The week began with a sharp fall on Dalal Street. The indices tanked in line with global markets. The Nifty just about managed to hold on to the 5,000 mark, ending the session at 5,034, down 101 points. The Sensex shut shop at 16,781, down 336 points. The advance-decline was expectedly poor at 1:4.
Will Nifty revisit 4,800?
Nischal Maheshwari, Head of Research, Edelweiss, is not sure if the Nifty will re-test 4,800 levels in June or July. But he is confident that the markets will remain volatile for the next 3-6 months. "This is a kind of situation we had seen in the US, a similar kind of situation is there is Europe today. If a Hungary kind of a situation happens, it will create panic among the market and that could be fuel to see the market going around to even 4700-4800 levels."
Sell is Technical Analyst Ashwani Gujral call. "The markets may go down slowly or may go down in a fast manner. But 5,150-5,200 is sort of becoming a ceiling because bull markets are based on confidence and conviction. They are not based on headline risk and people feeling uneasy about what could happen overnight. Today, the Nifty has held 5,000 but we will have to see for how long."
But Apurva Shah of Prabhudas Lilladher expects the markets to trade rangebound in June. "The markets are likely to move somewhere around these levels itself. I do not see any major gains from the market in the coming weeks. I do not see any major buying emerging over the next 30-45 days."
Global cues may hurt markets going forward, said Vibhav Kapoor of IL&FS. "We saw a very good bounceback from 4800, which is the bottom end of the range, last week and have had a good recovery after that. As of now that range of 4850-5400 stands. At the same time, the global situation is getting a little bit more nervous than it was earlier. So if there is a global meltdown, then there's always the risk of this range breaking on the downside. I would say the chances of that have increased a little bit over the past few weeks. But till that range breaks or does not break, you are still in that 4,800-5,400 band."
Will 2010 be a year of consolidation for markets?
Will weak global cues break the back of Indian markets or will the indices show resilience? Jyotivardhan Jaipuria of DSP Merrill Lynch sees the markets consolidating in 2010. "We had a great rally last year and this year we are going to really do nothing much on the index, probably just move around in a narrow range, which is good for the market in the longer-term. We will be in one of the narrowest ranges we have had for the market in a long time. The move this year has been just 2,000 points or something."
Nilesh Shah, Deputy MD, ICICI Prudential AMC, sees overseas inflows continuing over the next couple of months. "We have a fairly large variety of offshore investors. During this entire downfall, the strength and the stability which exchange traded funds (ETFs) have provided has actually surprised me. Some of the long-only investors are actually looking at corrections to buy. At every dip, they are seen accumulating stocks. So except for momentum or hedge funds, which badly have to redeem because of redemption or market calls, we will actually end up seeing quality investment coming in the next couple of months."
Monday, June 7, 2010
The most expensive pharma deal ever-www.moneycontrol.com
It took four hours for Ajay Piramal to negotiate a whopping USD 3.7 billion valuation for his generics business with Abbott. Just how did he pull it off?
The secret rendezvous was set at a hotel in Dubai early this year. Ajay Piramal, the chairman of Piramal Healthcare, India’s fifth largest pharmaceutical company, and his daughter Nandini had a two-hour meeting lined up at this carefully chosen neutral location. They met up with Miles White, chairman of USD 30 billion Abbott Laboratories, the world’s seventh largest drug maker. A couple of weeks later, the Piramals met another senior Abbott executive Olivier Bohuon, executive vice president pharmaceuticalbusiness for a couple of hours. During his meeting with White, Piramal handed over a succinct three page note detailing his basis for the valuation. White would have to revert within a week, if the deal was to be consummated. Eventually, White did get back, and offered nearly as much as Piramal had asked for.
Today, most pharma industry watchers would die to get hold of a copy of that note. After all, it formed the basis for the Rs 17,500 crore deal that Piramal clinched for abusiness that he had started 22 years ago with a capital of just Rs 16.5 crore. This isn’t quite the biggest deal in the Indian pharmaceutical industry. In 2008, Japanese firm Dai Ichi paid USD 4.6 billion for a 50% stake in Delhi-based Ranbaxy Laboratories, India’s largestpharmaceutical company . Yet the valuations would make it one of the most expensive, especially for a firm like Piramal which sells inexpensive, off patent drugs (also called generics). Abbott will eventually pay Piramal nine times the current sales, 60 % more than what the Delhi-based Singh brothers — Malvinder and Shivinder — got for selling their stake in Ranbaxy.
Piramal did not rely on any advisors or investment bankers. He says that he arrived at the deal valuation after a few discussions with his daughter Nandini, who is now an executive director in the company. “It took about four hours of my time to negotiate the deal,” says Piramal. Only two executives from Piramal’s side assisted Abbott’s team in conducting their due diligence over a couple of weeks.
Despite the huge premium it is paying, there are, of course, quite a few advantages for Abbott. It will get total control of Piramal’s domestic drug sales business, plus a factory in Baddi, Himachal Pradesh, that manufactures these products. Unlike Ranbaxy, Abbott won’t need to go through any stock market related regulatory issues since it is just buying a business division and not a listed company. And the icing on the cake: Abbott will become India’s No.1 domestic company beating rivals like GlaxoSmithkline and Cipla. There’s little doubt that the deal will now force global pharma companies like Sanofi-Aventis, Glaxosmithkline and Pfizer, who are looking to expand their Indian foot print, to pay a lot more for local assets.
Even a year ago, Piramal says he had no intention to sell off the business. Pressure from the multinationals was gradually mounting. He had met up CEOs of global drug majors, including Abbott’s White, who had shown interest in striking a deal with Piramal earlier too. It was only late last year that Piramal started having a second thoughts about running his domestic pharmaceutical business.
Last year was also when MNC pharma firms like Pfizer inked the most number of deals with Indian firms for partnerships in manufacturing and research. Says an executive who works closely with Piramal, who did not wish to be named: “Piramal felt that just like it made sound sense to get into the business when MNCs were winding down their presence in India in the 1980s, it will be a good idea to quit the business when they are coming back.”
To recap, when Piramal inherited the family textile business in the eighties, labour trouble and increasing costs had already scuppered any chances of growth. As Piramal searched for new business opportunities, he zeroed in on pharma, convinced that there would be a shortage in primary healthcare services in India. Incidentally, Piramal’s wife, Swati, is a medical practitioner who sits on the board of Piramal Healthcare.
Since there was no patent protection in India, which allowed local companies to copy and sell their drugs cheaply in the country, MNCs increasingly found the going tough. In the late 1980s, instead of creating a business from scratch, Piramal starting buying multinational companies that were exiting the country at that time. His peers didn’t see it quite the same way: They felt MNC talent was far too expensive. Piramal landed some plum deals, capitalising on the desperation of the MNCs to exit the country. In the initial deals, Piramal made sure that he kept his promise that he would retain the people he inherited through thhe acquisition. So as word got around, more MNCs decided to sell their businesses and brands to him.
