"The 10 Commandments contain 297 words. The Bill of Rights is stated in 463 words. Lincoln's Gettysburg Address contains 266 words. A federal directive to regulate the price of cabbage contains 26,911 words.”
Investors will have to keep a close watch on two key events - the F&O expiry today and the outcome of the Fed policy meeting. It's only words that matter for the time being as far as the Fed is concerned as status quo is likely to be maintained on the interest rate front. Beyond these events, the next big impetus will come from the earnings announcements. IT stocks movement will particularly hinge on the results and the guidance for the rest of the year. In the meantime, software shares will be at the mercy of the daily trend in the forex market.
Local market has managed to hold its own amid a slew of worries, like the sub-prime mortgages in the US, higher oil prices, a slowdown in FII inflows and big-ticket issues of DLF and ICICI Bank. But, there may be some cooling going ahead. The timing of an imminent correction and its intensity is something no one can accurately predict.
We expect a strong opening on the back of strength across global markets. As a result, we may see some more short-covering from the bears. Having said that, the intra-day gyrations are here to stay and so is the stock specific action. Given that the Sensex is about 300 points away from a new lifetime high, we would advocate some caution. Fresh purchases should be avoided for the day and use spikes to exit shaky positions.
FIIs were net sellers to the tune of Rs5.67bn (provisional) in the cash segment yesterday while local institutions pumped in Rs2.44bn. In the F&O segment, foreign funds were net sellers at Rs6.91bn. On Tuesday, FIIs offloaded stocks worth Rs2.99bn in the cash segment.
Among the stocks, Kesoram will rise after BK Birla said it will hand over the reigns of this diversified company to his grandson Kumar Mangalam Birla. Maruti may gain amid reports of export orders from a few ASEAN markets. Cambridge Solutions is likely to feel some pressure as a financial daily says that HCL Tech and Carlyle have decided against bidding for the BPO firm. Adlabs will attract attention as reports say CEO Manmohan Shetty will retire next year.
Tyre companies should advance as rubber prices have dropped sharply this year. Sugar companies may build on yesterday's gains as Finance Minister has indicated that the government may announce some more sops for the beleaguered industry. Nicco Corp may continue its rally amid reports that ADAG is likely to pick up a stake in the cable manufacturer. BSEL Infrastructure is also expected to be in action as it announces its results and is likely to go for a private placement to fund future projects.
Dabur India, Godrej Consumer and Emami will be in the limelight. A financial daily says that Dabur India has dropped the plan to acquire Unza while its other two peers may have entered the race for the takeover of the Malaysian FMCG firm. Panacea Biotec might rise amid reports that it is likely to launch seven anti-cancer drugs.
Shares of Meghmani Organics will get listed on the bourses today. The issue price was fixed at Rs19 per share. The premium heard on the street is to the tune of Rs15-20. Meghmani's competitor Asahi Songwon might just see some action as it has come out with its results for the fourth quarter and the full year. Indiabulls may gain as a business newspaper says NTC will develop 100 acres of mill land in Mumbai.
US stocks posted its first advance in four days on the back of a rally in energy shares while the technology sector benefited from the better-than-expected earnings of Oracle.
Exxon Mobil, Intel and Microsoft helped lift the S&P 500 Index to its biggest gain in two weeks. Oracle jumped the most in three months after saying sales may grow 21%.
A rebound in financial shares aided the rise after the CEO of Merrill Lynch and Goldman Sachs said they see little risks in credit markets from the sub-prime mortgages. Results from Nike also improved the sentiment on earnings growth.
The S&P 500 added 13.45, or 0.9%, to 1506.34. The Dow Jones Industrial Average surged 90.07, or 0.7%, to 13,427.73. The Nasdaq Composite Index increased 31.19, or 1.2%, to 2605.35.
Crude oil for August delivery rose 1.8% to $68.97 a barrel in New York after an Energy Department report showed an unexpected decline in US gasoline inventories last week.
Treasury prices were lower, raising the yield on the benchmark 10-year note to 5.09% from 5.08% late on Tuesday. In currency trading, the dollar moved higher versus the euro and eased against the yen. COMEX gold for August fell 50 cents to $644.80 an ounce.
European shares lost ground. The pan-European Dow Jones Stoxx 600 index declined 0.4 to 387.98. The UK's FTSE 100 closed down 0.5% at 6,527.60, the German DAX lost 0.8% at 7,801.23 and the French CAC-40 slipped 0.2% to 5,941.76.
In the emerging markets, the Bovespa in Brazil rose 0.5% to 54,143 while the IPC index in Mexico gained 0.2% to 30,804 and the RTS index in Russia dived 1.2% to 1875.
Asian stocks are all up sharply this morning after crude oil prices advanced and the yen weakened. Woodside Petroleum, Australia's second-largest oil explorer, gained for the first time in six days. Honda rose by the most in almost three weeks, leading gains among Japanese exporters.
Energy shares posted the biggest gains on the Morgan Stanley Capital International Asia-Pacific Index. The benchmark index climbed 0.4% to 151.50 at 10:25 a.m. in Tokyo, after sliding 1.2% yesterday to its lowest since June 14.
Japan's Nikkei 225 Stock Average added 0.4% to 17,915.86, halting a four-day, 2.1% drop. Australia's S&P/ASX 200 Index jumped 1%, the region's biggest advance, while the Hang Seng in Hong Kong was up 293 points at 21,999. Other markets open for trading advanced.
Markets ended in red ahead of the F&O expiry as bulls lost ground towards the fag end of the session. The Asian and European markets also were in the negative terrain dampening the sentiments of investors. Further selling pressure in the heavy weights like ONGC, BHEL and Tata Steel dragged the key indices to close lower. The BSE Metal, Bank and Auto index was the major losers, however, the Mid-Cap and the small cap index managed to close in positive terrain.
