Financial Daily from THE HINDU group of publications
Friday, Oct 15, 2004
Financial Daily from THE HINDU group of publications Friday, Oct 15, 2004 |
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Markets
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Stock Markets Columns - Ear to the ground Talk of price drop weakens Gujarat Ambuja Cement
When contacted, the Gujarat-based cement dealers confirmed that cement prices in Gujarat had seen an almost 20 per cent fall over the last 10 days. Dealers said that premium cement i.e. an Ambuja or an L&T/UltraTech, which had been quoting at around Rs 145 per 50 kg bag (wholesale) as on October 1, has now dropped to around Rs 120. There is speculation that prices could further plunge to Rs 115 levels over the next few days. Retail prices are said to be hovering around Rs 126-128 (per 50 kg bag) levels. Analysts speculate that a leading cement company may have prompted the rate war, by dropping prices as part of its re-branding exercise. Another factor at play is said to be the doubling of capex by Sanghi Cement whose production has also come into the market in a big way. The stock of Gujarat Ambuja Cement Ltd (GACL), touted as the lowest cost producer of cement in India, opened at Rs 356, touched an high of Rs 360.95 and a low of Rs 348.20 before ending the day at Rs 358.10, with around 2.19 lakh shares traded on the BSE. The GACL stock had hit a new high on October 11 when it had closed at Rs 363.95.
Turns weak on global advice The stock prices of aluminium, copper, steel and sponge iron companies saw a sharp downturn on Thursday on weakening global commodity prices. Analysts said that aluminium and copper prices ended two per cent lower on the LME while nickel reportedly fell by about 4.5 per cent. Hindalco led the way registering a 6.87 per cent fall at Rs 1,237 (BSE) and was followed by Tata Steel at Rs 284.40 (down 3.38 per cent), Jindal Iron & Steel at Rs 260.25 (down 2.03 per cent) and Nalco at Rs 169.95, down 5.87 per cent, on the BSE. Analysts, however, touted the reversal in the `metal' sentiment to a knee jerk reaction by the market. Sources said that the correction was long overdue as metal prices had been on a one-way track, which had become almost difficult to justify. Brokers attribute the global weakening of metal prices to hedge funds choosing to book profits. Additionally, with the dollar appreciating against other currencies, metal was reportedly the most obvious or the first sector to be hit.
Deeptha Rajkumar
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