...as the wind blows out a candle, and blows in a fire.
The bears seem to be like a candle in the wind. For the bulls, the tailwinds are strong powered by relentless inflow of foreign money. If the momentum continues then 16k for the Sensex, or Rs2000 for Reliance Ind is not a distant dream. Many market observers, (including us), have raised red flags over the flare-up in recent weeks citing various concerns. And, though the global markets too appear to be in the pink of health, turning from pink to red does not take much time. The housing slump in US, overheating in China and rising oil prices could potentially weaken the market.
Assuming a benign interest rate scenario and robust economic outlook, the strong undercurrent of liquidity will continue to lift the main indices higher. An unexpected event (we don't want to spoil your weekend or trigger negative ideas) locally or overseas is the only hope for the bears right now. Stay on high alert and react swiftly to any negative surprise.
For today, except profit booking at higher levels, we do not see any unexpected development that could put the bulls on the backfoot. The Dow has managed to close at 14k and all other major equity markets have rallied in tandem. As a result, we expect another strong opening and a good end to the week. Among the stocks, Moser Baer could rise amid news that big private equity players are eyeing a 10% stake in its Photo Voltaic arm. ABG Shipyard is reportedly the frontrunner for buying Goa-based Western India Shipyard. Apart from that we expect a lot more stock centric action.
On Wall Street overnight, the Dow Jones Industrial Average finished above 14,000 for the first time ever, helped by positive earnings while investors kept a close eye on the Federal Reserve's outlook on the economy. Even though there were some disappointments, upbeat earnings from companies such as IBM, Honeywell and Bank of America helped lift stocks.
Federal Reserve Chairman Ben Bernanke said the American central bank needs more economic data before it is convinced that inflation is moderating and warned that the recent losses in the subprime mortgage sector could hit $100bn. Stocks trimmed some gains briefly after the central bank's latest minutes stated that housing is likely to remain a drag on growth but that inflation remains its greatest concern.
Oil prices climbed towards $76 a barrel as US light crude for August delivery rose 87 cents to $75.92 a barrel on the New York Mercantile Exchange. The front-month contract was quoting 5 cents higher at $75.97 a barrel in extended trading in Asia. Treasury prices edged higher Wednesday, sending the yield on the benchmark 10-year note lower to 5.01 percent from 5.03 percent late Wednesday. The dollar eased against the euro and was slightly higher versus the yen. COMEX gold for August gained $4.40 to $678.10.
Across the Atlantic, European stocks rose for the first time in three days after profit from SAP and Roche Holding beat analysts' estimates. All 18 industry groups in Europe's Stoxx 600 Index advanced. The Stoxx 600 added 1% to 396.94. National benchmarks advanced in all 18 western European markets except Finland and Iceland. The UK's FTSE 100 rose 1.1% to 6640.20. France's CAC 40 added 1.2% to 6065.50, and Germany's DAX was up 1.24% at 7991.21.
Brazilian stocks closed at a record high for the 32nd time this year, and Mexican equities also finished higher. In Brazil, the benchmark Bovespa stocks index closed up 568 points, or 1%, at 58,124.57, the third consecutive record this week. In Mexico, the IPC index of 35 most-traded stocks rose 264 points, or 0.8%, to close at 32,150.65.
Most Asian markets were trading up this morning. The Nikkei in Tokyo was up 26 points at 18,143 while the Hang Seng in Hong Kong rose 127 points to 23,143, and the Kospi in Seoul climbed 31 points to 1969. The Straits Times in Singapore advanced 44 points to 3648 and the Taiex in Taiwan added 75 points to 9544. The Morgan Stanley Capital International Asia Pacific Index added 0.5% to 159.46 at 10:23 a.m. in Tokyo, extending yesterday's 0.6% increase. Eight of its 10 industry groups advanced. All markets open for trading rose.
Bulls again ended in a dominating position as better the expected results from L&T and Ranbaxy, firm cues from the Asian and the European markets boosted key indices. Heavyweights like RIL, Infosys, Bharti and R Com were in demand as they led from the forefront lifting both the indices to close at new all time highs. Shares from the Oil & Gas, IT and Auto gained ground. However, Select Consumer Durable and Realty declined. Today’s surge was broad based as even the Mid-Cap and the Small Cap indexes participated in yet another historic rally. Finally, BSE 30-share Sensex gained 248 points to close at 15550. NSE-50 Nifty closed 62 points higher at 4562.
L&T surged by over 2% to Rs2379 after the company announced its Q1 result with net profit at Rs3.77bn (up 140%) and net sales at Rs45.05bn (up 30%). The scrip touched intra-day high of Rs2419 and a low of Rs2338 and recorded volumes of over 14,00,000 shares on NSE.
ACC edged higher by 1% to Rs1147. The company declared its June quarter Profit at Rs3.51bn (down 13.5%) and net sales at Rs18.68bn (up 27.7%). The scrip touched intra-day high of Rs1158 and a low of Rs1120 and recorded volumes of over 17,00,000 shares on NSE.
Ranbaxy advanced by 1.5% to Rs352 after the company announced its Q2 result with net profit at Rs2.91bn (up 194%) and net sales at Rs10.15bn (down 2.7%). The scrip touched intra-day high of Rs355 and a low of Rs346 and recorded volumes of over 42,00,000 shares on NSE.
Lupin slipped by 2% to Rs706 after the company announced its Q1 result with net profit at Rs783.8mn (up 54%) and net sales at Rs6.02bn (up 28%). The scrip has touched intra-day high of Rs745 and a low of Rs703 and recorded volumes of over 8,00,000 shares on NSE.
