Sensex Keeps Momentum

Elena
06 Nov, 2006
New York City

Consumer goods stocks surged today and helped the benchmark index continue its winning streak. Buying was mainly in large-caps, and some mid-caps also gained. A few cement stocks ended positive on hopes of continued strong demand and a rise in retail prices. Other stocks that gained included stocks in pharma, oil and gas and capital goods sectors. Hindustan Lever led the advance, while Maruti and Bajaj Auto led the decliners. The Central government is likely to cut petrol and diesel prices.

[R]10:30AM The Sensex advances for the fourth day in a row on consumer goods.[/R]
The Sensex on BSE finished 56.10 points, or 0.43%, higher to 13,186.89. The market-breadth was strong. For 1,395 shares that advanced, 1,147 declined and 54 remained unchanged. From the Sensex stocks, 15 advanced while the rest declined. The turnover on BSE was Rs 4,240 crore, higher than Rs 4,034 crore on Frriday. The turnover on NSE was Rs 7,752.63 crore.

Economic news

The government said it will cut petrol and diesel prices if it finds the fall in international oil prices to have helped oil companies overcome losses on fuel sales.

Advancers

Hindustan Lever led the advancers, gaining 4.76% to Rs 246.70 on 20.35 lakh shares on reports that the company is preparing for price hike for the fourth time in the year and is to raise product prices by 4-10%.

Other consumer goods stocks advanced on renewed buying interest in the wake of reports that they will resort to price hikes. Mc Dowell advanced 5% to Rs 833.35, Colgate edged up 0.24% to Rs 422, ITC gained 1.60% to Rs 190.20, Godrej Consumer notched 0.72% up to Rs 160.

Cement stocks advanced on hopes of continued strong demand and a rise in retail prices on the back of a boom in construction activity. ACC rose1.01% to Rs 1,017 and Gujarat Ambuja Cements moved 3.29% higher to Rs 127.25. Other cement stocks also rose. Shree Cement gained 5.25% to Rs 1279.40, JK Lakshmi Cement spurted 3.37% to Rs 151.75 and India Cements was up 0.67% to Rs 224.70.

Cipla gained 2.95% to Rs 263.50 after it received approval from the U.S. Food and Drug administration for selling insomnia drug zolpidem tartrate in the tablet form.

Index heavy Reliance Industries surged 1.56% to Rs 1,307. It had hit an all-time high of Rs 1,315.90 on strong buying demand.

Software developer i-flex solutions gained 2.54% to Rs 1,573 on market talks that Oracle Corporation would improve the open offer price to purchase shares in the Indian company. In September, Oracle had offered to buy 16.629 million shares of i-flex solution, or 20%, at Rs 1,475 a share.

Indiabulls Financial Services gained 2.58% to Rs 476.60 after its unit received in-principle approval from the federal government to develop a multi-product special economic zone in Maharashtra.

Zinc producer, Hindustan Zinc jumpe 2.69% to Rs 940 after it lifted zinc prices by Rs 1,200 a tonne, or by 0.54% to Rs 2,23,000 with immediate effect.

Decliners

ONGC led the decliners, down 2.55% to Rs 855 on 4.73 lakh shares. It had plunged to a low of Rs 853.20, while its high of the day was at Rs 895. Auto stocks were under selling pressure. Bajaj Auto lost 2% to Rs 2,784 and Maruti Udyog sank 2.39% to Rs 951. SBI fell 1.71% to Rs 1,107.05 and Satyam fell 1.13% to Rs 421.15.

Other news

Lakshmi N. Mittal was today appointed as the Chief Executive Officer of Arcelor Mittal, which was born out of a merger between Mittal Steel and Luxembourg-based Arcelor in June.


[R]9:45AM Merger deals boosted market at opening.[/R]
U.S. stocks advanced at opening, boosted by a series of corporate deals in the health-care sector. Abbott Laboratories Inc. ((ABT)) said it will acquire Kos Pharmaceuticals ((KOSP)) for $3.7% billion. Abbott shares fell 1%, while Kos shares soared 54%. Drug wholesaler McKesson ((MCK)) said it will acquire rival healthcare concern Per-Se Technologies Inc. Shares of McKesson rose 1% to $49.02 while Per-Se Technologies soared 13%. Four Seasons Hotel ((FS)) surged 31% after the hotel chain said it received a $3.7 B takeover offer from investors, including Saudi prince and Bill Gates.

