Realty shares rally
Buy Vijay Shanti Builders Ltd at Rs.15.50--Rs.16, T--Rs.30-31, SL--Rs.14.
Index heavyweight Reliance Industries (RIL) pared intraday gains. Interest rate sensitive realty stocks rose on expectations that the Reserve Bank of India (RBI) will start cutting interest rates in the coming months to prop up slowing economy. Metal stocks rose amid continued anticipation of further monetary policy easing from China.
The market regained positive terrain after slipping into the red after hitting one-month high at the onset of the trading session. The key benchmark indices alternately moved between the positive and negative terrain in morning trade. The market trimmed gains after strengthening in mid-morning trade. The 50-unit S&P CNX Nifty trimmed gains after hitting fresh one-month high in mid-morning trade. The market regained strength as key benchmark hit fresh one-month highs in early afternoon trade. A bout of volatility was witnessed in afternoon trade as key benchmark regained positive zone after reversing direction after surging to fresh one-month high in early afternoon trade.
At 13:16 IST, the BSE Sensex was up 27.98 points or 0.17% to 16,193.07. The index rose 79.61 points at the day's high of 16,244.70 in early afternoon trade, its highest level since 12 December 2011. The index fell 19.90 points at the day's low of 16,145.19 in early trade.
The S&P CNX Nifty was up 10.95 points or 0.23% to 4,860.50. The index hit a high of 4,877.20 in intraday trade, its highest level since 12 December 2011. The index hit a low of 4,841.60 in intraday trade.
The BSE Mid-Cap index was up 1.06% and the BSE Small-Cap index was up 1.59%. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,850 shares rose and 788 shares fell. A total of 98 shares were unchanged.
Among the 30-member Sensex pack, 15 rose and an equal number of stocks fell. Mahindra & Mahindra (down 2.15%), TCS (down 1.78%), Cipla (down 1.51%), Jindal Steel & Power (down 1.44%), Tata Motors (down 1.41%), Bharti Airtel (down 1.01%), Infosys (down 0.94%) and ONGC (down 0.73%), edged lower from the Sensex pack. Hero MotoCorp (up 2.01%), Bajaj Auto (up 1.08%), Sun Pharmaceutical Industries (up 0.77%), ICICI Bank (up 0.73%) and HDFC (up 0.58%), edged higher from the Sensex pack.
Index heavyweight Reliance Industries (RIL) gained 0.96% to Rs 742.20, off the day's high of Rs 746. The stock extended Tuesday's near 4% rally. RIL last week said it has scheduled a planned maintenance turnaround of one of the crude distillation unit of its SEZ Refinery at Jamnagar complex for a period of approximately three weeks starting mid February 2012. This maintenance turnaround is planned for the first time after its commissioning during the Financial Year 2008-09, RIL said. This opportunity would also be utilised to take up productivity improvement related jobs in other secondary processing units as necessary, RIL said. During this period, other three crude distillation units at Jamnagar refining complex are expected to sustain normal operations, RIL added.
RIL had announced early last week that it is divesting a part of the interest in ETV channels in favour of TV18 Broadcast, a Network18 Group firm. RIL said that as a part of the deal with TV18 Broadcast, Infotel Broad Band Services (Infotel), a subsidiary of RIL, has entered into a Memorandum of Understanding with TV18 Broadcast and Network18 Media and Investments for preferential access to all content of the latter for distribution through the 4G Broadband Network being set up by RIL.
Interest rate sensitive realty stocks gained for the second straight day on expectations that the RBI will start cutting interest rates in the coming months to prop up slowing economy. Lower interest rates may help revive demand for properties. Purchases of both residential and commercial property are largely driven by finance.
Sunteck Realty (up 12.28%), Anant Raj Industries (up 9.54%), HDIL (up 8.63%), Peninsula Land (up 6.56%), Parsvnath Developers (up 4.4%), DLF (up 3.95%), Unitech (up 3.52%), Oberoi Realty (up 3.49%), Indiabulls Real Estate (up 2.86%), Prestige Estates (up 2.7%), Sobha Developers (up 2.61%), Phoenix Mills (up 1.75%) and Godrej Properties (up 1.62%), edged higher.
India's property investments by private-equity firms rose 69% last year, according to Venture Intelligence, a research company that tracks private equity, and mergers and acquisitions. Private equity made $2.68 billion of real-estate investments through 53 transactions in the country in 2011. In 2010, they spent $1.58 billion on 55 investments.
