Monday October 8, 04:00 PM
Bear hug... |
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By Equitymaster.com
The bears were in complete control as domestic indices lost more than 1.8% in today's trade. While selling was witnessed across the board with energy, metal, power, and pharma stocks leading the pack of losers, software stocks closed firm. On the sectoral indices front, the BSE Metal Index (down 4.3%) and the BSE Oil & Gas Index emerged as key losers, while BSE Infotech closed with gains of 0.4%. As far as global markets are concerned, the Asian markets closed mixed. European indices too have opened on a cautious note.
The BSE Sensex closed at 17,451 (down 322 points) while the NSE Nifty closed at 5,072 (down 114 points). The rupee was trading at 39.43 to the dollar.
Amid strong global cues, the BSE Sensex opened with a positive gap of 129 points at 17,902, and soon rallied to a fresh all-time intra-day high of 17,983 - just 17 points shy of the 18,000-mark. However, once again resistance at higher levels saw the index pare all its gains and slip into the negative zone. Aggressive profit-booking saw the index tumble to a low of 17,322 - down 661 points from the day's high. Selective buying, thereafter, helped the index recover partially towards the close. The Sensex finally closed at 17,451 - 322 points below its previous close. The overall market breadth was negative with 5 losers for every gainer on the Nifty. ZEE Entertainment, Unitech, SAIL and Tata Steel (TISC.BO, news) (each down 6%) emerged as key losers on the NSE.
As per a leading business daily, the IBF, the industry body that represents almost all broadcasters in the country, including Zee, Star, Sony and Times Now, has recommended an across-the-board input cost inflation surcharge of 25% from advertisers. In other words, advertisers will be required to pay a surcharge of 25% over and above the existing rates for buying spots on TV. IBF's argument is that while the cable & satellite footprint has grown in five years from under 40 m to over 70 m homes across the country, ad rates have not seen a simultaneous increase. Input costs of broadcasters have grown substantially - ranging from programming and transportation costs to payments to artists, and costs involved in procuring content. Any increase in advertisement rates would help in increasing the margins of the broadcasters and help them to cope better with the increasing costs as advertisements is a major source of revenue. While Zee lost 6%, TV18 closed flat in today's trade.
As per a leading business daily, Tata Motors is planning to acquire Zastava Auto, the Serbian national automobile manufacturer. Zastava Auto is a government-owned carmaker and has brands like Yugo, Opel Astra and Punto. Its group company, Zastava Kamioni, manufactures small and medium-range trucks. Zastava has been looking for a strategic partner, as part of a privatisation drive. It has an installed capacity of 60,000 vehicles a year but currently produces only 15,000 units due lack of demand for its dated technology products and rising competition in the domestic market. The move is part of Tata Motors' strategy to expand its base in Eastern Europe. It is eyeing new emerging markets and is looking for small and medium-sized companies to gain a footprint on a global level. The stock, along with Maruti closed in the red (each down 1%).
India's leading plastics company, Sintex Industries has declared its 2QFY08 results. Consolidated sales grew 46% YoY in 2QFY08 and 47% YoY during the half-year period. The strong growth in the company's consolidated topline was largely on account of the robust performance of the plastic division, which raked in a growth of 61% YoY during 2QFY08. However, the results of this division are not really comparable due to two acquisitions made during this fiscal. Higher staff costs led to a marginal contraction in operating margins during both 2QFY08 and 1HFY08. The company's net profits grew by 40% YoY and 46% YoY during 2QFY08 and 1HFY08 respectively. The stock closed marginally in the positive.
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