Indian Markets - Markets end on a flat note - 7 May 2008

07 May 2008 | 17:12

Markets end on a flat note

The markets opened on a weak note and traded in a volatile fashion through the day to finally end on a flat note. While the Sensex was down 33.7 points or 0.19% at 17,339.31, the Nifty lost 9.15 points or 0.18% to close at 5135.50. The broad market indices underperformed the frontline indices as the BSE Midcap and Smallcap indices ended 0.40% and 0.25% lower respectively. The market breadth was negative, as A/D ratio was 0.76:1 on the BSE.

Sectorally, it was a mixed bag. While the BSE IT, Oil & Gas and FMCG indices ended with gains less than 1%, the BSE Realty, PSU and Capital Goods indices lost more than 1%. Gainers from the index pivotals include TCS, M&M, Infosys and HUL. Losers include BHEL, Bharti Airtel, DLF and L&T.

Our outlook on the market remains the same. With the main indices near some strong supports, the downsides seem limited. Moreover, with the underlying trend up, we believe the current weakness will provide excellent opportunities for the trader and investor to buy stocks. The Nifty is likely to continue to consolidate between the 5000 and 5200 levels in the coming sessions

 

Read More

Indian Markets - Weakness continues - 6 May 2008

06 May 2008 | 18:09

Weakness continues

Markets opened on a weak note and slipped through the day. While the Sensex was down 117.89 points or 0.67% at 17,373.01, the Nifty lost 47.6 points or 0.92% to close at 5144.65. The broadmarket indices underperformed the frontline indices as they lost more. While the BSE Midcap index lost 0.94%, the Smallcap index lost 1.09%. Market breadth was negative, as A/D ratio was 1:1.8 on the BSE. NSE cash turnover was Rs.14,647.15 crs Vs. Rs.14,798.12 crs. yesterday.

Most of the BSE Sectoral indices ended in the red. The BSE IT and FMCG indices were the top gainers with gains of 1.53% and 0.97% respectively.

The top losers were BSE Realty, Power, Capital goods and Healthcare.

Gainers from the index pivotals included Satyam, ITC, Infosys, Tata Steel and Wipro. Losers included Bharti Airtel, DLF, Jaiprakash Associates, Reliance Energy and BHEL.

With the main indices near some strong supports, the downsides seem limited. Moreover, with the underlying trend up, we believe the current weakness will provide excellent opportunities for the trader and investor to buy stocks. The Nifty is likely to consolidate between the 5000 and 5200 levels in the coming sessions.

Read More

Post-budget analysis - FMCG

FMCG 2,474.45 +0.53%

May 02, 15:46

Post-budget analysis

What the Budget does

# Higher excise duty on non-filter cigarettes.

# Reduction in excise duty from 16% to nil on tea and coffee mixes.

# Reduction in excise duty from 16% to 8% on water purification devices, specified packaging material and breakfast cereals.

# Tea Fund to get Rs 40 crore special support fund, while Tea Research association would get Rs 20 crore.

# Customs duty on bactofuges reduced from 7.5% to nil

# Excise duty on paper, paper board and articles manufactured out of non-conventional raw materials reduced from 12% to 8% with a further reduction on clearances up to 3,500 MT from 8% to nil. Excise duty on certain varieties of writing, printing and packaging paper is to be reduced from 12 %to 8%.

# General CENVAT rate on all goods reduced from 16% to 14%.

# Central sales tax rate reduced from 3% to 2%.

Impact on sector

# Higher excise duty on non-filter cigarettes will bring it on par with both filter cigarettes. This is negative for the tobacco segment, which is already highly taxed.

# Reduction in excise duties on packaging products would provide thrust to the packaging segment. It would also help reduce wastage and spoilage.

# Reduction in excise duties on tea, coffee, water purification devices and breakfast cereals would lead to reduction in their cost and spur demand. Further, funds provided for re-plantation and rejuvenation of tea and coffee would improve the production.

# Customs duty reduction on bactofuges would benefit dairy industry and increase shelf life of milk.

Impact on companies

# ITC has leading brands in the non-filter segment like Scissors, Hero, Bristol, and Capstan. While higher excise duty would reduce its sales volumes in non-filter segment, no increase in excise on filtered cigarettes is positive. Further, reduction on excise on paper and paperboard would boost demand.

# Reduction in water purification devices would help Hindustan Unilever by way higher demand for its product 'Purefit' that it recently launched.

# Reduction in excise on tea, coffee and breakfast cereals would help companies like Tata Tea, HUL, Nestle, McLeod Rusell. Also the funds provided for plantation crops would benefit Tata Tea, Tata Coffee and Mcleod Rusell.

# Packaging materials is one area where most FMCG companies had expectations from the budget. The reduction in duties would drive growth in the processed foods and personal care segment. Essel Propack, Paper Products and FMCG companies in food segment like HUL, ITC, Nestle and Britannia would benefit.

Read More

Post Budget Analysis of Media

Media

What the Budget does

# Exemption from customs duty on specified parts of set top boxes and specified raw materials for use in the IT/ electronic hardware industry.

# Reduction in customs duty on convergence products from 10% to 5%.

# No change in the corporate income tax rates.

# No change in the rate of surcharge and dividend distribution tax.

Impact on sector

# The exemption of customs duty will bring broadcasting equipment like set top boxes on par with rates applicable on telecom equipment and provide a fillip to the DTH industry that uses set top boxes.