Piramal also stayed away from copying and selling the drugs sold by multinationals. He also consciously kept away from selling generic drugs in regulated markets, as it meant litigating with MNCs against their patents. Says a former CEO of a Piramal group company: “Piramal always laid a great emphasis on amicability. He kept away from confrontations.”
This time around, when Abbott again proposed a deal, Piramal picked up the gauntlet. Says Piramal: “I thought I would see where the discussion led us to.” If things didn’t go to plan, he would merely pull out of the discussions.
From his vantage point observatory, Piramal could sense the growing buzz about emerging economies. Every major MNC was looking to increase their presence in these markets. Companies like AstraZeneca and Roche have been investing in China in the last five years but none of them had made big moves for India yet. There was a lot riding on the potential of emerging markets, perhaps with reason too. Drug demand was expected to rise on an average 15 percent a year in emerging markets through 2014
He had a clear logic in justifying a higher valuation than Ranbaxy. Says Piramal: “Since we had a pure domestic play on offer, we knew that our valuations should be substantially more than Ranbaxy.” This wasn’t entirely unfounded. The domestic branded generic business is by far the most profitable segment for Indian firms and it is natural that will command a higher valuation, says Manoj Garg, pharma analyst at broking firm Emkay Global Financial Services. Piramal and his daughter Nandini, 28, also did a few simple extrapolations of where theirdomestic business would be headed in the next three to five years. Nandini, an Oxford and Stanford business graduate, was inducted into Piramal Healthcare’s board as executive director in April 2009.
Piramal’s business was already growing at close to 25% in the past couple of years and it had steadily climbed to the No. 5 spot in the Indian market. Piramal erred on the side of caution and pegged the growth at 20%. But he factored in a substantial premium for the scale of thedomestic operations. “There are few businesses of our size available in the domestic market and that too organised in clear business division like MNCs,” says Piramal. So far, Cipla, Sun Pharmaceuticals and Zydus Cadila, who were in the same league as Piramal, had publicly declared that they weren’t interested in selling their business. “At least during my lifetime I won’t sell Cipla as I wouldn’t know how to use up all that money,” says Dr Y.K. Hamied, chairman and managing director of Cipla.
Piramal also knew that Abbott quickly needed a presence in India. Says analyst Nimish Mehta of Mehta Partners: “The trick was perhaps in choosing a buyer who was desperate to have a bigger say in thedomestic Indian market.” Way back in 2001, Abbott had built its strategy around established products. In 2007, it formed a new international unit to focus on the BRIC markets, where competitors like Pfizer and AstraZeneca were striking deals with local players.
Piramal hopes to use the money for three broad purposes. He will invest more money in his existing healthcare businesses as he feels that they have great potential for growth. He has also identified two new business areas, which he will announce in due course. He also plans to reward his shareholders with a special one-time dividend. “I have a few ideas for new business initiatives, but I don’t want to do any kite flying now,” says
The secret rendezvous was set at a hotel in Dubai early this year. Ajay Piramal, the chairman of Piramal Healthcare, India’s fifth largest pharmaceutical company, and his daughter Nandini had a two-hour meeting lined up at this carefully chosen neutral location. They met up with Miles White, chairman of USD 30 billion Abbott Laboratories, the world’s seventh largest drug maker. A couple of weeks later, the Piramals met another senior Abbott executive Olivier Bohuon, executive vice president pharmaceuticalbusiness for a couple of hours. During his meeting with White, Piramal handed over a succinct three page note detailing his basis for the valuation. White would have to revert within a week, if the deal was to be consummated. Eventually, White did get back, and offered nearly as much as Piramal had asked for.
Today, most pharma industry watchers would die to get hold of a copy of that note. After all, it formed the basis for the Rs 17,500 crore deal that Piramal clinched for abusiness that he had started 22 years ago with a capital of just Rs 16.5 crore. This isn’t quite the biggest deal in the Indian pharmaceutical industry. In 2008, Japanese firm Dai Ichi paid USD 4.6 billion for a 50% stake in Delhi-based Ranbaxy Laboratories, India’s largestpharmaceutical company . Yet the valuations would make it one of the most expensive, especially for a firm like Piramal which sells inexpensive, off patent drugs (also called generics). Abbott will eventually pay Piramal nine times the current sales, 60 % more than what the Delhi-based Singh brothers — Malvinder and Shivinder — got for selling their stake in Ranbaxy.
Piramal did not rely on any advisors or investment bankers. He says that he arrived at the deal valuation after a few discussions with his daughter Nandini, who is now an executive director in the company. “It took about four hours of my time to negotiate the deal,” says Piramal. Only two executives from Piramal’s side assisted Abbott’s team in conducting their due diligence over a couple of weeks.
Despite the huge premium it is paying, there are, of course, quite a few advantages for Abbott. It will get total control of Piramal’s domestic drug sales business, plus a factory in Baddi, Himachal Pradesh, that manufactures these products. Unlike Ranbaxy, Abbott won’t need to go through any stock market related regulatory issues since it is just buying a business division and not a listed company. And the icing on the cake: Abbott will become India’s No.1 domestic company beating rivals like GlaxoSmithkline and Cipla. There’s little doubt that the deal will now force global pharma companies like Sanofi-Aventis, Glaxosmithkline and Pfizer, who are looking to expand their Indian foot print, to pay a lot more for local assets.
Even a year ago, Piramal says he had no intention to sell off the business. Pressure from the multinationals was gradually mounting. He had met up CEOs of global drug majors, including Abbott’s White, who had shown interest in striking a deal with Piramal earlier too. It was only late last year that Piramal started having a second thoughts about running his domestic pharmaceutical business.
Last year was also when MNC pharma firms like Pfizer inked the most number of deals with Indian firms for partnerships in manufacturing and research. Says an executive who works closely with Piramal, who did not wish to be named: “Piramal felt that just like it made sound sense to get into the business when MNCs were winding down their presence in India in the 1980s, it will be a good idea to quit the business when they are coming back.”
To recap, when Piramal inherited the family textile business in the eighties, labour trouble and increasing costs had already scuppered any chances of growth. As Piramal searched for new business opportunities, he zeroed in on pharma, convinced that there would be a shortage in primary healthcare services in India. Incidentally, Piramal’s wife, Swati, is a medical practitioner who sits on the board of Piramal Healthcare.
