AMID VOLATILITY MARKET ENDS IN GREEN
The market posted modest gains amid high volatility today, 26 July 2007, the day the July 2007 derivatives contracts expired. It was firm in the first half of the day following healthy rollover of derivative positions from the July 2007 series to the August 2007 series. But it weakend in mid-afternoon trade on profit booking, before bouncing back again in late trade.
Shares from auto, pharma and IT sectors were in demand, while cement, banking and capital goods stocks edged lower. Sugar stocks spiked at the fag end of the trading session. Global markets were subdued.
Meanwhile, the International Monetary Fund (IMF) on Wednesday, 25 July 2007, revised upwards its growth projections for the global economy, citing accelerating growth in China, India and Russia, while the United States appears to be regaining momentum. The IMF's updated World Economic Outlook forecast global growth of 5.2% for both calendar year 2007 and 2008, up from its earlier forecast of 4.9% growth for both years.
The BSE 30-share Sensex was up 56.63 points to 15,755.95, as per provisional trade. It opened higher at 15,768.28 and jumped to a high of 15,812.27. The index also slipped to a low of 15,654.40 at 13:01 IST
The S&P CNX Nifty was up 24.25 points to 4,612.95, as per provisional trade.
The market breadth, indicating the overall health of the market, held firm as small- and mid-cap stocks saw continued buying interest. On BSE, 1,558 shares advanced as compared to 1,100 that declined, while 73 remained unchanged
The total turnover on BSE amounted to Rs 5,719 crore as compared to Rs 4,276 crore by 14:30 IST
Among the 30-Sensex pack, 18 gained and the rest declined
India’s largest drug manufacturer by sales Ranbaxy Laboratories jumped 9.95% to Rs 375 on 19.34 lakh shares. It was the top gainer from the Sensex pack. The stock rose after Ranbaxy today, 26 July 2007, reached an agreement with GlaxoSmithKline (GSK) to end their litigation in the US on Valtrex (valacyclovir hydrochloride tablets) used in the treatment of herpes.
Other pharma stocks Cipla (up 4.16% to Rs 193.90) and Dr Reddy’s Laboratories (up 0.29% to Rs 667.40) also edged higher.
Auto stocks advanced on fresh buying interest in anticipation that sales will pick up after monsoon, generally a slack season. Bajaj Auto (up 1% to Rs 2378) and Mahindra & Mahindra (up 2.55% to Rs 802) advanced.
Maruti Udyog vaulted 3.38% to Rs 837 after India’s biggest small car maker today, 26 July 2007, reported a 35.1% growth to Rs 499.60 crore in net profit in Q1 June 2007 over Q1 June 2006. Net sales were up 26% at Rs 3,930.82 crore. Maruti Udyog will be renamed as Maruti Suzuki India.
IT pivotals rose on stock-specific buying despite the Indian rupee heading towards a nine-year high on Thursday, 26 July 2007, in anticipation of strong capital inflow.
India’s second largest software services exporter Infosys Technologies gained 1.81% to Rs 2,026 after it bagged a $250-million (around Rs 1,010 crore) contract from Royal Philips Electronics. It is one of the largest acquisition-cum-outsourcing deal by an Indian information technology firm.
TCS (up 3.13% to Rs 1185), Wipro (up 4.22% to Rs 520) and Satyam Computers (up 1.64% to Rs 494.90) gained in anticipation of further mergers and acquisitions activity in the IT sector. The BSE IT Index was up 1.41% to 4,976.13.
In early trade, the rupee was at 40.31/32 per dollar, strengthening from the previous close of 40.3500/3575 and inching towards from a nine-year high of 40.20 hit earlier this week.
Cement shares declined for the second straight day on fresh selling following reports that the goverment is easing cement import norms in an attempt to rein in prices. India’s second largest cement manufacturer ACC plunged 4.55% to Rs 1,021.80 on 3.82 lakh shares. It was the top loser from the Sensex pack.
Ambuja Cements (down 3% to Rs 124.50) and Shree Cement (down 2.86% to Rs 1,280) also slipped.
Cement scrips had fallen yesterday, Wednesday, 25 July 2007, following reports that the Monopolies and Restrictive Trade Practices Commission (MRTCP) had on Tuesday, 24 July 2007, ordered a probe into the business practices of 14 leading cement manufacturers.
The country’s biggest private sector company Reliance Industries (RIL) advanced 1.92% to Rs 1,940, after striking an all-time high of Rs 1,948. RIL's results are due on Saturday, 28 July 2007. The market expects surprise on the positive side.
Capital goods heavyweights Bhel (down 2.05% to Rs 1,753) and L&T (down 1.13% to Rs 2,544.50) declined on profit booking after a recent rally.
Top cellular services provider Bharti Airtel dropped 2.30% to Rs 925 on profit taking even as it reported robust Q1 June 2007 results. Bharti Airtel’s consolidated net profit as per US GAAP jumped 100% to Rs 1,511.60 crore in Q1 June 2007 over Q1 June 2006, exceeding market expectations. Revenue rose 53% to Rs 5,904.60 crore in Q1 June 2007 over Q1 June 2006. Revenue growth was within market expectation. The stock had hit an all-time high of Rs 960 in early trade.
Bank shares drifted lower on selling pressure. HDFC Bank (down 2.12% to Rs 1,215), State Bank of India (down 1.2% to Rs 1,549) and ICICI Bank (down 1.51% to Rs 945) slipped. With inflation under control, the Reserva Bank of India (RBI) is likely to keep rates steady when the monetary policy comes up for review on 31 July 2007. However, it remains to be seen whether the central bank will raise the cash reserve ratio (CRR) to suck out excess liquidity in the banking system.
India’s biggest cigarette maker ITC lost 0.21% to Rs 165.50. The stock had surged almost 9% on Wednesday, 25 July 2007, on market talks it may announce demerger of its agri business. ITC announces Q1 June 2007 results tomorrow, 27 July 2007.
Sugar stocks spurted at the fag end of the trading session. Shree Renuka Sugars (up 5.51% to Rs 635), Bajaj Hindustan (up 4.30% to Rs 160.20) and Balrampur Chini Mills (up 5.45% to Rs 70.65), galloped.
As per latest data, marketwide rollover from the July 2007 contracts to August 2007 contracts stood at 60%, while Nifty rollover was 61%.
The total open interest in NSE’s futures and option (F&O) segment vaulted to an all-time record of Rs 1,02,247.50 crore on 25 July 2007, from Rs 94,285.34 crore on the previous day.
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