Reliance Communication was the major laggard as it dragged the benchmark index Sensex by 12.1 points. Finally, the 30-share Sensex slipped 70 points to close at 14431. NSE-50 Nifty was down 21 points to close at 4263.
Tata Power spurred nearly by 2% to Rs644 after the company announced that they may buy ships to transport coal to India. The scrip touched intra-day high of Rs660 and a low of Rs623 and recorded volumes of over 7,00,000 shares on NSE.
Petron Engineering slipped by 0.9% to Rs186 after Kazstroy Services made an offer to buy the company’s Stake at Rs180 per share. The scrip touched intra-day high of Rs195 and a low of Rs185 and recorded volumes of over 23,000 shares on NSE.
IKF Technology advanced by 3% to Rs7.8 after the company announced that it has entered into JV with Salampuria Agrotech for biofuel activity. The scrip touched intra-day high of Rs8 and a low of Rs7.59 and recorded volumes of over 82,00,000 shares on BSE.
MICO dropped by over 4.5% to Rs4485. The company's German parent hiked the open offer price to Rs4600 per share from Rs4000 earlier. The scrip touched intra-day high of Rs4500 and a low of Rs4300 and recorded volumes of over 71,000 shares on NSE.
IFCI surged by over 3.5% to Rs51 as RBI allowed overseas investors to resume purchases in the stock. The scrip touched intra-day high of Rs58 and a low of Rs50 and recorded volumes of over 5,00,00,000 shares on NSE.
Metal stocks lost their shine led by fall in SAIL as the scrip was down by 2.6%t o Rs130, Tata Steel slipped 2% to Rs592, Hindustan Zinc slipped 2.6% to Rs705 and JSW Steel edged lower by 0.5% to Rs605.
Banking stocks were on the receiving end led by fall in the index heavy weight like SBI slipped by 0.7% to Rs1447, ICICI Bank lost by 0.9% to Rs938 and HDFC Bank edged lower by 0.5% to Rs1094. Bank of Baroda, OBC and Corp Bank were the major gainers among the Mid-Cap stocks.
Pharma stocks also were in bad health. Cadila plunged by over 4% to Rs379, Sun Pharma declined 2.2% to Rs1014, Ranbaxy dropped 1.3% to Rs342 and Cipla slipped 0.7% to Rs205.
Technology stocks gained momentum towards the end as the Indian rupee weakened to Rs41 per against Dollar. Satyam Computer surged by 2.6% to Rs468, Infosys was up by 0.7% to Rs1935 and Wipro added 0.3% to Rs509.
Results Today:
Blue Bird, BSEL Infrastructure, Cranes Software, Dish TV, Dredging Corp, EL Forge, Jain Studio, KRBL, Lok Housing, Moschip Semiconductor, Mount Everest Mineral, Navneet, Nilkamal, Pfizer, Phoenix Mills, Pritish Nandy, Radha Madhav Corp, Tourism Finance Corporation, TVS Motor, Unity Infra and Zee News.
Major Bulk Deals:
Principal PNB Asset Mgmt has bought Zenith Infotech; PRB Secs has sold Nelcast; Religare has purchased ADF Foods; Sundaram BNP Paribas MF has picked up La Opal.
Insider Trades:
Rolta India Ltd: 1) Morgan Stanley & Co. International Limited a/c Morgan Stanley Dean Witter Mauritius Co. Ltd. 2) Morgan Stanley & Co. International Limited A/C Morgan Stanley Investment Mauritius Ltd. has purchased from open market 2,000,000 equity shares of Rolta India Ltd on 20th June, 2007.
Rico Auto Industries Ltd: Reliance Long Term Equity, Reliance Tax Saver (ELSS) Fund & Reliance Regular Savings Scheme - Schemes of Reliance Mutual Fund has purchased from open market 1,076,000 equity shares of Rico Auto Industries Ltd on 22nd June, 2007.
Lower Circuit:
Tulip IT, Triton Corp and Hindo SPG
Upper Circuit:
Deep Industries, GMR Industries, Teledata Informatics, GVK Power, 3MIndia, Lanco Global, MLL, Ansal Housing, Bank of Rajastan, Orbit Corp and BF Utilities.
Delivery Delight (Rising Price & Rising Delivery):
Aditya Birla Nuvo, Alstom Ltd, Amtek Auto, Bank Of Maharashtra, Bongaigaon Refinery, Hero Honda, Hindustan Lever, HT Media, IOC, Jet Airways, Mahindra Gesco, Mercator Lines, Prism Cement and Rico Auto.
Abnormal Delivery:
Reliance Capital, Arvind Mills, Gammon India, Sterlite Industries, Torrent Pharma, INOX Leisure, Bharati Shipyard, PNB and Sun TV.
Major News & Announcement:
Ashapura Minechem announces 1:1 bonus
Nilkamal to acquire material handling business of two companies for Rs250mn
TCS & IFS in pact for Asset Service, Management
Chidambaram sees Indian Growth around 9% this year
Sun TV starts FM Radio Station inn Bhubaneshwar
MSK Projects secures Rs231.2mn order
Tata Power completes acquisition of 30% stake in Coal Companies owned by PT Bumi Resources
IKF Tech enters into JV with Salampuria Agrotech for biofuel activity
Indiabulls Real Estate to raise $200mn selling securities
Kazstroy Services makes offer to buy Petron Engineering Stake at Rs180
J&K Bank to sell about $150mn shares overseas.