Tuesday, September 20, 2005

Banking, IT stocks push Sensex to 8,500; RIL hits all time peak


The bull fervour on the bourses appears to be unstoppable. The market firmed
up further today in what has been a solid surge in the past few days. Sensex
jumped 55.44 points or 0.66% to 8,500.28 – a lifetime closing high.
Software, banking pivotals, and index heavyweight Reliance Industries
powered today’s surge in the Sensex.

Software stocks were much pursued on expectations of strong Q2 results. HDFC
Bank advanced for the second day in a row on expectation of strong Q2
results. L&T came on strong on the back of an order win from ONGC. Auto
scrips slipped on profit taking.

Select PSU banks like State Bank of India, Oriental Bank of Commerce, Punjab
National Bank and Canara Bank firmed up at the fag end of the trading
session. Buying was evident in front line sugar scrips, and select FMCG
stocks. In contrast, selling was conspicuous in hotel scrips.

Market breadth remained weak right from the beginning of the trading
session. At the end of the day, losers outpaced gainers by a ratio of 3.3:1.
The last time such a weak market breadth was recorded was way back on 23
August 2005.

Though market breadth was weak, a host of side counters zoomed up and select
stocks made headway on huge volumes. Stocks like Bajaj Auto Finance, Tata
Metaliks, Panacea Biotech, Bata India, Financial Technologies, SRF,
Carborundum Universal, HCL Technologies, Omax Autos, Finolex Cables, Hinduja
TMT, SSI, Reliance Industrial Infrastructure, UTI Bank, and Glaxosmithkline
Consumer moved strong.

Buying was also witnessed in Bombay Dyeing, EID Parry, Britannia, Finolex
Industries, and Flex Industries. Scrips like SRF, BOC India, and Abhishek
Industries rose on high volume.

Stocks like Pantaloon Retail, Supreme Industries, Samtel Color, Shree Rama
Multi-Tech, Grindwell Norton, Shyam Telecom, Torrent Power SEC, J K
Industries, Mukand, Dewan Housing Finance, Zicom Electronic Security, ICI
India, Tamil Nadu Petroproducts, Indo Rama Synthetics (India), Sesa Goa, and
McDowell slipped on profit taking. Some of these stocks had spurted in the
past few days.

The Sensex gained 55.44 points or 0.66% to 8,500.28. The Sensex hit a high
of 8,515.50, which is an all time high for the barometer index. It took just
8 trading sessions for the Sensex to hit 8,500 after the barometer index had
first hit the 8,000-mark on 8 September 2005.

The S&P CNX Nifty rose 10.90 points or 0.4% to 2,578 – a lifetime closing
high.

Turnover on BSE surged to Rs 4,389 crore compared to Monday’s Rs 4,070
crore.

The market has been on a roll. From a recent low of 7,634.43 on 29 August
2005, Sensex has now risen 865.85 points or 11.3% in a span of just 15
trading sessions to current 8,500.28. This sharp surge has materialised
without any correction and the rally is the biggest rise in Sensex (in terms
of points) in such a short while in last more than one year.

RIL gained 2% today to a lifetime closing high of 780.50. The scrip was
boosted by media reports that it is considering oil sector acquisition in
Europe and US and that the company may also go in for listing in New York or
London. 34.9 lakh shares changed hands in the counter on BSE today.

Two private sector banks – ICICI Bank and HDFC Bank advanced for the second
day in a row today. ICICI Bank gained 3.6% to a lifetime closing high of Rs
577. 4.7 lakh shares changed hands in the counter on BSE.

HDFC Bank gained 2.8% to a lifetime closing peak of Rs 729.95. 1.1 lakh
shares changed hands in the counter on BSE.

Renewed buying pushed up IT stocks. Infosys was up 1.8% to Rs 2,495, Satyam
Computer was up 2.3% to Rs 554.40 and TCS gained 1.3% to Rs 1,473.

L&T gained 1.3% to Rs 1,400 after the company said Oil & Natural Gas
Corporation (ONGC) has entrusted a fast-track job of installation of
diversionary pipelines and associated platform modifications to a consortium
led by L&T with Global Industries Offshore LLC, USA.

Bhel gained 1.3% to Rs 1,127 and NTPC rose 1.2% to Rs 103.85.

ONGC gained 0.6% to Rs 1,028. ONGC today said it has acquired a 30% stake in
seven exploration blocks in Cuba.

