Headlines (31 July 2009)

Date: 31 July 2009

 Thought for the day

“Do the thing you fear, and the death of fear is certain”

— Ralph Waldo Emerson


 1)After getting three desi versions of US president’s ‘Air Force One’, the Indian President and PM are now all set to also acquire 12 swanky and secure helicopters for VVIP travel on the lines of ‘Marine One”. The multi-million dollar deal to procure the 12EH/AW-101 helicopters, manufactured by Italian aviation major Agusta Westland, is in the concluding stages now, say defence ministry sources.



 2)The annual Wholesale Price Index fell for a seventh straight week, declining 1.54 per cent in the week to July 18 after falling 1.17 per cent on a year-on-year basis in the previous week, the Government said on Thursday. Inflation was recorded at 12.54 per cent during the corresponding week of the previous year.



3)Usha Martin Ltd, manufacturer of wire and wire ropes and special steel, has entered the Chinese market for the first time, according to the Chairman, Mr B.K. Jhawar. “We have secured an initial order valued at $3 million for supplying 1,200 tonnes of special wire ropes to China Oil Company for meeting its requirements for drilling and exploration operations,” Mr R. Jhawar, Managing Director, told Business Line.



4)The rupee gained marginally by 8 paise against the dollar, tracking the Sensex which gained in the last hour of trade. The domestic currency opened at 48.54 and strengthened to close at 48.34, as against the previous close of 48.42.


5)BUOYED by treasury gains, the country’s largest lender, State Bank of India(SBI), beat market estimates to post a 42% rise in net profit at Rs 2,330 crore against Rs 1,641 crore a year ago. On a consolidated basis, SBI group’s profit stood at Rs 2,759 crore, up 68% year on year.


6)UCO Bank may float a Rs 800-850 crore follow-on issue during the third quarter of the current fiscal. The bank has also decided to float a non-life joint venture company by this September.



7)The country’s equity indices ‘snapped initial losses’ and closed the day with gains, following short covering and positive cues from the Asian and European markets. Domestic markets remained volatile throughout the trading session on the last day of expiry of July futures and option(F&O) series. Dealers in the markets also added
 that, better than expected results from the State Bank of India (SBI) led the buying in the banking stocks during the final hours of trading. The 30-share Sensex of Bombaty Stock Exchange(BSE) added 214.50 points or 1.41% to close the day at 15,387.96 points. The broader S&P CNX Nifty of National Stock Exchange (NSE) gained 57.95 points or 1.28% to end the day at 4,571.45 points. Ambareesh Baliga, vice president at Karvy Stock Broking said, “It was basically huge short covering during the final hours
 of trading. Benchmark indices are likely to remain unstable in the coming days, due to lack of any trigger from the domestic as well as international front”.


8)The July series expired on a bright note, led by smart gains in IT, realty, banking and FMCG stocks. Reliance Industries and metal stocks were weak. The August futures are expected to open on a strong note and the Nifty is likely to cross the 4,600-mark during early trades with upside resistance at around 4,650 levels.


9)Markets regulator Sebi plans to introduce more dollar-rupee contract versions to give currency futures traders a wider choice. It has also decided not to introduce trading in other currencies with the rupee at this time. “We do not have much demand for other currency pairs. Instead(traders) need more variety in the current single-pair offering,” a senior Sebi executive told FE.



10)Buoyed by the recent surge in capital markets, India Inc is planning to raise Rs 16,000 crore($3.3 billion) through initial public offerings(IPOs) this fiscal, an industry lobby report said on Thursday. “The companies are weighing higher expectations from renewed investors’ sentiments to raise funds from the primary market,” Assocham President Sajjan Jindal said. The Assocham Financial Pulse(AFP) analysis of the emerging IPO trends said companies in the infrastructure, IT, hospitality and textile sec-
 tors would issue IPOs to raise funds.

Indian Express

11)THE COUNTRY’S largest steelmaker SAIL may hit the capital market through an initial public offering(IPO) this year to raise funds for its current expansion programme, a senior official said. “The board will soon finalise a proposal in this regard and submit it to the steel ministry for its approval,” he said requesting anonymity. For the first time, SAIL will offload equity to retail investors, he said.



12)GMR Infrastructure on Thursday said it has received the approval from its board for splitting its stocks in the ratio of 1:2. The board has accorded approval for sub-division of all its equity shares of Rs 2 each into two equity shares of Re 1 a piece, GMR Infrastructure said in a filing to the BSE.



13)Increasing number of mutual fund houses are gearing up to battle the no-entry-load regime, which will come into effect on August 1, by raising exit barriers for investors. Fund houses such as HSBC Mutual Fund, Tata Mutual Fund, Kotak Mutual Fund and Escorts Mutual Fund have already announced that they will increase their exit loads. Other fund houses such as IDFC Mutual Fund and Mirae Asset Management Co too are planning to follow suit.


