Turnover drops ahead of long weekend

The market ended with small gains on a volatile day of trade. The market breadth turned weak later during the day in contrast to a strong breadth earlier during the day. IT pivotals rallied. Reliance Industries edged higher.
FMCG, capital goods, consumer durables, banking stocks declined. Satyam Computer Services and Infosys were major gainers whereas ACC and Cipla were major losers from the Sensex pack. European markets were positive. Asian markets were mixed today, 20 December 2007. The Dow industrials and the S&P 500 declined slightly on Wednesday, 19 December 2007.
Annual inflation, based on the wholesale price index (WPI), rose 3.65% in the week ended 8 December 2007, lower than previous week's 3.75% rise, data released by the government during trading hours today showed.
The 30-share BSE Sensex rose 70.61 points or 0.37% to 19,162.57. It hit a high of 19,291.14 in mid-morning trade. At its day’s high Sensex had gained 199.18 points.
The S&P CNX Nifty up 15.35 points or 0.27% to 5,766.50.
BSE clocked a turnover of Rs 6206 crore, lower than Wednesday (19 December 2007)'s Rs 8,347.15 crore.
The market remains closed on Friday, 21 December 2007 on account of Bakri Id.
Nifty December 2007 futures were at 5780.05, at a premium of 13.55 points as compared to the spot closing of 5766.50.
The NSE's futures & options (F&O) segment turnover was Rs 73,067.55 crore, which was lower than Rs 79,137.15 crore on Wednesday, 19 December 2007.
Market breadth was weak. On BSE, 1,139 stocks advanced, 1,748 stocks declined and 26 stocks remained unchanged. 16 out of 30 stocks from the Sensex pack advanced.
BSE Mid-Cap index declined 0.6% to 9,025.54. BSE Small-Cap index declined 0.86% to 11,813.32. Both these indices underperformed Sensex.
BSE Metal index (up 0.39% to 18,273) and BSE IT index (up 3.34% to 4,320.63) outperformed Sensex.
BSE Auto index (up 0.28% to 5,541.26), BSE Realty index (up 0.09% to 11,614.08), BSE Health Care index (down 0.11% to 4,242.53), BSE Bankex (down 0.24% to 10,738.59),BSE Power index (down 0.27% to 4,211.32), BSE Consumer Durables index (down 0.62% to 6,084.31), BSE Capital Goods index (down 0.91% to 18,725.69) and BSE FMCG index (down 1.16% to 2,198.45) underperformed Sensex.
IT stocks surged. Wipro (up 1.77% to Rs 491.75), Tata Consultancy Services (up 2.34% to Rs 1,045.25), Infosys (up 3.68% to Rs 1,698.35), Satyam Computer Services (up 5.65% to Rs 427.70) edged higher.
FMCG majors declined. ITC (down 1.83% to Rs 196.05), United Spirits (down 2.56% to Rs 1,846), Hindustan Unilever (down 0.28% to Rs 211.450 edged lower.
Capital goods stocks declined. Bharat Heavy Electricals (down 1.27% to Rs 2,370), Larsen & Toubro (down 0.48% to Rs 3,979) and Suzlon Energy (down 3.66% to Rs 1,830) edged lower.
Banking stocks declined. ICICI Bank (down 0.35% to Rs 1,157), HDFC Bank (down 0.18% to Rs 1,654) edged lower. State Bank of India rose 0.31% to Rs 2,265.20.
Consumer durables stocks edged lower. Videocon Industries (down 2.11% to Rs 625.25), Titan Industries (down 1.45% to Rs 1,480) and Rajesh Exports (down 1.92% to Rs 869.15) edged lower.
India’s largest private sector firm by market capitalization & oil refiner Reliance Industries was up 0.37% to Rs 2,714.70. The stock came off session's high of Rs 2,754. Reliance Industries (RIL) is reportedly in talks with Tata Chemicals (TCL) for sale of 2.2 million metric standard cubic metres per day (mmscmd) of gas from KG basin once the ongoing dispute with Reliance Natural Resources (RNRL) is resolved.
