“The construction of life is at present in the power of facts far more than convictions.”
The Sensex just needs to construct 120-odd points to scale point 15k. Given the recent conviction, bulls will hope the milestone is breached today itself. All eyes will be real estate stocks as industry bellwether DLF makes its much-awaited debut on the bourses today. The company has set an issue price of Rs525 per share. The stock may cross Rs600 on opening but expect some cooling (if grey market prices are any indication). Buzz on the street is that DLF could skyrocket in the coming days after initial selling pressure.
There are no cues from Wall Street owing to the Independence Day holiday but Asian markets are smiling. FIIs also appears to have stepped up their buying of late. Today, we expect the market to open firm. However, yesterday's negative market breadth coupled with the rise in the Put-Call-Ratio (PCR) are cause of concern. Also worrisome is the steep increase in crude oil prices, with the Brent crude oil having crossed the $73 per barrel mark overnight. We advocate cautious optimism. One should avoid aggressive buying at this stage and hold existing ones with strict stop losses.
Inflation has cooled off substantially from the two-year peak struck in January. Unless there is a fuel price hike, there is no big threat as far inflationary expectations is concerned. A good monsoon may also have a soothing effect on prices of essential commodities. Investors will also be looking out for this month's RBI policy review for indications on the movement in interest rates.
But before that we will have an even bigger event. The quarterly results that is. The most keenly followed results will be that of the IT companies following the sharp spike in the rupee versus the dollar in the last quarter. In fact, yesterday the Indian currency touched a nine-year peak of 40.45. We may have some correction if there is a bigger than expected negative surprise from any of the software majors.
The old economy companies, except Auto and Sugar, is likely to post strong bottomline growth. Watch for the Capital Goods, Engineering, Construction and Infrastructure companies. They are expected to announce strong results. Banking, Cement, Metals and even Oil & Gas companies are likely to do well. Auto will surely be a laggard due to the slowdown in sales and increasing input costs.
BEML's Board will determine the issue price for the company's follow-on public issue today. Bihar Tubes' Board will meet today to allot 31,75,000 warrants on a preferential basis to the entities belonging to the promoter group and other strategic investors.
Hero Honda will attract attention amid reports that the company has deferred the starting of operations at its new Haridwar plant due to the slowdown in demand and tax considerations. Country Club India may also gain as a financial daily reports that it is scouting for acquisitions abroad. Bombay Rayon Fashions has come out with its Q4 and FY07 results. The garment firm has reported strong growth in topline as well as bottomline.
MNCs such as Hindustan Unilever, Nestle, Colgate and GSK Consumer Healthcare may rise after the Delhi Income-Tax Appellate Tribunal ruled that advertisement expenditure can be fully deducted for income tax calculations.
IT companies may come under fresh pressure as the rupee has hit a nine-year high against the dollar. Cement stocks will remain in the limelight following reports of a countrywide price hike. Select metal shares like Sterlite could do well as copper prices touched a seven-week peak on the LME overnight.
European shares edged higher. But trading was listless because of the US Independence Day holiday. European hotel stocks like InterContinental and Accor stood out after Blackstone said it will buy Hilton Hotels.
The pan-European Dow Jones Stoxx 600 index rose 0.4% to 397.36. The UK's FTSE 100 closed up 0.5% at 6,673.10, while the German DAX increased 0.3% to 8,075.26 and the French CAC-40 advanced 0.5% to 6,098.08.
In the emerging markets, the Bovespa in Brazil closed flat at 55,696 while the IPC index in Mexico rose 0.3% to 32,201 and the RTS index in Russia added 0.2% to 1943.
Most Asian stock markets are up this morning, with some hitting new record. The Nikkei in Tokyo was up 100 points at 18,268 while the Hang Seng in Hong Kong rose 25 points to 22,243. The Kospi in Seoul advanced 19 points to 1857 and the Straits Times in Singapore added 12 points to 3567.
Samsung jumped after a brokerage report raised speculation that prices for dynamic random access memory, or DRAM, will climb, boosting profit. BHP Billiton Ltd. and Rio Tinto Group advanced on higher metals prices.
The Morgan Stanley Capital International Asia-Pacific Index gained 0.5% to 156.69 at 10:39 a.m. in Tokyo. Markets open for trading advanced, except in China and Malaysia.
Markets ended on a flat note after rallying for four trading sessions NSE Nifty index closed almost from where it started, however benchmark Sensex managed to add 73 points in volatile session. The benchmark Sensex yet again managed to settle on a new peak as even the Cement and the Sugar stocks gained momentum. The index heavy weights like ICICI Bank, ACC, L&T, Reliance Industries and Gujarat Ambuja aided the key indices from slipping in to red. Finally, the 30-share Sensex gained 73 points to close at 14880. NSE-50 Nifty added 1 point to close at 4359.
Bharti Airtel slipped 1% to Rs858. Temasek picked up a 4.99% stake in the company. Also yesterday it announced that they have signed a pact with Nokia Siemens for a US$900mn. The scrip touched intra-day high of Rs882 and a low of Rs867 and recorded volumes of over 7,00,000 shares on NSE.
