Sometimes it pays to stay in bed in Monday, rather than spending the rest of the week debugging Monday's code”.
After Friday’s fall, the bulls may have rested over the weekend hoping it was just an aberration. Bears too got an opportunity and are unlikely to easily give in to the bulls in the coming week. For the day, we see a positive opening on the back of encouraging signals from the US market as well as rest of the world. But the current choppiness is here to stay. Reliance may have not announced a split/bonus as many market participants would have wanted to. But, the results day may spring some surprise. So watch that counter closely.
What remains to be seen now is whether the bulls will resume their shopping spree this week as the pace of the result announcements accelerates. As has been the case over the course of the past two months or so, much will hinge on the liquidity factor. As long as the FIIs are pouring money into Indian stocks, the bulls will remain in complete command, barring an odd bad day in office like it was on Friday.
The rally will get renewed thrust with the Congress leadership now backing off from the potential confrontation with the Left parties over the Indo-US nuke deal, which now seems headed for the cold storage. On the flip side, the communists and other UPA allies could make life even more difficult for the Congress till the general election in 2009. So, tough reforms in key areas like insurance, banking, pension funds, retail, FDI, etc. will take a backseat. Still, the Indian economy is expected to clock 8-9% growth over the next few years, that's more than good news for the bulls.
What perhaps could play a spoilsport is the RBI's mid-term review on Oct. 30 and a pause by the Federal Reserve at its meeting the next day. With the rupee showing no signs of holding back versus the beleaguered dollar and the Finance Minister apparently hinting at the Government's discomfort over the relentless appreciation in the local currency and the "copious" foreign inflows, the central bank might just go for a CRR hike. So, those betting on lower rates may well have to wait for a while.
The strong IIP numbers for August will make the case for another liquidity tightening measure even stronger. If this indeed comes true, the market naturally will react, and we may see some correction/consolidation at that time. But, we will have to carefully interpret the tenor of the RBI's statement to determine the mood on the Mint Street. In the meantime though, the earnings and global trends will drive the market.
Results Today: Axis Bank, BOC India, IFCI, Indian Bank, Jaiprakash Associates, KLG Systel, Orbit Corp, Petronet LNG, Reliance Industrial Infrastructure, Sasken, TCS, UCO Bank, Vakrangee Software and Welspun Gujarat.
Shares of Consolidated Construction Consortium Ltd. will get listed on the bourses today. CCCL has announced an issue price of Rs510 per share after a fairly successful IPO. The stock could appreciate by at least Rs200 today.
Himatsingka Seide has announced the opening of the second international store for "Atmosphere", in Singapore, on October 12. The first overseas store of "Atmosphere" opened in Dubai in May. Sical Logistics' shareholders have approved the proposal for increasing the investment ceiling for FIIs, from 24% to 49%.
Advanta India has have signed independent MOUs with TEAM and CALSA for the development of its Nutrisun healthy sunflower oil.
US technology shares jumped on Friday on fresh M&A news in the sector, while broader gains were limited. Oracle's bid for BEA Systems, McDonald's improved earnings forecast and GE's strong quarterly results highlighted the session's positive corporate news.
Wall Street also welcomed a strong report on retail sales and a mild reading on inflation. Those reports may have also dented hopes that the Federal Reserve will cut interest rates at its next policy meeting that ends Oct. 31, as was evident by rising Treasury bond yields.
However, concern that the world's largest economy might be at risk of accelerating too much were tempered by weaker-than-expected reports on business inventories and consumer sentiment.
The Dow Jones Industrial Average and the S&P 500 index both gained around 0.5%. Both major gauges hit all-time intra-day highs on Thursday. The Nasdaq Composite added 1.2%. The tech-heavy index hit a fresh 6-1/2 year high on Wednesday.
For the week, the Dow and S&P 500 ended barely higher, while the Nasdaq gained nearly 1%.
Market breadth was positive. On the New York Stock Exchange, winners topped losers 9 to 7 on volume of 1.10 billion shares. On the Nasdaq, advancers beat decliners 3 to 2 as 2.01 billion shares changed hands.
Crude oil prices settled at a record high Friday on news of dwindling stockpiles, potential trouble with Turkey and projections for a colder winter. US light crude oil for November closed at a record high of $83.69 per barrel. Oil briefly hit a record trading high of $84.05 during the session before pulling back.
Treasury prices slumped, raising the yield on the benchmark 10-year note to 4.68% from 4.63% late on Wednesday. In currency trading, the dollar gained versus the yen and euro. COMEX gold for December delivery fell $2.90 to $753.80 an ounce.
European shares reversed earlier losses to close slightly higher on Friday. The pan-European Dow Jones Stoxx 600 index inched 0.1% higher to 390.63. The UK's FTSE 100 closed 0.1% higher at 6,730.70 and the German DAX 30 added 0.1% as well at 8,041.26. The French CAC-40 closed down 0.3% at 5,843.95.
In the emerging markets, the Bovespa in Brazil fell by 1.2% to 62,456 while the IPC index in Mexico rose 1.5% to 32,473. The RTS index in Russia was down 0.5% at 2163 and the ISE National-30 index in Turkey gained 1.4% at 74,222.
Asian markets were trading mixed this morning. Stock benchmarks in Hong Kong, Shanghai set intra-day records while Japanese and other regional indexes retrenched from morning highs as investors booked profits.
Market to be choppy
After opening with a positive bias, markets witnessed selling pressure after comments from the Finance Minister; P. Chidambaram hampered the sentiments of the trades on the bourses. A four day wining streak was snapped as all round selling pressure in the scrips across the sectors dragged the key indices from the days high.
