If something anticipated arrives too late it finds us numb, wrung out from waiting, and we feel - nothing at all. The best things arrive on time.
Hopefully, the time has come. We are not talking of the Ganeshotsav or the festival season in general, but the much awaited meeting of the Federal Open Market Committee. The Federal Reserve's policy-setting panel will hold its meeting tomorrow amid fresh concerns over the subprime contagion affecting other parts of the world. The latest casualty of the collapse in the US housing sector is a bank in the UK. Markets across the world, barring a few in Asia, tumbled on Friday following the announcement by Northern Rock that it had to seek emergency funds from the Bank of England amid continuing tight credit market conditions. Our market too tanked in step with the global trend. But, thankfully US shares managed to escape unhurt and ended flat ahead of the Fed meeting. Asian markets too do not appear to be all that rattled this morning.
So, we expect a flat to slightly positive start and a rangebound sort of day. Most investors are waiting with bated breadth what the Fed will do tomorrow? Will it finally lower interest rates to prevent a recession in the US? If yes, what will be the size of the cut? And, will there be hints of further reductions down the line? To get answers to a a lot of questions we will have to wait for Tuesday afternoon (US time). Indian and other Asian markets will only get to react to the event only on Wednesday morning. One will also have to listen what the Fed has to say on the US economy, particularly the housing sector. Expect a lot of stock centric action and don't be over aggressive with your purchases. Also, don't forget the quality of the stock that you are buying.
Watch out for Tech Mahindra, SAIL and Jaiprakash Associates.
US stocks closed slightly higher on Friday with the major indexes all scoring weekly gains, after a stronger-than-expected consumer confidence reading offset weak August retail numbers and news that a UK lender is tapping the Bank of England for emergency funds.
The Dow Jones Industrial Average gained 18 points or 0.1% to end at 13,442.5. It had a weekly advance of 2.5%. The S&P 500 finished flat at 1,484.25, giving it a weekly gain of 2.1%. The Nasdaq Composite Index too closed unchanged at 2,602.18, translating into a weekly gain of 1.4%.
A monthly survey by Reuters and the University of Michigan pointed to a rebound in consumer sentiment in September, with an index rising to 83.8 in September from 83.4 in August, above a forecasted rise to 83.5.
US retail sales rose 0.3% in August, with all of the gains coming from cars and trucks. Excluding vehicle sales, the figure fell 0.4%.
The US current account deficit narrowed to $190.8 billion in the second quarter, or 5.5% of GDP. Inventories at US businesses tightened in July ahead of the August financial crunch. The Fed reported an August rise in output at US factories, mines and utilities, with industrial production up 0.2%.
Gold futures shed earlier gains, with gold for December falling 10 cents to close at $717.80 an ounce. Despite Friday's modest declines, gold posted a gain of $8.10 on the week.
The dollar gained 0.1% against the euro and was down 0.1% against the yen. The benchmark 10-year Treasury note was up 2/32 at 102 9/32, its yield at 4.46%.
Crude oil futures fell 99 cents to close at $79.10 a barrel, giving it a 3.1% rise for the week. The front-month contract was quoting 52 cents lower at $78.58 a barrel.
Former Fed chairman Alan Greenspan says his outlook for the future of the US economy is pretty gloomy. In an interview to a US television network, Greenspan said over the long run, the biggest problem facing the US economy is the re-emergence of inflation, and rising interest rates.
British stocks declined on Friday after UK lender Northern Rock turned to the Bank of England for emergency funds, saying the global credit crunch has it struggling to raise financing. The FTSE 100 in London closed down 1.2%, or 74.60 points, at 6,289.30. The index closed off lows after a stronger-than-forecast reading of US consumer confidence.
Other European stocks also ended lower. The pan-European Dow Jones Stoxx 600 index declined 1.2% to 367.75. The German DAX 30 fell 0.5% at 7,497.74 and the French CAC 40 dropped 0.5% to 5,538.92.
In emerging markets, the Bovespa in Brazil fell 0.4% to 54,671 while the IPC index in Mexico dropped 0.7% at 30,096 and the RTS index in Russia rose 0.55% to 1943. The ISE National-30 index in Turkey surged 2.5% to 64,055.
The Shanghai Composite index was up this morning despite China lifting its benchmark interest rates to cool the nation's economic growth and inflationary pressures. Markets in Tokyo are shut for a holiday while stock indices are down in Hong Kong, Singapore, Seoul and Taipei.
Swinging markets pared their intra-day gains following a sharp fall in the European markets after Northern Rock Plc, a British Home lender sought emergency funding from the Bank of England after a freeze in money markets left the mortgage provider unable to finance itself. The Auto and the IT stocks were worst hit and other like Pharma and Consumer Durable stocks followed suit. Even the Mid-Cap and the Small-Cap indices ended lower. Finally, BSE 30-share benchmark Sensex slipped 10 points to close at 15603. NSE Nifty slipped 10 points at 4518.
L&T gained by 1% to Rs2591 following reports that the company has secured order worth Rs762crores. The scrip touched an intra-day high of Rs2629 and a low of Rs2580 and recorded volumes of over 6,00,000 shares on NSE.
