The secret of health for both mind and body is not to mourn for the past, worry about the future, or anticipate troubles, but to live in the present moment wisely and earnestly. – Buddha
Call it short-covering or what you may. But the bulls enjoyed every moment on Wednesday. After the inexplicable spurt, the bulls would hope to consolidate their position today. Signals from the global markets are pretty much mixed this morning. US shares closed down overnight. European and Latin American stocks advanced. Asian markets are mixed. The provisional FII figure for yesterday's session raises doubts about yesterday's big bang rally and as always makes the near term future market direction uncertain.
Unless net inflows from foreign funds turns significantly higher, the main indices may struggle to attain greater heights. They will largely remain in a range and the intra-day volatility will continue. Action will continue to be stock specific and at times sector specific. The lack of any big event in the near term will make it tough for the bulls to continue pushing the indices higher and higher. Some consolidation is a given following the sharp rise from late August to 20,000 level on the Sensex.
The upside appears to be capped at the moment, and a meaningful, healthy correction cannot be ruled out completely. Despite this, we hear Nifty levels of close to 7000 by December. (We’ll wait to see whether December 2007 or December 2008). The trend will be decided by global markets, local political happenings and liquidity. Today, we expect a cautious to slightly higher opening and a choppy day.
Among stock-specific action, Om Metals is likely to continue its spurt on expectations of a placement at a significant premium to the current price.
Marg Constructions has announced the arrival of a Cutter Suction Dredger. MARG CAUVERY with a dredging capacity of 2000 cubm/hour arrived on November 9, and would be immediately deployed in the dredging works of Karaikal Port which is currently being developed by the company.
Broking counters could be in action as the IPO of Edelweiss Capital begins today. The price band for the same has been fixed at Rs725 to Rs825. Going by the grey market premium, Edelweiss is likely to double on listing.
Amtek India has signed a technical collaboration agreement with Teksid SpA. The Italian company is a world leader in the production of iron castings for the automotive industry with operations spread out in Europe, North and South America and Asia.
Essar Oil's Board of Directors will meet on November 16 to consider further issue of securities including issue of securities and warrants on a preferential offer basis to the Promoters / Promoter Group.
US stocks ended lower on Wednesday owing to selling pressure in the last half hour of trade, as investors chose to lock in gains in technology, financials and some of the other leaders of the previous day's rally.
Retailers and PC makers led the fall after Macy's cut its sales forecast and the government said consumer spending slowed last month. Dell, IBM and Apple led technology shares to a fifth drop in six days.
The Dow Jones Industrial Average lost 76 points, or 0.6%, to 13,231.01. The Nasdaq Composite Index fell 29 points, or 1.1%, to 2,644.32. The Standard & Poor's 500 Index dropped 10 points, or 0.7%, to 1,470.58.
Market breadth was negative. More than two stocks declined for every one that rose on the New York Stock Exchange.
On Tuesday, the Dow rallied nearly 320 points, registering its second biggest one-day point gain of the year following encouraging comments from Goldman Sachs and other Wall Street banks on their exposure to the sub-prime mortgage mess.
But the ghost of the housing sector slump returned to haunt investors on news of large writedowns from HSBC and Bear Stearns. Also, Tuesday's rally was largely due to short-covering, which didn't extend into Wednesday's session.
Going ahead, US stocks are likely to be volatile through the rest of the year.
After the close, Merrill Lynch confirmed market rumors that NYSE-Euronext CEO John Thain will take over the top spot at the bank, following Stanley O'Neal's exit.
Airline stocks rose in the afternoon on reports that United Airlines' parent UAL and Delta Air Lines are considering a possible merger. E*Trade Financial rallied for a second session after plunging roughly 60% on Monday on rumors that it would need to file for bankruptcy.
Fed Chairman Ben Bernanke says the central bank will begin providing its economic forecast four times a year, instead of the current two. He also says that when the Fed gives its forecast, it will look out three years into the future, as opposed to the current two years.
Treasury prices inched higher by the end of the session, lowering the yield on the 10-year note to 4.25% from 4.26% late on Tuesday. In currency trading, the dollar continued to slump against the euro. The greenback also inched higher against the yen.
US light crude oil for December delivery rose $2.92 to settle at $94.09 a barrel on the New York Mercantile Exchange, bouncing back after several down sessions. COMEX gold for December delivery rose $15.70 to $814.70 an ounce.
European shares closed higher. The pan-European Dow Jones Stoxx 600 index rose 0.5% to 370.28. The French CAC-40 gained 1.4% to 5,613.60, while the UK's FTSE 100 closed up 1.1% at 6,432.10 and the German DAX 30 inched 0.1% higher at 7,783.11.
Stock markets also rose in Brazil and Mexico. Brazil's Bovespa stocks index ended up 2.7% at 64,630. Mexico's IPC index of 35 most-traded stocks closed up 0.6% at 29,655.68.
