“If your position is everywhere, your momentum is zero.”
The current run appears to be a pure momentum play. This week's pull back has been driven mainly by short-covering and therefore may not sustain going ahead for the near term. What will continue is the intra-day gyrations as a lot of churning is being seen in the market. Tread cautiously. The Sensex needs just over 300 points to make another lifetime peak. We expect a decent opening despite the overnight weakness in US shares. However, things may get volatile during the day. The short-term bias is up though the bulls may get tired after scaling a new peak.
The US stocks were down sharply overnight. Asian markets have not reacted to the fall on Wall Street. Hong Kong index is up over 170 points while the Nikkei in Tokyo is up marginally. We expect the bulls in India to capitalise on the momentum gained in the past couple of days. Yesterday's provisional FII figure and Tuesday's reported figure are both encouraging.
FIIs were net buyers of Rs2.42bn (provisional) in the cash segment yesterday and local institutions pumped in Rs1.04bn. In the F&O segment, foreign funds poured in Rs11.54bn yesterday. On Tuesday, FIIs were net buyers of Rs6.5bn in the cash segment. Mutual Funds were net sellers to the tune of Rs339mn.
Among the stocks, SBI could be in the focus as the government is contemplating a merger between the bank and four of its subsidiaries. Lanco Global may come under some pressure as Ernst & Young has reportedly found the joint bid by the company and its partner Globeleq invalid. Max India is likely to attract some attention as it has raised Rs10bn through a QIP, including investment by IFC. The company is also looking at inorganic opportunities. Tata Motors might be in the limelight as it plans to raise $450mn from the international market for new product development and capex.
Sesa Goa could rise amid reports that iron ore exports have actually risen in the last couple of months and spot prices have also increased. ONGC may fall as a financial daily reports that the Director General of Hydrocarbon (DGH) has substantially slashed the company's estimates from its latest KG basin gas discovery. Britannia is also expected to hog the limelight amid reports that the Wadia group and Danone are heading for an amicable resolutions of all the differences.
A late selloff sent the Dow tumbling on Wednesday owing to rising Treasury bond yields. Stocks were also dragged lower by energy producers after the price of crude oil fell from a nine-month high.
The S&P 500 declined 20.86, or 1.4%, to 1512.84. The Dow Jones Industrial Average lost 146, or 1.1%, to 13,489.42. The Nasdaq Composite Index decreased 26.80, or 1%, to 2599.96.
The yield on the benchmark 10-year US note rose to 5.13% from 5.08% on Tuesday. In currency trading, the dollar gained against the euro and the yen. COMEX gold for August delivery fell $4.70 to $660 an ounce.
US light crude for July delivery sank 91 cents to settle at $68.19 a barrel in New York. The government reported that weekly crude and gasoline supplies rose much more than expected.
European shares closed higher. The pan-European Dow Jones Stoxx 600 index, which tracks Europe's 600 biggest companies, rose 0.4% to 397.86. The German DAX 30 rose 0.7% to 8,090.49 to reach a new closing high. The previous closing high of 8,064.97 was reached on March 7, 2000. The French CAC-40 advanced 0.4% to 6,093.29. The UK's FTSE 100 finished a fraction of percentage point lower at 6,649.30.
Stocks in Brazil and Mexico declined. In Mexico City, the IPC lost 1.6%, to end at 31,550.76. In Sao Paulo, the benchmark Bovespa index fell 1.1% to 54,029.24. The RTS index in Russia climbed 1.5% to 1915.
Asian stocks advanced for a sixth day after prices of computer-memory chips surged and a report today showed Japan's export growth almost doubled in May.
Samsung and Toshiba paced technology shares higher, helping the Morgan Stanley Capital International Asia Pacific Index to a record. China Mobile lifted Hong Kong's Hang Seng Index to a new high.
The MSCI index added 0.2% to 154.11 as of 12:11 p.m. in Tokyo, after declining as much as 0.3% earlier. The measure jumped 2.9% in the previous five days.
Japan's Nikkei 225 Stock Average climbed 0.1% to 18,237.25, recouping losses of as much as 0.6%. Benchmarks gained elsewhere in the region, except in New Zealand, Australia and the Philippines.
Markets further gained ground as bulls continued its rally. After opening on a strong note as key indices managed to hold on to their gains as index heavy weights like SBI, L&T, Tata Motors and Bajaj Auto aided support. Even the Mid-Cap and the small cap participated in the rally.
All the key indices finished in positive terrain with Banks again leading the way from front. However, Oil & Gas index was a bit dicey as Reliance Industries gained only Rs4. Blue chip SBI was the major mover as the scrip lifted the benchmark Sensex by 19points.Finally, the 30-share Sensex surged 116 points to close at 14411. NSE-50 Nifty advanced 34 points to close at 4248.
