The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane.
With FII activity slowing down in the past few weeks the side counters are attracting all the attention even as the large caps go through some consolidation. Those with positions on the moving side counters will like to be part of the insane movements as long as it is on the positive side. How else does one explain the sharp spurts on counters, which have hardly moved for years! We expect the market to open flat to positive. The intra-day swings will continue with lots of stock centric action. Investors should also stick to selective buying of fundamentally sound scrips. No run away rise is expected from here. At the same time, chances of a major crash are also slim.
Even the global trend is hard to predict these days with no major ups or down days. Crude oil has cooled after being within striking distance of crossing US$100 per barrel mark. No big events - local or global - are on the horizon, barring of course the Dec. 11 Fed meeting and the relatively less significant advance tax data. OPEC is meeting today to discuss whether its members should increase output to soften spiraling prices. As of now, it is not clear whether the cartel will agree on shoring up production or refrain from it. In any case, the outcome may not have a big impact on crude oil prices.
Apar Industries could gain as the company is likely to announce a tie up with an Italian company. Raymond could also see some buying as the company is set to announce a strategic tie-up tomorrow. MICO, which skyrocketed on Tuesday, will share some strategic announcements on Thursday. Suryachakra Power is another counter which could gain as a leading MF is said to be accumulating it.
Shree Digvijay Cement is likely to be in the limelight amid reports that Portuguese cement major CIMPOR will purchase Grasim's 53% stake in the troubled company for about Rs3.22bn. Shree Digvijay Cement has also been removed from the BIFR purview.
Pharma shares may be in focus as a financial daily reports that the Government is considering reducing trade margins on all medicines sold in the country. Parekh Aluminex could gain as a clutch of Gulf-based funds have reportedly bought an 18% stake in the company.
Nitin Fire Protection is also expected to be in the limelight amid reports of an acquisition in Dubai. The company has also achieved ISO 11439:2000 (E) for CNG cylinders. This certification will enable Nitin Fire to enter the export market in Iran, Egypt, Pakistan, Bangladesh, Malaysia, Thailand and other CIS countries.
George Soros is on the prowl again in India and the billionaire investor's Quantum Fund is believed to have picked up a 5.8% stake in Ahmedabad-based agro processing company Gujarat Ambuja Exports.
Jacob Ballas Capital India and JM Financial Equity Fund are reportedly in talks to pick up a stake in Indore-based Sayaji Hotels.
ONGC may be in action as a business newspaper reports that the PSU oil giant, along with the Hinduja Group are planning to buy a 50% stake in Iran's South Pars gas field - the world's largest, and Azadegan - one of the world's biggest onshore oil field.
BL Kashyap says it is contemplating divesting its stake in its subsidiary Soul Space Projects Ltd., which is engaged in the development of real estate projects. BL Kashyap owns a 97.9% stake in Soul Space Projects.
US stocks ended lower on Tuesday, falling for a second session as the nagging worries about the health of the financial sector kept investors at bay ahead of the upcoming November jobs report and the Fed policy meeting on Dec. 11.
JP Morgan Chase said deteriorating credit markets will reduce profits at the four biggest securities firms, while lower oil prices dimmed the earnings outlook for energy companies.
Goldman Sachs, Morgan Stanley, Merrill Lynch and Lehman Brothers declined after JP Morgan analysts said the brokerages may announce further write downs linked to the turmoil in the subprime mortgages.
Exxon Mobil and Chevron led energy companies to their first drop in five days after crude prices fell to a six-week low.
The Standard & Poor's 500 Index lost 10 points, or 0.7%, to 1,462.79. The Dow Jones Industrial Average dropped 66 points, or 0.5%, to 13,248.73. The Nasdaq Composite Index slid 17 points, or 0.7%, to 2,619.83.
Market breadth was negative. More than two stocks fell for every one that rose on the New York Stock Exchange.
According to analysts, Wall Street is now looking to Friday's November jobs report and next week's Fed meeting for guidance. That sense of anticipation could keep stocks in a tight range ahead of the events.
Wall Street is betting that the employment report will be positive. Additionally, investors are also hoping that the Fed will cut a key short-term interest rate by at least a quarter-point, if not a half-point.
