Enjoy the jingle
Enjoy when you can, and endure when you must
After starting the last trading week of the year on a strong note, the bulls would look to consolidate their hold on the market. However, there are doubts about the strength of yesterday's rally as it came on low trading volume. Also, FIIs were net sellers to the tune of Rs2.1bn (provisional) in the cash segment yesterday. In the F&O segment, they were net buyers of Rs7.32bn. This indicates that market players may be covering their short positions ahead of Thursday's derivative settlement. Some more short covering is expected today and may be even tomorrow, lifting the key indices higher. However, with FIIs having decided to remain in the sidelines for a while and no major positive triggers on the horizon for the next couple of weeks, the current rally may not sustain itself for long. Putting fresh money at this juncture is fraught with danger as valuations are not cheap. Volatility has increased in the last two weeks. The market is likely to be rangebound after the F&O expiry. One should wait for the latest quarterly results for clues on the direction of the market. The Budget will be another big event, especially if the Government announces a few reform-oriented measures. Till then, one should take the foot off the accelerator and switch to a lower gear.
Watch out for Dr. Reddy's. The company has received FDA approval for selling generic Zofran tablets in the US. The Dr. Reddy's expects $40-50mn from a six-month exclusivity.
US stocks rose on Tuesday as falling oil prices helped offset a weak report on holiday retail sales. Citigroup and Bank of America led financial stocks higher amid expectations that a slowing economy may prompt the Federal Reserve to cut interest rates next year. Airlines surged as oil had its biggest drop in a month.
The S&P 500 rose 6.14, or 0.4%, to 1416.90, aided by a rally in raw-material stocks after gold climbed the most in a week. The Dow Jones added 64.41, or 0.5%, to 12,407.63. The Nasdaq increased 12.33, or 0.5%, to 2413.51.
Crude oil fell more than 2% in New York, the biggest drop in six weeks, as mild US weather curbs heating-fuel consumption.
Treasury prices in the US edged higher, with the yield on the 10-year note slipping to 4.6% from 4.62% on Friday. The dollar was higher versus the euro and the yen. COMEX gold added $4.60 to $626.90 an ounce.
Among the Indian ADRs, Patni was up 3.6%; VSNL rose 2.75%; Infy advanced 2.6%; Wipro climbed 3.5%; Satyam surged 4.5%; Tata Motors added 3.5%; HDFC Bank was up 1%; ICICI Bank rose 3.25% and MTNL put on nearly 3%.
Major markets in Western Europe were closed. In the emerging markets, the Bovespa in Brazil was up 0.6% at 43,606 while the IPC index in Mexico climbed by over 1% to 25,705 and the RTS index in Russia was flat at 1852.
Asian stocks rose to the highest in more than seven months. Toyota and Sony led gains after the dollar strengthened against the yen, increasing the value of exporters' overseas sales.
Electronics goods makers like LG.Philips LCD gained after prices of crude oil dropped. Newcrest Mining advanced after prices of gold surged the most in a week.
The Morgan Stanley Capital International Asia-Pacific Index added 0.6% to 139.70 as of 10:35 a.m. in Tokyo, headed for the highest close since May 12. Japan's Nikkei 225 Stock Average climbed 0.5% to 17,247.85.
Stock indexes rose elsewhere in the region, except in South Korea. The Kospi index lost 0.9%, led by steelmakers including Posco, on concern that costs will increase after two Japanese rivals said they will pay 9.5% more to buy iron ore from a supplier.
Major Bulk Deals:
Lotus Global has sold Ennore Foundries and GV Films; Macquarie Bank has picked up Federal-Mogul; Citigroup has sold Gokaldas Exports while Prudential ICICI MF has bought the stock; Deutsche Securities has sold IOL Broadband; ABN AMRO Bank has bought Lok Housing and Lotus Global has sold it; Morgan Stanley has purchased Sujana Metal.
Market Volumes:
The turnover on NSE was down by 18% to Rs61.69bn. BSE IT index was the major gainer and gained by 2.81%. BSE Metal (up 1.20%), BSE FMCG (up 1.76%), BSE Bank (up 1.78%) and BSE Auto index (up 1.65%) were among the other major gainers.
Volume Toppers:
IFCI, Essar Oil, SAIL, Indiabulls, ITC, Zee, Century Textiles, Satyam Computers, Great Offshore, Polaris, Gujarat Ambuja Cements, Gateway Distriparks, ONGC, Tech Mahindra and Reliance Industries.
Delivery Delight:
ABB, ACC, Bharati Shipyard, Bharti Airtel, Bombay Dyeing, Cipla, Colgate, Dishman Pharma, Grasim Industries, HCL Technologies, ICICI Bank, India Infoline, Infosys, Jaiprakash Associates, Jet Airways, Moser Baer, Rajesh Exports, Reliance Capital, Reliance Industries, Sasken, Satyam Computer, Sun Pharma, TCS and Tata Motors.
Upper Circuit Filters:
Shree Precoated Steel, BF Utilities, Rajesh Export, Sonata Software, McNally Bharat, GVK PIL, BPL, KLG Systel, Sagar Cement and Flex Industries.
Brokers Recommendations:
Nagarjuna Constructions – Buy from Kotak
Long Term Investment:
Hanung Toys
Major News Headlines:
BPCL to pay interim Dividend of Rs6 per share
SBI raises prime lending rate by 50 basis points
Simplex Infrastructure wins orders worth Rs8.25bn
Maharashtra Seamless secures order worth Rs4.74bn from ONGC
Genus Overseas gets order worth Rs750mn from Rajasthan State Electricity
Unity Infrastructure wins Rs171mn order from LIC
Havells India to raise upto $150mn overseas