India's second largest power utility by revenue Reliance Energy rose 3.04% to Rs 1,939.85.
Cipla (down 2.04% to Rs 210.95), ACC (down 2.77% to Rs 1,002.05) and Ranbaxy Laboratories (down 1.65% to Rs 196.40) edged lower.
India's biggest power generation firm by revenue NTPC declined 0.04% to Rs 229.40. The company is reprotedly in active talks with more than one foreign power generation company for acquiring assets in excess of $1 billion (Rs 3,960 crore).
India's biggest commercial vehicle maker in terms of market share, Tata Motors, rose 2.86% to Rs 710.90. The company which is considered a front-runner to buy Ford Motor Co's luxury Jaguar and Land Rover brands, will unveil the world's cheapest car at an auto show in India next month. Tata Motors will showcase its $2,500 car at the Auto Expo in New Delhi on 10 January 2008, with a commercial launch planned for later in 2008.
Tata Steel, the world's sixth largest steel maker, rose 0.07% to Rs 824.80. Vale, the world’s largest producer of iron ore and pellets, is reportedly in talks with Tata Steel to set up a steel slab plant in Brazil. The $20 billion mining company, formerly known as CVRD, has three plants under construction in Brazil in partnership with ThyssenKrupp, Dongkuk and Baosteel. Vale has a minority stake in these projects.
IFCI clocked the highest volume of 6.11 crore shares on BSE. The scrip declined 23.29% to Rs 76.75 after the company, on Wednesday, 19 December 2007, called off the exercise to rope in a strategic partner through the private placement of 26% equity stake.
Ispat Industries clocked the second highest volume of 2.1 crore shares on BSE. The stock declined 3.91% to Rs 82.25. IKF Technologies clocked the third highest volume of 1.78 crore shares. The scrip declined 9.35% to Rs 12.89. Harig Crankshaft clocked the fourth highest volume of 1.28 crore shares. The scrip hit 55 upper circuit at Rs 4.50.G V Films clocked the fifth highest volume of 1.27 crore . The scrip declined 7.22% to Rs 10.66.
IFCI clocked the highest turnover of Rs 473.69 crore on BSE. Reliance Energy (Rs 292.34 crore), Reliance Industries (Rs 251.92 crore), Ispat Industries (Rs 175.3 crore) and Reliance Petroleum (Rs 86.96 core) were other turnover toppers in that order.
European markets edged higher in early trade. Germany’s DAX (up 0.51% to 7,877.18) and UK’s FTSE 100 (up 0.56% to 6,319.60) edged higher.
Asian markets were mixed today, 20 December 2007. Japan's Nikkei (up 0.01% to 15,031.60), Shanghai Composite (up 2.05% to 5,043.54) edged higher. Hong Kong's Hang Seng (down 0.05% at 27,017.09), Taiwan's Taiwan Weighted (down 1.96% at 7,857.08), South Korea's Seoul Composite (down 0.92% at 1,844.37) declined.
The Dow industrials and the S&P 500 declined slightly on Wednesday, 19 December 2007, in light trading on concerns about more fallout from the housing slump. The Dow Jones industrial average declined 25.20 points, or 0.19%, to end at 13,207.27. The Standard & Poor's 500 Index shed 1.98 points, or 0.14%, at 1,453.00. But the Nasdaq Composite Index edged up 4.98 points, or 0.19%, to close at 2,601.01.
Traders are likely to start building positions towards the end of the month based on expectations of Q3 December 2007 results due next month.

