At the bottom of a bull run, promoters have vision and investors have money
At the height of bull run, promoters have money and investors have vision
Money and vision remain in the market but just changes hands. Today, we see a slightly soft opening following the slide in global markets. Next week we may face some more volatility due to the F&O expiry.
Looks like the dust is beginning to settle as far as global markets' reaction to the Fed rate cuts is concerned. Markets across the world have stabilised as investors try to ascertain the weakness in the US economy and its wider fallout on the global economy. Though the Fed has slashed rates aggressively to combat the turmoil in the financial markets, it remains to be seen whether it's enough to prevent the US from slipping into a recession. The surge in crude oil prices and the weakness in the dollar are other worries. Having said that the dollar's slide is positive for emerging market equities, including India, as global investors seek higher returns post the Fed rate cuts. At the same time, a stronger rupee also has its downside, like a sharp increase in foreign inflows and the consequent liquidity management.
Contrary to expectations, the RBI may not soften its stance on monetary policy and could step up intervention in the currency market. Still, the outlook for the Indian economy appears to be strong though there may be some slowdown due to high interest rates. The upcoming result season should provide some clues on the state of the local economy and health of India Inc. We expect the market to remain rangebound in the near term. Anxiety over the fate of the Government may pose some problems, but if FII inflows are robust the key indices will head further up in the medium term too.
US stocks fell for the first time in three days after FedEx cut its profit forecast and a sharp fall in the dollar stoked concerns that inflation could pick up again.
FedEx fell the most in two months after the second-largest US express delivery firm said the housing slump hurt shipments of construction materials. Homebuilders posted five of the top 10 declines in the Standard & Poor's 500 Index after Federal Reserve Chairman Ben Bernanke said the housing recession may become more severe.
The S&P 500 lost 10.28 points, or 0.7%, to 1,518.75. The Dow Jones Industrial Average dropped 48.86 points, or 0.4%, to 13,766.70. The Nasdaq Composite Index slipped 12.19 points, or 0.5%, to 2,654.29.
More delinquencies and foreclosures can be expected in the subprime, adjustable-rate mortgage market as borrowers face interest-rate resets, Federal Reserve Chairman Ben Bernanke said on Thursday.
The dollar hit a new all-time low against the euro and falling to parity with its Canadian counterpart, pressured by lower US interest rates and on reports that Saudi Arabia might end its dollar peg. The euro broke through the $1.40 level for the first time, just two days after the Fed announced an aggressive 50 bps cut in its benchmark interest rate target. The euro was last up 0.7% at $1.4068. It earlier rose to $1.4097, its highest level since the currency began trading in January 1999.
Gold futures rallied on the back of a steep fall in the dollar and record high crude oil prices. The precious metal touched its highest level in 27 years. Gold for December delivery closed up $10.40 at $739.90 an ounce in New York. It touched a high of $746.30. In electronic trading, gold reached a high of $746.50.
Crude oil futures closed above $83 a barrel on news that oil facilities in the Gulf of Mexico shut down 28% of production ahead of a fresh storm. Crude for October delivery briefly climbed to an all-time peak of $84.10 a barrel in electronic trading. It closed up $1.39, or 1.7%, at $83.32.
European shares retreated with financials and miners giving up some of the previous day's gains, while exporters came under pressure as the euro hit a record high against the dollar. The pan-European Dow Jones Stoxx 600 index fell 0.7% to 374.98. The French CAC-40 index closed down 0.7% at 5,688.76, The UK's FTSE 100 index gave up 0.5% to 6,429.00 and the German DAX 30 index slipped 0.2% to 7,735.09.
In the emerging markets, the Bovespa in Brazil was down 0.6% at 56,906 while the IPC index in Mexico fell 0.1% at 30,485. The RTS index in Russia ended flat at 2015 while the ISE National-30 index in Turkey slid 0.7% to 68,185.
Most Asian markets were trading in the red this morning. Toyota and Samsung Electronics led exporters lower amid concerns that demand for their products could drop in the US, the region's biggest export market.
The Morgan Stanley Capital International Asia-Pacific Index declined 0.7% to 155.74 at 11.19 a.m. in Tokyo, falling from its highest since July 26. Japan's Nikkei 225 Stock Average slipped 0.6%. Hong Kong's Hang Seng Index down 0.3% in first half hour.
Benchmark index rose to record for second straight trading session led by Realty and Metal stocks. Volatility was witnessed on D-Street after yesterday’s historical session. Sugar stocks witnessed profit taking as declined slightly after yesterday dream run. L&T, ITC, RIL and Reliance Energy were the leading gainers. While the whole of IT pack was offloaded. Finally, BSE 30-share benchmark Sensex ended 25 points higher to close at 16347. NSE Nifty added 15 points to close at 4747.
