Action makes more fortune than caution
The bulls are on the rampage these days and caution has literally gone for a toss. Bulls remain in action as foreign capital inflows continue unabated. In fact, FII inflows have crossed last year's figure of $8bn in just under seven months! Of late, the surge has been mainly due to the big-ticket issues of DLF, ICICI Bank and Sterlite Industries. There's more to come as more and more issues hit the primary market, given the current bullishness in the secondary market. The relentless FII inflows have also got the government and the central bank worried, and has sent the rupee to a nine-year high. In a nutshell, the ongoing boom in the stock market is being driven largely by the unprecedented foreign inflows.
A moderation or a correction, which is desirable at this stage, can only take place when the pace of the inflows slows down substantially. Given the government's upbeat assessment of the economy, which is likely to grow by 9%, the inflows are unlikely to stop in a jiffy. It will take some untoward development to soften the current rally. Right now there are more chances of it happening globally then in India. Till then, we do not see the bulls easing their grip on the market. Having said that, the record level of open interest in F&O segment, coupled with concerns on valuations could pose a few problems. Today, we expect the market to open on a cautious note on the back of the mixed cues from the global markets. But any correction may be short-lived.
The equity shares of Celestial Labs will get listed on the bourses today.
The Dow Jones Industrial Average finished at a new record for the third straight session, but the broader market struggled ahead of the week's key earnings reports and inflation reports.
Almost eight stocks declined for every three that gained on the New York Stock Exchange after natural gas tumbled to a six-month low. Oil producers and power companies led the fall, after forecasts for cooler weather stoked concern that demand for electricity will drop.
The S&P 500 slipped from a record, falling 2.98, or 0.2%, to 1549.52. The Dow added 43.73, or 0.3%, to 13,950.98. The Nasdaq Composite Index dropped 9.67, or 0.4%, to 2697.33.
Oil prices edged higher. US light crude for August delivery added 22 cents to $74.15 a barrel on the New York Mercantile Exchange. The front-month contract was quoting unchanged at $74.15 a barrel in extended trading in Asia.
COMEX gold for August delivery slipped $1 to $666.30 an ounce. Treasury prices rose, lowering the yield on the benchmark 10-year note to 5.04% from around 5.09% late on Friday. The dollar held near record lows against the euro and remained steady versus the yen ahead of Bernanke's testimony before Congress on Wednesday.
European stocks traded in a tight range. The banking sector showed strength after a consortium led by Royal Bank of Scotland made a fresh offer for ABN Amro, while commodity-centered shares and Vodafone Group lost ground. The pan-European Dow Jones Stoxx 600 index gained 0.2% to 399.67.
The German DAX 30 closed up 0.2% at 8,105.69 and the French CAC-40 inched 0.1% higher to 6,125.60, while the UK's FTSE 100 slipped 0.3% to 6,697.70.
Mexican stocks closed lower, and Brazilian stocks slipped on the expiration of options. In Mexico City, the IPC index of 35 most-traded stocks fell 121 points, or 0.4%, to 32,266. In Sao Paulo, the benchmark Bovespa stocks index closed 270 points, or 0.5%, lower at 57,374.
Asian markets are trading mixed this morning. The Nikkei in Tokyo was down 45 points at 18,193 while the Hang Seng in Hong Kong was up 119 points at 23,073. The Straits Times in Singapore was flat at 3654.
The Morgan Stanley Capital International Asia-Pacific Index slid 0.2% to 158.90 as of 11:22 a.m. in Tokyo. Japan's markets were closed yesterday for a holiday. Markets in South Korea are shut today.
Despite flat closing benchmark Sensex managed to close above the 15300mark and NSE Nifty closed above the 4500mark. After opening on a flat note markets struggled to gain any specific direction and traded in a range for whole trading session. Yet again IT stocks had a disappointing session as Indian rupee further strengthened against the US Dollar, as the rupee closed at 9 year high. Pharma and FMCG stocks also were on the receiving end. On the other hand banks, Realty and PSU stocks were the pick of the day. Finally, the 30-share Sensex added 38 points to close at 15311. NSE-50 Nifty closed flat at 4512.
L&T gained by 0.6% to Rs2415 after the company’s consortium secured orders worth Rs10.70bn from Tata Steel. The scrip touched intra-day high of Rs2434 and a low of Rs2388 and recorded volumes of over 6,00,000 shares on NSE.
MTNL surged by over 4% to Rs168 after the company announced that they have secured Rs14.62bn tax refund and Rs20bn yet to be refunded. The scrip touched intra-day high of Rs171 and a low of Rs161 and recorded volumes of over 35,00,000 shares on NSE.
RPL dropped by 2.4% to Rs115. The company announced that it expects to start refinery by December 2008. The scrip touched intra-day high of Rs118 and a low of Rs114 and recorded volumes of over 1,00,00,000 shares on NSE.
Lanco Infratech surged nearly by 3% to Rs254 after reports stated that the company’s unit secured 2 orders worth Rs10.06bn. The scrip touched intra-day high of Rs259 and a low of Rs242 and recorded volumes of over 26,00,000 shares on NSE.
RS Software rallied by over 7% to Rs48 after the Board of Directors of the Company at its meeting held on July 12, 2007, approved the allotment of 700,000 Equity Warrants on a Preferential Basis to the Promoters at a price of Rs66/-. The scrip touched intra-day high of Rs51 and a low of Rs43 and recorded volumes of over 2,00,000 shares on NSE.
