Tuesday, September 06, 2005

Sensex extends its upbeat run and now seems poised to clear 8,000-mark

Sensex extended its winning streak today but the market witnessed
volatility as the barometer index moved between positive and negative
territory. However, the volatility in the Sensex was within a narrow
range of 61.99 points, between a high of 7,976.40 and low of 7,914.41.
For the day, the barometer index gained 21.54 points or 0.2% to
7,946.78. The S&P CNX Nifty rose 5.70 points to 2,428.65. Volatility,
to some extent, was the result of volatility in two index heavyweights
Reliance Industries and Infosys Technologies which moved between
positive and negative territory. Part of the volatility was due to
mixed trend in Sensex constituents. Select auto stocks like Hero Honda
and Tata Motors also found their feet to advance as the hike in retail
price of petrol and diesel came in more or less in line with market
expectation. The price hike announcement hit the market in mid-morning
trade. The government today hiked petrol prices by Rs 3 per litre and
diesel prices by Rs 2 per litre. The price of LPG and kerosene was
kept unchanged. Cement scrips slipped on profit taking. But scrips
like State Bank of India (SBI), ITC, Cipla and Bharti Tele-Ventures
held firm. Satyam Computer recovered from lower level in late trading.
Diamond scrips witnessed a broad based rally. Select tea shares and
select PSU banks were in demand.
A host of side counters surged. Stocks like Exide Industries,
Financial Technologies, Indo Ram Synthetics, Suashish Diamond, GTC
Industries, Godfrey Phillips, Indo Rama Textiles, Gujarat Siddhee
Cement, Gujarat Borosil, Jay Bharat Maruti, TVS Electronics, 3M India,
Kinetic Engineering, National Plastic, GE Shipping, Biopac India,
Simplex Casting, and Surana Telecom surged.
Stocks such as Gujarat Siddhee Cement, GTC Industries, MSK Projects,
Futura Polymers, Chambal Fertilisers, Su-Raj Diamond, GE Shipping,
DCW, Rolta India, GHCL, and McDowell rose on decent to high volume.
SBI (up 3% to Rs 843) made good headway on reports that it has
increased the size of its medium-term notes (MTN) programme to $ 2
billion from $ 1 billion. The programme, which is listed on the
Singapore Stock Exchange, was set up last year to raise funds to
augment the bank's overseas operations.
ITC gained 2.2% to Rs 1,833. The stock advanced for the second day in
a row on reports that it plans to set up two super luxury hotels - one
in Chennai and the other in Bangalore.
Cipla gained 2.6% to Rs 364 and Bharti Tele-Ventures rose 2% to Rs 325.50.
Hero Honda gained 1.2% to Rs 704. The stock bounced back from a low of
Rs 684. Tata Motors gained 0.1% to Rs 496. The stock recovered from
the day's low of Rs 489. Though car major Maruti Udyog ended 0.2% down
to Rs 503.90, it recovered from lower level. The stock came off the
day's low of 495.10.
Satyam Computer rose 1.5% to Rs 533 and software major Infosys gained
0.2% to Rs 2,361.
Index heavyweight Reliance Industries shed 0.3% to Rs 728.
GE Shipping spurted 6.8% to Rs 208. The stock rose on high volume of
17.5 lakh shares.
Tata Chemicals held firm right from the beginning of trading today.
The stock jumped 4% to Rs 195.70.
Scandent Solutions Corporation fell sharply.

Ion Exchange advances on forming JV with Belgian company

Ion Exchange is currently up 6.02% to Rs 123.25 on volumes of 1.45 lakh shares. The shares were caught in a range of between Rs 126 and Rs 118 so far today.
Ion Exchange made headway after it today announced the formation of a Joint Venture (JV) with Belgian major Fifth Element N.V. The JV will concentrate on the areas of water, and other businesses related to environmental issues. Ion Exchange is a frontrunner in the Indian water treatment sector. It provides solutions for total water management for industries, homes and communities. The company forms a select group that has expertise in a range of technologies, products and services that cover the entire spectrum of water and waste-water treatment. The company's domestic household segment is reputed for its Zero-B brand of drinking water purifiers and water conditioners. The company also also entered the public health sector, urban and rural, for infrastructural and community level drinking water treatment. The company's portfolio of products include water, process liquid and waste water treatment as well as recycling plants, using various physico-chemical processes for setting, clarification, filteration, disinfection, membrane and ion exchange technology, ion exchange resins, polymers and polyelectrolytes for water and non-water processes; boiler, cooling water and fireside treatment chemicals; Zero-B (bacteria) water purifiers which provides bacteria-free drinking water instantly, and electrochlorinators for disinfecting water.
For the quarter ended 30 June 2005, the company turned out a 15% fall in net profit to Rs 0.46 crore on net sales of Rs 53.23 crore. Net sales increased by 8%.

