A perpetual holiday is a good working definition of hell: George Bernard Shaw
It should be the local players who should be on a holiday to celebrate Diwali. But, looks like the FIIs are on a holiday or planning to take one, if one goes by the recent trend in their investments. If the vacation gets extended, the bulls will find it tough to advance from the current levels. In a scenario of steady FII outflows or lack of fresh inflows, the market will remain choppy and rangebound. Chances of a long-overdue correction may also increase if FIIs remain net sellers over the next few days. On top of that, we have fresh concerns on the subprime mess in the US and its impact on global markets. Throw in the lack of any positive factors in the near term and what we have is a market which in cricketing terms is in 'no man's land'. And, the bulls certainly don't like to be stuck at one place. So, we expect the consolidation phase to continue for a while. The broad market direction will hinge on global markets and the mood of the FIIs.
Today however, things do not appear that somber. Most global markets are in a chirpy mood today thanks to the overnight rally on Wall Street. As a result, we expect a firm opening. But, yesterday too the start was good and the close wasn't. Similar was the case on Monday too. Don't be surprised, if the same trend plays out on the bourses even today. The bulls somehow seem to be suffering from fatigue after a huge run-up from late August. Intra-day gyrations will continue amid no clarity on the direction. As much as possible be stock specific and avoid aggressive purchases at this stage as the upside looks capped. One may also lock in some gains on every rally.
Wall Street staged a late rebound to finish higher on Tuesday, as higher oil and gold prices buoyed a market still grappling with credit market jitters. Energy and metal producers paced the gains after oil climbed to a record and gold advanced to a 27-year high.
Exxon Mobil posted its steepest advance since August, while Newmont Mining rallied to the highest since July 2006. Bank of America, JPMorgan Chase and Wells Fargo led a rebound in financial shares after three days of declines pushed valuations to a 10-year low.
The S&P 500 Index added 18 points, or 1.2%, to 1,520.27. The Dow Jones Industrial Average rose 117 points, or 0.9%, to 13,660.94. The Nasdaq added 30 points, or 1.1%, to 2,825.18.
Market breadth was positive. Almost three stocks gained for every one that fell on the New York Stock Exchange.
Oil prices jumped more than $3 a barrel to a new record trading high of $97.07 a barrel on supply fears and a falling dollar. Light, sweet crude for December settled up $2.72 to $96.70 a barrel on the New York Mercantile Exchange. Crude oil surged past $98 a barrel in after hours.
Gold prices continued to trade at levels not seen since 1980, as COMEX gold for December added $13 to $823.80 an ounce.
Treasury prices fell, lifting the yield on the benchmark 10-year note to 4.37 percent, down from 4.31 percent late Monday. The dollar retreated to a new record low against the euro but gained against the yen.
European shares snapped a three-session losing streak. The pan-European Dow Jones Stoxx 600 index rose 0.4% to 378.64. The UK's FTSE 100 closed up 0.2% at 6,474.90, the German DAX 30 increased 0.3% to 7,827.19 and the French CAC-40 gained 0.5% at 5,710.09.
In the emerging markets, the Bovespa in Brazil jumped 2.5% to 64,503 while the IPC index in Mexico gained 0.9% at 30,430. The RTS index in Russia rose 1.8% at 2268 and the ISE National-30 index in Turkey was up 1.8% at 72,267.
Asian stocks advanced for a second day after commodities prices rallied and Softbank and Singapore Telecommunications reported higher earnings.
BHP Billiton gained after gold reached a 27-year high and crude oil rose to a record. Mitsui OSK Lines rose after the Nikkei newspaper said container rates charged by shipping lines between Asia and North America will increase 15% next year.
The Morgan Stanley Capital International Asia Pacific Index added 0.9% to 167.89 as of 11:02 a.m. in Tokyo, extending yesterday's 0.6% advance. Indices tracking energy, materials and telecom stocks posted the biggest gains among the regional benchmark's 10 industry groups.
Japan's Nikkei 225 Stock Average climbed 0.4% to 16,318.80 and the S&P/ASX 200 Index rose 0.8% in Australia, where the central bank raised its key interest rate to an 11-year high. Asian stock benchmarks climbed across the region.
Volatility to continue
A volatile session ended in red for second straight trading session as bulls yet again struggled to hold on to their early gains. Key indices erased all their gains as selling pressure in the Banking, Metal, Oil & Gas and Auto stocks dragged the benchmark Sensex to hit a low of 19,337. Finally, benchmark Sensex lost 190 points to close at 19,400. NSE Nifty closed 60 points lower at 5,786.
BHEL surged by over 3.5% to Rs2743 after reports stated that the company emerged the sole bidder for 1600MW power plant in Andhra Pradesh. The scrip has touched an intra-day high of Rs2785 and a low of Rs2674 and has recorded volumes of over 11,00,000 shares on NSE.
