day, compared to the last trading price of Rs 336.70 of 7 November 2006. The scrip
was relisted after giving effect to a restructuring scheme, whereby its offshore
services division has been demerged into a separate company, and will be listed
separately at a later date.
On 27 November, Lanco Infratech closed at Rs 241.40 on BSE, a marginal premium
compared to the IPO price of Rs 240. Its public issue was oversubscribed nearly 12
times.
On 30 November, Parsvnath Developers settled at Rs 526.30, compared to the IPO
price of Rs 300 per share. The company's paid-up equity capital is Rs 181.60 crore.
Mutual funds were net sellers for the first four days of the week, to Rs 262.48 crore,
while FIIs purchased shares worth Rs 265.40 crore during the same period.
The domestic economy grew by 9.2% in the July-September quarter from a year
earlier, higher than market expectations of 8.90%, data released earlier today
showed. The annual growth rate in the second quarter of the 2006/07 financial year
was higher than the April-June rate of 8.9%.
India's wholesale price index rose 5.45% in the 12 months to 18 November, higher
than the previous week's annual rise of 5.29% due to a rise in mineral and
manufactured product prices, data showed on Friday.
3
rd
week ended on 15
th
December 2006
The BSE Sensex snapped its winning streak, posting a loss for the week ended
Friday, (15 December) on profit-booking.
The Sensex lost 184.97 points for the week ended Friday, (15 December) to
13,614.52, while the NSE Nifty lost 63.90 points, to settle at 3,888.65.
The Sensex started the week with a sharp plunge of 400.06 points, to settle at
13,399.43, on 11 December 2006, after the RBI came out with a surprise 0.5% hike
in cash reserve ratio (CRR), after market hours on Friday (8 December).
On 12 December 2006, the BSE Sensex registered a mammoth 404.41 point loss, to
settle at 12,995.05 as selling continued following data showing lower-than-expected
6.2% growth in industrial production in October 2006, which raised fears of economic
slowdown.
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The BSE Sensex jumped 186.32 points on 13 December, to settle at 13,181.34, on
bargain-hunting after a steep fall and on short covering later in the day.
The market continued to recover due to strong buying in index pivotals, with the
Sensex gaining 305.82 to 13,487.16 on 14 December 2006.
The Sensex jumped 127.36 points, to settle at 13,614.52 on 15 December on the
back of firm global markets, and a decline in inflation.
Reliance Industries (RIL) lost 1.22% to Rs 1,252.55. RIL has reportedly paid Rs 444
crore towards the third installment of advance tax due 15 December 2006. CLSA, a
brokerage, while issuing an outperform rating on the scrip with a 12-month price
target of Rs 1,265, recently stated that RIL's scrip performance over the next year will
hinge on news flow.
State Bank of India (SBI) declined 7.33% to Rs 1,261. The Standing Committee on
Finance has endorsed the proposed legislative amendment to reduce State Bank of
India’s shareholding in its subsidiary banks from current 55% to 51%.
ICICI Bank slipped 0.10% to Rs 868.05, after it announced an increase of 0.5% in its
Benchmark Advance Rate (I-BAR) and its Floating Reference Rate (FRR) for
consumer loans (including home loans) with effect from 18 December 2006. The hike
in lending rates will help protect margins.
Tata Steel lost 5.27% to Rs 460. Brazil’s CSN had announced a higher bid at 515
pence per share for Corus. There are media reports that the company will invest Rs
450 crore for setting up an iron ore smelting plant in Thailand. The iron ore smelter
unit will be part of Millennium Steel, Tata Steel's Thai subsidiary. Tata Steel had also
hiked its offer for Corus to 500 pence per share, from the earlier 455 pence per
share. Reacting to the CSN bid, Tata Steel said Monday, it was considering its
position on Corus. Media speculates that Tata Steel may raise its bid to 550 pence
per Corus share, raising the price to over $10 billion, to trump Companhia
Siderurgica Nacional's (CSN) offer of 515 pence per share.
