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Sensex sheds 331 points during the week

Sunday, July 29, 2007

The market edged lower, last week, due to a sharp fall in a single trading session on Friday, 27 July 2007, that was caused by setback in Asian and US stocks. Earlier, the market remained firm for a better part of the week as renewed buying was witnessed due to good Q1 June 2007 results. FII inflows remained robust.

The 30-share BSE Sensex lost 330.98 points or 2.13% to 15,234.57 in the week ended 27 July 2007. The S&P CNX Nifty lost 120.85 points or 2.6% to 4,445.20 in the week.

Profit taking was witnessed in small-cap and mid-cap shares after their recent solid surge. BSE Small-Cap index shed 261.67 points or 3.2% to 7,926.45 in the week. BSE Mid-Cap index lost 237.75 points or 3.48% to 6,598.32 in the week.

A good rollover was witnessed to the August 2007 series from the July 2007 series when the July 2007 contracts expired on Thursday, 26 July 2007. According to one brokerage report, overall 83% positions have got rolled to August 2007 from July 2007. A good rollover of 73% was witnessed in index futures as well. Institutional investors rolled over short positions in Nifty following the hedging of their positions in the cash market

FIIs inflow in three trading sessions from Monday, 23 July 2007, to Wednesday, 25 July 2007, totaled Rs 2322.40 crore. Mutual funds sold shares worth a net Rs 468.70 crore in four trading session from Monday, 23 July 2007 to Thursday, 26 July 2007.

Trading for the week began on an upbeat note. Sensex surged 166.65 points or 1.07% to 15,732.20, an all time closing high on Monday, 23 July 2007. Shares from the auto, real estate, and capital goods sectors were at the forefront of the rally.

Shares rose in China as well on that day. Shanghai Composite jumped 3.81% to 4,213.36, even as the central bank raised borrowing costs, effective Saturday, 21 July 2007, in the latest of a series of moves aimed at capping inflation and preventing the world's fourth-largest economy from overheating.

The market extended its winning steak to firth straight session on Tuesday, 24 July 2007, helped by steady buying interest for capital goods, power and IT stocks. Sensex rose 62.72 points to 15,794.92, an all time closing high.

The market remained weak throughout the day on Wednesday, 25 July 2007, as correction set in after five straight days of rally. Sensex lost 95.59 points to 15,699.33. Weakness in global markets triggered profit taking.

Short covering ahead of expiry of July 2007 derivatives contracts aided 77-point surge in Sensex on Thursday, 26 July 2007. Two index heavyweights Reliance Industries and Infosys led rally on that day.

Weak Asian and US markets spooked domestic bourses on Friday, 27 July 2007, as Sensex plunged 541.74-point, or 3.4%, to 15,234.57, registering its biggest rout in a single trading session in nearly four months. Stocks across Asia fell after the US market dropped 2.3% on Thursday, 26 July 2007, on signs of further weakness in the US housing market and deteriorating conditions for corporate buyouts. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were down between 2.4% to 4%

Reliance Energy surged extending its solid rise witnessed since mid-June 2007 on hopes that the company may win the 4,000- megawatt Sasan power project in Madhya Pradesh as it was the second best bidder after Lanco. The empowered group of ministers (E-GoM) headed by power minister Sushil Kumar Shinde, on Tuesday, 24 July 2007, decided to scrap the allotment of the 4,000- megawatt Sasan power project in Madhya Pradesh to the lowest bidder, the Lanco-Globeleq consortium. E-GoM declared Lanco’s bid as void ab-initio (invalid from the outset). However, E-GoM did not take any decision on awarding the Rs 20,000-crore project to REL or invite fresh bids.

India’s largest cigarette manufacturer ITC surged nearly 9% in a single trading session on Wednesday, 25 July 2007, on market talks it may announce demerger of its agri business. The stock extended gains on Friday, 27 July 2007, when it reported a forecast beating 20% growth in net profit in Q1 June 2007. The company unveiled its results during trading hours on Friday, 27 July 2007.

Car major Maruti Udyog rose nearly 4% on Thursday, 26 July 2007, when it beat forecast by reporting a 35.1% growth in net profit in Q1 June 2007 over Q1 June 2007 during trading hours.

Ranbaxy Laboratories, India's largest pharma firm by sales, jumped nearly 10% on Thursday, 26 July 2007, after it reached an agreement with GlaxoSmithKline (GSK) to end their litigation in the US on Valtrex (valacyclovir hydrochloride tablets) used in the treatment of herpes.

