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.
Markets take a breather... - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Sep 15, 2007

    Markets take a breather...

    After two weeks of continuous gains, markets took a breather last week gone by with the BSE-Sensex and the NSE-Nifty ending the week with marginal gains of 0.1% and 0.2% respectively. Though bears made their presence felt many times during the week, with domestic indices closing in negative for 4 out of 5 trading sessions, the bulls managed to scrape through.

    The last week began on a negative note with the BSE Sensex opening more than 170 points down on Monday, tracking weak global cues. The markets however witnessed an amazing turnaround with the index finally closing flat for the day. The bears dominated the volatile markets for the next two days, with the BSE Sensex shedding 55 points and 37 points on Tuesday and Wednesday respectively, after firm openings. The bulls made a comeback on Thursday with the BSE Sensex gaining more than 100 points (0.7%). The rally was led by auto, banking and software stocks. Although, Friday started on a positive note, market pared early gains as fresh selling emerged in later half of the day when European markets drifted lower. The BSE Sensex finally closed the day with a marginal loss of 11 points.

    On the institutional activity front, between 7th and 13th September, while Foreign Institutional Investors (FIIs) emerged as net buyers to the tune of Rs 12 bn, mutual funds sold equities worth Rs 2 bn.

    (Rs m) MFs FIIs Total
    7-Sep (1,877) 5,809 3,932
    10-Sep 101 (629) (528)
    11-Sep (1,793) 4,456 2,663
    12-Sep 733 2,819 3,552
    13-Sep 802 (466) 336
    Total (2,034) 11,989 9,955

    On the sectoral indices front, the BSE Metal Index and the BSE Oil & Gas Index ended the last week with a gain of 3.2% and 2.5% respectively, while the BSE Infotech Index emerged as the key loser (down 4.5%).

    Index As on September 7 As on September 14 % Change
    BSE IT 4,660 4,449 -4.5%
    BSE SMLCAP 8,434 8,573 1.7%
    BSE OIL AND GAS 8,186 8,387 2.5%
    BSE HEALTHCARE 3,706 3,666 -1.1%
    BSE AUTO 4,890 4,885 -0.1%
    BSE PSU 7,288 7,300 0.2%
    BSE MIDCAP 6,852 6,897 0.7%
    BSE FMCG 2,047 2,073 1.3%
    BSE BANKEX 8,096 8,136 0.5%
    BSE METAL 11,609 11,980 3.2%

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

    The empowered group of ministers (EGoM) has approved the pricing formula proposed by RIL for its Krishna-Godavari (K-G) basin gas. The group however did make minor modifications that reduced the delivered price of gas. The decision of the EGoM will lead to a price of US$ 4.20 per million British thermal units (mbtu) at delivery point. The approved price is 8.3% lower than that proposed by contractors. The EGoM managed a reduction in price by sticking to dollar pricing for the K-G gas (instead of rupee pricing) and capping the price of crude in the variable portion of the formula at US$ 60 per barrel, instead of US$ 65 proposed by RIL and its partner, Niko Resources. Since there is no re-pricing to be done, the company's gas production schedule would not be affected. RIL is slated to start production of 40 million standard cubic metre per day (mscmd) of gas from the K-G basin by July 2008 and ramp it up to a peak production of 80 mscmd subsequently. However, confusion on how much of this gas would be available to users exists as most of RIL's K-G basin gas is already locked up with Reliance Natural Resources (RNRL), NTPC and for captive use by RIL. While Reliance advanced by 4%, ONGC lost close 2% during the week.

    As per leading business news daily, Essel Propack, is in talks to acquire a packaging unit of Alcan. The deal, if successful, would catapult Essel Propack, to the top position in personal care packaging. Alcan Packaging had posted sales of US$ 800 m last year. Essel Propack has relatively smaller presence in the personal care packaging segment. Alcan's packaging business includes packaging for food and beverage, medical and pharmaceutical, cosmetics and tobacco. Alcan Packaging has some of the world's leading cosmetics and beauty companies as its customers. The deal would boost Essel Propack's profitability as a cosmetic, as a business segment, is growing fast in Asia, thanks to rising incomes. The stock declined by 1% during the week.

    Top gainers during the week (BSE A)
    COMPANY Price on July 20 (Rs) Price on July 27 (Rs) % CHANGE 52-WEEK H/L (Rs)
    BSE SENSEX 15,590 15,604 0.1% 15,869 / 11,834
    S&P CNX NIFTY 4,510 4,518 0.2% 4,648 / 3,420
    INDUSIND BANK 55 66 19.4% 68 / 37
    JINDAL STEEL 3,915 4,619 18.0% 4720 / 1546
    WELSPUN GUJ. STAHL 230 264 14.7% 278 / 65
    NEYVELI LIGNITE 83 95 14.5% 99 / 49
    RELIANCE CAPITAL 1,224 1,392 13.8% 1437 / 513

    Telecom stocks closed mixed with Tata Teleservices (up 4%) and Idea Cellular (up 1%) featuring among the key gainers, while Spice Communications (down 3%) and Bharti Airtel (down 2%) closed in the red. As per leading business daily, GSM operators added 5.9 m subscribers in August 2007 to take their total subscriber base in the country to 147.7 m, according to figures released by the GSM representative body, Cellular Operators' Association of India (COAI). Bharti Airtel, added 2.1 m users in August, lifting its user base to 46.8 m. It now has a 31.7% share of the GSM market. Vodafone Essar added 1.7 m users to take its subscriber base of 34.1 mn. It has a 23.1% share among GSM operators. Idea Cellular gained 0.9 m subscribers in August, lifting its user base to 17.9 m, giving it a GSM market share of 12.1%.

    Top losers during the week (BSE A)
    COMPANY Price on July 20 (Rs) Price on July 27 (Rs) % CHANGE 52-WEEK H/L (Rs)
    ROLTA INDIA 518 446 -13.9% 525 / 205
    HCL TECH 310 279 -9.9% 366 / 267
    CMC LTD 1,129 1,019 -9.8% 1550 / 494
    IGATE GLOBAL 250 228 -8.8% 432 / 172
    WIPRO 478 450 -5.9% 690 / 436

    In the absence of any fresh triggers, markets are expected to remain range-bound. Crude oil prices, which reached an all-time new high to close above US$ 80, remained largely ignored by the markets. A further rise in crude prices could however spell trouble for the financial markets. Though domestic indices showed some resilience to weak global cues during the week, Friday's close suggest we are yet to 'de-couple' from the global markets. Hence, we advise investors to not get swayed by all these short-term factors (read noise) and instead concentrate on companies with strong fundamentals and good management that are likely to provide adequate returns on investment.



    Equitymaster requests your view! Post a comment on "Markets take a breather...". 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.

    Dear PM Modi, India is Already Land of Self-Employed, and It Ain't Working (Vivek Kaul's Diary)

    Aug 21, 2017

    Most Indians who cannot find jobs, look at becoming self-employed.

    The Key Factor Pushing Gold Up These Days (Outside View)

    Aug 21, 2017

    PersonalFN explains the chief factor pushing gold prices up of late.

    How Unique Are the Companies You Invest In? (The 5 Minute Wrapup)

    Aug 21, 2017

    One of the hallmarks of successful investing is to look out for companies that have a unique and enduring moat.

    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.

    More Views on News

    Most Popular

    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.

    The Most Profitable Investment in the History of the World(Vivek Kaul's Diary)

    Aug 8, 2017

    'Yes, it looks like a bubble. And, yes, it's like buying a lottery ticket. But there's something happening that has never happened before. It's an evolutionary leap in money itself.'

    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.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

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

    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 21, 2017 (Close)