Anyone who thinks there's safety in numbers hasn't looked at the stock market pages.
With the F&O expiry out of the way, the market will look to the global markets and FII trend for near-term direction. We expect a cautious to positive opening and another volatile day of trade ahead of the weekend. The second-quarter GDP numbers will be released at noon. A private survey of economists sees GDP growing at less than 9% in the July-September quarter. A number better than this could have a positive impact on the sentiment, albeit only briefly. Inflation will also be announced at around the same time, though it is expected to be well under control in the absence of fuel price hike.
November wasn't a particularly memorable month for the bulls due to renewed concerns over the sub-prime crisis in the US and selling by the FIIs. Overseas investors offloaded stocks worth over US$1bn in the cash segment. Though this may not be too significant an amount to lose one's sleep over, it did have a bearing on the sentiment. The lack of any big positive trigger also acted as a deterrent for the bulls to continue the buying spree. As a result, the Sensex and the Nifty have gained only about 1-2% each this month.
The lackluster trend may not change much in December, as year-end issues and the SEBI curb on P-Notes is likely to keep the FIIs at bay. Plus we will have the daily dose of news on the housing sector in the US and its implications on global financial markets. Incidentally, real estate stocks with exposure to Maharashtra, particularly Mumbai may remain in the limelight following the scrapping of the Urban Land Ceiling and Regulation Act by the state assembly.
Dec. 11 is a crucial day for world markets, as the Federal Reserve will meet to assess the impact of the previous rate cuts and consider further monetary easing. Right now, Wall Street is betting on a 25 basis point reduction in the benchmark fed funds rate. Though, positive economic reports, like yesterday's upwardly revised GDP numbers (4.9% growth in Q3), could dim the prospects of another rate cut from the Fed.
As far as India is concerned, rising interest rate differential with the US is good news, as it improves the outlook on foreign capital inflows. But, FII selling in the month of November shows that it may not necessarily be the case.
US stocks rose for a third day on Thursday, ending marginally higher. More than three stocks fell for every two that rose on the New York Stock Exchange as the Russell 2000 Index of smaller companies dropped 0.5%.
The Standard & Poor's 500 Index finished nearly flat at 1,469.72. This is the first time since Sept. 14 that the benchmark has gained three consecutive days. The Dow Jones Industrial Average added 22 points, or 0.2%, to 13,311.73. The Nasdaq Composite Index rose 5 points, or 0.2%, to 2,668.13.
US stock indexes had weakened due to rising oil prices and a 99% drop in profit at Sears Holdings and then declined further after the Commerce Department said that builders cut prices the most in 26 years in October, boosting sales of new homes.
The US Government also reported a rise in weekly jobless claims to near two-year highs, along with an upward revision in third-quarter US economic growth to 4.9%.
Crude futures rallied as much as $4 a barrel after a fire crippled a key pipeline bringing Canadian oil into the US. On the New York Mercantile Exchange, crude futures ended up 39 cents at $91.04 a barrel, after rising $4.55 to an intraday high of $95.17 a barrel in electronic trade earlier.
Elsewhere on the NYMEX, Gold for December delivery fell $5 to finish at $795.3 an ounce. The dollar held gains against the euro. Treasury prices rallied, with the benchmark 10-year yield falling to 3.939%.
Gains from copper miners offset lower travel stocks and retail weakness in Europe. The pan-European Stoxx 600 index, which on Wednesday scored its second-best single-day rise of the year, tacked on another 0.5% to end at 365.72.
The German DAX 30 rose 0.5% to 7,765.19 and the French CAC-40 advanced 0.7% to 5,598.11, while the UK's FTSE 100 gained 0.7% to 6,349.10.
Latin American stocks finished higher. The Bovespa rose 0.7% to 62,156.34. Mexico's IPC rose 0.4% to 29,399.92. Chile's IPSA gained 0.5% to 3,176. Argentina's Merval rose 0.3% to 2,236.39.
In other emerging markets, the RTS index in Russia rose 0.6% at 2180 and the ISE National 30 in Turkey fell 0.2% at 67,406.
Asian stocks were mostly up this morning, helping a regional index to its best weekly gain in two months, after copper prices climbed to a one-week high and Credit Suisse raised its recommendation on some Japanese steel makers.
BHP Billiton climbed to a three-week high. JFE Holdings, the world's third-largest steel maker, jumped the most in two months.
The MSCI Asia Pacific Index added 0.6% to 161.64 as of 10:02 a.m. in Tokyo, set for its highest close since Nov. 15.
An index of mining companies and steel makers jumped 1.5%, the biggest advance among 10 industry groups. The benchmark is up 4.4% this week, the most since the five days ended Sept. 28. Gains helped trim the MSCI index's November loss to 6.1%, its worst monthly performance since May 2006.