Since there was no patent protection in India, which allowed local companies to copy and sell their drugs cheaply in the country, MNCs increasingly found the going tough. In the late 1980s, instead of creating a business from scratch, Piramal starting buying multinational companies that were exiting the country at that time. His peers didn’t see it quite the same way: They felt MNC talent was far too expensive. Piramal landed some plum deals, capitalising on the desperation of the MNCs to exit the country. In the initial deals, Piramal made sure that he kept his promise that he would retain the people he inherited through thhe acquisition. So as word got around, more MNCs decided to sell their businesses and brands to him.
Piramal also stayed away from copying and selling the drugs sold by multinationals. He also consciously kept away from selling generic drugs in regulated markets, as it meant litigating with MNCs against their patents. Says a former CEO of a Piramal group company: “Piramal always laid a great emphasis on amicability. He kept away from confrontations.”
This time around, when Abbott again proposed a deal, Piramal picked up the gauntlet. Says Piramal: “I thought I would see where the discussion led us to.” If things didn’t go to plan, he would merely pull out of the discussions.
From his vantage point observatory, Piramal could sense the growing buzz about emerging economies. Every major MNC was looking to increase their presence in these markets. Companies like AstraZeneca and Roche have been investing in China in the last five years but none of them had made big moves for India yet. There was a lot riding on the potential of emerging markets, perhaps with reason too. Drug demand was expected to rise on an average 15 percent a year in emerging markets through 2014
He had a clear logic in justifying a higher valuation than Ranbaxy. Says Piramal: “Since we had a pure domestic play on offer, we knew that our valuations should be substantially more than Ranbaxy.” This wasn’t entirely unfounded. The domestic branded generic business is by far the most profitable segment for Indian firms and it is natural that will command a higher valuation, says Manoj Garg, pharma analyst at broking firm Emkay Global Financial Services. Piramal and his daughter Nandini, 28, also did a few simple extrapolations of where theirdomestic business would be headed in the next three to five years. Nandini, an Oxford and Stanford business graduate, was inducted into Piramal Healthcare’s board as executive director in April 2009.
Piramal’s business was already growing at close to 25% in the past couple of years and it had steadily climbed to the No. 5 spot in the Indian market. Piramal erred on the side of caution and pegged the growth at 20%. But he factored in a substantial premium for the scale of thedomestic operations. “There are few businesses of our size available in the domestic market and that too organised in clear business division like MNCs,” says Piramal. So far, Cipla, Sun Pharmaceuticals and Zydus Cadila, who were in the same league as Piramal, had publicly declared that they weren’t interested in selling their business. “At least during my lifetime I won’t sell Cipla as I wouldn’t know how to use up all that money,” says Dr Y.K. Hamied, chairman and managing director of Cipla.
Piramal also knew that Abbott quickly needed a presence in India. Says analyst Nimish Mehta of Mehta Partners: “The trick was perhaps in choosing a buyer who was desperate to have a bigger say in thedomestic Indian market.” Way back in 2001, Abbott had built its strategy around established products. In 2007, it formed a new international unit to focus on the BRIC markets, where competitors like Pfizer and AstraZeneca were striking deals with local players.
Piramal hopes to use the money for three broad purposes. He will invest more money in his existing healthcare businesses as he feels that they have great potential for growth. He has also identified two new business areas, which he will announce in due course. He also plans to reward his shareholders with a special one-time dividend. “I have a few ideas for new business initiatives, but I don’t want to do any kite flying now,” says
Sunday, June 6, 2010
Friday, June 4, 2010
Nifty closes higher for 3rd consecutive day; SBI, ITC lead
he benchmark Nifty closed higher the for third consecutive day on positive European cues. The indices were consolidated in the first half of trade due to lack of Asian and US cues while in the second half of trade, they strengthened on European cues.
Financial (barring HDFC Bank), telecom (was loser in first half of trade), FMCG, auto and select technology companies' shares helped the Nifty to stay above 5100 and the Sensex above 17100 levels. However, selling in metal companies' shares along with ONGC, HDFC Bank, BHEL, Ambuja Cements, Kotak Mahindra Bank, Tata Power and Unitech capped the gains.
Portfolio Manager PN Vijay said the Nifty would trade in the 5,200-5,250 range. “We are seeing the unwinding of very big short positions that had been taken in the market in the last two weeks. With volatility coming down a wee bit globally, these shorts have to be covered because they have extremely high positions. That would take this market probably back to a base level or a normal level on fundamentals of about probably 5,200 or 5,250.”
http://www.moneycontrol.com/news/local-markets/nifty-closes-higher-for-3rd-consecutive-day-sbi-itc-lead_462198.html
Indices fell once in the last eight sessions and closed this week around 1.5% higher. Sanjay Shah, MD and Co-Head, Institutional Equity, India, Morgan Stanley said that they were bullish on the Indian outlook.
Shah said that confidence in India was boosted by the macro story while more inflow of funds from both domestic and overseas investors was likely to continue till the global economy improves. India had already seen an overseas flow of USD 14 million in the last six to eight months while an additional USD 4 million had come in as domestic funds via insurance companies and mutual funds.
The 30-share BSE Sensex closed at 17,117.69, up 95.36 points or 0.56% and the 50-share NSE Nifty rose 25 points or 0.49% to settle at 5135.50. However, the Nifty June future ended at 19 points discount, as per provisional data.
The Reserve Bank of India (RBI) has given India's largest bank State Bank of India (SBI) a year's extension to meet the 70% provision coverage ratio, sources told CNBC-TV18. CNBC-TV18 learns India's largest public sector bank is now required to meet its provision coverage ratio of 70% by September 2011. Shares of the bank gained 2.34%.
Among the other financial stocks, ICICI Bank was up 1.4% and PNB was up 1.1%. HDFC, IDFC, Axis Bank and Reliance Capital gained 0.25-0.9%. However, HDFC Bank fell 1%.
HUL from FMCG space rose 1.9% as the company will consider buyback on June 11 and ITC went up 1.9%.
Telecom companies' shares, which were losers in the first half of trade, continued their rally for the third consecutive day. Bharti Airtel was up 1%, Reliance Communications up 2.3% and Idea Cellular went up 0.45%.
Auto shares remained on buyers' radar today as well. Maruti Suzuki was up 2.5%, as the company is going to launch new small car with 1 litre engine. Hero Honda, Tata Motors and M&M gained 0.4-0.85%.
Cairn India from oil & gas space rose 3% while ONGC was down 1.76% and GAIL down 0.2%. Reliance Industries and BPCL were flat.
DLF from realty segment went up 1.2% while Unitech declined 0.56%. L&T and Siemens from capital goods space gained over 0.3% while BHEL fell 0.5%.
