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Tuesday, December 11, 2007
Post Market Commentary
After a day’s pause, bulls were back in action on Tuesday sparked by a global rally on expectations of an interest rate cut at US Federal Reserve’s crucial meet later today.
Key indices ended at all-time highs spurred by significant gains in frontline shares. Second line shares also participated. Sectorwise, realty and banking stocks charged ahead. But consumer durables and information technology shares finished marginally lower.
“The market was volatile for the last few sessions. But the undertone was always bullish. It was waiting for heavyweights to participate to spark a rally. And today, Reliance Industries provided fuel for the index move, which automatically spurred other frontline shares,” said technical analyst, Sachin Chavan.
The 50-stock Nifty ended at an all-time high of 6097.25, up 136.05 points or 2.29 per cent from its previous close. Intra-day, the index made a new high of 6,111.20.
The 30-share Sensex closed 360.21 points or 1.8 per cent higher at 20,290.89, making a fresh peak of 20,333.06 earlier today. Year ago, on Dec 11, 2006, the 30-share index was at 13,399.43, a gain of 6,891.46 points or 51.43 per cent. Total market capitalization for the Sensex was Rs 6,780,443.62 crore. Of the 30 shares, 25 advanced and 5 declined.
BSE Midcap Index and Smallcap Index gained 1.19 per cent and 0.76 per cent respectively.
Stocks that made a new high included Bihar Sponge at Rs 45.40, State Bank of India Rs 2,475.25, First Leasing Rs 80.65, GTC Industries Rs 750, Kotak Mahindra Bank Rs 1,334.80, LIC Housing Finance Rs 402.90, Rain Commodities Rs 279, Remi Metals Rs 30.5, ICI India Rs 642.90.
The top traded scrips by volume were Ispat Industries, Ashok Leyland, Reliance Petroleum, Mangalore Refinery & Petrochem, MTNL, Arvind Mills, Apollo Tyres, Alok Industries, Lanco Infra, IDFC.
Realty shares chalked up smart gains with Ansal Infrastructure catapulting 17.51 per cent, Unitech up 8.48 per cent, Omaxe adding 6.95 per cent and HDIL climbing 5.68 per cent.
Banking shares also attracted investor interest. Indian Overseas Bank added 4.93 per cent, HDFC Bank rose 4.81 per cent, Canara Bank climbed 3.94 per cent and Union Bank advanced 3.37 per cent.
Among frontliners, Bharti Airtel (up 6.21%), HDFC Bank (4.8%), ONGC (3.68%), Hindalco (3.34%), ICICI Bank (3.32%), Maruti Suzuki (3.64%) and Reliance Industries (1.99%) boosted the Sensex while DLF (down 1.20%), Infosys Technologies (0.31%), BHEL (0.27%) and Ambuja Cements (0.27%) disappointed.
Market breadth on BSE saw 1981 gainers and 894 losers.
Overnight, US stocks gained after investors in Singapore and the Middle East agreed to inject $11.5 billion into UBS AG and on increased expectations of Federal Reserve interest-rate cut. Shares of rate- sensitive companies like banks, mortgage lenders and home builders were the frontrunners in the rally.
Dow Jones industrial average was up 101.45 points or 0.74 per cent to end at 13,727.03. Standard & Poor's 500 Index was up 11.30 points or 0.75 per cent at 1,515.96. Nasdaq Composite Index was up 12.79 points or 0.47 per cent at 2,718.95.
On Asian shores, Japan’s Nikkei average ended 0.76 per cent up at 16,044.72, South Korea’s Kospi settled at 1,925, up 0.98 per cent, Singapore Strait Times advanced 1.01 per cent to close at 3,589.
However, European markets were lagging behind. UK’ FTSE 100 was down 0.54 per cent at 6,529, Germany’s DAX was at 8,024, down 0.12 per cent and France’s CAC 40 was down 0.39 per cent at 5,728.
