A loud bang with less volume!
A loud voice cannot compete with a clear voice, even if it's a whisper.
The bulls voices may get louder on the street but the volume is toning down. Need we tell you to be very very cautious. The bulls welcomed the new year with a bang. Though volume was down, market breadth was quite positive. For today, global cues are encouraging. We may see yesterday's rally spillover into the early part of the session. Thereafter there might be some softening owing to the usual profit booking.
Looks like expectations are already building up for another quarter of strong earnings growth. Indian companies will start declaring results in the next few days. As usual, IT firms will set the tone with Infosys unveiling its results on January 11. Other sectors likely to do well include: Construction, Real Estate, Capital Goods, Engineering, Cement, Pharma and even Oil & Gas. FMCG, Metals and Auto companies may disappoint. Banking could be a mixed bag, with private sector on a better wicket than their PSU counterparts.
Another event that nobody's talking about is the quarterly review of the Monetary Policy by the RBI on January 31st. Going by the mood on the Mint Street, the central bank could well go ahead and hike short-term rates yet again to reign in inflation and moderate the accelerating growth in credit. That may have some impact on sentiment on Dalal Street as rising interest rates are generally seen as bad news for corporate earnings and therefore for equity markets. Budget will also play some role in swinging the direction of the market. But, FIIs will continue to gold the key to the market.
BHEL may be in action amid reports that it is set to bag a Rs4bn contract from Bangladesh. Nissan Copper could come under fresh pressure as market regulator SEBI is all set to probe its unprecedented rise since listing last week. Deepak Fertilisers has been witnessing value buying in recent times.
FIIs were net sellers to the tune of Rs2bn (provisional) in the cash segment on Tuesday despite the Sensex rising by over 100 points. On the other hand, they were net buyers of Rs2.02bn in the F&O segment. On Friday, foreign funds pumped in Rs3.32bn in the cash segment. Mutual Funds too were net buyers at Rs2.25bn.
Asian stocks were mostly higher on Wednesday, with Australia's S&P/ASX 200 rising to an intraday record. Australia's S&P/ASX 200 rose as much as 0.2% to 5,682.60. Shanghai's Composite Index was up as much as 4.2%, or 107.88 points, to 2,675.47.
Japan's stock exchanges remained closed for national holidays. They are scheduled to re-open Thursday.
US markets are scheduled to re-open later in the day. They were closed on Monday for the New Year's holiday and Tuesday for a state funeral for former President Ford.
Elsewhere in Asia, South Korea's Kospi declined 0.7%. Singapore's Straits Times Index was up 1% and Malaysia's KLSE Composite rose 1.1%. Taiwan's Weighted Price Index was up 0.1%. Hong Kong's Hang Seng Index rose 0.6% in early trading to a record 20,423.51.
Oil hovered above $61 a barrel on Tuesday in thin trade as mild weather in the US capped demand for winter fuel. Oil markets in Japan and Singapore were shut for a holiday. Trading floors in New York were also closed in memory of former US President Gerald R. Ford.
Front-month crude-oil futures fell as much as 11 cents to $60.94 a barrel in electronic trading.
Spot gold was quoted at $639.50 an ounce.
The dollar traded near its lowest level in more than three weeks against the euro on speculation that an industry survey will show manufacturing failed to grow in the world's largest economy last month.
European shares rose to a six-year high on Tuesday. The pan-European Dow Jones Stoxx 600 index advanced 1.3% to 369.86, its top level since Dec 2000. The French CAC-40 rose 1.4% to 5,617.71. The UK-based FTSE 100 rose 1.5% to 6,310.90 and the German DAX Xetra 30 increased 1.3% to 6,681.13.
In the emerging markets, the Bovespa in Brazil was up 2% at 45,382 while the IPC index in Mexico gained 0.8% at 26,664 and the RTS index in Russia out on 0.6% at 1921.
2006 was another record year for fund flows into emerging market equity funds, in total US Dollar terms, as these funds attracted $22.4bn of new money, according to Emerging Portfolio Funds Research. Of this amount, a full $11.2bn, or half of the total inflows into all EM equity funds tracked by EPFR, went into China related equity funds.
Major Bulk Deals: Goldman Sachs has sold BF Utilities.
Insider Trades:
ICICI Bank Ltd: V Vaidyanathan, Executive Director has sold in open market 9950 equity shares of ICICI Bank Ltd on 27 December, 2006.
Godrej Industries Ltd: Jamshyd N Godrej (Director and relative of Smita V Crishna, the seller) has sold in open market 2000 equity shares of the company on 27 December, 2006.
Kirloskar Oil Engines Ltd: Vikram Shreekant Kirloskar, Director has sold in open market 5000 equity shares of Kirloskar Oil Engines Ltd on 28th and 29th December 2006.
Market Volumes:
The turnover on NSE was down by 21.4% to Rs59.38bn. BSE Auto index was the major gainer and gained 3.22%. BSE Technology index (up 1.38%), BSE Capital Good index (up 1.16%), BSE Oil & Gas index (up 0.97%) and BSE Metal index (up 0.91%) were among the other major gainers.
Volume Toppers:
IFCI, Nissan Copper, SAIL, Ashok Leyland, GTL Infrastructure, DCB, TTML, Satyam Computer, ITC, MTNL, IVRCL Infrastructure, Indian Hotels, Praj Industries, Parsvnath Developers, Polaris, Hindalco and Unitech.
Upper Circuit Filters:
Educomp Solution, Shaw Wallace, Atlanta, All Cargo, Orient Paper, Crew BOS, Flex Industries, Ganesh Housing, IOL Broadband and KS Oils
Brokers Recommendations:
SBI - Underweight from Morgan Stanley with price target of Rs800
Allcargo Global - Buy from Kotak with price target of Rs1224
Long Term Investment:
M&M
Major News Headlines:
Maruti's Dec sales rose 24%
Bajaj Auto's Dec sales were up 24%
Tata Motors Dec sales up 37%
M&M Dec Tractor sales up 20%
Ipca, Ranbaxy alliance gets USFDA nod for Atenolol Tablets
Jet to buy 10 Boeing 787 aircraft
KM Sugar Mills Board declares 15% dividend
ABG Shipyard secures repeat order from Gujarat Ambuja Cements
GTL Infra announces 1:1 rights issue at par
Lupin gets tentative USFDA nod for Sertraline tablets
Bihar Tubes Board to consider interim dividend, bonus on Jan 10
Nagarjuna Constructions wins orders worth Rs2.55bn
McNally Bharat gets order worth Rs923.1mn
Thomas Cook India to sell Hindustan Cargo to Allcargo Logistics
Aurobindo Pharma gets 2 more USFDA approvals
Mefcom Agro Industries plans to sell shares to some investors