# It will also encourage domestic production of set top boxes.

Impact on companies

# The move will give a boost to the cable TV, direct-to-home (DTH) and IPTV operators.

# The substantial revenue leakage currently present due to underreporting by the LCOs, will get corrected to some extent with the proliferation of set top boxes. Broadcasters like Zee, NDTV and TV18 would benefit from this move.

Read More

Post-budget analysis - BSE CG

BSE CG 14,244.87 +2.25%

May 02, 15:46

Post-budget analysis

What the Budget does

# Fourth UMPP at Tilaiya to be awarded shortly; Chhattisgarh, Karnataka, Maharashtra, Orissa and Tamilnadu urged to bring five more UMPPs to the bidding stage by extending the required support.

# Rajiv Gandhi Grameen Vidyutikaran Yojana to be continued during the Eleventh Plan period with a capital subsidy of Rs 280 bn; allocation of Rs 55 bn for FY09.

# Rs 8 bn to be provided for Accelerated Power Development and Reforms Project (APDRP) in FY09.

# Proposal to set up a national fund for transmission and distribution (T&D) reform in the power sector.

# Exemption from 4% additional duty of customs has been withdrawn on power generation projects (other than mega power projects), transmission, sub transmission and distribution projects, and specified goods for high voltage transmission projects.

# Custom duty on project imports reduced from 7.5% to 5%

# Initiatives like skill development programme and setting up of industrial training institutes to be taken

# Defense allocation to be increased by 10%

# Excise duty being exempted on end-use basis, on refrigeration equipment (consisting of compressor, condenser units, evaporator, etc) above 2 TR (tonne refrigeration) utilising power of 50 KW and above.

# Parent company allowed to set-off the dividend received from its subsidiary company against dividend distributed by the parent company; provided that the dividend received has suffered DDT and the parent company is not a subsidiary of another company.

Impact on sector

# Aggressiveness in allotting UMPPs to prospective bidders expected to be helpful for engineering companies providing equipments and EPC services for power plants.

# Setting up of a national fund for T&D reforms to aid growth prospects of equipment suppliers and T&D project developers.

# Removal of exemption from additional customs duty on power generation, transmission and distribution projects to increase cost for companies importing such projects, which shall consequently be beneficial for domestic project developers. However, on the other hand, reduction in custom duty on project imports to nullify the impact.

# Initiatives like skill development programme and setting up of industrial training institutes to reduce talent crunch for engineering companies, which are reporting high levels of attrition

# Increase in defense allocation to aid prospect of companies providing defense equipments and technologies.

Impact on companies

# Allocation of UMPPs to support growth if equipment and service providers like BHEL, L&T and Siemens.

# Greater focus on the T&D front to be beneficial for ABB, Siemens, Crompton Greaves, Emco, Bharat Bijlee. Also, companies providing T&D project services like Jyoti Structures and Kalpataru Transmission to benefit.

# Removal of exemption from additional customs duty on power generation, transmission and distribution projects to benefit domestic companies like BHEL, L&T, Siemens and Reliance Energy.

# Skill development initiatives to pare pressure of attrition from companies like L&T and BHEL.

# Increase in defense allocation to aid prospects of Tata Power, L&T and Bharat Electronics.

Read More

Post-budget analysis - Power

Power 3,402.99 +1.92%

May 02, 15:46

Post-budget analysis

What the Budget does

# Fourth UMPP at Tilaiya to be awarded shortly; Chhattisgarh, Karnataka, Maharashtra, Orissa and Tamilnadu urged to bring five more UMPPs to the bidding stage by extending the required support.

# Rajiv Gandhi Grameen Vidyutikaran Yojana to be continued during the Eleventh Plan period with a capital subsidy of Rs 280 bn; allocation of Rs 55 bn for FY09.

# Rs 8 bn to be provided for Accelerated Power Development and Reforms Project (APDRP) in FY09.

# Proposal to set up a national fund for transmission and distribution (T&D) reform in the power sector.

# Coal distribution policy and appointment of a coal regulator to bring regularity to the process of coal production and pricing

# Exemption from 4% additional duty of customs has been withdrawn on power generation projects (other than mega power projects)], transmission, sub transmission and distribution projects, and specified goods for high voltage transmission projects.

# Parent company allowed to set-off the dividend received from its subsidiary company against dividend distributed by the parent company; provided that the dividend received has suffered DDT and the parent company is not a subsidiary of another company.

Impact on sector

# Aggressiveness in allotting UMPPs to prospective bidders expected to be helpful in speeding up the generation capacity expansion programme.

# Setting up of a national fund for T&D reforms to provide a more focused approach towards these segments.

# Higher allocation to APRDRP to speed up reduction in losses of state electricity boards.

# Coal distribution policy and appointment of a coal regulator to bring regularity to the process of coal production and pricing.

# Removal of exemption from additional customs duty on power generation, transmission and distribution projects to increase cost for companies implementing such projects

Impact on companies

# Generation companies like Tata Power, NTPC to benefit from allocation of UMPPs at a faster rate

# National fund for T&D reforms to help the prospects of companies looking at open access, like Tata Power and Reliance Energy.

# Reforms in the coal sector to help generation companies like NTPC, Tata Power and Reliance Power.

# Removal of custom duty exemption on power projects to impact companies like NTPC and Tata Power who are planning to take aid of foreign engineering companies in setting up such projects.