Car major Maruti Udyog lost 3.5% to Rs 570, Tata Motors shed 1.2% to Rs
520.80 and Bajaj Auto shed 0.5% to Rs 1,669.95.

SRF jumped 7.8% to Rs 342. The stock rose on high volume of 51.5 lakh shares
on BSE. The stock has spurted since late March 2005 with the company’s
potential to generate substantial revenue from sale of carbon credits
boosting the stock.

BOC India jumped 20% to Rs 195.50. The stock rose on high volume of 35 lakh
shares.

Housing finance major HDFC lost 2.1% to Rs 1,029. A block deal of 3 lakh
shares was executed in the stock on BSE at Rs 1,033 - at a discount to
Monday’s closing price of Rs 1,051.75.

Gujarat Ambuja Cements (GACL) lost 2.4% to Rs 71.95, FMCG major Hindustan
Lever (HLL) shed 1.1% to Rs 175, Cipla lost 1.2% to Rs 363.85, Tata Power
shed 1% to Rs 457 and Wipro lost 1% to Rs 377.

Apollo Hospitals jumped 20% to Rs 528 boosted by reports that it was looking
to acquire New Delhi based Escorts Heart Institute and Research Centre.
After trading hours, the company clarified that various financial
intermediaries had been approaching the company but no concrete proposal has
been submitted to the board in this regard.

Select PSU banks witnessed a late surge. Oriental Bank of Commerce (OBC)
jumped 5% to Rs 283.90, Punjab National Bank gained 1% to Rs 443.10, Canara
Bank rose 0.5% to Rs 248.40 and State Bank of India advanced 0.4% to Rs
915.25.

Select FMCG stocks surged on positive outlook for the FMCG sector.
Glaxosmithkline Consumer jumped 7.6% to Rs 500, Britannia gained 3.8% to Rs
1,200, Godrej Consumer rose 3.3% to Rs 465, Nestle gained 1.3% to Rs 880.95,
and Procter & Gamble rose 1.3% to Rs 836.90. The FMCG sector is now growing
at a healthy double-digit rate, and the pricing war is receding.

Front line sugar scrips advanced. EID Parry rose 4% to Rs 199.70, Balrampur
Chini Mills gained 4% to Rs 93, Bajaj Hindustan rose 2.4% to Rs 215, and
Bannari Amman Sugar gained nearly 1% to Rs 832

Selling was conspicuous in hotel shares. Indian Resort Hotels plunged 7% to
Rs 355, Taj-GVK Hotels lost 3.7% to Rs 599, EIH Associated Hotels shed 3.6%
to Rs 122, Hotel Leelaventure shed 3.2% to Rs 276, Kamat Hotels lost 3% to
Rs 123, EIH shed 3% to Rs 495, Indian Hotels lost 1.3% to Rs 768, and Asian
Hotels lost 1% to Rs 415.

Timex Watches plunged 11.8% to Rs 24.45. The stock declined on high volume
of 14.3 lakh shares.

Financial Technologies jumped 9% to Rs 1,620. 83,736 shares got traded in
the scrip on BSE.

UltraTech Cement gained 4% to Rs 483.

Nagarjuna Construction gained 3.1% to Rs 231.15 after the company said it
has secured a new order of Rs 253 crore from National Highway Authority of
India (NHAI) for construction of Lucknow-Muzaffarpur National Highway
Project on NH-28 under joint venture.

Matrix Laboratories gained 1.4% to Rs 194.60 after the company said it had
acquired a 43 percent stake in Switzerland's Explora Laboratories. Explora
is engaged in research and development of active pharmaceutical ingredients
and intermediates that are used to make medicines. Matrix said Explora
expects to have revenue of 2 million Swiss francs ($1.59 million) for 2005.

source: capitalmarket

Sensex gains 866 points in 15 trading sessions


The bull fervour on the bourses appears to be unstoppable.

The market firmed up further today in what has been a solid surge in the
past few days. Sensex jumped 55.44 points or 0.66% to 8,500.28 – a lifetime
closing high.

Software, banking pivotals, and index heavyweight Reliance Industries
powered today’s surge in the Sensex.

The market has been on a roll. From a recent low of 7,634.43 on 29 August
2005, Sensex has now risen 865.85 points or 11.3% in a span of just 15
trading sessions to current 8,500.28. This sharp surge has materialised
without any correction and the rally is the biggest rise in Sensex (in terms
of points) in such a short while in last more than one year.

Stock specific activity on the bourses remains robust. Though market breadth
was weak, a few stocks zoomed up today. A set of stocks surge every day (not
the same set of stocks). This has been the trend for a while now.