The market move on Wednesday will be largely guided by US Federal Reserve’s move on interest rates later today. A quarter point rate cut, after 0.75 percentage point of reductions in September and October, would mark the greatest easing of borrowing costs since 2001.
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Post Session Market Commentary
The market surged today to hit new landmarks by creating a rally over the sectoral indices scrips on the back of heavy buying across the counters. The market opened on a strong supported by favoring global cues and keeps on marching forward through out the trading session. The investors showed more interest in buying rather than selling. The domestic market surged taking firm global cues ahead of the US Federal Reserve meeting to be held on Tuesday evening. Most buying is seen from Realty, Metal, Bankex and Oil & Gas baskets. The BSE Sensex closed with hand some gains of 360.21 points at 20,290.89 and NSE Nifty grew by 136.65 points to closed at 6,097.25. Both the BSE Mid cap and Small cap closed higher by 69.54 points and 136.92 points at 9,186.98 and 11,667.84 respectively. Overall, the market breadth was strong as 1,981 stocks are closed higher while 894 stocks are closed lower.
BSE Realty index surged 359.44 points to close at 12,182.32. Scrips that pushed it up Ansal Infra (17.51%), Unitech (8.48%), Omaxe (6.95%), HDIL (5.68%), Purvankara (5.01%).
BSE Metal index inched up by 352.75 points to close at 19,054.59. Scrips that advanced are Welspun Guj (8.31%), Nalco (5.75%), Maharas Sea (4.28%), Jindal Steel (3.75%) and SAIL (2.12%).
BSE Bankex index closed higher by 292.16 points to close at 11,778.71. Scrips that gained are IOB (4.93%), HDFC bank (4.81%), Canara bank (3.94%), ICICI bank (3.32%) and Union bank (3.37%).
BSE Oil & Gas index advanced by 225.44 points to closed at 12,965.44. Pulled up by HPCL (6.25%), GAIL (3.70%), ONGC (3.68%), BPCL (3.11%), IOCL (1.99%) and Reliance industries (1.99%).
BSE Capital goods closed up by 168.83 points at 20,299.75. Scrips that grew are Suzlon energy (2.74%), Punj Lloyd (2.47%), SKF India (1.12%), ABB (0.73%) and Siemens (0.63%).
BSE Auto index grew by 84.04 points to close at 5,761.43. Scrips that Jumped are Maruti Suzuki (3.17%), Bajaj auto (3%), Exide industries (2.27%), Hero Honda (2.05%) and MRF (1.99%).
Sensex scales new high
The market exhibited awesome display in anticipation of more foreign fund inflows if US Federal Reserve cuts the interest rate further as expected and achieved a new peak on the back of all-round buying. The benchmark share index, Sensex, rose to its record high of 20,333 as realty and banking stocks registered heavy gains. The market opened with a positive gap of 118 points and kept its upward bias for the entire day. The realty major Ansal Properties and Infrastructure, Unitech, and Omexe registered the biggest gains in today's trades. Bharti Airtel and HDFC Bank were also the major contributors in today's rally. The index moved within a range in the afternoon. However, Sensex witnessed hectic buying towards the close and ended the session near its all-time high with a gain of 360 points at 20,291. The Nifty closed the session at 6,097, up 137 points.
Among sectoral indices, Realty index led the upsurge with a gain of 3.04% at 12,182 followed by the BSE Bankex index (up 2.54% at 11,779), the BSE Metal index (up 1.89% at 19,055) and the BSE PSU index (up 1.80% at 10,086). The market breadth was extremely positive. Of the 2,914 stocks traded on the Bombay Stock Exchange (BSE), 1,980 stocks advanced, 896 stocks declined and 38 stocks ended unchanged.
