He who would leap high must take a long run.
Looks like the bulls will not rest till they propel the Sensex and the Nifty to their new highs, which is not too far from the current levels. The new highs are unlikely to materialise today, though the current momentum will push the two main indices past the previous landmarks next week. The resurgence in FII inflows coupled with steady buying by Mutual Funds bodes well for the bulls despite the volatility and uncertainty in global markets. Having said that, after the pull back in the past few sessions, the market does appear to be a little bit top-heavy.
As a result, we may see some consolidation once the Sensex and the Nifty scale new peaks. That will be the ideal time when one should lock in some gains in stocks that have rallied in the last couple of weeks. Use every rise to exit weak stocks and stick to quality scrips, irrespective of the market cap.
Yesterday, we saw the key indices soaring on the back of short covering. Some more of that is not ruled out as the bulls are gradually tightening their grip on the market. Still, one should be careful on account of the worries surrounding the US housing market meltdown and its impact across global economy. Also, the political situation in the country is far from being resolved completely. We expect the market to rise at open and end the week on a strong note, though some resistance is expected at higher levels.
US stocks ended marginally higher as encouraging data on August sales from the retailers overshadowed all the bad news on the housing sector. Wal- Mart, Target and Macy's climbed. Mining companies had their biggest advanced in more than a year after gold topped $700 an ounce.
The Dow Jones Industrial Average added 57.88 points, or 0.4%, to 13,363.35. The Standard & Poor's 500 Index rose 6.26 points, or 0.4%, to 1,478.55. The Nasdaq Composite Index increased 8.37 points, or 0.3%, to 2,614.32.
Higher retail sales, rising productivity and a report showing service industries expanded helped allay concern that credit market losses will cause a recession. In addition, two regional Federal Reserve bank presidents said that the US economy was weathering rising credit costs.
The major indexes had been on both sides of the breakeven point throughout the session, as investors remained jittery ahead of Friday's labor market report. US employers are expected to have added 110,000 jobs to their payrolls in August after adding 92,000 in July.
Wall Street is looking for economic news to add to expectations that the Federal Reserve will cut interest rates at its next policy meeting on September 18, and strong reports would reduce the chances of the central bank lowering its benchmark rate.
COMEX gold for December delivery rose $13.90 to settle at $704.60 an ounce. Treasury prices slipped a bit after Wednesday's big rally, raising the yield on the 10-year note to 4.50 percent from 4.46 percent late on Wednesday. In currency trading, the dollar fell versus the euro and inched higher against the yen.
US light crude oil for October delivery rose 56 cents to $76.29 a barrel on the New York Mercantile Exchange. Oil prices were volatile after the weekly inventory report showed a drop in crude supplies and a big rise in distillates, which are used to make heating oil. The front-month contract was quoting 15 cents up at $76.45 a barrel in extended trading in Asia.
Across the Atlantic, key European markets ended higher as well. The CAC-40 in Paris rose 25 points or 0.45% to 5576, while the DAX in Frankfurt advanced 33 points or 0.44% to 7621.72 and the FTSE 100 in London was up 42 points or 0.68% at 6313.
The European Central Bank pumped 42.2 billion euros ($57.7 billion) into money markets to lower borrowing costs and said there was more to come as it shelved an increase in the benchmark interest rate.
The Bank of England left the benchmark interest rate unchanged at a six-year high, saying it was trying to determine whether a surge in credit costs will harm the British economy.
In emerging markets, the Bovespa in Brazil gained 0.3% to 54,569 while the IPC index in Mexico finished flat at 30,816. The RTS index in Russia advanced 0.8% to 1920 and the ISE National-30 index in Turkey added 0.4% to 62,376.
Asian markets were mixed this morning. The Nikkei in Tokyo lost 100 points at 16,156 while the Hang Seng in Hong Kong gained 32 points at 24,082. The Kospi in Seoul was flat at 1891 and the Straits Times in Singapore rose 31 points to 3498.
Bulls were back on D-Street as firm cues from the European markets coupled with buying interest in the index heavyweights like Reliance Industries, HDFC, ITC and SBI lifted the markets higher. All the key sectoral indices ended in green even the Mid-Cap and the Small-Cap stocks participated in the rally lifting the benchmark Sensex to close above the 15600 mark and NSE Nifty above the 4500 mark. Finally, the BSE 30-share Sensex closed at 15,616 surging 170 points. NSE Nifty added 42 points to close at 4518.
