We're in the middle of some very choppy waters here, and we wanted everybody to grab an oar.
After an enjoyable ride so far, the markets are turning choppy. Put on your lifejackets (trade with stop loss) and be adventurous only if you have the ability for high risks. Renewed interest from FIIs has kept the momentum intact. After climbing atop mount 15k on Friday, the Sensex finished above that level yesterday, reinforcing a view that the undertone remains positive. Lower inflation and strong response to the recent public issues added to the positive sentiment. A generally healthy trend across global markets has also helped the local bulls' cause. As a result, both the key indices and other smaller indices are now trading at lifetime highs. This, despite the spike in crude oil prices, which have crossed the $76 per barrel mark in London. If oil prices continue to rise there could be an impact on equity markets amid nagging concern about inflation and interest rates.
The mega event - Infosys results - will be unraveled tomorrow. IT stocks have already taken a severe beating in the past 3-4 months because of the appreciation in the rupee vis-a-vis the dollar. But, any further bad news from the industry heavyweights will have a short-term impact on the sector and the market. Keep a close watch on what Infosys management has to say on the outlook going forward. A fresh round of selling in software shares will make them attractive from a long-term perspective. The broader market could also cool off a little bit after the recent advance. We see a cautious to positive start and a choppy day ahead.
Shares of Ankit Metal & Power will get listed today. Suzlon could come under pressure amid reports that the government is probing the accounts of its subsidiaries as part of a wider exercise to look into the use of IPO money since 2004. ONGC and SICAL Logistics might be in the limelight after an offshore supply vessel of the state-run oil & gas major, operated by the latter on contract sank off the Mumbai coast yesterday. TVS Motor could attract some buying after the company launched a new version of its premium bike, the Apache. The company also plans to launch two more bikes during the rest of the fiscal year.
Sun Pharma is planning to acquire 14% more stake in Israel's Taro Pharma by buying out the promoters. The move is aimed at thwarting any attempt by other shareholders of Taro Pharma to block the deal. GTL is another to keep an eye on, as it has sold its enterprise and managed services business to France Telecom for Rs2.5bn. HTMT Global is likely to be in action as the ITES arm of the Hinduja Group is looking to get into consulting through the inorganic route. Public sector aluminium major NALCO is planning to diversify into cement by using the fly ash generated at its captive power plant at Angul, Orissa.
RCF, the public sector fertilizer giant is planning to make alternative building materials from gypsum that could substitute the conventional bricks. Pharma major Wockhardt has received a tentative approval from USFDA to market a generic version of Pfizer's anti-convulsive drug Cerebyx (50 ml injection). Tata Motors could attract attention as chairman Ratan Tata said at the AGM that the company plans to launch a slew of new vehicles in the next few months to beat off competition. Development Credit Bank's (DCB) Board will meet today to consider raising an amount up to Rs3.1bn by way of a preferential issue.
US stocks posted modest gains, just missing new record highs, as jittery traders eyed the upcoming earnings, which began after the closing bell with Alcoa. Buyback plans by Johnson & Johnson and ConocoPhillips also boosted the sentiment.
The Dow Jones industrial average rose 38.29 points, or 0.28%, to end at 13,649.97. The Standard & Poor's 500 Index was up 1.41 points, or 0.09%, at 1,531.85. The Nasdaq Composite Index was up 3.51 points, or 0.13%, at 2,670.02.
Treasury prices rose, lowering the yield on the 10-year note to 5.14%, down from the 5.18% level reached late on Friday. The dollar fell slightly versus the euro and yen. US light crude down 76 cents to settle at $72.05 a barrel on the New York Mercantile Exchange.
European shares rallied, led by resource companies, while shares of Numico shot up more than 10% after Groupe Danone said it will pays $16.7 billion to acquire the Dutch baby-food group. The pan-European Dow Jones Stoxx 600 index increased 0.3% to 398.52. The German DAX Xetra 30 closed up 0.4% at 8,077.39, the UK's FTSE 100 added 0.3% to 6,712.70 and the French CAC-40 finished virtually flat at 6,104.66.
In the emerging markets, the Bovespa in Brazil gained 0.9% at 56,443 while the IPC index in Mexico was down 1% at 32,088 and the RTS index in Russia climbed 1.3% to 1999.
Asian markets were mixed this morning. The Nikkei in Tokyo was down 44 points at 18,217 while the Straits Times in Singapore gained 11 points to 3637 and the Kospi in Seoul was flat at 1883. The Hang Seng in Hong Kong was down 61 points at 22,756.