Liquidity continues to drive rally on the Indian bourses. On Friday 16
September 2005 – the day when the Sensex jumped 97 points - FIIs bought
shares worth a substantial Rs 443.70 crore. In three out of the four trading
sessions, between 13 September 2005 and 16 September 2005, the daily inflow
exceeded Rs 400 crore . The Sensex jumped 242.54 points or 2.9% in those
four trading sessions to 8,380.96 on 16 September from 8,138.42 on 12
September.

Net foreign fund investment has exceeded $ 8 billion this year, compared
with $ 8.5 billion for all of 2004, and it is expected that concerns about
the strength of the US economy in the aftermath of Hurricane Katrina may see
more flows being diverted to emerging markets, including India.

Firmness in Asian market supported upmove on the Indian bourses. The
sentiment perked up further after Finance Minister P Chidambaram stated in
an interview on 15 September 2005 that he expects a resolution soon to
problems stalling stake sales in state-run firms.

The market has shrugged off the hike in the domestic price of petrol and
diesel as it was more or less in line with market expectation. On 6
September, government increased petrol price by Rs 3 per litre and diesel
price by Rs 2 per litre. The price of LPG and kerosene was kept unchanged.
The oil price rise also removed weeks of uncertainty about domestic fuel
prices.

There has been a near secular uptrend on the bourses since the past four and
half months. From a low of 6,195.15 on 2 May 2005, Sensex has now gained a
whopping 2,305.13 points or 37% to current 8,500.28. The corrections have
been sharp and swift during the market’s rise higher. The last time a major
correction took place was during 18 August 2005 to 24 August 2005. In just
five trading sessions, the Sensex had, on that occasion, fallen 247 points.
Prior to that, a major correction had shaved 201 points off the Sensex in
just three trading sessions between 5 August 2005 and 9 August 2005.

Earlier, in mid-July 2005, the Sensex had lost 119 points in three trading
sessions between 12 July 2005 and 14 July. Before that, in early July, the
Sensex had lost 142.47 in a single trading session on 7 July 2005. In late
June, the Sensex had lost 102 points in a single trading session on 28 June
2005.
source: capitalmarket

Virinchi Technologies surges on tie up with Qualcomm


Virinchi Technologies was locked up at the 10% ceiling at Rs 74.55 and
notched up a huge 14.03 lakh shares as volumes at that level on BSE.

The stock has been range-bound in the past two months, between Rs 60 and Rs
70.

Virinchi Technologies, the Hyderabad-based products and services provider,
hit the roof today after it forayed into mobile applications covering
gaming, and enterprise solutions.

Virinchi Technologies is partnering with Qualcomm to set up a BREW centre,
and with Mobitas to develop a solution for the construction industry. BREW
(binary runtime environment for wireless), pioneered by Qualcomm, helps to
run various mobile applications. It is referred to as BuildPlans, a joint IP
developed at Hyderabad which helps people in the construction industry to
send ground information to the office using mobile phones, capturing local
data.

Virinchi Technologies, in partnership with Mobile Websurf, earlier developed
a solution for mobile phones where a user can access and send information
using his mobile phone as if he were working on a PC.

Virinchi’s mobile applications group has also developed interactive games
for an environment where multiple mobile users function which can now be
played individually.

Virinchi Technologies is set to hike its authorised capital from Rs 13 crore
to Rs 18 crore and also make a preferential offer. The offer is to be made
to both strategic investors and promoters, and is priced at Rs 67 per share.

Virinchi Technologies provides consultancy services in the field of
information technology and infrastructure. It has four strategic business
units consisting B2B e-commerce, enterprise wide resource planning
solutions, networking, and services.

For the quarter ended 30 June 2005, the company reported a 144% jump in net
profit to Rs 1.95 crore on net sales of Rs 6.04 crore. Net sales also jumped
by 150%.

Venus Remedies is up 2.6% to Rs 266 on volumes of 29,358 shares


The day's range so far was between Rs 260 and Rs 272.25.

The stock has declined from the higher level, from the close of Rs 292.35 on
6 September 2005 to close at Rs 259.30 yesterday.

Venus Remedies advanced today after it commercially launched a new
formulation, developed by its in-house R & D wing, in the critical care and
ventilation therapy segment through its parenteral specialty division. The
formulation has been launched in the domestic markets.