The brokerage sector turned in one of the market's best performances, reversing from a considerable weakness last week. Jefferies ((JEF)) and Charles Schwab ((SCHW)) led the sector higher, with both brokers rising more than 2 %. Significant strength also emerged in the networking sector, with Alcatel ((ALA)) and Cisco ((CSCO)) posting notable gains. Airline stocks also moved higher in early trading, despite an increase by the price of oil. In midmorning trading, the Dow Jones industrial average rose 69.96, or 0.58%, to 12,056.00. The Standard & Poor''s 500 index was up 9.90, or 0.73%, at 1,374.20, and the Nasdaq composite index advanced 27.84, or 1.19%, to 2,358.63. Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.73% from 4.71% late Friday.


[R]9:30AM The FTSE 100 advances in early trading Monday on M&A, metals[/R]
The FTSE 100 in London gained 45.8 points, or 0.7%, to 6,193.9.

Advancers

With metal prices rising, Vedanta Resources rose 1.8%, BHP Billiton firmed 1.8% and Kazakhmys gained 1.8%.

Ladbrokes firmed 0.5%, 888 jumped 7.7% while fellow internet gamer PartyGaming was 4.6% higher on hopes it could still get involved.

EMI Group, the music company, advanced 2.5% amid speculation that a management buy-out was on the cards.

Whitbread firmed 0.6% on press reports that Starwood Capital had acquired a 3% stake in the leisure group. The rumours lifted hopes of a takeover by the US property company.

Unilever gained 2.5% as long-time bear Merrill Lynch upgraded the consumer goods company from sell to neutral and raised its earnings forecasts.

[Decliners

Gilat Satcom plunged to an all time low after the broadband satellite services provider warned that full year results will not match market expectations following a third quarter loss. Gilat Satcom plunged 33.90%.

Daily Mail & General Trust lost 0.7% amid reports that Morgan Stanley had placed 7.5 million shares in the newspaper owner. Marks and Spencer eased 0.6% ahead of interims on Tuesday.

Other news

The Office for National Statistics said manufacturing output was broadly unchanged on the month with a 2% fall in electrical and optical equipment offsetting an increase in the chemical and man-made fibre industries. UK interest rates will be decided Thursday.

Tokyo Stock Exchange has confirmed press reports that it has held talks with the London Stock Exchange over an alliance of some type, but which stops short of a merger.


[R]9:00AM Stock futures pushed up on retreating oil and merger activity.[/R]
U.S. stock futures indicated a higher start, recovering from last-week losses, with support given by retreating oil prices and acquisition activity. Crude oil declined 45 cents to $58.69 a barrel. In merger-and-acquisition news, Four Seasons Hotels ((FS)) received a $3.7 billion buyout bid from investors, including Bill Gates and Saudi Arabia prince. In another deal, McKesson Corp. ((MCK)) said it was buying Per-Se Technologies ((PSTI)) for $1.8 billion, representing a 15% premium to Per-Se''s closing price on Friday. Per-Se shares rose 12% before market opening. Kohlberg Kravis & Roberts and Goldman Sachs ((GS)) agreed to buy for the forklift unit of Germany''s Linde for $4.6 billion. OSI Restaurants ((OSI)) said it received a total acquisition bid of $3.2 billion, or $40-per-share by an investor group, which included Bain Capital and company founders. Elsewhere, Anadarko ((AP)) said it had decided to sell its Gulf of Mexico assets to Statoil ((STO)) for $901 million. Among companies affected by brokers’ comments, Dow component Home Depot ((HD)) and fellow home improvement retailer Lowe''s Cos. ((LOW)) declined as they were downgraded to reduce from neutral at UBS. The broker cited growing concerns over weakness in the U.S. housing market. Dow Jones futures were recently up 41 points, S&P 500 futures rose 5.3 points and Nasdaq futures advanced 6 points.


[R]8:30AM Abbott agreed to acquire Kos.[/R]
Abbott Laboratories ((ABT)), diversified health care products make, announced on Monday it will acquire Kos Pharmaceuticals Inc. ((KOSP)) for about $3.7 billion, or $78 per shares. The deal represents 56% premium on its closing price Friday at $50.09 on the Nasdaq. Through the acquisition of Kos, which reported 2005 revenue of $751.7 million., Abbot aims at expanding it cholesterol drug holdings. Abbott expects the transaction will weaken earnings by 2 cents to 3 cents per share in 2007, not affect profit in 2008, and add to earnings thereafter. Abbott shares fell to $46.85 in premarket trading from their close Friday at $47.64 on the New York Stock Exchange.