Reliance Communications gained 4.58% to Rs 466, on media reports that it is in talks
with three US private equity groups, for buying the India operations of Hutchison
Telecommunications International in a deal worth more than $14 billion.
ONGC lost 3.39% to Rs 812, on reports that its joint venture with Mittal group, is
close to signing an agreement for an oil block in Turkmenistan. Another report that
ONGC’s overseas investment arm proposes to undertake joint exploration and
production activities in Iraq with Reliance Industries (RIL), too, aided the recovery
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after a steep decline in the past four days. ONGC Mittal Energy (OMEL), the joint
venture between ONGC and Mittal group, is eyeing opportunities in Kazakhstan,
Azerbaijan and Indonesia, reports add.
Larsen & Toubro (L&T) rose 0.39% to Rs 1,454, after announcing that the company
won two major contracts of an aggregate value of $ 86 million from a leading Chinese
petrochemical company, Sinopec. It had also bagged a massive Rs 5,400 crore
contract from GMR Infrastructure, to design and construct the terminal and run-way
at New Delhi airport. Also L&T Infotech, the software and services arm of
construction major Larsen & Toubro, signed an agreement to acquire US-based GDA
Technologies, an electronics design services firm.
Diversified firm Grasim lost 0.15% to Rs 2,741. The company is reportedly said to be
buying a stake in Austrian cellulose-fibre maker Lenzing AG. The deal could help the
firm to get a foothold in the global viscose staple-fibre market, and will increase its
fibre production capacity by almost 4,53,000 tonnes. The deal is likely to be
completed during the current fiscal.
Budget airline SpiceJet advanced 6.33% to Rs 56.25, after Tata group on Monday
said it had picked up `less than 10% stake' as a purely financial investment.
In a surprise move, the RBI hiked cash reserve ratio (CRR) by 50 basis points after
trading hours on Friday (8 December). The RBI move fuelled expectations of rise in
lending and deposit rates by Indian banks. They are likely to take a final view on
raising interest rates on loans as well as deposits, by the end of this week, or early
next week.
India's wholesale price index rose 5.16% in the 12 months to 2 December 2006,
lower than the previous week's annual rise of 5.30% helped by a decline in food and
energy prices, data showed on Friday (15 December).
India's industrial production rose 6.2% in October from a year earlier, which was well
below market expectations, lower-than-expected manufacturing output being the
prime culprit for the slowdown. Output growth for September remained unchanged at
an annual 11.4% reported earlier. Manufacturing production, which represents more
than 75% of industrial output, rose 6.0% in October from a year earlier, compared
with 12.0% annual growth in September.
Meanwhile, the US Federal Reserve kept interest rates unchanged on Tuesday (12
December) for the fourth straight time, as worries about inflation continued to
overshadow concerns about the slowing economy. At its final meeting of 2006, Fed
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left its target for federal funds at 5.25%. The funds rate, the interest that banks
charge each other, has been at that level since June, when the Fed raised rates for
the 17th consecutive time in a two-year effort to combat rising inflation.
4
th
week ended on 15
th
December 2006
The market continued its journey downward, posting losses for the third straight
week.
The barometer index lost 142.78 points (1.05%) for the week ended Friday (22
December) at 13,471.74. The S&P CNX Nifty slipped 17.50 points (0.5%), to
3,871.15.
The 30-shares BSE Sensex gained 116.57 points, to 13,731.09, on 18 December, on
strong buying in index pivotal, especially for index heavyweight Reliance Industries
(RIL).
The BSE Sensex plunged 349.08-point on 19 December 2006, to 13,382.01, amid
high volatility following a sell-off across Asian emerging markets, sparked by a 10%
penalty imposed on foreign funds moving out Thailand within a year, by its central
bank.
The Sensex lost 41.80 points to 13,340.21 on 20 December following a mixed trend
in index pivotal.
The BSE Sensex settled with a gain of 44.65 points, at 13,384.86, as buying
resumed. On 22 December 2006, the BSE index gained 86.88 points, to 13,471.74,
as buying picked up in the fag end of the trading session.
