Make up your mind to act decidedly and take the consequences. No good is ever done in this world by hesitation.
Weakness across Asian markets this morning could cause hesitation at open. High crude oil prices are another source of discomfort. Locally, there is very little to worry about. Concerns of valuations and seemingly over-leveraged positions in the F&O segment are often brushed aside with liquidity coming in. The undertone continues to be positive on the back of strong liquidity and robust economic fundamentals. If you are not leveraged, ride the short-term volatility by staying invested in sound counters. But be careful while making fresh purchases at this stage as it is time to get very choosy.
In the near term, quarterly results will drive the action. Investors will keenly watch the RBI's review of annual monetary policy at the end of this month. We do not expect the central bank to go for any further tightening though it may keep all its options open. A stable interest rate environment or some softening in borrowing costs will only add to the bullishness. However, there may be some cooling largely due to technical factors. Today, we see a slightly lower opening, but things may turn around later in the day.
On Wall Street, the Dow Jones Industrial Average notched up another record for the fourth straight session after having pierced the 14,000 mark for the first time ever. A benign inflation report and several strong earnings reports pushed the key stock indices higher.
Exxon Mobil and Chevron declined after crude oil prices fell from a 11-month peak. About six stocks declined for every five that gained. Energy companies were the biggest drag on the Standard & Poor's 500 Index.
The Dow rose 20.57 points, or 0.2%, to 13,971.55. It had climbed as high as 14,021.95. Year-to-date, the blue-chip US index is up 12.15% and has notched 31 record closes so far. The S&P 500 finished flat at 1549.37. The Nasdaq Composite Index added 14.96, or 0.6 percent, to 2712.29.
Oil prices turned lower, after reaching an 11-month high. US light crude for August delivery lost 10 cents to $74.05 a barrel on the New York Mercantile Exchange. The front-month contract was quoting slightly higher at $74.19 a barrel in the extended trading in Asia.
Treasury prices fell, with the yield on the benchmark 10-year note rising to 5.07% from 5.04% late on Monday. The dollar held near a record low against the euro and was steady against the yen. COMEX gold for August delivery slipped 40 cents to $665.90 an ounce.
European shares declined, led by rate-sensitive financial shares. Industrial and auto shares lost ground as the dollar stayed near recent record lows against the euro. The pan-European Dow Jones Stoxx 600 index slipped 0.5% to 397.63. The German DAX fell 0.8% to 8,038.21. The UK's FTSE 100 closed down 0.6% at 6,659.10 and the French CAC-40 gave up 0.4% to 6,099.21.
In Latin America, Brazilian share prices closed at a fresh record. The benchmark Bovespa stocks index rose 285 points, or 0.5%, at 57,660. In Mexico City, the IPC index of 35 most-traded stocks fell 287 points, or 0.9%, or 31,979.14.
Key Asian markets were down this morning. The Nikkei in Tokyo was down nearly 200 points at 18,017 while the Hang Seng in Hong Kong dropped 24 points to 23,032. The Kospi in Seoul added 2 points to 1951 and the Straits Times in Singapore dipped by 10 points to 3641.
Canon and Nintendo led Japanese exporters lower as the yen strengthened against the dollar. BHP Billiton led mining companies lower after copper prices fell. Posco slid as some investors shrugged off the company's highest quarterly profit in two years and took recent gains as an opportunity to sell.
The Morgan Stanley Capital International Asia Pacific Index lost 0.6% at 11.54 a.m. in Tokyo. All markets open for trading in the region fell except Taiwan, Malaysia and the Philippines.
Three day winning streak came to an end as market lost ground led by fall in the heavy weights like Reliance Communication, Tata Steel, Bharti Airtel, BHEL and SBI. Further weak European markets also dampened the sentiments of the traders on Dalal Street. After staying strong till afternoon trades key indices pared all its early gains as all round selling dragged the market down. Finally, the 30-share Sensex declined 21 points to close at 15290. NSE-50 Nifty slipped 15 points to close at 4497.
Reliance Industries gained 3% to Rs1827 on news of a new gas discovery in the Cauvery basin. The scrip touched intra-day high of Rs1838 and a low of Rs1780 and recorded volumes of over 6,00,000 shares on NSE.
RPG transmission slipped 1.6% to Rs284. According to reports the group has announced that to invest Rs120bn in Power. The scrip has touched intra-day high of Rs308 and a low of Rs281 and has recorded volumes of over 32,000 shares on NSE.
MTNL declined by over 2% to Rs164. The company announced that they would pay 10% dividend. The scrip touched intra-day high of Rs170 and a low of Rs164 and recorded volumes of over 11,00,000 shares on NSE.