14)WITH ban on entry loads in mutual funds becoming effective from Saturday, distributors have begun unveiling their cost structure. From transaction-linked fees to portfolio-linked fees, mutual fund investors will be charged on the basis of the amount they invested. They may not be able to negotiate rates with distributors. But on
 balance, the fee they will be paying is likely to be a fraction of what they were being charged till now.



15)Indian Oil Corp, the country’s largest oil refiner, on Thursday reported a nine-fold jump in net profit in the first quarter of the current fiscal as it took advantage of falling crude oil prices, making inventory gains. IOC posted a net profit of Rs 3,682.83 crore in the April-June quarter against Rs 415.13 crore a year ago, chairman Sarthak Behuria told reporters. This year’s profit also included that of Bongaigaon Refineries Ltd, which was merged with the company in March.


16)MAHINDRA & Mahindra, the country’s largest utility vehicles and tractor maker, on Thursday announced a better-than-expected 152% growth in net profit in the June quarter, boosted by lower raw material costs, higher sales and the merger of Punjab Tractors with itself. The company’s net profit rose to Rs 401 crore in the period under review from Rs 159 crore in a year-ago period while net sales rose by 29% to Rs 4,229 crore.


17)BHUSHAN Steel posted 30% increase in net profit to Rs 171.8 crore for the quarter ended June compared with Rs 132.6 crore in the corresponding period last year, backed by steep drop in raw material prices. Net sales slipped marginally by 1% to Rs 1,304 crore during the quarter.



 18)Gold imports into India in July were between 8 to 10 tonnes against 24 tonne in all of July a year ago, the head of Bombay Bullion Association(BBA) said on Thursday. “The reason for the fall is the same the prices are too high,” Suresh Hundia, president of the BBA said.



19)Notwithstanding a booming telecom market, state-owned Bharat Sanchar Nigam Ltd has reported a massive decline in its profit for 2008-09 to Rs 574.85 crore from Rs 3,009 crore in the previous year. This is in sharp contrast to the private players who have been reporting good numbers riding on record number of subscriber additions.
 Bharti Airtel, for instance, reported profit of Rs 2,648 crore in just one quarter.


20)SUNIL Mittal, chairman and group CEO of Bharti Enterprises, is in talks with government officials to clear regulatory issues over listing of the Bharti Airtel-MTN combined entity in India as well as South Africa in case the negotiations between the two telcos eventually lead to a full merger.



21)In a move aimed at going aggressively after Government contracts, IT services major Wipro is ‘revisiting’ its strategy and game plan with regard to the Government business. “Government business has been a thrust area for us..But we feel that our plans have been somewhat conservative. We expect the business to be big in this
 space, and so the exercise is aimed at leveraging our full capability in tapping the opportunities,” Mr Suresh Vaswani, Joint Chief Executive Officer of Wipro Ltd, said. Wipro – like its larger rivals TCS and Infosys – is said to be keenly eyeing the Unique Identification (UID) Project and other large Government contracts.



22)Crude oil rose more than $3 a barrel and gasoline surged the most in four months after better-than-expected corporate earnings and as jobless claims held below late-June levels. Crude oil for September delivery rose $2.98, or 4.7 per cent, to $66.33 a barrel at 10:54 a.m on the New York Mercantile Exchange.



Karvy Consultants Ltd www.karvy.com
 www.karvycomtrade.com (Commodities)
KARVY Global Services Ltd www.KARVYGlobal.com
KARVY Realty (India) Limited www.karvyrealty.com
Economic Times www.economictimes.com
The Financial Express www.financialexpress.com
Business Line www.businessline.in
Business Standard www.business-standard.com
The Times of India www.timesofindia.com
The Hindu www.hindu.com
Deccan Chronicle www.deccan.com
The New Indian Express www.newindpress.com

FOR THE DAY (31 Aug 2009)


The indices are expected to open on a positive note as global markets have ended on a positive note.

Trade long in Nifty above 4600 levels else from lower supports of 4550 with a stop loss placed at 4520 levels targeting 4680 and 4700 levels.

Index Level (31 Aug 2009)

Previous Close: SENSEX 15388 : NIFTY 4571

Today’s Levels

Trade long if SENSEX sustains above 15388 (NIFTY 4471)

[Upper targets/resistances at 15463(4599)/15580(4636) or higher]

Trade short if SENSEX fails to sustain above 15580 (NIFTY 4636)

[Lower targets/supports at 15463(4599)/15388(4471) or lower]