MARKET COMMENTARY FOR THE DAY 11 JUNE 2010

The bourses have started showering their blessings in big droplets even as it rained like cats and dogs and in the process driving power out from my house and making me wonder when I’ll be able to post this market commentary. So, the sensex shot up by 142.87 to end the weekend at 17064.95, The Nifty rose by 40.75 to end the day at 5119..35.

Index of Industrial Production [ IIP ] this time around has once again displayed strong growth of 17.6 per cent in April 2010 compared to IIP of April 2009 [ it was a dismal 1.1 per cent then ] and this is the sharpest rise since December 2009 when IIP rose 17.7 per cent. Manufacturing sector rose 19.4 per cent in April 2010 compared to same month last fiscal, mining activity was up 11.4 per cent and power increased 6 per cent. Dr. Amit Mitra, Secretary General, FICCI expressed hope that with such robust industrial numbers, GDP growth target of 8.5 per cent in 2010-11 can be achieved.

RIL agreed to buy Infotel Broadband Services for Rs.4800 crores. Infotel is the only company which bid successfully for broad band wireless access spectrum in all 22 circles. RIL intends to launch 4 G services in India. Besides, RIL made investors happy by announcing its sixth oil discovery in an exploration block in Gujarat.No wonder RIL rose by Rs.31.05, 3.06 per cent. BHEL rose by Rs.67.90 and Siemens by Rs. 18.75. Bharti Airtel decreased by Rs. 11.70 to end the day at Rs.273.50. Unitech traded lower by Rs.2.45 to end the day at Rs.68.25.- I wouldn’t be surprised if someone told me that swing traders may be praying for the price to slide down to Rs.60 or even lower in order to take a bet on this one at least!

Shareholders of Nagarjuna Constructions Ltd [ NCL ] may be rejoicing even as the company declared that it won orders worth Rs.7.9 billion. Hats off to Rakeshbhai [ RJ ] for having the enviable foresight to buy 1,49,00,000 shares of a company that is performing exceedingly well Trust RJ continues to hold this bulk of NCL..

As regards IPO’s I guess gone are the days when people use to subscribe ardently to any IPO not caring whether promoter was Tom, Dick or Harry. Fat Pipes Network India received poor response to its IPO because of which it had to bring down the price band to Rs. 80-85 from earlier band of Rs. 82-85 as if thins reduction will tempt investors to rush out and apply for this IPO! QIB category was subscribed 0.84 times and the retail investor category was subscribed just 0.22 times.

Rain or no rain, have a great weekend.



Kishor S. Khot, [Kishor@hbjcapital.com], Equity Strategist, HBJ Capital Services Pvt Ltd
.