Read More

Post-budget analysis - BSETECk

BSETECk 3,507.10 +1.00%

May 02, 15:46

Post-budget analysis

Telecom

What the Budget does

# Roll out of national rural employment guarantee scheme to all 596 districts in India with a provision of Rs 160 bn.

# Specified inputs and raw materials for manufacture of specified electronics/ IT hardware items have been exempted from excise duty.

# Additional duty of 1% to be levied on imported mobile phones towards national calamity contingency reserve.

# Countervailing duty on wireless data modem cards with exempted by way of excise duty exemption. These goods are already exempt from customs duty. However, 4% additional duty of customs will be attracted.

# Internet telecommunication service brought under the service tax net.

# Customs duty on convergence products to be reduced from 10% to 5%.

# Parent company allowed to set-off the dividend received from its subsidiary company against dividend distributed by the parent company; provided that the dividend received has suffered DDT and the parent company is not a subsidiary of another company.

Impact on sector

# Roll out of national rural employment guarantee scheme to all 596 districts in India to aid faster penetration of mobiles.

# Exemption from excise duty for specified inputs and raw materials for manufacture of specified electronics/ IT hardware to lower the network cost for telecom service providers.

# Additional duty on imported mobile phones to make handsets expensive, thus prohibiting a faster acceptance.

# Imposition of service tax on Internet telecommunication services to make them expensive.

# Reduction in customs duty on convergence products to help establish parity between devices used in the information/communication sector and the entertainment sector.

# Parent company allowed to set-off the dividend received from its subsidiary company against dividend distributed by the parent company; provided that the dividend received has suffered DDT and the parent company is not a subsidiary of another company.

Impact on companies

# Wider rollout of national rural employment guarantee scheme to aid faster penetration of mobiles and consequently faster growth of Bharti Airtel, Reliance Communications and Vodafone in these areas.

# Lower network equipment costs to benefit mobile service players like Bharti Airtel, Vodafone, Idea and Reliance Communications.

# Additional duty on imported mobile phones to restrict volume (subscriber) growth for mobile services companies, though not in a major way.

# Reduction in customs duty on convergence products to help companies like Bharti Airtel and reliance Communications in lowering their costs for DTH expansion.

View full report

Read More

Post-budget analysis - Realty

Realty 8,718.69 +2.51%

May 02, 15:46

Post-budget analysis

Budget 2008-2009 was largely neutral for the Real estate sector. There was no direct benefit accrued to the sector. We continue to remain bullish on the real estate sector on back of demand growth mainly driven by large population, higher consumer spending, growing urbanization and availability of financing options.

Impact Table

Item Current Status Change in Budget Impact

Five year tax holiday for hotels (U/S 80 ID) 100% of profits is deducible for the 5 years commencing from initial assessment year in case of an undertaking engaged in hotel business (2,3,4 star category) located in National Capital Territory of Delhi and the districts of Faridabad, Gurgaon, Gautam Budh Nagar and Ghaziabad. Which is constructed and started or starts functioning between April 2007 to March 2010. Extended to World Heritage Sites. Which is constructed and started or starts functioning between April 2008 to March 2013. Positive: Real estate companies, who have plans to enter into hospitality space, are expected to benefit from this.

Steel Excise duty (CENVAT) in steel - 16%. Excise (CENVAT) in steel reduced from 16% to 14%. Positive: Reduction in excise duty on steel is expected to lower the cost of construction and hence can have a positive effect on the sector.

Source - SBICAP Securities Limited

Read More

Post-budget analysis - IT

IT 4,358.58 +2.27%

May 02, 15:46

Post-budget analysis

As expected, the budget proved to be lack lustre for the IT sector. The status quo, pertaining to the taxation of export profits from STPI units post FY09, was maintained. The current sector valuations broadly expect a scenario of effective tax rates for large companies escalating to 18-25% in FY10, due to a gradual shift in SEZs. We believe that a wide universe of mid & small cap cos. might not be able to shift to SEZs. Policy on the FBT structure has not been tweaked significantly & corporate tax structure has been left unchanged. Hence, we continue to have a neutral view on the sector.

Customs duty on specified raw materials and inputs has been lowered while the excise duty on packaged software has been increased from 8% to 12%.

The Budget has yet again maintained its focus on education, in line with expectations, by increasing funds allocation to the sector to Rs.34,400cr up 20% from the earlier allocation of Rs. 28,674cr. The allocation for Sarva Shiksha Abhiyan (SSA) now stands at Rs. 13,100cr.

Other initiatives include provision for scholarships, extension of the Mid-day meal scheme to upper primary, and setting up of institutions for higher learning.

We believe, such education sector reforms are a positive for the sector in the long term since it is an effective way of dealing with problems like talent crunch and wage inflation.

Impact Table

Item Current Status Change in Budget Impact

Extension of tax benefits to IT cos. U/S 10A/10B STP tax incentives to be discontinued post FY09 No change Negative for sector, but valuation have already factored in the possibility

Increased allocation towards education Total allocation of Rs. 28,674 cr. Allocating increased by Rs. 5,726 cr. Positive for education companies catering to government schools & for the IT sector in the long term.

