'Crack' is showing, RIL struggles below Rs 2,000
Shares of Reliance Industries (RIL), India largest-private sector company, continued its slide on Friday on rising concerns over the oil and gas major's profitability. The stock shed over 3% to close at Rs 1,931.40, closing below the psychological Rs 2,000-mark for the second successive session. Analysts expect RIL’s bottomline and operating margins to be hit by the falling crude oil and crack prices, globally. Cracks such as diesel, jet fuel and gasoline are the products derived from refining crude oil.
Fears that the global economy is headed for recession and hurricane Gustav not being as worse as previously imagined has brought down oil prices to $101 from near $150 levels a few weeks back. This and the finished product mix of RIL will lead to weakening in gross refining margins (GRM) of RIL, analysts opine.
During the past couple of months, gas oil (diesel) cracks have come down while those of fuel oil have risen. However, since RIL does not process crude into fuel oil, it will be more hard-pressed than other refiners, a official with a oil firm said. “Simply put, the Reliance gross refining margin faces more downward pressure in the second quarter (July-Sept) than other refiners’ GRM which have fuel oil as part of their product basket,” the official said. Diesel, jet fuel and gasoline are among the major products sold by RIL.
According to the market talk, few analysts have downgraded their price targets for the RIL stock, which today vary from Rs 1,900 to Rs 3,800. However, as per Bloomberg data, only two analysts have a “sell” rating of the on the stock company. One of them, Sanjeev Prasad of Kotak says that his firm sees potential downside risks to its earnings estimates of RIL, since its earnings are highly sensitive to refining margins and weaker-than-expected margins could significantly impact their earnings.
“We could see a short-term rebound from current very low levels but we believe that refining margins will likely remain weak for the next 12 months at least led by weak global demand and large refining capacity additions later in the current year,” Mr Prasad wrote recently in a note to clients.
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Showing posts with label 000. Show all posts
Showing posts with label 000. Show all posts
13 September 2008
09 July 2008
Sensex gains 615 pts, settles near 14,000
Sensex gains 615 pts, settles near 14,000
Global markets turned buoyant following a sharp fall in crude oil prices, and taking cues, the Indian bulls assembled in full strength as the session opened, and more importantly, stayed on right till the end to guide the benchmark indices Sensex and Nifty to a highly positive close today.
With the Left parties officially parting ways with the ruling coalition following their differences on the Indo - US civilian nuclear deal issue, the uncertainties that had clouded the market came to an end. On expectations that the government will now speed up certain reforms, market participants started picking up stocks in a frenzied manner almost right through the session today.
Stocks, irrespective of sectors or size, had a nice ride up the charts as the mood remained quite upbeat till the end. Realty, bank, power and capital goods stocks sparkled. FMCG, oil, IT, auto and metal stocks, despite turning a bit sticky at times, had a fine run as well. Pharma and consumer durables stocks also closed on a high note.
The Sensex, which opened with a positive gap of over 230 points at 13,581.41 and hit a high of 13,998.48 in late afternoon trade, ended with a thumping gain of 614.61 points or 4.6% at 13,964.26 today. The Nifty recorded a gain of 168.55 points or 4.23% as it settled at 4157.10, a few points down from a high of 4169.40 it touched a few minutes before the closing bell.
Reliance Infrastructure (10.7%) and Jaiprakash Associates (10%) remained high up in the positive territory right through the day. Tata Motors, which rallied sharply in afternoon trade, took the third place in the list with a handsome gain of 7.5%.
ITC closed stronger by 6.8%. Reliance Communications moved up by 6.15%. Tata Consultancy Services, HDFC Bank, BHEL and Reliance Industries gained 5% - 6%. Bharti Airtel ended nearly 5% up at Rs 747.40. Infosys Technologies (4.9%), Grasim Industries (4.85%), DLF (4.85%), ICICI Bank (4.75%), Larsen & Toubro (4.7%), NTPC (4.3%), HDFC (4.2%) and Tata Steel (4.1%) sparkled.
More @ Sensex gains 615 pts, settles near 14,000
Source: www.Sify.com/finance
Global markets turned buoyant following a sharp fall in crude oil prices, and taking cues, the Indian bulls assembled in full strength as the session opened, and more importantly, stayed on right till the end to guide the benchmark indices Sensex and Nifty to a highly positive close today.
With the Left parties officially parting ways with the ruling coalition following their differences on the Indo - US civilian nuclear deal issue, the uncertainties that had clouded the market came to an end. On expectations that the government will now speed up certain reforms, market participants started picking up stocks in a frenzied manner almost right through the session today.
Stocks, irrespective of sectors or size, had a nice ride up the charts as the mood remained quite upbeat till the end. Realty, bank, power and capital goods stocks sparkled. FMCG, oil, IT, auto and metal stocks, despite turning a bit sticky at times, had a fine run as well. Pharma and consumer durables stocks also closed on a high note.
The Sensex, which opened with a positive gap of over 230 points at 13,581.41 and hit a high of 13,998.48 in late afternoon trade, ended with a thumping gain of 614.61 points or 4.6% at 13,964.26 today. The Nifty recorded a gain of 168.55 points or 4.23% as it settled at 4157.10, a few points down from a high of 4169.40 it touched a few minutes before the closing bell.
Reliance Infrastructure (10.7%) and Jaiprakash Associates (10%) remained high up in the positive territory right through the day. Tata Motors, which rallied sharply in afternoon trade, took the third place in the list with a handsome gain of 7.5%.
ITC closed stronger by 6.8%. Reliance Communications moved up by 6.15%. Tata Consultancy Services, HDFC Bank, BHEL and Reliance Industries gained 5% - 6%. Bharti Airtel ended nearly 5% up at Rs 747.40. Infosys Technologies (4.9%), Grasim Industries (4.85%), DLF (4.85%), ICICI Bank (4.75%), Larsen & Toubro (4.7%), NTPC (4.3%), HDFC (4.2%) and Tata Steel (4.1%) sparkled.
More @ Sensex gains 615 pts, settles near 14,000
Source: www.Sify.com/finance
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