Any belief worth having must survive doubt.
We have our doubts about the pullback this week. June has really been a tumultuous month, with the key indices swinging back and forth. If one week they were up the next week they were down. This week has so far been pretty good for the bulls, with the market advancing in the past three days. Most of it has been due to short covering in sectors such as banking, auto, oil & gas and metals, besides value buying in capital goods and pharma.
A persistent slide in inflation and the subsequent subsiding of fears over fresh monetary tightening have also helped. A report says that inflation this month will stabilise between 4.4-4.6%, the RBI's medium-term target. If this turns out to be true, we should be able to close out the week on a strong note. Before that, we will have to deal with weak cues coming from the Asian markets, though US shares ended higher.
The market has chosen to shrug off concerns about liquidity squeeze from the big public issues of DLF and ICICI Bank. Even oil prices hurtling towards the $70 per barrel mark has not had any major impact. Strong advance tax numbers coupled with the success of the DLF and ICICI Bank issues have lifted the spirits of the bulls.
US shares finished higher on Thursday as lower oil prices coupled with a better-than-expected report from the manufacturing sector offset rising Treasury yields.
The S&P 500 Index climbed 9.35 points, or 0.6%, to 1522.19. The Dow Jones Industrial Average rose 56.42 points, or 0.4%, to 13,545.84. The Nasdaq Composite Index added 17 points, or 0.7%, to 2616.96.
US light crude settled down August fell 21 cents to $68.65 a barrel in NYMEX trading.
The Blackstone Group announced that it had priced 133.3mn common units at $31 each, bringing its total offering to $4.75bn, making it the largest US IPO of the year. The private equity firm will begin trading under the symbol "BX."
US senators have introduced a legislation that would make private-equity firms that go public pay the same 35% rate as corporations. The law would more than double Blackstone's taxes after five years.
The yield on the benchmark 10-year note rose to 5.19%, from 5.14% in the previous session. COMEX gold for August delivery fell $5.80 to $654.20 an ounce.
In currency markets, the yen fell to a 4 1/2-year low against the dollar as investors borrowed Japan's currency to buy higher-yielding assets in the US, Britain and New Zealand in so-called carry trades.
The Japanese currency this week reached a record low versus the euro, the weakest since Sept. 1992 against the pound and a two-decade low versus New Zealand's dollar. Japanese Finance Minister Koji Omi told reporters that policy makers will carefully watch the currency market.
The pan-European Dow Jones Stoxx 600 index, which measures Europe's leading stocks, closed at its lowest level in a week. It lost 1% to end at 393.84. The German DAX declined 1.6% to 7,964.71, after reaching a closing high on Wednesday, the French CAC-40 slipped 1% to 6,029.79 and the UK's FTSE 100 dropped 0.8% to 6,596.
In the emerging markets, the Ibovespa in Brazil gained 1.2% to 54,656 while the IPC index in Mexico advanced 0.9% to 31,830 and the RTS index in Russia dived 1.2% to 1893.
Asian stocks fell for the first time in seven days. The Nikkei in Tokyo was down 127 points at 18,112 while the Hang Seng in Hong Kong was flat at 21,947. The Kospi in Seoul slid 22 points to 1771 and the Straits Times in Singapore lost 25 points to 3613.
FIIs were net buyers of Rs1.44bn (provisional) in the cash segment yesterday while the local institutions pumped in Rs1.48bn. In the F&O segment, FIIs were net sellers yesterday at Rs770mn.
Assam Company has found oil and gas in the Laxmijan Field, which was awarded to it by ONGC in April 2004. Flawless Diamond India's Board will meet today to consider the allotment of 588,000 equity shares to Bennett, Coleman & Co. Ltd.
RNRL could gain as the Bombay High Court has ruled that Reliance Industries cannot sell gas from its KG basin fields to a third party other than NTPC and RNRL.
Bulls continued its upward run led by gains in the Capital Goods, Auto, Consumer Durables and Metal stocks. Again the Mid-Cap and the Small-Cap stocks also contributed in the rally as the both the indices gained over 0.5% each. Sugar stocks were back inaction on stockpile announcement. Refinery stocks were the star performers today post the HPCL – Mittal Energy news after Government approved Lakshmi Mittal's 49% stake in HPCL's Bhatinda unit. Other refinery stocks Bongai refinery and Chennai Petroleum also surged.
BHEL was the biggest mover among the 50-scrip’s of Nifty as the scrip lifted the index by 5.45 points. L&T was the major mover among the 30-scrip’s of Sensex lifting the benchmark Sensex by 31 points. Finally, the 30-share Sensex surged 87 points to close at 14499. NSE-50 Nifty advanced 18 points to close at 4267.
