Whatever the struggle, continue the climb. It may be only one step to the summit.
The bulls appear to be struggling at the moment, not just in India but across the world. We expect a soft opening today on the back of some weakness in the Asian markets and a flat finish on Wall Street. Crude oil too is hovering above the $65 per barrel mark. The market will remain volatile, with alternate bouts of buying and selling. One should stick to a stock specific strategy to avoid a bigger hit in one's portfolio.
FII inflows seem to have dried up over the past couple of weeks after the April-May euphoria. Ever since the Nifty made a new lifetime peak, the market has lost its momentum. The underlying sentiment has weakened slightly mainly due to global concerns and lack of fresh local catalysts. The immediate trigger would be the progress of monsoon. The next trigger could come from the first-quarter earnings, which will start trickling in from the second week of next month. Before that, we have the industrial production data coming in today.
A sharply lower reading on this front could signal a slowdown in the economy and therefore in earnings growth. One positive to emerge from this could be that inflation may cool off. As a result, there will be less pressure on the RBI to hike rates. Still, the central bank governor has made it a habit to surprise the markets, and one never knows what he has in store for us.
The latest data from China shows that inflation accelerated last month, increasing the possibility of higher interest rates. There is also a possibility that Bank of Japan may hike its key rate in the next few months after the world's second-largest economy expanded at a faster pace than earlier anticipated in the first quarter. Last week's comments from Federal Reserve Chairman Ben Bernanke hinted that interest rates in the US will at best remain unchanged this year. Some are even betting that rates in the US could even head higher next year if the economy there picks up pace as predicted by Mr. Bernanke himself. Central Banks in the UK and Europe too are eager to keep the threat of inflation at bay.
FIIs were net sellers to the tune of Rs261.2mn (provisional) in the cash segment yesterday while the local institutions pumped in Rs2.37bn. In the F&O segment, foreign funds net buyers of Rsbn yesterday. FIIs pulled out Rs9.36bn from the cash market on Friday. Mutual Funds were net buyers of Rs2.27bn on the same day.
US stocks ended flat, giving up most of the day's gains, with investors showing reluctance amid rising Treasury yields and higher oil prices. Energy and financial shares rallied on prospects for higher earnings.
The S&P 500 closed flat at 1509.12. The Dow Jones Industrial Average too ended nearly unchanged at 13,424.96. The Nasdaq Composite Index finished static at 2572.15.
After the close of trade, Texas Instruments narrowed its second quarter revenue forecast to a level that could miss analysts' estimates. The chipmaker also narrowed its earnings forecast to a level that is in line with analysts' estimates. Shares fell 2% in extended-hours trading.
US bond yields fell an earlier advance and have retreated 0.10 percentage point from their high last week. Treasury prices slipped, raising the yield on the benchmark 10-year note to 5.15% from 5.1% late on Friday.
In currency trading, the dollar rose modestly versus the euro and the yen. COMEX gold for August delivery rose $8.70 to settle at $659 an ounce.
US light crude oil for July delivery advanced $1.17 to settle at $65.93 a barrel on the New York Mercantile Exchange. The front-month contract was quoting 17 cents lower at $65.80 a barrel in extended trading.
European stocks advanced. The pan-European Dow Jones Stoxx 600 index added 0.8% to 388.01. The German DAX Xetra 30 closed up 1.5% at 7,706.10, the French CAC-40 rose 1% to 5,940.09 and the UK's FTSE 100 added 1% to 6,567.50.
In the emerging markets, the Ibovespa in Brazil rose 0.85% to 52,776 while the IPC index in Mexico was up 1.2% at 31,833 and the RTS index in Russia advanced 0.5% to 1798.
Asian stocks are mixed this morning. But, materials and energy shares rose after the price of metals and crude oil rebounded. BHP Billiton climbed to a record, leading advances on the Morgan Stanley Capital International Asia-Pacific Index.
The MSCI index added 0.2% to 151.01 as of 10:15 a.m. in Tokyo, extending yesterday's 0.2% advance. Benchmarks rose in markets open for trading around the region, except in Japan and Malaysia.
The Nikkei 225 Stock Average slipped 0.2% to 17,792.29, after earlier rising as much as 0.2%.
A measure of six metals traded on the London Metal Exchange gained 2.2% yesterday, rebounding from a four-day 6.7% slide. Copper climbed 3.1%, while zinc rose 3.3%.
Markets witnessed flat close however managed to end in positive terrain. Select, IT, Pharma and FMCG aided some support as Banking and Consumer Durable were the major draggers. Even the Mid-Cap and the small cap came under selling pressure. Grasim, ONGC and SBI were among the major losers, however GAIL, Tata Power and VSNL were the major gainers among the 50scrip’s of NSE Nifty. Finally, the 30-share Sensex added 19 points to close at 14083. NSE-50 Nifty was flat at 4145.
Satyam Computer gained 1% to Rs497 after the company partners with JDA Software group. The scrip touched intra-day high of Rs513 and a low of Rs492 and recorded volumes of over 49,00,000 shares on NSE.
Bharti shipyard gained by 1.7% to Rs475 after the company announced that they have secured order worth $65.1mn from Norwegian offshore. The scrip touched intra-day high of Rs486 and a low of Rs467 and recorded volumes of over 50,000 shares on NSE.
RPG Life Sciences spurred by over 5% to Rs105 after the company announced its plans to separate its Pharma Biz, investment. The scrip touched intra-day high of Rs112 and a low of Rs102 and recorded volumes of over 76,000 shares on NSE.
Welspun Gujarat surged nearly by 3% to Rs183 after the company secures orders worth Rs11.66bn. The scrip touched intra-day high of Rs187 and a low of Rs180 and recorded volumes of over 20,00,000 shares on BSE.
Gayatri Projects spurred by over 3% to Rs266 after the company secured order worth Rs1.4bn. The scrip touched intra-day high of Rs270 and a low of Rs259 and recorded volumes of over 1,00,000 shares on NSE.
Technology stocks pared their gains as rupee strengthens against the US Dollar. Wipro pared its gains as it slipped 1% to Rs542, Polaris was down by 3.6% to Rs162 and Moser Baer dipped by 4.3% to Rs434. However, Satyam Computer gained by 1% to Rs497, Infosys was up by 1.5% to Rs1979.
Select Auto stocks were on the receiving end. TVS Motors lost by 1% to Rs63, Maruti was down 0.6% to Rs733 and Bajaj Auto edged lower by 0.2% to Rs2115. However, Hero Honda was up 2% to Rs698, Tata Motors added 0.2% to Rs653.
Pharma stocks were in good health. Glenmark Pharma gained by 1% to Rs684 after the company announced that they would split each share into two, Ranbaxy was up by 0.6% to Rs370, Cipla was flat at Rs210, Glaxo gained by 1.2% to Rs1299.
Insider Trades:
IVRCL Infrastructures & Projects Ltd: HSBC Global Investments Funds - A/c HSBC Global Investment Funds
(Mauritius) Ltd., PAC: HSBC Investments (Singapore) Limited has sold in open market 953150 equity shares of IVRCL Infrastructures & Projects Ltd on 5th June, 2007.
UFLEX Limited: A.R. Leasing Private Limited (part of the promoters' group) has purchased from open market 129158 equity shares of UFLEX Limited on 8th June, 2007.
Praj Industries Ltd: Shashank Inamdar, Managing Director has sold in open market 14350 equity shares of Praj Industries Ltd on 7th June, 2007.
Lower Circuit:
Bag Films, DCB, Ansal Housing, Ruby Mills and Raj Tele.
Upper Circuit:
MSK Projects, Godrej industries, Mascon Global, RPG Cables, GV Films, IKF Technology, Satra Properties and Yashraj Securities.
Delivery Delight (Rising Price & Rising Delivery):
3i Infotech, Ashok Leyland, Canara Bank, Carborundum Universal, Crompton Greaves, Dishman Pharmaceuticals, Exide
Industries, Geometric Software, HDFC Bank, Hero Honda, Indian Hotels, IPCL, IVRCL Infrastructures, Jain Irrigation, Maharashtra Seamless, SAIL and Sun TV.
Abnormal Delivery:
Dhampur Sugar, India Cements, Praj Industries, EKC, CESC, ABB, PVR, GVK Power, Jet Airways, LIC Hsg, Moser Baer, Mysore Cements, Nagarjuna Fertilizers and TV Today.
News Headlines:
April infrastructure output grows 7.4% yoy
GAIL says, no plans to issue bonus shares
Hexaware wins its largest ever APAC deal
Petron Eng gets order worth Rs235.7mn
Subex Azzure promoters to increase stake in the company
Glenmark to split each share into two
Yashraj Securities recommends 5:1 bonus and stock split
MSK Projects gets order worth Rs348.8mn
Petronet LNG to sign LNG contract with Qatar for 1.25mn tons
Satyam allies with JDA Software group