PSU oil exploration major ONGC advanced 5.7% to Rs 869.There were reports of
huge gas finds in the Bay of Bengal, initial estimates suggesting reserves of about 21
trillion cubic feet.
Reliance Industries (RIL) advanced 1.5% to Rs 1,272. It has paid an advance tax of
Rs 444 crore for the third installment, taking its total remittance to Rs 1,102 crore,
compared to Rs 848 crore paid in the same period last year, reports said. Also, there
were reports that RIL is talking with the Russian government for permission to invest
in a refinery and petrochemical industry there. Unconfirmed reports suggested that
the company had acquired Orient Craft, a leading garment exporter.
Maruti Udyog rose 2.13% to Rs. 922.10, after the Cabinet Committee on Economic
Affairs (CCEA) approved the sale of the government's residual 10.2% stake.
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Japanese car giant Suzuki has a majority 54.2% stake in the company. The
government's stake in Maruti is valued at Rs. 2,800 crore.
PSU engineering major Bhel lost 8% to Rs 2,310. The scrip declined as it failed to
secure ceratin equipment orders for the upcoming ultra mega power projects. It also
bagged a Rs 165-crore order from IOC for setting up a power plant at the oil major's
Haldia refinery in West Bengal.
FMCG bigwig, ITC, slipped 2.90% to Rs 169.55, amid reports that it will expand fruit,
vegetable retail as well as the wholesale business by opening 54 new outlets in
select metros in the next three years. The company will target metropolitan cities for
these wholesale-cum-retail stores. Currently, there are 6,500 e-Choupal kiosks in
over 38,000 villages across nine states.
Telecom software firm, Tech Mahindra, jumped 46.36% to Rs 1,651. It had
announced signing of a five-year deal to provide BT with strategic sourcing services.
This contract is expected to generate in excess of $1 billion new revenue for Tech
Mahindra. The company will support BT’s planned growth of managed services to
business customers around the globe, while continuing ongoing services related to
BT’s internal systems, processes and re-usable platforms.
L.T. Overseas settled at a slight discount, at Rs 55, compared to its IPO price of Rs
56 per share on 18 December 2006. The stock listed on BSE at 7.14% premium, at
Rs 60, and hit an intra-day high of Rs 62.90. The intra-day low was Rs 51.
On 20 December 2006, Sobha Developers settled at premium at Rs 968.75 on BSE,
compared to its IPO price of Rs 640 per share. The scrip debuted at Rs 1,111.25 on
BSE and hit a high of Rs 1,179. Its low was Rs 918.10. Sobha Developers’ IPO was
subscribed over 100 times.
Ruchira Papers finished at a discount, at Rs 20.95 on BSE, compared to the IPO
price of Rs 23 per share on 20 December. The stock listed on BSE at 5.86%
premium, at Rs 24.35 per share, which was also its intra-day high. The stock dipped
to a low of Rs 20.65.
On 21 December, Great Offshore settled at Rs 727.05. Great Offshore came into
existence following a restructuring of GE Shipping, whereby the shipping firms’
offshore services business was transferred to a separate company.
Jindal Drilling & Industries settled at Rs 580 on BSE, on 22 December. Jindal
Drilling’s restructuring scheme involved the amalgamation of two group companies
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Newsco Newtech and Discovery Hydrocarbons with the company. It also involved
demerger of Jindal Drilling’s Casinvest division into Haryana Engineering.
India's wholesale price index rose 5.32% in the 12 months to 9 December, which is
higher than previous week's annual rise of 5.16% due to an increase in food prices.
The annual inflation rate was 4.39% during the corresponding week of the previous
year, data released on Friday showed.
Meanwhile, RBI on 15 December came out with new capital market exposure norms
for banks, which will come into force from April 2007. In terms of the new guidelines,
the exposure of a bank to the capital market cannot exceed 40% of its net worth as
on 31 March of the previous year.
5
th
week ended on 29
th
December 2006
The market rallied during the week, as buying for index pivotals resumed, after a
sharp fall on the back of a surprise hike in CRR announced on 8 December 2006,
after completion of trading.