BPCL surged by 5% to Rs350 after Life Insurance purchased 2.02% stake in the company. The scrip touched intra-day high of Rs352 and a low of Rs330 and recorded volumes of over 4,00,000 shares on NSE.
HPCL spurred by over 4.5% to Rs274 after the Union Cabinet approved the proposed investment by steel tycoon Lakshmi Niwas Mittal in the Bhatinda refinery project of HPCL. Mittal Investments plans to acquire a 49% stake in the 180,000 barrels per day (9mn tonnes per year) refinery for Rs33.65bn through its 100% arm, Mittal Energy Investments Pte Ltd,
Orchid Chemical slipped 1.7% to Rs254. The company received US FDA approval for its Cefepime. The scrip touched intra-day high of Rs264 and a low of Rs251 and recorded volumes of over 4,00,000 shares on NSE.
Parsvnath edged lower by 0.5% to Rs336. The company announced that it secured 1.5bn DMRC project. The scrip touched intra-day high of Rs342 and a low of Rs333 and recorded volumes of over 12,00,000 shares on NSE.
Capital Good stocks were in limelight led by gains in the index heavy weight L&T as the company received a US$94.95nm shipbuilding contract the scrip was up by over 4% to Rs2105. BHEL advanced by 4% to Rs1483, ABB edged higher 0.7% to Rs4690 and Punj Lloyd added 0.8%t o Rs263.
Technology stocks recovered towards the end. NIIT Ltd gained by 1.5% to Rs950 and Rolta added 6% to Rs491. Heavy weight Infosys edged higher by 0.2% to Rs1958 and Wipro added 0.4% to Rs524.
Sugar stocks also gained momentum on stockpile announcement. Renuka Sugar surged by 1.8% to Rs616, Bajaj Hindustan advanced by 0.7% to Rs165, Balrampur Chini added 2% to Rs69.
Metal stocks again shined brightly. Tata Steel edged higher by 0.2% to Rs609, Hindalco surged by 2.5% to Rs166; Hindustan Zinc advanced by 4.5% to Rs750 and Jindal Steel rose 3.2% to Rs3539.
Results Today:
Alphageo, Amara Raja, Apeejay Tea, Ciba Speciality, Dolphin Offshore, DS Kulkarni, House of Pearl Fashions, Piramyd Retail, PSL, United Breweries,
Insider Trades:
Bharat Petroleum Corp Ltd: Life Insurance Corporation of India has purchased from open market 1 crore 35 lakh equity shares of Bharat Petroleum Corp. Ltd from 5th to 12th June, 2007.
Major Bulk Deals:
Merrill Lynch has sold FAG Bearings; Emerging Markets has sold Heritage Foods; Lotus Global has sold IKF Technologies but has purchased Modipon; Reliance Capital has sold Kirloskar Pnumatic while Franklin Templeton has bought the stock and Goldman Sachs has picked up Om Metal Infrastructure.
Lower Circuit:
McNally Bharat, Rama Pulp and Yashraj Industries.
Upper Circuit:
RIIL, Dishman Pharma, Hindustan Organic, Goldstone Technology, Shasun Chemical, Tanla, Malu Paper, Asian Electronic, Sical Logistics, Prime Focus, Heritage Foods, Vyapar Industries, Flawless Diamond, Ruby Mills, Swan Mills, Vakranjee Software and Shaw Wallace.
Delivery Delight (Rising Price & Rising Delivery):
Ashok Leyland, Asian Electronics, Bajaj Hindustan, BEML, Century Textiles, Colgate, Crompton Greaves, Era Constructions, Geometric Software, HDFC Bank, Hindalco, IFCI, Infosys, M&M and R Com.
Abnormal Delivery:
Tulip IT, NALCO, Welspun Gujarat, Sun TV, Rico Auto, Mercator Lines, Mahindra Gesco, Cipla, Maruti and
Spanco Telecom.
Major News & Announcements:
Aban Offshore to pay dividend of Rs3 per share
Abbot India Q2 profit at Rs183mn (up 34%), sales at Rs1.54bn (up 18.4%)
States to get average 14% more as coal royalties
Parsvnath secures Rs1.5bn DMRC project
Govt decides to increase sugar stockpile, says Chidambaram
Govt okays Lakshmi Mittal's 49% stake in HPCL's Bhatinda unit
Orchid Chemical receives USFDA approval for its Cefepime drug
Sangam India ties up with Rioplele Texteis, Portugal
Glenmark gets tentative USFDA approval for its ANDA for Terbinafine
L&T signs US$94.95mn shipbuilding contract with Biglift
Micro Technology enters in accord with TWI International
Hindustan Zinc raises Lead prices by 4% per ton