Tango if you have cash
Life shrinks or expands in proportion to one's courage.
Don’t be courageous if you don’t have the cash to back you. Wednesday was one of the most volatile days in recent memory, with bulls and bears slugging it out really hard. That slugfest is likely to continue, as both the camps will try to outdo each other. The sudden and sharp fall this week is also likely to make it difficult for all category of players to take a call on the immediate direction of the market.
Global cues are mixed. The US market closed flat but in Asia, key markets are in positive territory. Oil is trading above $61 per barrel. OPEC is holding a meeting today. The opinion is split between another cut in production and a status quo. Brace for another cautious opening and a choppy day. It is humanly impossible, especially in the light of this week's sharp fall, to predict the closing on the main indices. So, don't bother about that and happy trading.
For retail investors it makes perfect sense to wait for some more time before taking a fresh plunge, unless of course you have the cash and are willing to ride through any short term setbacks. Having said that the more grittier ones could look at long-term investment opportunities in quality scrips. On the whole the sentiment is still weak owing to the near-term uncertainty.
FII inflows are expected may slow down further due to the year-end factor. But markets could swing wildly with lower volumes are local operators may tend to get more active with lesser volumes. The upcoming quarterly results and the build-up to the Budget 2007 will also keep investors on tenterhooks. So, we see the market being rangebound after it recovers from the latest mayhem.
FIIs were net buyers of Rs245.2mn (provisional) in the cash segment yesterday. They pumped in Rs252.1mn in the F&O segment. On Tuesday, foreign funds were net buyers of Rs952mn in the cash segment. On the other hand, Mutual Funds were net sellers to the tune of Rs5.18bn.
The IPOs of Shree Ashtavinayaka Cine Vision and Lumax Auto Technologies open today.
Shares of Sutlej Textiles and Industries Ltd. will get listed on the bourses today.
Eicher Motors is a stock to watch out for, amid renewed media reports that DaimlerChrysler is looking at a majority stake in the commercial vehicles maker. Maruti will be in action amid reports that it will hike prices in January. However, reports of rising royalty burden could limit the gains.
Airlines such as Air Deccan, SpiceJet, GoAir and Kingfisher might advance as a financial daily reports that the Government is considering relaxing the criterion for flying overseas, from five years of domestic operations to three years. ICICI Bank and other banks will continue to be in the spotlight as the largest private bank in the country has hiked lending and deposit rates following the increase in the CRR.
GV Films' Board will meet on December 23, to consider a proposal to acquire theatres abroad, and sign agreement for a joint venture with an overseas company for the web casting division.
Diageo, the global liquor giant, has received the FIPB approval for entering into a 50:50 Joint Venture with Radico Khaitan. Teledata Informatics has signed a MOU with eSys Technologies Pte Ltd., Singapore towards subscribing to the share capital of the company.
FCI OEN Connectors Ltd. has agreed to sell its Automotive Connector business to FCI Technology Services Ltd., a 100%-subsidiary of FCI Asia Pte Ltd, Singapore.
On Wall Street, the S&P 500 Index approached a six-year high as retailers rallied on the first increase in sales since July and energy producers benefited from higher oil prices. Wal-Mart led the rally after the government said retail sales rose 1% last month, more than the forecast.
The S&P 500 closed flat at 1413.21, leaving it within two points of its highest since November 2000. The Dow Jones too finished nearly unchanged at 12,317.50. Chip stocks dropped, weighing on the Nasdaq, after analysts downgraded Applied Materials and Micron Technology. The tech-rich index ended at 2432.41.
European indexes got a lift from the retail sector. The pan-European Dow Jones Stoxx 600 index rose 0.6% at 361.86. The German DAX Xetra 30 closed up 0.7% at 6,520.77, the French CAC-40 rose 0.9% to 5,475.85 and the UK's FTSE 100 added 0.6% at 6,192.50.
Asian stocks rose for a third day on Thursday after a US retail sales report fueled speculation that demand in the world's largest economy will remain healthy. Toyota and Hynix Semiconductor paced the advance.
The Morgan Stanley Capital International Asia-Pacific Index gained 0.4 percent to 137.15 at 11:11 a.m. in Tokyo. Eight of the measure's 10 industry groups advanced. All regional benchmarks rose, except in the Philippines.
Japan's Nikkei 225 Stock Average climbed 66 points to 16,759 while the Hang Seng advanced 102 points to 18,820. The Kospi in Seoul added 4 points to 1387 while the Straits Times in Singapore gained 9 points to 2893.
Japanese shares rose after the Nihon Keizai newspaper reported that the Bank of Japan will probably leave interest rates unchanged at its next meeting.
Australia's key stock index was set for a record close. QBE Insurance gained after buying companies to boost overseas earnings. Qantas Airways jumped after agreeing to a buyout offer from Macquarie Bank and Texas Pacific.
In the emerging markets, the Bovespa in Brazil rose 0.6% to 43,284 while the IPC index in Mexico lost 0.5% to 25,690 and the RTS index in Russia fell 0.7% to 1829.
Major Bulk Deals:
Standard Chartered has bought ABG Shipyard; Bear Stearns has sold Adhunik Metaliks; HSBC Financial has picked up Alok Industries; Citigroup Global has purchased Gayatri Projects; Birla Sunlife MF has bought Greaves Cotton; Templeton MF has picked up India Cements; Merrill Lynch has sold Infotech Enterprises but has bought K Sera Sera; Bear Stearns has sold K Sera Sera; Goldman Sachs has purchased Lloyd Electric; HSBC has bought Mazda; ABN AMRO Bank has picked up shree Ram Mills.
Market Volumes:
IFCI, R Com, Ashok Leyland, India Cements, Parsvnath, IVRCL Infrastructure, NTPC, Reliance Industries, Gujarat Ambuja, Zee Telefilms, Hindalco, Indiabulls, Century Textile and Satyam Computer.
Volume Toppers:
The turnover on NSE was down by 12.4% to Rs96.36bn. BSE Bank index was the major gainer and gained 2.97%. BSE Pharma index (up 1.87%), BSE Technology index (up 1.62%), BSE Auto index (up 1.34%) and BSE Oil & Gas index (up 1.31%) were among the other major gainers.
Upper Circuit Filters:
LMW, GTC Industries, Mcnally Bharat and Surana Industries.
Delivery Delight:
Andhra Bank, Bank of Baroda, Era Constructions, Glenmark, IOC, Polaris, Reliance Communications, Sterling Biotech, Suzlon Energy and Syndicate Bank.
Brokers Recommendations:
L&T – Buy from Citigroup
Shree Cement – Buy from ASK Raymond James
Long Term Investment:
ABB
Major News Headlines:
Bharti Airtel, to form Mutual Fund JV with Axa
Raymond unit signs JV pact with AJ Rose
Britannia in pact to buy stake in 2 bakeries in Middle East
Tantia Constructions to consider plan to sell securities
McNally Bharat gets order worth Rs399mn
L&T Infotech acquires US electronic design services firm
Glenmark to start trials of pain medicine in Europe
Sical Logistics plans to sell $50mn shares to large investors
Zee sets Dec 18 as date for split into 3 companies
Teledata Informatics signs MoU with eSys Technologies, Singapore