Wednesday, February 13, 2008

Investors deserting stocks linked to power, realty


Kumar Shankar Roy
BL Research Bureau Patterns in stock price declines on Monday showed that investors dumped stocks that had strong linkages either to the power sector or to realty. The much-anticipated listing of Anil Ambani Group company Reliance Power saw the stock losing 17 per cent relative to its offer price. This had a rub-off effect on power stocks, particularly the power generation companies, which had been sharply re-rated since October on hopes that the listing would set a new valuation benchmark for the sector.

Power off


After Monday’s closing, companies such as Gujarat Industries Power (-49 per cent), CESC (-30 per cent), GMR Infrastructure (-44 per cent), NTPC (-35 per cent) and Reliance Energy (-40 per cent) have witnessed a significant price erosion from the highs hit by them in the October-February period.

Reliance Power filed the draft prospectus for its mega IPO in October and mopped up Rs 11,000 crore in January. This contributed to a re-rating of power stocks and also to the run-up in domestic equities. Now with the Reliance Power stock listing below its offer price, power stocks have been beaten down to their October levels. Except for Tata Power and Torrent Power, all the stocks in the BSE Power Index have gone back to pre-October 2007 levels.

Not hot anymore

The real estate sector came in for significant selling as well. The unsuccessful Emaar-MGF IPO and the recent sector downgrades by several foreign brokerages on Indian real estate saw the BSE Realty Index ending 6.3 per cent lower from last Friday’s closing.

Housing Development Infrastructure (HDIL) was the biggest loser in percentage terms (-13।75 per cent) followed by Ansal Infrastructure (-13.5 per cent), Phoenix Mills (-10.6 per cent), Purvankara, and Unitech (both -10.4 per cent).


Notably, Sensex-constituent DLF, which held the crown for India’s biggest IPO till Reliance Power dethroned it, lost just 2.6 per cent even as the Sensex fell by 4.78 per cent.

From being one of the top five performers in 2007 (growth of 73 per cent for BSE Realty Index), 2008 has seen a poor start for the realty sector, with the index losing 30 per cent till Monday.

The same can be said for BSE Oil & Gas Index, which is composed of Sensex heavyweights like Reliance Industries, ONGC, losing 27 per cent in the year-to-date. The Oil & Gas index gave returns of 115 per cent in 2007 as Sensex clocked gains of 47 per cent.

Today, the fall in the Oil & Gas index was led not only by heavyweights but also by players such as Essar Oil (-16 per cent), Reliance Natural Resources (-16.4 per cent), and HPCL (-8 per cent), as investors were in ‘sell’ mode.

Source : thehindubusinessline.com

4 comments:

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Indian stock market




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www.ShareTipsInfo.com Team said...

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Regards


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www.ShareTipsInfo.com Team said...

Dear Visitors,

This Blog is really nice and informative. We are pleased to know this
blog is really helping people. Its our pleasure to post
Informative content on this useful blog created by webmaster.

As we all know major stock market exchanges in India are

BSE
and NSE. Full form of BSE is Bombay stock exchange covering SENSEX
where as

NSE is
National stock exchange covering Nifty and Nifty stocks.

Now a days USA is facing recession which is affecting world market and
recently we have witnessed major fall in Nifty and Sensex.

In this fall many investors were trapped and loosed around 50% to 70%
of their portfolio which is a major issue and need to be taken care
of.

Stock market is risky and will remain risk always still one can
minimize risk factor in it by using proper stoploss. As the name suggest
Stoploss , it stops the losses
which one can incur in the market.

There are few levels which we call support and resistance level which
we suggest one should strictly follow for coming days if they want to
survive in stock market.


Right now Nifty is direction less

Major suport-4660 below it next will be 4400.If breached then 4000.

On upper side Res- 5025 closed above can take Nifty to 5150-5200 . 2-3
closings above 5200 means 5400.

We suggest strictly follow these level and enter in market as per these
levels as these are very crucial levels technically.



Please feel free to contact us for any query.


Have a Nice trading days ahead.

Regards


SHARETIPSINFO TEAM

9891655316
9899056796
9891890425

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