Share prices may not record significant gains immediately: Friday Closing Report
Moneylife Digital Team 04 March 2011

Sensex and Nifty will remain listless

The local market opened with decent gains on support from the global arena following easing of crude prices. Banking, auto, metal and capital goods counters witnessed good demand, which contributed to the early gains. A gradual slippage was noticed after the indices touched their intra-day highs in initial trade. The market touched the neutral line a little after 2pm, but bounced back with the indices trading in a narrow range and closing almost unchanged from the Thursday's close.

Yesterday, we had mentioned that the market had rallied strongly for four days (ending 3rd March) and that it is expected to pause now. Today, both the indices ended flat. The Sensex closed three points down at 18,486, while the Nifty finished just three points up at 5,539.

The Sensex opened with a positive gap of 133 points at 18,623, thanks to a huge rally in the US overnight, followed by an equally strong rally in Asia this morning, and the Nifty opened 50 points up at 5,586. Both benchmarks managed to keep the trend of a higher high and a lower low for the fourth consecutive day. The intra-day highs were 18,737 and 5,608 respectively. Towards the end of the trading session both the indices hit their intra-day lows of 18,449 and 5,524 but recovered to close flat. The advance-decline ratio on the National Stock Exchange was 876:791.

In line with the flat closing, the market breadth on the Sensex and Nifty was almost equal. The Sensex had 16 declining stocks, 13 advancing stocks and one stock remained unchanged. The 50-share Nifty had 24 gainers, an equal number of losers and two stocks were unchanged. The broader indices underperformed the Sensex today. The BSE Mid-cap index closed 0.10% lower, while the BSE Small-cap index fell by 0.26%.

The BSE Bankex (up 0.53%), BSE Auto (up 0.44%) and BSE IT (up 0.31%) were the top gainers in the sectoral space. BSE Capital Goods (down 2.06%), BSE PSU (down 0.25%) and BSE Metal (down 0.19%) were the major losers.

Tata Power (up 2.27%), Hero Honda (up 2.15%), Bajaj Auto (up 2%), HDFC (up 1.63%) and Reliance Infrastructure (up 1.38%) were the top performers on the Sensex. Larsen & Toubro (down 3.08%), Jaiprakash Associates (down 2.04%), BHEL (down 1.94%), TCS (down 1.37%) and Bharti Airtel (down 1.19%) were the laggards on the benchmark.

The government has sought Parliament's nod for the sanction of an additional Rs79,590 crore to meet extra expenses related to oil and fertiliser subsidies during the current fiscal, over and above the funds allocated earlier.

The enhanced expenditure includes additional Rs21,000 crore for compensating oil marketing companies, Rs9,000 crore for meeting the defence pension bill and Rs8,000 for fertiliser subsidies, among others.

Markets in Asia finished the day with good gains on optimism that the global recovery will hold, side-stepping the turmoil in West Asia. However, worries about spiralling crude prices kept investors guarded.

The Shanghai Composite gained 1.35%, the Hang Seng rose 1.24%, the Jakarta Composite surged 1.38%, the KLSE Composite advanced 1.04%, the Nikkei 225 gained 1.02%, the Straits Times was up 0.79%, the Seoul Composite jumped 1.73% and the Taiwan Weighted closed 0.53% higher today.

Meanwhile, crude oil for April delivery rose 94 cents to $102.85 a barrel in electronic trading on the New York Mercantile Exchange and it was at $102.66 in Singapore. On Thursday, the contract slipped 32 cents, or 0.3%, to $101.91, the first decline in three days.

Brent crude for April settlement was at $115.85, up $1.06, on the London-based ICE Futures Europe exchange. It slid $1.56, or 1.3%, to $114.79 yesterday.

Back home, institutional investors, both foreign as well as domestic, were net buyers of stocks on Thursday. While FIIs pumped in funds worth Rs229.02 crore, DIIs bought equities worth Rs95.52 crore.

Onco Therapies, the wholly-owned subsidiary of Strides Arcolab (up 4.40%) has received the European Union's (approval for Carboplatin 10 mg/ml in the first wave covering select European countries. This is the first European approval out of 22 filings made by the OTL in the year 2010 for products which have a combined market value of over $5 billion. The product will be manufactured at Strides' oncology complex in Bangalore which received approval from European regulatory authorities in June 2010.

Cairn India (up 0.31%) is planning to commence production from the Bhagyam oil field, its second biggest oil field in the Rajasthan block, in the second half of 2011. The commencement of this production will take the total output to 1,75,000 barrels per day (bpd).

The Bhagyam oil field is targeted to produce a peak output of 40,000 bpd by year end which would help the company achieve the approved peak output of 1,75,000 bpd.

Power equipment maker, BGR Energy Systems' (up 0.67%) environment engineering division has secured two orders worth Rs30 crore from UAE-based Power Infrastructure (LLC) to design, engineer, manufacture, supply and commission two condensate polishing units for Adani Power's upcoming super power projects at Tiroda in Maharashtra (2x660 MW) and Kawai in Rajasthan (2x660 MW).

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