Life is supposed to be a series of peaks and valleys. The secret is to keep the valleys from becoming grand Canyons.”
We've seen the peak and fears of visiting a valley are bound to worry investors. The fact that the Sensex took five months to make a new high is a clear signal that making money will not be easy after a four-year rally. After flirting with a new high, the bulls look set to romance a little more this morning. The global market rally will strengthen the mood at start. The Dow has managed a triple-digit gain and the Nasdaq hit a fresh six-year high. Asian markets are also up this morning. Major European benchmarks declined but Markets in Brazil and Mexico ended higher. However, higher crude oil prices might just spook the bullish trend though a stronger rupee mitigates some of the impact from increased energy costs. We expect a higher opening and a volatile day. Be sure of some pressure at higher levels.
Though the Sensex finally breached its earlier all-time high and scaled a new peak, the key indices lost altitude and the Nifty actually ended in the red. The Sensex too gave up a lot of ground. Has the market peaked out and could it face resistance going ahead? This is one question that is uppermost on the minds of all investors. We might get the answer in the next few days as corporate earnings start rolling in. Watch out for the IT sector results, as the rupee's appreciation is likely to have a bearing on their bottomline.
The recent rallies have been driven by select sectors and select index shares. This time too its the same story. Banking and Capital Goods were among the top gainers while Cement, IT and Auto were the laggards. This trend is likely to continue as the market is at historic high and concerns about valuations will start playing themselves out. Select stock picking is the way to go as the market will remain choppy. In short, a strong open and choppiness lay in store for the day.
FIIs were net buyers of Rs945.7mn (provisional) in the cash segment yesterday. Domestic institutions offloaded stocks worth Rs867.1mn.
On Friday, FIIs pumped in Rs5.84bn ($1.43bn) in the cash segment. However, a major chunk of this inflow includes proceeds towards the ICICI Bank's mega follow-on public offering and its ADR issue.
L&T will declare a special dividend today.
US stocks rallied on Monday as investors cheered more M&A news, falling Treasury yields and a better-than-expected report on manufacturing.
Costco Wholesale climbed to a record and helped lead the Nasdaq Composite Index to a six-year high after Goldman Sachs upgraded the wholesaler. Caterpillar, United Technologies and Honeywell International lifted the Dow Jones Industrial Average and the S&P 500 Index to their first gain in three days.
The S&P 500 added 16.08 points, or 1.1%, to 1519.43. The Dow gained 126.81 points, or 1%, to 13,535.43. The Nasdaq rose 29.07 points, or 1.1%, to 2632.3.
US markets are set to close early on Tuesday and are closed Wednesday for the July 4 holiday.
On the economic front, the Institute of Supply Management's monthly index came in at 56 in the month, after a 55 reading in May. Any reading above 50 indicates growth in the sector. Economists had expected the index to remain unchanged at 55.
Treasury prices rose, pushing the yield on the 10-year note down to 4.99% from 5.02% late on Friday. It was the first time the yield on the 10-year note fell below 5% since June 7.
Oil prices rebounded after slipping below $70 per barrel in early trading. US light crude rose 41 cents to close at $71.09 a barrel on the New York Mercantile Exchange. The front-month contract was quoting 8 cents lower at $71.01 a barrel.
COMEX gold for August delivery added $8.30 to $659.20 an ounce. The dollar declined across the board, hitting a 26-year low against British pound and falling sharply against the euro and the yen.
European shares started the third quarter on a downbeat note. The UK's FTSE 100 closed down 0.3% at 6,590.60, while the German DAX fell 0.6% to 7,958.24 and the French CAC-40 shed 0.5% to 6,026.95. The pan-European Dow Jones Stoxx 600 index declined 0.3% to 391.65.
Major Latin American stock markets closed higher, paced by a rally on Wall Street and aided by an upbeat outlook of Mexico's credit from Standard & Poor's.
In Sao Paulo, the Bovespa jumped 979 points, or 1.8%, to set a record high at 55,371.21. At the same time, the IPC in Mexico City climbed 270 points, or 0.9%, to end at 31,420.69.
Most Asian stocks were up this morning following encouraging economic reports from the US and Europe and prices of metals and crude oil climbed.
The Morgan Stanley Capital International Asia-Pacific Index added 0.4% to 155.19 at 10:39 a.m. in Tokyo, extending a three-day, 2.4% rally. All 10 industry groups advanced.
Japan's Nikkei 225 Stock Average gained 0.3% to 18,204.57, after rising 1.7% in the previous three sessions. Benchmarks rose elsewhere, except in New Zealand. The Hang Seng in Hong Kong was up 189 points at 21,961.
Markets closed on a flat note despite a strong opening. The benchmark Sensex pierced its life time high defying global weakness. The index heavy weights like L&T, Reliance Communication, Infosys and Tata Motors were among the leading movers lifting the benchmark Sensex to hit its new peak of 14745.97.
