Monday April 16, 03:30 PM
Bulls continue to dazzle... |
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By Equitymaster.com
Bulls continued to dominate the day's affairs and further added to their tally in the final hour of trade. The advance to decline ratio ended strongly in favour of advances with just 6 of the Nifty stock ending in the red. The buying interest was not just restricted to frontline stocks, as advances outnumbered declines in the ratio of 3.3:1 on the overall NSE.
The BSE Sensex closed at 13,696 (up 312 points) while the NSE Nifty closed at 4,013(up 96 points). The rupee was trading at 42.05 to the dollar.
Carrying on from where they closed last week, markets opened on a firm note today and barring few initial hiccups, kept on gaining ground with every passing hour. Volatility was also on the lower side today. Wind energy major, Suzlon Energy and media major Zee Entertainment emerged as the highest gainers on the Nifty as they both edged higher by 7% each. Asian markets ended the day's proceedings on a firm note and European markets have also opened strong.
In yet another attempt to salvage the bleeding oil marketing companies, Planning Commission has suggested withdrawal of subsidized LPG cylinders to taxpayers. This means that PSU oil marketing companies will charge full market rate for cooking gas cylinders from income tax paying households. Thus, a LPG cylinder will cost Rs 475 instead of Rs 298 in Mumbai, an increase of Rs 177, which the government makes up to oil marketing companies. The proposal is a step towards easing the government's mounting subsidy burden on keeping price of kitchen fuels low. The subsidy bill on the LPG front is estimated to go up to around Rs 500 bn this fiscal. The panel claimed that since the list of taxpayers and cooking gas consumers were computerized, the plan could be implemented as early as June this year. However, as the majority of gas connections are in the name of housewives, most of whom are unlikely to be on the three crore I-T list, the plan will be difficult to implement. Apart from this, political parties are likely to oppose the move. Domestic LPG is one of the four subsidized products sold by the oil marketing companies, which is leading to significant under recoveries to these companies. The profitability of oil-marketing companies is likely to be volatile due to unclear government policies. The stock of oil marketing companies ended firm with HPCL, BPCL and IOC (all up 3%).
According to a leading business daily, Tata Consultancy Services (TCS) has clinched a US$ 100 m technology solutions deal; spread over five years, from Bank of China (BOC). Bank of China is the second-biggest lender in China and has the largest global network among all Chinese banks. The deal is being touted as one of the largest in Asia and alignments across hardware, software and networking equipment are firming up for various consortia. TCS, which is in operations in China for the last five years, will provide a range of banking solutions to the BOC. As offshoring has not yet been tried in any of the Chinese banks, the Indian vendors are keen on garnering a portion of the current project to get access to the banking operations in China. The revenues will spread evenly over the five years. Though currently Chins forms a small part of the TCS' revenue, going forward the share is likely to increase. The stock ended firm (up 1%) along with its peers Wipro (up 3%) and Infosys (up 2%).
As per a leading business daily, SAIL has been allotted the Sitanala coking coal block in Jharkhand, which has reserves of around 108 million tonne (MT). This will go some way in meeting the coal requirements of its integrated steel plants. SAIL's total annual coal requirement is around 15 MT, of which around 10 MT is imported. About 1.6 MT of coal is required to produce 1 tonne of crude steel. According to the company's corporate plan 2011-12, the company would endeavor to achieve 22 MT capacity and the coal requirement for enhanced capacity would be in the region of 22 to 23 MT as against 15 MT at present. Thus, SAIL's requirement of coal will only go up. However, the allotment of Sitanala coking coal block will result in significant cost savings on raw materials front. Steel stocks ended firm with SAIL (up 2%) and Tata Steel (TISC.BO, news) (up 5%) as major gainers.
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