Metal stocks rose amid continued anticipation of further monetary policy easing from China, the world's largest consumer of copper and aluminum. Sterlite Industries (up 4.43%), Hindalco Industries (up 4.27%), Sesa Goa (up 2.83%), Tata Steel (up 2.22%), Sail (up 2.04%), NMDC (up 1.18%), Nalco (up 1.14%), Hindustan Zinc (up 1.12%), JSW Steel (up 0.99%), Coal India (up 0.88%) and Bhushan Steel (up 0.82%), edged higher.
Meanwhile, US aluminium major Alcoa at the time of announcing its Q4 results on Monday said it has bullish view of the global aluminum market. The aluminum company's results were in line with expectations overall. It swung to a fourth-quarter loss as prices slumped and costs rose but it has a bullish view of the global aluminum market.
Top gainers in the BSE Mid-Cap index were, Sunteck Realty (up 13.99%), Jai Corp (up 10.41%), Anant Raj Industries (up 10.40%), Wockhardt (up 10.13%) and KSK Energy Ventures (up 9.89%).
Top gainers in the BSE Small-Cap index were, Aegis Logistics (up 20%), A2Z Maintenance & Engineering Services (up 19.99%), Ruchi Infrastructure (up 19.88%), Kanani Industries (up 17.82%) and HEG (up 16.37%).
Foreign institutional investors (FIIs) bought shares worth Rs 324.32 crore on Tuesday, 10 January 2012, as per provisional data from the stock exchanges. FIIs have bought shares worth a net Rs 951.57 crore so far in January 2012, as per provisional data from the stock exchanges.
Moody's has upgraded India's rating for short-term foreign currency bank deposits from speculative to investment grade after finance ministry sought clarity from the global rating agency. Moody's has lifted the short-term country ceiling on foreign currency bank deposit from NP (not prime) to Prime (P-3), suggesting acceptable ability to repay short-term obligations. The upgrade will help the country attract overseas deposits to fill up the void created by the sharp slowdown in equity inflows. Moody's last month unified India's local and foreign currency bond ratings at Baa3 and said the outlook on the ratings was stable.
Meanwhile, state governments in India have reportedly given their in-principle approval to a proposed national goods and service tax (GST), raising hopes that the ambitious tax reform could be included in the upcoming budget. Finance ministers from different states agreed to the central government's GST proposal, but specified a list of services, such as luxury and entertainment, that would remain taxed at the state level. The GST will cut business costs and boost government tax revenue, but has missed several deadlines for implementation due to resistance from states that fear a loss of fiscal autonomy and the main opposition Bharatiya Janata Party.
The next major trigger for the market is Q3 December 2011 corporate earnings, which will start trickling in from tomorrow, 12 January 2012. The focus will be on guidance from the company managements on outlook for the remaining part of the year and for the next year. Analysts expect weak Q3 December 2011 results due to lower volume growth in a slowing economy, higher raw material costs and higher interest charges.
IT bellwether Infosys and housing finance major HDFC report Q3 results tomorrow, 12 January 2012. TCS and HCL Tech unveil quarterly results on 17 January 2012. Jindal Steel & Power announces Q3 results on 18 January 2012. HDFC Bank, Hero MotoCorp and Bajaj Auto unveil Q3 results on 19 January 2012. Wipro, ITC, Axis Bank and Jet Airways (India) unveil Q3 results on 20 January 2012. JSW Steel reports its Q3 standalone results on 20 January 2012.
Asian Paints, Zee Entertainment Enterprises and Godrej Consumer Products unveil Q3 results on 21 January 2012. L&T, Maruti Suzuki and Kotak Mahindra Bank unveil Q3 results on 23 January 2012. Cairn India and Biocon unveil Q3 results on 24 January 2012. Sesa Goa and Rural Electrification Corporation unveil Q3 results on 25 January 2012. Dabur India unveils Q3 results on 31 January 2012. Dr. Reddy's Laboratories reports Q3 results on 3 February 2012. India Cements announces Q3 results on 6 February 2012. Mahindra & Mahindra unveils Q3 results on 7 February 2012. BPCL unveils Q3 results on 10 February 2012. Aditya Birla Nuvo announces Q3 results on 11 February 2012.