The new product is launched under the brand name Mucomelt, and it is a
specialty product that will be used for treatment of diseases of the
respiratory segment. Mucomelt is an essential drug for patients under
intensive care and immuno-compromised patients. It restores respiration
during critical stages and substantially reduces the duration of
hospitalisation and the incidence of multi-organ dysfunction syndrome,
inhibits esophageal tumors and potentiates the effect of anti-angina drugs.

Venus Remedies earlier this month, entered into a strategic marketing tie-up
with Elder Pharmaceuticals for the right placement of the new formulation.
The new injection is proposed as a remedy for bacterial meningitis, which
till date did not have a specific medication for treatment.

Venus Remedies is a Chandigarh-based pharmaceutical company, engaged in the
manufacture of super specialty formulations.

For the quarter ended June 2005, the company reported a 358% surge in net
profit to Rs 2.29 crore (Rs 0.50 crore). Net sales jumped 157.2% to Rs 15.38
crore (Rs 5.98 crore).

SRF jumped 8.7% to a lifetime high of Rs 344.60.


The stock rose on high volume of 31.3 lakh shares on BSE.

The stock has spurted since late March 2005 with the company’s potential to
generate substantial revenue from sale of carbon credits boosting the stock.
Under the Kyoto Protocol, industries in developed countries can offset their
carbon dioxide emissions by buying carbon credits from projects that cut
emissions in developing countries.

From a low of Rs 82.35 on 29 March 2005, the stock spurted 285% in a few
months to Rs 317.15 by 19 September 2005. Expectation of strong Q1 June 2005
results boosted stock further since late June 2005.

For Q1 June 2005, SRF reported 96% jump in Q1 June 2005 net profit to Rs
23.70 crore. Net sales rose 49% to Rs 318.20 crore. NTCF Nylon Tyre Cord
Fibre) prices, which went up in Q4 due to imposition of anti dumping duty,
helped manufacturers such as SRF to increase prices and generate better
margins.

The technical textiles business of SRF comprises of the Nylon Tyre Cord
Business (NTCF) and the industrial fabrics business.

The chemicals business of SRF consists of refrigerant gases, chloromethanes
and pharma chemicals. SRF will soon launch its new capacity to manufacture
3000 TPA of HFC-134a/HFC-32, which are new generation gases. This new
capacity should become operational by June 2006.

Early this month, SRF entered into a deal to sell 5,00,000 carbon credits to
a unit of Royal Dutch/Shell. The value of the deal was not made public.

Hindalco spruces up on expected fund-raising initiative


Hindalco improved 2.15% to Rs 163.10 on volumes of 7.52 lakh shares.

The day’s range so far was between Rs 146.45 and Rs 161.

The stock witnessed a decent run up from Rs 136.32 on 26 August 2005 to Rs
159.75 yesterday, following the closure of 10:1 stock split (which saw an
adjustment in stock price). Volumes have increased significantly after the
stock split

Aluminum major Hindalco has proved firm ahead of its board meet today to
consider a rights issue and/or raising of funds through various options.

Hindalco needs funds for its major expansion projects. The company has
chalked out aggressive plans in both copper and aluminium. The plans include
capacity expansions and new ventures, and entail a capital investment in
excess of Rs 20,000 crore over three years.

The company has entered into MoUs with the respective governments for
setting up of greenfield alumina and aluminium facilities in Orissa and
Jharkhand.

Hindalco's alumina capacity at Muri is being raised from 110,000 to 500,000
TPA. The company has also begun evaluation work for expanding the Belgaum
refinery from 350,000 to 650,000 TPA and that of high value special alumina
capacity at Belgaum to 167,000 TPA from 91,000 TPA.

Concurrent to the alumina expansion, Hindalco is also augmenting its smelter
and captive power generation capacity at Hirakud. Hindalco’s current
debt-equity ratio 0.44:1. The long-term debt-equity ratio is 0.42:1.

Hindalco’s net profit rose 38% to Rs 324.90 crore in Q1 June 2005 (Rs 235.60
crore). Net sales rose 7% to Rs 2,207.80 crore (Rs 2,061.60 crore).
source:capitalmarket

Software stocks edged higher today on renewed buying interest


IT bellwether Infosys Technologies gained 2.7% to a 52-week high of Rs
2,515. Satyam Computer rose 2.5% to Rs 555.25, and TCS gained 1.5% to Rs
1,475. Wipro was up 0.08% to Rs 381.10

HCL Technologies rose nearly 3% to Rs 468, Patni Computer gained 2.6% to Rs
457, Mphasis BFL rose 2.8% to Rs 263, VisualSoft Technologies gained 1.7% to
Rs 215, and Polaris Software rose 1.8% to Rs 156.

