Market Become 1-1/2-month high

The market edged higher in early trade, extending Wednesday's (29 December 2010) rally. The market held firm in morning trade. The market trimmed gains in mid-morning trade. The market further pared gains in early afternoon trade. The market regained strength in afternoon trade. A bout of volatility was witnessed in mid-afternoon trade as the key benchmark indices hit fresh 1-1/2-month highs.The expiry of the near-month December 2010 futures & options (F&O) contracts may cause volatility during the last one hour of trade. The near-month December 2010 derivatives contracts expire today, 30 December 2010.Back home, the stock market regulator has reportedly mandated that companies with less than 25% public float will have to raise funds through a public share sale and not through private placement to institutions, a move aimed at widening retail holding and limiting stock Market price manipulation.

A major challenge for the RBI in the recent period has been liquidity management. It is the RBI's endeavor to alleviate the liquidity pressure in a manner consistent with the monetary policy stance of containing inflation and anchoring inflationary expectations, the RBI said.Among the 30-member Sensex pack, 22 rose while the rest declined. Tata Motors, Tata Power Company and Bhel rose by between 1.21% to 1.44%.Index heavyweight Reliance Industries (RIL) rose 0.30% to Rs 1051.45, with the stock gaining for the second straight day. The stock came off the day's high of Rs 1055.70. RIL's advance tax payment reportedly surged 42.8% to Rs 1191 crore in Q3 December 2010 over Q3 December 2009.FMCG stocks gained on bargain hunting. Nestle India, Hindustan Unilever, ITC, United Spirits, Colgate Palmolive, Godrej Consumer Products rose by between 0.02% to 2.01%.Consumer durables stocks also edged higher. Rajesh Exports, Titan Industries and Videocon Industries rose by between 0.6% to 6.11%.Realty stocks reversed initial losses. DLF, HDIL, Indiabulls Real Estate and Unitech rose by between 0.14% to 3.63%.IT stocks rose in anticipation of economic recovery in the US in 2011. US is the biggest market for Indian IT firms. India's second largest IT services provider by sales Infosys gained 1.13%. The stock hit a record high of Rs 3,447 today. Infosys today said it will unveil Q3 December 2010 results on 13 January 2011.

Temasek Holdings, owned by the government of Singapore, has acquired over 3% stake in the Max india

Max India rose 1.27% to Rs 139.45 at 09:42 IST on india's stock market BSE, on reports Temasek Holdings, owned by the government of Singapore, has acquired over 3% stake in the diversified firm.Meanwhile, the BSE Sensex was down 44.13 points, or 0.22% to 19,938.75.On BSE, 71,191 shares were traded in the counter as against an average daily volume of 3.12 lakh shares in the past one quarter.The stock hit a high of Rs 142.50 and a low of Rs 138.40 so far during the day. The stock had hit a 52-week high of Rs 245 on 15 January 2010 and a 52-week low of Rs 132.90 on 26 November 2010.The mid-cap stock had underperformed the market over the past one month till 23 December 2010, falling 12.40% as compared to the Sensex's 1.48% rise. It also underperformed the market in past one quarter, declining 18.83% as against 0.61% rise in the Sensex.The company's equity capital is Rs 46.49 crore. Face value per share is Rs 2.Temasek Holdings has reportedly acquired over 3% equity of Max India at an average price of about Rs 160 per share through stock market purchases since early November 2010.Max India reported net loss of Rs 18.95 crore in Q2 September 2010 compared to net profit of Rs 1.97 crore in Q2 September 2009. Net sales rose 13.40% to Rs 94.12 crore in Q2 September 2010 over Q2 September 2009.

JSW Steel Ltd surged 2.3% in the stock market

India’s third largest steel producer, JSW Steel Ltd surged 2.3% in the stock market on Tuesday, after it announced its plan to buy an 84-percent stake in Ispat Industries for $476 million. The company plans to expand its capacity in the country through the acquisition.As per the statement issued by the company, JSW will subscribe to 108 crore shares of Ispat Industries at Rs 19.85 per share, via preferential allotment. The shares of the JSW Steel Ltd jumped as the company is paying less for the deal than had been expected. JSW is buying the stock at a discount of 20 percent.“The company will subscribe to 108.66 crore equity shares of Ispat by way of preferential allotment at a price of Rs. 19.85 per piece,” JSW Steel said in a filing to the Bombay Stock Exchange.

Rupee recovered from two week low

The rupee recovered from two-week lows on Thursday after the central bank refrained from hiking rates as expected, cheering the stock market.The dollar's losses against major currencies also boosted the local currency.India's central bank left interest rates on hold but warned of inflationary risks and unveiled steps to address persistently tight liquidity, adding to the possibility that it will resume monetary tightening in January.The partially convertible rupee closed at 45.34/35 per dollar, after hitting 45.61, its lowest since Dec. 1, and marginally stronger than 45.395/405 at the close on Wednesday.Shares ended in the stock market the holiday-shortened week on a positive note as they notched a 1.1 percent gain, relieved by the central bank's decision to hold interest rates steady.