Sensex declines 181 pts in a choppy trade

The market declined sharply in the late trade before recovering from lower level in what was a choppy trading session today. Though the market breadth was still negative, it improved substantially compared to a weak breadth in mid-morning trade. FMCG, healthcare and consumer durable stocks gained. Banking, metal and capital goods stocks edged lower. Reliance Industries declined.
European markets which opened after Indian market were in green. Asian markets, which opened before Indian markets were mixed today, 18 December 2007. US stocks tumbled on Monday, 17 December 2007, on concerns about the US economy, amid signs of rising inflation and weakness in holiday shopping.
The 30-share BSE Sensex declined 181.71 points or 0.94% to 19,079.64. It had hit a low of 19,009.35 in late trade. At day’s low Sensex lost 252 points. It hit a high of 19,375.07 in early trade. At its day’s high Sensex had gained 113.72 points.
The S&P CNX Nifty declined 34.7 points or 0.6% to 5,742.30.
Market breadth was negative. On BSE, 1,193 stocks advanced, 1,672 stocks declined and 27 stocks remained unchanged. 18 out of 30 stocks from the Sensex pack declined.
BSE clocked a turnover of Rs 8007 crore, lower than Monday (17 December 2007)'s Rs 9641 crore.
Nifty December 2007 futures were at 5788, at a premium of 45.70 points as compared to the spot closing of 5742.30.
The NSE's futures & options (F&O) segment turnover was Rs 74,579.26 crore, which was higher than Rs 73,373.37 crore on Monday, 17 December 2007.
BSE Mid-Cap index declined 0.13% to 9,093.84. BSE Small-Cap index declined 0.18% to 11,818.12. Both these indices outperformed Sensex.
BSE Realty index (down 0.38% to 11,654.58), BSE Power index (down 0.17% to 4,215.30), BSE Auto index (down 0.08% to 5,564.87), BSE FMCG index (down 0.05% to 2,210.01), BSE Oil & Gas index (down 0.04% to 12,309.68), BSE Consumer Durables index (up 1.12% to 6,059.99), BSE Health Care index (up 1.5% to 4,261.32) outperformed Sensex.
BSE Capital Goods index (down 1.18% to 18,902.71), BSE Metal index (down 1.35% to 18,077.63) and BSE Bankex (down 1.42% to 10,764.22) underperformed Sensex.
India’s largest private sector firm by market capitalization & oil refiner Reliance Industries declined 1.75% to Rs 2,728.85. As per reports, Reliance Industries (RIL) has paid advance tax of Rs 1045 crore in the third quarter ended 15 December 2007 compared to Rs 440 crore in the corresponding quarter of the previous year.
Reliance Communications (RCom) was down 0.47% to Rs 714.40. As per reports it will invest Rs 800 crore to roll out a telecom network — fixed and mobile — in Uganda, a country in Eastern Africa. The company has bagged a licence to be the African nation’s sixth telecom operator. The company plans to launch services in Uganda by Q3 in 2008, the report added.
FMCG majors rose. ITC (up 2.22% to Rs 197.85) and Tata Tea (up 1.28% to Rs 880.60) edged higher. Hindustan Unilever (down 3.39% to 211.20) edged lower.
Consumer durables stocks rose. Videocon industries (up 0.53% to Rs 619.40), Lloyd Electric (up 1.19% to Rs 174) and Titan Industries (up 4.99% to Rs 1,459.65) edged higher.
Healthcare stocks rose. Sun Pharmaceuticals (up 4.03% to Rs 1,137.95), Cipla (up 3.78% to Rs 215.75), Dr. Reddy’s Laboratories (up 0.09% to Rs 717.45), Ranbaxy Laboratories (up 1.05% to Rs 410), edged higher.
Metal stocks declined. Tata Steel (down 0.91% to Rs 816.35),Sterlite Industries (down 1.76% to Rs 959), and Hindalco Industries (down 0.47% to Rs 199.70) edged lower. Steel Authority of India was flat at Rs 259.75.
Capital goods stocks declined. Bharat Heavy Electricals (down 1.24% to Rs 2,395.10) and Larsen & Toubro (down 2.8% to Rs 3,967.80) edged lower. Suzlon Energy (up 1.84% to Rs 1,861.80) edged higher.
Banking stocks declined. ICICI Bank (down 2.27% to Rs 1,140.65), and HDFC Bank (down 1.28% to Rs 1,685) edged lower.
State Bank of India declined 0.47% to Rs 2,303.70. State Bank of India (SBI) shelled out Rs 1090 crore, up 26.7% over the tax it paid in the corresponding period in the previous year.
Maruti Suzuki India (up 0.93% to Rs 1,019.65) and NTPC (up 1.66% to Rs 232.40) edged higher.
India’s largest dedicated housing financing firm by operating income HDFC declined 2.27% to Rs 2,812.30.
IKF Technologies clocked the highest volume of 3.77 crore shares on BSE. The stock rose 5.17% to Rs 13.03. IFCI clocked the second highest volume of 3.57 crore shares on BSE. The stock declined 6.73% to Rs 101.10. Ispat Industries clocked the third highest volume of 3.31 crore shares. The stock rose 4.43% to Rs 81.35. G V Films clocked the fourth highest volume of 2.65 crore. The scrip declined 3.24% to Rs 10.76. Himachal Futuristic Communications declined 0.12% to Rs 41 and it clocked the fifth highest volume of 2.29 crore shares.
ONGC clocked the highest turnover of Rs 387.94 crore on BSE. IFCI (Rs 364.74), Essar Oil (Rs 293.96 crore), Ispat Industries (Rs 259.98 crore) and Reliance Petroleum (Rs 227.16 crore) were other turnover toppers in that order.
European markets were trading higher today. Germany’s DAX (up 0.83% to 7,891.17) and UK’s FTSE 100 (up 0.77% to 6,326) edged higher.
Asian markets were mixed today, 18 December 2007. Hong Kong's Hang Seng (up 0.51% at 26,732.87), South Korea's Seoul Composite (up 1.18% at 1,861.45), Singapore's Straits Times (up 0.47% at 3,369.31) edged higher. Taiwan's Taiwan Weighted (down 0.3% at 7,807.39), Shanghai Composite (down 0.83% to 4,836.17) and Japan's Nikkei (down 0.27% to 15,207.86) declined.
The Dow Jones industrial average slid 172.65 points, or 1.29%, to end at 13,167.20, on Monday, 17 December 2007. The Standard & Poor's 500 Index dropped 22.05 points, or 1.50%, to 1,445.90. The Nasdaq Composite Index tumbled 61.28 points, or 2.32%, to 2,574.46.
US government reports last week showed rising price pressures in November 2007, while concerns about the housing slump intensified after news that sentiment among US home builders held at a record low for a third consecutive month in December 2007.
Volatility may remain high in the near term ahead of expiry of December 2007 derivatives contracts next Thursday, 27 December 2007. The market remains closed on Friday, 21 December 2007 on account of Bakri Id and also on Tuesday, 25 December 2007 on account of Christmas. Therefore, only six trading sessions are left for expiry of December 2007 derivatives contracts.
Meanwhile, the market regulator Securities and Exchange Board of India (Sebi) on Monday, 17 December 2007, put out a note on the proposed plan to introduce new products in the derivatives segment on its website to seek comments/suggestions from market participants on or before 21 December, 2007.

