Anyone who says sunshine brings happiness has never danced in the rain.
Though the daily routine for the Mumbaiites may have got a bit tougher due to heavy rains, its good news for the Indian economy. We've had a fairly satisfactory start to the monsoon season. In fact, showers have reached the capital ahead of schedule. A good harvest tends to soften prices of essential agri commodities. So, if the monsoon is good inflation may cool down in the latter half of the current fiscal. We'll get the latest inflation data at noon, and it may have moderated a bit more. That would mean stable interest rate regime and continuation of the India shining story. But, that story will take time to play out.
In the immediate future, the market may remain range bound and volatile till the first batch of quarterly results are out in the first week of July. The latest trigger is that the F&O expiry was in line with the previous ones at 70%. But, the July Nifty futures is at a 32-point discount to the spot index, with a 28% rise in open interest. This suggests that there may be some selling at higher levels. Also, with the cost of carry being high and build of long positions in individual stock futures, there are concerns of a correction crack at some point. The open interest has also risen sharply to around Rs810bn.
Today, we see the key indices opening flat or slightly lower. The US market closed nearly unchanged overnight after the Federal Reserve left its benchmark short-term interest rate static. In its accompanying statement, the Fed's policy-making body FOMC said that it was still worried about inflation. This means that the American central bank will leave rates alone for a while instead of cutting them despite concerns about a sluggish economy.
US investors were confused about the Fed remarks. US stocks extended early gains right after the Fed's announcement but retreated later, closing mixed for the day. Treasury bonds fell, pushing the yield on the benchmark US 10-year Treasury note up to 5.10% from about 5.08% late on Wednesday. Asian markets are also mixed this morning, with the Nikkei and Kospi advancing while the rest of the benchmarks are in the red. A key concern is the spurt in crude oil prices to $70 per barrel level. We expect our market to swing back and forth during the day with most of the action being concentrated on the side counters.
One of those stocks will be Infosys. Media reports say that the Indian IT giant is likely to buy Capgemini. Shares of the French firm shot up yesterday amid talk that Infosys could be interested in bidding for Europe's largest IT services group. Capgemini gained 3.5% to a two-week high, making it the biggest gainer on France's CAC-40 benchmark index. However, both the companies have denied the news.
Benchmark US indexes were little changed after the Fed said the housing slowdown won't keep the economy from expanding. Intel and Cisco led computer stocks higher after analysts advised buying the shares. Transocean, the biggest offshore driller, led a drop in energy producers after natural gas fell the most in four months.
Fed policy makers held their benchmark lending rate at 5.25% for an eighth meeting after saying inflation remains their main concern. The economy will probably expand at a moderate pace even as home sales slow, they said.
The Standard & Poor's 500 Index ended flat at 1505.71. The Dow Jones Industrial Average slid 5 points to 13,422.28. The Nasdaq Composite Index rose 3 points, or 0.1%, to 2608.37.
US light crude gained 60 cents to settle at $69.57 a barrel in New York. The dollar rose slightly against the euro and yen.
European shares advanced. The pan-European Dow Jones Stoxx 600 index added 0.9% to 391.02. The French CAC-40 index advanced 1.1% to 6,006.31, as consultancy firm CapGemini took the lead with a 4.6% rise in its shares. The UK's FTSE 100 climbed 0.7% to 6,571.30.
In the emerging markets, the Bovespa in Brazil closed flat at 54,146 while the IPC index in Mexico rose 0.9% to 31,079 and the RTS index in Russia jumped 1% to 1894.
Asian stocks climbed for a second day today after Japan's household spending rose for a fifth month and its jobless rate stayed at a nine-year low, signaling strengthening demand in the region's biggest economy.
Toyota gained as the yen weakened, boosting the value of overseas sales. Toshiba advanced after Credit Suisse raised its rating. Taiwan Semiconductor Manufacturing climbed after Lehman Brothers advised investors to buy shares of Intel.
The Morgan Stanley Capital International Asia-Pacific Index added 0.6% to 152.85 at 10:43 a.m. in Tokyo. The benchmark is set for a 0.5% slide this week, trimming its June gains to 1.7%. This marks its ninth straight monthly gain, the longest winning stretch since the benchmark was introduced in 1987.
Japan's Nikkei 225 Stock Average climbed 1% to 18,103.52. Other markets open for trading advanced, except for Australia and China.
Markets ended higher as bulls made a come back on the bourses led by short covering during the fag end of the trading session. The index heavy weights like ACC, BHEL, Bharti Airtel led the way from front lifting the benchmark Sensex to close above the 14500mark. The Cement stocks were the star performers of the day Finance minister said that the government hasn’t asked companies to freeze prices, Sugar stocks also gained momentum as Finance Minister indicated that the government may announce some more sops for the beleaguered industry.
HDFC was the top gainers among the 30-scrip’s of Sensex index as the scrip lifted the index by 33.4 points. Finally, the 30-share Sensex gained 73 points to close at 14504. NSE-50 Nifty was up 18 points to close at 4282.