Sebi vets UID use for stock market deals

The Securities and Exchange Board of India (Sebi) has taken the first step towards evaluating the feasibility of using the unique identification (UID) number for all securities market transactions.

C B BhaveNandan Nilekani, who is heading the UID project, met Sebi brass yesterday and explained how the number could be relevant in capital market transactions. The meeting was attended by stock exchange officials, investment bankers, brokers, fund managers, registrars and depository participants.

According to a person privy to the development, the importance of the meeting can be gauged from the fact that top Sebi officials, including Chairman C B Bhave, besides whole-time members and executive directors, were present. Recent reports suggest that the Ministry of Finance has asked Sebi to see if UID can be made mandatory for all securities market transactions.

“The session aimed at creating awareness about UID among various market participants,” said a person who attended the meeting, adding, “It is too early to comment on the implementation, as the process of issuing UIDs has only begun.”

UID was launched on September 29, when 10 residents of Tembhali village in Nandurbar, Maharashtra, were issued their numbers. According to the website of the Unique Identification Authority of India, over 600 million UIDs will be issued over five years.


Others who attended the meeting included Sanjay Sharma of Deutsche Bank (also the vice-chairman of the Association of Merchant Bankers of India), Milind Barve of HDFC Mutual Fund and S Subramaniam of Enam. Top officials of the Bombay Stock Exchange, the National Stock Exchange and representatives of depositories and registrars were also present.

According to industry players, a move towards UID will mean a paradigm shift from the current use of the permanent account number (PAN) for all stock market transactions. “Multiple PANs in the name of a single person is a systemic risk, which will be eliminated by migrating to UID. One cannot have multiple UIDs, as the system will also capture fingerprints and iris details,” said the head of a domestic retail brokerage.

Indian stock market is extremly volatile

Indian stock market traded in an extremely range bound volatile session. Stock Banking and FMCG appeared as major losers while Oil-Gas appeared as biggest gainers. The Sensex closed at 19934, down 46 points from its previous close, and Nifty closed at 5976, down 15 points. The CNX Midcap index was down 1.1% and the BSE Smallcap Index was down 1.6%. The stock market breadth was negative with advances at 322 against declines of 980 on the NSE. The top Nifty gainers were NTPC, Hindalco, ACC and GAIL and losers included Axis Bank, ICICI Bank, Kotak Mahindra Bank and SBI. The FIIs were net sellers with investments worth Rs 522.83 cr (prov. cash market fig)

Market Outlook

In the next session, NIFTY is expected to trade in the range of 5930-6030, sustaining beyond the range may decide the market trend. Banking stocks and Realty may face more selling at higher levels while Metals, IT and Oil-Gas may attract buying. Traders are suggested to be cautious of long positions if NIFTY traded below 5930.

Sebi, has unearthed a nexus between some mid-cap companies and stock market operator

The Securities & Exchange Board of India , or Sebi, has unearthed a nexus between some mid-cap companies and stock market operators who rigged the share prices of these firms ahead of convertible bond issues and private placements to institutional investors .

Late on Thursday, the regulator barred the promoter groups of Murli Industries, Ackruti City, Welspun Corporation and Brushman India from dealing in their shares till further notice, for colluding with share trader Sanjay Dangi and his associates, and the Ashika Group in rigging the stock price of their respective companies. Sanjay Dangi and his group of investment arms, and the Ashika group of firms too have been banned. Ackruti City Managing Director Vimal Shah said he would challenge the Sebi order.

Shares of Murli Industries, Brushman India were trading lower on Friday. Welspun Corp tanked 27 per cent while Ackruti City tumbled by 19.99 per cent to a record low of Rs 307.90, hitting a lower circuit on BSE. Murli Industries saw a steep decline of 19.99 per cent while Brushman India counter dropped by 4.96 per cent in the early trade on BSE.

ET had reported on December 2 that the Intelligence Bureau had information about Sanjay Dangi manipulating share prices of mid-cap companies, including Welspun, in connivance with the promoters. Dangi is a comparatively new name in the club of Dalal Street operators who specialise in rigging stock prices of mid and small-cap companies . “... the Dangi group successfully offers its services for a commercial consideration,” said Sebi. The stock exchanges have been ‘advised’ by Sebi to enable squaring off the derivative positions of all these entities.

Barring Welspun, none of the other three companies is eligible for derivatives trading. December futures of Welspun Corporation closed at 220 on Thursday, a premium of 1.50 to the cash market price. The modus operandi in each instance was the same. The companies would have a set of investment arms, which would sell shares to various entities controlled by the Dangi group.

This cartel would then push up the stock price by buying some more shares from the market, and at the end of the operation, sell the shares back to the company’s investment arms. The profits would be shared by the Dangi group and the companies. The Dangi group entities traded through a large number of stock brokers, primary among them being Ashika Stock Broking, Sanchay, Systematix Shares & Stocks and Anand Rathi Financial Services.

In the case of Murli Industries, the company had raised $23 million through foreign currency convertible bonds (FCCBs ) in February 2007, with a conversion price of 565. An FCCB holder has the option of converting the bonds into shares anytime during the tenure of the bond. But he will do so only if the conversion price is below the stock market price.