Avoid all that glitters
Weak eyes are fondest of glittering objects.
A little weakness and suddenly you may find some scrips very attractive. Resist such temptations. We warned you about a morning trap on Monday and right enough the bulls failed to hold on to their gains made in the first half. In fact they succumbed to the selling pressure in the latter half despite a strong rally across Asian markets. Today, we expect a weak start and another choppy day.
IT shares continue to be under pressure. Whether it is a stronger rupee or just some offloading, there are no clear answers. All we know is IT caused a drag on the key indices yesterday. FIIs have been reluctant this month to add to their tally of strong inflows seen in the previous two months. High valuations coupled with volatile global markets could have proved to be the main deterrents. The latest issue that could hit foreign capital inflows is the latest CBDT circular on the classification of earnings from the sale of shares.
Plus, there are concerns about interest rates going up across global markets, sucking out liquidity that has driven equity markets to record levels. Crude oil prices have been rising off late and are now hovering around the $69 per barrel mark. Higher energy prices might weigh on the markets as we still have to contend with the summer in the US and the hurricane season. To add to the woes, OPEC is refusing to increase output.
Locally, there are short term worries regarding the impact of large public issues of DLF and ICICI Bank on the secondary market. Then there is the confusion over the CBDT circular, record high open interest in the F&O segment, an erratic start to the monsoon and the usual uncertainty about corporate earnings. Most importantly, the bulls seem to be suffering from fatigue after having bounced back from the lows of February-March. Investors are not willing to take high risks with the main indices near all-time highs. As a result, the market has turned volatile yet range bound. The ongoing yo-yo trend may continue in the near term, though medium- to long-term outlook remains strong. Once again keep some cash handy for better bargains in the coming days.
There is a new listing today. Decolight Ceramics Ltd. will make its stock market debut. The offer price fixed at Rs 54 per share. HTMT Global Solutions will also list today following the demerger of Hinduja TMT's ITES-BPO business into a separate company.
US stocks fell on Monday for the first time in four days after oil prices jumped to a nine-month high and confidence in the homebuilding industry dropped to a 16-year low. The losses were limited as energy shares rallied on higher crude oil prices. The Standard & Poor's 500 Index fell 1.86 points, or 0.1%, to 1531.05. The Dow Jones Industrial Average decreased 26.50 points, or 0.2%, to 13,612.98. The Nasdaq Composite Index finished flat at 2626.60.
US light crude for July delivery settled up $1.09 to $69.09 a barrel. The front-month contract was trading 16 cents lower at $68.93 a barrel in extended trading in Asia. COMEX gold for August delivery added $1.20 to $659.90 an ounce. Treasury prices edged higher, putting the yield on the 10-year note at 5.14%. In currency trading the dollar eased against the euro and was higher versus the yen.
European stocks traded modestly lower. The Dow Jones Stoxx 600 ended 0.4% lower at 397.89. The UK's FTSE 100 declined 0.4% to 6,703.50 and the French CAC 40 shed 0.3% to 60.87.15 and the German DAX 30 rose 0.1% to 8,036.12.
In the emerging markets, the Ibovespa in Brazil rose 0.4% to 54,730 while the IPC index in Mexico gained 0.3% to 32,218 and the RTS index in Russia added 0.2% to 1896.
Asian stocks fell this morning, dragging the Morgan Stanley Capital International Asia-Pacific Index from a record high, after confidence in the US homebuilding industry dropped to a 16-year low and metals prices declined.
The MSCI APAC index slipped 0.1% to 153.14 as of 10:37 a.m. in Tokyo, ending a three-day, 2.6% rally that lifted the index to a record yesterday. China's CSI 300 Index swung between gains and losses.
In Japan, the Nikkei 225 Stock Average was little changed at 18,141.71, while the broader Topix index dropped 0.3%.
Australia's S&P/ASX 200 Index slid 0.3%. Benchmarks swung between gains and losses elsewhere in the region. Markets in Hong Kong and Taiwan are closed for holidays.
Markets ended lower extending its downward run in the first day of the new week, as bulls seem to be running out of steam and finding it hard to find direction at higher levels. Today again after opening at a high both the key indices pared its intra-day gains as selling pressure in the IT, Auto and Capital Good stocks dragged the markets down. However, the select Banking stocks managed to hold on to its gains.
Even the Mid-Cap and the small cap indexes closed in red. Spice Jet hogged the limelight following stake sale reports. Recently listed Time Techno also was in focus as the scrip was up by over 10% to Rs525. Finally, the 30-share Sensex slipped 82 points to close at 14080. NSE-50 Nifty dropped 24 points to close at 4147.
