Thursday April 12, 03:30 PM
Iffy before Infy! |
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By Equitymaster.com
Markets maintained status quo during the final hour of trade as the indices failed to make much headway on either side. Advance to decline ratio on the Nifty ended in favour of the latter with a whopping 72% of the stocks ending with a decline. Weakness also plagued all the major sectors today although selective buying was witnessed in certain software and pharma counters.
The BSE Sensex closed at 13,114 (down 69 points) while the NSE Nifty closed at 3,830 (down 32 points). The rupee was trading at 42.87 to the dollar.
It was an out and out bearish session on the bourses today. The decline though was not as massive as witnessed in the recent past and volatility too was on the lower side as despite being in the red, the indices chose to move within a narrow range. Not surprising, given the fact that FY07 results season will go full steam ahead post the Infosys results announcement tomorrow. Investors seem to be waiting anxiously to know what does the IT behemoth have in store for them and maybe even decide whether to commit more money or take some of it off the table. This though has not deterred them to sell certain heavyweights like ONGC, Tata Steel (TISC.BO, news) and Ranbaxy and buy into Bajaj Auto (BJAT.BO, news) and Infosys.
Hotel stocks are ended weak today with Hotel Leelaventure (down 1%) and Taj GVK (down 1%) being the major losers. According to a leading business daily, the hotel sector is set to see an explosive rise in capacity with an expected addition of 80,000 rooms over the next two years, an 80% increase over the current number. This will entail an investment of Rs 520 bn in the sector. Despite this sudden surge in capacity, the average room rates are expected to hold steady if not rise owing to the fact that the current estimated shortfall in hotel rooms is to the tune of 1,50,000. Aided by the positive business environment and strong inflow of tourists, India has become a good business opportunity for many of the international chain of hotels that are keen to set up shop here.
Select buying was witnessed among engineering stocks today with gainers being Alfa Laval and Siemens (each up 1%). As reported in a leading business daily, engineering and constriction major, L&T, is planning to set up a manufacturing facility in China, seemingly to benefit from the low cost manufacturing in that country. The company, as per the latest plans, will be setting up units for valve and tyre manufacturing by the end of June 2007. As a matter of fact, these two plans follow close on heels of the company's recent set up of a switchgear facility in China. The stock however closed 1% lower today.
Energy stocks ended mostly weak today with heavyweights like ONGC and GAIL (GAIL.BO, news) ending lower by 3% each. IOC, the refining and marketing behemoth, has chalked out a major investment plan for FY08. The company is planning to spend Rs 18 bn on its marketing activities in FY08. It will also invest Rs 3 bn for developing a 600,000 tonne a year LPG station in Ennoor near Chennai. The company is looking to increase its investment in the retail segment from Rs 5.3 bn in FY07 to Rs 6.2 bn in FY08. The investment in the LPG segment that includes equipment procurement, auto LPG, three new bottling plants in Mathura, Raipur and Baroda, would move up from Rs 4.2 bn to Rs 6.3 bn. While investments in aviation fuel business is expected to increase from Rs 240 m to Rs 600 m, an additional Rs 3 bn would be invested in developing small pipeline projects, upgradation of quality control laboratories and modernisation of lube plants. IOC has also envisaged reaching out to the rural markets in India through its Kisan Seva Kendras (KSKs). The stock ended lower by 1% today.
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