All you need in this life is ignorance and confidence; then success is sure
Despite confidence in the India story investors can't afford to ignore the global cues. Consumer sentiment recorded its sharpest fall in nearly two years during August while home prices dropped in the second quarter. The Conference Board's index of confidence dropped nearly 7 points to 105.0, its lowest reading in a year. The worst fears regarding the housing crisis appear to be coming true.
Add to the woes, the Federal Reserve commentary failed to please the market reeling in bouts of negative news. The Dow Jones and Nasdaq fell over 2% each. Asian markets are all down. In fact, the minutes from the last Fed meeting had nothing new. However, fears are the Fed did not appear to be closer to cutting rates added to the sell off. Fed chairman Ben Bernanke's comments on Friday at the annual economic symposium will be the next market mover after which Wall Street takes an extended weekend.
Indian ADRs fell. ICICI Bank and VSNL dropped over 4.5%. Genpact, Sterlite, Infosys, Satyam, Wipro, HDFC Bank, MTNL, Tata Motors and Dr.Reddy's slipped 2-4% each.
Standard & Poor's report showed that home prices fell 3.2 percent in the second quarter versus a year ago. U.S. light crude oil for October delivery fell 27 cents to settle at $71.70 a barrel on the New York Mercantile Exchange.
We've rattled all we could about the US markets because the opening hinges on just these factors today. Expect a gap down open at start. Hopefully, buying will set in at lower levels. Bid for your favorite stocks at lower prices. If it comes your way fine. Else wait for another day.
Ess Dee Aluminium may buy India Foils Ltd. from Vedanta Resources Plc for as much as Rs3bn
Buzz is that UTV Software may take stake in Radaan Media. No confirmation on the same. However, what Radaan did confirm in reports is it is considering allotment of shares to private equity funds, for which there are many offers.
Blackstone Group will buy 14.5% stake in Nagarjuna Construction Company for $150mn.
Watch out for sugar stocks as UP government has requested Centre to grant Rs.20bn interest free loan for state sugar companies.
Essar Group said on Tuesday that it would be setting up a 1,200-MW plant at Jamnagar in Gujarat at an estimated cost of Rs48bn.
Tata Steel and Corus Group Plc's consolidated operations for the June quarter almost tripled. Operating profit climbed to Rs49.04 billion. Revenue surged more than five-fold to Rs311.55bn .
Sical Logistics is to enter into freight forwarding business in order to offer end- to-end logistics service.
Mauritius-based fund Helix Investments has put in $12 million to buy nearly 30 per cent equity stake in MT Educare Pvt Ltd, a holding company of Mumbai-based Mahesh Tutorials.
RIL gas pricing formula is likely to pass muster as members of the EGoM are believed to have broadly agreed to the RIL formula
Reliance Communications have short listed three Japanese submarine cable construction firms for building its $1.5bn next generation network.
The defence ministry floated its biggest ever defence tender for the purchase of 126 multi-role combat aircraft (MRCA), the bill for which could well run up to Rs420bn.
Two years after setting up an ambitious 50:50 joint venture to market farm produce, the Bharti-Rothschild combine is likely to rope in a third partner for FieldFresh Foods (P) Ltd.
Bombay Dyeing said it has got shareholders’ approval to raise about Rs3bn through issue of warrants
Paperboards and Specialty Papers Division of ITC has decided to invest Rs350nmby the year end at its Bolaram facility to increase capacity.
Volatility was back as benchmark Sensex gyrated nearly 200 points and NS Nifty around 40 points. Key indices struggled for direction as mixed cues from the International markets and alternate bout of buying and selling kept the bourses volatile. Volumes however, continued to rise; turnover in NSE cash segment rose 3.3% and in F&O segment rose 8.7%. Finally, the BSE 30-share Sensex closed at 14,919 surging 76 points. NSE Nifty added 18 points to close at 4320.
Dr. Reddy's Lab gained by 1% to Rs636 on reports that it may buy US-based Bradley Pharmaceuticals Inc. for as much as $300mn. The scrip touched an intra-day high of Rs640 and a low of Rs631 and recorded volumes of over 2,00,000 shares on NSE.
Tata Power slipped 1.3% to Rs680. The corporate credit rating of Tata Power and its $300 million senior unsecured bonds have been lowered to BB- from BB+ on Friday by Standard and Poor’s Rating Services. The scrip touched an intra-day high of Rs701 and a low of Rs677 and recorded volumes of over 3,00,000 shares on NSE.
Reliance Energy gained 0.5% to Rs766. The company announced that its 4,000MW Raigad project may get delayed as the Bombay High Court put a stay on the construction activities. The scrip touched an intra-day high of Rs781 and a low of Rs751 and recorded volumes of over 18,00,000 shares on NSE.
TCS edged higher 0.2% to Rs1028. The company yesterday announced that they have signed pact for IT, Infrastructure services. The scrip touched an intra-day high of Rs1039 and a low of Rs1011 and recorded volumes of over 5,00,000 shares on NSE.
