STRATEGY INPUTS FOR THE DAY
Bulls say Bought'em out
Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well.
We mentioned about sunshine after sun outage at the beginning of the week. You had plenty of time to pick up heavyweights which no one seemed interested to buy for the last couple of weeks . We've had a fairly successful week as far as the bulls are concerned. Yesterday, was particularly satisfying with the key indices shooting up with a sharp jump in volumes and a positive breadth. Along with a buoyant global mood, some amount of short covering also helped. FIIs too seem to have pumped up the volume yesterday. Provisional figures on the NSE show that the overseas investors poured in Rs7.13bn in the cash segment. In the F&O segment, they were net buyers of Rs21.76bn. All of a sudden, things are looking up once again, as if we never had a fall last month.
Has something drastically changed. Except the sentiment? It always pays to be a little bit cautious as some of the concerns that brought about last month's downfall are still there. Today, we expect a higher opening given the mixed set of cues from US and Asian markets. Also, some selling pressure could set in at higher levels ahead of the weekend. The market could remain choppy as we will have the F&O expiry next week.
IFCI is likely to gain after the state-run term lender said it has appointed Ernst & Young, for advising the company on the induction of a strategic investor. Dabur India will be in focus amid reports that it is to acquire Singapore's Unza Holdings. TCS is also expected to attract attention amid reports of a big bang acquisition. HCL Tech and Cambridge Solutions are also going to be in the limelight as a deal could be brewing between the two companies. Torrent Pharma might also be in spotlight as reports suggest the Ahmedabad-based company along with Israel's Teva are the only ones left in the race for the generic business of Germany's Merck. Telecom stocks could be in the thick of things as well after the Cabinet formally approved 75% FDI yesterday.
ITC and other cigarette makers could be in for some more pressure as Maharashtra has also decided to impose a 12.5% VAT on all tobacco products except bidis. Indiabulls Real Estate Ltd., the real estate arm of stock broking firm Indiabulls Financial will make its debut today. F&O trading in Hinduja TMT will be suspended from March 30 due to the spin-off of its IT business into a separate company. The existing contracts for April and May will expire on March 29 and fresh month contracts will not be introduced.
US markets closed mixed. While the Dow managed slim gains the Nasdaq ended in the red and the S&P 500 finished flat. The S&P 500 ended flat at 1434.54. The Dow added 13.62, or 0.1%, to 12,461.14. The Nasdaq lost 4.18, or 0.2%, to 2451.74.
US light crude oil for May delivery jumped $2.08 to $61.69 a barrel, a gain of more than 3%, on the New York Mercantile Exchange. The front-month contract was 16 cents higher at $61.85 a barrel.
Treasury prices slumped, raising the yield on the 10-year note to about 4.58% from 4.54% late on Wednesday. In currency trading, the dollar fell versus the euro and rose modestly versus the yen. COMEX gold for April delivery added $4.20 to $664.20 an ounce.
Blackstone Group LP, the leveraged buyout firm that has spent $160bn taking companies private in the past two decades, plans to raise as much as $4bn by going public.
Motorola shares slid more than 6%. The mobile handset maker warned on Wednesday that it will post a first-quarter loss and that full-year sales will miss forecasts, owing to weak sales of mobile devices. The company also said its chief financial officer would retire effective April 1.
European indexes rose. The pan-European Dow Jones Stoxx 600 index added 1.5% to 374.36. The index is now up about 2% from its Dec. 29 close of 365.26, having recovered from last month's sell-off. The German DAX Xetra 30 closed up 2.2 % at 6,856.96, the French CAC-40 rose 1.8% to 5,598.37 and the UK's FTSE 100 added 1% to 6,318.00, with the latter's gains capped by some weakness in the pharmaceutical sector.
In Asia, stock benchmarks in Singapore, China and Korea are down. The Hang Seng is nearly flat while the Nikkei has gained marginally. The Morgan Stanley Capital International Asia-Pacific Index gained 0.1% to 145.72 at 11:02 a.m. in Tokyo, set to close at the highest since Feb. 27. For the week, the gauge is heading for a 3.1% rise, the most since the five days to Aug. 18. Markets open for trading elsewhere in the region fell, except in Australia, Taiwan and Malaysia.
Fantastic Friday on cards
This week as of now is turning out to be an impressive for the bulls as the benchmark Sensex has recovered by nearly 1000 points from weeks low of 12427 on Monday to 13300 mark making a strong come back in last four trading sessions. Strong Global cues and the decision of the Federal Reserve to keep interest rates unchanged boosted the key indices at open. Today's rally yet again belonged to the large cap stocks again, however the Mid-Cap and the small cap stocks were unable to follow today yet both the indexes managed to close up nearly by 1%. Aggressive buying was again witnessed in the scrip's across the bourses lifting the benchmark Sensex over 350 points.
Finally, the 30-share benchmark Sensex surged 362 points to close at 12308. NSE Nifty jumped 111 points to close at 3875. VSNL, Tata Chemical and PNB were the major gainer, however Britannia, Zee Tele and Glaxo were the major losers among the 50-scrip's of NSE Nifty.
Suzlon Energy slipped sharply after reports stated that the company would increase its bid for Repower. The scrip fell from a high of Rs1025 to hit an intra-day low of Rs975 finally closing 1.3% up to Rs1008. The scrip touched an intra-day high of Rs1025 and a low of Rs975 and recorded volumes of over 5,00,000 shares on NSE.
IDFC surged by over 2% to Rs87 after the company bought a stake in the toll-road unit of Abhijeet Group for Rs656mn. The scrip touched an intra-day high of Rs89 and a low of Rs85 and recorded volumes of over 37,00,000 shares on NSE.
VSNL rallied by over 10% to Rs423 following reports that the company may be asked by the government to sell land to raise as much as Rs100bn. The scrip touched an intra-day high of Rs426 and a low of Rs389 and recorded volumes of over 21,00,000 shares on NSE.
BHEL surged nearly by 6% to Rs2230 after reports stated that the company may win an order from ONGC to supply equipment for oil rigs. The scrip touched an intra-day high of Rs2256 and a low of Rs2103 and recorded volumes of over 9,00,000 shares on NSE.
The index heavy weight Reliance Industries rose 2.6% to Rs1375 after the company entered into a Memorandum of Understanding with Rohm and Haas Company to explore the joint construction of a world-scale acrylic-monomer complex in Jamnagar, India. The scrip touched an intra-day high of Rs1379 and a low of Rs1347 and recorded volumes of over 24,00,000 shares on NSE.
Banking sector once again out performed the benchmark indexes as the Bank index rose over 4% for second consecutive trading session after Finance Minister said money supply with Banks will ease in coming days as Government will start spending funds from the budget marked for the fiscal year. The Mid-Cap stocks yet again led from front, Bank of India surged by over 12% to Rs176, Canara Bank rose 7.8% to Rs208 and PNB advanced 7% to Rs482. HDFC Bank, SBI and ICICI Bank were the major gainers among the heavy weights with each gaining over 3.5%.
Oil & Gas exploration stocks also were in the limelight today. ONGC was up by a whopping 5% to Rs852 and Reliance Industries surged by over 2.5% to Rs1375. Oil & Gas stocks refinery stocks also extend their gains marginally. BPCL gained 0.7% to Rs313, HPCL marginally gained by 0.9% to Rs267 and IOC edged higher 0.6% to Rs420.
Auto stocks slowly shifted to top gear today. Hero Honda led the race the scrip rose 5.2% to Rs685, Maruti paced ahead by 5% to Rs831, Tata Motors surged by over 3.5% to Rs805 and M&M advanced 3.7% to Rs781.