Even the weak start to peak!
Weak eyes are fondest of glittering objects.
Suddenly many market players appear to have got the Midas Touch. Just about everything they touch are hitting new highs and giving returns much better than gold would have in recent times. But remember the over-used adage - all that glitters is not gold. And few strokes of rubbing will reveal the worth of what you hold. Not that we are suddenly negative today. Just reminding you to stay cautious against the careless attitude of getting into intrinsically weak counters hoping to ride the bull run.
We are expecting another action packed day with lots of news, especially results. The mood seems to have improved after the highly volatile few days earlier in the month. Though the market may remain choppy but the bias is definitely positive at the moment, spurred by the strong performance of India Inc so far. FIIs too seem to be back in action after a brief hiatus. Global markets are also smiling as crude has taken a big dip. IT stocks will continue to drive the momentum for a while, though one need not ignore the old economy pack, as the Indian economy appears to have hit a purple patch.
Having talked about the bullish scenario, we must advise investors to remain alert at all times for any unforeseen event(s). One such development could the hike in interest rates in Japan followed by an increase in the domestic rates as well later this month. Valuations have shot through the roof, particularly for the large caps. Some action can be expected in small- and mid-caps, but one has to pick these scrips carefully. Weak banks may gain strength on the bourses following comments by a minister that the amendment to to the Banking Regulation Act will facilitate foreign banks to take over under-capitalized private banks.
Cairn India may come under fresh pressure amid reports that market regulator SEBI is probing the company's controversial IPO. Also, the company has denied reports that it has already reached an agreement with ONGC on building the pipeline to evacuate crude from it's Rajasthan fields.
TCS, HCL Tech and other IT shares will gain further after the two IT majors announced stellar set of results for the October to December quarter. M&M is likely to rise amid reports that the Romanian authorities are in talks with the company for selling Tractorul assets. FMCG stocks such as HLL and Dabur might advance as the companies have recently effected price increases in select products.
BHEL could be in action as the company has signed a deal with Alstom for the transfer of technology for super critical power plants. Keep an eye on Nestle India, as the company has decided to give special dividend to shareholders. Atlanta might gain as its Board is to announce a stock split today.
Anant Raj Industries is another scrip to watch out for as the real estate firm has come out with strong numbers for the October-December quarter. S. Kumars Nationwide, Tulip IT, RPG Transmission and LT Overseas have also reported good results. Sanwaria Agro might attract some attention as the group is planning to enter into the real estate sector.
Shares of Lumax Auto Technologies Ltd. will get listed on the bourses today. The IPO of House of Pearl Fashions will kick off today. The public issue of Akruti Nirman has been subscribed 1.3 times while that of Autoline Industries has been subscribed nearly 20 times.
US financial markets were shut on account of the Martin Luther King Jr. day.
European shares hit six-year highs on Monday. The pan-European Dow Jones Stoxx 600 index rose 0.6% to 374.16. The UK-based FTSE 100 rose 0.4% to 6,263.50, the German DAX Xetra 30 gained 0.4% to 6,731.74 and the French CAC-40 increased 0.2% to 5,631.08.
Asian markets rose on Tuesday after Goldman Sachs recommended investors to buy Japanese electronic component makers amid higher earnings expectations.
The Morgan Stanley Capital International Asia-Pacific Index added 0.2% to 140.46 at 11:30 a.m. in Tokyo. Key indexes in Australia and Singapore rose to records. Stocks advanced around the region, except in Hong Kong and New Zealand.
The Nikkei gained 43 points at 17,253 while the Hang Seng in Hong Kong was down 71 points at 19,998. The Kospi in Seoul was flat at 1389 and the Straits Times in Singapore advanced 9 points to 3045.
The Bank of Japan may raise its benchmark lending rate from 0.25% to curtail excessive investment and ward off the threat from any possible asset bubbles. Governor Toshihiko Fukui and his colleagues will probably boost the key overnight lending rate to 0.5% at a meeting that ends on January 18.
In the emerging markets, the Bovespa in Brazil fell 0.4% to 42,919 while the IPC index in Mexico rose 0.6% to 26,480 and the RTS index in Russia jumped 2.9% to 1850.
Results Today: Bajaj Auto, Batliboi, Gujarat Ambuja Exports, HT Media, Prism Cement, Patel Engineering, Lok Housing, KS Oils, Jubilant Organosys and Escorts.
Major Bulk Deals:
Macquarie Bank has sold Crew BOS; Prudential ICICI AMC has bought Finolex Cables while Fidelity has sold the scrip; Reliance Capital has picked up Rallis India while UTI MF has sold the stock; Principal MF has purchased Sagar Cement; Bear Stearns has picked up Sujana Metal.
Market Volumes:
The turnover on NSE was down by 14.8% to Rs85.18bn. BSE Metal index was the major gainer and gained 2.67%. BSE Capital Good index (up 1.51%), BSE Consumer Durable index (up 1.19%), BSE Pharma index (up 0.96%) and BSE Oil & Gas index (up 0.78%) were among the other major gainers.
Volume Toppers:
IFCI, SAIL, TTML, IDBI, Nagarjuna Fertilizers, Cairn India, R Com, Indiabulls, ITC, Ispat Industries, Reliance Industries, TCS, Gujarat Ambuja, Lloyds Steel, HLL, Uttam Steel and MTNL.
Upper Circuit Filters:
Flex Industries, GMR Industries, Zandu Pharma, Tata Sponge, Jyoti Structure, Shyam Telecom, Heritage Foods, RIIL, Nesco Ltd, Anant Raj Industries, KEC International, Rajesh Exports, Ganesh Housing, KS Oils, KLG Systel, BF Utilities, Prajay Engineering and Atlanta.
Delivery Delight:
ABB, Aurobindo Pharma, Bayer (India) Ltd, BEML, CESC, Cummins India, Financial Technologies, Gammon India, Godrej Industries, GNFC, Havells India, HDFC Bank, India Cements, India Infoline, IPCL, Infotech Enterprises, Jet Airways, Mahindra & Mahindra, Mahindra Gesco, NDTV, Ranbaxy, Sesa Goa, Siemens, Strides Arcolab, TCS, Tisco and UTI Bank.
Brokers Recommendations:
UTI Bank – Under performer from Enam with target of Rs430
Long Term Investment:
Financial Technologies
Major News Headlines:
Sterlite Industries Q3 profit at Rs2.14bn (up 43%), sales at Rs32.2bn (up 48%)
ABB wins Rs1.8bn contract from Indian Electricity Co.
TCS Q3 profit at Rs11.05bn (up 47%), sales at Rs48.6bn (up 41%) and interim dividend of Rs3 per share
Tulip IT Q3 profit at Rs274.91mn (up 101%), turnover at Rs2.22bn (up 64.4%)
RPG Transmission Q3 profit at Rs58.7mn (up 136%), total income at Rs907.9mn (up 56.5%)
SREI Infra signs deal with European Bank of Reconstruction and Development
SingTel will consider hiking Bharti shares under 'right terms'
Geometric Q3 profit at Rs82.99mmn (up 253%), sales at Rs453.8mn (up 42.9%)
Tata Steel to purchase Rawmet Ferrous
ACE to buy 74% in Romanian company