Source - SBICAP Securities Limited

Read More

Post-budget analysis- Bankex

Bankex 9,142.18 +3.66%

May 02, 15:46

Post-budget analysis

Banking

The budget has come out with two proposals which could impact the banking sector in a significant manner. Removal of TDS on interest on Corporate bonds is a positive as this would make it easier for financial institutions and banks to raise funds from the bond markets. (banks raise money via bonds to meet their capital adequacy requirement).

The impact of the other measure on loan waiver to farmers is still unclear in the absence of any budgetary allocation being made for the same. While the FM has indicated that liquidity would be provided over a period of time, it is still unclear whether the government would be compensating banks for the write off of loans or only support them by way of liquidity (i.e. by lending funds which need to be repaid back by the banks over a period of time).

Capital Market

Increase in Short Term Capital Gain Tax

Short Term Capital Gain Tax increased from 10% to 15%.

Securities Transaction Tax would not be eligible for rebate. However would be an allowable expenditure while calculating Income From Business or Profession. This is a negative as earlier, STT was reduced directly from tax while now it is being reduced from the income

Impact Table

Item Current Status Change in Budget Impact

Scheme of Debt Waiver and Debt Relief for Farmers No Such Scheme Rs. 600 bn. Worth loans to be waived off to farmers If the banks have to take the impact, it is a negative for the banks. However, the govt. has indicated at providing liquidity support. If this liquidity amounts to the govt. willing to reimburse the banks, it is a positive for the banks as some of the loans which would have gone bad would also be reimbursed by the govt. However, if such liquidity support is to be repaid by the banks to the govt., it is a negative for banks.

Waiver of TDS on Corporate Bonds Interest on Corporate Bonds was subjected to TDS No TDS on Corporate Bonds Makes corporate bonds more attractive for investors. Companies like PFC, IDFC, REC and banks would find it easier to raise money via the bond market.

Source - SBICAP Securities Limited

Read More

Post-budget analysis - BSE CD

BSE CD 4,568.85 +0.57%

May 02, 15:46

Post-budget analysis

Retail

What the Budget does

# The Finance Minister has been silent on proposals for the retail industry.

# Central Sales Tax rate being reduced from 3% to 2% from April 1, 2008.

# Customs duty being reduced on specified machinery from 7.5% to 5% to provide fillip to the manufacture of sports goods; duty also being exempted on specified raw materials for sports goods.

# Customs duty to be exempted on rough cubic zirconia and to be reduced on polished cubic zirconia from 10% to 5%, in order to encourage value addition and exports by gem and jewellery industry.

# Customs duty on rough coral being reduced from 10% to 5%.

# Threshold limit of exemption from personal income tax in the case of all assessees increased to Rs 150,000.

# Dividend tax paid by parent company allowed to be set off against the same paid by its subsidiary.

Impact on sector

# Increase in the threshold limit of exemption from personal income tax to result in a rise in disposable incomes thereby fueling growth of the retailing sector.

Impact on companies

# Rise in disposable incomes due to the increase in the threshold limit of exemption from personal income tax will benefit companies like Shoppers' Stop, Pantaloon, Trent etc.

Read More

Post-budget analysis - Metal

Metal 15,863.17 -1.56%

May 02, 15:46

Post-budget analysis

Steel

What the Budget does

# Steel melting scrap will be exempt from customs duty

# Excise duty reduction in select segments of automobile manufacturing

# Continuation of power sector reforms

# Coal regulator to be appointed

# Dividend tax paid by parent company allowed to be set off against the same paid by its subsidiary

Impact on sector

# Reduction in customs duty on scrap will help steel manufacturers that use the electric arc furnace route for steel manufacturing lower their costs. On the other hand, it will be a negative for manufacturers that use the blast furnace route.

# If auto manufacturers pass on the reduced excise benefits in the form of lower prices, it will help spur demand for automobiles, which in turn will drive steel demand

# Increased investment in the power sector will also help boost demand for steel

# The proposed coal regulator will help ease the process of allocating coal blocks, a key raw material in the steel manufacturing process

Impact on companies

# Reduction in excise duties on automobiles will help companies that supply steel to auto makers. Key beneficiary would be Tata Steel

# Players that supply steel to the power equipment companies like SAIL and JSW Steel will benefit from increased investments in the power sector

# Better access to coal mines will be a positive for all the players that do not have their own captive mines

Full report | Pre budget analysis

Aluminium

What the Budget does

# Aluminium metal scrap to be exempt from customs duty

# Continuation of power sector reforms

# Excise duty reduced on manufacturing of automobiles of certain specifications

# Coal regulator to be appointed to oversee allocation of coal blocks

# Encouragement to usage of green technology

# Dividend tax paid by parent company allowed to be set off against the same paid by its subsidiary

Impact on sector

# While reduction in customs duty on aluminium metal scrap is positive for certain secondary aluminium manufacturers, it is negative for ingot manufacturers like NALCO and HINDALCO

# Increased investments in T&D will help boost demand for aluminium as the electrical sector is the major consumer of aluminium in the country

# If the auto players pass on the reduced excise duty benefits, it will help spur auto demand, which in turn would drive demand for aluminium based auto components

# Promotion of green technology will lead to demand shift towards aluminium owing to its environment friendly qualities like lower weight and better strength

# The proposed coal regulator will help ease the process of allocating coal blocks, a key feedstock for captive power plants

Impact on companies

# Companies like NALCO and HINDALCO will be positively impacted due to greater demand from sectors like auto and power

# Customs duty exemption on aluminium metal scrap is likely to make its cost more competitive vis-a-vis the ingots being manufactured by NALCO and HINDALCO

Read More

Post-budget analysis - Oil & Gas

Oil & Gas 11,715.37 +1.82%

May 02, 15:46

Post-budget analysis

What the Budget does

# Foreign investment of US$ 3.5 to 8 bn expected for exploration of new blocks under NELP VII.

# Customs duty exemption withdrawn on naphtha used in the manufacture of polymers. It will be taxed @ 5 %. Naphtha imported for the production of fertilisers will remain exempt.