US home prices showed the biggest quarterly drop in 25 years in the third quarter, according to a report. Wednesday brings the revised reading on third-quarter productivity, the weekly oil inventories report and the monthly reports on factory orders and the services sector of the economy.
Treasury prices slipped, boosting the yield on the 10-year note to 3.86% from 3.85% late on Monday. In currency trading, the dollar dipped versus the euro and the yen.
US light crude oil for January delivery fell 99 cents to settle at $88.32 a barrel in New York. COMEX gold for February delivery rose $12.90 to settle at $807.60 an ounce.
European shares registered their biggest one-day drop since mid-November as banking shares tumbled. Nokia shares came under pressure after the Finnish mobile phone maker announced a conservative outlook.
The pan-European Dow Jones Stoxx 600 index fell 1.5% to 363.34, the worst day for the index since losing just over 2% on Nov. 21. Nokia fell 4.4%. The UK's FTSE 100 closed down 1.1% at 6,315.20, while the German DAX 30 slipped 0.4% to 7,808.94 and the French CAC-40 declined 1.5% to 5,547.21.
In Latin America, Chilean stocks finished lower while Mexican stocks managed slim gains. Chile's IPSA fell 1.3% to 3,154.88. Mexico's IPC rose 30 points, or 0.1%, to 29,998.79. Brazil's Bovespa gained 0.5% to end at 63,481.53 and Argentina's Merval shed 5 points, or 0.2%, to close at 2,186.94.
In other emerging markets, the RTS index in Russia rose 0.2% to 2204 and the ISE National-30 index in Turkey shed 0.7% to 68,409.
Asian markets were mixed this morning. Shares of banks and commodities companies fell after JP Morgan Chase said subprime losses will require larger writedowns and oil fell to a six-week low. Mizuho Financial led regional banks lower. Woodside Petroleum and Inpex Holdings slid among oil producers.
The MSCI Asia Pacific Index fell 0.4% to 161.46 as of 10:57 a.m. in Tokyo, extending yesterday's 0.1% drop. An index of finance-related stocks contributed the most to the decline.
The Nikkei in Tokyo was down 49 points at 15,430 while the Hang Seng in Hong Kong fell 101 points to 28,778. The Kospi in Seoul was down 5 points at 1912 and the Straits Times in Singapore dropped 25 points to 3500. All markets open for trading fell except China, Taiwan and Malaysia.
Global cues to dictate trend!
Markets ended on a soft note as key indices were unable to hold on to their early gains. It was yet another sloppy session for the frontrunners as the limelight was towards the Mid-Cap and the Small-Cap counters.
Select Mid-Cap and Refinery stocks were in action. Stocks like IOC, HPCL, MRPL and BPCL all surged by over 5% each. Mid-Caps like WWIL, Pearl Global, Videocon Industries, Chambal Fertilizer.
Among the index gainers, Tata Steel, L&T, BHEL and IT bellwether Infosys were among the major gainers. However, RIL, ICICI Bank, ONGC and TCS were among the major laggards. Finally, 30-share Sensex ended 73 points lower to close at 19,529 and Nifty closed flat at 5,858.
M&M gained 3% to Rs773 after the company on Monday announced that total sales of its automotive division totaled 18,585 units in November as against 13,597 in the same month a year earlier, registering a growth of 36.7% over the corresponding month last year.
M&M clocked total vehicles sales of 17,846 units in the domestic market as against 13,154 in the corresponding month last fiscal, a growth of over 35.7%. The scrip touched an intra-day high of Rs779 and a low of Rs751 and recorded volumes of over 4,00,000 shares on NSE.
3i Infotech advanced 1% to Rs141 after the company declared that it purchased majority stake in Linear Financial. The scrip touched an intra-day high of Rs148 and a low of Rs141 and recorded volumes of over 10,00,000 shares on NSE.
NTPC edged lower by 0.4% to Rs239. India's biggest power producer announced that they would spend Rs110bn to increase its production capacity and meet the nation's increasing demand for energy. The scrip touched an intra-day high of Rs243 and a low of Rs238 and recorded volumes of over 71,00,000 shares on NSE.
