S-election struggle continues
Elections are won by men and women chiefly because most people vote against somebody rather than for somebody
We 'campaigned' for the bulls yesterday and they got voted to power. Elections don't happen frequently, but stock selection is an ongoing process. Legendary investment gurus swear by this style of stock investing. In fact, with the market getting quite volatile these days, the best bet is to adopt a stock-specific strategy. Some suggest a bottom-up approach while others prefer top-down one. But, if stock research is not your cup of tea, you should leave the same to the experts or invest in mutual funds. We expect the market to remain choppy with a positive bias till the budget is out of the way. The trend thereafter will hinge on what the Finance Minister P. Chidambaram has in store. Another key factor will be the FII inflows. So far this year, it has not been great, but things could change going forward. And, the S&P's upgrade of India's sovereign ratings should come in handy.
For today, the trend looks positive. On Wall Street, the Dow Jones Industrial Average hit a new record. Asian markets are also in cheerful mood this morning. Japan's Nikkei 225 Index clocked a 6-1/2 year intraday high. Markets also rose in Europe and emerging markets like Brazil and Russia. The only worry now is oil prices, which are still ruling well above the $57 per barrel mark. So, expect the bulls to hold on to their edge over the bears at least for the day.
FIIs were net sellers of Rs2.42bn (provisional) in the cash segment yesterday. In the F&O segment, they pumped in Rs4.28bn.
US retailers and energy shares catapulted the Dow to its fifth record this year and the S&P 500 Index to a six-year high after the Bush Government said that consumers spent more without fueling inflation.
Personal spending climbed in December by the most in five months and an inflation measure rose less than forecast. The data reinforced the Federal Reserve's decision to leave interest rates unchanged as economic growth picks up without spurring faster consumer-price increases.
The Dow increased 51.99, or 0.4%, to 12,673.68. The S&P 500 added 7.70, or 0.5%, to 1445.94, the highest since September 2000. A drop in Google shares after the company posted revenue that failed to top projections left the Nasdaq Composite Index lagging behind the blue chip indexes. The tech-heavy index rose 4.45, or 0.2%, to 2468.38.
Gold futures closed at their highest level since August 2006 as a recent strength in oil prices and a slight dip in the dollar helped lift prices past $660 an ounce . Gold for February delivery climbed $5.40 to close at $657.40 an ounce on the New York Mercantile Exchange. It rose as high as $661.50 earlier, an intraday level the contract hasn't seen since Aug. 11.
Crude oil futures were pretty volatile. March crude closed down 84 cents at $57.30 a barrel. The contract peaked at $58.85, its highest level since Jan. 3, on expectations that demand for fuel will rise as the US economy remains strong. Also, this week's data on fuel supplies showed the first decline in distillates in seven weeks.
Treasury prices fell, raising the yield on the benchmark 10-year note to 4.83% from 4.80% late on Wednesday. In currency trading, the dollar gained modestly versus the euro and the yen.
Across the Atlantic, European shares finished up as well. The pan-European Dow Jones Stoxx 600 index advanced 1.1% at 376.95. The UK's FTSE 100 climbed 1.3% at 6,282.20. The French CAC-40 rose 1% at 5,662.25 and the German DAX Xetra 30 rose 0.9% at 6,851.28, with both indexes trading near six-year highs.
Emerging markets too are smiling. The Bovespa in Brazil gained 0.4% at 44,815 while the RTS index in Russia surged 2.8% to 1894 and the IPC index in Mexico added 1% to 27,842.
Asian stocks advanced to the highest in nine months on Friday. Sony and Samsung Electronics gained after US consumer spending climbed to the highest in five months.
The Morgan Stanley Capital International Asia-Pacific Index added 0.5% to 142.93 at 11 a.m. in Tokyo, set for the highest since May 9. For the week, the regional gauge added 1.6%, its third straight consecutive advance.
The Nikkei rose 0.5% to 17,600.40. South Korea's Kospi index added 1.8% and the Straits Times Index in Singapore rose to an all-time high. Stock benchmarks advanced around the region, except in China.
China shares listed in Shanghai and Shenzhen were mixed in early trading as bargain-hunting offset concerns that the market may see funds set aside for the A-share subscription for Ping An Insurance, which is set to begin next week.
China shares ended flat on Thursday following a sharp decline on Wednesday on concerns that regulators may impose austerity measures to cool speculative activity. In early Friday trading, the Shanghai Composite index was up 0.2% at 2791.49 while the Shenzhen Index slipped 0.1% to 659.02.
Market Volumes:
The turnover on NSE was down by 22% to Rs80.34bn. BSE Consumer Durable index was the major gainer and gained 2.47%. BSE Bank index (up 2.11%), BSE Metal index (up 1.65%), BSE Technology index (up 1.64%) and BSE Capital Good index (up 1.08%) were among the other major gainers.
Volume Toppers:
IFCI, SAIL, TTML, IDFC, IDBI, Escorts, Pyramid Saimira, Shree Ashtavinayak, R Com, Ashok Leyland, Indiabulls, IVRCL Infrastructure, Hanung Toys, HMT, ITC, Satyam Computer, Crompton Greaves and NTPC.
Upper Circuit Filters:
Crisil Ltd, Prism Cement, Heritage Food, Goldiam International, Goldstone Technology, Radha Madhav, GVK Power, Rajesh Exports, Ganesh Housing, HOV Services, Marg Construction, Taneja Aerospace and Tanla.
Delivery Delight:
ABB, Ashok Leyland, CESC, Indiabulls, IVRCL Infrastructures, Jet Airways, Kesoram Industries, Lupin, Maruti, Patni Computer, Punj Lloyd, Satyam Computer, Siemens, SRF, Strides Arcolab, Titan Industries and Usha Martin.
Brokers Recommendations:
AIA Engineering – Outperform from Kotak with target of Rs1615
Buy - India Cements from Deutsche Bank with target of Rs295
Long Term Investment:
Reliance Energy
Major News Headlines:
Tata Motors Jan sales at 55440 units (up 19%)
Bajaj Auto Jan bike sales at 195560 units (up 12%)
Aditya Birla Group January sales at 2.82mn ton (up 3%)
Tata Chemicals to form 50:50 JV with Total Produce Plc
Ballarpur Ind raises uncoated paper prices – Reports
Orchid Chemical signs partnership pact with Actavis
SAIL bags order worth Rs1.17bn
ACC Q4 profit at Rs3.58bn (up 106%), sales at Rs16.2bn (up 50%); to pay Rs15 dividend
BHEL gets Rs5.05bn order from Bangladesh
Kirloskar Brothers wins US orders worth $2.1mn
Gujarat Ambuja Jan cement sales rise 6% to 1.49mn
Hindus Group denies reports of withdrawal from Hutch race
Sesa Goa to consider interim dividend on Feb 10
NTPC and Railways to build a 1,000MW thermal power plant in Bihar