HDIL surged by over 2.5% to Rs593 after the company announced that they would develop 70acres of Land in Kochi and have signed Joint development agreement with Blue Star Realtors. The scrip touched an intra-day high of Rs610 and a low of Rs583 and recorded volumes of over 29,00,000 shares on NSE.
Suzlon edged lower by 0.8% to Rs1373. According to reports the company has won Rs20bn DFL order for 500-MW turbines. The scrip touched an intra-day high of Rs1404 and a low of Rs1363 and recorded volumes of over 6,00,000 shares on NSE.
Simplex Infrastructure gained by 1% to Rs368 amid reports that the company would foray into power transmission EPC business in India and abroad. The scrip touched an intra-day high of Rs380 and a low of Rs366 and recorded volumes of over 14,000 shares on NSE.
Banking stocks ended higher on expectation that Federal Reserves may cut interest rates in its meet due on 18th September and RBI would follow suit. ICICI Bank surged by over 2.5% to Rs906 and HDFC Bank added 1.2% to Rs1228. However, Mid-Cap Banks pared their gains Bank of India, Union Bank and OBC were the major losers among the Mid-Cap Banks.
ABG Shipyard surged by over 1% to Rs633 after reports stated that the company would bid for more than 51% for restructuring of Western Shipyard Ltd. The scrip touched an intra-day high of Rs639 and a low of Rs625 and recorded volumes of over 33,000 shares on NSE.
M&M lost 1.4% to Rs698. According to reports the company has pulled out of the race to buy Ford's luxury brands - Jaguar and Land Rover. The scrip touched an intra-day high of Rs719 and a low of Rs695 and recorded volumes of over 24,000 shares on NSE.
Oil PSUs stocks also pared their gains on back of profit booking. IOC slipped 0.7% to Rs392, HPCL was down by 0.7% to Rs239 and BPCL lost 1.5% to Rs306.
Realty stocks continued its firm run led by gains in the index heavyweights. DLF advanced by 3% to Rs665, Akruti surged by over 3% to Rs630 and Sobha added 1% to Rs757. However, Parsvnath slipped by 1% to Rs318.
Cement shares were a mixed bag. According to reports local companies may go in for a price hike of Rs3-5 per bag. ACC slipped by 2% to Rs1107, Grasim dropped by 1.1% to Rs3227. However, Ambuja Cement added 0.5% to Rs144.
Banking stocks ended higher on expectation that Federal Reserves may cut interest rates in its meet due on 18th September and RBI would follow suit. ICICI Bank surged by over 2.5% to Rs906 and HDFC Bank added 1.2% to Rs1228. However, Mid-Cap Banks pared their gains Bank of India, Union Bank and OBC were the major losers among the Mid-Cap Banks.
SCI and ONGC to form JV for offshore services; It will focus on drilling ships.
De Beers has shown interest in jewellery and retailer Rajesh Exports for acquiring 51% stake in it.
Tata Sons proposes to make an open offer for 29.3% equity stake in Tata Investment Corporation at Rs600 per share, a 33% premium to Friday’s closing of Rs450 .
Nipuna Services, the BPO arm of Satyam Computers, is looking at a BFSI buy.
10 bidders in fray for 26% stake in IFCI.
Subex Azure has announced cut in its guidance for FY08 due to postponement of capex commitments by a US customer.
United Spirits may see some action as announcing the acquisition of a majority stake in Liquidity Inc., a Delaware company engaged in the business of alcoholic beverages.
Omnitech InfoSolutions could also attract some attention after the company decided to incorporate a Joint Venture in Japan.
Ess Dee Aluminium is likely to be in the limelight as Morgan Stanley has picked up 1410000 shares at Rs575 per share.
The Government issued guidelines for semiconductor policy; to provide incentives up to 20% for minimum investment at US$550mn in a “fab” unit located in a SEZ.
The TRAI has asked all the telecom operators to give access to their fixed line optical fibre cable and copper network to each other on a non-discriminatory basis.
Fund Activity:
FIIs were net buyers of Rs12.86bn (provisional) in the cash segment on Friday and the local institutions pulled out Rs2.6bmn. In the F&O segment, foreign funds were net buyers of Rs5.11bn.
On Thursday, FIIs were net sellers to the tune of Rs466mn in the cash segment. Mutual Funds were net buyers of Rs802mn on the same day.
Upper Circuit:
Tourism Finance, Bombay Burmah, IID Forgings and Jai Corp.
Lower Circuit:
Carol Info, Usher Agro and Marathon Nextgen.
Major Bulk Deals:
Morgan Stanley has picked up Advani Hotels; Bear Stearns has bought Ganesh Forgings; Principal PNB MF has purchased Gayatri Projects; Religare Securities has bought Goldstone Tech; UBS has picked up Gremac Infra; UBS and ABN AMRO have purchased IT People; Citigroup Global has picked up Indowind Energy; HSBC has sold JRG Securities; Lotus Global has sold Kashyap Tech; Bear Stearns has bought SREI Infra; HSBC picked up Vinay Ceme; BNP Paribas has purchased XL Telecom.