# Ad valorem excise duty on unbranded petrol and unbranded diesel replaced by an equivalent specific duty of Rs.1.35 per litre. There will be only a specific duty of Rs 14.35 per litre on unbranded petrol and Rs 4.60 per litre on unbranded diesel.

# Central Sales Tax reduced from 3% to 2% from April 1, 2008. Dividend tax paid by parent company allowed to be set off against the same paid by its subsidiary

Impact on sector

# Polymer industry will be negatively impacted, as costlier Naphtha will push its cost structure upwards.

# Polymer in turn is used in a host of downstream sectors such as plastics and paints, which will face margin pressures.

# Oil downstream segment will continue to suffer under recoveries from petroleum products as the budget does not address either product prices or the excise duties.

Impact on companies

# The polymer segment of RIL and GAIL will be adversely impacted, as the raw material costs will go up. Given that the petrochemical segments had a bad 3QFY07, this development comes at a bad time.

# No respite for PSU oil marketing companies-IOC, HPCL, BPCL.

# The announcement on dividend tax will benefit IOC, HPCL and BPCL as they have refineries as subsidiaries.

# GAIL will benefit from the reduction in CST as natural gas falls under inter state trade.

Read More

Post-budget analysis- Auto

Auto 4,861.15 +2.86%

May 02, 15:46

Post-budget analysis

What the Budget does

# Reduction in excise duties from 16% to 12% on manufacturing of 2&3 wheelers, buses and small cars

# Agricultural credit outlay increased to Rs 2,80,000 crore

# 10% increase in defence sector allocation to Rs 1,05,600 crore

# Dividend tax paid by parent company allowed to be set off against the same paid by its subsidiary

# Higher allocation towards road development programme such as the NHDP.

Impact on sector

# Excise duty reductions will help lower prices and stimulate demand for 2&3 wheelers and small cars

# Increased demand for new buses from STUs (State Transport Undertakings) as well as private players

# Higher defence allocation will spur investment in new vehicles

# Higher agricultural credit outlay will help boost demand for tractors

# Increased thrust on road infrastructure is a positive for all the automobile manufacturers especially passenger vehicles and CVs

Impact on companies

# 2&3 wheeler makers like Hero Honda, Bajaj and TVS Motors to benefit from reduction in excise duties

# Small car players like Tata Motors and Maruti will reap the benefit from small cars excise duty reductions

# Ashok Leyland and Tata Motors, the leading bus manufacturers will benefit from excise duty reductions on buses

# Suppliers to the defence sector like M&M and Ashok Leyland to benefit from higher defence sector allocation

# Increased agriculture credit outlay will benefit two-wheeler makers as well as tractor manufacturers like M&M and Punjab Tractors.

Read More

Post-budget analysis- Healthcare

Healthcare 4,289.31 +0.33%

May 02, 15:46

Post-budget analysis

What the Budget does

# Increase in allocation to the health sector by 15% over 2007-08.

# Allocation to the National Rural Health Mission (NRHM) increased to Rs 12,050 crore.

# Provision of Rs 993 crore to the National Aids Control Programme and allocation of Rs 1,042 crore for the eradication of polio with focus on high risk districts in Uttar Pradesh and Bihar.

# Customs duty to be reduced from 10% to 5% on certain specified life saving drugs and on bulk drugs used for their manufacture. These drugs are also exempted from excise duty or countervailing duty.

# Excise duty on all goods produced in the pharmaceutical sector reduced from 16% to 8%.

# Anti-AIDS drug, 'Atazanavir', as well as bulk drugs for its manufacture to be exempted from excise duty.

# In order to promote outsourcing of research, weighted deduction of 125% on any payment made to companies engaged in R&D.

Impact on sector

# Increase in allocation to the healthcare sector is a positive given the need to ramp up the healthcare infrastructure in the country and improve the accessibility of quality healthcare to a larger section of the population.

# Reduction of excise duty from 16% to 8% is a positive for all pharma companies enabling them to boost profitability going forward given that the excise duty is being paid on MRP.

# Increased allocation of funds for eradication of HIV/AIDS and polio and reduction in customs duty on certain life saving drugs from 10% to 5% is a positive for companies having product pipeline catering to these segments.

# Weighted deduction of 125% on payments made for outsourcing research services is a positive for the sector as a whole given that the emphasis on R&D has increased.

Impact on companies

# Reduction of excise duty from 16% to 8% is a positive for all pharma companies namely domestic companies such as Cipla, Ranbaxy and the likes and MNC pharma companies such as GSK Pharma, Pfizer and Aventis.

# Emphasis on allocating funds for the eradication of HIV/AIDS and polio is a positive for Cipla (which has a strong presence in the manufacture of anti-AIDS drugs) and Panacea Biotec (which largely manufactures oral polio vaccines).