Indo Rama slipped by 1.4% to Rs51. The company declared its Q1 result with net profit at Rs22.7bn (up 4%) and revenue at Rs7.29bn (up 54%). The scrip touched intra-day high of Rs54 and a low of Rs51 and recorded volumes of over 83,000 shares on NSE.
Power stocks continued to trade firm on back of increase in Government spending for electricity generation. Reliance Energy surged by over 4% to Rs704, CESC spurred by over 10% to Rs499, Tata Power gained by 1% to Rs694. However, Suzlon pared its gains by 0.5% to Rs1463.
Metal stocks shined brightly on talks of consolidation in the global metal industry, firm metal prices takeovers in the metals industry and higher commodity prices have been driving up metal stocks. Nalco surged by over 4% to Rs299, Hindalco advanced by 3.6% to Rs180. However, SAIL was down by 1.2% to Rs157 and Tata Steel edged lower 0.2% to Rs694.
Banking stocks were on the move on hopes that RBI would not tinker with Interest rates. SBI surged by 3.3% to Rs1611. Syndicate Bank rose by over 6.5% to Rs88, Union Bank advanced by 3.5% to Rs156 and Bank of Baroda added 5.5% to Rs300 were the major gainers among the Mid-Cap stocks.
Realty stocks are a mixed bag. DLF advanced by 1.6% to Rs610. However, Akruti slipped by 1% to Rs492 and Sobha was down by 0.2% to Rs927.
IT stocks were on the receiving end as dollar closed at 9 year high. Satyam Computer declined by 2.3% to Rs481, Wipro was down by 2% to Rs502 and Infosys edged lower 0.3% to Rs1935. Mphasis, HCL Tech and NIIT Ltd were among the major losers among the Mid-Cap stocks.
Pharma stocks also ended lower led by fall in the heavy weight Ranbaxy as the scrip was down by 2% to Rs345, Cipla was down by 1.6% to Rs208, Dr Reddy’s Lab declined 1.5% to Rs662 and Cadila marginally slipped 0.2% to Rs360.
Results Today:
Aventis Pharma, Aztecsoft, Bayer Cropscience, Diamond Cables, Garware Offshore, Gateway Distriparks, Jubilant Organosys, KPIT Cummins, LIC Housing Finance, Madras Aluminium, MTNL, Morepen Labs, NDTV, Noida Toll Bridge, S. Kumars Nationwide, Tata Tea, Ucal Fuel and Zee Entertainment.
Fund Activity:
FIIs were net buyers of Rs3.06bn (provisional) in the cash segment on Monday. On the other hand, local institutions were net sellers at Rs4.08bn. From the F&O segment, FIIs pulled out Rs640.3mn on the same day.
On Friday, FIIs poured in Rs23.46bn in the cash segment. Mutual Funds were net buyers of Rs2.91bn.
Major bulk Deals:
Morgan Stanley has bought Mastek; HSBC Financial has picked up Nitco Tiles; Citigroup has sold Emkay; Bear Stearns has sold Micro Tech and SB&T International; Macquarie Bank has also sold SB&T International; UBS Securities has purchased Srinivasa Shipping & Property Development and Goldman Sachs has sold Sujana Metal.
Insider Trades:
Goldstone Technologies Ltd: Standard Chartered Premier Equity Fund (Scheme of Standard Chartered Mutual Fund) has purchased from open market 433500 equity shares of the company on 13th July, 2007.
Hindalco Industries Ltd: Life Insurance Corporation of India has purchased from open market 2043663 equity shares of the company on 11th July, 2007.
Lower Circuit:
Tripex Overseas, TCI Finance, Bilcare, Empire Industries and Zenith Infotech.
Upper Circuit:
Wire & Wireless, Kothari Products, Goldstone Tech, PBA Infrastructure, GVK Power, Carol Info, Yashraj Containers, Swan Mills, Pearl Global, Adhunik Metalik, Diamond Cable, Godawari Power, Zenotech Lab and IID Forgings.
Delivery Delight (Rising Price & Rising Delivery):
Andhra Bank, Arvind Mills, Bajaj Hindustan, CESC, Gammon India, Gitanjali Gems, GTC Industries, Hero Honda, LIC Housing, MRPL, Mastek, ONGC, Tata Chemicals and VSNL.
Abnormal Delivery:
Gujarat Alkalies, HDFC, Century Textiles, Moser Baer, Patel Engineering, IOC, Patni, Nicholas Piramal, RPL and TTML.
Major News & Announcements:
India’s economy to grow by 9% in FY08, PM's advisory panel says
TCS Q1 profit at Rs11.8bn (up 37% yoy), revenues at Rs52bn (up 26% yoy)
L&T consortium secures orders worth Rs10.70bn from Tata Steel
RPL expects to start refinery by Dec 2008
MTNL gets Rs14.62bn tax refund; Rs20bn yet to be refunded
South Indian Bank to sell shares to large investors
Lanco Infratech unit gets 2 road projects worth Rs10.06bn
R Com to buy Yipes for $300mn; added 20mn users in last one year
Parsvnath to invest Rs4bn in Hyderabad SEZ
Ashok Leyland & Siemens VDO forms joint venture in infotronics