Fast is fine, but accuracy is everything.
The recent rally may well be the fastest 1000-point run gain one can remember. When speed is the key, safety should not be left behind. But hell to all concerns for the day and hopefully we'll Look at cheering a new milestone for the key indices. The Sensex just needs to crack a ton (100 points) to hit the 17k mark, while the Nifty will need to score another 60-odd points more to attain 5k. The undertone has been bullish since late August, and last week's Federal Reserve's move has only improved the outlook for emerging markets like India. FII inflows have crossed $1.5bn in the past five days, topping the $11bn mark for the year. There are still three more months to go in the year.
Indications from the F&O segment are also positive, though the record open interest of Rs1 trillion could pose some trouble whenever a correction happens. So, avoid over leveraging at this stage and wait for the next round of quarterly results before taking a broader call on the market. Valuations are not cheap after the sharp run-up in the past several sessions. A whole host of stocks have rallied without any significant events backing up the meteoric rise. All these may be signs of some softening though the overall outlook remains upbeat. Today, we expect a flat to slightly positive opening and wild intra-day gyrations as usually is the case during a derivative expiry week.
A long day is in store and it remains to be seen whether the new milestones will be achieved or will it be so near yet so far!
Media Video and Pantaloon Retail will announce their audited results today. STC India will consider a bonus issue today.
BAG Films could gain as Fidelity has picked up more than 10mn shares of the television software company.
US technology shares climbed on Tuesday, but the broader market was subdued following profit warnings from a couple of retailers and grim reports on consumer confidences and home sales.
Oil prices dropped below $80 a barrel. Gold prices slipped. Treasury prices rose, lowering the corresponding yields. The dollar slumped against the euro anew.
The S&P 500 finished flat at 1,517.21. The Dow Jones Industrial Average rose 19.59 points, or 0.1%, to 13,778.65. The Nasdaq Composite Index added 15.50 points, or 0.6%, to 2,683.45, helped by a 1.7% gain in Microsoft.
About eight stocks dropped for every five that rose on the New York Stock Exchange.
Target Corp. and Lowe's Cos. reduced their earnings forecasts, heightening concern that the housing slump has slowed consumer spending.
Target, the second-largest US discount chain, fell the most in six weeks after slashing its projection for September sales. Lowe's, the second-biggest home-improvement retailer, posted its steepest decline since 2003 after saying earnings this year may miss its previous forecast.
Lennar Corp., the largest US homebuilder, sank to a four-year low on the worst quarterly loss in its history.
The September consumer confidence report showed a bigger-than-expected drop to 99.8, down from an upwardly revised 105.6 in the previous month. Existing home sales fell to a five-year low in August, while July home prices posted the biggest monthly drop in 16 years.
GM resumed contract talks with the United Auto Workers union one day after the UAW launched a nationwide strike against the automaker. Microsoft shares rose after the launch of its Halo 3 video game at midnight.
Treasury prices rose modestly, with the yield on the 10-year note at 4.63%, little changed from late on Monday. In currency trading, the dollar fell against the euro and also inched lower versus the yen. COMEX gold for December delivery fell 50 cents to settle at $738.80 an ounce.
US light crude oil for November delivery lost $1.43 to settle at $79.53 a barrel in New York. Last week, the October contract settled at a record high of $83.32.
European shares lost some ground. The pan-European Dow Jones Stoxx 600 index declined 1.1% to 372.42. In London, the commodity-heavy FTSE 100 closed down 1.1% at 6,396.90. The French CAC-40 fell 0.9% to 5,641.59 and the German DAX 30 lost 0.2% at 7,769.44.
In the emerging markets, the Bovespa in Brazil was up 0.2% at 58,858 while the IPC index in Mexico was down 0.8% at 30,294. The RTS index in Russia tumbled 1.6% to 2008 and the ISE National-30 index in Turkey dropped 1.3% to 67,059.
Asian markets were flat to lower in early trading. Weak data on US home sales and consumer confidence fueled speculation that the Federal Reserve will slash rates further to bolster the world's largest economy. A regional benchmark touched a two-month high.
The Morgan Stanley Capital International Asia-Pacific Index gained 0.2% to 159.04 at 10:40 a.m. in Tokyo, set for the highest close since July 26. An index of financial shares posted the biggest gain among the MSCI's 10 industry groups.
The Nikkei 225 Stock Average added 0.2% to 16,426.98 in Japan, where the government today reported that the trade surplus more than tripled in August. Taiwan's Taiex index climbed 1% on the island's first trading day this week, the best performance in the region.
Markets in Hong Kong and South Korea are shut today.
Markets staged an impressive recovery in a highly volatile session led by index heavyweights like Reliance Industries, HDFC Bank, Bharti Airtel and Hindustan Unilever. Benchmark Sensex recouped over 200 points and NSE Nifty recovered over 50 point’s from their respective lows. IT stocks ended with modest gains after rupee, which reached a nine- year high yesterday, paused its advance on speculation the central bank will sell the currency to curb a rally that is eroding export earnings. However, Others like Realty, Auto and Capital Good stocks were offloaded.