In the metal pack, SAIL, Jindal Steel and Sterlite Industries went down 0.5-0.8% while Hindalco gained 1.1% post numbers. Hindalco reported consolidated net profit of Rs 3,925 crore, a growth of 709.28% on year-on-year basis. Its derivatives gain stood at Rs 2,736 crore in FY10 as against Rs 2,381 crore loss at Novelis, a US-subsidiary of Hindalco.
In the midcap space, Puravankara Projects, TVS Motor, HT Media, Dish TV India and Welspun Corp were up 5-7% while Redington, Mahindra Holiday, Core Projects, Marico and Apollo Tyres fell 3-3.7%.
In the smallcap space, PVR, INOX Leisure, Sonata, GeeCee Ventures and Swaraj Mazda gained 7.6-13% while Electrotherm, Kanani Industries, Parenteral Drug, Maharashtra Elektrosmelt and Timex Group declined 4-7%.
The market breadth was mixed; about 1534 shares advanced while 1550 shares declined on the BSE. Nearly 220 shares remained unchanged.
The markets reported total turnover of Rs 78,954.64 crore. This included Rs 11,282.48 crore from the NSE cash segment, Rs 64,139.82 crore from the NSE F&O and the balance Rs 3,532.34 crore from the BSE cash segment.
At 14:52 hours IST, the 30-share BSE Sensex was trading over the 17,100 level, with a 100 points gains. Positive European cues and buying interest in banking & financial, FMCG, realty, telecom, auto and select metal companies' shares were helping the markets. European markets like CAC, DAX and FTSE went up 0.6-1%.
However, select stocks like ONGC, HDFC Bank, BHEL, Jindal Steel, GAIL, Sterlite, Ambuja Cements, Tata Power and Reliance Power were the only losers in trade.
The Sensex was trading at 17117, up 95 points and the Nifty was at 5135, up 25 points. However, the Nifty future was trading at 13 points discount.
SBI was the top gainer as well as top traded counter on bourses today, gained 2.51%. RBI gave the bank one-year extension to meet 70% Provision Coverage Ratio (PCR), reports CNBC-TV18 quoting sources. CNBC-TV18 learns that SBI will now meet PCR of 70% by September 2011.
Other top gainers - Cairn India was trading at Rs 298.70, up 2.42%; HUL was at Rs 252.85, up 2.35%; Maruti Suzuki was at Rs 1,323, up 2.02%; ITC was at Rs 290.90, up 1.89% and DLF was at Rs 283.50, up 2.11%.
Aditya Birla group's flagship company Hindalco Industries has reported consolidated net profit of Rs 3,925 crore as against Rs 485 crore, a growth of 709.28% (YoY), on derivatives gain of Rs 2,736 crore as against Rs 2,381 crore loss at Novelis, a US-subsidiary of Hindalco. The stock gained 1.1%.
Tata Steel, Reliance Communications, Educomp Solutions, Sesa Goa, Reliance Industries and ONGC were the most active shares on bourses.
Sensex strengthens on European cues; SBI leads
At 13:40 hours IST, after a consolidation in the first half of trade, the benchmark Sensex strengthened and gained nearly 100 points following positive European cues. CAC, DAX and FTSE were up 0.7-0.85%.
Financial (barring HDFC Bank), technology, FMCG, auto, healthcare and realty companies' shares were helping the markets to trade higher. ACC and Reliance Industries were other gainers.
However, telecom and metal companies' shares along with ONGC, HDFC Bank and BHEL were putting some pressure and continued to aid volatility.
The Sensex was trading at 17107, up 85 points and the Nifty was at 5135, up 25 points. The Nifty June futures' discount also trimmed to 11 points from 16-20 points.
Shares of India's largest bank SBI, today's top traded counter, gained over 2% after RBI gave the bank one-year extension to meet 70% Provision Coverage Ratio (PCR), reports CNBC-TV18 quoting sources. CNBC-TV18 learns that SBI will now meet PCR of 70% by September 2011.
Tata Steel, Sesa Goa, Reliance Capital, Reliance Communications, Reliance Industries, ONGC and Tata Motors were other most active shares on bourses.
In the midcap space, Man Infra, Dish TV India, Gujarat Flourochem, Welspun Corp (bagged order worth Rs 700 crore) and TVS Motor went up 4-7.8%. However, Apollo Tyres, Bajaj Finserv, Educomp Solutions, Redington and Trent fell 2-3%.
In the smallcap space, GeeCee Ventures, Phillips Carbon, Man Industries, Dhampur Sugar and Zandu Realty gained 6-10.7% while Electrotherm, Shristi Infra, Kanani Industries, Maharashtra Ele and Intra Infotech lost 4.7-5.7%.
Nifty lacklustre; ITC, ICICI Bank, HUL, Cairn top gainers
At 12:10 hours IST - the 50-share NSE Nifty was completely lacklustre in trade and was hovering around its previous closing value. On the one side, shares of telecom, metal, capital goods, technology and realty companies were pulling the markets down.
However, FMCG, financial (barring HDFC Bank) and healthcare companies' shares were supporting the markets. Cairn, ACC and Jaiprakash Associates were other gainers. Auto and power sectors were mixed in trade.
Lack of global cues was another reason for today's consolidation. Asian markets were quiet in trade.
The Sensex was trading at 17013, down 9.5 points and the Nifty was at 5109, down 0.85 points. The Nifty June future was trading at 17 points discount.
Top gainers - HUL was trading at Rs 251.75, up 1.90%; Reliance Capital was at Rs 684, up 1.63%; Cairn India was at Rs 296.25, up 1.58%; ITC was at Rs 289.95, up 1.56%; Hero Honda was at Rs 2,001.90, up 1.13%; ICICI Bank was at Rs 862.10, up 1.10%; Maruti Suzuki was at Rs 1,309.25, up 0.96% and ACC was at Rs 849.30, up 0.83%.
Top losers - Sterlite Industries was trading at Rs 639.30, up 1.91%; Reliance Communications was at Rs 161.95, up 1.73%; Ambuja Cements was at Rs 112.60, up 1.4%; BPCL was at Rs 572, up 1.36%; Reliance Power was at Rs 159.50, up 1.3%; M&M was at Rs 574.85, up 1.36%; Tata Power was at Rs 1,233, up 1.11% and Hindalco was at Rs 144.55, up 1.03%.
Top percentage gainers - Karur KCP was locked at 20% upper circuit. ANG Auto, GeeCee Ventures, EuroMult, Donear Industries and Integ Fin Ser were up 12-18%.
Sensex trades in narrow range; telecom, metals dip
At 10:41 hours IST, the benchmark Sensex was trading in a narrow range of 16970-17050, while the Nifty was hovering around the 5100 level. Telecom, technology, capital goods, power, metal and realty companies' shares were under pressure. HDFC Bank and Reliance Industries were also in the red.