The BSE Sensex advanced 315.17 points for the week ended Friday (29 December
2006) to 13,786.91, while the S&P CNX Nifty rose 95.25 to settle at 3,966.40.
The market was closed on 25 December 2006 on account of Christmas.
The Sensex surged 236.60 points on 26 December 2006, to settle at 13,708.34, on
strong buying in IT scrips anticipating robust December quarter results.
The Sensex gained a further 151.35 points to end at 13,859.69, on 27 December
2006, on account of short-covering ahead of the December futures contracts expiry
(28 December 2006).
On 28 December 2006, the BSE Sensex slipped 13.35 points to 13,846.34, amid
volatility at the close, due to expiry of December 2006 derivatives contracts.
The Sensex declined 59.43 points to 13,786.91, in late-trading on 29 December
2006, under selling pressure.
Infosys Technologies rose 3.27% to Rs 2,243, after it scheduled a board meeting on
11 January 2007, to consider Q3 December 2006 results. It is also believed to be in
talks with ten global banks for its banking software – Finacle. Reports speculate big
deals are likely to materialise in a couple of months. The company foresees big
opportunity in the software replacement market in the US and Europe, apart from
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plans to enter the Latin American market. The company announces its Q3 December
2006 results on 11 January 2007.
Reliance Industries (RIL) gained 0.43% to Rs 1,270. It is reportedly planning an
investment of Rs 5,000 crore for gassification of lignite in south Gujarat. The project
will be a joint venture between (RIL) and Gujarat Mineral Development Corporation
(GMDC). The private sector oil refiner is said to be negotiating with GMDC, and
scouting for lignite reserves in south Gujarat.
ITC jumped 4.87% to Rs 176.35, after the FMCG major said it had struck an agro-
alliance with Marubeni Corp, a Japanese trading house. Under the alliance, both
companies will consider joint exports of Indian-made soyabean cake and maize
grains for livestock feed, Marubeni said in a statement. The tie-up is aimed at
expanding the trade of food and other agricultural products between India and Japan.
Dr Reddy’s Lab gained 0.87% to Rs 811, after it received final approval from the U.S.
Food and Drug Administration for cholesterol-lowering simvastatin tablets.
Simvastatin is the generic equivalent of Merck & Co. Inc.'s blockbuster drug Zocor.
Reliance Communications (RCL) rose 0.48% to Rs 470.60. It is examining the
opportunity in mobile operator Hutchison Essar and a potential combination could
create compelling value for all shareholders. Chairman Anil Ambani also told a news
conference the company had received commitments from global bankers for financial
support for any potential bid. Ambani said there was no certainty on the timing of a
bid and declined to say how much the firm will offer, saying it will remain within a
conservative limit. Meanwhile, RCL plans to invest $1.5 billion to expand capacity of
its Flag Telecom submarine cable network.
State Bank of India rose 2.47% to Rs 1,245.35. It executed a 50 bps hike in prime
lending rate to 11.5% with immediate effect.
Indiabulls Financial Services surged 12.82% to Rs 652. The company announced 9
January 2007 as a record date for its demerged real estate business, now under
Indiabulls Real Estate (IREL). The stock will stay in the no-delivery period on BSE
from 2 January 2007 to 8 January 2007, for the demerger.
On 28 December 2006, Ess Dee Aluminium settled at a premium, at Rs 238.75,
compared to its IPO price of Rs 225 per share. The stock listed at Rs 260 on BSE.
XL Telecom settled at a discount, at Rs 136, compared to the issue price of Rs 150
per share. The stock listed at 18.06% premium, at Rs 177.10, on 28 December 2006.
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On 29 December 2006, Nissan Copper settled at a sharp 230.25% premium at Rs
128.80 on BSE on high total volumes of 6.11 crore shares. The shares were issued
at Rs 39 per share in the recently concluded IPO. The stock debuted at Rs 40 on
BSE and hit a high of Rs 135.70, and dipped to a low of Rs 40 for the day.
The Reserve Bank of India permitted foreign investment up to 49% in stock
exchanges, paving the way for New York Stock Exchange (NYSE) to expand into
Asia's best performer.
