Our energy is in proportion to the resistance it meets.
The bulls sure look energized (we’re not talking just of Reliance Energy) with FIIs pumping in over Rs10bn on the last day of the month. And all this after being sellers for virtually the whole of November. Is this the sign of things to come or just an aberration only time will tell. Generally, overseas investors tend to reduce their activity around this time of the year, ahead of the Christmas holidays. One has to wait and see whether this trend continues this year as well. But as we mentioned on Friday, historically, this has been a good month and bulls will hope to usher in the new calendar year with gains.
Today, we see a positive opening on the back of Friday's rally and positive FII data. To go with that, global markets are in better shape and oil prices are hovering around the US$89 per barrel mark. Auto stocks will attract some attention due to the release of the monthly sales data. Maruti has reported strong numbers. Hero Honda has managed to beat the negative growth trend in the two-wheelers segment. IFCI will be in action as a financial daily reports that it has decided to sell up to 20% stake to IFC, the World Bank's private arm.
Reliance Energy will remain in the limelight. The promoters have decided to inject Rs80bn in the company to help it fund the two UMPPs at Sasan and KrishnapatnamAshok Leyland could resume its buying spree as a business newspaper reports that the promoters may announce a share buy back at Rs60-65 per share. Tata Motors has reportedly bought Jaguar and Land Rover from Ford. But, there is still no official confirmation of the report that appeared on the web site of The New Zealand Herald. Deccan Chronicle is likely to rise as the RBI has allowed fresh purchases by FIIs.
The FIIs were heavy sellers last month, offloading Indian shares worth nearly US$1.5bn. As a result, the Sensex and the Nifty struggled to make further advances. In short, liquidity will hold the key if the main indices are to cross the previous lifetime highs. Market participants will also have to pay attention to the global factors like the US slowdown and housing sector meltdown there. Fresh bad news on this front could spark renewed sell-off across global markets.
For now though, world markets are stable and there is talk of more rate cuts from the Fed when it meets on Dec. 11. If the American central bank obliges again, there will be a relief rally. The downside would be capped in that case. Besides the Fed meet, there are no major triggers that can move the market either way. So, we expect the market to remain lackluster with alternative bouts of buying and selling. Moreover, in the absence of any great catalysts, there could be more intra-day swings.
Citigroup and Lehman Brothers have both bought Hindustan Oil Exploration; Citigroup has also purchased Indo Asian Fusegear; Prudential ICICI MF has picked up Ion Exchange while UBS has sold the stock; Tata Sons has bought Tata Elxsi while HDFC MF has sold it; HSBC has sold Vyapar Industries and Intense Tech.
US shares closed mixed on Friday with the blue chip Dow Jones Industrial Average and the S&P 500 index managing modest gains on growing optimism of further rate cuts. But, the Nasdaq finished slightly lower on disappointing outlook from PC major Dell.
The advance reduced the worst monthly losses in five years for the S&P 500 and Dow.
The S&P 500 rose 11 points, or 0.8%, to 1,481.14. The Dow gained 60 points, or 0.5%, to 13,371.72. The Nasdaq slipped 7 points, or 0.3%, to 2,660.96, led by Dell's 13% fall after the company's earnings missed analysts' estimates.
Market breadth was positive. About nine stocks gained for every five that fell on the New York Stock Exchange.
Wall Street had a tough November, with the Dow losing around 4%, the S&P 500 dropping just over 4% and the Nasdaq down around 7%.
Treasury prices cut losses by the end of the session, with the yield on the 10-year note at 3.94%, up from 3.93% late on Thursday. In currency trading, the dollar gained versus the euro and the yen.
US light crude oil for January delivery fell US$2.30 to settle at US$88.71 a barrel on the New York Mercantile Exchange. COMEX gold for February delivery tumbled US$13.20 to settle at US$789.10 an ounce, falling along with other dollar-traded commodities.
US Federal Reserve Chairman Ben S. Bernanke sparked another strong day of gains in European shares on Friday. The pan-European Dow Jones Stoxx 600 index rose 1.3% to 370.35. The UK's FTSE 100 gained 1.3% at 6,432.50, while the German DAX 30 index advanced 1.4% to 7,870.52 and the French CAC-40 climbed 1.3% to 5,670.57.
Brazilian shares also closed up and Mexican stocks too rose on continued hopes of US rate cut this month. Brazil's benchmark stock index, the Bovespa, climbed 849 points, or 1.4%, to end at 63,000.06. In Mexico City, the 35-stock IPC index rose 1.3% to 29,770.52. Chile's IPSA rose 0.9% to 3,204.83. Argentina's Merval, however, fell 1.3% to 2,207.16.
Asian stocks rose for a third day this morning, led by Mitsubishi UFJ Financial and National Australia Bank on speculation that US Treasury Secretary Henry Paulson will announce an agreement with banks today to stem credit losses.
Paulson, who is negotiating an agreement with banks to fix interest rates on loans to subprime borrowers, may make the announcement when he addresses a housing conference in the US today.
