X

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.
Tottering at the top... - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Dec 8, 2007

    Tottering at the top...

    Indian markets alternated between weak closings and strong comebacks throughout the week, with sectors whirling in and out of favour. Three out of the five sessions during the week ended in the green as Foreign Institutional Investors (FIIs) turned out to be net buyers. Thus, for the week ended December 7, 2007, the BSE-Sensex gained 3.1% while the NSE-Nifty gained 3.7%

    The week began on a positive note, with the Sensex gaining 240 points and the Nifty gaining 102 points on Monday. Tuesday witnessed a reversal of sentiments as selling pressure in banking, software and telecom stocks caused the indices to close in the red. The Sensex shed 74 points, while the Nifty lost 7 points. Stocks from the energy sector turned back the tables on Wednesday, as the Sensex closed 209 points higher while the Nifty gained 82 points. Despite a firm start and strength across global markets on Thursday, the Indian indices failed to retain the momentum as occasional bouts of profit booking took a toll on the index heavyweights. Select telecom and banking stocks were in favour while selling was witnessed in commodity, auto and pharma stocks. The Sensex closed 58 points higher while the Nifty gained 15 points. After opening to a firm start on Friday on the back of global cues, the benchmark indices failed to sustain the momentum as sporadic attempts of profit booking dragged them below the 20K mark. The Sensex closed at 19,966 (up 170 points) while the NSE Nifty closed at 5,974 (up 20 points).

    On the institutional activity front, between 30th November and 6th December, FIIs were net buyers to the tune of Rs 35 bn, while mutual funds bought equities worth Rs 9 bn.

    (Rs m) MFs FIIs Total
    30-Nov 6,605 14,804 21,409
    3-Dec 4,494 1,144 5,638
    4-Dec (257) 195 (62)
    5-Dec (2,967) 10,813 7,846
    6-Dec 977 8,224 9,201
    Total 8,852 35,180 44,032

    On the sectoral indices front, BSE SMLCAP (8%), BSE METAL (6%) and BSE MIDCAP (6%) featured among the key gainers.

    Index As on November 30 As on December 07 % Change
    BSE SMLCAP 10,526 11,342 7.8%
    BSE METAL 17,731 18,738 5.7%
    BSE MIDCAP 8,554 9,022 5.5%
    BSE IT 4,198 4,425 5.4%
    BSE HEALTHCARE 3,823 4,007 4.8%
    BSE BANKEX 10,871 11,378 4.7%
    BSE AUTO 5,470 5,651 3.3%
    BSE OIL AND GAS 12,360 12,735 3.0%
    BSE PSU 9,613 9,869 2.7%
    BSE FMCG 2,155 2,177 1.0%

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

    As per a leading business daily, SAIL is planning to invest Rs 120 to 150 bn over the next five years to upgrade technology and to increase the current production capacity. There is cost overrun by the company from earlier estimate of Rs 490 bn. The company has lined up major expansion of capacity of hot metal by 26 m tonnes (MT) in 2012 in their revised corporate plan as against 22 MT planned earlier. The company plans to fund its revised Rs 530 bn modernisation and expansion programme through a mix of internal accruals and proposed 1:1 debt equity ratio. To raise funds, the company is also evaluating other option such as dilution of government stake, if need be. The stock of SAIL closed higher by 6%, while its peer Tata Steel (up 1%) also found favour.

    As per a leading business daily, the government is considering a relaxation of the 5,000-hectare cap on the land size of special economic zones once the new relief and rehabilitation policy and the proposed amendments to the Land Acquisition Act are put in place. It maybe noted that RIL was planning a 10,000-hectare zone in Jhajjar, Haryana while DLF had proposed an 8,000-hectare zone in Gurgaon, Haryana. The ceiling was enforced against the backdrop of widespread protests and violence at Nandigram, West Bengal and Panvel, Maharashtra. This is a positive development for RIL and DLF as key infrastructure components like airports and ports need land size much in excess of 5,000 hectares. The stock of RIL was closed flat while its peer DLF closed 7% higher.

    Company Price on
    November 30 (Rs)
    Price on
    December 07 (Rs)
    %
    Change
    52-Week
    H/L (Rs)
    BSE SENSEX 19,363 19,966 3.1% 20,238 / 12,316
    S&P CNX NIFTY 5,763 5,974 3.7% 6,042 / 3,555
    FDC LTD. 31 42 38.7% 45 / 27
    CHAMBAL FERT 63 85 36.6% 94 / 30
    PUNJAB TRACTORS 202 252 24.5% 359 / 183
    GEOMETRIC SOFT 72 87 22.0% 145 / 69
    RAMCO SYSTEMS 148 174 17.8% 233 / 119

    As per a leading business daily, ONGC Videsh (OVL), the foreign arm of ONGC, is considering to enter into a JV with the Hinduja group for 50% stake in the massive South Pars gas fields and the Azadegan oil fields in Iran. The other 50% stake will be held by a subsidiary of the National Iranian Oil Company. Although much depends on the terms of the agreement and modalities thereafter, this would be a significant development for ONGC as South Pars is the largest offshore gas field in the world while Azadegan is one of the biggest oil finds in the last 30 years. The stock of ONGC closed 2% higher, while its peer RIL closed flat.

    Company Price on
    November 30 (Rs)
    Price on
    December 07 (Rs)
    %
    Change
    52-Week
    H/L (Rs)
    ICI INDIA 577 551 -4.5% 590 / 392
    GRASIM 3,793 3,642 -4.0% 4,074 / 1,927
    ING VYSYA BANK 317 305 -3.8% 340 / 149
    RAYMOND 421 410 -2.5% 460 / 251
    ORCHID CHEMICALS 257 251 -2.3% 285 / 176

    With the Sensex swinging between gains and losses on a daily basis, investors with a focus on business fundamentals are left wondering. We refer to what Warren Buffett mentioned his 1983 letter to shareholders, "People who buy for non-value reasons are likely to sell for non-value reasons. Their presence in the picture will accentuate erratic price swings unrelated to underlying business developments." Even if prices go all over the place due to non-value reasons, dear readers, we urge you to stick to value reasons. As Mr. Buffett mentions in his 1985 letter, "Wild swings in market prices far above and below business value do not change the final gains for owners in aggregate; in the end, investor gains must equal business gains."

     

     

    Equitymaster requests your view! Post a comment on "Tottering at the top...". 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 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.

    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?

    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!

    More
    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

    S&P BSE SENSEX


    Aug 21, 2017 (Close)

    MARKET STATS