Thursday, September 15, 2005

Sensex hits new all time high

The Sensex extended its recent rally today, following good momentum
(sustained inflow) from FIIs and mutual funds, and stretched to touch a new
all time high. Strong buying was witnessed in both Old Economy as well as
New Economy shares.

The regulator, the Securities & Exchange Board of India's decision on
Wednesday, to enable a full-fledged participation of mutual funds in
derivatives trading also helped to lift sentiment. Mutual funds will now be
treated at par with FIIs on this count. So far, mutual funds were allowed to
participate in derivatives trading only for hedging purposes and for
rebalancing their portfolio.

The Sensex caught steam in late noon trades and kept on heading higher, and,
in the last hour of trades, hit a new lifetime high of 8294.24 points on all
round buying interest.

The BSE Sensex ended the day at a provisional close of 8291 points adding
101 points from its previous close.

The NSE Nifty ended the day at a provisional close of 2524 points, adding 32
points from its previous close.

The low for the BSE Sensex was 8203.77 points. The Sensex witnessed a 90-odd
point swing in the course of the day.

Among the Sensex stocks, 26 stocks were in the green while only 4 were in
the red.

Grasim was the biggest gainer in the Sensex up 4.3% to Rs 1400 on volumes of

Gujarat Ambuja Cements was up 3.9% to Rs 73.50 on volumes of 18.11 lakh

TCS was up 3.82% to Rs 1453 after a foreign brokerage hiked its price

Among the few losers, Hero Honda lost maximum by 0.45% to Rs 648.50 on
volumes of 70604 shares.

The total turnover amounted to Rs 3818 crore.

The advance decline ratio ended strong close to 2.5:1. 1882 shares advanced
while 737 declined. 46 shares remained unchanged.

The BSE Mid cap index ended higher by 1.35% while the BSE Small cap index
ended with a gain of 2.12%.

Reliance Industries topped the turnover list with turnover of Rs 143.25
crore followed by SBI with Rs 95.14 crore and Usha Martin with Rs 84.05

Tayo Rolls, JMT Auto, Agro Tech Foods, GL Hotels, Wellwin Ind, Classic
Biotech, Atlas Cycles, Hanil Era Textiles, Ace India, Bajaj Steel, Rama
Paper, India Infoline among the side counters surged close to 20% each.

RT Exports, Modern Dairy, Shirpur Gold and NK Industries all lost 6% to 9%

Notable block deals for the day include Aurobindo Pharma with 2.49 lakh
shares, Bayer Cropscience with 1.07 lakh shares, Bharat Forge with 9.5 lakh
shares, Dishman Pharma with 1.57 lakh shares, EIH with 1.50 lakh shares,
Geometric Software with 10 lakh shares, Indian Rayon of 1.60 lakh shares,
Mothersin Sumi of 1.63 lakh shares, ONGC with 1.21 lakh shares and Sterling
Biotech with 6.71 lakh shares among others.

Orchid Chemicals settled at Rs 251 on volumes of 55774 shares after it went
ex bonus today in the ratio 1:2. Yesterday the stock closed at Rs 368.75.

Mahavir Spinning finished the day at Rs 304.5, and notched up volumes of
14,162 shares, after it went ex-bonus today (the ratio for the bonus issue
was 1:2). Yesterday, the counter ended at Rs 456.05.

The Sensex hit another ton today extending its recent surge.

The records are being rewritten with every passing day of late in terms of
stock market indices.

The barometer BSE Sensex jumped 94.28 points or 1.1% to a lifetime closing
high of 8,283.76. The barometer index hit a high of 8,294.24. The S&P CNX
Nifty advanced 31.50 points or 1.2% to an all time closing peak of 2,523.95.

Ever since the barometer index decisively surpassed the 7,000 level in late
June 2005, the Sensex has been hitting record high levels almost every day.

Index heavyweight Reliance Industries (RIL), software major TCS, car major
Maruti Udyog, FMCG majors Hindustan Lever and ITC, cement majors, Grasim and
Gujarat Ambuja Cements, steel major Tisco, cellular services major Bharti
Tele-Ventures, housing finance major HDFC and HDFC Bank powered today’s
rally in Sensex.

RIL gained nearly 3% to a lifetime closing high of Rs 762.55.