R Com slipped by 2.3% to Rs560. The company announced that they would spend Rs160bn on expansion this year, also yesterday announced that it has purchased Yipes Communication for $300mn and added 20mn users in last one year. The scrip touched intra-day high of Rs579 and a low of Rs559 and recorded volumes of over 17,00,000 shares on NSE.
Jubilant Organosys has gained by 1.8% to Rs314 after the company announced its Q1 result with net profit at Rs1.43bn (up 210%) and revenue at Rs5.4bn (up 31%). The scrip has touched intra-day high of Rs322 and a low of Rs307 and has recorded volumes of over 98,000 shares on NSE.
Banking stocks were also on the receiving end led by fall in the heavy weight SBI declined by over 1.8% to Rs1583, HDFC Bank was down 1.5% to Rs1199 and OBC declined by 1.5% to Rs256.
Select Realty stocks managed to hold on to its gains. IB Real Estate surged by over 6% to Rs592 and Akruti advanced by 5% to Rs516. However, DLF was down by 0.2% to Rs610 and Parsvnath declined by over 3.5%t o Rs365.
IT stocks recorded smart gains despite strengthening rupee. TCS surged by over 2.5% to Rs1154 after the company yesterday announced its Q1 result with net profit at Rs11.8bn (up 37%) and revenues at Rs52bn (up 26%), Satyam Computer gained by 1.6% to Rs489 and Infosys added 0.3% to Rs1938.
Metal stocks witnessed profit booking. JSW Steel slipped by 3% to Rs699, Sterlite industries dropped by over 4.5% to Rs633, Tata Steel was down by 2% to Rs681 and SAIL lost 3% to Rs153.
Auto stocks were in reverse gear as US light crude for August delivery added 22 cents to $74.15 a barrel on the New York Mercantile Exchange. Bajaj Auto dropped 1.5% to Rs2223, Tata Motors was down by 1.5% to Rs748 and Maruti edged lower by 0.5% to Rs824.
Results Today:
Alembic, Anant Raj Industries, Areva, Biocon, Four Soft, HEG, Hexaware, IDBI, IL&FS Investment Managers, Infotech Enterprises, Plethico, Polaris, Reliance Energy, RNRL, Sona Koyo, Tamil Nadu Newsprint & Papers, Tanla, Texmaco, Themis Medicare and Wipro.
Fund Activity:
FIIs were net buyers of Rs3.59bn (provisional) in the cash segment on Tuesday. On the other hand, local institutions were net sellers at Rs1.65bn. From the F&O segment, FIIs pulled out Rs875.3mn.
On Monday, FIIs poured in Rs16.6bn in the cash segment. Mutual Funds were net sellers of Rs3.72bn.
Major bulk Deals:
Credit Suisse and Kotak have sold Celestial Labs; CLSA and Crown Capital have picked up McDowell Holdings; HSBC Financial has purchased Nitco Tiles; Macquarie Bank has sold SB&T International; Prudential ICICI MF has picked up Solectron Centrum while Fidelity has sold the stock and Morgan Stanley has sold Sujana Metal.
Insider Trades:
ANG Auto Limited: Funds under the management of FMR Corp and its direct and indirect subsidiaries and Fidelity International Limited and its direct and indirect subsidiaries has purchased from open market 198019 equity shares of the company on 10th July, 2007.
Lower Circuit:
ESS DEE Aluminum, Radha Madhav and Prism Cement
Upper Circuit:
Noida Toll, Goldstone Tech, Crisil, Yashraj Containers, Vyapar Industries, Pearl Global, IID Forgings and Jaybharat Textiles.
Delivery Delight (Rising Price & Rising Delivery):
Bank of Baroda, HCL Tech, ICICI Bank, Satyam and Titan Industries.
Abnormal Delivery:
Sadbhav Engineering, Bank of Baroda, HCC, Mahindra Gesco, Mangalam Cement, BPCL, APIL, Canara Bank, TCS and Cipla.
Major News & Announcements:
RIL confirms gas discovery in Cauvery basin
R Com to spend Rs160bn on expansion this year
L&T bags another order worth Rs9.8bn from Tata Steel
Confidence Petro plans to raise $30mn overseas
Tata Tea Q1 profit at Rs430mn (down 3.5%) and revenue at Rs2.9bn (up 14.1%)
Satyam gets 4 major deals from Singapore, Australia & Gulf
RPG group to invest Rs120bn in power - Reports
Jubilant Organosys Q1 profit at Rs1.43bn (up 210%) and revenue at Rs5.4bn (up 31%)