Tata Steel edged higher by 0.3% to Rs593 following reports that they have signed MoU with TN Govt to invest Rs2500cr in Titanium Dioxide Plant. The scrip touched intra-day high of Rs599 and a low of Rs590 and recorded volumes of over 15,00,000 shares on NSE.
Subhash Projects was locked at 5% upper circuit to Rs23.30 as the company has announced that they would meet on June 30 to consider issuance of Equity Shares not exceeding Rs3bn to other bodies corporate on preferential basis. The scrip touched intra-day high of Rs233.30 and a low of Rs220 and recorded volumes of over 58,000 shares on NSE.
SBI gained by 1.7% to Rs1471. RBI announced that it would sell SBI stake at Rs1030 per share and its stake sale would allow SBI to raise more capital. The scrip touched intra-day high of Rs1474 and a low of Rs1448 and recorded volumes of over 22,00,000 shares on NSE.
Hindustan Zinc declined by 1.5% to Rs696 after the top zinc producer announced that it has cut zinc prices by 5.8% to Rs1,58,900 per ton and it has increased lead prices by 5.5% to Rs1, 19,000 per ton from 1, 12,800 per ton. The scrip touched intra-day high of Rs707 and a low of Rs688 and recorded volumes of over 2,00,000 shares on NSE.
Auto stocks continued to be sluggish. Bajaj Auto slipped by 1.8% to Rs2093, M&M declined by 1.7% to Rs706, Tata Motors lost 1.1% to Rs664 and Maruti was down 0.5% to Rs748.
Cement stocks were back in the limelight after Finance minister said that the government hasn’t asked companies to freeze prices. ACC rallied by 8% to Rs896, Gujarat Ambuja surged by 8% to Rs125, Grasim was up by 5% to Rs2626 and Mangalam Cement was locked at 10% upper circuit to Rs163.80.
Banking stocks also ended with smart gains. SBI gained by 1.7% to Rs1471, HDFC Bank was up by 0.7% to Rs1097, ICICI Bank added 0.6% to Rs942. Canara Bank, Bank of India and Bank of Baroda were the major gainers among the Mid-Cap stocks.
Metal stocks were on the receiving end. Sterlite Industries lost 1.6% to Rs575, Hindustan Zinc was down by 1.6% to Rs696, Hindalco slipped by 0.5% to Rs169.
Results Today:
Aarvee Denim, Ansal Buildwell, Atul, Balmer Lawrie, Bilcare, BL Kashyap, Champaign Indage, Crest Animation, Emami, Essar Shipping, Essar Steel, Force Motors, Four Soft, Gangotri Textiles, Jagran, Kajaria, Kalyani Forge, Kernex Micro, Khaitan Electronics, Kilburn Engineering, Mercator Lines, Natco Pharma, Opto Circuits, Prime Focus, Simplex Infra, Sundaram Fasteners, Themis Medicare, Trent, Valecha Engineering and Wanbury.
Major Bulk Deals:
Birla MF has bought Hindustan Sanitaryware; UBS has purchased IOL Broadband; HDFC MF has picked up Meghmani Organics; Reliance Capital has bought Subhash Projects from Citigroup.
Insider Trades:
Gujarat Ambuja Cement Ltd: Shri P B Kulkarni, Director has sold in open market 22000 equity shares of Gujarat Ambuja Cement Ltd from 19th to 22nd June, 2007.
Prime Securities Limited: Mr. Vinay Motwani, Whole-time Director has purchased from open market 10000 equity shares of Prime Securities Limited on 22nd June, 2007.
Shringar Cinemas Limited: Mr. Balkrishna Shroff, Director has purchased from open market 10000 equity shares of Shringar Cinemas Limited on 26th June, 2007.
Lower Circuit:
IKF Technology, Tulip IT and Vakranjee Software.
Upper Circuit:
Mangalam Cement, Tourism Finance, Deep Industries, GVK Power, Teledata Informatics, Agro Tech, Infomedia, RPG Cables, GMR Industries, Nilkamal, Cholamandalam DBS and Classic Diamond.
Delivery Delight (Rising Price & Rising Delivery):
Alstom Projects, Bajaj Hindustan, Balrampur Chini, BEML, Birla Corp, Century Textiles, Crompton Greaves, Cummins India, Federal Bank, Financial Technologies, HDFC Bank, IOC, Lloyd Electric and MLL.
Abnormal Delivery:
Man Industries, Dena Bank, Nagarjuna Construction, Escorts, Unitech, GDL, NDTV, Praj Industries and MTNL.
Major News & Announcement:
Tata Steel signs MoU with TN Govt to invest Rs2500 cr in Titanium Dioxide Plant
Subhash Projects to meet on June 30 to consider issue of equity shares not exceeding Rs3bn to other bodies corporate on a preferential basis
RBI to sell SBI stake at Rs1030 per share
Australia supports Indian Steelmakers to plan to buy Coal Mines