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.
Bulls on the march… - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Sep 1, 2007

    Bulls on the march…

    The week belonged to the bulls as domestic indices closed firm for all the five trading sessions. Though global and political factors made their presence felt during the week, markets managed to sail through. Uncertainty in Indian politics, which gnawed at investors in the previous week, saw some relief and stability. BSE-Sensex and NSE-Nifty ended with gains of more than 6% for the week.

    The week ended August 31, 2007, began on a positive note with BSE Sensex advancing more than 400 points on Monday, tracking strong global cues. The rally was led by banking, metals and auto stocks, which were butchered in the past few weeks. Revival of global worries on Tuesday, however, led indices opening marginally in the red. Subsequent buying in metal and software stocks, however, led to indices closing with marginal gains. Similar trend was visible on Wednesday, with the BSE Sensex closing with a gain of 77 points after being down more than 250 points in the early trades. The markets were less volatile on Thursday and Friday, with the BSE Sensex advancing by 1% and 2% respectively.

    On the institutional activity front, between 24th and 30th August, FIIs and mutual funds both emerged as net buyers to the tune of Rs 11 bn and 13 bn respectively.

    (Rs m) MFs FIIs Total
    24-Aug 847 4,145 4,992
    27-Aug 3,454 12,018 15,472
    28-Aug 459 3,656 4,115
    29-Aug 598 (1,921) (1,323)
    30-Aug 7,264 (6,645) 619
    Total 12,622 11,253 23,875

    The recovery in markets was broad-based as all the sectoral indices ended the week on a positive note. The BSE Metal (up 13%), BSE Oil & Gas (up 8%), BSE Bankex and BSE Small-Cap Index (each up 7%) were the biggest gainers for the week.

    Index As on August 24 As on August 31 % Change
    BSE IT 4,408 4,586 4.0%
    BSE SMLCAP 7,522 8,061 7.2%
    BSE OIL AND GAS 7,517 8,160 8.6%
    BSE HEALTHCARE 3,424 3,573 4.3%
    BSE AUTO 4,569 4,878 6.8%
    BSE PSU 6,626 7,095 7.1%
    BSE MIDCAP 6,190 6,608 6.8%
    BSE FMCG 1,878 1,974 5.1%
    BSE BANKEX 7,315 7,859 7.4%
    BSE METAL 10,277 11,566 12.5%

    Now let us have a look at some of the key stock/sector specific developments during the week:

    Auto stocks closed firm with TVS Motors (up 15%), M&M (up 11%) and Maruti (up 10%) leading the pack of gainers. As per leading business news daily, TVS Motor, India's third-largest two-wheeler manufacturer will launch a hybrid and a CNG-run two-wheeler next year. The company will invest Rs 500 to 600 m every year to increase its capacities and launch new products. Around 3% of its turnover will go into R&D and developing future technologies. It is close to launching hybrid and CNG bikes, which will bring fuel costs down by 50%. TVS Motor, which has faced reversals on the two-wheeler front and had cut production to control inventories, expects a turnaround in 2008. The company is expecting good growth during the festival period of October-December. It has strengthened its portfolio and entered the 125 cc executive segment with its product Flame, which should help in increasing its sales. The stock closed up 8% while its peer Bajaj Auto ended 1% higher.

    Top gainers during the week (BSE A)
    Company Price on
    Aug 24 (Rs)
    Price on
    Aug 31 (Rs)
    H/L (Rs)
    BSE SENSEX 14,425 15,319 6.2% 15,869 / 11,444
    S&P CNX NIFTY 4,191 4,464 6.5% 4,648 / 3,328
    ISPAT IND. 16 19 25.5% 20 / 10
    ESCORTS 77 95 24.0% 157 / 73
    TATA STEEL 582 690 18.4% 731 / 399
    TITAN IND. 1,058 1,242 17.4% 1378 / 660
    SAIL 146 168 15.4% 173 / 71

    As per a leading business daily, the Telecom Regulatory Authority of India (Trai), in a move to enhance competition and spur mergers in the telecom sector, has recommended no limit on the number of players in this sector, relaxation of stringent M&A norms, technology neutrality for telecom licences, in addition to suggesting that both GSM and CDMA players pay an entry fee and higher spectrum fee for additional 2G radio frequency allocation. It also has suggested that the price of spectrum beyond 10 Mhz should be raised substantially. The operators should pay Rs 160 m for every additional one Mhz of spectrum that they require beyond this cut-off bar. Also the telecom operators should pay Rs 800 m as 'one time spectrum acquisition charge' in the cities of Mumbai and Delhi and other prime states. Also companies like RCOM (a CDMA operator) should be allowed to now launch a pan-India GSM service within the same license, but only after paying an additional Rs 15 bn. However, the industry is not happy with the recommendations, as it would have to pay over Rs 20 bn for 5 MHz of spectrum (Rs 5 bn due to additional revenue share and the rest as payment for spectrum). While Reliance Communications gained 9%, Bharti Airtel advanced by 2% for the week.

    Real Estate stocks closed firm with Parsvnath (up 8%), DLF and Unitech (up 6%) leading the pack of gainers. As per a leading business daily, real estate major Parsvnath Developers is forming a special purpose vehicle (SPV) to foray into the mobile services (GSM) space. The company has already submitted applications to the Department of Telecom (DoT) for providing unified access service in 22 telecom circles across the country. According to the management, the company will rope in a strategic partner for the venture while the Parsvnath group will hold atleast 26% stake in the company. Parsvnath's application will put further pressure on the Government, which is finding it difficult to make available adequate spectrum for existing operators. Mobile service providers including Idea Cellular, Spice Telecom and Aircel are awaiting spectrum in new circles.

    Top losers during the week (BSE A)
    Company Price on
    Aug 24 (Rs)
    Price on
    Aug 31 (Rs)
    H/L (Rs)
    NIIT 130 125 -3.4% 170 / 40
    GILLETTE 891 863 -3.1% 1020 / 762
    WYETH LTD. 503 491 -2.5% 607 / 440
    FINOLEX CABLES 79 77 -2.4% 110 / 66
    P&G 768 751 -2.2% 1005 / 725

    While the markets have recovered most of the lost ground during the week, we believe there are still plenty of opportunities left on select counters. With the liquidity tap being turned off to a great extent, courtesy the recent sub prime meltdown, more sanity is likely to prevail in the markets. As such, we would advice our investors to stay invested for the long-term and in good quality stocks, as the fundamental stories remain intact.



    Equitymaster requests your view! Post a comment on "Bulls on the march…". 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.

    You've Heard of Timeless Books... Ever Heard of Timeless Stocks? (The 5 Minute Wrapup)

    Aug 19, 2017

    Ever heard of Lindy Effect? Find out how you can use it to pick timeless stocks.

    Why NOW Is the WORST Time for Index Investing (The 5 Minute Wrapup)

    Aug 18, 2017

    Buying the index now will hardly help make money in stocks even in ten years.

    Trump Takes a Beating (Vivek Kaul's Diary)

    Aug 18, 2017

    Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.

    How To Read Your Mutual Fund Account Statement Correctly (Outside View)

    Aug 17, 2017

    PersonalFN simplifies the mutual fund account statement for you.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    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 18, 2017 (Close)