Reliance Energy in India Surges

Ivaylo
16 Jul, 2007
New York City

The market exhibited a range-bound trading Monday and finished with a slight gain for the third straight session. Banking, real estate and cement stocks advanced, while IT and pharma shares declined. Reliance Energy and Bajaj Auto were the top performers, ACC led cement stocks higher. Wipro, Satyam, and Ranbaxy led the decliners. Jaiprakash Associates hired Barclays Capital to sell $400 million of convertible bonds to boost cement production.

[R]7:30AM NY – 6:30 PM Mumbai Sensex finishes 38 points higher with Reliance Energy surging.[/R]

The Sensex on BSE finished Monday 38.50 points higher, or 0.25%, to 15,311.22.

Intra-day high and low

The benchmark index opened 22 points higher at 15,295, and soon touched record high of 15,341. Then, profit-taking at higher levels weighed the index down to a low of 15,239, down 102 points from the peak.

The market-breadth was positive as out of 2,753 stocks traded on BSE, 1,485 advanced, 1,210 declined and 58 were unchanged. Of the 30 stocks in the Sensex, 12 advanced, while the rest declined.

The turnover on BSE was Rs 5,270 crore, compared with Rs 6,752 crore on Friday. On NSE, turnover was Rs 11,519 crore, lower than Rs 14,883 crore on Friday.

Economic news

The biggest builder of dams in India, Jaiprakash Associates Ltd engaged Barclays Capital to sell $400 million of convertible bonds to boost cement production. Jaiprakash will also use proceeds from the debt sale to build a new thermal power plant and for capital expenditure.

The rupee kept rising against the dollar and passed 40.40 during morning trading, boosted by exporters and banks selling dollars as well as by the weakness of the dollar in the overseas markets.

Trading highlights

GMR Infrastructure was the most active stock with a turnover of Rs 248 crore followed by Reliance Communications and Indiabulls Real Estate.

Advancers of the Day

Reliance Energy rallied 4.5% to Rs 706. Reliance Energy is planning to secure at least two ultra mega power projects of 4,000 MW each worth nearly Rs 40,000 crore. Other strong gainers were State Bank of India which advanced 3.8% to Rs 1,614 and Bajaj Auto which gained 3.7% to Rs 2,255.

SBI Mutual Fund, accumulated Rs 2,536 crore from Infrastructure Fund Series-I, which closed for subscription in June 2007.

Reliance Communications rallied 3.5% to Rs 574. There are reports that it had signed an agreement to acquire Yipes, telecom company based in the U.S., for $300 million. Hindalco surged 3.5% to Rs 180. ONGC moved up 1.6% to Rs 915, and Grasim added 1% to Rs 2,900.

ACC surged 2% to Rs 1,118, leading cement producers higher on speculation they will post strong earnings as prices of the building material climbed. Ambuja Cements rallied 3.4% to Rs 133.

Index heavy Reliance Industries advanced around 0.5% to Rs 1,777.

Decliners of the Day

Wipro and Satyam led the decliners. Both companies were around 2.3% lower. Wipro finished at Rs 501, while Satyam dipped to Rs 482. Trading in IT large-caps was subdued throughout the day. TCS was down 0.8% to Rs 1,128 and Infosys lost 0.3% to Rs 1,934.

Ranbaxy slipped over 2% Rs 346. Other pharmaceutical industry stocks also declined weighed down by the strength in rupee. Cipla lost 1.3% to Rs 209 and Dr. Reddy’s Laboratories declined 0.9% to Rs 662.

Hindustan Unilever shed 2.2% to Rs 185. BHEL and NTPC lost 1.5% each to Rs 1,659 and Rs 155, respectively.

[R]6:30AM European shares gain Monday on a sweetened offer by Royal Bank of Scotland for ABN Amro.[/R]

National benchmarks climbed in 12 of the 17 western European markets that were open. The U.K. FTSE 100 index rose less than 0.1% to trade at 6,718.50, the German DAX 30 index climbed 0.1% at 8,099.60 while the French CAC-40 index gained 0.1% at 6,122.46.

In focus

ABN Amro, the Dutch lender, rallied 3.8% after Royal Bank of Scotland, the second-largest bank in the U.K., improved its offer for ABN Amro, in an attempt to outbid Barclays in the world biggest banking takeover. Dutch conglomerate Philips Electronics lost 1.5% after its second-quarter net income and sales missed analyst forecasts.

Around Europe

In London, financials were strong as Barclays rose 1.3% and Royal Bank of Scotland added 0.2%. BT increased 1.4% after Merrill Lynch hiked its recommendation for the U.K. largest phone company to buy from sell. Also in broker news, GlaxoSmithKline gained 1.6% as the world second-largest drugmaker was upped to neutral from underweight at JPMorgan.

In Frankfurt, the chief gainers were Deutsche Bank and insurer Allianz. Volkswagen climbed after the carmaker announced it expects to boost sales in China. Deutsche Bank advanced 1.2%. Reportedly, the largest bank in Germany may bid for Abbey Life, the closed life-insurance business of Lloyds TSB Group. Allianz gained 1.1% and Volkswagen added 0.8%.

Also in Germany BASF, the German chemicals group, rose 1.4% as UBS raised its price target on the group while Schneider Electric, also weak of late, rallied 2.4% as Citigroup lifted its recommendation from hold to buy.

In Paris, L’Oreal lost 3.9% as growth in sales at the cosmetics and beauty group failed to impress the market. Also in the news, EADS, struggling with losses caused by the Airbus division A380 plane delays, named Louis Gallois as sole chief executive officer. Total, the largest oil refiner in Europe, announced profit from converting crude oil into gasoline, diesel and other products increased 12% in the second quarter from a year earlier.

Currencies

The U.S. dollar was lower against other major currencies in European trading Friday morning. The euro traded at $1.3797, up from $1.3789 late Friday. The British pound traded at $2.0392, up from $2.0336. The dollar bought 121.61 Japanese yen, down from 122.03.

Gold traded in London at $667.25 per troy ounce, up from $665.30 late Friday.

Brent crude oil traded above $78 a barrel in London for the first time since Aug. 9 as field maintenance limited North Sea supplies.

Crude oil in New York for August delivery gained 51 cents, or 0.7%, to $74.44 a barrel in after-hours electronic trading on the New York Mercantile Exchange.

[R]5:30AM Gold dips, copper advances, oil finishes higher, corn ends higher.[/R]

August gold lost $1 to end at $667.30 an ounce on the Nymex, while September silver dipped 7 cents to $13.11 an ounce.

Copper advanced nearly 1% on the LME and added 1.2 cents to finish at $3.593 a pound on the New York Mercantile Exchange.

Nymex crude oil, which has ended 10 straight trading sessions above $70 a barrel, gained $1.43 to close at $73.93 a barrel after briefly hitting $74.

Hopes for continuing builds in gasoline inventories weighed pressure futures down 4.15 cents to end at $2.2248 a gallon.

In Chicago, agriculture futures oscillated throughout the day. December corn gained 3.25 cents to $3.685 a bushel, while November soybeans advanced 7.25 cents a bushel to $9.4875.

Wheat futures closed down 0.75 cent to $6.2075.