Tuesday, November 01, 2005

Market remains subdued; HDFC surges


The market remained subdued in morning trade. Market breadth remained weak.

Steel scrips slipped on reports that steel makers have cut hot-rolled coil
prices by Rs 500 per tonne with effect from 1 November 2005. Profit taking
pulled down IT stocks and PSU banks.

Index heavyweight Reliance Industries was subdued. Two-wheeler makers Bajaj
Auto and Hero Honda edged higher on the back of strong sales in the month
just gone by even as car major Maruti Udyog (MUL) slipped ahead of the
announcement of October car sales.

Cement pivotals were steady to firm. Housing finance major HDFC was in
demand.

1,239 stocks declined on BSE as compared to 504 stocks that rose. 30 scrips
were unchanged. Losers outpaced gainers by a ratio of 2.4:1.

At 11:23 IST, the Sensex was down 16 points at 7,927. The Sensex moved 69.57
points between a low of 7,891.23 and a high of 7,960.80.

MUL lost 2.3% to Rs 538.30. 56,341 shares changed hands in the counter on
BSE.

Hero Honda rose 1.8% to Rs 719, and Bajaj Auto gained 1.2% to Rs 1,741. Hero
Honda reported a 23% hike in bike sales in October 2005 to 3.01 lakh units.
Exports rose 14% to 6,357 units. On a month on month basis, sales rose 13%
from 2.66 lakh units in September 2005.

Bajaj Auto on Tuesday said its total vehicle sales in October rose 37% to
241,808 units from 176,693 in October 2004. Motorcycle sales surged 43
percent to 205,012 units from 143,491 and sales of all two-wheelers rose 40
percent to 219,927 units from 157,631, it said. Sales of three-wheelers
climbed 15 percent to 21,881 units from 19,062 units a year earlier. The
company said exports surged 49 percent to 22,713 units from 15,262 units.

Housing finance major HDFC surged 3% to Rs 1,000, on renewed buying
interest. 22,017 shares changed hands in the counter on BSE.

Grasim rose 1.6% to Rs 1,144 and Gujarat Ambuja Cements gained 0.79% to Rs
70.40. But ACC lost 0.6% to Rs 449.05 and India Cements shed 4% to Rs 86.30.

Tisco lost 2% to Rs 332.75 and Sail shed 1.7% to Rs 51.10. JSW Steel shed
2.5% to Rs 207 and Ispat Industries shed 4.4% to Rs 13.40. Steel companies
have cut HR coil prices due to easing global prices and larger domestic
inventories, reports suggest. The average price of HR coils, the primary
steel used for making various grades of steel, would be about Rs 21,000 ($
465) per tonne following the latest price cut.

Software shares edged lower on weakness in US tech stocks. Wipro lost 1.1%
to Rs 360, TCS shed 1.2% to Rs 1,391, Infosys shed 1% to Rs 2,509 and Satyam
Computer shed 0.8% to Rs 607. US stocks fell on Tuesday, dragged lower by
technology shares after a disappointing outlook from Dell Inc. The
technology-laced Nasdaq Composite Index shed 6.25 points, or 0.29 percent,
at 2,114.05.

State Bank of India shed 1.8% to Rs 823. 2.7 lakh shares changed hands in
the counter on BSE.

National Aluminium Company jumped nearly 4% to Rs 168.60 on reports that the company has hiked aluminium prices by Rs 3,000 per tonne


The National Aluminium Company (Nalco) scrip had staged a rebound from the
lower level in the past two days ahead of the announcement. From a low of Rs
153.45 on 28 October 2005, the stock gained 5.7% in two trading sessions to
Rs 162.25 on 1 November 2005.

The latest price hike by Nalco is on the back of firm LME aluminium prices.
Domestic aluminium prices track LME prices. In the past one month or so,
LME's aluminium prices edged up to $ 1,980.50 per tonne from $ 1,857 per
tonne at end September 2005.

In the past six months, aluminium prices on the LME have gone up 10% from $
1,795 per tonne at the beginning of May 2005 to the current $ 1,980.50 per
tonne.