The government has decided to allow Qualified Foreign Investors (QFIs) to directly invest in the Indian equity market from 15 January 2012. A QFI is an individual, group or association resident in a foreign country that is compliant with Financial Action Task Force (FATF) standards. QFIs include pension funds which normally tend to stay invested for a longer period of time. QFIs do not include FIIs/sub accounts. In August last year, the government allowed foreign investors to directly invest up to $13 billion in equity and debt schemes of mutual funds.
Qualified foreign investors, or QFIs, will now be able to invest individually up to 5% of the capital of the Indian company. Cumulatively, QFIs can invest up to 10% of the capital of the company being invested in. These limits are over and above the FII and NRI investment ceilings prescribed under the PIS route for foreign investment in India, a government statement said.
Food inflation plunged into the negative territory in the fourth week of December mainly due to base effect, data released by the Government showed on Thursday, 5 January 2011. Fuel inflation edged up though. Food inflation shrank by 3.36% in the week ended December 24, after rising by 0.42% in the preceding week. Inflation in the Primary Articles group fell to 0.1% in the week under review, from 2.7% in the week ended December 17. Inflation in the Fuel & Power group stood at 14.60% in the week ended December 24, versus 14.37% in the previous week.
At its mid-quarterly monetary policy review meet on 16 December 2011, the RBI left its main lending rate unchanged in order to support faltering economic growth as inflation shows signs of cooling. While inflation remains on its projected trajectory, downside risks to growth have clearly increased, RBI had said in a statement on 16 December 2011. From this point on, monetary policy actions are likely to reverse the cycle, responding to the risks to growth, RBI had said.
RBI had said inflation risks remain high and inflation could quickly recur as a result of both supply and demand forces. RBI also said that the rupee remains under stress. The timing and magnitude of further actions will depend on a continuing assessment of how these factors shape up in the months ahead, RBI said. The RBI has raised rates 13 times since March 2010.
Data on industrial production for November 2011 on Thursday, 12 January 2012, and data on inflation for December 2011 on Monday, 16 January 2012, could provide cues on the central bank's likely policy stance at the third quarter review of Monetary Policy 2011-12 scheduled on 24 January 2012. Industrial production is seen rising 2.1% in November 2011 as per the median estimate of a poll of economists carried out by Capital Market. Industrial production had declined 5.1% during October 2011, snapping consistent growth for the preceding 29 months in a row.
Inflation based on wholesale price index (WPI) is seen easing to 7.4% in December 2011 from 9.1% in November 2011, per the median estimate of a poll of economists carried out by Capital Market.
Credit rating agency Moody's Investors Service on 14 December 2011 said that the sharp decline in the value of the Indian rupee against the dollar over the past few months is generally exerting only a moderate impact on rated Indian companies. Risks for companies holding large amounts of dollar denominated debt are also manageable in the near term, given that debt maturities are limited for this time frame, Moody's said in a new report. This means Indian companies rated by Moody's do not have a significant dollar outflow at a time when the Indian rupee is losing ground.
The budget for 2012/13 ending March will be presented after elections scheduled in five states, Finance Minister Pranab Mukherjee said on Monday, 2 January 2012. State elections are scheduled between the end of January and early March. The annual budget is usually presented on the last working day of February. The Election Commission on 24 December 2011 announced the dates for the assembly polls in Uttar Pradesh, Punjab, Uttarakhand, Manipur and Goa. Uttar Pradesh will have polling on February 4, 8, 11, 15, 19, 23 and 28, while Uttarakhand and Punjab will go to polls on January 30. Manipur will have polls on January 28 and Goa on March 3.
Asian stocks advanced for a third day on Wednesday as optimism about the US economy offset a warning from Fitch Ratings that it may downgrade Italy's credit rating. Key benchmark indices in Hong Kong, Japan, Singapore, and Taiwan rose by between 0.13% to 0.77%. Key benchmark indices in China, Indonesia and South Korea fell by between 0.41% to 0.42%.
Italy faces a "significant chance" of a credit-rating downgrade by Fitch Ratings, which is reviewing all European sovereign ratings and will make a decision by the end of the month.
Trading in US index futures indicated that the Dow could fall 13 points at the opening bell on Wednesday, 11 January 2012. US stock rallied to a 5-month high on Tuesday on optimism that China may begin monetary easing and after Alcoa kicked off the earnings season on a positive note. China's reported a drop in import growth triggering speculation that monetary easing is right around the corner adding to the worldwide stock rally.
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