Surana Industries was frozen at 5% upper circuit to Rs125.70 after the company reportedly is in the final stages of negotiations to secure a long-term lease for a coal mine in
Batliboi surged by 7% to Rs116 after the company announced that they have purchased
Wockhardt gained by 1% to Rs395 after the company secured US FDA approval for Cefprozil tablets. The scrip touched intra-day high of Rs398 and a low of Rs390 and recorded volumes of over 1,00,000 shares on NSE.
Varun Shipping advanced 2% to Rs56 after the company acquired very large Gas carrier. The scrip touched intra-day high of Rs57 and a low of Rs54 and recorded volumes of over 1,00,000 shares on NSE.
Blue Dart rallied by over 10% to Rs771 following reports of an open offer at price which could be substantially high compared with its current market price. However, company denied any such move. The scrip touched intra-day high of Rs819 and a low of Rs663 and recorded volumes of over 6,00,000 shares on NSE.
Banking stocks continued its upward trend led by gains in the frontline stock SBI as the scrip gained by 3.8% to Rs1423, ICICI Bank edged higher by 0.4% to Rs948. Canara Bank was the star performer as the scrip rose by over 10% to Rs275 others like Bank of India and Corp Bank were the major gainers among the Mid-Cap stocks.
Capital Good stocks also ended higher. BHEL advanced by 1.4% to Rs1425, ABB was up by 1% to Rs4650, Punj Lloyd surged by over 6% to Rs262, Gammon
IT stocks managed to end with gains. The Mid-Cap stocks like Rolta spurred by 5.5% to Rs464, Mphasis BFL surged by 3.3% to Rs318 and NIIT Ltd added 2.7% to Rs934. however, Infosys slipped lower.
Results Today:
Aban Offshore, Abbott India, Educomp Solution, Gateway Distriparks, Hotel Leela and Mcnally Bharat.
Insider Trades:
Hotel Leela Venture Ltd: Life Insurance Corporation of India and Its Associates has purchased from open market 600,000 equity shares of Hotel Leela Venture Ltd on 14th June, 2007
Tech Mahindra Limited: Hon. Akash Paul, Director has sold in market 8985 equity shares of Tech Mahindra Limited on 14th June, 2007
Petronet LNG Limited: P. Dasgupta, Managing Director & CEO has purchased from open market 10000 equity shares of Petronet LNG Limited on 12th and 14th June, 2007
Gujarat Ambuja Cement Ltd: Shri P B Kulkarni, Director has sold in open market 19000 equity shares of Gujarat Ambuja Cement Ltd on 12th, 14th and 15th June, 2007
Major Bulk Deals:
Citigroup has picked up Gayatri Projects; Lotus Global has sold IKF Technologies and Soma Textiles; Bear Stearns has bought Swan Mills; Goldman Sachs has purchased Vakranjee Software.
Lower Circuit:
Hindustan Organic, Rama Pulp, Yashraj Securities, United Breweries and BF Utilities.
Upper Circuit:
DCB, UTV Software, Deep Industries, Godrej Industries, Ashapura Minechem, Deccan Chronicle, Tanla, Malu Paper, Heritage Foods, Sical Logistics, GV Films, Prime Securities, Surana Industries, Swan Mills, Ruby Mills, Vakrangee Software.
Delivery Delight (Rising Price & Rising Delivery):
Adlabs Films, Amtek Auto, Arvind Mills, Bajaj Auto, Bank of India, BEML, Bharti Airtel, CEAT, Cipla, GDL, Gitanjali Gems, Grasim, Gujarat Ambuja, Gujarat State Petronet, Hindalco, HDFC, Indiabulls Financial, MTNL and ONGC.
Abnormal Delivery:
Essel Propack, EIH, HCL Infosystems, IOC, Jagran Prakashan, Mahindra Gesco, IPCL, 3i Infotech, Aptech, Cambridge Solutions and Suzlon Energy.
Major News & Announcement:
Ranbaxy gets tentative nod for generic Norvasc
Tata Motors to raise US$450mn overseas
Batliboi Buys France’s AESA Air Engineering
Cadila to set up venture with US TGL Enterprise
BEML follow-on public issues on June 27
Meltar Trading plans to buy 14.43% of Great Offshore
Indian Hotels to increase the limit of Foreign Investment to 30%
Aarti Industries forms Venture with Sojitz Chemical
Wockhardt gets US FDA approval for Cefprozil tablets
Varun Shipping acquires very large Gas carrier