MARKET COMMENTARY FOR THE DAY 23 JUNE 2010

The Sensex closed at 17755.94, up by 6.25 points and the Nifty rested at 5323.15, up 6.60 points. The top three gainers were Maruti Suzuki, Unitech and Sunpharma which rose by 2.80 per cent, 2.36 per cent and 2.13 per cent respectively. The top three losers were L&T, HCL Technologies and Sterlite Industries which shed 3.29 per cent, 1.92 per cent and 1.45 per cent respectively. In fact, L&T is down by Rs. 78.65 [ loss of 4.26 per cent ] from its 52 week high of Rs. 1843.75 achieved on 21 June.

As is known, in April 2010, RIL had acquired a 40% stake in Atlas Energy’s Marcellus share acreage in the US, gaining access to approximately 343,000 acres of undeveloped land with estimated gross resources of over 13 trillion cubic feet of gas. But the growth episode does not rest here.

RIL’s voracious appetite for growth does not seem to be abating – RIL will be buying 45% in the Eagle Ford shale gas field for about Rs 6,500 crore. It will make an up-front payment of nearly Rs 1,400 crore and the balance in the next four years, said a person close to the matter.

No matter what, RIL’s stock price defies all aerodynamic laws and refuses to take off smartly despite great diversification news and grandiose growth plans! RIL’s stock closed the day at Rs.1058.70, down by Rs. 5.10, 0.48 per cent.

Most Indian firms including Reliance Industries, L&T, Tata Steel and Tata Motors, have paid higher advance tax in Q1 June 2010 over Q1 June 2009. Higher advance tax payment normally indicates higher profits for the period under review. [ capitalmarkets ]

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