IPO Audit : Precision Pipes and Profiles (PPAP) -Avoid

Investors can avoid the initial public offering of Precision Pipes and Profiles (PPAP), which manufactures automotive sealing systems.
While the company appears to have grown impressively over the years, future growth prospects may not be as bright, given the ongoing slowdown in the automobile industry.
The volume-driven nature of its business and the negligible potential for after-market sales, also peg up uncertainty.
In the price band of Rs 140-150, the offer is priced at about 15-16 times its likely FY-09 per share earnings on a diluted equity base.This appears pricey given PPAP’s presence at the lower end of the value chain in the automobile industry.
At a time when established auto component manufacturers are finding the going tough despite their presence in niche and high-value products, PPAP’s business, restricted to lower end automotive sealing products appears not so attractive.
The company is highly reliant on domestic sales, with a marginal exposure to the overseas market. While the company intends to increase its exports share, it could take a couple of years for significant revenues to come by.
Investors can adopt a wait-and-watch approach to the IPO and consider investments after listing.
Business
PPAP makes automotive sealing systems and exterior products for the automobile industry.
Its products range from weather strips, windshield moulding to skirt air damper and body-side moulding.Catering to clients such as Maruti Udyog, Honda SIEL, General Motors and Toyota Kirloskar, the fortunes of PPAP have grown in tandem with its clients. It witnessed a compounded earnings growth of about 34 per cent annually, backed by a 28 per cent growth in sales during the last four years.
PPAP also caters to the white goods industry, manufacturing PVC-based customised profiles to companies such as Godrej, Voltas and Videocon; the segment contributed to about 5 per cent of revenues.PPAP does not enjoy a significant exposure to the export market (less than 4 per cent of its revenues).
However, the company proposes to increase its exports and has entered into a manufacturing agreement with the Australia-based Power Data Corporation for exporting the company’s ‘Electrical Outlet System’.
On the operational front, the company has expanded its margins by improving utilisations.For the year ended March 2007, the operating margins expanded by three-percentage points to about 25 per cent.
Expansion initiatives
The company proposes to use the proceeds from the issue towards setting up two new manufacturing plants for auto components and electrical outlet system products for Power and Data Corporation of Australia. It also plans to use the proceeds to expand capacity (to about 30 lakh kilos) in its existing plant from the current 12 lakh-levels.
Offer details
The offer is open from December 17-20. The company seeks to raise Rs 75 crore through this offer. UTI Securities and Nexgen Capitals are the lead managers to the issue and Intime Spectrum Registry is the registrar