However, FMCG, healthcare, select financial and auto companies' shares were witnessing buying interest and capped the losses to some extent. Public sector undertakings like ONGC, GAIL, BPCL and Chennai Petroleum were up 0.4-0.6% ahead of meeting on deregulation of oil prices. HPCL, IOC and Oil India gained 1.5-2.2%.
The Empowered Group of Ministers headed by Finance Minister Pranab Mukherjee is scheduled to meet on June 7, 2010 to discuss deregulation of fuel prices. The panel would take into account the recommendations put forth by the Kirit Parikh Committee on the issue.
Optimistic about significant measures being taken in the June 7 meet, Kirit Parikh, Member of the Planning Commission said he was hopeful that both petrol and diesel would be freed. “The government can free diesel prices and cut excise. But raising price without freeing it will not be of much gain. Also, hiking prices of LPG will not happen if petrol is freed without excise cuts,” he said, adding that the consumers could bear hike in LPG prices.
The Sensex was trading at 16980, down 42 points and the Nifty was at 5093, down 13 points. The Nifty June future was trading at 16 points discount.
HUL rose 1.5% as the company will consider buyback in a board meeting on June 11.
Tata Steel, Colgate, Sesa Goa, Havells India, SBI, ICICI Bank and Reliance Communications were the most active shares on bourses.
In the midcap space, Gujarat Flourochem, Syndicate Bank, TV18, IOB and IBN18 Broadcast gained 3-5.5% while Educomp Solutions, Indiabulls Real, Deccan Chronicle, Sintex India and Apollo Tyres lost 2-3.5%.
In the smallcap space, GeeCee Ventures, Phillips Carbon, Dhampur Sugar, Sonata and Transformers went up 6.6-13.4% while Electrotherm, Kanani Industries, Panoramic Universal, Maharashtra Ele and EIH Associated Hotel declined 4.6-6%.
Nifty hovers around 5100; PSU oil cos on buyers' radar
The benchmark Nifty started the day on a quiet note due to lack of global cues. The markets were consolidating after recent run-up.
At 9:02 hours IST, the Sensex was trading at 17001, down 20 points and the Nifty was at 5101, down 8.75 points.
The CNX Midcap fell 6 points to 7842 while BSE Smallcap Index gained 7 points at 8634. About 349 shares advanced while 305 shares declined on the NSE.
Among the frontliners, HUL ralied 3%. The company will consider buyback on June 11.
There were reports that government gave ONGC and OIL freedom to price gas. BPCL, ONGC, Cairn and GAIL went up 1% each. Oil India rose 2%.
Hero Honda, Reliance Power, HCL Tech, Axis Bank, ICICI Bank, ACC,
However, Reliance Communication, Sterlite India, Hindalco, Tata Steel, Suzlon Energy, Bharti Airtel, DLF, Jindal Steel & Power, Idea Cellular and Sterlite Industries were under pressure.
Midcap & Smallcap space:
Rana Sugars was up 3% and Shree Renuka up 1%. Lakshmi Vilas Bank, UCO Bank and Yes Bank were in green.
Howver, Sesa Goa and Gujarat NRE Coke were down 1.5% each.
Havells lost 0.65% on profit booking.
Godrej Consumer was down 0.5%, as there were reports that the company is looking to raise Rs 600 crore.
Global cues:
Asian markets were quiet in trade.
The US markets ended flat amid volatile trade and economic data. Large-cap technology stocks showed strength.
The Dow Jones Industrial Average ended up 6 points at 10255, after seeing swing of 140 points during the day.
The Nasdaq ended up 22 points at 2303, after witnessing swing of 33 points during the day. The S&P 500 ended up 4.5 points at 1103, after seeing swing of 13 points during the day.
Commodities
Crude oil was up 2.4% at USD 74.61 a barrel.
Crude oil inventories for the week ended May 28 had a draw of 1.90 million barrels against no change.
Natural Gas was up 5.9% at USD 4.69 per MMBtu.
Gold was down 1% at USD 1210/ounce.
Silver was down 2.5% at USD 17.86/ounce.
Baltic Dry Index fell 2.7%.
Market cues:
FIIs were net sellers of USD 27 million in equities on June 2
NSE F&O Open Int was up Rs 4937 crore at Rs 1.17 lakh crore
As per provisional data of June 3, FIIs were net buyers of Rs 406 crore; DIIs were net buyers of Rs 79 crore in cash markets. FIIs were net buyers of Rs 2,150 crore in F&O.
F&O cues:
Futures Open Int up Rs 1147 crore
Options Open Int up Rs 3789 crore
Nifty Futures shed 2.7 lakh shares in Open Int
Nifty Futures at 14-point discount
Nifty Open Int PCR at 1.35 versus 1.30
Nifty Puts add 51 lakh shares in Open Int
Nifty Calls add 17 lakh shares in Open Int
Nifty 5000 Put adds 18 lakh shares in Open Int
Nifty 5100 Put adds 18 lakh shares in Open Int
Nifty 5200 Call adds 5.7 lakh shares in Open Int
Nifty 5300 Call adds 5.3 lakh shares in Open Int
Stock Futures add 1 cr shares in Open Int
Financial (barring HDFC Bank), telecom (was loser in first half of trade), FMCG, auto and select technology companies' shares helped the Nifty to stay above 5100 and the Sensex above 17100 levels. However, selling in metal companies' shares along with ONGC, HDFC Bank, BHEL, Ambuja Cements, Kotak Mahindra Bank, Tata Power and Unitech capped the gains.
Portfolio Manager PN Vijay said the Nifty would trade in the 5,200-5,250 range. “We are seeing the unwinding of very big short positions that had been taken in the market in the last two weeks. With volatility coming down a wee bit globally, these shorts have to be covered because they have extremely high positions. That would take this market probably back to a base level or a normal level on fundamentals of about probably 5,200 or 5,250.”
http://www.moneycontrol.com/news/local-markets/nifty-closes-higher-for-3rd-consecutive-day-sbi-itc-lead_462198.html
Indices fell once in the last eight sessions and closed this week around 1.5% higher. Sanjay Shah, MD and Co-Head, Institutional Equity, India, Morgan Stanley said that they were bullish on the Indian outlook.
Shah said that confidence in India was boosted by the macro story while more inflow of funds from both domestic and overseas investors was likely to continue till the global economy improves. India had already seen an overseas flow of USD 14 million in the last six to eight months while an additional USD 4 million had come in as domestic funds via insurance companies and mutual funds.
The 30-share BSE Sensex closed at 17,117.69, up 95.36 points or 0.56% and the 50-share NSE Nifty rose 25 points or 0.49% to settle at 5135.50. However, the Nifty June future ended at 19 points discount, as per provisional data.