Asian stocks are mixed this morning. The Morgan Stanley Capital International Asia Pacific Index added 0.4% to 162.96 as of 10:19 a.m. in Tokyo, after yesterday posting its largest advance since Sept. 19.
Japan's Nikkei climbed 52 points to 15,552, while the Hang Seng in Hong Kong was flat at 29,168.
Rally likely to continue
After opening with a positive gap up in the early trades markets constantly gained momentum as the day progressed. Overnight gains in the
Unabated buying across the board boosted the benchmark Sensex to close over 19,900 rallying 893 points recording it’s biggest-ever single-day gain in absolute terms.
The index added to its yesterday’s 300 points gain almost recouping the 1,200 points it had lost in previous six trading sessions till Monday.
Wipro surged 7% to Rs472 as
Infosys Technologies gained 5% to Rs1707 after the company yesterday declared that they have planned to acquire smaller competitors in
ITC advanced 2% to Rs181 after reports stated that
SBI has gained 1% to Rs2316 following reports that the nation's biggest lender by assets and some other state-run lenders may get Rs200bn as fresh capital from the government. The scrip has touched an intra-day high of Rs2450 and a low of Rs2315 and has recorded volumes of over 2,00,000 shares on NSE.
Pratibha Industries advanced 8.5% to Rs303 after the company announced that they won Rs410mn order for the expansion of the domestic arrival terminal at the Indira Gandhi International airport. The scrip touched an intra-day high of Rs304 and a low of Rs285 and recorded volumes of over 10,000 shares on NSE.
Mcnally Bharat was locked at 5% upper circuit to Rs259.5 after the company yesterday declared that they have received Rs340mn order from Maharashtra State Power Generation Company. The scrip touched an intra-day high of Rs259.5 and a low of Rs251 and recorded volumes of over 1,00,000 shares on NSE.
Stocks in News:
ICICI Financial bidders seek greater disclosure on the underlying subsidiaries of the bank.
Bharti Airtel to go in for major network expansion drive and add over 1,000 locations by March in north Maharashtra.
Malaysia’s Columbia Asia Group of Hospitals to construct 100-bed multi-spatiality hospitals in DLF townships.
Gail is in talks with Qatar Petrochemical and Russia’s Lukoil to build a large petrochemical plant overseas.
Oil companies sell bonds at a discount to LIC and other financial institutions.
Apollo Group to buy 300-bed hospital in the UK.
Essar group run Aegis BPO buys TeleTech Services, a 50:50 JV between TeleTech Europe and Bharti Ventures.
MindTree has bought Purple Vision, Indian subsidiary of French company TES Electronic Solutions SA for US$6.6mn.
The Finance Ministry is to investigate the identity of the promoters of ByCell.
Warburg Pincus sells 8.9% stake in Nicholas Piramal for Rs7.7bn.
RIL to purchase two helicopters for its offshore oil exploration work on the east coast.
Banglore Metropolitan Transpot Corporation (BMTC) is expected to raise Rs7.5bn via IPO.
SISCO, a JSW group company plans to increase production of specialty steel to 3mn tons per annum over the next 3-4 years.
Tech Mahindra to invest Rs10bn for setting up software development centres in Chandigarh, Noida and Jaipur in the next few years.
Nicholas Piramal is set to cut about 70 jobs at its manufacturing plant in Morpeth, UK.
ACC has decided to transfer the ready mix concrete business to its wholly owned subsidiary ACC Concrete for ~Rs1bn.
Sebi has announced new derivative instruments to deepen the market.
The Finance Ministry has finalized modalities to issue bonds worth Rs75bn to the fertiliser companies by the end of this month.
India added 5.7mn subscribers under the GSM segment in October.
The Government’s indirect tax collections grew 18.6% in October.
Members of COAI are willing to go for open auction of spectrum for 2G services beyond 10MHz.
Sugarcane crisis in UP escalates as private sugar mills are unwilling to start crushing.
According to a joint study by the CII and McKinsey, the earth-moving and construction equipment industry’s revenue is likely to grow five-fold to US$13bn by 2015.
FII Investment Trend:
FIIs were net buyers of just Rs1.63bn (provisional) in the cash segment on Wednesday while the local institutions pumped in Rs5.67bn.
In the F&O segment, FIIs were net buyers of Rs20.66bn.
Foreign funds were net buyers of Rs1.22bn in the cash segment on Tuesday.
Mutual Funds pulled out Rs128mn from the cash segment on the same day.
Upper Circuit:
HFCL, KEC Infra, Lloyd Steel, Uttam Galva, Surya Chakra Power, Vikash Metal, Shah Alloys, Kamdhenu, Indus Fila, Bombay Burmah, Zandu Pharma, Tourism Finance, GTC Industries, SREI Infra, Nesco, Ispat Industries and Shree Precoated.
Lower Circuit:
RIIL, MMTC, Engineers India, ITD Cementation, Temptation Foods.