The Reserve Bank of India also said that foreigners could hold up to 49% in
depositories and clearing corporations.
Under the new rules, foreign direct investment will be limited at 26%, while foreign
portfolio investments will be capped at 23% in all such entities, the central bank said.
It, however, said portfolio investments will be allowed only through the secondary
market. The stock exchange also plans to list shares on its own trading floor.
Media reports indicate the New York Stock Exchange is eager to pick up a stake in
BSE.
The wholesale price index rose 5.43% in 12 months to 16 December, higher than the
previous week's annual rise of 5.32% due to an increase in manufactured product
prices, data showed on Friday (29 December). The annual inflation rate was 4.62%
during the corresponding week of the previous year.
The market has ended calendar 2006 on a strong note, with the Sensex gaining
46.7% to settle at 13,786.91, which a less than 200 points off its all-time closing high
of 13,972.03 of 7 December 2006. It had struck an all-time high of 14,035.30 on 6
December 2006. The S&P CNX Nifty gained 39.8% for the calendar year 2006. The
market settled with gains for the fifth straight year. Banking, telecom, IT and cement
shares hogged the limelight in 2006.
The Nikkei 225 index finished just 0.01% higher, at 17,225.83, on 29 December
2006. That marked its highest close since early-May. The benchmark ended 2005 at
16,111.43.
5.0 SENSEX MILSESTONES
The Sensex crossed the 1,000 mark on July 25, 1990; the 2,000 mark on January
15, 1992; the 3,000 mark on February 29, 1992; the 4,000 mark on March 30, 1992;
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the 5,000 mark on October 11, 1999; the 6,000 mark on January 2, 2004; the 7,000
mark on June 21, 2005; the 8,000 mark on September 8, 2005; the 9,000 mark on
December 09, 2005; and finally the historic 10,000 mark on February 7, 2006. It
created another landmark when it touched 11,000 on March 27, 2006. The Sensex
closed at a high of 12,903 on 28 Oct 2006. To reach from the 11,000 mark to the
12,000 mark only took 19 working days, the shortest time interval for a 1000 points
climb in BSE Sensex history, surpassing the just set record of 29 days that it took to
reach 11,000 from 10,000.
Here is a timeline on the rise and rise of the Sensex through Indian stock market
history.
1000, July 25, 1990 - On July 25, 1990, the Sensex touched the four-digit figure for
the first time and closed at 1,001 in the wake of a good monsoon and excellent
corporate results.
2000, January 15, 1992 - On January 15, 1992, the Sensex crossed the 2,000-mark
and closed at 2,020 followed by the liberal economic policy initiatives undertaken by
the then finance minister and current Prime Minister Dr Manmohan Singh.
3000, February 29, 1992 - On February 29, 1992, the Sensex surged past the 3000
mark in the wake of the market-friendly Budget announced by the then Finance
Minister, Dr Manmohan Singh.
4000, March 30, 1992 - On March 30, 1992, the Sensex crossed the 4,000-mark and
closed at 4,091 on the expectations of a liberal export-import policy. It was then that
the Harshad Mehta scam hit the markets and Sensex witnessed unabated selling.
5000, October 11, 1999 - On October 8, 1999, the Sensex crossed the 5,000-mark
as the BJP-led coalition won the majority in the 13th Lok Sabha election.
6000, February 11, 2000 - On February 11, 2000, the infotech boom helped the
Sensex to cross the 6,000-mark and hit and all time high of 6,006.
7000, June 21, 2005 - On June 20, 2005, the news of the settlement between the
Ambani brothers boosted investor sentiments and the scrips of RIL, Reliance Energy,
Reliance Capital and IPCL made huge gains. This helped the Sensex crossed 7,000
points for the first time.
8000, September 8, 2005 - On September 8, 2005, the Bombay Stock Exchange's
benchmark 30-share index -- the Sensex -- crossed the 8000 level following brisk
buying by foreign and domestic funds in early trading.