NTPC, India’s largest power generation company, firmed up after it signed an MoU with Asian Development Bank for setting up a joint venture company to undertake renewable power generation. The company made this announcement after trading hours on Monday, 23 July 2007.

Hindustan Unilever (HUL) surged on Monday, 23 July 2007, after its parent announced after market hours on 20 July 2007 it is considering a plan to buy its own shares on 29 July 2007. HUL will also declare financial accounts for the second quarter and half year ended 30 June 2007 on that day.

Index heavyweight Reliance Industries (RIL) edged higher on reports it may seek foreign partner for its deep-water exploration blocks off the country's east coast. The stock hit record high of Rs 1948 on Thursday, 26 July 2007. Reports indicate that global oil firms, including Chevron, have shown interest in partnering RIL for its Cauvery oil & gas assets

Oil exploration major ONGC extended gains after reported an 11.9% growth in net profit to Rs 4610 crore in Q1 June 2007 over Q1 June 2006, due to fall in subsidy sharing burden. The company unveiled results on 25 July 2007.

Cement stocks plunged after their recent rally following reports on Tuesday, 24 July 2007, that Monopolies & Restrictive Trade Practices Commission (MRTCP) had ordered a probe into the business practices of 14 leading cement manufacturers.

ICICI Bank drifted lower despite posting a 25% rise in net profit in Q1 June 2007 to Rs 775.08 crore over Q1 June 2006, riding on increased fee-based income and retail lending. Total operating income rose 46.9% to Rs 9,281.42 crore in Q1 June 2007 over Q1 June 006. The results were announced on 21 July 2007.

UTI Bank lost ground after it priced its GDR issue at a discount to the ruling market price. It announced before market on 23 July 2007 that it had priced its offering of 14.13 million GDRs, aggregating $ 218.07 million. Each GDR, representing one underlying share, was priced at $15.43 and will be listed on the London Stock Exchange. This represents a discount of 1.7% to the closing price of the Bank's GDR on 20 July 2007.

Real-state developer Housing Development and Infrastructure settled at Rs 558.60 on BSE on Tuesday, 24 July 2007, a modest premium of 11.72% over the price of Rs 500 per share. The stock debuted at Rs 567.50. The stock also debuted in NSE's F&O segment with a lot size of 400. The HDIL IPO was subscribed 6.6 times

Debutante Suryachakra Power Corporation settled at Rs 22.82, on Monday 23 July 2007, a premium of 14.1% over the IPO price of Rs 20. The stock debuted at Rs 30. The Suryachakra IPO had closed on 29 June 2007 with 2.18 times subscription.

BSE, on Monday, 23 July 2007, announced that it is shifting 45 scrips to trade-to-trade segment with effect from Friday, 27 July 2007. The stocks transferred to trade-to-trade segment include B.A.G. Films, BSL, Dharamsi Morarji Chemical, Isibars, Pearl Engineering Polymers, V.I.P. Industries and Southern Ispat among others.

Meanwhile, a development that could increase domestic liquidity is the approval given by the Cabinet Committee on Economic Affairs on Thursday, 26 July 2007, to public sector companies enjoying Navratna and Miniratna status to invest up 30% of their surplus funds in equity mutual funds. The total surplus of central PSUs in 2005-06 was estimated at about Rs 2,39,500 crore, according to public enterprises survey. This means that about Rs 70,000 crore may flow to equity mutual funds. However, investments would be allowed only in public sector mutual funds.

Emerging markets-dedicated funds saw their second best inflows ever in the week ending 18 July 2007, after setting their all-time high just the previous week. Inflows to emerging markets equity funds exceeded outflows by $3.3 billion in the week ended 18 July 2007. More than half of this net inflow - a record high of $1.8 billion went to funds dedicated to Asia ex-Japan.

Global index provider FTSE Group (FTSE) and Indian infrastructure specialist, Infrastructure Development Finance Company (IDFC) on Tuesday, 24 July 2007, the FTSE IDFC India Infrastructure Index Series which will represent the performance of Indian companies listed on NSE or BSE, generating the majority of their revenue from infrastructure.

Bowing to pressure from Left-backed trade unions, the Employees Provident Fund (EPF) board on Monday, 23 July 2007 agreed to continue paying 8.5% interest rate to its nearly four crore subscribers for fiscal 2006-07 as well. The EPF has a corpus of Rs 94,000 crore including pension fund.

Data released on Friday, 27 July 2007, showed India's wholesale price index rose 4.41% in the 12 months to 14 July 2007, higher than the previous week's 4.27% due to increase in food prices

Posted by FR at 7:10 PM  

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Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it.& take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations given in this blog.