We want the facts to fit the preconceptions. When they don't,
it is easier to ignore the facts than to change the preconceptions.”
So what if global markets were in doldrums. The local bulls ignored the negative cues following the smaller 25 bps cut in interest rates by the Fed. The stronger than expected industrial production data for October may have helped prop up the mood in the local market. Fact of the matter is though the IIP numbers were much better than in the previous two months, the sharp improvement could be due to a low base effect and good festive demand. November data will more or less affirm whether the Indian industry can sustain double-digit growth rate for the rest of the fiscal year.
Investors will await advance tax figures expected in the next few days. Then of course the third quarter results in January. A piece of data which may not enthuse the bulls is that FIIs were sellers yesterday even as the Sensex and the Nifty rose by 1% each. Local funds continued to lend support as they were once again net buyers yesterday.
Traded volume was much better yesterday and the market breadth too was positive. The F&O data indicates continued buying momentum. Hence, the near-term outlook is positive as the bulls are likely to extend their hold on the markets. We expect a higher opening, though the fall in Asian markets could temper the euphoria. Lots of stock centric action is expected, with small- and mid-cap shares expected to remain in the limelight.
Maars Software is likely to set up a JV for infrastructure development. It is also likely to foray into media entertainment and film distribution. The company's Board is to meet on Dec 19. Shares of real estate developer Kolte Patil will list on the bourses today. Expect a decent debut for the Pune-based company.
L&T is likely to be in action amid news that is setting up a JV with Technip. Also, the Government is considering extending the tax subsidies for shipyards by another 10 years. Glenmark will be another stock that will a lot of activity. The company is reportedly close to signing a US$100-150mn deal for its experimental drug Oglemilast for the European market. It is also among the eight generic drug makers in race to tap the US market for AstraZeneca’s cholesterol-reducing tablet, Crestor. Aurobindo Pharma and Sun Pharma are among the eight companies. IFCI is expected to gain amid reports that the Government has decided not to convert its debt held in IFCI to equity. Tile manufacturers like Nitco Tiles, Kajaria and Euro may attract some attention amid reports that the companies are augmenting capacities to meet rising demand. The companies have also raised money to fund the expansion. Morepen Labs could extend its gains as a financial daily reports that the company may have sealed a settlement with its lenders.
US stocks erased early gains to end marginally higher on Wednesday amid continued anxiety over the ongoing credit crisis. Technology and energy shares led the gains after the Federal Reserve and four other central banks added cash to the financial system in the biggest concerted liquidity injection since the 2001 terrorist attacks.
Exxon Mobil, Cisco Systems and AT&T led the advance and an index of stock market volatility fell the most in a week. Gains were limited as Wachovia and Bank of America said credit-losses will widen.
The Standard & Poor's 500 Index added 9 points, or 0.6%, to 1,486.6. The Dow Jones Industrial Average increased 41 points, or 0.3%, to 13,473.9. The Nasdaq Composite Index climbed 19 points, or 0.7% , to 2,671.14.
Market breadth was positive. About eight stocks rose for every five that fell on the New York Stock Exchange.
The market's late decline was a big break from earlier in the day, when the Dow opened strong and was up 271 points early on. Elsewhere, the dollar fell against the euro and rose against the yen. Treasury prices fell.
US light crude oil for January delivery soared $4.37 to settle at $94.39 per barrel on the New York Mercantile Exchange after the government reported a surprise decline in crude oil and heating fuel supplies.
In economic news, the US trade deficit grew in October compared to the previous month, according to the government's latest reading that showed the gap between imports and exports was slightly larger than Wall Street expectations.
European shares rose. Britain's FTSE 100 closed up 0.4% at 6,559.80, while the German DAX 30 jumped 0.8% to 8,076.12 and the French CAC-40 advanced 0.3% to 5,743.32.
Brazilian stocks finished higher while Argentine stocks ended down. Brazil's Bovespa rose 0.4% to 64,741. Argentina's Merval reversed earlier gains to close down 0.2% at 2,226.12. Chile's IPSA fell 2.4% to 3,090.63. Mexican markets were closed for a holiday.
Asian stocks fell, led by Mitsubishi UFJ Financial Group on concern that a plan by central banks to inject cash into the global financial system will fail to stem credit-market losses.
The MSCI Asia Pacific Index fell 0.5% to 162.32 as of 10:16 a.m. in Tokyo, adding to a 1.3% slide yesterday. The Nikkei 225 Stock Average declined 1.2% to 15,738.12.
Bulls look to carry momentum!
Volatile session ended with smart gains as weak cues from the International markets and lower than expected rate cut by the Federal Reserve dragged the Indian bourses at open. However, after opening with a negative gap, bulls staged a strong bounce back recovering almost all its early losses on back of gains in the index heavyweights like HDFC, Rcom and Bharti Airtel.
Benchmark Sensex ended at a new all time closing high of 20,375 adding 84 points and Nifty index closed at 6,159 adding 62 points.
Classic Diamond slipped 3.5% to Rs467. The board of the directors of the company approved fund raising overseas. The scrip touched an intra-day high of Rs490 and a low of Rs467 and recorded volumes of over 26,000 shares on NSE.
Mercator Lines was down 1% to Rs132. Reports stated that the company raised about US$142.5mn from its listing at the Singapore stock exchange. The scrip touched an intra-day high of Rs138 and a low of Rs130 and recorded volumes of over 7,00,000 shares on NSE.