Pearl Global was frozen at 20% upper circuit to Rs100.5 after the company signed collaboration agreement with DLF retail. The scrip touched an intra-day high of Rs100.5 and a low of Rs86 and recorded volumes of over 62,000 shares on NSE.
Ambuja Cement advanced 1.2% to Rs154 after media reports stated that Hoclim hiked stake in Ambuja Cement by 13% to 46% via open offer. The scrip touched an intra-day high of Rs160 and a low of Rs151 and recorded volumes of over 37,00,000 shares on NSE.
Siemens was up 1.2% to Rs1862 as the company inaugurated its state-of-the-art Power Transformer factory at Kalwa near Mumbai. This is the eighth factory of Siemens in Maharashtra and the fifth factory belonging to its Power business.
The facility is spread over an area of 40,000 square meters, the new factory was set up with an investment of Rs2bn and will cater to the domestic as well as export markets. The scrip touched an intra-day high of Rs1927 and a low of Rs1846 and recorded volumes of over 6,00,000 shares on NSE.
FSL rallied by over 6% to Rs70 after the company announced that they have completed $275mn overseas Bond sale. The scrip touched an intra-day high of Rs73 and a low of Rs66 and recorded volumes of over 9,00,000 shares on NSE.
Parsvnath spurred by over 3% to Rs368 after its SEZ signs agreement with Rajasthan government and would invest Rs14bn in developing 112 acres. The scrip touched an intra-day high of Rs375 and a low of Rs357 and recorded volumes of over 11,00,000 shares on NSE.
Cement stocks lost early gains after government asked MMTC to import cement to stabilize prices. Grasim was down 0.6% to Rs3815, ACC edged lower by 0.5% to Rs1086, and Ultratech Cement was flat at Rs999.
What the FIIs are doing
FIIs were net sellers of Rs3.33bn (provisional) in the cash segment on Wednesday while the local institutions pumped in Rs1.16bn. In the F&O segment, foreign funds were net buyers of Rs6.18bn on the same day.
On Monday, FIIs were net buyers to the tune of Rs1.14bn in the cash segment. Mutual Funds too were net buyers of Rs4.49bn on the same day.
Stocks in News:
Matrix Laboratories has announced that it has received tentative approval from the US Food and Drug Administration (FDA) under the President’s Emergency Plan for
AIDS Relief (PEPFAR) for its Abbreviated New Drug Application (ANDA) for Tenofovir Disoproxil Fumarate Tablets, 300 mg. The company’s Tenofovir Disoproxil Fumarate is the first and only generic tentative approval of Gilead Sciences' Viread Tablets, 300 rug.
Rig shortage may affect exploratory activities of Reliance Industries in 11 deepwater blocks. Also, RIL's proposed plant shutdown may hit LPG supplies by 25% in December.
IOC says crude oil in Cairn India’s Rajasthan block may be waxy, but it has found it to be sweet.
Reliance Entertainment has formed a 50:50 JV with London based Great Wheel (GWC).
National Australia Bank and Japan’s Shinsei Bank are likely to be the two strategic partners in UTI Mutual Fund’s pre-IPO placement.
Reliance Retail is reportedly in talks with UK’s health and beauty giant Boots for its wellness business.
RIL and GAIL have announced that they would set up a SPV for petrochemical complexes outside India in feedstock rich countries.
Bajaj Auto is considering picking up majority stake in Austria KTM.
Dolce & Gabbana's joint venture with DLF gets approval from Foreign Investment Promotion Board.
Air India to divest 10-15% equity in its IPO to be floated next year.
The Bajaj Brothers have made an open offer to acquire 1.2mn shares of Bajaj Electricals at Rs389 per share.
The swap ratio of the BRPL-IOC merger, which awaits final clearance from the Government, is set at 37:4.
The Government is considering a proposal to scrap withholding tax on overseas borrowings by infrastructure companies and financial institutions servicing the power sector.
The Government says it has collected over Rs938bn in taxes and duties from public sector oil companies.
The Government may allow FDI in multi-branding retailing.
TRAI to set up a panel on number portability.
The Government approves 16 FDI proposals worth Rs6.47bn.
Major Bulk Deals:
Reliance MF has sold Jindal South; Lotus Global Investment has sold Kashyap Tech; UBS has sold Pyramid Saimira.