Out of the 30 Sensex stocks, 25 managed to end in the green while five stocks ended with losses. Bharti Airtel was the leading gainer and soared 6.21% at Rs1,031. HDFC Bank jumped 4.81% at Rs1,775, ONGC shot up by 3.68% at Rs1,238, Hindalco advanced 3.34% at Rs200, ICICI Bank moved up by 3.32% at Rs1,316, Maruti Suzuki added 3.17% at Rs1,079 and Bajaj Auto gained 3% at Rs2,794. Among the laggards DLF dropped 1.20% at Rs1,014. Infosys, BHEL, Ambuja Cement and Reliance Energy slipped marginally.
Over 3.23 crore Tata Teleservices shares changed hands on the BSE followed by IKF Technologies (2.73 crore shares), Himachal Futuristic (2.43 crore shares), GV Films (1.77 crore shares) and IFCI (1.72 crore shares).
Lanko Infrastructure registered a turnover of Rs210 crore on the BSE followed by Reliance Petroleum (Rs209 crore), Tata Teleservices (Rs192 crore), IFCI (Rs186 crore) and Reliance Energy (Rs128 crore).
Sensex, Nifty strike record highs on hopes of pick up in FII inflow
The market surged today to hit record high on renewed buying in blue chips in anticipation of more foreign fund inflows if the United States cut rates as expected. Sensex settled above 20,000 mark for the first time. Nifty closed above 6,000 level for the first time. The US Federal Reserve is expected to cut Fed funds rate by at least 25 basis points at its policy meeting to be held later today, 11 December 2007.
Asian markets were trading higher today, 11 December 2007. However, European markets, which opened after Indian market, were in red.
Bharti Airtel and HDFC Bank were major gainers from Sensex. Infosys and DLF were major losers from Sensex pack. Banking, realty, auto and metal stocks edged higher. Except BSE IT index all the other sectoral indices on BSE were in green. Reliance Industries gained. BSE Mid-Cap and Small-Cap indices hit all-time highs. Market breadth was strong.
The 30-share BSE Sensex jumped 360.21 points or 1.81% to 20,290.89, a record closing high. Sensex hit all-time high of 20,333.06 in late trade. At day's high, Sensex had gained 402.38 points.
The broader S&P CNX Nifty jumped 136.65 points or 2.29% at 6,097.25, a record closing high. Nifty hit all-time high of 6,111.20 today.
BSE clocked a turnover of Rs 8179 crore compared to Monday (10 December 2007)'s Rs 7,420.72 crore.
Nifty December 2007 futures were at 6096.35, at a slight discount of 0.90 points as compared to the spot closing of 6097.25.
The NSE's futures & options (F&O) segment turnover was Rs 59,421.97 crore, which was higher than Rs 47,277.77 crore on Monday, 10 December 2007.
BSE Mid-Cap index rose 0.76% to 9,186.98. It hit an all-time high of 9,268.23 today. BSE Small-Cap index rose 1.19% to 11,667.84. It hit an all-time high of 11,740.96 today. Both these indices underperformed Sensex.
BSE Bankex (up 2.54% to 11,778.71), BSE Metal index (up 1.89% to 19,054.59), BSE Realty index (up 3.04% to 12,182.32) outperformed Sensex.
BSE Auto index (up 1.48% to 5,761.43), BSE Capital Goods index (up 0.84% to 20,299.75), BSE FMCG index (up 0.43% to 2,169.62), BSE IT index (down 0.01% to 4,432.45), BSE Oil & Gas index (up 1.77% to 12,965.44), BSE Power index (up 0.49% to 4,523.55) and BSE PSU index (up 1.8% to 10,086.09) underperformed Sensex.
Market breadth was strong. On BSE, 1,948 stocks advanced, 892 stocks declined and 28 stocks remained unchanged. 25 out of 30 stocks advanced in the Sensex pack.
Bharti Airtel (up 6.21% to Rs 1,030.70), ONGC (up 3.68% to Rs 1,238.45) spurted.
