Posts Tagged ‘benchmark index’

Indian Stocks Rose After Govt Approved Disinvestment Plans

Indian Stocks Rose After Govt Approved Disinvestment Plans

Indian Stocks Rose After Govt Approved Disinvestment Plans

Indian stocks rose, extending the benchmark index’s longest string of gains in five weeks, after the government approved a plan to sell more shares in state- controlled companies, helping it raise funds to boost spending.

MMTC Ltd., India’s biggest state-owned trading company, surged 20 percent, the most in 10 months.

Rico Auto Industries Ltd., an auto component maker that supplies General Motors Co. and Ford Motor Co., climbed 5.1 percent after workers ended a 45-day strike.

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The Bombay Stock Exchange’s Sensitive Index, or Sensex, rose 94.38, or 0.6 percent, to 16,158.28.
The measure this week gained 1.7 percent, snapping two weeks of losses.

The S&P CNX Nifty Index on the National Stock Exchange rose 0.6 percent to 4,796.15.
The BSE 200 Index added 1.1 percent to 2,011.08.

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“The disinvestment move will help moderate India’s fiscal deficit,” said Jagannadham Thunuguntla, head of equities at SMC Capitals Ltd. in New Delhi.

“Also, it may help in higher GDP growth led by increased government spending.”

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MMTC soared 20 percent to 36,146.85 rupees, the most since Dec. 17.
State Trading Corp., the No. 2, leapt 15 percent to 353.6 rupees.

NMDC Ltd., India’s largest iron-ore producer, climbed 10 percent to 338 rupees. 

Hindustan Copper Ltd., India’s biggest copper miner, 99.59 percent state-owned, gained 10 percent to 256.35 rupees.

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Budget Deficit

The government owns 99.33 percent in MMTC and 91.02 percent in State Trading, while it holds 98.38 percent in NMDC, according to filings to the Bombay Stock Exchange.

The government will use the money raised from the sale of shares of state companies for social spending.

India’s fiscal deficit reached 6 percent of gross domestic product in the year ended March 31, surpassing the 2.5 percent government target.

The key Sensitive stock index has more than doubled from this year’s lowest level, in March.

Govt’s stand to sell state assets and accept more overseas funds into insurance and banking, has strengthened, after Prime Minister Manmohan Singh resounding re-election victory in May.

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Downward Movement Hits Indian Equities Markets

Downward Movement Hits Indian Equities Markets

Downward Movement Hits Indian Equities Markets

Indian equities markets entered into a consolidation zone with analysts terming the downward movement as long expected.

A benchmark index fell 5.44 percent from its last weekly close and ended trade below the 16,000-mark.

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The 30-share sensitive index (Sensex) ended 914.53 points, or 5.44 percent lower, at 15,896.28 points at the weekly close Friday, as opposed to the previous week’s close at 16,810.81 points.

The broader S&P CNX Nifty of the National Stock Exchange (NSE), too slipped, closing at 4,711.7 points, down 5.7 percent from its last weekly close.

However, companies with large-to-medium market capitalization saw greater selling with the BSE midcap index ending 7.36 percent lower and the BSE smallcap index losing 8.01 percent over the last week.

“This consolidation was expected anyways as the valuations were not commensurate with the earnings of corporates. To an extent a correction in valuations was warranted,” said Jagannadham Thunuguntla, equities head of brokerage and capital markets consultancy SMC Capital.

The markets started on a cautious note Monday ahead of the Reserve Bank of India‘s mid-year policy review Tuesday.

The Sensex ended a volatile day at 16,740.50 points — 70.31 points or 0.42 percent lower than Friday’s close.

The Nifty followed a similar trajectory and ended in negative at 4,970.9 points, down 0.52 percent.

Both benchmark indices nosedived Tuesday as the RBI indicated in its policy review that it would start tightening the monetary policy and look at exiting the stimulus measures.

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Data with markets watchdog Securities and Exchange Board of India (SEBI) showed that foreign funds were net sellers during the week, having sold scrips worth $12.8 million.

The top gainers this week on the Sensex were

Tata Motors (up 7.2 percent),
Ranbaxy Labs (up 4.8 percent),
Wipro (up 2.9 percent),
Grasim (up 1.6 percent) and
Hindustan Unilever (up 1 percent).

The top losers were :

DLF (down 18.5 percent),
Reliance Capital (down 14.5 percent),
Reliance Infrastructure (down 14.2 percent),
Hindalco (down 13.9 percent) and
Reliance Power (down 12.9 percent).