Diamond Cables proves a gem on inspiring new order win

Diamond Cables is currently up 3.15% to Rs 65.45 on volumes of 2.62 lakh shares.
The stock was exhibiting volatility today. The intra-day high was Rs 66.50, a new 52-week high for the counter. The low was Rs 60.30. The stock had spurted six-fold from the close of Rs 12 on 6 July 2005, to close at a high of Rs 63.45 yesterday as the company announced consistent order wins. Diamond Cables today announced the receipt of an order for supply of 5,000 kilometres of all aluminum alloy conductors from ABB for its turnkey projects in MVVNL and PUVVNL in Uttar Pradesh. The order aggregating Rs 6.684 crore is expected to be executed in September / October 2005. Last month, Diamond Cables bagged an order aggregating Rs 3.2 crore from wind energy major Suzlon for its projects at Jaisalmer, Dhule and Porbandar. The said order was for supply of conductors aggregating 610 kms and cables aggregating 45 kms. Diamond Cables, in August, started commercial production of theft proof conductors, the first consignment of these conductors has been supplied to a SEB for installation in a power theft prone area. These theft proof conductors ensure that no power can be drawn from a live line, as the outer layer of the live line is mono conducting in nature. For the quarter ended 30 June 2005, the company reported a net profit of Rs 0.69 crore (net loss of Rs 5.46 crore). Net sales jumped 349% to Rs 20.42 crore (Rs 4.55 crore).

Volatility marks Sensex as it dips into the negative

The market could not keep pace with the earlier momentum and the Sensex moved down into negative territory in afternoon trade even as the announcement of hike in petrol and diesel price came in matching with general expectations. The price hike announcement hit the market in mid-morning trade.
Auto scrips remained subdued. Index heavyweights Reliance Industries and Infosys failed to sustain higher level. Refinery scrips came off the higher level.
The market was volatile today as the Sensex moved between positive and negative territory. Volatility, to some, extent was caused by mixed trend in pivotals. Stocks like State Bank of India, ITC, Cipla, and ICICI Bank held firm.
At 13:50 IST, Sensex was down 3 points at 7,922. Sensex moved 61.99 points so far between a low of 7,914.41 and high of 7,976.40. The S&P CNX Nifty was down 2.65 points to 2,420.30
Government today hiked petrol price by Rs 3 per litre and diesel price by Rs 2 per litre. There was no change in prices of kerosene and LPG.
The market breadth which had improved in mid-morning trade weakened by afternoon trade. There were 1,504 losers on BSE as compared to 1,084 gainers. 56 scrips were unchanged.
Scandent Solutions plunged in afternoon trade. The stock was down 7.6% to Rs 304. 6 lakh shares changed hands in the counter on BSE. Scandent Solutions, after trading hours on Monday, said that it will merge with back-office service entity Cambridge Services Holdings LLC, another arm of the Singapore-headquartered Scandent Group. The merged company will be renamed Cambridge Solutions. The new company has combined revenues of around $ 275 million (about Rs 1,200 crore), and it will be targeting a turnover of more than $ 300 million in the year to March 2006.
In contrast, stocks like Financial Technologies and Electrosteel Castings surged in afternoon trade. Financial Technologies edged higher for the second day in a row today. The stock was up 6.7% to Rs 1,125. 28,519 shares changed hands in the counter on BSE.
Tata Chemicals held firm right from the beginning of trading today. The stock was up 3.3% to Rs 194.
Scrips like Subhash Projects, Ambika Cotton, Patel Roadways, Cubex Tubings, Tips Industries, Alembic Glass, Hanil Era Textile, Stone India, Cromption Greaves, Spanco Telesystems, ABG Heavy Industries, TIL, Harita Seating, Indian Hume Pipe, NIIT, Galaxy Entertainment, India Glycols, DCM, OCL India, Thermax and Aarti Drugs lost ground. Some of these stocks had surged in the past few days.
Auto scrips were subdued following oil price hike announcement. Bajaj Auto lost 1.3% to Rs 1,468 and TVS Motor shed 3.4% to Rs 81.55. Car major Maruti Udyog was down nearly 1% to Rs 500, Tata Motors shed 0.7% to Rs 492 and Hero Honda was down 0.6% to Rs 691.
Bhel shed 0.6% to Rs 1,073 and L&T lost 1% to Rs 1,312.
Cement scrips eased on profit taking. India Cements lost 1.9% to Rs 111, UltraTech Cement shed 1.3% to Rs 430, Gujarat Ambuja Cements shed 1% to Rs 71.15 and ACC lost 0.7% to Rs 479.65.
SBI gained 1.8% to Rs 632 on reports that it has increased the size of its medium-term notes (MTN) programme to $ 2 billion from $ 1 billion. The programme, which is listed on the Singapore Stock Exchange, was set up last year to raise funds to augment the bank's overseas operations.
ICICI Bank gained 1.1% to Rs 490
ITC rose 1.4% to Rs 1,819. The stock advanced for the second day in a row on reports that it plans to set up two super luxury hotels - one in Chennai and the other in Bangalore.
Buying was also witnessed in IDBI. The stock was up 2% to Rs 109.