Reliance Energy surged by over 4% to Rs860 following reports that the company may separate its engineering procurement and construction division into a company and sell shares. The scrip touched an intra-day high of Rs865 and a low of Rs817 and recorded volumes of over 33,00,000 shares on NSE.
Hindustan Zinc rose over 2.5% to Rs722. The company announced that it has lowered lead prices by 6% to Rs139,000 per ton. The scrip touched an intra-day high of Rs725 and a low of Rs688 and recorded volumes of over 87,000 shares on NSE.
Sadbhav Engineering edged lower by 0.5% to Rs707. The company secured order worth Rs1.9bn. The scrip has touched an intra-day high of Rs729 and a low of Rs702 and recorded volumes of over 41,000 shares on NSE.
Aurobindo Pharma advanced by 1% to Rs637 after the company announced that it has secured US approval for Sterile Drug Facility. The scrip touched an intra-day high of Rs646 and a low of Rs620 and recorded volumes of over 67,000 shares on NSE.
Mastek slipped 1% to Rs280. The company announced that they would raise Rs1.5bn selling securities overseas. The scrip touched an intra-day high of Rs286 and a low of Rs280 and recorded volumes of over 23,000 shares on NSE.
MSK Projects closed flat at Rs100 the company announced that they have secured new order worth Rs764.5mn. The scrip touched an intra-day high of Rs101 and a low of Rs96 and recorded volumes of over 27,000 shares on NSE.
Auto stocks were in momentum led by gains in the index heavyweights like Tata Motors surged by over 2% to Rs712, Hero Honda gained by 2.8% to Rs655 and Maruti edged higher by 0. 8% to Rs880.
Metal stocks erased its intra-day losses as fresh buying interest lifted the metal stocks higher Tata Steel rose 1.6% to Rs692, JSW Steel gained 1.1% to Rs689 and National Aluminum edged higher by 0.3% to Rs264.
FMCG stocks recorded smart gains. Hindustan Unilever surged by over 2% to Rs216, McDowell gained by 1.2% to Rs1516 and Marico added 0.3% to Rs59.
Cement stocks were in limelight. ACC advanced by 1.3% to Rs1102, Ambuja Cement surged by 2.5% to Rs141, Mangalam Cement edged higher by 0.4%to Rs183 and India Cement rallied by over 4% to Rs274.
Pharma stocks recorded healthy gains. Ranbaxy gained by 3.5% to Rs414, Biocon was up by 1.1% to Rs471, Cipla advanced by 1.8% to Rs185 and Nicolas Dr Reddy’s lab added 0.6% to Rs662.
Fund Activity:
FIIs were net buyers of Rs3.11bn (provisional) in the cash segment on Thursday and the local institutions pulled out Rs82.6mn. In the F&O segment, foreign funds were net buyers of Rs9.08bn.
On Wednesday, FIIs were net buyers to the tune of Rs4.1bn in the cash segment. Mutual Funds were net buyers of Rs674mn on the same day.
Major Bulk Deals:
Merrill Lynch has bought Amtek Auto; ILFS Investsmart has purchased Goldstone Tech; Crown Capital has sold IVRCL Infrastructures; Merrill Lynch has picked up; HDFC Core has sold Rico Auto; Merrill Lynch has bought Shree Precoated Steels; Bear Stearns has picked up Unity Infra Projects; A slew of deals on both sides took place in Proto Infosys.
Lower Circuit:
Yashraj Securities.
Upper Circuit:
Zuari Industries, Tourism Finance, Bag Films, Aarti Industries, Bombay Burmah, Saregama Industries, GTC Industries, Bank of Rajasthan, Hindustan Oil and Nirlon
Delivery Delight (Rising Price & Rising Delivery):
Adlabs, Birla Corp, Gateway Distriparks, Hindustan Zinc and Indiabulls Financial.
Abnormal Delivery:
NDTV, Sterlite, FT, Kesoram and Rolta.
Major News & Announcements:
KS Oils enters in to Joint venture in Malaysia
Sadbhav Engineering gets Rs1.9bn orders
Mastek to raise Rs1.5bn selling securities overseas
Ashok Leyland August sales at 6055 units (down 6.6%)
MSK Projects secures new order worth Rs764.5mn
Hindustan Dorr secures Rs770mn order from Nalco
Aurobindo Pharma gets US nod for Sterile Drug Facility