Can bulls handle the bounce?
“A hard fall means a high bounce... if you're made of the right material.”
The Indian cricket team may be finding it hard to handle the bounce in South Africa. In stark contrast, the bulls on the street so far have been unperturbed by the talk of expensive valuations and possibility of a correction. As we have been reminding you, make sure your stock is made of stuff, which can bounce back in case of any eventuality. Bulls are presently like the Australian team; more like the kangaroos just hopping ahead. The good innings could extend for a while as there is no dearth of FII powered strokes.
There may be some more volatility ahead of Thursday's F&O expiry. We are beginning the expiry week with record Open Interest in the derivative segment. The short-term direction of the market will hinge on whether the bulls rollover F&O contracts into the next month series or decide to play safe. Fresh buying at this juncture is best avoidable though the positive bias will continue as there is not much of bad news on the horizon. One should not get carried away and build up a lot of long positions as December could see some slowdown in foreign capital inflows. As for today, we expect a cautious opening, on the back of mixed global cues.
FIIs have been quite gung-ho in the past few months, especially in November. They pumped in Rs11.79bn in the cash segment on Thursday. This may include inflows towards recent big-ticket IPOs like Parsvnath and Lanco Infratech and some major bulk as well. They have poured in $1.75bn this month so far after investing over $1bn each in the past three months. In Friday's trade, foreign funds were net buyers to the tune of Rs2.99bn (provisional) in the cash segment. In the F&O segment, they were net sellers of Rs3.46bn. Mutual Funds on the other hand have been more cautious. They pulled out Rs2.76bn on Thursday.
GE Shipping shares will re-list on the exchanges today after the demerger of its offshore business. Investors will get 1 share of Great Offshore for every five shares of GE Shipping. Great Offshore will list after a month. The shares are likely to list between Rs225-250.
Shares of Lanco Infratech Ltd. will also get listed today. The issue was oversubscribed 11.88 times. The offer price was fixed at Rs 240 per share.
Hindalco could be under some pressure as it has temporarily halted operations at a copper smelter at Dahej in Gujarat after declining global copper ore supplies reduced processing and refining charges
Sun TV's Board will meet today to consider the proposed merger of Satellite Television Broadcasting Companies with itself. Bharti Airtel will be in focus amid reports that the Bharti Group is likely to announce a partnership with Wal-Mart for its retail venture.
M&M might also attract some attention as it has entered into an agreement to acquire 66% stake in DGP Hinoday Industries Ltd. UTV Software could advance as the company has entered into a term sheet with Astro Multimedia International (BVI) Ltd. for establishing a television channel joint venture business in India, South Asia and South East Asia.
US stocks slipped on Friday in a shortened post-Thanksgiving session, as investors focused on rising oil prices and reports from the nation's retailers about the start of the crucial holiday shopping season.
The Nasdaq was down 5.72 to 2,460.26, after ending Wednesday's session at its highest point since February 2001. The Dow Jones fell 46.78 to 12,280.17, and the broader S&P 500 dropped 5.14 to 1,400.95. The S&P ended last Wednesday's session at a six-year high.
For the week, the Nasdaq gained 0.6%, the Dow lost 0.5% and the S&P was barely changed.
US light crude oil for January delivery rose 26 cents to $59.50 a barrel in after-hours electronic trading in Asia. Treasury bond prices rose, lowering the yield on the 10-year note to 4.55% from 4.56% late on Wednesday. In currency trading, the dollar slipped versus the euro and yen.
European stocks dropped on Friday, ending lower for the third straight session after the dollar reached its lowest level against the euro since April 2005. The pan-European Dow Jones Stoxx 600 index lost 0.8% at 355.98. The German DAX Xetra 30 dropped 1% to 6,411.96, the French CAC 40 shed 0.7% to 5,389.46 and the UK's FTSE 100 slipped 0.3% to 6,122.10.
Asian stocks were mixed Monday morning. The Nikkei was up 69 points at 15,803 while the Hang Seng was down 51 points at 19,209.
Taiwan's Taiex gained for a 10th day, heading for its highest in more than six years. Singapore's Straits Times climbed as much as 0.9% to a record. Markets rose around the region, except in China, New Zealand and the Philippines. South Korea's Kospi and the Hang Seng in Hong Kong swung between gains and losses.
The Morgan Stanley Capital International Asia-Pacific Index added 0.4% to 133.06 as of 11:35 a.m. in Tokyo.
In the emerging markets, the Bovespa in Brazil lost 0.7% to 41,757 while the IPC index in Mexico gained 0.25% to 24,792 and the RTS index in Russia put on 0.6% to 1722.
Major Bulk Deals:
UBS has bought Bank of Baroda and sold JHS Svenguard; Prudential ICICI MF has picked up Prithvi Info; ABN Amro and Merrill Lynch have sold Rohit Ferro; T. Rowe Price has sold SREI Infrastructure; Templeton MF has bought TVS Motor.
Insider Trades:
Rajshree Sugars & Chemicals Ltd: Raja M J Abdeen, Director has purchased from open market 300000 equity shares of Rajshree Sugars & Chemicals Ltd on 24th November 2006.
IL&FS Investsmart Limited: Vibhav Kapoor, Director has sold in open market 69000 equity shares of IL&FS Investsmart Limited on 22November & 23 November 2006.
Market Volumes:
The turnover on NSE was down by 7.7% to Rs81.95bn. BSE Metal index was the major gainer and gained 1.36%. BSE PSU index (up 1.40%), BSE Consumer Durable index (up 0.86%) and BSE Pharma index (up 0.65%) were the other major gainers. However BSE Capital Good index lost 1.31%.
Volume Toppers:
SAIL, NTPC, DCB, Siemens, IVRCL Infrastructure, Yes Bank, Hindustan Construction, Zee Telefilms, Tata Steel, India Cements, HLL, Ashok Leyland, ITC, MTNL, Dabur, Hanung Toys, Sterling Biotech.
Delivery Delight:
Aftek Infosys, Arvind Mills, BEML, BRFL, Cipla, Dabur India, Dr Reddys Laboratories, Era Constructions, Gammon, Gujarat Heavy Chemicals Ltd, Hero Honda, HLL, HDFC, India Infoline, Indiabulls, IPCL, Jyoti Structures, ONGC, Pidilite Industries, PNB, Titan Industries and Zee Telefilms.
Brokers Recommendations:
Infosys – Outperform from CLSA
Long Term Investment:
Hanung Toys
Major News Headlines:
Essar Oil to spend $2.4bn to build new refinery
Usha Martin acquires Agra based company
Hindustan Zinc denies Congo mines acquisition news
Jupiter Bioscience to raise funds up to Rs950mn
Subex Azure wins contract from Middle East company
Ranbaxy to increase sales by increasing business, acquisitions
Emco gets order worth Rs380mn from Power Grid Corp
HDFC Bank gets RBI approval to open new branches