Century Textile rose over 4.5% to Rs1050 following reports that the company would develop 3 m Sq Ft land in first phase. The scrip has touched an intra-day high of Rs1095 and a low of Rs976 and has recorded volumes of over 10,00,000 shares on NSE.
Sun TV closed on a flat note at Rs310. The company announced that they are launching two FM radio stations in
Biocon was up 2% to Rs573 after reports stated that the company is close to acquire a drug marketing and distribution firm in US by the year end. The scrip touched an intra-day high of Rs585 and a low of Rs562 and recorded volumes of over 3,00,000 shares on NSE.
Punj Lloyd dropped 5.4% to Rs502. Reports stated that the company’s subsidiary won a contract of Rs17bn in
Gitanjali Gems dropped 3% to Rs366. The company announced that they have formed a Joint Venture Company in the name of "Modali Distributors Pvt Ltd". The JV Company is engaged in the business of distributionship, primarily of jewellery and jewellery related products.
Further the Company informed that, the name of the joint Venture Company "Modali Distributors Pvt Ltd" has been changed to "Modali Gems Pvt Ltd". The scrip touched an intra-day high of Rs383 and a low of Rs340 and recorded volumes of over 13,00,000 shares on NSE.
Diamond Cables locked at 10% upper circuit to Rs374 after reports stated that Clear Water Capital would invest Rs160cr and GE Capital would invest Rs68cr in the company. The scrip touched an intra-day high of Rs374 and a low of Rs341 and recorded volumes of over 2,00,000 shares on NSE.
Sterlite Optical advanced 1.4% to Rs304 after the company announced that it has won Rs1.43bn contract from BSNL. The scrip touched an intra-day high of Rs317 and a low of Rs300 and recorded volumes of over 5,00,000 shares on NSE.
Aztecsoft slipped 2.3% to Rs48. The company announced that they have would build SEZ campus in
Jindal Drilling lost 0.3% to Rs1098. The company on Monday announced that it is now increasing its presence in this emerging segment of oil & gas. The Company is engaged in the Business of Offshore Oil & Gas Drilling Activities. JDIL is also present in the Horizontal and Directional Drilling Business Activity.
The company’s total order book stands at Rs26.30bn & the financial impact of this contract would start accruing from the fourth quarter of current years itself. The scrip touched an intra-day high of Rs1200 and a low of Rs1082 and recorded volumes of over 10,000 shares on NSE.
Stocks in News:
Reliance Industries has struck gas in its KG-OSN-2001/1 block, in the Krishna offshore basin.
ONGC has decided to pick up sizeable stake in two more blocks in Sudan.
Wipro Tech has filed a patent for e-Enabler, a solution kit based on Service Oriented Architechture.
Lupin plans to acquire a specialty pharmaceutical company in US.
Wockhardt is set to foray in the niche anti-cancer drug segment in the domestic retail market.
Ballarpur Industries is looking for acquisitions to take its total capacity to 1 mn tons.
PTC India plans to source 15mn tons of coal from Australia,
Indonesia and Africa.
Amtek is close to acquiring a UK based automotive machinery company Triplex
Ketlon Group plans to merge Amtek Auto and Amtek India.
Maharashtra Government has stayed the land acquisition process for a Videocon SEZ near Pune.
GAIL plans to source LNG from Nigeria besides acquiring equity stake in LNG projects there.
PSL has achieved financial closure for its integrated pipe manufacturing and coating facility in Mississippi.
GlaxoSmithKline’s breast cancer drug Tykerb is set to enter the Indian market next year.
NTPC and Railways will set up a 1,000MW power plant in Bihar.
The RBI has recommended tightening ECB norms further to check unbridled foreign capital inflows.
The planning commission has floated a new proposal for allowing up to 49% equity by
foreign airlines in domestic carriers.
FII Investment Trend:
FIIs were net buyers of just Rs76.2mn (provisional) in the cash segment on Tuesday while the local institutions pumped in Rs2.07bn.
In the F&O segment, FIIs were net sellers of Rs3.3bn.
On Monday, FIIs were net sellers of Rs6.57bn in the cash segment.
Major Bulk Deals:
Morgan Stanley has bought Garware Wall Ropes while Merrill Lynch has sold it; Morgan Stanley has sold Gitanjali Gems; Bennett Coleman & Co. has purchased GTL Infra; Lotus Global has sold Kashyap Tech; Clearwater Capital has picked up Lyka Labs; LIC has purchased Mastek while Morgan Stanley has sold it; Reliance MF has bought Nicholas Piramal; Templeton MF has picked up PTC India; Lehman Brothers has purchased S. Kumars Nationwide.