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Indian stock market and companies daily report (October 04, 2012, Thursday)
The Indian markets are expected to open in the green today, tracing positive opening in SGX Nifty and most Asian markets. Asian stocks are trading higher with export stocks rising on positive U.S. jobs data and as expansion in service industries in US beat economist estimates.
Investors reacted positively to the upbeat US economic reports as stocks moved mostly higher during trading on Wednesday. Private sector employment increased by 162,000 jobs in September compared to economist estimates of an increase of about 140,000 jobs. A separate report from the Institute for Supply Management also helped push stocks higher, as it showed an unexpected acceleration in the pace of service sector growth in the month of September.
Indian shares rose modestly on Wednesday, extending the recent rally, on continued hopes for further policy reforms in the coming months. The rupee rose to a fresh over five-month high and crude prices continued to fall in Asian trading, pressured by worries of slowing economic growth and uncertainty about a Spanish bailout, helping market sentiment amid lackluster global cues.
The trend deciding level for the day is 18,864 / 5,730 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 18,911 - 18,953 / 5,744 - 5,758 levels. However, if NIFTY trades below 18,864 / 5,730 levels for the first half-an-hour of trade then it may correct up to 18,822 - 18,775 / 5,717 - 5,703 levels.
Cement dispatches - September 2012
Ambuja Cements (Ambuja) posted a 4.9% yoy growth in its dispatches during September to 1.55mn tonne. The tepid growth in September follows de-growth of 2.4% yoy posted by the company in August 2012. The improved performance by the company in September indicates an improvement in cement demand in the company's key market situated in north India. For 1HFY2013, Ambuja's dispatches have grown by a marginal 3.6%. We continue to remain Neutral on Ambuja.
Delhi HC relief to Bharti Airtel: Ban on 3G roaming pacts stayed
In a major relief to Bharti Airtel, the Delhi High Court yesterday granted a stay on a government order asking the telecom major to stop offering 3G mobile services outside their licensed areas through roaming pacts. The Delhi HC has asked the department of telecommunications (DoT) to not take any coercive action until the next hearing of the case. This effectively means that Bharti Airtel can continue to offer 3G services in the seven circles - Maharashtra, Madhya Pradesh, Kolkata, Uttar Pradesh East, Gujarat, Kerala and Haryana - where it does not have 3G spectrum, but offers 3G services through roaming pacts. The date for next hearing has not been decided. However, the court has asked Bharti Airtel to respond to the show cause notice issued to them by DoT within 60 days.
Bharti Airtel, on Monday, had filed a petition in the Delhi High Court challenging an advisory by DoT which asked the operator to stop intra-circle 3G roaming services within three days. In its plea, Bharti Airtel had sought quashing of the government's September 28, 2012 decision directing the service provider to stop providing intra-circle roaming (ICR) services and alleged that the decision is contrary to the interim orders passed by the Telecom Disputes Settlement and Appellate Tribunal (TDSAT).
DoT had also indicated that similar notices would be sent to Vodafone and Idea Cellular. Though, both Vodafone and Idea are yet to receive notices from the DoT, the Delhi HC stay order augurs well for them as well. DoT had earlier ruled such pacts illegal in December 201 1 and asked the operators to stop offering 3G services beyond their licensed circles through roaming agreements.
Though the operators paid higher prices for bagging 3G airwaves, but the uptake of the service remained, slow among the subscribers partly due to the high cost of such services. We maintain our Neutral on telecom sector.
Maruti Suzuki hikes car prices by 1% with immediate effect
Maruti Suzuki (MSIL) has increased the prices of its vehicles by 1% with immediate effect to mitigate the impact of adverse foreign exchange movement and rising input cost pressures on operating margins. The average increase in vehicle prices across models post the hike will be in the range of '2,500 - '5,250. While the company has increased the prices ahead of the festival season wherein demand increases substantially, considering the current environment (demand for petrol cars remains extremely weak in spite of higher discounts) the move to hike prices may dampen consumer sentiments further. However, we believe it is less likely to impact the consumer demand for diesel cars. At the CMP of '1,364 the stock is trading at 14.7x FY2014E earnings which is in-line with its historical average of 15x. We maintain our Neutral rating on the stock.
BG group to sell its stake in Gujarat Gas
The promoters of Gujarat Gas, BG group, have agreed to sell their 65.12% stake in the company for '2,464cr to Gujarat State Petroleum Corporation (GSPC). The deal is subject to the customary regulatory approvals and is expected to close pursuant to completion of open offer as per SEBI Takeover Code and the approval of the Competition Commission of India and Reserve Bank of India; it is expected to be completed by 1HCY2013. The deal implies price of '295/share (current market price - '337). GSPC is engaged in oil and gas exploration and gas trading. Also, it has a significant presence in the gas transmission and gas distribution businesses. We do not expect any material impact on Gujrat Gas financials as a result of this deal. Hence, we continue to remain Neutral on the Gujarat Gas.
Economic and Political News
- FDI in multi-brand retail will help increase productivity: RBI
- Irda favours 49% FDI for insurance sector
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- Mahindra Satyam gives 7-1 2% wage hikes
- ICICI Prudential MF ties up with Syndicate Bank
- Kingfisher to seek DGCA's nod for resuming operations
- Sobha Developers sets record new space sale
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