Bulls ‘discover’, bears short-cover
One doesn't discover new lands without consenting to lose sight of the shore for a very long time.
A couple of discoveries in the KG basin by ONGC and Reliance gave the bulls a chance to shore up the indices. The BSE Oil & Gas index was up nearly 3%. The bears are not running out of gas though. We see a cautious opening and some weakness owing to the lull in global markets.
FIIs were net sellers to the tune of Rs3.69bn (provisional) in the cash segment yesterday despite the rally in the market. In the F&O segment, they pumped in Rs2.58bn. On Friday, they were net sellers of Rs460mn in the cash segment. But, Mutual Funds were net buyers at Rs1.31bn.
The slugfest between the bulls and the bears will continue for a while amid uncertainty over the near-term trend of the market. Post last week's sudden crash and an equally remarkable rebound, most players are taking a cautious approach. With the year nearing a close, the market will see reduced participation from most players.
The market will remain choppy with intermittent bouts of buying and selling. We are not sure if another carnage is on the cards or not today. But, one has to be prepared for any eventuality. Going by the current valuations and the lack of immediate triggers, we would advise investors to remain guarded and be very selective.
The Bank of Japan has kept its benchmark interest rates unchanged as it awaits more data on the strength of the world's second-largest economy. Central bank Governor Toshihiko Fukui and his policy board kept the key overnight lending rate at 0.25%, the central bank said in a statement released in Tokyo. The decision, which was unanimous, was in line with expectations.
Hero Honda is likely to gain amid reports that the company will hike prices by up to Rs1,000 from January. Binani Industries could come under pressure as the company's zinc operations in Kerala have been suspended due to environmental concerns.
Goldstone Technologies might gain as it has entered into a Franchisee Agreement with BSNL for providing IPTV, Video On Demand and Interactive Gaming Services to the latter's customers in Hyderabad, through a revenue sharing and non-exclusive arrangement for a period of five years.
Varun Shipping is likely to advance as it has acquired its 12th LPG carrier. With this, the company will own around 79% of total LPG tonnage presently operating under Indian flag. The company now owns a fleet of 18 vessels.
US stocks closed lower on Monday, as investors booked profit on recent gains, notably in technology shares, offsetting an upgrade of Citigroup and more merger news. A slide in crude oil prices also weighed on energy shares and capped gains for the broader market.
The Dow was down 4.25 points to 12,441.27, after scaling a new intraday high of 12,490.70 before turning lower in the final hour of trading. The broader S&P 500 fell 4.61 points to 1,422.48, and the tech-fueled Nasdaq was down 21.63 points to 2,435.57.
US light crude oil for January delivery sank $1.22 to settle at $62.21 a barrel on the New York Mercantile Exchange. The front-month contract was quoting 4 cents up at $62.25 per barrel.
Treasury prices edged higher, lowering the yield on the benchmark 10-year note to 4.58% from 4.59% late on Friday. The dollar drifted lower against the euro and the yen.
European shares closed lower. The Dow Jones pan-European Stoxx 600 index slipped 0.1% to 365.79. Among other indexes, the UK-based FTSE 100 closed down 0.2% at 6,247.40, the German DAX Xetra 30 increased 0.1% to 6,597.25 and the French CAC-40 shed 0.2% to 5,530.32.
Asian stocks fell this morning from a seven-month high as investors judged recent gains excessive given the outlook for earnings. Oil producers including BHP Billiton and Inpex Holdings slid after crude prices tumbled the most in more than a month.
The Nikkei was down 50 points to 16,911 while the Hang Seng tumbled 221 points to 18,971. The Straits Times in Singapore dropped 42 points to 2920.
Insider Trades:
The Great Eastern Shipping Co. Limited: Bharat K. Sheth, Deputy Chairman & Managing Director has purchased from open market 331930 equity shares of The Great Eastern Shipping Co. Limited on 11th December and 12th December, 2006.
Bajaj Auto Ltd: Shekhar Bajaj, Director has purchased from open market 6000 equity shares of Bajaj Auto Ltd on 13 December, 2006.
Balrampur Chini Mills Ltd: N.K. Khetan, Chief General Manager has sold in open market 9000 equity shares of Balrampur Chini Mills Ltd on 11th December, 2006.
Market Volumes:
IFCI, SAIL, R Com, ITC, Lanco Infratech, Polaris, India Cements, Ashok Leyland, Tata Steel, Hindalco, ONGC, Reliance Industries, Bank of India, Unitech, GMR infrastructure, Satyam Computer and Mphasis BFL.
Volume Toppers:
The turnover on NSE was down by 5.7% to Rs82.22bn. BSE Oil & Gas index was the major gainer and gained by 2.97%. BSE Auto index (up 1.03%), BSE Pharma index (up 1.01%) and BSE Bank index (up 0.89%) However, BSE Consumer Durable index lost 1.01%.
Upper Circuit Filters:
Flex Industries, Sonata Software, Educomp Solution, Crew BOS, Birla VXL and Radha Madhav.
Delivery Delight:
ABB, BPCL, Divis Laboratories, Educomp Solutions, GAIL, Glenmark, HDFC Bank, ICICI Bank, IVRCL Infrastructures, J&K Bank, L&T, Maruti, McDowell, Mysore Cements, ONGC, Ranbaxy, Siemens, SBI, Sterling Biotech, TCS, Tata Motors and Tata Power.
Brokers Recommendations:
Reliance Com – Outperform from Macquaire Research
Bombay Dyeing – Buy from Motilal Oswal
Long Term Investment:
Siemens
Major News Headlines:
IVRCL raises Rs5.55bn through QIP route, prices offering at Rs370 per share
Reliance Industries finds oil in KG basin
Govt introduces bill in parliament to amend the SBI Act
Glenmark gets 25mn euros from Merck
Unity Infra gets a contract from Ulhasnagar Municipal Corp
Ranbaxy to partner Govt in drug discovery research
ABG Shipyard gets repeat order from Dutch company
Ashok Leyland to source CNG engine tech from Brehon Energy
Essar Shipping to invest $400mn to buy drilling rigs
Tata Power, Lanco win bids for first two Ultra Mega Power Projects
Tata Motors to invest Rs1.2bn in Thai JV
Pratibha Industries bags water supply order
Subex Azure approves raising $200mn by sale of securities