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 have a blast! - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Nov 25, 2006

    Bulls have a blast!

    Markets continued to defy gravity and for the fifth week in a row and moved into higher territory. While the BSE benchmark 'BSE-Sensex' edged higher by 2%, gains in NSE-Nifty were a tad higher at 2.5% for the week ended November 24, 2006.

    The week's proceedings started on a rather dispirited note on Monday, as markets seemed to take a leaf out of the previous week's close. The Sensex tumbled by as much as 200 points within the first couple of hours. While it continued to stay rangebound throughout the day, it recovered miraculously in the final hour to shed all its losses and close at breakeven levels. However, there were no such worries over the next two days as led by gains in heavyweights, bulls literally went on a rampage and the Sensex edged higher by a mind numbing 275 points. Considering the levels the indices are at, the gain of such a magnitude is indeed staggering. After a mild profit booking on Thursday, indices resumed their northbound journey on Friday and recouped most of the gains it had pared the day before.

    As far as the institutional activity on the bourses was concerned, Foreign Institutional Investors (FIIs) were net buyers this week to the tune of nearly Rs 31.6 bn. Domestic mutual funds (MFs), on the other hand, turned out to be net sellers to the tune of Rs 3.4 bn.

    (Rs m) FIIs MFs Total
    17-Nov-06 13,026 858 13,884
    20-Nov-06 580 (2,858) (2,278)
    21-Nov-06 6,422 (788) 5,634
    22-Nov-06 (210) 2,062 1,852
    23-Nov-06 11,788 (2,762) 9,026
    Total 31,606 (3,488) 28,118

    As far as sectoral indices are concerned, this week it was the turn of the BSE IT index to emerge as the frontrunner as it closed higher by 4%, comfortably above the rest of the pack. Sector majors like Wipro and Satyam played pivotal rules in propping up the IT index as they ended higher 8% and 7% respectively for the week. With valuations among other heavyweights looking rather stretched, relatively safer havens like software stocks seem to be once again propping up on the radar of investors.

    Among other indices, the midcap and small cap indices gained 2.8% and 2.6% respectively. As large caps are looking rather expensive, investors seem to be moving towards mid cap and small cap stocks in a view to further improve upon their investment results. However, one need to keep in mind that the high returns on these stocks are directly proportional to the higher risks involved. Hence, caution needs to be exercised to that extent.

    Index As on November 17 As on November 24 % Change
    BSE IT 4,949 5,157 4.2%
    BSE MIDCAP 5,501 5,655 2.8%
    BSE SMLCAP 6,359 6,523 2.6%
    BSE METAL 8,790 9,015 2.6%
    BSE Auto 5,211 5,339 2.5%
    BSE PSU 6,139 6,289 2.4%
    BSE HEALTHCARE 3,707 3,744 1.0%
    BSE Bankex 7,125 7,150 0.4%
    BSE OIL AND GAS 6,167 6,178 0.2%
    BSE FMCG 2,006 2,001 -0.2%

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

    As per a leading business daily, the dispute between Reliance Industries (RIL) and power generation major NTPC, over the supply of natural gas to the Kawas and Gandhar power projects may be resolved, as the two companies are working out a limited liability formula to cover the eventuality of non-supply of gas or NTPC not buying the gas it contracted for. RIL was to supply 132 trillion British thermal units (BTU) of gas to NTPC's 2,600 MW expansion plans for the Kawas and Gandhar power plants at a price of US$ 2.97 per MMBTU for 17 years. Reliance is proposing a fresh price discovery after every 2 to 3 years, reflecting market trends. The new price of gas would then be US$ 4.3 per MMBTU. However, it needs to be noted that power companies cannot afford to pay energy cost above US$ 4 per MMBTU, which is likely to make the power generation cost uneconomical. NTPC stock emerged as the highest gainer on the Sensex for the week by notching up gains of 8%. Other energy stocks

    Top gainers during the week (BSE A)
    Company Price on Nov 17 (Rs) Price on Nov 24 (Rs) % Change 52-Week H/L (Rs)
    BSE Sensex 13,429 13,703 2.0% 13,791/8,655
    S&P CNX NIFTY 3,853 3,951 2.5% 3,977/2,596
    ADANI EXPORT 155 202 30.2% 202/48
    BOM DYEING 721 819 13.6% 989/309
    HINDUJA TMT 505 572 13.2% 867/343
    PIDILITE 103 116 13.1% 123/74
    UNITED PHOSPHORUS 292 329 12.7% 334/204

    In what could be termed as another landmark event in the Indian stock market history. dotcom major, Info Edge made its debut on the bourses during the week, and what an opening it was! The stock opened with 41% gains over its offer price of Rs 320 and went on to make the opening day's high of Rs 624. It finally closed the week at Rs 583, a rise on nearly 82% over the offer price. As a matter of fact, Info Edge is a leading provider of online recruitment and matrimonial classifieds and related services in India, and owns brands like 'Naukri.com' and Jeevansathi.com'. Other software stocks

    Top losers during the week (BSE A)
    Company Price on Nov 17 (Rs) Price on Nov 24 (Rs) % Change 52-Week H/L (Rs)
    SUPREME INDUSTRIES 216 203 -6.2% 241/122
    TATA ELXSI 256 242 -5.5% 270/147
    APOLLO HOSPITALS 489 465 -4.9% 589/340
    CORPN BANK 416 398 -4.3% 445/205
    GTL LIMITED 133 127 -4.3% 181/101

    Engineering major Siemens earlier this week gained a huge 11% in just one trading day as it won a huge Rs 36 bn order from a Qatar based company. However, the stock closed 1% lower for the week as its FY06 results although buoyant, fell short on expectations, thus sparking a sell off. Consolidated revenues and net profits grew by 64% YoY and 27% YoY respectively. This strong performance was specifically aided by traction in the company's power and telecom divisions. The company board has recommended a dividend of Rs 3.8 per share for the fiscal (dividend yield of 0.3%). Other engineering stocks

    Despite the satisfactory performance of India Inc. and positive news emanating with respect to organic and inorganic growth across sectors, there is no yardstick that seems to justify the current level of valuations. At the current levels, markets have more than factored in the growth prospects of India Inc. from a medium term perspective. Nevertheless, a bottom up approach, longer investment tenure and selective stock picking with cognizance of one's risk profile will stand investors in good stead. Happy investing!



    Equitymaster requests your view! Post a comment on "Bulls have a blast!". 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.

    Will They Haul Off Trump's Statue, Too? (Vivek Kaul's Diary)

    Aug 16, 2017

    All across the country, the old gods become devils. New, gluten-free gods take their places...

    This Company Beat the Business World's 'Three Killer Cs' (The 5 Minute Wrapup)

    Aug 16, 2017

    And what it has in common with beating the stock market too.

    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!

    Let's Hope This Correction Continues (The 5 Minute Wrapup)

    Aug 14, 2017

    Last week's correction is making a number of Super Investor stocks look a lot more attractive...

    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.

    Proxy Plays: A Smart Way to Bet on 'Off Limits' Companies(The 5 Minute Wrapup)

    Aug 4, 2017

    The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.

    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 16, 2017 (Close)