Exide Industries surged by over 7% to Rs60 after the company approved right issue to offer 1 share for every 15 held at Rs30 per share. The scrip touched an intra-day high of Rs60 and a low of Rs56 and recorded volumes of over 24,00,00,000 shares on NSE.
Gayatri Project surged by over 1.5% to Rs274 after the company announced that it has increased FII limit to 49%. The scrip touched an intra-day high of Rs281 and a low of Rs271 and recorded volumes of over 27,000 shares on NSE.
Shipping stocks ended higher ahead of the announcement of the news shipping policy. SCI advanced by 2% to Rs178, ABG Ship gained by 2.2% to Rs502, GE Shipping was up by 0.7% to Rs302.
Sugar stocks were in momentum led by fresh buying. Bajaj Hindusthan surged by 3% to Rs128, Renuka Sugar spurred by over 3% to Rs487 and Balrampur Chini advanced by 3.8% to Rs55.
FMCG stocks were back in action led by gains in the index heavyweights like ITC, scrip gained by 1.3% to Rs167, Mc Dowell gained by 2.2% to Rs1390, Hindustan Unilever added 1% to Rs202 and Tata Tea added 1.7% to Rs746.
Banking stocks also ended higher. HDFC Bank gained by 2.7% to Rs1150, OBC was up by 2% to Rs203, Canara Bank gained 1.8% to Rs238 and Union Bank added 1% to Rs133. However, ICICI Bank slipped by 2.2% to Rs862.
Auto stocks were on the receiving end led by fall in the index heavyweight Tata Motor slipped by 2% to Rs663, Hero Honda was down by 1.5% to Rs631 and TVS Motors edged lower by 1% to Rs60 and Maruti edged lower by 0.2% to Rs832.
Though, the market advanced further for a second day in a row, it is not clear if the turnaround has already taken place or will there be fresh massacre going forward. Going by the sudden and sharp correction, nobody wants to take any chance. However, one must add that the long-term outlook still remains upbeat due to the strong economic fundamentals. So, investors with long-term view should buy quality stocks around these levels. The bulls may take a breather, as F&O expiry is likely to keep market choppy. Investors are advised to remain alert at all the time and lock-in some gains after every rally as profit booking could set in the market.Fund Activity:
FIIs were net buyers of Rs3.9bn (provisional) in the cash segment on Friday and the local institutions sold worth Rs0.7bn. In the F&O segment, FIIs were net buyers at Rs22.4bn. On Monday, foreign funds bought worth Rs12bn from the cash segment. Mutual funds were net buyers to the tune of Rs3.4bn.
Major Bulk Deals:
ABN Amro bought Anku Dr Ph, Deutche International bought Asian Granito. Bhagwati Banquets was picked up by Lotus Global. Morgan Stanley bought and sold India Bulls Real Estate. Ipca Labs was sold by ICICI Prudential. KPR Mill was sold by Citigroup. Mastek was sold by Macquire Bank.
Lower Circuit:
IOL Broadband and Bellary Steel.
Upper Circuit: Kothari Products, Hindustan Motors, Jai Corp, ETC Network, XL Telecom, RMCL, Atlanta, Tourism Finance, IID Forgings, Shree Precoated, Swan Mills, Kalindi Rail, Era Construction, Bag Film, Raj Tele and BF Utilities
Delivery Delight (Rising Price & Rising Delivery):
Ashok Leyland, Assam Company, Gokaldas Exports, GHCL and Hotel Leela.
Abnormal Delivery:
Lupin, Satyam, Tata Motors, Alfa-Laval and Mangalam Cement.
Major News & Announcements:
Elder Pharma to acquire 51% stake in Biomedia
Gayatri Projects increases FII limit to 49%
Exide Industries board approves right issue, to offer 1 share for every 15 held at Rs30 per share
Essar Group has sought Sebi permission to delist Essar Oil without having to make an open offer.
As per commerce ministry, India would meet $160bn exports target for 2007-08.
Regional airlines will be allowed to fly abroad, subject to certain aviation norms and regulations.
Essar Group has earmarked Rs12bn for telecom retail expansion in order to increase number of stores from 250 at present to 2500
by 2010.
DLF has acquired 25 acre of land from Andhra Pradesh state government for Rs4.5bn which would be used for IT purposes.
Dr Reddy’s Laboratories will relocate majority of the manufacturing activities carried out by German subsidiary Betapharma to Hyderabad by 2007 year end.
Pantaloon Retail India is likely to raise Rs12.6bn through issue of shares and warrants to investors including Bennett, Coleman and
promoters.
CESC has received shareholders approval for raising over Rs20bn through term loans from various financial institutions.
Power Minister proposes a three-pronged strategy to achieve the target of adding 78,577mw of power generation by 2012.
Bureau of Indian Standards (BIS) certifies two Pakistan-based cement companies to import cement in India.