Stop worrying about the potholes in the road and celebrate the journey!
Though officially Diwali festivities begin today, on the bourses the festive spirit has been underway for quite some time now. Last week, the Sensex crossed the 20k mark and the Nifty breached 6,000. Concerns keep bursting like loud crackers time and again. First there was the subprime mess in the US, which was followed by a smart pullback. Then came the P-Note scare. Last week, the policy announcements from the RBI and then from the Fed also did little to upset the apple cart, so to speak. The bulls have survived the bumpy ride of the past three months and seem to be in the driver's seat, thanks to the non-stop foreign capital inflows. Having said that, the same appears to have tapered off a little in the past few days. So, if the trend continues for a while, the market will react and we will have a long-overdue but a healthy consolidation/correction. Still, we wouldn't press the panic button, as the 'India Shining' story remains solid. Short-term blips apart, one should consider taking the longer, and more fruitful journey. Those who dare to tread this path should stay put in quality stocks and capitalise on any downside to buy more. Others should lock in gains as the ride has turned choppy and will remain so amid the lack of any specific catalysts. Today, we see a weak opening due to a sharp fall in Asian indices, especially the Hang Seng. Thereafter the market will turn volatile.
US stocks ended a volatile trading session on Friday with modest gains as investors weighed a surprisingly strong October jobs report and an unexpected rise in factory orders against ongoing credit-related turmoil in the financial sector.
Citigroup said its CEO Charles Prince is stepping down after the largest US bank warned of as much as $11bn of additional writedowns on subprime mortgages and related securities, on top of more than $6bn of charges reported for the third quarter.
The Dow Jones Industrial Average climbed 27.2 points to 13,595.10, but ended with a 1.5% loss for the week. The broader S&P 500 index closed up 1.25 points at 1,509.69, but ended with a weekly loss of 1.6%. The Nasdaq rose 15.55 points to 2,810.38, leaving it virtually unchanged from the prior week's close.
The US economy created 166,000 jobs in October, helping investors brush aside lingering fears over weakness in the housing and credit sectors. The growth in non-farm payrolls was the best since May. The unemployment rate held steady at 4.7%.
In commodities trading, crude-oil and gold futures both rallied on Friday. Light, sweet crude for December delivery gained $2.44 to a record close of $95.93 per barrel, while the benchmark gold contract rallied to close above $800 at their highest level in nearly 28 years, finishing up $14.80 to end at $808.50 an ounce.
Across the Atlantic, banks led the top FTSE 100 index in London into the red amid nagging worries that the recent credit market crisis may not yet be over. The FTSE 100 index closed 0.8%, or 55.50 points lower, at 6,530.60. Other European markets also closed down, though they came off lows after the release of stronger-than-expected US jobs data.
In emerging markets, the Bovespa in Brazil tumbled by close to 2% at 64,050 while the IPC index in Mexico fell by over 2% to 30,806. The RTS index in Russia gained 0.4% at 2228 and the ISE National-30 index in Turkey gave up 1.2% at 72,304.
Asian markets were mostly down this morning on renewed concerns about the extent of strain in US housing sector and its implications on the world's largest economy.
Mitsubishi UFJ Financial and National Australia Bank declined after Citigroup said it will increase writedowns by as much as $11bn on its mortgage-related investments and Deutsche Bank estimated Merrill Lynch will have to write off another $10bn on subprime-linked assets.
BHP Billiton slipped after copper had the biggest weekly loss in two months. Inpex Holdings gained after crude oil prices ended last week at a new lifetime high.
PetroChina, which raised $8.9bn in the world's biggest IPO this year, passed Exxon Mobil as the world's largest company by market value after surging on its trading debut in Shanghai.
The Morgan Stanley Capital International Asia Pacific Index lost 0.6% to 167.47 as of 11:06 a.m. in Tokyo, having slipped 2.2% on Nov. 2 from a record close. Financial shares were the biggest drag among the benchmark's 10 industry groups.
Japan's Nikkei 225 Stock Average declined 0.9% to 16,362.64. Hong Kong's Hang Seng Index lost 1.2%, the region's biggest drop, after comments by China's Premier Wen Jiabao suggested the nation may delay a plan to allow mainland investors buy Hong Kong shares.
China, Malaysia, Indonesia and the Philippines were the region's only markets to advance.
Volatility to prevail
After opening lower by more than 400 points in the opening trades the benchmark Sensex recouped all its losses and closed 251 points or 1.28% higher shrugging off all the negative cues from the International markets. The recovery was led by the index heavyweights like SBI, HDFC, Reliance Energy and ONGC.
Almost all the BSE sectoral indices ended in positive terrain towards the end of the session. The Bankex index was the top gainer, the index gained 3.5%. Others like Capital Good, FMCG and Realty indices followed suit
Finally, the 30-share Sensex gained 251 points to close at 19,976. Nifty index gained 65 points to close at 5,932.
Ranbaxy edged higher 0.6% to Rs438. The company announced that it received tentative approval from the US FDA to make and sell the hypertension tablets, Valsartan. The scrip touched an intra-day high of Rs441 and a low of Rs422 and recorded volumes of over 6,00,000 shares on NSE.
