Daily Market View: In continued uptrend
Moneylife Digital Team 12 July 2010

Subject to minor declines, market may be headed for a new intermediate high

The market in the green for the third day in a row on positive Asian markets; however, lower-than-expected industrial growth limited the gain. The Sensex settled at 17,937, up 103 points (0.6%) and the Nifty stood at 5,383, up 30 points (0.6%). The indices started the day with support from their Asian counterparts. The market pared off some gain in the mid morning session following the announcement of the industrial output numbers. In the early afternoon session it recovered to limit some of the losses.

Asian markets were up on the positive sentiment of Wall Street's best weekly performance in a year on Friday, 9th July. Strong Chinese export data for the month of June also supported the upmove. Key benchmark indices in Hong Kong, Singapore, Indonesia, China, and South Korea were up 0.01% to 0.8%. However, Japan's Nikkei 225 was down 0.4% in volatile trade after the government lost an upper house election over the weekend.

Wall Street closed at its best week in a year on Friday. The Dow was up 59 points (0.58%) at 10,198. The S&P 500 was up 7.7 points (0.7%) at 1,078. The Nasdaq was up 21points (0.9%) at 2,196.

Industrial output, as measured by the Index of Industrial Production (IIP), in May was up at a slower-than-expected 11.5% from a year earlier, government data showed on Monday. Manufacturing output rose an annual 12.3%, the statistics office said. Mining output was up 8.7% and power generation rose 6.4%. Production of capital goods rose 34.3% year-on-year after an annual rise of 72.8% in April 2010, while consumer durables output grew 23.7%, down from a 37% rise in the previous month. Analysts opine that IIP for the second half of the calendar year 2010 will slow down to 6%-9% and end the fiscal 2010-11 with an average growth of around 9%.

The steel ministry wants a ban on the iron exports as they are non-renewable. India produced about 230 million tonnes of iron ore in the last fiscal, of which around 106 million tonnes were exported, mainly to China. This was announced by the ministry after the Karnataka government wrote a letter for banning iron ore export.

The Reserve Bank of India (RBI) is likely to soon announce a sunset clause with a deadline of 30 June, 2011 for all loans in the erstwhile benchmark prime lending rate (BPLR) system to migrate to the new base-rate model.

Foreign institutional investors were net buyers of equities worth Rs1,104 crore on Friday. Domestic institutional investors were net buyers of Rs39 crore on the same day.

Bhilwara Energy Ltd (BEL), a LNJ Bhilwara group company, plans to dilute 10.8% stake to two foreign investors as part of its plans to fund its power projects. BEL has agreed to disinvest holdings to Washington's IFC and India Clean Energy Fund for $50 million ($25 million each) or Rs230 crore. RSWM (up 6.1%) is one of the promoters of Bhilwara Energy and currently holds 19.5% in the company. 

The board of Treadsdirect (down 2.5%) has decided to restructure the company business with effect from 1 April, 2010 through a composite scheme of arrangement by amalgamating the company along with Elgi Rubber Company Ltd into Elgi Rubber International Ltd, a company which will eventually be listed on the NSE. The board has also decided to demerge certain divisions of the company to Treadsdirect (India) Ltd, which will become a wholly-owned subsidiary company of Elgi Rubber International. 

Amrit Corp (up 1.4%) informs that the promoters of the company are restructuring their shareholding in ABC Paper Ltd, pursuant to which, 22,99,900 equity shares of Rs10 of ABC Paper are proposed to be transferred to co-promoter, Esteem Finvest Ltd, at a premium to the market price.

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jaswant
1 decade ago
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