Finally, BSE 30-share benchmark Sensex ended 53 points higher to close at 16899. NSE Nifty added 6 points to close at 4938.
HCC slipped by 3% to Rs143. The company is in joint venture with Alpine Mayreder and Samsung Corporation bagged a prestigious contract worth Rs7.7bn from DMRC. The scrip has touched an intra-day high of Rs148 and a low of Rs141 and recorded volumes of over 7,00,000 shares on NSE.
Opto Circuits gained by 1% to Rs569 after reports stated that the company would drawn up plans to enter the US market with a range of cardiac care products. The scrip touched an intra-day high of Rs579 and a low of Rs561 and recorded volumes of over 1,00,000 shares on NSE.
Gayatri Projects marginally gained by 0.5% to Rs310 after the company announced that they have secured new order valued Rs1.54bn. The scrip touched an intra-day high of Rs319 and a low of Rs305 and recorded volumes of over 1,00,000 shares on NSE.
BPCL has surged by over 9.5% to Rs357 on reports of Assam Gas Discovery. The scrip has touched an intra-day high of Rs360 and a low of Rs333 and has recorded volumes of over 2,00,000 shares on NSE.
Tata Power gained by 0.3% to Rs836 as reports have stated that the company would pick up 15% stake in power exchange to be set up by NCDEX and NTPC. The scrip touched an intra-day high of Rs842 and a low of Rs814 and recorded volumes of over 5,00,000 shares on NSE.
GAIL dropped by 3.2% to Rs363. According to reports the company has announced its plan to explore options for strategic co-operation with BPCL for petrochem and E&P activities. The scrip touched an intra-day high of Rs382 and a low of Rs357 and recorded volumes of over 15,00,000 shares on NSE.
Pharma stocks ended higher following reports that National Pharmaceutical Pricing Authority decided to revise prices of over 200 life saving medicines. Ranbaxy gained 1.8% to Rs424, Galxo was up by 0.6% to Rs1125 and Sun Pharma added 0.2% to Rs951.
IT stocks bounced back after rupee, which reached a nine- year high yesterday, paused its advance on speculation the central bank will sell the currency to curb a rally that is eroding export earnings. Satyam Computer gained by 0.8% to Rs412, Infosys advanced by 0.5% to Rs1771 and NIIT Ltd added 1.1% to Rs147.
Telecom stocks were a mixed bag. Reports stated that Department of Telecommunications is setting up an internal committee for developing guidelines for companies seeking fresh unified access service licenses. Bharti Airtel surged 2% to Rs962. However, R Com slipped 0.5% to Rs594 and Idea was down 2% to Rs125.
Realty stocks were badly beaten up on back of profit booking. Akruti dropped by 5% to Rs705, HDIL was down by 4% to Rs608, DLF slipped by 2% to Rs765 and Parsvnath lost 2.7% to Rs339.
Auto stocks were also in the reverse gear. Hero Honda lost 3% to Rs744, M&M was down by 2.3% to Rs765, Bajaj Auto declined 1.8% to Rs2529 and Tata Motors dipped 1% to Rs741.
Stocks in News:
The RBI has allowed corporates, individuals and mutual funds to invest more overseas. It has also increased ECB prepayment limit for companies up to $500mn.
Essar Communications plans to raise $3.6bn in term loans against put options that exist in the Vodafone-Essar agreement.
Wipro has reportedly bagged $130mn five year contract from British utility Thames Water.
Reliance Fresh has decided to shut shops in UP owing to the mass opposition from local shopkeepers and traders.
SRF will set up a new polyster industrial yarn spinning unit with an annual capacity of 14500 tonnes at its existing Gumminipoondi plant in Tamil Nadu.
Arcelor Mittal aims to invest $20bn for building two 12mn tonnes steel plants in India.
PFC has invited preliminary bids from prospective developers for setting up the Ultra Mega Power Project at Tilaiya in Jharkhand.
Hindustan Unilever announced that the buy back of 551.6mn shares at up to Rs230 would begin from October 3.
Pfizer has been asked by NPPA to reduce prices of two drugs, Benadryl and Caladryl.
IT companies have indicated that billing rates for new contracts will go up by 3-4% and the old ones by 2-3%, to rein in margin pressure.
Fund Activity:
FIIs were net buyers of Rs14.96bn (provisional) in the cash segment on Wednesday and the local institutions pulled out Rs5.16bn. In the F&O segment, foreign funds were net buyers of Rs855.5mn.
On Tuesday, FIIs were net buyers to the tune of Rs12.84bn in the cash segment. With this, their net investment in Indian shares in the past five days to more than US$1.5bn.
Major Bulk Deals:
Morgan Stanley has sold Patni Computer. There are no other major bulk deals.
Upper Circuit:
Accel Frontline, RIIL, Bag Films, Gremac Infrastructure, Jayant Agro, Crazy Infotech, Ruby Mills, IID Forgings, Jai Corp, Marathon Nextgen and BF Utilities.
Lower Circuit: