Be cautious. Opportunity does the knocking for temptation too
The market remains in no man's land with the bulls and bears appearing equally confused. The situation has remained so ever since the Nifty hit a new high earlier this month. The Sensex, which is just a few hundred points away from a new lifetime high has been unable to narrow the gap. The key indices have been trading in a range over the past few weeks and the trend may continue for a while.
Today, we expect another cautious opening, given the weakness across global markets. Having said that there is a likelihood of a short-covering led bounce back ahead of the F&O expiry on Thursday. The markets will also be eyeing the outcome of the Fed meeting on Thursday and the US central bank's take on inflation and rates in the world's largest economy. After that the market may remain choppy and will await the first-quarter results, especially that of the IT companies.
Global markets have also been quite choppy of late as have been the FII inflows. Crude oil prices have gradually inched higher to the $70 per barrel mark. Concerns about inflation and interest rates continue to haunt global markets, though here in India inflation has softened substantially from a two-year high struck in end-January. Still, nobody's sure if the RBI is done with its monetary tightening steps. The quarterly review in July will give us a better idea of where interest rates are heading locally.
FIIs were net buyers to the tune of Rs198.4mn (provisional) in the cash segment yesterday. On the other hand, local institutions pumped in Rs1.79bn. In the F&O segment, FIIs pulled out Rs7.64bn. On Friday, foreign funds were net buyers of Rs782mn in the cash segment. Mutual Funds were net sellers at Rs267mn on the same day.
Jet Airways will be in action as the company announces its results and considers a Rights Issue. SpiceJet will be in the limelight once again amid reports that Jet Airways is interested in picking up a stake in the budget carrier. All aviation related shares will attract attention as a financial daily reports that the government may allow up to 100% FDI in the sector.
SBI is expected to gain after its chairman said that the nationalised bank wants to unlock value by hiving off its asset management and insurance subsidiaries. ICICI Bank will also continue to hog the limelight as it is likely to re-file its application for foreign investment in the proposed new holding company. Bajaj Auto would also be in focus amid reports that sales will pick up from October after the launch of its new entry level bike. The company is also experimenting with a passenger four-wheeler platform along the lines of Tata Motors' one-lakh car.
Tata Motors might face some pressure amid rising competition to its one-tonne cargo vehicle Ace and reports that DaimlerChrysler will start manufacturing commercial vehicles in India. Sesa Goa may also witness some weakness as a business newspaper reports that the government will clamp down on higher iron ore exports.
Reliance Industries, Reliance Energy and RNRL will remain in the spotlight amid the raging controversy over the offtake of gas from the KG Basin and its pricing. Construction companies may gain further ground amid reports that the government may relax norms on portfolio investment in the sector in its upcoming review of the FDI policy.
US shares declined on Monday amid renewed concerns about sub-prime mortgages. Wall Street continued to worry about hedge funds hit by big losses in troubled securities backed by sub-prime mortgages.
Bear Stearns slid to its lowest in nine months after Merrill Lynch analyst Guy Moszkowski said the second-biggest US underwriter of mortgage bonds may have to salvage a second troubled hedge fund that it manages. That fund could have a loan exposure of as much as $7bn, Moszkowski wrote.
The S&P 500 Index fell 4.82, or 0.3%, to 1497.74. Earlier, the gauge rose 0.8%. The Dow average dropped 8.21, or 0.1%, to 13,352.05. The Nasdaq Composite Index declined 11.88, or 0.5%, to 2577.08.
A private report today reinforced concern that the slump in the housing market will worsen. Sales of previously owned homes in the US fell in May to the lowest in almost four years.
US stocks had rallied early in the session after bond yields retreated for a second day. Yields on the benchmark 10-year Treasury note fell 5 basis points, to 5.08%.
The weak housing number helped dispel fears that the Fed would have to start raising interest rates soon, sending stocks higher. The US central bank will begin its two-day rate setting meeting on Wednesday, when policymakers are widely expected to hold an overnight lending rate for banks, at 5.25%.
After falling by more than a dollar earlier in the session, US light crude for August ended 4 cents higher at $69.18 a barrel in New York. In currency trading, the dollar declined against the euro and the yen. COMEX gold for August delivery fell $2.30 to $654.70 an ounce.
European shares ended mostly lower. The pan-European Dow Jones Stoxx 600 index slipped 0.1% to 391.95. The German DAX lost 0.2% to 7,930.61 and the French CAC-40 dropped 0.3% to 6,002.85. The UK's FTSE 100 ended up 0.3% at 6,588.40.