TCS gained 3.8% to Rs 1,453 on reports that the company is witnessing an
increase in order flow due to more outsourcing by customers.

Car major Maruti Udyog (MUL) advanced for the second day in a row on hopes
of pick up in festive demand after a good monsoon this year. The stock
gained 3.6% to a 52-week closing high of Rs 545.

FMCG major Hindustan Lever (HLL) rose for the second day in a row on
positive outlook for the FMCG sector. HLL gained 2.5% to Rs 176.05. ITC
advanced 1.1% to Rs 1,877.50. The FMCG sector is now growing at a healthy
double-digit rate, and after a gap of over three years, the pricing war is

Grasim jumped 4% to Rs 1,400 and Gujarat Ambuja Cements (GACL) gained 3.8%
to Rs 73.50.

The market breadth remained strong right from the beginning of the trading.
At the end of the day, gainers outpaced losers by a ratio of 2.5:1 on BSE.

Among side counters, stocks like Tayo Rolls, Hanil Era Textiles, Agro Tech
Foods, Rama Paper Mills, Wellwin Industry, Ganesh Benzoplast, Uniflex
Cables, VST Tillers, Bayer CropScience, Fairfield Atlas, Glenmark Pharma,
Nocil, Ashapura, Madhucon Industries, Chemfab Alkalies, GMR Industries,
Aptech, Kinetic Engineering, Nahar Industrial Enterprises, Aptech, Tudor
India, SSI, and Hexaware, rose between 9% to 20% for the day.

Stocks like IFSL, India Infoline, Nocil, IFCI, Gujarat Sidhee Cement, GTL,
Indiabulls, Punjab Tractors, IDBI, Eveready Industries, Jindal Stainless,
and Hanil Era Textiles rose on decent to high volumes.

The regulator, Securities & Exchange Board of India, on Wednesday (14
September 2005), announced guidelines enabling a full-fledged participation
of mutual funds in derivatives trading. Mutual funds will be treated on par
with FIIs on this count. So far, mutual funds were allowed to participate in
derivatives trading only for hedging purposes and for rebalancing their

The market has spurted sharply in the past few days amid an intermittent
surge in FII inflow, and on the back of a pick-up in inflow from local
mutual funds. From 7,946.78 on 6 September 2005, the Sensex has jumped
336.98 points or 4.2% in just six trading sessions to current 8,283.76.

Data released by Sebi after trading hours on Wednesday showed FIIs bought
shares worth a huge Rs 418.20 crore on Tuesday (13 September 2005) – the day
when the Sensex rose 55 points.

The inflow of local funds in the past four trading sessions has been robust.
These institutions put in between Rs 183 crore and Rs 316 crore in four
trading sessions between 8 September 2005 and 13 September 2005.

The market has been on an uptrend for a while now but the recent rally has
been quite sharp and swift. From a low of 6,195.15 on 2 May 2005, the
barometer index has risen a staggering 2,088.61 points or 33.7% in a matter
of just over 4 months.

NIIT Technologies shot up 4.7% to Rs 188, following RBI's allowing FII buying up to 49% in the stock.

NIIT Technologies surges. 2.8 lakh shares changed hands in the counter on
BSE by late trading.

The stock had risen sharply since mid-August 2005. From a low of Rs 149.65
on 16 August 2005, the stock rose nearly 20% in a short while to Rs 179.40
by 14 September 2005.

With strong expansion plans and robust order book position, NIIT
Technologies expects 7-8% sequential growth in revenues in the coming
quarter Q2 September 2005.

But NIIT Technologies financial performance reported weak financial
performance for Q1 June 2005. On a sequential basis, the consolidated net
profit declined 17% to Rs 14 crore from Rs 16.90 crore in Q4 March 2005.
Sales were flat at Rs 136.50 crore (Rs 137.10 crore in Q4 March 2005).

In software services, NIIT Technologies is focusing on mainly three industry
verticals, the financial services, transportation, and retail. The other
areas are the enterprise solutions space, mainly on package implementation
around SAP, and another niche product, which is in the GIS space.

In the BPO business, NIIT Technologies has been focussing on the same
industry verticals as in the IT solutions business. So far BPO activities
have been mainly around insurance and collections

Tyre major MRF jumped 5% to Rs 3,339.10 - the maximum permissible level for the day

10,058 shares changed hands in the scrip on BSE by mid-afternoon trade.