Japan's Nikkei 225 Stock Average gained 0.7% to 15,623.06. Stock indices rose in other Asian markets open for trading, except New Zealand. The Philippines is closed for a holiday today.
Bulls pray for December delight
After losing ground for two trading sessions bulls managed to make a come back on F&O expiry day. Markets opened with a positive gap following overnight gains in the
Among the 30-scrips of Sensex ICICI Bank, Reliance Industries, HDFC Bank and SBI were among the major gainers. While, Rcom, BHEL and REL were among the major laggards.
JP Associates edged higher by 0.3% to Rs1798 after the company announced that they have planned to sell a part of its road-construction unit to raise funds for Rs55bn expressway from
Prime Focus marginally gained 0.3% to Rs1798 after the company announced that they would buy Logic Studious for $43mn. The scrip touched an intra-day high of Rs1310 and a low of Rs1100 and recorded volumes of over 17,000 shares on NSE.
DLF ended flat at Rs8801. The company clarified that they have no plans to buy
Surya Chakra Power surged by over 5% to Rs42 after the board of Directors of the company approved to raise $100mn overseas. The scrip touched an intra-day high of Rs43 and a low of Rs39 and recorded volumes of over 21,00,000 shares on NSE.
Satra Properties dropped over 3.5% to Rs282. The company announced their plans to raise Rs7bn and would also invest Rs500mn in Sharvan. The scrip has touched an intra-day high of Rs295 and a low of Rs270 and has recorded volumes of over 1,00,000 shares on NSE.
Sugar stocks pared their gains as were unable to hold on to their momentum. Reports stated that government may grant further sops for Sugar mills to clear cane arrears. Balrampur Chini slipped 1% to Rs92, Renuka lost 6% to Rs668 and Sakhti Sugar lost 4% to Rs69.
Real Estate stocks were back in the limelight after Maharashtra Assembly cleared repealing of the
What the FIIs are doing
FIIs were net sellers of Rs11.13bn (provisional) in the cash segment on Thursday while the local institutions pumped in Rs6.06bn.
In the F&O segment, foreign funds were net buyers of Rs26.93bn yesterday.
On Wednesday, FIIs were net sellers to the tune of Rs4.5bn.
Stocks in News:
Indian Oil is trying to fit the expansion of Haldia refinery within the plant's 500-acre property.
ONGC finds more gas in a block in Rajasthan.
Ashok Leyland to hire 400-500 executives for its JV with Nissan.
RCom to place orders for 70mn lines worth US$5.6bn for its GSM foray.
Vodafone to speed up expansion in India and seeks JVs to operate its network.
Jet Airways to suspend international flights to London from Ahmedabad due to poor passenger response.
Tata Group opens pharma R&D centre in Bangalore.
Ceat plans Rs5bn greenfield plant for passenger car tyres.
Reliance Industries to invest Rs170bn in oil and gas exploration over the next few years.
GMR’s 388 MW Vemagiri project to go on stream in January.
ONGC to embark on a corporate revamp as suggested by McKinsey.
International Finance Corporation (IFC) may invest in Tata Power’s Mundra project.
Ashok Leyland launches 4921 tractor trailer.
Abhishek Industries plans Rs9.6bn capex to diversify into contract farming and set up textile unit.
Pantaloon faces legal cases including adulteration charges.
Godrej & Boyce's Interio is seeking a JV with a European player.
Mercator Lines enters ship building business.
Infosys to invest Rs8bn more this year, in addition to the Rs8n already made during the first half of FY08.
DLF is eyeing the India franchisee rights of ultra luxury brand Salvatore Ferragamo.
GMR Infrastructure is looking to bid for privatization of Prague airport.
Bharti Airtel and Western Union tie up for mobile money transfer service.
Bharti Telesoft, the VAS arm of Bharti Enterprises, is set to acquire Jataayu Software for US$20mn.
Infosys’ Pune campus will become its largest facility by July 2008.
ICRA has downgraded IOC from its AAA rating to LAA+.
Wipro and BAE Systems tie up for undertaking aerospace projects.
United Spirits formally approves the merger of Shaw Wallace with itself; merger ratio 4 shares of United Spirits for 17 shares of Shaw Wallace.
BPCL board approves acquisition of 2.5% stake in Oil India.
Custom duty on man-made fibres to be reduced to 5% from 10%.
The Maharashtra Government repeals the three decade old Urban Land Ceiling and Regulation Act.
SEBI allows companies to offer up to 10% discount to retail investors in IPOs.
The DoT is learnt to have prepared a settlement package for GSM players in a bid to end the stand-off over spectrum allocation.