S and P launches index of Indian equities for int'l investors

NEW DELHI: Standard & Poor's on Monday launched an equity index of 60-listed Indian companies, including the likes of Infosys, Bharti Airtel and Reliance Industries, to provide international investors with information on tradeable exposure to the largest and most liquid scrips in the country.

"The new S&P India Select Index was developed in response to growing investor demand for access to the leading companies in India. The index has a pool of easily accessible underlying stocks that provides a unique way for international investors to take part in India's growth story," R Ravimohan, Managing Director and Head of South and Southeast Asia, S&P said in a statement.

The 'S&P India Select Index' comprises leading companies, with no single scrip representing a weight more than 10 per cent in the index.

According to the leading index provider, the stocks that have reached the maximum percentage holding for Foreign Institutional Investors (FIIs) are excluded from the index in order to reflect the "lack of access of those stocks to foreign investors."

"The index is fully float adjusted and stock weights are determined by what is legally and practically available to foreign investors," the statement added.

The top 10 holdings by percentage of index weight are Infosys Technologies, Bharti Airtel, Oil and Natural Gas Corporation, Reliance Communications, Housing Development Finance, Reliance Industries, ICICI Bank, Hindustan Lever, Bharat Heavy Electricals, and Larsen & Toubro.
thanks to: economictimes.indiatimes.com

Short covering in Nifty futures; Aug ends flat

MUMBAI: Bouts of profit booking on weak opening of European markets led Indian stocks to shed all early gains on Monday.

National Stock Exchange's 50-share Nifty closed the day slightly higher at 4335.35 and August futures provisionally ended flat to spot. However, September futures settled at 1 point discount, indicating rollovers of short positions in the series.

August futures price gained 0.29 per cent while open interest shed 3.25 lakh shares. Nifty September futures price advanced 0.32 per cent and added 59 lakh shares in OI.

Call writing was observed at strikes 4400 and 4300 of August series and in September at strikes 4500 and 4400.

Put buying was witnessed in August series at strikes 4400 and 4300 levels while September series showed put buying at 4200 and 4000 levels. The options data indicates resistance at 4400 and support at 4200 levels.

"We saw short covering across the counters ahead of F&O expiry Thursday. Markets will remain volatile till the expiry. Data on US and India GDP, due on Aug 28 and 29 respectively, are of vital importance for the markets, also inflation data. Players should utilise every rally to lighten their commitments," said Subrato Basubani, analyst with Spark, a wealth advisory firm.

Realty and banking sectors were the major gainers while metal, power and oil & gas lost the most.

In banking, Bank of Baroda August futures gained 4.5 per cent while the contract ended flat to spot. Kotak Mahindra Bank near month futures price advanced 2.31 per cent and open interest added 1.16 lakh shares. ICICI Bank contract ended in a slight premium to spot.

DLF August rose 1.88 per cent while the contract closed at Rs 5 discount. HDFC jumped 3.36 per cent on short covering. However, HDIL futures dropped 2.17 per cent and shed 8.71 lakh shares in open interest.

Metal and commodity stocks fell on tumbling prices in international market.

Tata Steel futures fell 2.19 per cent, Sterlite Industries skid 0.44 per cent and shed 6.30 lakh shares and SAIL August futures slipped 0.34 per cent with huge additions in open interest, indicating short build up in the SAIL contract.

Total F&O turnover on NSE was Rs 45,979 crore, up 3 per cent from Friday.

Elsewhere, European stocks fell as concern deepened that credit losses will spread, threatening economic and profit growth. US index futures declined.
thanks to: economictimes.indiatimes.com

Short covering in stock futures, huge call writing at 4300 level

MUMBAI: After an initial hiccup, Indian markets recovered smartly in afternoon trade on Friday on the back of positive opening in European markets. National Stock Exchange's 50-share Nifty closed the day 0.84 per cent higher at 4319 and August futures provisionally settled at a premium.

The August futures premium widened to 10 points from 4 points Thursday. The contract price gained 0.98 per cent and added 10.5 lakh shares in open interest. Rising open interest coupled with widening premium indicates some longs being added in the contract.

Interestingly, huge call writing was observed at 4400 and 4300 levels while 4200 strike saw call buying. On the other hand, 4300 and 4400 puts shed positions in open interest where as 4200 witnessed put writing from bulls. The options data indicates Nifty range at 4200-4400 levels.

"Short covering was observed in banking, metal and auto stocks ahead of F&O expiry next week. Metal stocks gained as weak dollar bolstered the commodity prices in international markets," said Amrit Mehta, an independent analyst.