IPO Audit : Aries Agro - Avoid

Investors can stay away from the initial public offer of Aries Agro, a manufacturer and marketer of plant micronutrients.
Though micronutrients have good demand prospects in the Indian context and are not subject to the regulatory constraints that fertilisers face, the business is characterised by high competition.
The offer price also appears high in relation to the multiples enjoyed by companies in the fertiliser and agricultural inputs business.At the price band of Rs 120-130, the offer price values the company at between 18 and 20 times its FY-07 earnings per share, on a fully diluted equity base.
Much larger players in the agri-inputs space such as Rallis India (11 times), which have a presence in this segment, trade at cheaper multiples.The offer proceeds are to fund working capital, towards the acquisition of an overseas material supplier, purchase of mobile vans for marketing products as well as capacity expansion.The substantial scaling up of capacities over the next year could provide justification for the offer price over the medium term.However, the intense competition in this business poses significant execution risks to the scaling up of operations.Micronutrients businessAries Agro derives the bulk of its turnover from the marketing of micronutrients under the names — Agromin and Chelamin, which are its leading brands.Aries also has a small presence in the crop protection and veterinary products business. Micronutrients, which are required in relatively smaller dosages to supplement macro-nutrients (nitrogen, phosphate and potassium — usually delivered through mainstream fertilisers), help improve the yield and output of agricultural and horticultural crops.The company focusses on chelated micronutrients (combinations of metallic nutrients such as zinc, iron and copper with certain chemicals) that have higher efficacy and allow better absorption by the plant.The micronutrients business has considerable potential in the Indian context. Factors such as low yields of major foodgrains and horticultural crops, high soil alkalinity and intensive cultivation are the key demand drivers for micronutrients.Wide networkAries has built an extensive distribution network which reaches 375 districts across 20 states, through a network of 4700 distributors. This is backed by a portfolio of 37 products consisting of micronutrients, chelated nutrients and insecticides.From being a small player, Aries has substantially ramped up its manufacturing capacities in FY-07, with capacities rising from 12,000 tonnes to 21,600 tonnes in FY-07.Net sales have climbed from Rs 26 crore to Rs 73 crore between FY-04 and FY-07 while net profits have risen from a minuscule Rs 0.09 crore to Rs 8.69 crore over the same period.Both numbers have been helped by a substantial trading component to sales.The company has now lined up an ambitious expansion, with 79,200 tonnes of additional micronutrients capacity proposed to be added to the existing facilities across locations.Limited pricing powerThe market for micronutrients such as zinc, iron and copper in India, is expected to double over the next two decades. This suggests sustained single-digit growth in demand over the next few years.Unlike fertilisers, micronutrients are not subject to any price controls by the government and, thus, allow greater operational freedom to producers.However, players such as Aries Agro would still be constrained by limited pricing power, due to competition from imports as well as the host of local/regional brands, as the product offers limited differentiation possibilities.The business has low entry barriers, involves small capital investments to put up capacities, limiting the company’s ability to withstand pricing pressures and scale up sales.The relatively high pricing of the offer also may not leave room for disappointments on this score.

