Monday morning blues
Before you can really start setting financial goals, you need to determine where you stand financially.
For those standing tall with their investments, its concern time right now. Though the bulls began the new year with a bang, pushing the Sensex past 14k yet again, things started to cool down towards the end of the week. We expect a cautious to weak opening and another day of high volatility. The market will remain choppy ahead of Infosys results. It would be wise to wait for a while and take a call after the key IT earnings are out of the way. Also don't forget the old economy as the Indian economy remains on strong footing.
All eyes this week will be on Infosys' results on Thursday. Analysts are looking at some moderation in technology results due to a stronger rupee, high base effect and lesser billing days during the quarter. Wipro and Satyam will be under some pressure owing to salary hike. However, history suggests that more often than not, companies like Infosys have managed to beat most forecasts, even its own guidance. The bulls will surely want an encore from Infosys and others like TCS. The results from the IT majors and the tone of their management would set the pace for other software companies and for the market this month.
Other big event to watch out for will happen tomorrow. The beleaguered Cairn India will make its stock market debut. The stock will come under pressure as the company had a really tough time getting its issue subscribed. FII inflows will also be a key factor. Right now, they seem to be in a sell mode. Global cues are not so encouraging. Stock markets it US, Europe and Latin America ended down on Friday and Asian markets are also weak this morning.
FIIs were net buyers of Rs554.9mn (provisional) in the cash segment on Friday. However, in the F&O segment they offloaded securities worth Rs2.65bn. On Thursday, foreign funds were net sellers to the tune of Rs2.62bn. Mutual funds too were net sellers at Rs214.2mn on the same day.
HFCL could gain amid reports that a US-based private equity firm is planning to pick up a stake in its subsidiary, HFCL Infotel. Himatsingka Seide is also likely to rise as a financial daily has reported that the Bangalore-based textile company is eyeing Italian home furnishing firm Bellora. Gammon India might advance as the Mumbai Port Trust has reportedly zeroed in on a consortium, led by the company for its Rs12.28bn offshore container terminal.
Cambridge Technology Enterprise IPO closes tomorrow. Investors can consider putting in some money in this. The IPO of Autoline Industries Ltd. opens today.
Results Today: Eastern Silk, IG Petro, KLG Systel, RM Mohite Textiles and Rama Newsprint.
Keep an eye on Aurionpro Solutions, as its Board meets today to consider and approve merger between the Company and Aurionpro Services Pvt. Ltd., the promoter company.
US blue chip shares fell in the first trading week of 2007 as a surprisingly strong jobs report fueled fears that the Federal Reserve may not rush to cut its benchmark interest rates this year. But, technology shares managed modest gains on the back of a strong rally on Thursday.
The Dow Jones Industrial Average lost 0.5% in the three-day trading week to end at 12,398.01 while the S&P 500 index dropped 0.6% to close at 1,409.71. The Nasdaq on the other hand, gained 0.8% to finish at 2,434.25.
Asian stocks were down sharply this morning. The Hang Seng in Hong Kong was down 257 points at 19,980 while Tokyo financial markets are closed for a public holiday. The Kospi in Seoul was down 12 points at 1372 while the Taiex in Taiwan declined 71 points to 7764.
European shares closed lower on Friday. The pan-European Dow Jones Stoxx 600 index dipped 0.6% to 366.53. The UK-based FTSE 100 declined 1.1% to 6,222.10, while the Germany's DAX Xetra 30 lost 1.2% to 6,593.09 and the French CAC-40 slipped 1% to 5,517.35.
In the emerging markets, the Bovespa in Brazil tumbled by 4% to 42,245 while the IPC index in Mexico shed 1.6% to 26,135 and the RTS index in Russia rose 0.6% to 1921.
The February crude oil contract rose as much as 25 cents a barrel to $56.56 in after-hours electronics trading in Asia. On Friday, the contract was up 72 cents at at $56.31 a barrel, recovering from an earlier intraday decline to $55.10.
The dollar rallied to a six-week high against the euro on Friday, after a government report showed a surprisingly strong job growth in the US last month, dashing hopes that the Federal Reserve will lower interest rates soon.
Insider Trades:
BASF India Ltd: Reliance Capital Asset Management Limited has purchased from open market 31930 equity shares of BASF India Ltd on 3rd January, 2007.
Kirloskar Oil Engines Ltd: Vikram Shreekant Kirloskar, Director has sold in open market 20000 equity shares of Kirloskar Oil Engines Ltd on 3rd January, 2007.
Major Bulk Deals:
Birla Sunlife MF has picked up Apar Industries; Morgan Stanley and Citigroup have bought Asian Electronics; Deutsche Securities has purchased Atlanta; ABN AMRO Bank has sold Bajaj Hindusthan; UTI Bank has bought Gayatri Projects; Blackstone has picked up Indo Tech Transformers; DSP Merrill Lynch has purchased KS Oil; Emerging Capital has bought KEI Industries; Bear Stearns has purchased Micro Technologies; Kotak Mahindra Bank has sold NK Industries; Merrill Lynch has picked up Pioneer Embroideries and Pyramid Saimira; Bank of New York has sold Pyramid Saimira; Merrill Lynch, Prudential ICICI MF, ABN AMRO Bank and Citigroup have bought Tanla Solutions.
Market Volumes:
The turnover on NSE was up by 2.5% to Rs87.72bn. BSE Auto index was the major loser and lost 1.51%. BSE Capital Good index (down 0.79%), BSE Technology index (down 0.74%), BSE Pharma index (down 0.68%) and BSE FMCG index (down 0.645) were among the major losers. However, BSE Oil & Gas index gained 1.30%.
Volume Toppers:
Tata Teleservices, DCB, ITC, Ashok Leyland, Tanla Solutions, HLL, HCC, Mercator Lines, Rain Calcining, Bajaj Auto, Polaris, Sobha Developers, Reliance Industries, Tata Steel, Satyam, Welspun Gujarat and MTNL.
Delivery Delight:
Adlabs, APIL, Asian Electronics, BHEL, Grasim, HDFC Bank, HEG, HPCL, Kesoram Industries, MTNL, NTPC, Reliance Capital, Sun TV and Tisco.
Upper Circuit Filters:
Flex Industries, Zandu Pharma, KLG Systel, Goldstone Technology, Nesco Ltd, Champagne Industries, Ganesh Housing, McNally Bharat and Rajesh Exports.
Brokers Recommendations:
IDFC – Buy from Motilal Oswal with price target of Rs95
Long Term Investment:
Nagarjuna Construction
Major News Headlines:
Inflation at 5.48% for the week ended Dec 23 vs 5.43%
Biocon ties up with Abu Dhabi company
Ashok Leyland Dec sales rise 30% to 5890 units
Unity Infra in 50:50 JV with BSEL
BRFL approves hike in FII investment limit to 40%
Hindustan Zinc cuts prices by Rs800 to Rs211400 per ton
Prajay Engineers forms JV with Sunway City for Hyderabad residential project
Micro Tech gets approval for its product in UAE
S. Kumar Nationwide to acquire Brandhouse Retail for Rs129.5mn
Mefcom Agro to consider bonus on Jan 12
SBI raises interest rate on bulk deposits
HCC ropes in Starwood to manage hotels at Lavasa
Sesa Goa stock on fire on reports of stake sale by Japan's Mitsui & Co