# Weighted deduction of 125% on payments made for outsourcing research services is a positive for R&D focused companies such as Ranbaxy and Nicholas Piramal.

Read More

Voices from the Market Wednesday, 7 May 2008

Last trading day: Wednesday, 7 May

4:00 PM - The market had a quiet day despite heavy news flows. Crude oil hit a record high, government asked steel companies to cut prices and rupee continued to trade at record lows. The market was choppy in a range and Sensex closed at 17339, down 33 points and Nifty at 5135, down 9 points from the previous close. The CNX Midcaps index and BSE Smallcaps index were both down nearly 0.25%. Market breadth was negative with 483 advances against 748 declines on the NSE. Top Nifty gainers included Cairn India, TCS and Tata Power while losers included BHEL, SAIL and DLF. 

 

3:57 PM - Koutons has a price target of Rs 1000 in 12 months, says Ashish Maheshwari of India Capital Markets, on CNBC TV18. The stock is currently trading at Rs 784, up 0.05% on the BSE. 

 

3:54 PM - Usha Martin has short-term target of Rs 120 and if that is crossed Rs 130-135, says Sachin Chavhan, techincal analyst, on CNBC TV 18. The stock is currently trading at Rs 100, down 2.29% on the BSE. 

 

3:50 PM - Cairn India has a 25% upside in the medium term, says Rahul Mohindar, technical analyst, on CNBC-TV18. The stock is currently trading at Rs 277, up 7.20% on the BSE. 

 

3:47 PM - GVK Power has short-term target of Rs 70-75, says Sachin Chavhan, techincal analyst, on CNBC TV 18. The stock is currently trading at Rs 55, up 8.59% on the BSE. 

 

3:42 PM - Reliance Money has a put a 'buy' call on Elder Pharma, with a target price of Rs 554, reports NDTV Profit. The stock is currently trading at Rs 369, down 0.14% on the BSE. 

 

3:39 PM - Reliance Industries is a clear outperformer, it has resistance at Rs 2750, support at Rs 2640, says Salil Sharma of Kapoor & Sharma Company, on CNBC Awaaz. Maintain a stop loss of Rs 2630, he adds. The stock is currently trading at Rs 2695, up 1.7% on the BSE. 

 

3:34 PM - The market closed flat for the day. Sensex closed at 17341, down 31 points (provisional) and Nifty at 5136, down 8 points (provisional) from the previous close. The CNX Midcaps index was down 0.20% and BSE Smallcaps index was down 0.26%. Market breadth was negative with 510 advances against 728 declines on the NSE. 

 

3:26 PM - The sugar space is a good place to be right now and top picks are Shree Renuka Sugars, Balrampur Chini and Bajaj Hindustan, says Sachin Chavhan, techincal analyst, on CNBC TV 18. 

 

3:21 PM - The market is likely to be rangebound from a month (around May 10-June 10), says SP Tulsian, Investment Advisor, on CNBC-TV18. On the lower side Sensex has support at 16000 and resistance at 18000, he adds. 

 

3:12 PM - India most attractive among the world market and it offers the best match for our business, says John Thain, CEO of Merrill Lynch, on NDTV Profit. US conditions will slowdown consumption, he says. ML would like to help manage huge wealth being created in India and assist Indian companies expand overseas, he adds. Do not believe in the decoupling theory, he says. 

 

3:00 PM - The market is trading almost flat. Sensex is trading at 17363, down 9 points and Nifty is at 5141, down 3 points from the previous close. The CNX Midcaps index is down 0.32% and BSE Smallcaps index is down 0.25%. Market breadth is negative with 514 advances against 719 declines on the NSE. 

 

2:53 PM - The market needs to pause for some time before it trades higher, says Raamdeo Agarwal, MD, Motilal Oswal Securities, on CNBC Awaaz. The earnings have been better than expected and this consolidation is healthy for the market, he adds. 

 

2:42 PM - Jet Airways has a cost cutting plan of $50 million to compensate 25-30% ATF price hike this year, reports CNBC TV18. The stock is currently trading at Rs 564, down 0.92% on the BSE. 

 

2:33 PM - Emco has bagged an order of Rs 126 crore, reports NDTV Profit. The stock is currently trading at Rs 184, down 0.19% on the BSE. 

 

2:24 PM - Geojit Financial has a 1-2 month target of Rs 75-80, says Rajesh Jain of SMC Global Securities, on NDTV Profit. The stock has support at Rs 45-50, he adds. It is currently trading at Rs 59.60, down 0.8% on the BSE. 

 

2:15 PM - The government asks steel companies to cut prices by Rs 4000/tonne, reports CNBC TV18. Steel companies say they are open to cut steel prices by Rs 4000/tonne only on certain conditions. The companies want 15-20% ad valorem export duty on iron ore and rollback of export duty on all categories of steel. Steel producers plan to meet the PM later today. Steel stocks have taken a beating on the news, SAIL.(down 4.42%), Gujarat NRE Coke (5.5%), Sesa Goa (down 2.3%), Jindal Steel (down 0.64%). 

 

2:05 PM - The market has witnessed a mild recovery. Sensex is trading at 17304, down 68 points and Nifty is at 5121, down 23 points from the previous close. The CNX Midcaps index is down 0.36% and BSE Smallcaps index is down 0.26%. Market breadth is negative with 480 advances against 744 declines on the NSE. 

