Market Diary 23 May, 2006

[MOTILAL OSWAL KURIACHIRA]

Halo Sir\Madam 

MOST DAILY – MONDAY, 22 MAY 2006 :

Heavy selling on Dalal Street hammered the benchmark Sensex below 10%, which led to a one hour trading halts on both the Mumbai Stock Exchange and the National Stock Exchange, However, shares recouped earlier losses on reopening after 1-hour break as the Government said that there are no cash problem in the stock market and all systems are in place. Sensex down 4% or 457 points to close at 10482 and Nifty closed at 3081, down by 166 points. Selling was seen across-the-board in counters like auto, metal, mid-cap, banking and capital good. The Finance Minister attempted to bolster the investors confidence by saying that brokers have come under margin pressure, and enough money is available to meet margin calls. Banks will also help investors meet calls for cash. BSE Consumer Durable index was by far the biggest loser and lost by 10.04%. BSE Metal (down 7.07%), BSE IT (down 4.50%), Pharma (down 3.28%) and Auto (down 4.92%) were the other major losers.

Among the auto stocks, Tata Motors down 10% to Rs762 after the company announced its Q4 results. Tata Motors Q4 profit was at Rs4.58bn (up 18%), total income at Rs68.88bn (28.2%) and recommended a dividend of Rs13 per share. Others auto stocks which were in reverse gear are Maruti, down by 5% to Rs749 and Bajaj Auto down 2% to Rs2871. The company announced its Q4 results with profit at Rs3.47bn (up 70%) and net sales at Rs21.66bn (up 32.4%) and to pay Rs40 a share as dividend.

BSE Metal index fall by over 7%. Tata Steel down 7% to Rs.471 continued to slide further after recording a 13.9% drop in Q4 profit. SAIL down 12% to Rs66, Sterlite Industries was down by 12% to Rs358 and Hindalco was down by 6% to Rs176.

Banking stocks also failed to survive the hammering and lost further ground with SBI down 1% to Rs860, Corporation Bank down 15% to Rs264, Union Bank down 8% to Rs100, Bank of India was down 7% to Rs119 and Syndicate Bank was down by 7% to Rs68.

OUTLOOK

: Global meltdown, margin selling by brokers has led to sharp fall and also unwinding of futures position has exaggereated the decline in the Indian markets. Several frontline counters have corrected by more than around 30% and thus long term investors must consider selective buying on strong fundamentals and be cautious in the approach. 

Corporate News

22 May, 2006

Mukand Q4 net profit before extra ordinary at Rs272mn (up 51%) and income at Rs4.1bn (down 1%)

Hindustan Zinc cuts lead prices by 1.4% to 63900 and zinc price by 2500 per ton to 183400 per ton

Hero Honda Motors - FY 06 results on May 30, 2006

Government may take a decision on revising gasoline and diesel prices by the end of this month

PSL wins Rs168cr order from L&T and Rs182cr order from GAIL

BSE and NSE were halted after worst fall in 2 years

Sterlite Industries has announced the full commissioning of the new 250,000 tpa aluminium smelter at its majority owned subsidiary, Bharat Aluminium Company Ltd (BACL) Korba Operations (Korha II) has been affected due to recent extreme weather conditions in Korha last week.

Commodity

Time 6.04pm (LME):

Metal price have recovered smartly from intra-day low. Aluminum price is hovering at $2773 per ton, up by $53 against previous day after touching low of $2675. Copper price is trading at $7515, down by $35. However Zinc has bounced back from intra-day low. It is trading at $3355 (low $3100), up by $125 against previous day closing.

Institutional activities

19-May : Rs (cr)            FIIs (Cash) : n.a.              FIIs(F&O) : 1878.00        MFs : 848.35 

Thank you.

 

Happy Investing!

 

Sincerely yours,

Vijo Joy Kuriakose P
Branch In Charge
MOTILAL OSWAL SECURITIES LTD
1st Floor, Flamon Complex
Kuriachira, Thrissur-680006
Ph: 0487-5523675,
Mob: 9895977410
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