Porwal Auto Components - Avoid

Investors can avoid subscribing to the initial public offering of Porwal Auto Components which is in the business of manufacturing castings. The fragmented nature of the foundry industry with a number of small players, competition from larger companies , unattractive margins and heavy dependence on one client, make the offer uninviting.
At the price band of Rs 68-75, the offer is priced at 15-17 times its likely FY-09 earnings on the post-issue equity. At the upper end of the price band, the company will raise around Rs 37.5 crore to fund its capacity expansion and set up a windmill for captive power consumption.
Business and plans
Porwal Auto manufactures ductile iron and grey iron castings and components primarily for the automobile industry. To cater to the growing demand, the company has expanded capacity up to 7400 tonnes in 2006-07.
The company plans to further increase installed capacity to 27,600 tonnes in FY 2008. 80 per cent of this installed capacity is to be utilized by 2009-10. With increase in capacity, the company expects to benefit from higher domestic demand for automobiles as well as the trend of overseas OEMs (Original Equipment Manufacturers) sourcing components from India.But in a fragmented industry such as this, small companies will find it tough to compete with bigger players.
The latter score over the smaller ones in terms of ability to execute larger orders, offer value added products such as machined castings and forgings and sub-assemblies and assemblies. These value additions also bring in better margins. Moreover, export growth for Indian component makers has come from high-end cast products and higher technology castings rather than from raw castings or forgings.
While the company too has plans to increase the supply of finished castings and scale-up its machined castings production, it will face stiff competition from established players. The company also needs to diversify its risks by supplying to other segments of the auto industry such as passenger cars and two-wheelers (to combat any slowdown in one particular segment ).
Currently, nearly 90 per cent of its revenues come from supplies to Eicher Motors for its commercial vehicles. L&T case equipment, Shakthi Pumps, Man Force trucks and a few others chip in with the rest. Eicher’s new joint venture with Volvo for the commercial vehicles business, may also create some uncertainty if the latter reviews the supply chain.FinancialsFor the year ended 31 March 2007, the company recorded sales of Rs 34 crore, which grew by about 32 per cent from the previous year. This was primarily due to capacity increase. Net profits decreased by about 8 per cent to Rs 75 lakhs. Margins may also be under pressure in the short-term due to finance charges

Understanding - Stock Splits

Stock splits refer to dividing the outstanding shares of a company into a larger number of shares, without affecting Stockholder's Equity or the total market value of the stock.

For example, if a company declares a 2-for-1 stock split of its stock, of which has a current market value of Rs 500/share and 200,000 shares outstanding, the following results occur:

Pre-split:

Outstanding shares: 200,000

Market Value: Rs 500

Market capitalization: Rs 100,000,000

Post-split:

Outstanding shares: 400,000

Market Value: Rs 250

Market capitalization: Rs 100,000,000

Essentially, in the 2-for-1 stock split, the company's outstanding shares are simply doubled and the stock price is divided in half. The market capitalization, or market value of the stock, remains the same at pre- and post-split conditions. This is because stock splits have no impact on the value of a company's stock. A stock split is merely an accounting transaction in which no equity is exchanged. Companies can split their stock in any number of ways. These splits may occur in different combinations.

When a company declares a stock split, the price of the stock may decrease, but the number of shares will increase proportionately. A stock split has no effect on the value of what shareholders own. If the company pays a dividend, your dividends paid per share will also fall proportionately.

Companies often split their stock when they believe the price of their stock exceeds the amount smaller individual investors would be willing to pay for the stock. By reducing the price of the stock, companies try to make their stock more affordable to these investors.Usually, stock splits have a positive affect on the stock price.

Over the long term, stock splits seem to have a considerable effect on the company's stock price. Although stock splits have no direct effect on a company's equity, the event of a split does forecast hints and signs of how the company is performing. Companies usually tend to split their shares when the company has an optimistic view of its future and operations. The announcement of a stock split can be a symbol that a stock has attained a certain level of success.

The fact that a company has a record of multiple stock splits usually indicates that the company is among one of the faster growing firms, since their stock has been split numerous times. Generally, a company is motivated to split their stock to attract more investors with a lower share price.

However, some people can only buy lower priced stock because they may not have the buying power to make a larger investment. Thus, they wait till a stock splits so they can afford some shares. Just because a company declares a stock split, it does not mean that the stock price will inevitably rise in reaction.

There are many other variables that influence investors' decisions in the result of a stock split including economic reports, market stability, earnings, interest rates, external conflicts, etc. Companies also split their shares if they need to broaden their shareholder base and make more shares available to investors.

A motivation for this could be a company's defence to a potential hostile takeover. Stock splits make the company more liquid, allowing more investors the opportunity to purchase an ownership in their company.