 

1:57 PM - Allcargo looking at acquiring companies of size $5-$15 million from China, Far East and UK, says Ashit Desai, director of the company, on NDTV Profit. The company has capex plans of Rs 300 crore over 2 years in CFS and ICD expansion, he says. Of this Rs 100 crore will be invested to expand the crane fleet, he says. The stock is currently trading at Rs 780, down 2.48% on the BSE. 

 

1:47 PM - Fortis Healthcare plans to continue its acquisition spree going forward, says Shivinder Mohan Singh, CEO & MD of the company, on NDTV Profit. The company expects its Vashi operations to be onstream this quarter, he adds. The stock is currently trading at Rs 82, down 0.72% on the BSE. 

 

1:36 PM - Every rupee drop versus $ raises import bill by Rs 3000 crore, reports NDTV Profit. Current fall in the rupee is due to demand for dollar from oil companies. Goldman Sachs says crude at $150-$200 per barrel possible in two years. 

 

1:27 PM - There is some interest coming back from the retail desk, but it is more in short term trade at the moment, says SA Narayan of Kotak Securities, on CNBC-TV18. He believes the market will remain rangebound in the near future. 

 

1:19 PM - Electrosteel Casting has resistance at Rs 70-75 where one can book profits and exit the stock, says a market expert on Zee Business. Maintain a stop loss of Rs 51, he adds. The stock is currently trading at Rs 54, down 1.72% on the BSE. 

 

1:10 PM - The Asian markets have weakened considerably. The Indian market is witnessing a dull day. Sensex is trading at 17286, down 88 points and Nifty is at 5118, down 26 points from the previous close. The CNX Midcaps index is down 0.27% and BSE Smallcaps index is up 0.01%. The market breadth is negative with advances at 550 against declines of 653 on the NSE. 

 

1:00 PM - If Tulsi Extrusions closes above Rs 90, then it will show further upmove, says Rajesh Jain of SMC Global Securities, on NDTV Profit. But if it falls below Rs 75, then it can fall further down, he adds. The stock is currently trading at Rs 76.60, down 0.8% on the BSE. 

 

12:53 PM - One can look at buying MRPL close to its support levels of Rs 85-90 for a target price of Rs 120-125, says Rajesh Jain of SMC Global Securities, on NDTV Profit. The stock is currently trading at Rs 105.20, up 0.5% on the BSE. 

 

12:46 PM - NIIT Technologies has a target price of Rs 170-180, where it will also face some resistance, says Rajesh Jain of SMC Global Securities, on NDTV Profit. The stock has support at Rs 125-130, he adds.It is currently trading at Rs 148.85, up 2.2% on the BSE. 

 

12:39 PM - Reliance Industries has a strong resistance at Rs 2,750, says Manas Jaiswal of Emkay Shares & Stock Brokers, on NDTV Profit. Once this is crossed, the stock can go up to Rs 3,050, he adds. On the downside, if Rs 2,550 breaks, then the stock might see a sharp correction, he says. It is currently trading at Rs 2,660, up 0.2% on the BSE. 

 

12:31 PM - Tata Communications is a volatile stock and is rangebound between Rs 440 and Rs 560, says Sachin Chauhan, technical analyst, on CNBC Awaaz. So one can trade here; buy at Rs 460 or below, with a stoploss of Rs 440 and sell close to Rs 530-540, he suggests. The stock is currently trading at Rs 487, down 0.6% on the BSE. 

 

12:25 PM - ITC is an uptrend and therefore a hold a current levels, says Rajesh Jain of SMC Global Securities, on NDTV Profit. The stock has good support at Rs 200-210, he adds. It is currently trading at Rs 228, up 1.4% on the BSE. 

 

12:18 PM - Monnet Ispat will rise further as and when the market goes up, says Rajesh Jain of SMC Global Securities, on NDTV Profit. The stock has support at Rs 450-500 and will face resistance at Rs 600-650, he adds. Continue to hold the stock, he suggests. It is currently trading at Rs 542.50, up 0.3% on the BSE. 

 

12:11 PM - Bank of Baroda may face resistance between Rs 330 and Rs 350, says Sachin Chauhan, technical analyst, on CNBC Awaaz. If one wants to average the cost, then look to buy it around Rs 275, as the stock has a long term support at Rs 250-255, he suggests. It is currently trading at Rs 323, down 0.7% on the BSE. 

 

12:03 PM - The market is on the recovery path. Sensex is at 17,359, down just 13 points from the previous close. Nifty is at 5142, down 2 points. CNX Midcap index is up 0.5% and BSE Smallcap index, up 0.4%. IT, metal and FMCG stocks are attracting buying interest, while capital goods and banking stocks are being beaten up. Market breadth is positive with 694 advances against 487 declines on the NSE. 

 

11:54 AM - DLF is a buy only if it falls to Rs 630-640, with a stoploss of Rs 585, says Manas Jaiswal of Emkay Shares & Stock Brokers, on NDTV Profit. It can also be bought if it breaks Rs 750 on the upside; then its target price will be Rs 900, he adds. But for now, avoid it, he suggests. The stock is currently trading at Rs 666.40, down 0.2% on the BSE. 

 

11:47 AM - RNRL may face a short term resistance at Rs 125, but once this is crossed, it can go up to Rs 145 and possibly even Rs 165, says Satish Kannav of Arihant Capital Markets, on NDTV Profit. The stock is currently trading at Rs 119.10. down 0.5% on the BSE. 

