Jamaican Farewell to the bourses!
Please don't ask me what the score is, I'm not even sure what the game is.
The 2007 Cricket World Cup is open. The first match will kick off today at the Sabina Park Stadium in Jamaica. Still time for India to get on to the pitch but viewer ship for cricket matches are bound to be higher than that of the market for sure. The bulls and bears seem to be battling or batting with less ferocity. The net result a boring game on the bourses.
The recent fall appears to have taken the wind out of the bulls' sails. Monday, was a perfect example of that. After a positive start and a firm trend, the key indices ran out of steam towards the slog overs. Any rally may be taken with a pinch of salt as the bulls are currently lacking in conviction and are short on confidence. It will take a while for the market to regain its composure.
The pace of FII inflows has slowed considerably from the same period last year. There is more bad news (local or international) in the air and positive developments are few and far between. Unless this trend changes, we expect the key indices to remain choppy and rangebound with a negative bias and the occasional spikes of short covering.
For the day, we see the market opening on a cautious note owing to weakness in Asian markets, though US stocks managed some gains overnight. A lot more stock centric action is expected. And while the major indices may languish, don’t be surprised if small and mid-cap counters slowly start pushing ahead. Avoid the temptation in operator driven counters because when the lower circuit filter sets in there is no option to exit.
Lanco Infratech could come under pressure amid news of continuing trouble for its proposed Sasan mega power project. Bajaj Hindusthan might hog the limelight again amid reports that Rahul Bajaj has acquired Birlas' stake in Bachhraj & Co., a stepdown subsidiary of the main holding company, Bajaj Sevashram.
Bajaj Electricals is likely to gain after a financial daily reported that it has picked up a 32% stake in Nashik-based CFL maker Starlite Lighting. Balaji Telefilms is another stock that may see some action amid reports that it is teaming up with STAR for a Telugu language channel. Rallis India could advance amid reports of its turnaround this year. Helios & Matheson could gain ob reports that the IT firm is eyeing acquisitions in UK and US.
FIIs were net buyers of Rs1.3bn (provisional) in the cash segment yesterday. In the F&O segment, they poured in Rs10.45bn. On Friday, foreign funds pumped in Rs3.96bn in the cash segment when the Sensex had lost over 160 points. Mutual Fund data for the same day is not available.
US stocks climbed on surged Monday. The market finally found momentum after a tough session with the worries about the subprime lenders offsetting M&A news and lower oil prices. The tech-heavy Nasdaq was up 14.74 points or 0.6% at 2,402.29, while the Dow Jones rose 42.3 points or about 0.3% to 12,318.62, and the broader S&P 500 gained 3.75 points to 1,406.60.
Dollar General led the S&P 500 to its third straight gain after the company agreed to be acquired by Kohlberg Kravis Roberts. Intel drove technology shares to their highest this month, lifting the Dow and Nasdaq.
New Century Financial, the No.2 US subprime home lender, said it doesn't have the cash to pay creditors, increasing speculation that the company will go bankrupt.
US light crude oil for April delivery fell 90 cents to settle at $59.15 a barrel on the New York Mercantile Exchange. The contract was quoting 42 cents higher at $59.33 a barrel in extended trading in Asia.
COMEX gold for April delivery fell $1.70 to $650.30 an ounce.
Treasuries rose amid concern that loan delinquencies among the riskiest borrowers will add to a slowdown in housing and stall economic growth. Treasury prices rose, lowering the yield on the 10-year note to 4.55% from 4.58% late on Friday.
In currency trading, the dollar fell the most in a week against the yen. The Japanese yen gained the most in a week against the dollar on speculation investors will unwind trades financed by low-yielding currencies. It also declined versus the euro.
European stocks declined as rising worries over the US mortgage market outweighed a slew of merger and acquisition deals. The French CAC 40 lost 0.8% to 5,496.07, the UK's FTSE 100 dipped 0.2% to 6,233.30 and the German DAX 30 finished virtually unchanged at 6,715.49. The pan-European Dow Jones Stoxx 600 index fell 0.4% to 366.02.
Brazilian and Mexican stocks edged up, taking their cue from record gains on Wall Street. Brazil's Bovespa stock index rose 0.3% to 44,249.23 and Mexico's IPC rose 0.6% to 27,261.17. Both had been in negative territory earlier. Elsewhere, Chile's IPSA climbed 1.3% to 2,912.25. Russia's RTS index added 0.2% to 1811.91.
Asian stocks snapped a five-day rally on Tuesday. Honda and Sony led Japanese exporters lower after the yen gained against the dollar, reducing the value of US sales.
The Morgan Stanley Capital International Asia Pacific Index lost 0.2% to 144.04 at 10.48 a.m. in Tokyo. All other markets open for trading declined, except in New Zealand, Taiwan, Malaysia and the Philippines.
Japan's Nikkei dropped 70 points to 17,221 while the Hang Seng in Hong Kong was down 28 points to 19,414. The Kospi in Seoul fell by 4 points to 1437 and the Straits Times in Singapore declined 11 points to 3171.