Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Another summit scaled! - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Feb 3, 2007

    Another summit scaled!

    It continued to rain gains during the holiday-shortened week ended Feb 2, 2006 and thus for the sixth time in a row, both the BSE-Sensex as well as the NSE-Nifty edged higher by 1.3% and 1.4% respectively. It should also be noted that these benchmark indices closed the week with another lifetime high.

    Bogged down by a few heavyweights, markets opened the week on a bearish note and the decline continued into Tuesday, where the losses were even steeper. Huge selling pressure on Tata Steel and Reserve Bank of India's (RBI) repo rate hike proved to be the main dampeners. The strong rally over the next two days however, not only helped reverse the losses, but also enabled the indices to close well into the positive. The US central bank's decision to keep the interest rate steady had a rub off effect on almost all the global indices and India was no different. Buoyed by the news, investors readily bought into Indian equities, that had been laid low to an extent owing to the sell off witnessed over the first couple of days of the week.

    As far as sectoral indices are concerned, the tables turned completely during the week as the 'Healthcare' index, previous week's worst performer came out on top while the 'Metal' index that had risen sharply and was previous week's number one, fell to the bottom of the list. Gains in the healthcare index were driven by heavyweights like Ranbaxy and Sun Pharma, both of which gained between 3% during the week. On the other hand, steel major, Tata Steel bled profusely during the week and lost almost 11%. With the company accounting for 30% of the metal index, little wonder the index was the worst performing index in the week.

    Index As on January 25 As on Feb 2 % Change
    BSE HEALTHCARE 3,803 3,855 1.4%
    BSE IT 5,365 5,392 0.5%
    BSE MIDCAP 6,089 6,118 0.5%
    BSE PSU 6,324 6,348 0.4%
    BSE AUTO 5,592 5,598 0.1%
    BSE SMLCAP 7,576 7,561 -0.2%
    BSE OIL AND GAS 6,691 6,655 -0.5%
    BSE BANKEX 7,447 7,406 -0.5%
    BSE FMCG 1,951 1,920 -1.6%
    BSE METAL 9,625 9,457 -1.7%

    Having looked at the institutional activity and the movement in key indices in the last week, let us consider some sector/stock specific developments:

    Tata Steel was the biggest loser on the Nifty during the week as it edged lower by 11%. The weakness was owing to the fact that it had to shell out 34% more than what was envisaged before to buy a controlling stake in Corus, Europe's second largest steelmaker. Markets seem concerned about Tata Steel's ability to service the debt it will have to undertake to finance the acquisition. While these are near term concerns, over the long run, we believe the acquisition will create huge synergies and will be value accretive to the company.

    Top gainers during the week (BSE A)
    Company Price on
    Jan 29 (Rs)
    Price on
    Feb 2 (Rs)
    H/L (Rs)
    BSE Sensex 14,212 14,404 1.3% 14,463 / 8,799
    S&P CNX NIFTY 4,124 4,184 1.4% 4,199 / 2,596
    UTI BANK 504 587 16.6% 615 / 222
    ESCORTS 122 141 15.8% 142 / 53
    EXIDE INDUSTRIES 42 47 12.6% 51 / 19
    GUJ. MINERAL DEV. 388 424 9.4% 491 / 237
    JINDAL STEEL 2,330 2,529 8.5% 2,580 / 1,151

    Reliance Communications, India's second largest cellular player announced robust results for 3QFY07 and this enabled the company to close the week with gains of 8% along with its rival Bharti Airtel. During 3QFY07, the topline of the company grew at a healthy rate of 26% YoY. Further, on the back of a strong expansion in operating margins, the net profits recorded a robust 198% YoY growth. This strong performance is a culmination of robust addition to the subscriber base, as the company neared the 27 m mobile subscriber mark. Backed by this, the mobile segment revenues increased by 39% YoY during the quarter. Among other segments, while broadband grew by 149% YoY, the company's global business (ILD and NLD service) recorded a 4% YoY decline in sales.

    Top losers during the week (BSE A)
    Company Price on
    Jan 29 (Rs)
    Price on
    Feb 2 (Rs)
    H/L (Rs)
    TATA STEEL 519 463 -10.9% 679 / 377
    HINDUSTAN ZINC 761 693 -8.8% 1,119 / 325
    ASAHI INDIA 142 132 -7.0% 152 /70
    ROLTA INDIA 335 313 -6.5% 343 / 124
    NESTLE 1,125 1,060 -5.7% 1,387 / 800

    Tobacco major, ITC, reported a robust performance for the December quarter, with a near 24% YoY growth in net sales led by cigarettes (up 14% YoY), branded packaged foods (up 65% YoY), hotels (up 29% YoY) and agri businesses (up 20% YoY). The margins for the quarter remained steady at 34%. Barring the one-time extraordinary effect in 3QFY06, bottomline has grown in line with the topline. The company's effort to de-risk its revenue model by increasing the share of its other businesses in its total revenue pie was yet again visible in this quarter. The stock ended 3% higher for the week while its peer Nestle was down 6%.

    With most of the heavyweights out with their results, the season is about to draw to a close. The markets are most likely to turn their attention towards the union budget and the kind of fiscal policies it spells out, which will determine which way the indices move next. With the economy in such a cruising mode, we do not expect the FM to tinker too much with the status quo. All in all, save for a few blips, it seems most likely that we are set for a good long-term buoyancy.



    Equitymaster requests your view! Post a comment on "Another summit scaled!". Click here!


    More Views on News

    How to Ride Alongside India's Best Fund Managers (The 5 Minute Wrapup)

    Jun 10, 2017

    Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.

    Were You Lured By Mr Market's Bait? (The 5 Minute Wrapup)

    Aug 23, 2017

    Mr Market lured investors into believing they'd bitten into a crash. Did you take the bait?

    Deep State First (Vivek Kaul's Diary)

    Aug 23, 2017

    Nowhere was the darkness deeper than in the nation's capital. There, no light shone. No flicker of awareness...observation...learning...or reflection appeared.

    Why Hasn't Warren Buffett Rung the Bell Yet? (The 5 Minute Wrapup)

    Aug 22, 2017

    It's surprising Warren Buffett hasn't warned investors about the expensive stock market? Let us know why.

    Think Twice Before You Keep Money In A Savings Bank Account (Outside View)

    Aug 22, 2017

    Post demonetisation, a cut in bank savings deposits rates was in the offing.

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

    Aug 16, 2017

    The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 23, 2017 (Close)