 

11:40 AM - Citi has a 'buy' rating on Tulip IT, with a target price of Rs 1,220, reports NDTV Profit. The stock is currently trading at Rs 923.70, up 2.8% on the BSE. 

 

11:33 AM - If 5100 on the Nifty gets broken, then the next support will be 5080-5020, says Rajat Bose, technical analyst, on CNBC-TV18. And this is where demand may come in again, which could result into a pullback rally to 5165 on the Nifty, he adds. 

 

11:25 AM - ITC can go up to Rs 240-245 in a short time, says Manas Jaiswal of Emkay Shares & Stock Brokers, on NDTV Profit. The stock is currently trading at Rs 228.10, up 1.4% on the BSE. 

 

11:19 AM - Bombay Dyeing looks strong on the charts and can go up to Rs 1,200-1,250 in the next 1-2 months, says Manas Jaiswal of Emkay Shares & Stock Brokers, on NDTV Profit. The stock is currently trading at Rs 995.15, up 2.3% on the BSE. 

 

11:11 AM - Bharti Airtel has support at Rs 777 and may face resistance at Rs 930-950, says Manas Jaiswal of Emkay Shares & Stock Brokers, on NDTV Profit. But once this resistance is crossed, the stock can go up to Rs 1,020-1,030, he adds. It is currently trading at Rs 837, down 1.1% on the BSE. 

 

11:04 AM - The market is still trading lower. Sensex is at 17,294, down 78 points from the previous close. Nifty is at 5125, down 19 points. But the CNX Midcap index is up 0.17% and BSE Smallcap index, up 0.4%. 

 

10:56 AM - HSBC has downgraded Jindal Saw to 'underweight' and has cut its target price to Rs 570 from Rs 770, reports CNBC-TV18. The stock is currently trading at Rs 618.55, down 0.9% on the BSE. 

 

10:49 AM - Praj Industries looks strong on the charts and one can buy the stock on declines, with a stoploss of Rs 165, says Manas Jaiswal of Emkay Shares & Stock Brokers, on NDTV Profit. The stock can appreciate by another Rs 50-60 in the next 2 months, he adds. It is currently trading at Rs 202.10, up 3.5% on the BSE. 

 

10:42 AM - ICICI Bank is a buy only if it falls to support levels of Rs 850-830 or if it breaks Rs 1,000 on the upside, says Manas Jaiswal of Emkay Shares & Stock Brokers, on NDTV Profit. The stock is currently trading at Rs 913.15, down 1.6% on the BSE. 

 

10:32 AM - DLF looks pretty weak on the charts now, says Rajat Bose, technical analyst, on CNBC-TV18. It needs to trade above Rs 670 to show any kind of recovery, he says. But if it falls below Rs 657, then it can go to Rs 644 too, he adds. The stock is currently trading at Rs 656, down 1.8% on the BSE. 

 

10:25 AM - RNRL may face stiff resistance at Rs 130, but once this is crossed, it can go up to Rs 160, says Manas Jaiswal of Emkay Shares & Stock Brokers, on NDTV Profit. The stock is currently trading at Rs 118.80, down 0.7% on the BSE. 

 

10:19 AM - Tata Steel may face medium term resistance at Rs 820, says Satish Kannav, technical analyst with Arihant Capital Markets, on NDTV Profit. If it can cross Rs 820-830, then Rs 900 is possible, he adds. Hold for now, and look at exiting close to Rs 920, he suggests. The stock is currently trading at Rs 819, up 0.3% on the BSE. 

 

10:12 AM - Praj Industries may face a short term resistance at Rs 205, says Satish Kannav, technical analyst with Arihant Capital Markets, on NDTV Profit. But any spike in global crude oil price may take it to Rs 235, which becomes its short term target, he says. Hold it for the long term, he suggests. The stock is currently trading at Rs 197.80, up 1.3% on the BSE. 

 

10:06 AM - Aishwarya Telecom has listed at Rs 55 versus the issue price of Rs 35, reports CNBC-TV18. The stock is currently trading at Rs 75.20, on the BSE. 

 

9:59 AM - The market has opened slightly higher today, but within seconds, has slipped into the negative terrain. Sensex is currently trading at 17,295, down 77 points from the previous close. Nifty is at 5120, down 24 points. 

 

9:54 AM - The market may have lower opening today and may see moderate volatility, says an NDTV Profit Poll. Nifty range is expected to be 5080-5178 and a close above 5215 is important now. Stocks to watch today are Idea Cellular, IOL Broadband and midcap IT stocks. 

 

9:50 AM - The market may see a bounceback today and if the Nifty manages to stay above 5165-5170, then many people may initate long positions, says Rajat Bose, technical analyst, on CNBC-TV18. But unless the Nifty crosses 5225-5235, one may not be able to see a sustained rally, he adds. 

 

9:43 AM - One should look at exiting Shree Cements at any Rs 40-50 rally or even at current levels, says Satish Kannav, technical analyst with Arihant Capital Markets, on NDTV Profit. But a trading call can be taken in India Cements, as it can go up to Rs 185, he adds. 

 

9:36 AM - Some downward pressure is expected in the market now, as it approaches its resistance levels, says Satish Kannav, technical analyst with Arihant Capital Markets, on NDTV Profit. The Sensex now has support at 17,050 and below that, at 16,800, he adds. 

 

Read More