Asian markets are trading mixed. The Nikkei in Tokyo is down 56 points at 18,031 while the Hang Seng in Hong Kong rose 34 points to 21,856. The Kospi in Seoul slipped 8 points to 1748 and the Straits Times in Singapore lost 24 points at 3555.
Volatile session ended on a flat note. Markets opened on a flat note and struggled to find any specific direction throughout the session. The frontline stocks like L&T, R Com, BHEL and ONGC stood firm saving the key indices from slipping in negative terrain. Cement stocks were in focus as heavy weight ACC and Gujarat Ambuja gained by 1% each and Capital Good index was the only strong gainer.
Reliance Petroleum was the top mover among the 50-scrip’s of Nifty as the scrip lifted the index by 4points. Finally, the 30-share Sensex gained 21 points to close at 14488. NSE-50 Nifty was up 8 points to close at 4259.
L&T surged 3% to Rs2174 after the company declared that they would consider special dividend on 3rd July. The scrip touched intra-day high of Rs2198 and a low of Rs2055 and recorded volumes of over 10,00,000 shares on NSE.
BHEL gained by 0.9% to Rs1450 after the company announced that they won Rs1.06bn order. The scrip touched intra-day high of Rs1468 and a low of Rs1430 and recorded volumes of over 8,00,000 shares on NSE.
ONGC marginally gained by 0.8% to Rs917 after the company declared dividend of Rs31 per share for FY07. The scrip touched intra-day high of Rs927 and a low of Rs905 and recorded volumes of over 12,00,000 shares on NSE.
IT stocks lost ground on back of selling pressure. Satyam Computer slipped by 1.6% to Rs454, Infosys was down 0.8%t o Rs1936 and Wipro edged lower 0.4% to Rs515. Rolta, Moser-Baer and Mphasis BFL were the major losers among the Mid-Cap stocks.
Pharma stocks looked in bad health. Zydus Cadila dropped by 3.6% to Rs373. The company announced that they have acquired
Results Today:
Ansal Housing, Apollo Hospitals, FDC, Gitanjali Gems, Godawari Power, Himatsingka Seide, Jet airways, NALCO and Rama Newsprint & Papers.
Major Bulk Deals:
SREI Infra has sold Diana Tea; Citigroup has sold Gayatri Projects; Lotus Global has sold IKF Tech; UTI Bank has sold Kernex Micro; HDFC MF has sold Netflier Finco; Citigroup and Merrill Lynch have picked up NIIT; Master Trust Bank Of Japan has purchased Sadbhav Engineering; Goldman Sachs has bought Vakranjee Software and Merrill Lynch has purchased Wearology.
Insider Trades:
Mahindra Gesco Developers Limited: ICICI Prudential Mutual Fund along with Prudential Asset Management Singapore Limited & Prudential Asset Management Hong Kong Limited has acquired in open market 74488 equity shares of Mahindra Gesco Developers Limited on 15th June, 2007.
Advanta India Limited: (1) Morgan Stanley & Co. International Limited a/c Morgan Stanley Mauritius Co. Ltd. (2) Morgan Stanley & Co. International Limited A/C Morgan Stanley Investment Mauritius Ltd. has purchased from open market
159000 equity shares of Advanta India Limited on 20th June, 2007
Lower Circuit:
Aarti Industries, GV Films, IKF Technology and Max India.
Upper Circuit:
Tripex Overseas, Ruby Mills, Marg Construction, Country Club, Flawless Diamond, Yashraj Securities, Bag Films, Heritage Foods, GMR Industries, Hindustan Oil Exploration, PBA Infrastructure, Inox Leisure, Godrej Industries, Goldiam International and Crisil.
Delivery Delight (Rising Price & Rising Delivery):
Alstom Projects, BILT, Bank of Baroda, BHEL, Bharti Airtel, GDL, Gujarat Ambuja, HDFC, India Cements, MTNL, NIIT, Prism Cement, Reliance Capital, UTI Bank and Voltas.
Abnormal Delivery:
Mahindra Gesco, Sterlite Optical, Moser Baer, Financial Technologies, Jagran Prakashan, Rajesh Exports, Mcleod Russel and Jyoti Structures.
Major News & Announcement:
ONGC Q4 profit at Rs26.82bn (down 13%) and revenues at Rs145.76bn (up 16%)
L&T to consider special dividend on 3rd July
GE Shipping Board to meet on June 26 to consider share sale to founders
Cadila pays about $26mn for Brazil's Nikkho
BHEL wins order worth Rs1.06bn
BEML Q4 profit at Rs935.1mn (up 8.66%), revenues at Rs9.58bn (up 14.4%)
BEML sets public issue price band of Rs1020-1090
Cholamandalam DBS to raise Rs2bn selling securities
Man Industries bags Export orders for pipes