Reliance Energy edged lower by 0.8% to Rs1933. The company announced that it won 1,200 MW EPC contract from Damodar Valley. The contract was worth Rs37.25bn. The scrip touched an intra-day high of Rs1965 and a low of Rs1902 and recorded volumes of over 25,00,000 shares on NSE.
Edelweiss Capital got listed at Rs1443 with a premium of 75% as expected by the players. The scrip ended at Rs1510 up 83%.
The company is a diversified financial service provider in India, mainly in two segments i.e. agency and capital. Services range from investment banking, institutional equities, asset management and investment advisory, private client broking, wealth management to insurance broking and wholesale financing services catering to its corporate, institutional and High Networth Individual (HNI) clients.
The scrip touched an intra-day high of Rs1608 and a low of Rs1443 and recorded volumes of over 66,00,000 shares on NSE.
Renaissance Jewellery an Indian jewelry producer and exporter, surged as much as 26% on listing on BSE against an issue price of Rs150. The scrip cooled off and ended with 10% gains to close at Rs164.
The company raised Rs798mn selling shares with warrants in an IPO. The jeweler received demand for 23.6 times the shares on offer at the close of the sale. The scrip touched an intra-day high of Rs200 and a low of Rs163 and recorded volumes of over 51,00,000 shares on NSE.
Punj Lloyd surged by over 7% to Rs557 after the company announced that it had won Rs5.9bn contract from IOC. The scrip touched an intra-day high of Rs560 and a low of Rs510 and recorded volumes of over 52,00,000 shares on NSE.
Jindal Drilling surged by over 3% to Rs1329 after reports stated that the company planned to divest 10% stake to fund expansion plans. The scrip touched an intra-day high of Rs1387 and a low of Rs1280 and recorded volumes of over 26,000 shares on NSE.
Geojit Financial was frozen at 10% upper circuit to Rs69.85 after following reports that the company would enter in 50-50 Joint Venture with BNP Paribas for institutional desk. The scrip touched an intra-day high of Rs69.85 and a low of Rs62.2 and recorded volumes of over 18,00,000 shares on NSE.
What the FIIs are doing
FIIs were net sellers of Rs3.85bn (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 Rs3.22bn on the same day.
On Tuesday, FIIs pumped in Rs6.9bn in the cash segment. Mutual Funds were net buyers of Rs3.08bn.
Stocks in News:
L&T is floating a JV with Technip a French company to expand its play in the oil & gas exploration. (ET)
L&T is set to invest Rs10bn to set up a SEZ in Hazira to be focused on engineering. (Mint)
Suzlon Energy plans to set up an integrated steel project in Karnataka. (BS)
SBI has cut the peak term deposit rate by 25 basis points to 8.5%. (BS)
ONGC has received a green signal for construction of a 20-inch diameter pipeline in the Uran-Trombay sector. (FE)
RIL to invest US$24bn in Gulf projects. (DNA)
Power Grid Corp has decided not to bid for the multi-billion-dollar license to run the Philippines’ National Transmission Corp. (BS)
Aurobindo, Glenmark and Sun Pharma are among the eight generic drug makers in race to tap the US market for AstraZeneca’s cholesterol-reducing tablet, Crestor. (BS)
Ashok Leyland has entered the multi-axle vehicle segment with the launch of its 3121 H (8*2) truck. (BS)
TVS Motor will launch a new Star Sport motorcycle in early January; it will be priced at Rs33,000. (DNA)
TCS is in talks for 12 large contracts. (BS)
Gateway Distriparks may buy logistics firms. (BS)
M&M plans to sell Scorpio in the US and has got firm orders for 45,000 units for the first year. (BS)
Daimler Trucks and Hero Group are reportedly planning a joint venture for CVs in India. (BS)
Jet Airways to have 56 flights from four destinations to cater to the Gulf market. (BS)
GMR Infrastructure raises US$1bn through QIP issue to fund its Istanbul Airport project. (ET)
Glenmark is close to signing a US$100-150mn deal for its experimental drug Oglemilast for the European market. (ET)
Sanofi Aventis and Abbott Labs have jointly filed a lawsuit against Glenmark to prevent it from selling its generic version of hypertension drug Tarka in US. (ET)
Videocon Industries is putting up a fresh bid for acquiring Daewoo. (ET)
Tata Power, Reliance Energy and GMR Infra have submitted non-binding bids for Tuas Power of Singapore. (ET)
The Government has decided not to convert its debt held in IFCI to equity. (ET)
Rights issue of SBI is likely to hit the markets in Q4 FY08. (ET)
Nitco Tiles has raised Rs1.7bn through issue of shares to leading foreign and domestic institutional investors. (ET)
SAIL is looking at taking over Steel Complex owned by the Kerela Government. (BL)
ONGC Videsh is hopeful of receiving an offer from Iran for a stake in Yadavaran field. (BL)
The Government might cut corporate tax rate to 26% with eliminations of some exemptions offered currently. (ET)
The shipping ministry has requested the Government to extend the 30% subsidy to Indian ship builders for another 10 years. (ET)
Companies would be able to raise deposits only from existing shareholders or will have to set up a NBFC to raise from general public. (ET)
India Inc has raised US$3.6bn overseas despite regulatory curbs on offshore borrowing. (ET)
The Government has planned more than a four-fold increase in coal production from captive blocks to 120mn tons per year by 2012. (BS)
The Cabinet is likely to announce across the board 2-3% increase in DEPB rates. (DNA).