L&T surged by over 3% to Rs2749 as reports have stated that the company is close to acquiring stake in Feedback Ventures. The scrip touched an intra-day high of Rs2799 and a low of Rs2675 and recorded volumes of over 13,00,000 shares on NSE.
Bharti Airtel gained by 0.8% to Rs893 reports have stated that it is the only Indian company left in the fray for bagging the second mobile license in Qatar. The scrip touched an intra-day high of Rs910 and a low of Rs882 and recorded volumes of over 11,00,000 shares on NSE.
Simplex Infrastructure surged by over 2.5%to Rs399 after the company announced that it has secured new contracts worth Rs8bn. The scrip touched an intra-day high of Rs412 and a low of Rs381 and recorded volumes of over 1,00,000 shares on NSE.
SCI rose 1.5% to Rs210 after reports stated that the company has floated four joint ventures to enter into shipbuilding, container terminal operation, dredging and offshore services. The scrip touched an intra-day high of Rs215 and a low of Rs208 and recorded volumes of over 4,00,000 shares on NSE.
Titan slipped 1% to Rs1486. According to reports the company entered into a five-year tie-up for exclusive marketing-cum-distribution of Hugo Boss watches in India with MGI Luxury. The scrip has touched an intra-day high of Rs1533 and a low of Rs1480 and has recorded volumes of over 1,00,000 shares on NSE.
Realty stocks were the star performers of the day, the index rose 6.8%. Unitech surged by over 12% to Rs329, DLF surged by over 4% to Rs748, IB Real estate jumped by over 9% to Rs573 and Ansal Infrastructure spurred by 3% to Rs299.
IT stocks continued to be on the receiving end as rupee crossed the 40 per dollar mark this morning for the first time since nine years. Infosys dropped by over 2.7% to Rs1801,TCS was down by 2% to Rs1002, Wipro declined by 3% to Rs434 and Satyam Computer lost 2% to Rs421.
Auto stocks ended higher. M&M surged by over 4% to Rs770, TVS Motors spurred by over 3.5% to Rs72, Tata Motors added 1.5% to Rs731 and Ashok Leyland 1.3% to Rs38.
Pharma stocks also witnessed selling pressure. Glaxo was down by 1.6% to Rs1128, Sun Pharma slipped 1.6%t o Rs994, Ranbaxy declined 1.5%to Rs407 and Dr Reddy’s Lab dipped 1% to Rs638.
Stocks in News:
Reliance Industries strikes oil in its D4 block in the KG basin, after striking gas in two
blocks.
Britannia has taken the dispute with Danone, over the Tiger brand, to a Singapore
court.
Godrej & Boyce plans to incur a capex of Rs3bn for foray into the CTV segment.
UTV plans to invest Rs6bn over the next three years to launch nine new television
channels.
Ramsarup has announced an expansion plan with an investment of Rs40bn over the
next three years.
Royal Orchid Hotels, Gold Finch Group and Maple Hotels are in the race to be the
hospitality partner for Golden Chariot, Karnataka Government’s proposed luxury on
wheel project.
Notz Stucki has joined the race to acquire ICICI Ventures 63% stake in Infomedia.
FIPB cleared a proposal by Maruti to form a JV with Japans Futaba Industrial Company
for setting up an exhaust parts manufacturing facility.
Financial Technology has secured the approval from CERC to set up a national level
power exchange – Indian Energy Exchange. PTC India has consented to take a 26%
stake, while Tata Power, Reliance Energy, IDFC, Lanco Infratech and Adani have also
agreed to buy stake in the energy exchange.
Petroleum Minister Murli Deora says that the government is not considering a hike in price of petrol and diesel in the near term.
Agriculture Minister Sharad Pawar says that the government is likely to extend the export subsidy given to sugar mills by one more year.
Fund Activity:
FIIs were net buyers of Rs16.27bn (provisional) in the cash segment on Thursday and the local institutions pulled out Rs5.64bn. In the F&O segment, foreign funds were net buyers of Rs5.91bn.
On Wednesday, FIIs were net buyers to the tune of Rs24.85bn in the cash segment. Mutual Funds were net buyers of Rs4.88bn on the same day.
Major Bulk Deals:
Deutsche International and Macquarie Bank have bought Ahluwalia Contract while Global Credit Capital has sold it; Citigroup has sold DCB while Goldman Sachs has purchased the stock; HSBC Global has sold Dwarikesh Sugar; Prudential ICICI MF has sold ICI India; Franklin India MF has sold IPCA Labs; Lotus Global has sold Kashyap Tech; Principal MF has bought Rallis India; UBS has picked up Simbhaoli Sugar; Bear Stearns has purchased Tourism Finance Corp.
Upper Circuit:
Swan Mills, Rby Mills, IID Firgings, RIIL, Morepen Labs, Bombay Burmah and Jain Studios.
Lower Circuit:
CCS Infotech and Marathon Nextgen.