The stock has witnessed a solid surge in the past one month or so. From a
low of Rs 2,286.55 on 3 August 2005, the scrip jumped a staggering 39% in a
short while to Rs 3,180.10 by 14 September 2005. A fall in prices of natural
prices had supported the rally in the counter.

According to market circles, institutional investors are mopping up the MRF

MRF is one of the major players in the Indian tyre market with over 20%
market share. It also derivatives substantial revenue from exports.

MRF like most tyre makers are witnessing pressure on profit margins due to
sharp surge in prices of key inputs including natural rubber. MRF had raised
the tyre prices by about one per cent in recent times, but this was just
nominal rise compared to the increase in cost.

MRF is original equipment supplier of radial tyres to Tata Indica. Volvo
which has entered the truck market in India is sourcing most of its tyre
requirements from MRF.

In the international market, MRF Ltd faces much better scenario as tyre
prices are much better in international market when compared to Indian

MRF’s net profit declined 1.2% in Q3 June 2005 to Rs 16.88 crore (Rs 17.09
crore). Net sales rose 21.1% to Rs 795.12 crore (Rs 656.22 crore).

TCS in the spotlight

Top software services exporter Tata Consultancy Services gained 2.6% to Rs
1,436 on reports that the company is witnessing an increase in order flow
due to more outsourcing by customers.

2.8 lakh shares changed hands in the counter on BSE by mid-afternoon trade.

The stock had cooled off in the past few days in volatile trade. Earlier,
the stock had spurted during late August and early September 2005 on the eve
of the software major bagging a major order from Dutch bank ABN AMRO. From a
low of Rs 1,300.25 on 24 August 2005, the stock surged to Rs 1,405.85 by 31
August 2005. On 1 September 2005, TCS said it sees revenue of over 200
million euros over the next five years on the back of a major outsourcing
order win from the Dutch bank

Earlier, TCS announced, on 15 July, that it has bagged a $100 million
contract with an unidentified US financial services firm.

TCS reported a consolidated net profit (as per Indian GAAP) of Rs 630.62
crore on sales of Rs 2,682.30 crore. The results were in line with market
expectations. As per figures available with, two
brokerages had forecast a net profit of between Rs 623.20 crore and Rs
642.20 crore for the company. TCS reported its results after trading hours
on Friday.

Tata Infotech is being merged in TCS. As per the swap ratio, 1 share of TCS
will be issued in exchange for every two shares of Tata Infotech. Tata
Infotech is particularly strong in systems integration in telecoms and
defence. It offers e-learning, software training, hardware design and
contract manufacturing services from its Goa facilities.

Vaibhav Gems sparkles as ban on FII buying lifted

Vaibhav Gems jumped 4% to Rs 285 after RBI allowed the enhancement of FII
ceiling to 60% of equity capital from the earlier 24%.
27,639 shares changed hands in the counter on BSE by early afternoon trade.
It may be recalled that in late July 2005, FIIs had barred fresh FII buying
in Vaibhav as the FII investment ceiling of 24% had been reached.
Vaibhav Gems had turned volatile since early August 2005 due to alternate
bouts of buying and selling. The stock moved between a low of Rs 246 and
high of Rs 294 since 5 August 2005.
In the past one year, the stock price galloped. From a level of Rs 35 in
August 2004, the stock price rose multi-fold.
Recently, Vaibhav Gems had announced that it had decided to acquire a global
jewellery manufacturing/marketing company belonging to the STS group of
companies situated in different areas of the globe for a sum not exceeding
Rs 400 crore.
Vaibhav Gems is a leading exporter of jewellery to the US and Europe. It is
increasingly laying emphasis on the studded jewellery segment.
The company has installed a state-of-the-art integrated plant for
manufacturing micro weight gold chains used in jewellery making. The plant,
imported from SISMA (Italy), was commissioned in April 2004 with the
objective to substitute the use of the imported variety with substantial
cost savings.
For Q1 June 2005, Vaibhav Gems reported 24.8% growth in net profit to Rs
2.51 crore (Rs 2.01 crore) on 17% growth in net sales to Rs 36.99 crore (Rs
31.59 crore).

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