However, Reliance Industries, ICICI Bank and TCS were among the leading draggers. The BSE Auto index shined on back of better than expected monthly sales figures. The Infrastructure and Mid-Cap stocks also gained momentum, however metal stocks slightly corrected. Finally, the 30-share Sensex gained 13 points to close at 14664. NSE-50 Nifty closed flat at 4313.
Maruti surged by over 3.5% to Rs770 after the company announced its June sales at 59917 units (up 23%). The scrip touched intra-day high of Rs786 and a low of Rs745 and recorded volumes of over 10,00,000 shares on NSE.
M&M advanced by 1.7% to Rs731 after the company announced its June sales at 17816 units (up 52%). The scrip touched intra-day high of Rs744 and a low of Rs720 and recorded volumes of over 6,00,000 shares on NSE.
Reliance Industries slipped by 1% to Rs1685 according to reports the company has appealed against Court order. The scrip touched intra-day high of Rs1712 and a low of Rs1685 and recorded volumes of over 22,00,000 shares on NSE.
Gujarat Alkalies spurred by over 5% to Rs152 after the company announced that they have tied up with Dow Europe GMBH. The scrip touched intra-day high of Rs156 and a low of Rs144 and recorded volumes of over 7,00,000 shares on NSE.
Aban Offshore advanced by 3% to Rs3091 after the company announced that they have secures order from Cairn Energy. The scrip touched intra-day high of Rs3154 and a low of Rs3012 and recorded volumes of over 2,00,000 shares on NSE.
Pharma stocks were in good health. Nicholas Piramal surged by over 5% to Rs316, Ranbaxy advanced 2.5% to Rs364; Wockhardt gained by 2.5% to Rs393 and Divi’s lab added 7% to Rs6235.
Select Auto stocks paced ahead on back of better than expected monthly sales figures. Maruti advanced by 3.6% to Rs770, Tata Motors gained by 1.8% to Rs682, M&M was up by 1.3% to Rs731. However, TVS Motors slipped by 1% to Rs60.
Capital Good stock recorded smart gains led by gains in the heavy weight L&T advanced by 1.8% to Rs2235, ABB surged by 2.9% to Rs1124, BHEL is up by 1.7% to Rs1563 and Punj Lloyd rallied by over 7% to Rs276
Metal stocks pared their gains on back of selling pressure. Hindalco was down by 1.2% to Rs158, Tata Steel slipped by 0.7% to Rs593. However Sterlite Industries gained 2.3% to Rs598.
Results Today:
Binani Cement, Bombay Rayon Fashions and Prism Cement.
Insider Trades:
Hinduja TMT Limited: Reliance Media & Entertainment Fund - Schemes of Reliance mutual Fund has purchased from open market 25000 equity shares of Hinduja TMT Limited on 27th June, 2007.
Major Bulk Deals:
UBS has sold Automotive Stampings; Merrill Lynch has picked up IID Forgings; Kotak PMS has sold Shringar Cinemas and Morgan Stanley has purchased Vimta Labs.
Major News & Announcements:
Maruti June sales 59917 units (up 23%)
TVS Motor June Motorcycle sales 47380 units (down 36%)
M&M June sales at 17816 units (up 52%)
Hero Honda June sales at 255200 units (down 8.4%)
Tata Motors June sales 44317 units (down 2%)
Valecha Engineering Board to consider Bonus issue on July 30
Centurion Bank to raise capital up to Rs5bn
XL Telecom gets phone order worth Rs468mn
Aban Offshore secures order from Cairn Energy
Gujarat Alkalies ties up with Dow Europe GMBH
SAIL cuts prices of flat products by Rs500 to Rs1000 per ton
IOC raised jet fuel prices for July as much as 1.7%
Pratibha Industries secures two contracts worth Rs978nm
Glenmark gets USFDA approval for its ANDA for Topiramte tablet
Lupin gets MHRA approval for Lisinopril UK
Lower Circuit:
Tripex Overseas, GV Films, Yashraj Securities, Teledata informatics and GMR Industries.
Upper Circuit:
Carol Info, Godrej Industries, Radha Madhav, Goldstone Technologies, Pratibha Industries, TCI Finance, DS Kulkarni, McNally Bharat, Texmaco, ION Exchange and Genus Overseas.
Delivery Delight (Rising Price & Rising Delivery):
Arvind Mills, BILCARE, BRFL, Crompton Greaves, Dena Bank, Era Constructions, Gujarat Alkalies, Gujarat NRE, GVK Power, HLL, IOC, Ipca Lab, MTNL, MLL, Petronet LNG , Rolta and Tata Motors.
Abnormal Delivery:
HMT Ltd, NIIT LTD, ITC Ltd, KEC International Ltd, Pfizer Ltd, Havells India Ltd, Lupin Ltd Patni Computer Systems Limited and Prism Cement Ltd.