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Sensex choppy on lack of fresh buying interest; Cipla, BHEL, SBI gain

 Markets  No Responses »
Aug 012012
 

MUMBAI: The Sensex was witnessing a choppy session due to lack of fresh buying interest near resistance levels. Realty, healthcare and capital goods led the gainers’ pack while metals, technology and auto sectors were moderately in the red.

At 01:00 pm, the 30-share BSE index was at 17,275.50, up 39.32 points or 0.23 per cent. The index has touched a high of 17,283.49 and a low of 17,189.16 in trade today.

The Nifty was at 5,243.45, up 14.45 points or 0.28 per cent. The index has touched a high of 5,246.30 and a low of 5,212.65 in trade today.

“Short-term momentum oscillators have rolled bullish, with RSI moving above its mean level of 50. However, broadly we are likely to trade in a range. Price action has indeed crossed above the 5,200 mark and is highly likely to face resistance at the ‘short day’ candlestick high of 19th July at 5,257. It is recommended to trade on the short side with stop-loss above 5,300 targeting 5,050,” said an Edelweiss report.

The BSE Midcap Index was up 0.80 per cent and the BSE Smallcap Index gained 1.01 per cent.

Among sectoral indices, the BSE Realty Index was up 1.23 per cent, the BSE Healthcare Index gained 1.01 per cent and the BSE Capital Goods Index moved 0.91 per cent higher. The BSE Metal Index was down 0.60 per cent and the BSE IT Index slipped 0.46 per cent.

Cipla (4.56%), BHEL (1.95%), SBI (1.72%), Tata Power (1.38%) and HDFC (1.34%) were among the major Sensex gainers.

Credit Suisse has maintained ‘outperform’ on Cipla with a raised target of Rs 390. Positive changes in the business model by the new management and increasing utilization of the indore sez are the key positives. The company is likely to benefit in the second quarter as well from Lexapro exclusivity, the brokerage says.

Losers included Coal India (3.24%), Hero MotoCorp (1.18%), ONGC (1.10%), Maruti Suzuki (0.98%) and Bharti Airtel (0.95%).

JP Morgan is underweight on Coal India with a target of Rs 300. It is of the view that additional obligation of being an importer of coal is not positive for the company. The real challenge is likely to arise when global coal prices spike up and whether transmission of prices is smooth.

The market breadth was positive on the BSE with 1,559 gainers and 940 losers.

Foreign institutional investors bought equities worth Rs 879.96 crore on Tuesday, as per provisional data from the NSE.

Govt plans to import cooking oil.

 Featured, Markets  No Responses »
Jul 082009
 

rbd-palm-oleinIndia is planning to again build up its public stocks of imported cooking oil as prices are expected to creep up in the coming festival months.
The oil would be sold in one-litre packs through ration shops to families below the poverty line.

There is concern with in the government that a weak monsoon could affect sowing of soyabeans and groundnut, two major kharif oilseeds, in Madhya Pradesh, Maharashtra and Gujarat. This could lower availability of indigenous oil, which usually acts as a cap on imports and reduces India’s dependence on cooking oil from Malaysia, Indonesia and Brazil.

Though the move would be consumer friendly at a time when food inflation is refusing to budge from 10%, it may depress margins for large private sector players in vegetable oils that are banking on rising local prices for making money in a business that traditionally yields just 2% net profit.

According to a fresh proposal before Cabinet, the government plans to ask state-owned trading companies – STC, MMTC and PEC, to import up to 1 million tonnes over the next one year, said a food ministry official on condition of anonymity.

These companies would have to import crude palm oil, the world’s cheapest oil, and get it refined and packed locally for sale to state governments, which in turn will deliver it to ration shops. For this the Central government is willing to pay a subsidy of Rs 15/kg to make good any losses that these companies incur while selling the oil to states.

This is the second time the Central government has shown willingness to supply cooking oil through ration shops. An earlier scheme for importing 1 mn t oil, that began in April 2008, had to be dropped midway due to a decline in international cooking oil prices, which made it affordable for consumers in the open market.

“Only 3.6 lakh t oil was imported under the earlier scheme despite a sanction for 10 lakh t, because states were unwilling to place orders with PSUs. But if prices again zoom in the coming months, consumers may return to ration shops for cooking oil,” the official said.

Though the government may be concerned about food inflation, neither private companies nor government-owned trading companies are likely to appreciate the move. If government starts supplying oil at below market prices to ration shops, diversion of demand and leakage of subsidized oil into the open market would tend to depress the entire price table and also discourage private importers from placing contracts, said a trader at a Mumbai-based cooking oil company.

Currently, crude palm oil is available at Indore for around Rs 35/kg while refined palmolein is available for Rs 40.50/kg plus VAT. At these prices, cooking oil is still fairly affordable for most families.
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