“Broadly speaking only about one percent of the quarterly results show a sound top line growth. Profits might have increased, but that is not because of increase in core operations – cost cutting and other income have contributed towards it,” said Thunuguntla.

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Bharti Airtel Shares Shot Up, Ended 4% Higher :)

Bharti Scrip ended 4 percent higher, a day after the firm had to terminate the proposed $24-billion equity-swap-cum strategic tie-up with South Africa’s telecom major MTN.

Bharti Scrip ended 4 percent higher, a day after the firm had to terminate the proposed $24-billion equity-swap-cum strategic tie-up with South Africa’s telecom major MTN.

Bharti Airtel shares, which opened on a firm note Thursday, ended 4 percent higher than its previous close, a day after the firm had to terminate the proposed $24-billion equity-swap-cum strategic tie-up with South Africa’s telecom major MTN.

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The deal, if it had materialized, would have created the world’s third largest mobile phone firm, but had led to analysts worrying that the consequent debt burden would have made its stock unattractive.

Upon collapse of the talks, the company’s shares opened at Rs. 435 Thursday on the Bombay Stock Exchange (BSE) as against the previous day’s close at Rs. 418.55.

It shut shop at Rs. 435.35, a gain of Rs.16.80 or 4.01 percent over the previous day’s close.

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The scrip had shot up to an intra-day high of Rs.467, moving up Rs.27.30 or 6.52 percent.

It had hit a 52-week high of Rs.990 on May 19 and an annual low of Rs.360.10 on Aug 11.

The company has been a laggard on the stock exchanges over the past month, falling 3.74 percent on the BSE even as the benchmark index of the bourse, the Sensex, rose 7.56 percent during the same period.

Analysts had been viewing the stock negatively owing to Bharti’s persistent sweetening of its offer for MTN.

In the last quarter, the scrip fell 4.36 percent, while the Sensex rose 18.17 percent.

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However, with the deal off, the scrip is back in favour with traders and is expected to take off.

‘In a way this is good news for the Bharti scrip; had this deal happened it would have burdened the company’s balance sheet which is currently low on leverage,’ said SMC Capitals equity head Jagannadham Thunuguntla.

‘Analysts have been wary of the deal because of past acquisitions like the Tata Corus deal, which turned Tata’s balance sheet into a heavily leveraged one,’ added Thunuguntla.

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Late Wednesday, Bharti Airtel and South Africa’s MTN said they were terminating their talks for the proposed deal that could have created a large mobile phone entity, just behind China Mobile and Vodafone Group, with a subscription base of 207 million.

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According to Bharti, the proposed deal was called off after the South African authorities declined to accept certain regulatory constraints on the part of both sides.

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Lehman Blues?? Not Anymore ;) Market Scales New Heights ;)

lehman brothers

Shrugging off the deadly blow received at the time of Lehman Brothers’ collapse, stock markets in emerging countries, led by India, have moved significantly higher from the low levels witnessed a year ago.

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Analysts feel green shoots like recovery in economic growth and return of stability in the financial systems have led to a revival in confidence and risk appetites.

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Emergence of these green shots has brought confidence towards a full fledged recovery and return of the risk appetite, which is also reflected on the bourses which moved up significantly higher from their low levels.

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Experts seem to agree on the fact that Lehman is history and Indian markets are not under any pressure. They have recovered and are trading at good levels.

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The benchmark index Sensex, which is currently around 16,200 points, has gained nearly 20 per cent since September 15 last year, the day when Lehman filed for bankruptcy. The index had been at 13,531.27 points in the same day last year.

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Market analysts said the collapse of Lehman Brothers had been the ultimate blow for financial markets, which were already in deep bearish mood.

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“The closest victims were the capital markets of United States and that of Europe. The Indian markets also faced severe fall,” SMC Capitals Limited CEO and Equity Head Jagannadham Thunuguntla said.

However market analysts feels that India and China would play an important role in determining the global economic health in times to come.

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Analysts said that fortunately unlike other recessions which followed the bursting of asset bubbles, this time around apart from recapitalization of the financial system, the governments of the major economies of the world acted swiftly by slashing interest rates to unprecedented levels and providing fiscal stimuli.

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These measures have aided the return of stability to the financial system and economic activity.

The factors which have helped the Indian markets in recovery include re-election of the UPA government, enabling the political stability, and significant domestic demand.

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“These factors have brought back the interest of the FIIs into the Indian capital markets and enabled significant Foreign Institutional Investors inflows,” Thunuguntla added.

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