Monday September 10, 03:30 PM
Smart recovery... |
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By Equitymaster.com
Markets recouped all their losses to close flat in today's trade. While buying was witnessed in power, FMCG, steel and energy stocks, software, telecom and select engineering stocks ended in the red. On the sectoral indices front, the BSE FMCG Index advanced by 1.9%, while BSE Infotech Index (down 2%) emerged as the key loser. Domestic indices continue to track global markets closely. While Asian markets ended in the red, European indices too have opened on a cautious note.
The BSE Sensex closed at 15,597 (up 6 points) while the NSE Nifty closed at 4,508 (down 2 points). The rupee was trading at 40.64 to the dollar.
Amidst weak global cues, the BSE Sensex opened with a negative gap of more than 170 points (1.1%). However, the index soon pared half of its losses to touch the 15,500 mark. Thereafter, markets proceeded to trade higher for the rest of the trading session and managed to close flat for the day. The overall market breadth was evenly poised with one gainer for every loser on the Nifty. Reliance (RELI.BO, news) Petroleum (up 5%), ITC (ITCd.BO, news) and BPCL (each up 4%) were the key gainers on the NSE.
As per a leading daily, Reliance has signed an agreement to acquire the assets of Hualon, Malaysia. Hualon is a leading polyester producer in Malaysia with a polyester (fiber, yarn and resin) manufacturing capacity of 500,000 tonnes per annum along with downstream textile manufacturing capabilities. It is one of the largest exporters in Malaysia. It may be noted that Reliance had acquired Trevira, Germany in 2004. The development is a step towards Reliance's vision of consolidating its global polyester capacity and will help the company consolidate its position further as the world's largest polyester manufacturer with 2.5 million tonnes capacity, a 25% increase from the current capacity and will help the company increase its revenues by around US$ 1 bn. It will also give the company a 7% global market share in polyester fiber and yarn. The stock of Reliance closed firm (up 1%) in today's trade.
As per a leading business daily, the much awaited two-wheeler from Bajaj, the Exceed, was launched at a price of Rs 41,000 (ex-showroom). The bike is pegged to bridge the gap between the entry level segment (100cc) and the high-end segment (150cc) as it will deliver the fuel efficiency of a 100cc bike combined with the performance of a 150cc one. The bike has been priced according to the market trend to derive a profit margin of about Rs 3,000 on each bike sold. The company is planning to produce 20,000 units this month, which would be hiked to about 50,000 units a month by October. In keeping with its trend, the company will launch a few more products based on the Exceed platform without taking out the focus on the ungeared scooter segment, where the company plans to launch high powered, sporty scooterette Blade by 2008. The launch of this bike will give boost to Bajaj's exports, while within the domestic market it is expected to grow in line with the industry on account of increasing competition. While Bajaj Auto closed flat, its peer TVS Motors closed 14% higher.
Software stocks closed weak with Wipro (WIPRd.BO, news) , TCS (each down 3%), and Tech Mahindra (down 2%) being the key losers. TCS has raised its billing rates by more than 5% for new contracts and 3% to 4% for existing deals to counter rising wages and the appreciation of the rupee against the US dollar. The company's deal momentum is strong and it also has a healthy pipeline. TCS is also planning to open another development centre in China by the end of FY08. TCS already has an office in Beijing and a development centre in Hangzhou, which it intends to use it as a base for other Asian markets. The software company is also looking at opportunities in Europe particularly Benelux, Nordic, Germany and Switzerland.
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