The Reserve Bank of India (RBI) has given India's largest bank State Bank of India (SBI) a year's extension to meet the 70% provision coverage ratio, sources told CNBC-TV18. CNBC-TV18 learns India's largest public sector bank is now required to meet its provision coverage ratio of 70% by September 2011. Shares of the bank gained 2.34%.
Among the other financial stocks, ICICI Bank was up 1.4% and PNB was up 1.1%. HDFC, IDFC, Axis Bank and Reliance Capital gained 0.25-0.9%. However, HDFC Bank fell 1%.
HUL from FMCG space rose 1.9% as the company will consider buyback on June 11 and ITC went up 1.9%.
Telecom companies' shares, which were losers in the first half of trade, continued their rally for the third consecutive day. Bharti Airtel was up 1%, Reliance Communications up 2.3% and Idea Cellular went up 0.45%.
Auto shares remained on buyers' radar today as well. Maruti Suzuki was up 2.5%, as the company is going to launch new small car with 1 litre engine. Hero Honda, Tata Motors and M&M gained 0.4-0.85%.
Cairn India from oil & gas space rose 3% while ONGC was down 1.76% and GAIL down 0.2%. Reliance Industries and BPCL were flat.
DLF from realty segment went up 1.2% while Unitech declined 0.56%. L&T and Siemens from capital goods space gained over 0.3% while BHEL fell 0.5%.
In the metal pack, SAIL, Jindal Steel and Sterlite Industries went down 0.5-0.8% while Hindalco gained 1.1% post numbers. Hindalco reported consolidated net profit of Rs 3,925 crore, a growth of 709.28% on year-on-year basis. Its derivatives gain stood at Rs 2,736 crore in FY10 as against Rs 2,381 crore loss at Novelis, a US-subsidiary of Hindalco.
In the midcap space, Puravankara Projects, TVS Motor, HT Media, Dish TV India and Welspun Corp were up 5-7% while Redington, Mahindra Holiday, Core Projects, Marico and Apollo Tyres fell 3-3.7%.
In the smallcap space, PVR, INOX Leisure, Sonata, GeeCee Ventures and Swaraj Mazda gained 7.6-13% while Electrotherm, Kanani Industries, Parenteral Drug, Maharashtra Elektrosmelt and Timex Group declined 4-7%.
The market breadth was mixed; about 1534 shares advanced while 1550 shares declined on the BSE. Nearly 220 shares remained unchanged.
The markets reported total turnover of Rs 78,954.64 crore. This included Rs 11,282.48 crore from the NSE cash segment, Rs 64,139.82 crore from the NSE F&O and the balance Rs 3,532.34 crore from the BSE cash segment.
At 14:52 hours IST, the 30-share BSE Sensex was trading over the 17,100 level, with a 100 points gains. Positive European cues and buying interest in banking & financial, FMCG, realty, telecom, auto and select metal companies' shares were helping the markets. European markets like CAC, DAX and FTSE went up 0.6-1%.
However, select stocks like ONGC, HDFC Bank, BHEL, Jindal Steel, GAIL, Sterlite, Ambuja Cements, Tata Power and Reliance Power were the only losers in trade.
The Sensex was trading at 17117, up 95 points and the Nifty was at 5135, up 25 points. However, the Nifty future was trading at 13 points discount.
SBI was the top gainer as well as top traded counter on bourses today, gained 2.51%. RBI gave the bank one-year extension to meet 70% Provision Coverage Ratio (PCR), reports CNBC-TV18 quoting sources. CNBC-TV18 learns that SBI will now meet PCR of 70% by September 2011.
Other top gainers - Cairn India was trading at Rs 298.70, up 2.42%; HUL was at Rs 252.85, up 2.35%; Maruti Suzuki was at Rs 1,323, up 2.02%; ITC was at Rs 290.90, up 1.89% and DLF was at Rs 283.50, up 2.11%.
Aditya Birla group's flagship company Hindalco Industries has reported consolidated net profit of Rs 3,925 crore as against Rs 485 crore, a growth of 709.28% (YoY), on derivatives gain of Rs 2,736 crore as against Rs 2,381 crore loss at Novelis, a US-subsidiary of Hindalco. The stock gained 1.1%.
Tata Steel, Reliance Communications, Educomp Solutions, Sesa Goa, Reliance Industries and ONGC were the most active shares on bourses.
Sensex strengthens on European cues; SBI leads
At 13:40 hours IST, after a consolidation in the first half of trade, the benchmark Sensex strengthened and gained nearly 100 points following positive European cues. CAC, DAX and FTSE were up 0.7-0.85%.
Financial (barring HDFC Bank), technology, FMCG, auto, healthcare and realty companies' shares were helping the markets to trade higher. ACC and Reliance Industries were other gainers.
However, telecom and metal companies' shares along with ONGC, HDFC Bank and BHEL were putting some pressure and continued to aid volatility.
The Sensex was trading at 17107, up 85 points and the Nifty was at 5135, up 25 points. The Nifty June futures' discount also trimmed to 11 points from 16-20 points.
Shares of India's largest bank SBI, today's top traded counter, gained over 2% after RBI gave the bank one-year extension to meet 70% Provision Coverage Ratio (PCR), reports CNBC-TV18 quoting sources. CNBC-TV18 learns that SBI will now meet PCR of 70% by September 2011.
Tata Steel, Sesa Goa, Reliance Capital, Reliance Communications, Reliance Industries, ONGC and Tata Motors were other most active shares on bourses.
In the midcap space, Man Infra, Dish TV India, Gujarat Flourochem, Welspun Corp (bagged order worth Rs 700 crore) and TVS Motor went up 4-7.8%. However, Apollo Tyres, Bajaj Finserv, Educomp Solutions, Redington and Trent fell 2-3%.
In the smallcap space, GeeCee Ventures, Phillips Carbon, Man Industries, Dhampur Sugar and Zandu Realty gained 6-10.7% while Electrotherm, Shristi Infra, Kanani Industries, Maharashtra Ele and Intra Infotech lost 4.7-5.7%.
Nifty lacklustre; ITC, ICICI Bank, HUL, Cairn top gainers
At 12:10 hours IST - the 50-share NSE Nifty was completely lacklustre in trade and was hovering around its previous closing value. On the one side, shares of telecom, metal, capital goods, technology and realty companies were pulling the markets down.
However, FMCG, financial (barring HDFC Bank) and healthcare companies' shares were supporting the markets. Cairn, ACC and Jaiprakash Associates were other gainers. Auto and power sectors were mixed in trade.
Lack of global cues was another reason for today's consolidation. Asian markets were quiet in trade.