"The F&O expiry next week may fuel the volatility in the markets. On Aug 29, Indian GDP data for Q1FY09 will be released. This is a figure market is waiting anxiously for. For banking sector, next week will be a tough one. Bounce back in crude prices is expected to continue and it may impact bank stocks," said Praveen Kumar, an analyst with large brokerage

"On Aug 28, US GDP preliminary data will be released. Advance estimates are indicating US economy to grow 1.9% annualized rate. If the actual figure comes in line with the preliminary estimate then it would mean recessionary fears are over and the Federal Reserve can concentrate on inflation fighting and we can expect rate hikes in US," Kumar added.

In stocks futures, Hindalco futures gained 4.17 per cent and Sterlite Industries jumped 3.7 per cent on short covering. Steel Authority of India August advanced 3.67 per cent.

Axis Bank August rose 4.83 per cent, Kotak Mahindra Bank increased 3.35 per cent and HDFC Bank gained 2.16 per cent.

Tata Motors futures gained 1.81 per cent, Mahindra & Mahindra advanced 1.53 per cent and Maruti rose 1.77 per cent.

Total F&O turnover on NSE was at Rs 44,332 crore, down 14 per cent from Thursday.

Meanwhile, European stocks rose as investors speculated takeovers may increase and a drop in oil boosted airlines and carmakers. U.S. index futures advanced, while Asian shares retreated.

thanks to: www.economictimes.indiatimes.com

Prabhudas puts outperformer on Bharti Airtel: target Rs 973

MUMBAI: Prabhudas Lilladher has maintained ‘outperformer’ on Bharti Airtel for a target price of Rs 973. Bharti expects the industry’s wireless subscriber base to reach 500 million by 2010 and 750 million by 2015, implying a compounded annual growth rate of 15 per cent over the period. The company has reiterated sustaining 25 per cent market share.

There are 5-10 slots available in all the circles, except Mumbai and Delhi that will suffice the needs of most of the operators. Mumbai and Delhi have 2-3 slots for auction with around five operators offering 2G services. These two circles being the key markets for 3G services may see serious bidding, says Prabhudas.

Bharti expects the auction process to take place between Sept’08-Oct’08 and launch of services in 6-9 months. However, no datapoints were given on the 3G capital expenditure.

3G will help the GSM incumbents to garner additional spectrum in the key markets for offering voice and high-end services. The spectrum-starved operators would like to ride the 3G services before the launch of Rcom GSM panindia and new entrants like Datacom, Unitech etc. rolling out their network.

Bharti expects to launch its DTH platform by Oct’08, initially targeting 100-120 cities. Test trials on 10,000 employees and associates have shown good results, says the brokerage.

Prabhudas expects Bharti to report strong subscriber additions over the next 5-6 months and has maintained its wireless leadership. Faster access to 3G spectrum shall be the key trigger in the foreseeable future.

At market price of Rs 792, the stock trades at a PER of 15.5x and at an EV/EBITDA of 9x FY10E earnings.
thanks to: economictimes.indiatimes.com

Bargain hunting helps indices close higher

MUMBAI: Selective stock buying by deep pockets and short coverings in banking, metals and auto stocks on Friday saw indices close on a higher note.

The market started off on a weak note on the back of negative Asian cues and rising oil prices. But soon, traders covered short positions in interest rates sensitive sectors as inflation rose moderately. Positive opening of European market bolstered sentiments further.

Metal commodity prices surged on speculation that demand will pick up in China after Olympics and as US dollar continued to decline against basket of currencies.

Capital goods and power space lost momentum as the day progressed on worries of outcome of the second day meet of Nuclear-Supply-Group on India-US nuclear deal.

“Stocks were available at good valuations after yesterday’s fall so some value buying was seen. Market seems to be in a neutral to positive zone,” said Ajay Parmar, Head of Research, Emkay Global Financial Services.

Bombay Stock Exchange’s Sensex closed at 14,401.49, up 157.76 points or 1.11 per cent. The index touched a high of 14,428.52 and low of 14136.86.

National Stock Exchange’s Nifty ended at 4327.45, up 43.60 points or 1.02 per cent. The broader index touched a high of 4337 and low of 4248.

BSE Midcap Index closed 0.34 per cent higher at 5726.85 while BSE Smallcap Index was down 0.16 per cent at 6,925.85.

Biggest Sensex gainers were Sterlite Industries (4.34%), Hindalco Industries (4.26%), Hindustan Unilever (3.73%), HDFC (3.22%) and BHEL (2.76%).

Index losers comprised Satyam Computer (-3.18%), Grasim Industries (-1.85%), NTPC (-1.70%), Wipro (-1.04%) and Larsen & Toubro (-0.88%).

Market breadth, however, remained negative with 1414 declines against 1209 advances on BSE.