The timeline of a stock split consists of four main dates: Declaration or announcement date, Record date, Payment date, Ex-dividend date. The two key dates that are important to investors are the announcement date and the payment date. The announcement date is important because no one knows for sure if and when a company a will declare a split of their company's stock.

Thus, investors speculate on whether the company will announce and when they will announce. The payment date is crucial as well because this is the day before the company actually splits its share price, after which investor activity changes as the new share price targets a different audience. Moreover, there is another factor that engenders the announcement of a stock split.

Companies tend to try to keep their stock within a certain price range. Therefore, when a stock hits the company's price target, the company, upon approval of the Board of Directors and the shareholders, will announce a stock split.

A stock split simply involves a company altering the number of its shares outstanding and proportionally adjusting the share price to compensate.

This in no way affects the intrinsic value or past performance of your investment, if you happen to own shares that are splitting. With lower-priced shares, a stock's liquidity increases and making it easier to trade.

As a stock price rises, some people will be psychologically unwilling to pay that 'high price' so a stock split brings the shares down to a more 'attractive' level. Again, the intrinsic value has not changed, but the psychological effects may help the stock.

Sensex Crashes 769 points on weak global equities

The market witnessed major correction as Sensex tumbled more than 850 points at one point of time in late trade tracking weak global markets. Metal, realty and power stocks declined sharply in late trade. Capital goods and banking stocks also declined heavily. Reliance Industries declined sharply. The market breadth turned negative in late trade in contrast to a strong breadth earlier during the day. All the sectoral indices on BSE were in red.
European markets which opened after Indian market were weak. Asian markets which opened before Indian markets were trading lower today. US stocks slumped on Friday, 14 December 2007, on concerns surging inflation may prevent the Federal Reserve from lowering interest rates.
Crude oil prices rose, supported by a US winter storm and renewed tensions in the Middle East as Turkish planes bombed Kurdish rebels in northern Iraq. US light, sweet crude for January delivery which expires on Tuesday, 18 December 2007, rose 48 cents to $91.75 a barrel.
The 30-share BSE Sensex slumped 769.48 points or 3.84% to 19,261.35. Sensex hit a low of 19,177.19 in late trade. At day’s low Sensex lost 853.64 points.
The S&P CNX Nifty declined 270.7 points or 4.48% to 5,777.
Market breadth was weak. On BSE, 972 stocks advanced, 1,932 stocks declined and 23 stocks remained unchanged. 29 out of 30 stocks from the Sensex pack declined.
BSE clocked a turnover of Rs 9524 crore as compared to Friday (14 December 2007)'s Rs 9,480.42 crore.
Nifty December 2007 futures were at 5791, at a premium of 14 points as compared to the spot closing of 5777.
The NSE's futures & options (F&O) segment turnover was Rs 73,373.37 crore, which was higher than Rs 61,326.39 crore on Friday, 14 December 2007.
BSE Mid-Cap index declined 3.87% to 9,105.58. It underperformed Sensex. The index hit all-time high of 9,541.03 today. BSE Small-Cap index declined 2.91% to 11,840.02. The index outperformed Sensex. It hit a record high of 12,402.86 today.
BSE Power index (down 4.8% to 4,222.68), BSE Oil & Gas index (down 5.13% to 12,314.72), BSE PSU index (down 5.63% to 9,511.13), BSE Realty index (down 5.65% to 11,699.36) and BSE Metal index (down 7.28% to 18,324.50) underperformed Sensex.
BSE Capital Goods index (down 3.69% to 19.129.14), BSE Bankex (down 3.67% to 10,919.22), BSE Consumer Durables index (down 3.41% to 5,992.76), BSE HealthCare index (down 2.55% to 4,198.20), BSE FMCG index (down 2.33% to 2,211.07) and BSE IT index (down 2.16% to 4,167.90) outperformed Sensex.
