Thursday, September 22, 2005

Small- and mid-caps suffer a setback as market witnesses freefall

Media reports that tax officers were investigating stock and real estate
brokers in several parts of the country for possible violation of rules
created panic among market men in the latter part of the trading session
with share prices witnessing a free fall.

At 15:14 IST, the Sensex was down 260 points to 8,226.

A host of small- and mid-cap stocks like Reliance Capital, GHCL, JCT, Zuari
Industries, Aarti Industries, GTL, Zicom Electronic Security, BOC India,
NIIT, Rolta India, DCW, Dewan Housing Finance, Rico Auto, Adlabs Films, Tata
Elxsi, and LML had lost between 10% to 20%.

Among Sensex constituents, Hindalco, Satyam Computer, ONGC, Bharti
Tele-Ventures, Tisco, and Reliance Industries weakened further. A number of
Sensex constituents were down between 2% to 6%.

Reliance Capital plunged 15% to Rs 375. The stock declined on huge volume of
54.8 lakh shares.

Some of the major losers among small-and-mid cap space were GHCL (down 20%
to Rs 91.30), JCT (down 15% to Rs 13.75), Zicom Electronic Security (down
15% to Rs 147.50), Zuari Industries (down 16% to Rs 104), Aarti Industries
(down 15% to Rs 127), BOC India (down 13% to Rs 164), Aksh Optifibre (down
13% to Rs 61), Rico Auto (down 11.8% to Rs 93.65), and Rolta India (down
11.8% to Rs 154).

The market breadth was extremely weak, as there were 29 losers on BSE for
every 1 gainer.

BSE clocked a turnover of Rs 3,700 crore.

The sentiment proved cautious right from the beginning of the trading
session today on reports that regulatory authorities have tightened their
vigil to prevent a repeat of scandals, and that the government was
monitoring surging stocks. The stock exchanges have tightened margin
requirements and placed restrictions on trading in many stocks.

Subdued to weak trend in global markets, following a fresh upward spike in
global crude oil price, too dampened sentiment in early trade.


Preferential issue inititiative drives up JBM Auto

JBM Auto added 1.65% to Rs 123 on volumes of 501 shares.

The days range is Rs 123 and Rs 110 so far.

The stock witnessed a mild rally from the close of Rs 103.55 on 8 August
2005 to close at a high of Rs 133.10 on 19 August 2005. From this level, it
remained rangebound.

JBM Auto company said yesterdays after market hours that it has decided to
issue in one or more tranch(es) on preferential basis to Bach Ltd up to 41.
90 lakh equity shares of Rs 10/- each at a premium of Rs 90/- per equity

JBM Auto Components reported a surge in Q1 ended 30 June 2005 net profit.
The company’s net profit jumped 118.18% to Rs 1.44 crore (Rs 0.66 crore).
Net sales during the same period soared 72.46% to Rs 24.42 crore (Rs 14.16

The JBM Group's New Delhi based auto ancillary company, JBM Auto Components,
is engaged in the manufacture of auto components, assemblies,
sub-assemblies, tools, dyes, wire rods and moulds among others. The client
list of JBM Auto Components includes the likes of Maruti Udyog, Mahindra &
Mahindra, Yamaha, Eicher, TAFE, IFB and Delphi among others.

Bharat Forge gained 3% to Rs 345.70 after the company announced a major Swedish acquisition

66,022 shares changed hands in the counter on BSE by the first few minutes
of trade.

The market had probably got an inkling of the acquisition in advance, as the
scrip had surged in the run up to the announcement. From a recent low of Rs
315 on 6 September 2005, the stock had surged to Rs 344.95 on 20 September
2005. It had cooled off to Rs 335.35 on 21 September 2005 on the eve of the

Earlier, a bout of volatility was witnessed in the stock on BSE since
mid-July 2005 after a 5-for-1 stock split was effected in the scrip on 20
July 2005. The scrip plunged to a low of Rs 290.55 on 24 August 2005 from a
lifetime closing high of Rs 336.85 on 20 July 2005. The stock since bounced
back from that low but witnessed high volatility due to alternate bouts of
buying and selling.

Bharat Forge on Wednesday announced acquisition of Imatra Kilsta AB, Sweden
along with its wholly owned subsidiary Scottish Stampings, Scotland. As per
reports, Bharat Forge has paid about Rs 250 crore for the acquisition.

Imatra Forging Group is among the world’s leading forging group, the largest
manufacturer of front axle beams and the second largest crankshaft producer
in Europe. All these are BFL’s core products. Imatra Forging Group also
happens to be a major supplier to leading passenger car and commercial
vehicle manufacturers including Volvo, Scania, SAAB, DAF, Perkins, MAN, and

Imatra Kilsta AB and Scottish Stampings are both profit-makking companies
accounting for a total forging capacity of 100,000 tons per annum across two
plants. The group registered an annual turnover of over 1 billion Swedish
Kroners (about $ 132 million) in 2004. The staff rolls add up to close to
600 employees.

This is the fourth overseas acquisition of Bharat Forge in the past few
years. Bharat Forge’s last overseas acquisition was that of US based Federal
Forge for $ 9.1 million.

Market loses further ground; Sensex falls below 8,400

The market lost further ground in early afternoon trade following weakness
in index heavyweights like Reliance Industries, ONGC and Bharti
Tele-Ventures (BTL).

A host of small cap, mid-cap and penny stocks remained in the red and the
market breadth weakened further by early afternoon trade. Losers outpaced
gainers by a ratio of 19:1.

The sentiment proved weak on reports that regulatory authorities have
tightened their vigil to prevent a repeat of scandals, and that the
government was monitoring surging stocks. Subdued to weak trend in global
markets, following a fresh upward spike in global crude oil price, too
dampened sentiment in early trade.

At 12:37 IST, the Sensex was down 98 points at 8,388.

Small-cap/mid-cap stocks like Aftek Infosys, Bajaj Auto Finance, JCT,
Torrent Power SEC, Flex Industries, Ramco Systems, Zicom Electronic
Security, Futura Polymers, Standard Indsutries, Agro Tech Foods, and Dewan
Housing Finance moved lower in afternoon trade.

Among the few gainers were Mahindra Gesco Developers, Pidilite Industries,
PSL, Unichem Laboratories, Glenmark Pharma, Sesa Goa, McDowell, and Punjab

NTPC, which had surged on Wednesday, proved the biggest loser today among
Sensex constituents. The stock dropped 3.6% to Rs 104. 5.5 lakh shares were
traded in the counter on BSE.

Gujarat Ambuja Cements (down 3% to Rs 68.30), FMCG major Hindustan Lever
(down 3% to Rs 165), Bharti Tele-Ventures (down 2.2% to Rs 342), and ONGC
(down 2.2% to Rs 1,014), all moved into the slipstream.

Hindalco declined on high volume for the second day in a row. The stock was
down 3.3% to Rs 150. 9.5 lakh shares changed hands in the counter on BSE.

RIL dipped 2% to Rs 766. 15.4 lakh shares were exchanged in the counter on

Mahindra Gesco Developers zoomed up 17.9% to Rs 287. The stock rose for the
second day in a row after RBI raised FII investment ceiling in the scrip to
30% from 24%

Pidilite Industries advanced for the second day in a row on speculative
buying. The stock was up 14% to Rs 96.30. Speculators zeroed in the counter
with the scrip entering no-delivery period.

Though ITC (up 1.4% to Rs 142) held positive territory, the stock cooled
off. Volumes were a huge 53 lakh shares. The brisk activity in the stock was
due to speculative buying after the stock entered the 5-day no-delivery
period on BSE from Wednesday (21 September).

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