The MSCI Asia Pacific Index gained 0.2% to 162.28 at 10:46 a.m. in Tokyo. Japan's Nikkei 225 Stock Average was little changed at 15,686.81, while the broader Topix index climbed 0.3% to 1,536.71. All other markets open for trading rose, except China.
The yen advanced against the dollar from the lowest in two weeks after Moody's Investors Service said that it is preparing the biggest credit rating cuts since subprime mortgage defaults rocked financial marketsUpward trend to continue
Markets saw second straight day of gains as players cheered healthy economic growth and better than expected Inflation figures.
The benchmark Sensex which opened with a positive gap immediately retreated from its highs as it faced resistance at higher levels. However, swiftly gained momentum as the day progressed on back of firm cues from Asian markets. Finally, 30-share Sensex ended 359 points higher to close at 19,363 and Nifty closed 128 points lower at 5,762.
Sector wise the BSE Metal index was the top gainer (up 5%). Other indices like BSE realty index (up 3.9%), BSE Bankex index (up 2.5%) and BSE IT index (up 2.7%). Even the BSE Mid-Cap and the BSE Small-Cap index gained over 1.5% each.
The Banking stocks gained momentum after government approved the company’s right issue, also announced that they would invest Rs10,000 cr in the issue. The whole of the banking pack was in demand with Mid-Cap banks like Bank of Baroda, Syndicate Bank and Bank of India surging over 6% each.
Cement stocks also were in the limelight as reports stated that the companies would hike prices in
Jet Airways edged higher by 0.5% to Rs829 after reports stated the nation's biggest domestic carrier won government approval to fly to
SBI gained 1.2% to Rs2302 after government announced that it approved the company’s right issue, also announced that they would invest Rs10,000 cr in the issue a and would also issue bonds for subscribing to SBI rights offer. The scrip has touched an intra-day high of Rs2345 and a low of Rs2282 and has recorded volumes of over 15,00,000 shares on NSE.
BPCL gained 1.1% to Rs386 as
Shares of IOC gained 2.8% to Rs543 as reports stated that the company is trying to fit the expansion of the Haldia refinery within the plants 500-acre property near port town. The scrip touched an intra-day high of Rs556 and a low of Rs530 and recorded volumes of over 7,00,000 shares on NSE.
ONGC advanced 2.6% to Rs1167 after the company yesterday announced that they found more gas in a block in Rajasthan. The scrip touched an intra-day high of Rs1177 and a low of Rs1120 and recorded volumes of over 11,00,000 shares on NSE.
Tata Steel gained 3.5% to Rs825 after the company announced that they have completed an accord with Riversdale Mining Ltd., an Australian coal-mining company to develop two coal projects in
Polaris surged by over 3.5% to Rs109 after the company announced that they have settled
What the FIIs are doing
FIIs were net buyers of Rs10.7bn (provisional) in the cash segment on Friday while the local institutions pumped in Rs6.88bn.
In the F&O segment, foreign funds were net sellers of Rs3.86bn on the same day.
On Thursday, FIIs were net sellers to the tune of Rs9.78bn.
Stocks in News:
Reliance Energy to raise Rs80bn for infrastructure projects; promoters to invest Rs65bn through convertible warrants and preferential shares.
ADAG Group on the lookout to buy coal assets abroad; shows interest to acquire PT Berau of Indonesia.
BHEL to invest Rs3bn to set up two plants to expand manufacturing capacity to 15,000MW annually.
Hindalco plans to raise captive copper supplies to 60%; planning for mines in South America.
GMR Energy, part of the GMR group is looking for global acquisitions in the power sector, especially in Singapore and Turkey.
Reliance Power is likely to tie up with an America company for strategic partnership in coal mining.
Tata Power may bid for three Singapore power generation companies Tuas Power, PowerSeraya and Senoko Power.
SAIL to invest Rs530bn over the next five years to increase hot metal capacity to 26mn tons.
Vedanta Resources, the holding company of the Sterlite group, would invest Rs50bn in Rajasthan.
Rashtriya Ispat Nigam proposes to acquire the entire Bird Group of companies to secure iron ore supplies.
Pfizer has won a US court ruling that prevents Ranbaxy from selling a generic version of blood pressure drug Caduet until 2010.
NMDC to invest Rs180bn to expand capacity to 50mn tons; to conduct fresh explorations within five years.
National Textile Corporation and Pantaloon Retail plan to float a retail JV.
A slowdown in manufacturing to 8.6% saw Q2 GDP growth at 8.9% vs. 10.2% a year ago.
Fiscal deficit stood at 54.5% of the total budget estimate of Rs1.5tn in the April-October period.
Air fares to increase after a 14% rise in ATF prices.
Mobile operators must return excess spectrum, says Telecom Minister.
Inflation rises to 3.21% mainly due to higher vegetable prices for week ended Nov. 17th ; CPI up at 5.5% in October.
The Government projects textile industry growth of 16% to touch US$115bn in the 11th Five-Year Plan.
The Government may divest 10% of its equity in Rashtriya Ispat Nigam in the market.
The Government not in favour to allow international flying rights of one airline to be transferred to another until it is wholly acquired.
The RBI gives in principle concurrence for a framework on stock lending and borrowing.