Vishal Retails shoots up at its debut on the bourses the scrip opened at Rs472.5 and ended up by over 180% at Rs758 against the issue price of Rs270 per share. The scrip has touched intra-day high of Rs784 and a low of Rs472 and has recorded volumes of over 1,00,00,000 shares on NSE. The company had come out with an initial public offering, of equity shares aggregating Rs110crore at the price band between Rs230 - Rs270 per equity share of Rs10 each.
Delhi-based retail house, Vishal Retail is eyeing to set up around 150 to 200 of its Vishal Mega Mart stores by 2010. The company is looking to set up 32 more stores across the country. The company has also announced its debut into capital market with a public issue of equity aggregating Rs1.1bn to fund 22 of its upcoming stores.
Indiabulls Real Estate surged by over 3.5% to Rs441 after the company announced that it would sell $360mn GDR’s at $10.32. The scrip touched intra-day high of Rs455 and a low of Rs428 and recorded volumes of over 60,00,000 shares on NSE.
Patel Engineering edged over 0.8% to Rs450 after the company announced that they have secured Algerian order worth $153mn. The scrip touched intra-day high of Rs458and a low of Rs440 and recorded volumes of over 6,00,000 shares on NSE.
Cement stocks recorded smart gains after reports stated that cement companies have hiked prices by Rs3-5 per bag. ACC surged by over 9% to Rs1027, Gujarat Ambuja was up by over 4% to Rs130, Kesoram Industries spurred by over 5.5% to Rs476 and Grasim added 1.2% to Rs2740.
Sugar stocks also gained momentum ion back of fresh buying interest. Renuka Sugar advanced by 1.7% to Rs651, Bajaj Hindustan gained by 1.8% to Rs167, Sakhti Sugar was up by 2.8% to Rs87 and Dhampur Sugar added 1.8% to Rs68.
Select Banking stocks witnessed selling pressure SBI was down by 1.1% to Rs1563, Union Bnk slipped 3.3% to Rs129, PNB dropped by 1.8% to Rs533. However, HDFC Bank gained 0.2% to Rs1150, ICICI Bank surged 2% to Rs985.
Select Auto stocks recorded smart gains. Tata Motors gained by 2.3% to Rs701, M&M was up by 1.8% to Rs748, Maruti advanced 1% to Rs791 and Bajaj Auto added 0.9% to Rs2119.
Consumer Durable stocks were on the receiving end. Blue Star was down by 0.8% to Rs239, Titan dropped by 4% to Rs1288, Rajesh Exports declined by 0.6% to Rs540 and Videocon edged lower by 0.3% to Rs417.
Fund Activity:
FIIs were net buyers of Rs7.24bn (provisional) in the cash segment yesterday while the local institutions pulled out money to tune of Rs3.97bn. In the F&O segment, foreign funds pumped in Rs7.26bn yesterday. On Tuesday, FIIs were net buyers of Rs4.1bn in the cash segment. Mutual Funds were net buyers at Rs547mn on the same day.
Results Today:
Asian Electronics, Hikal, MMTC, Network 18 Fincap and TV 18.
Major bulk Deals:
Merrill Lynch has picked up Allianz Securities; Goldman Sachs has bought Gayatri Projects; Citigroup Global has purchased Prime Securities and Goldman Sachs has bought Prithvi Information Solutions.
Insider Trades:
Kirloskar Oil Engines Ltd: Mr. RR Deshpande, Director has purchased from open market 5000 equity shares of the
company on 2nd July, 2007.
Lower Circuit:
GV Film, GMR Industries and Swan Mills.
Upper Circuit:
Zenith Infotech, Aurionpro Solutions, Prism Cement, Heritage Foods, Agro Tech, IID Forgings, Shree Precoated, GTC Industries, Vakran Software, Bilcare and Maxwell Industries.
Delivery Delight (Rising Price & Rising Delivery):
Arvind Mills, Asian Hotels, Bajaj Auto, BILT, BPCL, Cipla, Dhampur Sugar, Gujarat Ambuja, Hindustan Oil, K Cements, JK Lakshmi Cement, Jyoti Structures, NIIT, Prism Cement, Ranbaxy Laboratories, Unitech and Welspun India.
Abnormal Delivery:
IOC, Titan, United Phosphorous, PTC, DS Kulkarni, Bombay Dyeing, Max India, Matrix Labs and Bharat Forge.
Major News & Announcements:
Indiabulls Real Estate sells $360mn GDR’s at $10.32
Dollex Industries gets Rs200mn order for IMFL from Angola
Patel Engineering secures Algerian order worth $153mn
JSW says second Furnace to start operations later this month
ESS DEE Aluminum to raise $150mn selling securities overseas
Ansal Properties signs accord with Fortis
Philips Carbon to set up Carbon Black Plant at Vietnam
GAIL India & China Gas to form Joint Venture company