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9000, December 09, 2005 - The Sensex on November 28, 2005 crossed 9000 to
touch 9000.32 points during mid-session at the Bombay Stock Exchange on the back
of frantic buying spree by foreign institutional investors and well supported by local
operators as well as retail investors.
10,000, February 7, 2006 - The Sensex on February 6, 2006 touched 10,003 points
during mid-session. The Sensex finally closed above the 10K-mark on February 7,
2006.
11,000, March 27, 2006 - The Sensex on March 21, 2006 crossed 11,000 and
touched a life-time peak of 11,001 points during mid-session at the Bombay Stock
Exchange for the first time. However, it was on March 27, 2006 that the Sensex first
closed at over 11,000 points.
12,000, April 20, 2006 - The Sensex on April 20, 2006 crossed 12,000 and touched
a life-time peak of 12,004 points during mid-session at the Bombay Stock Exchange
for the first time.
13,000, October 30, 2006 - The Sensex on October 30, 2006 crossed 13,000 and
still riding high at the Bombay Stock Exchange for the first time. It took 135 days to
reach 13,000 from 12,000. And 124 days to reach 13,000 from 12,500. On 30th
October 2006 it touched a peak of 13,039.36 & closed at 13,024.26.
14,000, December 5, 2006 - The Sensex on December 5, 2006 crossed 14,000 and
touched a life-time peak of 14028 at 9.58AM(IST) while opening for the day
December 5, 2006.
On May 22, 2006, the Sensex plunged by a whopping 1100 points during intra-day
trading, leading to the suspension of trading for the first time since May 17, 2004.
The volatility of the Sensex had caused investors to lose Rs 6 lakh crore ($131
billion) within seven trading sessions. The Finance Minister of India, P.
Chidambaram, made an unscheduled press statement when trading was suspended
to assure investors that nothing was wrong with the fundamentals of the economy,
and advised retail investors to stay invested. When trading resumed after the
reassurances of the Reserve Bank of India and the Securities and Exchange Board
of India, the Sensex managed to move up 700 points, still 450 points in the red. This
is the largest ever intra-day crash (in points terms) in the history of the Sensex.
The Sensex eventually recovered from the volatility, and on October 16, 2006, the
Sensex closed at an all-time high of 12,928.18 with an intra-day high of 12,953.76.
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This was a result of increased confidence in the economy and reports that India's
manufacturing sector grew by 11.1% in August 2006.
6.0 FINDINGS
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After undertaking the indepth study of stock market and various financial markets, it
was found that the several events which had most affection in fluctuation of sensex
and nifty in particular month.
July 2006
• FMCG stocks rose following the advance of the monsoon.
• Cement shares edged higher on expectations of strong Q1 results.
• Mutual funds sold equities worth Rs. 101.97 crore.
• The metal index was the worst hit in the bearish market
August 2006
• FIIs invested to the tune of Rs 653.7 crore in the equity segment for the first
four days of the week.
• Auto shares advanced on expectations of strong sales in the current festival
season.
• Crude oil price declined sharply by about $ 4 a barrel during the week
following a truce in the Middle East that came into force from Monday (14
August).
• Metal shares turned volatile, tracking volatile metal prices on the London
Metal Exchange.
September 2006
• Bank shares extended their recent recovery.
• Metal stocks advanced as prices firmed up on the London Metal Exchange.
• SEBI, on Wednesday (13 September), made amendments in the SEBI
Foreign Institutional Investors (Second Amendment) Regulations 2006 to
treat overseas-registered or incorporated pension funds, mutual funds,
investment trusts, insurance companies, reinsurance companies, international
or multilateral agencies, foreign governmental agency or a foreign central
bank as an FII.
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October 2006
• The software outfit announced Q2 September 2006 results on Wednesday
(11 October 2006).
• Infosys has revised upwards its EPS and revenue growth guidance for FY
2007 (year ending 31 March 2007).
• For the first time in history, the Dow Jones Industrial finished above the
12,000 mark on Thursday.
November 2006
• Reserve Bank of India in its mid-term review of annual policy kept Reverse
Repo rate unchanged at 6%, while the Repo rate was raised by 25 basis
points to 7.25%.