95,540 shares changed hands in Infosys, 9.9 lakh shares got traded in
Satyam, 1.1 lakh shares changed hands in TCS, 63,880 shares changed hands in
HCL Technologies, and 36,210 shares got traded in Patni Computer.

In the past one month to 19 September 2005, the combined market cap of eight
large IT firms rose 7% to Rs 236751.70 crore.

IT pivotals had got a boost after two IT majors Infosys and TCS got a major
outsourcing contract earlier this month from Dutch bank ABN AMRO. The huge
ABN order indicates that demand for offshoring remains strong and that
Europe is opening up to offshoring in a big way. CIOs continue to stretch
their IT dollars by sending increasing volume/type of work offshore, with
India remaining the dominant preferred destination.

The upmove in the rupee versus the US dollar has slowed down in recent
months and this augurs well for IT companies according to analysts.

Analysts expect largely flat EBIT margins for leading IT firms due to better
operating efficiencies (utilization, onsite-offshore mix, metro/small-city
employee mix, lower general & administration (G&A) expenses as % of sales).

Early this month, Infosys said it bagged an outsourcing order worth $ 140
million over five years from ABM AMRO. TCS expects revenues of over 200
million euros over five years from the deal with the Dutch bank.

Apollo Hospitals Enterprise jumped 20% to Rs 528 on reports that it was looking to acquire New Delhi based Escorts Heart Institute and Research Centre


2.2 lakh shares changed hands in the counter on BSE by the first hour or so
of trading.

On Monday, the stock rose 10.1% to Rs 440. Earlier, the stock spurted during
late June 2005-early August 2005. From a low of Rs 325.40 on 20 June 2005,
the stock spurted to Rs 400.05 on 1 August 2005. The stock had later
witnessed a bout of volatility.

Apollo had recently completed a $70-million (Rs 305 crore) global depository
receipts (GDR) issue that was listed on the Luxembourg Stock Exchange. The
main aim of the issue was to raise resources to fuel the hospital's
expansion plan.

The company is on a major expansion spree whereby it proposes to set
up120-bed hospitals in seven mini-metros that would cost Rs 15 crore each.

Apollo Hospitals is the largest private healthcare conglomerate in South
Asia with over two decades of experience and excellent brand equity. It was
set up in Chennai in 1979, and has emerged as the world's fourth largest
corporate hospital. It has 2,193 own beds and 2,372 managed beds. At
present, Apollo Hospitals operates 39 hospitals across India.

Apollo is also looking to pump in an estimated Rs 65 crore in expanding its
network of maternity care centres, Cradle. Besides, this, Apollo clinics,
are also being beefed up across the country.

L&T constructs gains on impressive new order win from ONGC


Larsen and Toubro gained 2.6% to Rs 1,416 on volumes of 37,846 shares.

The day's range so far was Rs 1,370 and Rs 1,420.40 (a new 52-week high).

The stock made steady gains from the close of Rs 1,319.15 on 14 September
2005 to close at Rs 1,380.75 yesterday.

Larsen and Toubro said, after trading hours yesterday, that a consortium led
by the company has secured an order worth Rs 325 crore from ONGC to restore
the latter's Bombay High output.

L&T stated that it will engineer, supply and commission offshore facilities
worth around Rs 325 crore in addition to the main order of Rs 930 crore for
pipeline replacement including platform modifications received earlier this
year. The additional scope involves 12 new submarine pipelines and 24
platforms to be modified, with an ambitious completion target of pre-monsoon
2006.

Last month, the company had bagged an order worth more than Rs 211 crore to
rebuild the Kensington Oval stadium in Barbados. The Kensington Oval stadium
is being rebuilt in preparation for the World Cup cricket tournament in
2007. The project will be completed in 16 months.

L&T reported a 78% jump in Q1 ended 30 June 2005 net profit to Rs 142.97
crore compared to Rs 80.13 crore in Q1 June 2004. L&T’s total income rose
17.7% to Rs 3,183.81 crore compared to Rs 2,703.37 crore in Q1 June 2004.

Meanwhile, L&T has decided to exit the tractor business and is selling its
stake in a joint venture with Deere & Co in favour of its joint venture
partner Deere. L&T said it would focus on its core businesses of engineering
and construction, electricals and electronics and information technology.

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