Polaris dropped by over 3% to Rs135 after the company declared its Q1 result with net profit at Rs130.7mn (down 25%) and net sales at Rs2.32bn (up 22%). The scrip touched intra-day high of Rs141 and a low of Rs134 and recorded volumes of over 8,00,000 shares on NSE.
REL edged lower by 0.4% to Rs686. The company declared its Q1 result with net profit at Rs2.2bn (up 25%) and net sales at Rs16.24bn (up 40%). The scrip touched intra-day high of Rs700 and a low of Rs680 and recorded volumes of over 22,00,000 shares on NSE.
HPCL was down by 0.5% to Rs258 after the company announced its plans to shut refineries in 1st Quarter 2008. The scrip touched intra-day high of Rs260 and a low of Rs258 and recorded volumes of over 3,00,000 shares on NSE.
HCC was up by 1.5% to Rs126 following reports that the company has secured contract worth Rs3.11bn. The scrip touched intra-day high of Rs127 and a low of Rs124 and has recorded volumes of over 13,00,000 shares on NSE.
Auto stocks shifted to top gear led by gains in Bajaj Auto as the scrip raced ahead by 4.5% to Rs2383, Tata Motors surged by over 4.5% to Rs776 and TVS Motors added 0.2% to Rs62.
FMCG stocks were under pressure as heavyweight HLL marginally fell by 0.5% to Rs197, ITC was down by 0.2% to Rs153 and Britannia slipped by 1.9% to Rs1710.
IT stocks were in momentum despite constant rise in rupee. Heavyweight Infosys spurred by 2.7% to Rs1996, Satyam Computer gained 1% to Rs486. NIIT Ltd was up by 1137 and Moser Baer added 4.8% to Rs322.
Oil & Gas exploration stocks were also on the move as US light crude for August delivery jumped $1.02 to $75.02 a barrel on the New York Mercantile Exchange. Reliance Industries advanced by 4% to Rs1892, ONGC added 0.3% to Rs895.
Metal stocks regained momentum after being on the sidelines in the previous session. Hindalco surged 1% to Rs185, SAIL was up by 1% to Rs155. However, Tata Steel ended flat at to Rs682.
Realty stocks continued its upward trend on hopes that RBI would not tinker with the interest rates. DLF edged higher by 0.5% to Rs646, Parsvnath was up by 1.6% to Rs373. However, Unitech declined 1% to Rs543.
Results Today:
Ambuja Cements, BASF India, Cipla, Clutch Auto, Exide, Hindustan Oil, IPCA Labs, Jain Irrigation, Kirloskar Bros, Neyveli Lignite, Nitin fire Protection, PTC India, PVR, Raymond, Sasken, Satyam, SRF, Ultratech Cement, United Breweries and Voltas.
Fund Activity:
FIIs were net buyers of Rs6.52bn (provisional) in the cash segment on Thursday. On the other hand, local institutions were net sellers at Rs1.49bn. From the F&O segment, FIIs pumped in Rs9.58bn.
On Wednesday, FIIs poured in Rs12.34bn in the cash segment. Mutual Funds were net sellers of Rs1.75bn.
Major bulk Deals:
HSBC Financial has bought Bihar Tubes; Morgan Stanley and Goldman Sachs have picked up Gitanjali Gems while Citigroup has sold the scrip; UBS Securities has purchased Hexaware and Sharon Bio; Citigroup and Fidelity have bought Spice Communications; Goldman Sachs has picked up Sujana Metal while UBS Securities and Morgan Stanley have sold it; Merrill Lynch has purchased Wire & Wireless while Fidelity has sold it.
Insider Trades:
Hexaware Technologies Ltd: Macquarie Bank Limited has sold in open market 3650000 equity shares of the company on 10th July, 2007.
Omax Autos Ltd: Bear, Stearns & Co. A/C BSMA Ltd has sold in open market 50000 equity shares of the company on 9th July, 2007.
Lower Circuit:
GVK Power, Anant Raj Industries and Logix Micro.
Upper Circuit:
Prism Cement, Zee News, Infomedia, Zuari Industries, Kothari Products, Cambridge, Tanla, Ganesh Forgings, Swan Mills, Karuturi Networks, Rama Pulp, Nirlon, Diamond Cable, IID Forgings and BF Utilities.
Delivery Delight (Rising Price & Rising Delivery):
BHEL, Dabur India, HDFC Bank, ITC, Kesoram and M&M.
Abnormal Delivery:
Bombay Dyeing, MTNL, Titan, Nalco, Tata Chemicals, ICI India, Gujarat Alkalies, iGate Global and LIC Housing.
Major News & Announcements:
Lupin Q1 net profit at Rs783.8mn (up 54%) and net sales at Rs6.02bn (up 28%)
L&T Q1 profit at Rs3.77bn (up 140%) net sales at Rs45.05bn (up 30%) and to invest Rs15bn to build new
shipyard
Aban Offshore Q1 profit at Rs283.8mn (up 48.7%) and net sales at Rs1.28bn (up 3.2%)
Ranbaxy Q2 profit at Rs2.91bn (up 194%) and net sales at Rs10.15bn (down 2.7%)
ACC Q1 Profit at Rs3.51bn (down 13.5%), net sales at Rs18.68bn (up 27.7%)
ACC to pay dividend of Rs10 per share
DLF Q1 Profit at Rs5.79bn, net sales at Rs11.22bn
DLF expects to open first of 'new generation' malls this year
Jindal Steel signs accord with Bolivia for EL Mutun mine
R Com to sell shares in tower unit
Wipro looking for acquisitions in Germany, Canada – Reports
Bank of Baroda plans to buy bank in Africa
HCC gets contract worth Rs3.11bn – Reports
HPCL signs MOU with ONGC
BHEL gets Rs63mn order
Glenmark Buys 2 rights to Therapeutic Antibodies