• Bank rate was kept unchanged at 6% while the Cash Reserve Ratio (CRR)
was kept steady at 5%. The central bank also raised 2006/07 economic
growth forecast to "around 8%" from a previous 7.5-8% estimate.
• Airliners rose on reports that they are to raise airfares between 3 - 5%.
Reports also add that the number of low-priced tickets available on each flight
is also likely to be reduced as a cost-cutting measure
December 2006
• The domestic economy grew by 9.2% in the July-September quarter from a
year earlier, higher than market expectations of 8.90%.
• Oil & refinery stocks slipped after the government announced a cut in retail
prices of diesel and petrol by Re 1 and Rs. 2, respectively.
• The RBI hiked cash reserve ratio (CRR) by 50 basis points after trading hours
Friday (8 December). The RBI move fuelled expectations of rise in lending
and deposit rates by Indian banks
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7.0 CONCLUSIONS
India has been witness to a four-year up and down cycle in the stock markets. Since
1992, the Indian markets have peaked every fourth year and then dropped 35-45%
during the next three years. What is surprising though is that the Dalal Street has
bucked the trend this time around. Some of the major conclusions derived in the
study are as under.
ƒ Declaration of any financial result and other information of the company has
direct effect on its stock price.
ƒ News related to any political and economical affair has also the direct effect
on stock market.
In short, the following hypothesis have been tested and proved positive.
ƒ Any fluctuation in foreign market has more effect on Indian stock market
than that of domestic market.
ƒ In the given volatile economic conditions, the market is efficient to any
news and information.
At the end it is concluded that following are Major factors, which have generally
contributed to fall & rise in SENSEX & NIFTY:
1. US economic growth
2. Crude oil prices
3. Emerging market valuations
4. Foreign direct investment (FDI)
5. Capital spending
6. Equity supply
7. Government policy toward foreign firms
8. Politics
9. Domestic risk
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10. Foreign institutional investors (FII) withdrawals
11. US Fed interest rates
12. Indian industry growth
13. Budget 2006-07 and finance bill
14. Tax circular regarding transaction tax to FII.
8.0 RECOMMENDATIONS
After this study, I would like to give following recommendations, which can help to the
Investors, Brokers and SEBI and the policy makers in general.
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Investors
ƒ I would suggest that Long term Investors should not invest into panic market,
which led investors to erode their wealth.
ƒ It must be remembered that Long-term investors should go for frontline
stocks, which helps to keep their income regular and steady.
ƒ I would also suggest that Investors should take into consideration various
things before investing into scripts such as:
Long term growth prospect in company
1. Financial positions of company
2. Liquidity position
3. Dividend policy
4. Past performance of company
Brokers
1. Brokers should separate their portfolio from High Net worth Individuals (HNI).
2. Brokers should not exceed their trading limit in terms of upper and lower limit.
3. Brokers should not go for margin trading which results into defalcation to the
investors.
4. Brokers should go for margin trading where HNIs are major clients because of
reputation working with them to some extent.
SEBI
1. SEBI should come out with new regulation in context of circuit breakers.
2. SEBI should monitor HNI transactions in domestic as well as global market.
3. SEBI should issue regularly draft containing penalty details on defaulters to
keep market less speculative.
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9.0 BIBLIOGRAPHY
Magazines
1. Business week
2. Frontline
3. Business world
News papers
1. Business standard
2. Financial express
3. Economic times
4. Times of India
Websites
1. www.capitalmarket.com .
2. www.wikipedia.org
3. www.google.com
4. www.yahoofinance.com
5. www.moneycontrol.com
6. www.yahoofinance.com
7. www.galatime.com
8. www.indiaseekingalpha.com
9. www.sitebysite.com
10.www.skicapital.net
11.www.webindia.com
12.www.yeahindia.com
13.www.nseindia.com
14.www.bseindia.com
15.www.sebi.org
16.www.icicidirect.com
17.www.businessstandard.com
Reports and Journals
1. NSE journal
2. BSE journal

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