India’s largest private sector firm by market capitalization & oil refiner Reliance Industries rose 1.99% to Rs 2,878.75. As per reports, Reliance Industries (RIL), has struck a deal to explore uranium in Australia, as soaring demand and prices turn the heavy radioactive metal into a lucrative commodity. RIL, through its subsidiary RIL (Australia), has signed an agreement with Uranium Exploration Australia (UXA) to buy 49% in eight exploration blocks owned by the company in South Australia and Northern Territory, reports suggest.
Banking stocks gained. HDFC Bank (up 4.81% to Rs 1,774.70),Indian Overseas Bank (up 4.93% to Rs 185.30), ICICI Bank (up 3.32% to Rs 1,316.05), and State Bank of India (up 0.88% to Rs 2,445.85) edged higher.
Realty stocks surged. Ansal Propertes & Infrastructure (up 17.51% to Rs 341.65), Unitech (up 8.48% to Rs 479.80), Indiabulls Real Estate (up 1.35% to Rs 723.50) edged higher. DLF declined 1.2% to Rs 1,013.55.
Metal stocks rose. Shri Precoated Steel (up 10% to Rs 382.10), National Aluminium Company (up 5.75% to Rs 404.75), Sterlite Industries (up 2.81% to Rs 1,104.80), Steel Authority of India (up 2.12% to Rs 276.90), Hindalco Industries (up 3.34% to Rs 199.55), Tata Steel (up 0.28% to Rs 835.85) edged higher.
Auto stocks also gained. Tata Motors (up 0.7% to Rs 771.65), Maruti suzuki India (up 3.17% to Rs 1,078.50), Hero Honda Motors (up 2.05% to Rs 700.30) and Bajaj Auto (up 3% to Rs 2,793.90) edged higher.
Infosys (down 0.31% to Rs 1,743.05), Ambuja Cements (down 0.27% to Rs 150.50), Reliance Energy (down 0.02% to Rs 1,945.65) and Bharat Heavy Electricals (down 0.27% to Rs 2,670.25) edged lower.
Tata Teleservices (Maharashtra) clocked the highest volume of 3.23 crore shares on BSE. The stock declined 1.02% to Rs 58.40. IKF Technologies rose 20% to Rs 9.49 and clocked second highest volume of 2.73 crore shares. Himachal Fuutris Communications rose 5% to Rs 36.80 and clocked the third highest volume of 2.43 crore shares. G V Films declined 3.5% to Rs 7.71 and clocked the fourth highest volume of 1.77 crore shares. IFCI rose 1.42% to Rs 107.50 and clocked the fifth highest volume of 1.72 crore shares.
Lanco Infratech clocked the highest turnover of 210.75 crore on BSE. The stock rose 15.83% to Rs 699.50. Reliance Petroleum (Rs 209.32 crore), Tata Teleservices Maharashtra (Rs 192.73 crore), IFCI (Rs 186.94 crore) and Reliance Energy (Rs 128.18 crore) were other turnover toppers on BSE in that order.
European markets were trading in red. France’s CAC 40 (down 0.44% to 5,725.68), Germany’s DAX (down 0.26% to 8,012.24) and UK’s FTSE 10 (down 0.56% to 6,528.80) edged lower.
Asian markets were trading higher today, 11 December 2007. Hong Kong's Hang Seng (up 2.55% at 29,226.84), Japan's Nikkei (up 0.76% at 16,044.72), Taiwan's Taiwan Weighted (up 0.47% at 8,638.33), Straits Times (up 1.03% at 3,589.74), Shanghai Composite (up 0.25% to 5,175.08), South Korea's Seoul Composite (up 0.98% at 1,925.07) edged higher.
US markets ended higher yesterday, 10 December 2007 ahead of Fed rate decision. The Dow Jones Industrial Average gained 101.45 points, or 0.74%, to 13,727.03. The Standard & Poor's 500 index shot up 11.30 points, or 0.75%, to 1,515.96. The Nasdaq Composite index advanced 12.79 points, or 0.47%, to 2,718.95.