[R]8:00AM Linde agreed to sell its forklift division for $4.58 billion.[/R]
German Linde AG, industrial-gas and engineering group, agreed to sell its forklift division, Kion Group, for 3.6 billion euros ($4.58 billion) to a group of investors, including Kohlberg Kravis Roberts & Co. and investment bank Goldman Sachs Capital Partners ((GS)). KKR and Goldman reached an agreement to assume 400 million euros of liabilities. The buyers also agreed to honor all job-security agreements that the Linde executive board and employee representatives entered into in summer 2005. The forklift division employs 20,000 and reported sales of 3.6 billion euros for fiscal 2005 The deal is subject to approval by antitrust regulators.


[R]7:30AM Asian markets end higher Monday, led by Indonesia, HK, Australia.[/R]
Asian markets closed higher on Monday. The Nikkei 225 ended 0.1% higher at 16,364.76. Shares of Softbank Corp fell 1.2% in Tokyo. Mixi Inc., social networking site, slipped 7% on concerns over growing competition.

Honda Motor gained 0.7%, while Toyota Motor rose 1%, with both shares benefiting from a weaker yen. Mazda Motor Corp rose 1.9% after reporting last Thursday that first-half net profit fell owing to one-off charges but raising its full-year forecasts. Konica Minolta Holdings jumped 11.1% after the group reported it has returned to profit in the first half for the fiscal year through September and increased its forecast for the full year.

Hang Seng Index in Hong Kong set an intraday record before retreating slightly to end up 186.86 points, or 1%, at 18,935.55. Leading the advance was China Mobile, whose shares jumped 3.4%. Sinopec Corp. rose 4.6% on speculation the stock may be added to the Hang Seng Index during a reshuffle expected after the market close Friday.

South Korea Kospi index fell 0.3% to 1,379.19 on weakness in exporters and semiconductor-related shares. Singapore Straits Times Index fell 0.4% and Malaysia KLSE Composite Index lost 0.5%. Shares traded in the New Zealand gained, with the NZX-50 benchmark up 0.3%. Taiwan Weighted Price Index fell 0.6% to 7,120.44.

Australia S&P/ASX 200 rose 0.2% to close at a record 5,444.10 on gains in energy and banks. Oil and gas producer Woodside Petroleum rose 1.7%, while shares of Macquarie Bank gained 1.7%. Indonesia JSX Composite jumped 1.7%, setting a fresh record closing high for a sixth consecutive session on strength in banking shares ahead of an expected interest-rate cut this week. Leading lender PT Bank Mandiri Tbk gained 2.7%.


[R]6:30AM European markets trade higher in early session on earnings results.[/R]
European markets were higher on Monday. By mid morning, London FTSE 100 climbed 0.6% to 6,187.3, while Frankfurt Xetra Dax gained 0.7% to 6,286.26, the CAC 40 in Paris added 0.4% to 5,358.82.

Advancers

Ryanair gained 3.8% after the group announced a forecast-beating 23.7% rise in its second-quarter net profit and raised its outlook for the full year.

Merrill Lynch upgraded Anglo-Dutch consumer goods group Unilever from sell to neutral following its better-than-expected third-quarter results last week. Unilever shares rose 2.4%.

German sportswear maker Adidas gained 2.5% after Barrons, the weekly investment newspaper, said it expected the shares to rise to around 50 euros a share next year if the company can achieve cost savings following its Reebok purchase and increase its US market share.

Ferrovial, the Spanish construction group, said it was looking at offers for its property division, even though the unit was not officially for sale. Ferrovial shares added 2.7%.

Decliners

Vivendi shares traded down 0.5%. Vivendi noted over the weekend that it had received a friendly expression of interest from KKR following press speculation. Vivendi said that it reviewed the proposal - which reports put at 40 billion euros - but that the expression of interest did not result in a proposal.

Shares in steelmaker Arcelor Mittal declined 0.7% in Paris. It said its third-quarter sales declined 1.6% compared to the second quarter, with net income up 20% sequentially.

Oil and gold

Oil prices slipped Monday after threats late last week of disruptions to production in Nigeria and the United States failed to materialize. Light, sweet crude for December delivery dropped 46 cents to $58.68 a barrel in on the NYME. December Brent crude on London ICE futures exchange fell 45 cents to $58.70 a barrel.

Gold declined from an eight-week high after gains in the dollar reduced the appeal of the metal as an alternative investment. Gold for immediate delivery fell $1.10, or 0.2%, to $626.30 an ounce early trading in London after earlier rising to $629.90, the highest since Sept. 7.

Currencies

The euro fell against the U.S. dollar on Monday, retreating below the $1.27 mark before the American midterm elections on Tuesday. In morning trading, the euro bought $1.2694, down from $1.2773 on Friday. The dollar rose to purchase 118.38 Japanese yen, while the British pound dropped to $1.8952 from $1.9086.