India’s largest private sector firm by market capitalization & oil refiner Reliance Industries declined 3.86% to Rs 2,777.50.
Metal stocks slumped. Tata Steel (down 6.15% to Rs 823.85), Sterlite Industries (down 8.45% to Rs 976.15), National Aluminium Company (down 6.87% to Rs 418.50) and Hindalco industries (down 5.69% to Rs 200.65) edged lower.
Steel Authority of India fell 7.2% to Rs 259.75 on reports the company plans to enter the equipment manufacturing business to profit from the boom in the domestic steel sector.
Reliance Communications declined 5.55% to Rs 717.80 after the company today said it has completed the acquisition of US-based Yipes Holdings that would give the company access to a Rs 4,00,000 crore global enterprise data market.
Capital goods stocks declined. Bharat Heavy Electricals declined 5.32% to Rs 2,425.25. It announced during the market hours today that it has signed a joint venture agreement between with NTPC for establishment and operation of joint venture company for engineering, procurement and construction (EPC) business.
Larsen & Toubro (down 2.2% to Rs 4,082.10) and Suzlon Energy (down 6.67% to Rs 1,828.10) edged lower.
Tata Motors declined 5.8% to Rs 701.25 on reports that Ford Motor Company is poised to name the company as preferred bidder for its Jaguar and Land Rover brands.
Banking stocks declined. ICICI Bank (down 3.29% to Rs 1,167.10), HDFC Bank (down 2.91% to Rs 1,678.30) edged lower.
State Bank of India fell 3.98% to Rs 2,314.50 on reports the bank is planning to buy an Indonesian bank.
Power stocks declined. Reliance Energy (down 4.22% to Rs 1,828.95), NTPC (down 7.3% to Rs 228.60), Tata Power Company (down 0.39% to Rs 1,295.90) and Power Grid corporation (down 5.56% to Rs 137.55) edged lower.
Realty stocks declined. Peninsula Land (down 8.5% to Rs 135.05) , DLF (down 7.53% to Rs 944.25), Indiabulls Real Estate (down 8.26% to Rs 679.25) and Unitech (down 2.72% to Rs 465.35) edged lower.
Hindustan Unilever (up 0.76% to Rs 218.60) edged higher.
HDFC (down 5.93% to Rs 2,877.55), ONGC (down 5.84% to Rs 1,166.45) edged lower.
G V Films clocked the highest volume of 5.05 crore shares on BSE. It declined 7.41% to Rs 11.12. IFCI clocked the second highest volume of 3.97 crore shares on BSE. It declined 4.62% to Rs 108.40. Harig Crankshaft declined 3.43% to Rs 3.94 and clocked the third highest volume of 3.8 crore shares. Ispat Industries declined 1.45% to Rs 77.90 and clocked the fourth highest volume of 3.77 crore shares. Bellary Steels declined 0.13% to Rs 7.93 and clocked the fifth highest volume of 2.6 crore shares.
IFCI clocked the highest turnover of Rs 458.03 crore on BSE. Ispat Industries (Rs 309.58 crore), Kolte Patil Developers (Rs 287.71 crore), HDFC (Rs 204.55 crore) and Reliance Petroleum (Rs 196.28 crore) were the other turnover toppers on BSE in that order.
European markets were weak today. France’s CAC 40 (down 1.29% to 5,531.66), Germany’s DAX (down 1.32% to 7,843.41), FTSE 100 (down 1.17% to 6,321.90) edged lower.
Asian markets were trading lower today, 14 December 2007. Hong Kong's Hang Seng (down 3.51% at 26,580.38), Taiwan's Taiwan Weighted (down 3.54% at 7,830.85), Singapore's Straits Times (down 3.25% at 3,353.56), Shanghai Composite (down 2.53% to 4,881.40), Japan's Nikkei (down 1.71% to 15,249.79), South Korea's Seoul Composite (down 2.91% at 1,839.82) declined.
US stocks swooned on Friday, 14 December 2007, on concerns that surging inflation may prevent the Federal Reserve from lowering interest rates enough to pull the economy out of the grip of a housing and credit crisis. The three major indexes tumbled more than 1% each, and posted their worst week since 11 November 2007, after a report showing a jump in the consumer price index in November 2007.
Meanwhile, the advance tax figures, which will available this week, would trigger expectations regarding corporate performance of India Inc. in Q3 December 2007.
Bharatiya Janata Party (BJP) is poised to retain power in Gujarat but with a reduced majority losing some ground in Sunday (16 December 2007)'s second and final phase of polls in northern and central parts which was worst hit by 2002 communal riots, according to exit polls by four TV channels.