Shobha Developers ended flat at Rs925. According to reports the company has ventures into Pune residential market. The scrip touched an intra-day high of Rs929 and a low of Rs914 and recorded volumes of over 10,000 shares on NSE.
Suzlon Energy was up 0.3% to Rs1968. Reports stated that the company planned to export its products to 40 countries from present 14 countries over the next five years including locations like South Korea, South Africa and the emerging markets. The scrip touched an intra-day high of Rs1974 and a low of Rs1910 and recorded volumes of over 2,00,000 shares on NSE.
L&T gained 1% to Rs4461 after reports stated that the company secured Rs55.5bn order to build new integrated passenger terminal at
M&M slipped 1.4% to Rs754. The company announced that it has formed a Joint Venture with International Truck & Engine. The scrip touched an intra-day high of Rs819 and a low of Rs746 and recorded volumes of over 5,00,000 shares on NSE.
Tata Motors gained 1% to Rs754 after the company reported a total sale of 49,354 vehicles (including exports) for the month of October 2007, a growth of 13% compared to 43,743 vehicles sold in October last year.
The domestic market continues to be sluggish, due to the high interest rate regime, continuing to affect retails. The scrip touched an intra-day high of Rs759 and a low of Rs725 and recorded volumes of over 6,00,000 shares on NSE.
RPL gained 3.2% to Rs269. Chevron owns 5% stake in the company and further has option to buy 24%. The scrip touched an intra-day high of Rs274 and a low of Rs246 and recorded volumes of over 70,00,00,000 shares on NSE.
Ambuja Cement edged higher 0.8% to Rs145. The company declared its October sales at 1.48mn tons (up 3.4%) and output at 1.51mn tons (up 4.8%). The scrip touched an intra-day high of Rs145 and a low of Rs141 and recorded volumes of over 14,00,000 shares on NSE.
ACC slipped 1.8% to Rs1033. The company announced its cement production for the month of October, 2007 was up 4.8% to 1.76mn tones. The scrip touched an intra-day high of Rs1050 and a low of Rs1010 and recorded volumes of over 3,00,000 shares on NSE.
Apar Industries surged 2.5% to Rs257 after the company declared that they would sell Polymer unit for Rs1.11bn. The scrip touched an intra-day high of Rs280 and a low of Rs252 and recorded volumes of over 53,000 shares on NSE.
Stocks in News:
Decision on fuel prices likely soon; marginal hike in retail prices, excise duty cuts and import duty cut on crude likely options
Power Grid Corporation secures Rs42bn mega transmission project
RCom and Vodafone Essar, amongst others, could get more spectrum for expansion as they have already paid license fees
Pidilite to invest Rs4.5bn to set up a manufacturing unit in Gujarat
Financial Technologies identifies three partners to offload 16% stake in MCX
Apollo Hospitals would invest Rs8bn in two years to add 1,600 beds
Reliance Industries has contracted an ultra deepwater drillship Deepwater Pacific 1 from Transocean for US$935mn
Daimler has withdrawn its interest to acquire a strategic stake in Eicher Motors
SAIL and Rashtriya Ispat Nigam have hiked steel prices for third consecutive month
SBI has received government approval for its Rights Issue
GTL Infrastructure would invest Rs68bn to set up 25,000 shared telecom towers
Wockhardt Hospitals may raise Rs10bn to increase its network to 30 hospitals
The Government may approve capital restructuring of UCO Bank; bank may issue FPO of Rs2.5bn
BEML may set up JV with overseas partner to make high end boggies
PE giant Blackstone may invest Rs50bn in Hotel Leela
The Government proposes to allow 49% foreign investment in public sector oil refineries, in commodity exchanges and in Credit Information Companies
Power generation shortfall was 74% of the target in H1 FY08
New Mining policy likely to be announced by December; may allow higher FDI in the sector
Portfolio investments by FIIs in real estate companies should not be counted as part of FDI, according to Commerce Ministry
Fertilizer subsidy reform may cost an additional Rs12bn in FY08
The DoT rejects Law Ministry suggestion for GoM to handle applications for allotment of telecom licenses
The Tata group may participate in the Rs500bn dedicated freight corridor project; may set up a JV with Mitsubishi Corp.
Domestic drug makers have agreed to withdraw 120 combination drugs totaling over 270 brands worth Rs10bn from the market
FII Investment Trend:
FIIs were net sellers of Rs12.31bn (provisional) in the cash segment on Friday while the local institutions pumped in Rs4.45bn.
In the F&O segment, FIIs were net buyers of Rs13.8bn.
On Thursday, FIIs were net buyers of only Rs1.81bn in the cash segment. Mutual Funds were net sellers of Rs3.58bn on the same day.
Major Bulk Deals:
Clearwater Capital has picked up Alps Industries; Kotak Mahindra UK has bought Tera Software.
Upper Circuit:
Godrej Industries, Adhunik Metaliks, Nocil, GTC Industries, Deep Industries, Goldstone Tech, Goldiam International, Zandu Pharma, McNally Bharat, Prakash Industries and Ferro Alloys.
Lower Circuit:Shree Precoated Steel and Marathon Nextgen