Spice Jet surged by over 3.5% to Rs59 on stake sale reports. The scrip touched intra-day high of Rs60 and a low of Rs58 and recorded volumes of over 13,00,000 shares on NSE.
Aurobindo Pharma edged lower by 0.2% to Rs744. The company announced that it secured tenth approval from MCC South Africa. The scrip touched intra-day high of Rs760 and a low of Rs741 and has recorded volumes of over 1,00,000 shares on NSE.
PFC marginally gained 0.2% to Rs144 after Government granted Navratna status to PFC. The scrip touched intra-day high of Rs149 and a low of Rs143 and recorded volumes of over 19,00,000 shares on NSE.
Geodesic Information was locked at 10% upper circuit to Rs274.50 after the company recommended bonus issue in the ratio of 1:2. The scrip touched intra-day high of Rs274.50 and a low of Rs260 and has recorded volumes of over 1,00,000 shares on NSE.
Cranes Software surged by over 4% to Rs132 after the Board of Directors of the company approved acquisition of US Dunn Solutions. The scrip touched intra-day high of Rs133 and a low of Rs128 and recorded volumes of over 1,00,000 shares on NSE.
Technology stocks were again under pressure as the Indian rupee strengthens against the US Dollar. Satyam Computer has slipped by 1.2% to Rs475, Infosys was down 1% to Rs1989 and Wipro declined by 1.5% to Rs523. Mphasis BFL, NIT Ltd and Polaris were the major losers among the Mid-Cap stocks.
Pharma stocks were in poor health. Ranbaxy dropped by 3.8%t o Rs359, Glaxo was down by 2.7% to Rs1275, Sun Pharma slipped by 1.1% to Rs1046 and Cipla lost 1% to Rs207. However, Cadila surged by over 5% to Rs366.
Select metal stocks also were on the receiving end. Tata Steel slipped by 1.8% to Rs589, SAIL was down by 1.7% to Rs133. However Nalco was up by 0.8% to Rs889 and Hindalco added 0.4% to Rs161.
Securities in ban period:
The derivative contracts in the underlying BRFL, Parsvnath and Nagarjuna Fertilizers have crossed 95% of the market-wide position limit and are currently in the ban period.
Results Today:
Aarti Industries, Cambridge Solutions, Chettinad Cement, Gujarat Fluorochemicals, Indian Hotels, Kavveri Telecom Products, Lumax Industries, SREI Infrastructure Finance, Shalimar Paints and Tide Water Oil.
Major Bulk Deals:
Citigroup has picked up Prime Securities and Goldman Sachs has purchased Vakranjee Software.
Insider Trades:
Cipla Ltd: Life Insurance Corporation of India has purchased from open market 46531512 equity shares of Cipla Ltd on 13th June, 2007.
Gujarat NRE Coke Ltd: HSBC Global Investment Funds - A/C HSBC Global Investment Funds (Mauritius) Limited has purchased from open market 250000 equity shares of Gujarat NRE Coke Ltd on 12th June, 2007.
Housing Development Finance Corporation Ltd: N M Munjee, Director has sold in open market 1000 equity shares of
Housing Development Finance Corporation Ltd on 11th and 12th June, 2007
Shringar Cinemas Limited: Mr. Balkrishna Shroff, Director has purchased from open market 7216 equity shares of Shringar Cinemas Limited on 14th June, 2007.
Lower Circuit:
IKF Technology, Crazy Infotech, Yashraj Securities, UB, Raj Tele, Dawn Mills, IID Forgings and BF Utilities.
Upper Circuit:
Marksans Pharma, Asian Electronics, Chola DBS, Swan Mills, Geodesic Information, Ruby Mills, Shaw Wallace and Ess Dee Aluminum.
Delivery Delight (Rising Price & Rising Delivery):
AIA Engineering, Asahi India, Ashok Leyland, Century Textiles, EIH, Gujarat NRE Coke, GSPL, HCC, Indraprastha Gas, ITC, Nestle India, ONGC, Sterlite Industries, Union Bank of India and Welspun Gujarat.
Abnormal Delivery:
LIC Housing, Dishman Pharma, VSNL, MLL, India Cement, M&M, Mahindra Gesco, Ranbaxy, Unitech, Orchid Chemicals, UTI Bank and Wockhardt.
Major News Headlines:
HCL Tech secures $15mn contract from Alenia Aeronautics
Vikash Metal inks MOU with Bihar State Electricity Board
Aurobindo Pharma gets tenth approval from MCC South Africa
Cranes Software Board approves acquisition of US Dunn Solutions
Government grants Navratna status to PFC
Geodesic Info recommends bonus issue in the ratio of 1:2