Finance Minister was quoted as saying that, expect key Sensex to ‘Cool Down’ after a while. Also, according to Chidambaram, Rupee is not in a comfort zone.
Finally, BSE 30-share benchmark Sensex ended 395 points lower or lost 2.1% to close at 18,419. NSE Nifty lost 96 points or 1.75% to close at 5,428.
Koutons Retail
The IPO of apparel retailer was subscribed 45.21 times and the company has set an issue price of Rs415 per share. It could open at a premium of over Rs100 at least.
Punj Lloyd slipped 1% to Rs353. The company announced that they would construct pipeline for
ONGC surged by over 2.5% to Rs1093 after the company announced that they are seeking stake in
Exide Industries dropped 2.5% to Rs67. The company announced its Q2 result with net profit at Rs622.4mn (up 42.2%) and net sales at Rs6.68bn (up 48.1%). The scrip touched an intra-day high of Rs74 and a low of Rs66 and recorded volumes of over 27,00,000 shares on NSE.
HDFC Bank dropped by 2% to Rs1432. The company announced its Q2 result with net profit at Rs3.65bn (up 39.9%). The scrip touched an intra-day high of Rs1461 and a low of Rs1420 and recorded volumes of over 4,00,000 shares on NSE.
Rolta surged by over 7.5% to Rs624 after the board of Directors of the company announced that they would meet on October 22 to mull Bonus issue. The scrip touched an intra-day high of Rs651 and a low of Rs591 and recorded volumes of over 23,00,000 shares on NSE.
Unity Infrastructure advanced 1.8% to Rs689 after the company announced that they have secured order worth Rs1.48bn. The scrip touched an intra-day high of Rs743 and a low of Rs646 and recorded volumes of over 2,00,000 shares on NSE.
Gitanjali Gems edged lower by 0.5% to Rs359. Reports stated that the company plans to buy another leading jewellery retailer having over 100 outlets across the country for around US $100mn. The scrip touched an intra-day high of Rs380 and a low of Rs350 and recorded volumes of over 3,00,000 shares on NSE.
Rajesh Exports slipped 1.8% to Rs91. The company announced that they have secured orders worth Rs7.43bn from Gold Star Jewellery. The scrip touched an intra-day high of Rs935 and a low of Rs880 and recorded volumes of over 2,00,000 shares on NSE.
IT stocks continued its downtrend as rupee further strengthens against the USD. Infosys was down by 2.4% to Rs1929, TCS slipped by 1% to Rs1063, Satyam Computer dropped 2% to Rs439 and Wipro edged lower by 0.3% to Rs293.
Stocks in News:
Reliance Industries to invest US$9bn in the next four years at its petrochemical and refining complex in Jamnagar, Gujarat
United Phosphorus to team up with a Japanese PE fund to bid for Arysta LifeScience Corp.
Cadila Pharma to buy an European specialist in neurology and opthamology medicines for US$80mn
Idea, HFCL and ByCell could be among the first to get spectrum as DoT continues with existing ‘first come-first served’ basis for allocation of radio frequency
Cairn India and ONGC are likely to submit a proposal for joint development of Ambe and North Tapti satellite fields in western offshore by end of this fiscal
L&T is planning to enter the nuclear power sector; may manufacture boilers and turbines of nuclear reactors
Reliance Industries plans to double its hydrocarbon reserves to over 10bn barrels of oil equivalents from current 4.4bn barrels
Reliance Industries has submitted a bid for Tuntex, an integrated producer of polyester with PTA production in Thailand.
DLF plans to invest Rs160bn over the next four years to develop about 20 large shopping malls across the country
Ashok Leyland has decided to set up a plant in AP with an initial capacity to make 0.1mn LCVs p.a.
JSW will invest Rs170bn to increase production capacity to 10mn tons by 2010
Bombay Dyeing has entered in a partnership with a Dubai-based luxury lifestyle retailer Rivoli Group
M&M plans to spend about US$1bn in the next four years to double automobile production capacity
Dishman Pharma has earmarked US$50mn to acquire US and European companies operating in the CRAMS space
BPCL ties up with Godrej Aadhaar to foray into the agri-retail segment
Bilcare to invest Rs1bn in clinical research training
The Index of Industrial Production rose 10.7% in August vs. 10.28% a year ago, reversing a fourth month trend
Inflation declines to 3.26% for week ended September 29th
Production from 40 wells with 80mn cubic feet of gas in K-G basin to begin from June 2008, according to DGH
The Government may allow 100% FDI in oil and marketing companies
Average shortage of power more than halved to 4.8% in September from 10.4% at start of current fiscal.
IFC to increase its exposure to infrastructure projects in India to US$500mn in the current year (July-June) from US$300mn in the previous one.
Fund Activity:
FIIs were net buyers of Rs3.15bn (provisional) in the cash segment on Friday while the local institutions pulled out Rs8.84bn. In the F&O segment, foreign funds were net buyers at Rs13.72bn.
FIIs were net buyers of Rs9.91bn in the cash segment on Thursday. With this, their net investment in the month has crossed US$4.3bn and year-to-date the same is US$16.54bn.
Major Bulk Deals:
Reliance Capital has bought Emami while Sundaram MF has sold it; UBS has picked up Genus Power; Macquarie Bank has purchased JK Tyre but HDFC MF has sold the same.Upper Circuit:
RIIL, Evinix, Deep Industries, Tourism Finance, Usher Agro, IID Forgings, Jai Corp and Assam Company
Lower Circuit:
Malu Paper, Goldstone Tele and Rei Agro