Shrenuj and Company flares up after stock split record date announcement

Shrenuj and Company is currently up 5% to Rs 131.35 on volumes of 44,827
shares. This is also a new 52-week high for the counter. There are pending
buy orders of 26,891 shares on the counter on the BSE. The counter had moved
strong since 24 August 2005 when it was at Rs 98.05 at close. It touched Rs
125.10 yesterday ahead of the stock split announcement. Shrenuj and Company
has fixed 3 October 2005 as the record date for the purpose of sub-division
of equity shares of face value of Rs 10 each to Rs 2 each. In June 2005,
Shrenuj and Company had formed a subsidiary company in Dubai. The subsidiary
was set up with the aim of garnering larger market share of the expanding
diamond and jewellery market across the globe. The Mumbai-based diamond
company exports diamonds and precious stones to international markets. For
the quarter ended June 2005, the company posted net profit of Rs 2.14 crore
showing a marginal growth of 1.9%. Net sales remained flat at Rs 104.48

Som Distilleries & Breweries shines on new order

Som Distilleries is currently up 4.6% to Rs 22.80, a new 52-week high, on
volumes of 1.55 lakh shares. The counter had gained steadily from Rs 15.50
on 11 August 2005 to close at a high of Rs 21.80 yesterday. Som Distilleries
& Breweries moved strong today after it won an order worth Rs 15 crore for
the export of Indian Made Foreign Liquor (IMFL) to two countries in Africa -
Angola and Congo. The order involves the supply of malt whisky. In addition,
the company also plans to open a beer and liquor depot to cater to the beer
and liquor demand in European markets. Recently, the company extended its
arrangement with United Breweries (UBL) for the bottling of the latter’s
KingFisher brand for the Chhasttisgarh market. The company’s manufacturing
facilities are spread over 20 acres in Bhopal, where it has brewing, storing
and lagering facilities. This facility has an annual capacity of over 3.6
million cases. The company also possesses a facility to manufacture canned
beer. For the quarter ended 30 June 2005, the company posted turnaround
results. Net profit amounted to Rs 0.10 crore (net loss of Rs 0.30 crore).
Net sales rose 24.53% to Rs 8.02 crore (Rs 6.44 crore).

High tide for GE Shipping

Private sector shipping major Great Eastern Shipping surged on high early
volume on renewed buying interest. The stock was up 6% on BSE by mid-morning
trade to Rs 206.30. 12.55 lakh shares changed hands in the counter on BSE by
the first two hours of trade. The stock witnessed a bout of volatility since
31 August 2005 after the company’s board approved a restructuring proposal
whereby it will spin off its offshore oilfield services business into a
separate company. The stock moved between Rs 190 and Rs 194 since 30 August
2005. Earlier, the GE Shipping scrip had risen 12.4% in two trading sessions
to settle at Rs 190.70 on 30 August 2005 from Rs 169.65 on 26 August 2005
after the company announced that the board will consider a restructuring
proposal on 31 August 2005.
For quite some time now, the market has been agog with talk that GE Shipping
may separate its offshore business into a separate company. The stock
spurted in the past few months driven by such rumours. It had surged from a
low of Rs 132.65 on 30 June 2005. It is expected that the de-merged company,
which will have an offshore oilfields services business, will attract much
higher discounts on the bourses than the current discounting that GE
Shipping scrip gets. At present, at the current price of Rs 206.30, the GE
Shipping scrip trades at a PE multiple of 2.7 based on its Q1 June 2005
annualised EPS of Rs 74.30. The offshore business constituted 16% of GE
Shipping’s revenue and 14% profit before interest & tax (PBIT) in the
financial year ended March 2005. The offshore oil field sector is expected
to continue to draw importance especially on the back of higher oil prices
and increased budgetary allocation towards exploration and production
activities. Recently, the Government of India awarded 18 blocks under NELP V
with ONGC and Reliance getting the major blocks. ONGC’s target to increase
offshore exploratory drilling is encouraging for the offshore industry.
Consequent to the de-merger of the offshore oilfield services business, GE
Shipping’s equity will be reduced pro rata to the extent of the value of the
division transferred, the company said. Shareholders in GE Shipping will get
shares of the de-merged company in the same proportion of their holding in
GE Shipping. Thus, the shareholding of the new company would mirror the
shareholding in GE Shipping. The de-merged company will be later listed
separately on the bourses. The company has constituted a committee to work
out the detailed modalities of the de-merger and place before the board a
draft scheme of approval.

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