Markets are witnessing historical trading session almost everyday as bulls settle on new peaks. The benchmark Sensex closed above the 15kmark and Nifty closed above the 4400 mark for the first time ever. Yet again the index heavy weights like ONGC, L&T, Infosys and Bharti Airtel lifted the key indices to new highs. BSE IT, Metal, PSU and Banking index were among the major gainers. However, BSE Auto and FMCG index lost ground. Finally, the 30-share Sensex gained 81 points to close at 15,050 and NSE-50 Nifty added 34 points to close at 4419.
ICSA India jumped by over 7.5% to Rs1309 after the company announced that they have secured orders worth Rs300mn. The scrip touched intra-day high of Rs13620 and a low of Rs1184 and recorded volumes of over 52,000 shares on NSE.
Sadbhav Engineering gained by 0.6% to Rs598 after the company announced that they would raise FII limit to 49% from 24%. The scrip touched intra-day high of Rs617 and a low of Rs598 and recorded volumes of over 65,000 shares on NSE.
SAIL gained by 1.6% to Rs1133 after the company announced that their hot metal out put rises 6% to Rs3.8mn ton. The scrip touched intra-day high of Rs133 and a low of Rs130 and recorded volumes of over 30,00,000 shares on NSE.
Hikal surged by over 13% to Rs536 after the company announced that they have signed a mutually exclusive long-term agreement with Alpharma Inc., a US based global specialty pharmaceutical Company for manufacture and supply of an Active Pharmaceutical Ingredient (API) for the Veterinary sector. The scrip touched intra-day high of Rs544 and a low of Rs480 and recorded volumes of over 20,000 shares on BSE.
Lanco Infratech spurred by over 8% to Rs227 as the 500 MW Teesta VI Hydro Power Project being developed by Lanco Energy, a subsidiary of the company, in Sikkim has achieved Financial Closure. The scrip touched intra-day high of Rs229 and a low of Rs213 and recorded volumes of over 13,00,000 shares on NSE.
FMCG stocks were on the receiving end led by fall in the heavy weight HLL as the scrip slipped by 2.3% to Rs195, Colgate was down by 0.3% to Rs385 and Dabur declined by 1.9% to Rs101.
The Auto stocks also pared their intra-day gains as profit booking dragged the auto stocks lower. Bajaj Auto slipped by 0.3% to Rs2105, Maruti was down by 0.3% to Rs794, M&M declined by 1.2% to Rs779 and TVS Motors dropped 1.2% to Rs61.
Technology stocks also ended with firm gains. Infosys advanced by 1.2% to Rs1993, Wipro gained by 1.3% to Rs526 and Satyam Computer gained by 0.5% to Rs491. NIIT Ltd spurred by over 4% to Rs1167 and Rolta added 2.1% to Rs465.
Capital Good stocks ended with smart gains. L&T advanced by 2.1% to Rs2415, BHEL was up by 1.2% to Rs1575, Siemens gained by 1.2% to Rs1422 and BEL gained by 0.5% to Rs1866. However, ABB slipped 2% to Rs1114.
Results Today:
Eastern Silk, HDFC Bank, Radha Madhav, Sintex Industries, South Indian Bank and Zenith Birla.
Fund Activity:
FIIs were net buyers of Rs8.42bn (provisional) in the cash segment on Monday. On the other hand, local institutions were net sellers at Rs2.37bn. In the F&O segment, FIIs pumped in Rs10.07bn on the same day.
On Friday, FIIs poured in Rs31.79bn. However, a major chunk of this is towards the ICICI Bank follow-on public offering. Mutual Funds were net buyers of Rs258mn.
Major bulk Deals:
BNP Paribas Arbitrage has sold GV Films; Religare Securities has sold Madhav Marbles and Emerging Markets has sold Vimta Labs.
Insider Trades:
Ion Exchange: USB Securities Asia Ltd - A/C Swiss Finance Corporation (Mauritius) Ltd has purchased from open market 0.16% of the company on 28th June, 2007.
Lower Circuit:
Aviva Industries, Anant Raj industries and Swan Mills.
Upper Circuit:
Hindustan Oil Exploration, Hindustan Organic, prime Focus, Marksans, Aarti Industries, Deep Industries, Asian Electronics, Tanla, Radha Madhav, Tripex Overseas, Prime Securities, DS Kulkarni, Yashraj Containers, Vyapar Industries, Bilcare and Kothari products, Ruby Mills, Diamond Cables and Bank of Rajasthan.
Major News & Announcements:
ICSA India secures orders worth Rs300mn
Sadbhav Engineering to raise FII limit to 49% from 24%
IFC invests $67.2mn in Max Healthcare
SAIL hot metal output rises 6% to Rs3.8mn ton
Tata Motors to launch Rs1lakh car in Mid-2008 – Reports