The Sensex was trading at 17013, down 9.5 points and the Nifty was at 5109, down 0.85 points. The Nifty June future was trading at 17 points discount.
Top gainers - HUL was trading at Rs 251.75, up 1.90%; Reliance Capital was at Rs 684, up 1.63%; Cairn India was at Rs 296.25, up 1.58%; ITC was at Rs 289.95, up 1.56%; Hero Honda was at Rs 2,001.90, up 1.13%; ICICI Bank was at Rs 862.10, up 1.10%; Maruti Suzuki was at Rs 1,309.25, up 0.96% and ACC was at Rs 849.30, up 0.83%.
Top losers - Sterlite Industries was trading at Rs 639.30, up 1.91%; Reliance Communications was at Rs 161.95, up 1.73%; Ambuja Cements was at Rs 112.60, up 1.4%; BPCL was at Rs 572, up 1.36%; Reliance Power was at Rs 159.50, up 1.3%; M&M was at Rs 574.85, up 1.36%; Tata Power was at Rs 1,233, up 1.11% and Hindalco was at Rs 144.55, up 1.03%.
Top percentage gainers - Karur KCP was locked at 20% upper circuit. ANG Auto, GeeCee Ventures, EuroMult, Donear Industries and Integ Fin Ser were up 12-18%.
Sensex trades in narrow range; telecom, metals dip
At 10:41 hours IST, the benchmark Sensex was trading in a narrow range of 16970-17050, while the Nifty was hovering around the 5100 level. Telecom, technology, capital goods, power, metal and realty companies' shares were under pressure. HDFC Bank and Reliance Industries were also in the red.
However, FMCG, healthcare, select financial and auto companies' shares were witnessing buying interest and capped the losses to some extent. Public sector undertakings like ONGC, GAIL, BPCL and Chennai Petroleum were up 0.4-0.6% ahead of meeting on deregulation of oil prices. HPCL, IOC and Oil India gained 1.5-2.2%.
The Empowered Group of Ministers headed by Finance Minister Pranab Mukherjee is scheduled to meet on June 7, 2010 to discuss deregulation of fuel prices. The panel would take into account the recommendations put forth by the Kirit Parikh Committee on the issue.
Optimistic about significant measures being taken in the June 7 meet, Kirit Parikh, Member of the Planning Commission said he was hopeful that both petrol and diesel would be freed. “The government can free diesel prices and cut excise. But raising price without freeing it will not be of much gain. Also, hiking prices of LPG will not happen if petrol is freed without excise cuts,” he said, adding that the consumers could bear hike in LPG prices.
The Sensex was trading at 16980, down 42 points and the Nifty was at 5093, down 13 points. The Nifty June future was trading at 16 points discount.
HUL rose 1.5% as the company will consider buyback in a board meeting on June 11.
Tata Steel, Colgate, Sesa Goa, Havells India, SBI, ICICI Bank and Reliance Communications were the most active shares on bourses.
In the midcap space, Gujarat Flourochem, Syndicate Bank, TV18, IOB and IBN18 Broadcast gained 3-5.5% while Educomp Solutions, Indiabulls Real, Deccan Chronicle, Sintex India and Apollo Tyres lost 2-3.5%.
In the smallcap space, GeeCee Ventures, Phillips Carbon, Dhampur Sugar, Sonata and Transformers went up 6.6-13.4% while Electrotherm, Kanani Industries, Panoramic Universal, Maharashtra Ele and EIH Associated Hotel declined 4.6-6%.
Nifty hovers around 5100; PSU oil cos on buyers' radar
The benchmark Nifty started the day on a quiet note due to lack of global cues. The markets were consolidating after recent run-up.
At 9:02 hours IST, the Sensex was trading at 17001, down 20 points and the Nifty was at 5101, down 8.75 points.
The CNX Midcap fell 6 points to 7842 while BSE Smallcap Index gained 7 points at 8634. About 349 shares advanced while 305 shares declined on the NSE.
Among the frontliners, HUL ralied 3%. The company will consider buyback on June 11.
There were reports that government gave ONGC and OIL freedom to price gas. BPCL, ONGC, Cairn and GAIL went up 1% each. Oil India rose 2%.
Hero Honda, Reliance Power, HCL Tech, Axis Bank, ICICI Bank, ACC,
However, Reliance Communication, Sterlite India, Hindalco, Tata Steel, Suzlon Energy, Bharti Airtel, DLF, Jindal Steel & Power, Idea Cellular and Sterlite Industries were under pressure.
Midcap & Smallcap space:
Rana Sugars was up 3% and Shree Renuka up 1%. Lakshmi Vilas Bank, UCO Bank and Yes Bank were in green.
Howver, Sesa Goa and Gujarat NRE Coke were down 1.5% each.
Havells lost 0.65% on profit booking.
Godrej Consumer was down 0.5%, as there were reports that the company is looking to raise Rs 600 crore.
Global cues:
Asian markets were quiet in trade.
The US markets ended flat amid volatile trade and economic data. Large-cap technology stocks showed strength.
The Dow Jones Industrial Average ended up 6 points at 10255, after seeing swing of 140 points during the day.
The Nasdaq ended up 22 points at 2303, after witnessing swing of 33 points during the day. The S&P 500 ended up 4.5 points at 1103, after seeing swing of 13 points during the day.
Commodities
Crude oil was up 2.4% at USD 74.61 a barrel.
Crude oil inventories for the week ended May 28 had a draw of 1.90 million barrels against no change.
Natural Gas was up 5.9% at USD 4.69 per MMBtu.
Gold was down 1% at USD 1210/ounce.
Silver was down 2.5% at USD 17.86/ounce.
Baltic Dry Index fell 2.7%.
Market cues:
FIIs were net sellers of USD 27 million in equities on June 2
NSE F&O Open Int was up Rs 4937 crore at Rs 1.17 lakh crore
As per provisional data of June 3, FIIs were net buyers of Rs 406 crore; DIIs were net buyers of Rs 79 crore in cash markets. FIIs were net buyers of Rs 2,150 crore in F&O.
F&O cues:
Futures Open Int up Rs 1147 crore
Options Open Int up Rs 3789 crore
Nifty Futures shed 2.7 lakh shares in Open Int
Nifty Futures at 14-point discount
Nifty Open Int PCR at 1.35 versus 1.30
Nifty Puts add 51 lakh shares in Open Int
Nifty Calls add 17 lakh shares in Open Int
Nifty 5000 Put adds 18 lakh shares in Open Int
Nifty 5100 Put adds 18 lakh shares in Open Int
Nifty 5200 Call adds 5.7 lakh shares in Open Int
Nifty 5300 Call adds 5.3 lakh shares in Open Int
Stock Futures add 1 cr shares in Open Int
Thursday, June 3, 2010
NSE reduces charges for investors in rural, semi-urban areas-
In a major initiative to encourage investors from the rural and semi urban areas to participate in the equity market, the National Stock Exchange (NSE) on Monday announced reduction of connectivity charges and waiver of transaction charges.