Hero Honda firms up after reporting strong monthly sales growth


The stock declined from the peak of Rs 762.75 on 04 October 2005 to close at
Rs 687.75 on 19 October 2005 on profit taking.

Hero Honda edged higher today after it reported a 23% rise in bike sales for
the month of October 2005 to 3.01 lakh units. Exports rose 14% to 6,357
units. On a month on month basis, sales rose 13% from 2.66 lakh units in
September 2005.

Hero Honda has recorded a 22% rise in motorcycles sales for the month of
September 2005 to 266,071 units (217,507 motorcycles sold in September
2004).

Hero Honda's net profit spiraled up 23% in Q2 ended September 2005 to Rs 238
crore (Rs 194 crore). Total turnover (net of excise) rose 22.8% to Rs
2,209.36 crore from Rs 1,798.23 crore, on the back of strong volume growth.

Hero Honda's strong performance came on the back of strong rural sales and a
good response to its newly launched 125cc motorcycle, Glamour.

Munjal Group two-wheeler and mopeds manufacturing company, Hero Honda's
latest paid-up equity share capital stands at Rs 39.94 crore of which FIIs
hold 27.07% while promoters control 54.95% stake (as of 30 September 2005).

Bajaj Auto rose for the second day in a row on the back of robust sales in the month just gone by


The stock gained 1.1% to Rs 1,740 by early trade. 6,721 shares changed hands
in the counter on BSE.

Bajaj Auto on Tuesday said its total vehicle sales in October rose 37% to
241,808 units from 176,693 in October 2004. Motorcycle sales surged 43
percent to 205,012 units from 143,491 and sales of all two-wheelers rose 40
percent to 219,927 units from 157,631, it said. Sales of three-wheelers
climbed 15 percent to 21,881 units from 19,062 units a year earlier. The
company said exports surged 49 percent to 22,713 units from 15,262 units.

On a month on month basis, Bajaj Auto’s bike sales rose 13.8% from 1.8 lakh
units in September 2005. Total two-wheeler sales rose 12.8% on a month on
month basis from 1.94 lakh units in September 2005. Three-wheeler sales
declined 5.3% on a month on month basis from 23,118 units in September 2005.
Exports declined 3.1% on a month on month basis from 23,463 units in
September 2005.

Bajaj Auto’s CT-100 model continues to rule the economy motorcycle segment.
Bajaj Auto is currently the market leader in the entry and premium segments
of motorcycles. However, its share in the mid-segment is low. To penetrate
the mid-segment, the company had launched Discover, which is a 125 cc bike.

Bajaj Auto reported a net profit of Rs 289.36 crore – a growth of 61%
compared to a net profit of Rs 179.45 crore for Q2 September 2004. Total
income (net of excise) rose 30.3% to Rs 2,003.15 crore from Rs 1,536.52
crore. The company unveiled Q2 results on Saturday (15 October 2005). One
key highlight of the Q2 results was the increase in core operating profit
margin to 16.9% from 16.5% in Q2 September 2004.

Steel makers lost ground today on reports that they have cut prices of hot-rolled (HR) coils by Rs 500 per tonne with effect from 1 November 2005.


Sail lost 2.6% to Rs 50.65, Ispat Industries shed 4% to Rs 13.44, Tisco shed
1.7% to Rs 334.45, Lloyd Steel lost 5.4% to Rs 11.85, Essar Steel shed 1.5%
to Rs 43.25, JSW Steel shed 2.5% to Rs 207 and Uttam Galva Steel lost 1.9%
to Rs 36.

4.4 lakh shares changed hands in Sail, 3.4 lakh shares got traded in Ispat
Industries, 1.6 lakh shares changed hands in Tisco, 34,845 shares got traded
in Lloyd Steel, and 26,611 shares changed hands in Essar Steel.

Steel companies, it is reported, will cut HR coil prices due to easing
global prices and larger domestic inventories, reports suggest.