The move to reduce charges will make it more cost- effective for common investors, especially located in the semi-urban and rural areas, NSE said in a statement here.
Currently, members taking leased-line connectivity from the rural and semi-urban areas to connect to the Exchange have to pay an amount of Rs 1 lakh, annually, on a recurring basis.
http://economictimes.indiatimes.com/markets/stocks/market-news/NSE-reduces-charges-for-investors-in-rural-semi-urban-areas/articleshow/5995776.cms
Post today's announcement, the exchange has decided to waive the transaction charges pertaining to the trades generated from these leased lines to the extent of the annual leased line connectivity cost of Rs 1 lakh, it said.
This move is mainly to facilitate trading members to establish trading terminals in these semi-urban and rural areas as at a reasonable cost.
http://economictimes.indiatimes.com/
It is expected that there are around 300 leased lines in these areas which are used by members and they will benefit from this. Also, it is expected to benefit a large number of investors in these regions.
The move to reduce charges will make it more cost- effective for common investors, especially located in the semi-urban and rural areas, NSE said in a statement here.
Currently, members taking leased-line connectivity from the rural and semi-urban areas to connect to the Exchange have to pay an amount of Rs 1 lakh, annually, on a recurring basis.
http://economictimes.indiatimes.com/markets/stocks/market-news/NSE-reduces-charges-for-investors-in-rural-semi-urban-areas/articleshow/5995776.cms
Post today's announcement, the exchange has decided to waive the transaction charges pertaining to the trades generated from these leased lines to the extent of the annual leased line connectivity cost of Rs 1 lakh, it said.
This move is mainly to facilitate trading members to establish trading terminals in these semi-urban and rural areas as at a reasonable cost.
http://economictimes.indiatimes.com/
It is expected that there are around 300 leased lines in these areas which are used by members and they will benefit from this. Also, it is expected to benefit a large number of investors in these regions.
Wednesday, June 2, 2010
Experts expect mkts to bounce back, advice buy on dips
The markets showed resilience today and surged in the eleventh hour after a tepid day of trade. For most of the day, the Nifty gyrated between 4,950 and 5,000 levels, but managed to end the day above the 5000 mark. India performed much better than its Asian peers. At closing bell, the Nifty was up 50 points while the Sensex surged 170 points.
Speaking on today's trade, Mitesh Thacker, Technical Analyst, miteshthacker.com, said the Nifty tried to take out 5,000 levels two-three times during the course of the day but failed to sustain above that. "After breaking down with such large force yesterday, it is important that these technical levels recapture as fast as possible. In case we do not get close above 5,010 over the next 3--5 days, then it could be negative. The weight of averages would probably come into play and you would see a re-test of recent lows or probably even lower levels."
Road ahead for markets:
Experts feel the effect of the global crisis can be a good buying opportunity in India as the markets will bounce back eventually after some volatility. Dharmesh Dalal of Antique Stock Broking said India is trading in line with what is happening in the markets. "We have to be in tandem for a short while considering what plays out in the international markets. But we will bounce back that's for sure."
He advises investors to adopt a buying on dips strategy. "I would utilize every dip to buy. Each bad news in the international market provides a good opportunity to add. I would be a cautious buyer and wouldn't be investing the entire money that I have. I would be keeping cash not knowing whether I will get a better opportunity tomorrow again."
Rahul Chadha of Mirae Asset Management too sees the markets correcting in the near-term on global concerns. "The markets would remain volatile for the next couple of months. What we have seen over the last 15 months is strong cyclical recovery and sovereign debt concerns. What we used to talk about has now come to the forefront. We believe that this crisis remains confined to southern Europe. But with sovereign debt concerns, we will see the developed world growing below trend levels of growth and hence we will continue to see a near-term correction in the markets."
Krishna Kumar Karwa, MD, Emkay Global Financial Services, said global concerns remain and we will still see them panning out. "The domestic economy is doing very well and we have projections of almost 8.5% GDP growth. We have seen the kind of robust auto numbers which have come out for May. So, the domestic economy is doing phenomenally well. The question is what about global concerns on eurozone, China, and a possible slowdown in the US. Valuations being where it is, there is hardly any upside on current prices. What we are seeing is a rangebound market with 5,400 being the top and 4,700 on the downside. So, we are in a consolidation kind of a phase."
Courtesy:moneycontrol.com
Speaking on today's trade, Mitesh Thacker, Technical Analyst, miteshthacker.com, said the Nifty tried to take out 5,000 levels two-three times during the course of the day but failed to sustain above that. "After breaking down with such large force yesterday, it is important that these technical levels recapture as fast as possible. In case we do not get close above 5,010 over the next 3--5 days, then it could be negative. The weight of averages would probably come into play and you would see a re-test of recent lows or probably even lower levels."
Road ahead for markets:
Experts feel the effect of the global crisis can be a good buying opportunity in India as the markets will bounce back eventually after some volatility. Dharmesh Dalal of Antique Stock Broking said India is trading in line with what is happening in the markets. "We have to be in tandem for a short while considering what plays out in the international markets. But we will bounce back that's for sure."
He advises investors to adopt a buying on dips strategy. "I would utilize every dip to buy. Each bad news in the international market provides a good opportunity to add. I would be a cautious buyer and wouldn't be investing the entire money that I have. I would be keeping cash not knowing whether I will get a better opportunity tomorrow again."
Rahul Chadha of Mirae Asset Management too sees the markets correcting in the near-term on global concerns. "The markets would remain volatile for the next couple of months. What we have seen over the last 15 months is strong cyclical recovery and sovereign debt concerns. What we used to talk about has now come to the forefront. We believe that this crisis remains confined to southern Europe. But with sovereign debt concerns, we will see the developed world growing below trend levels of growth and hence we will continue to see a near-term correction in the markets."
Krishna Kumar Karwa, MD, Emkay Global Financial Services, said global concerns remain and we will still see them panning out. "The domestic economy is doing very well and we have projections of almost 8.5% GDP growth. We have seen the kind of robust auto numbers which have come out for May. So, the domestic economy is doing phenomenally well. The question is what about global concerns on eurozone, China, and a possible slowdown in the US. Valuations being where it is, there is hardly any upside on current prices. What we are seeing is a rangebound market with 5,400 being the top and 4,700 on the downside. So, we are in a consolidation kind of a phase."
Courtesy:moneycontrol.com
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