The average price of HR coils, the primary steel used for making various
grades of steel, would be about Rs 21,000 ($ 465) per tonne following the
latest price cut.

Weak market breadth; Maruti Udyog slips


The Sensex moved between positive and negative territory in opening trade. A
mixed trend was witnessed in various Sensex constituents.

Cement shares edged slightly higher. Bajaj Auto firmed up in early trade.
Software shares were subdued.

Car major Maruti Udyog (MUL) slipped in early trade ahead of the
announcement of its October 2005 vehicle sales.

Blue chips like State Bank of India, ITC, Reliance Industries (RIL), Infosys
and TCS slipped in early trade.

MTNL moved up in opening trade on reports in a section of the media that the
Department of Telecommunications (DoT) is exploring the option of a quasi
merger of BSNL and MTNL.

Hindalco Industries edged higher for the second day in a row.

Bajaj Auto rose slightly on the back of strong October sales even as Hero
Honda moved between positive and negative territory.

Market breadth was quite weak in early trade. 828 stocks declined on BSE as
compared to 376 stocks that rose. 21 scrips were unchanged. Losers outpaced
gainers by a ratio of 2.2:1.

At 10:19 IST, the Sensex was down 16 points at 7,927. The Sensex moved 51.82
points in early trade between a low of 7,908.98 and a high of 7,960.80.

MUL shed 2% to Rs 540. 27,369 shares changed hands in the counter on BSE.

State Bank of India (SBI) lost 1.5% to Rs 826.60. As per reports in a
section of the media, SBI has zeroed in Pt Bank Indomonex of Indonesia for a
possible acquisition. SBI has embarked upon a series of international
acquisitions to establish itself as a global player.

Software shares were subdued. TCS lost nearly 1% to Rs 1,395, Infosys shed
0.8% to Rs 2,515 and Satyam Computer shed 0.6% to Rs 608.

RIL shed 0.6% to Rs 761. 1.6 lakh shares changed hands in the counter on
BSE.

Hero Honda was down 0.1% to Rs 705. Hero Honda reported a 23% hike in bike
sales in October 2005 to 3.01 lakh units. Exports rose 14% to 6,357 units.
On a month on month basis, sales rose 13% from 2.66 lakh units in September
2005.

Bajaj Auto rose 0.8% to Rs 1,735. Bajaj Auto on Tuesday its total vehicle
sales in October rose 37% to 241,808 units from 176,693 in October 2004.
Motorcycle sales surged 43 percent to 205,012 units from 143,491 and sales
of all two-wheelers rose 40 percent to 219,927 units from 157,631, it said.
Sales of three-wheelers climbed 15 percent to 21,881 units from 19,062 a
year earlier. The company said exports surged 49 percent to 22,713 units
from 15,262 units.

MTNL gained 1.1% to Rs 113.75. As per reports in a section of the media, the
Department of Telecommunications (DoT) is exploring the option of a quasi
merger of BSNL and MTNL. The plan involves forming four regional wireline
companies, a mobile operator and an infrastructure company from BSNL. The
four regional wireline companies would be BSNL North, BSNL East, BSNL South
and BSNL West. Under the plan, MTNL’s wireline operations in Delhi would
merged with BSNL North and Mumbai operations with BSNL West. The mobile
operations of BSNL, along with that of MTNL, would be transferred to a
separate company, BSNL Mobile thus giving the public sector units a
pan-India mobile footprint, reports suggest.

Assam Company surged for the third day in a row after the company said it has struck oil at Amguri in Assam.


The stock was up 4.6% in early trade to Rs 21.50. 1.4 lakh shares changed
hands in the counter on BSE.

From Rs 17.94 on 27 October 2005, the scrip rose 14.5% in three trading
sessions to Rs 20.55 on 1 November 2005.

Assam Company has been carrying out exploration activities in the area in
association with its Canadian partner Canoro Resources.

Assam Company’s oil & gas division is currently engaged in exploration and
production of hydrocarbons in the Assam region in a joint production sharing
agreement with Canora Resources and ONGC.

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