As per latest data released by the Association of Mutual Funds in India (AMFI), existing open-ended equity schemes of mutual funds which includes equity linked saving schemes (ELSS) witnessed a net inflow of Rs 3004 crore in November 2007. Equity schemes mopped up Rs 2441 crore in new fund offerings (NFOs) in the month. This pertains to collections in those NFOs with respect to which allotment was completed in the month.
Market Close: Finally 20k Conquered! Whats Next?
Significant day for Indian Indices with strong cues from global markets helped Indian markets to see new high. After firm start indices continued north bound journey continued with strong interest in index heavy weights. Rally was ahead of Fed meet scheduled today where it is slated to cut rate. Sensex and Nifty surpassed the previous highs, Sensex made new high of 20,333 during the id session and Nifty crossed first time ever historic milestone of 6,100 mark and closed below life high. Profit booking has its hand but indices managed to recover to end strong. Asian Indices closed in green with HangSeng ended up over 725 points while Europe is trading the other way i.e in Red.
Buying was seen in most of the sectors except IT, Power, Fertilizer, Sugar and selective stocks in Capital Goods. Fertilizer stocks which were rallied so far on hopes of more subsidy, profit booking was seen today. Realty, Banking and Pharma stocks cheer the day. Mid and small cap were also in action, the index made all time high and closed in green but could not outperform the front line indices.
Sensex ended up by 360 points at 20290.891. It was helped up by gains in Bharti Tele (1030.7,+6 percent), HDFC Bk (1774.7,+5 percent), ONGC (1238.45,+4 percent), Hindalco (199.55,+3 percent) and ICICI Bk (1316.05,+3 percent). Restricting the gains are Infosys (1743.05,0 percent), BHEL (2670.25,0 percent), Guj Ambuja (150.5,0 percent), Rel Energy (1945.65,0 percent).
Leading credit rating agency, ICRA assigned an `A1+` rating to the Rs 100 cr short term debt programme of Unitech. Till now this is the highest credit quality rating assigned by ICRA to short term debt instruments. Instruments rated in this category carry the lowest credit risk in the short term. This reflects Unitech established position in the real estate sector with presence across all segments. With increase in number of launched new projects, Unitech profit after tax increased from Rs 87 cr in FY2006 to Rs 1306 cr in FY2007 while the ratio of Net Cash Accruals (NCA)/Debt increased from 7.61 % to 31.81 % in the same period. It has announced huge growth plan over the period. It has a land bank of around 20,000 acres now has big plans for the retail segment. The company announced an investment of Rs 20,000 cr for developing 48 malls over the next six years. In the first phase of two years, it will develop 24 malls with retail space amounting to 60 million sq ft. The company has also applied for license to operate as a telecom service provider. This will open up a new space for the company to grow with ambitious plans in organised retailing and telecom services, and given its dominance in the real estate segment. Unitech is well placed to capitalise the new opportunities. On hopes of leveraging the stock closed up by 8% which helps to reduce the interest cost, while improves the bottom line.
Telecom space in action after subscription numbers for the month end November were out. India's leading GSM based mobile operators added 5.82 mn new subscribers in November maintaining a rapid pace in the world's fastest growing wireless market. Bharti added 2.05 mn subscribers Vs 2.03 mn up by 1%, Idea added 8 Lakh subscribers up by 7%, Spice added 91,147 subscribers up by 3%, MTNL added 63,867 subscribers up by 19% while Rcom is yet to release its numbers. The mobile market in India is booming with availability of cheaper handsets and expansion of networks to smaller towns and rural areas. The potential growth is robust with only 19 mobile users out of 100 people in the country of more than 1.1 bn people which give more space of opportunity. Looking at the growth in this pivotal we see there will be more cost fight which will directly hit margins & Avg revenue. Growth in subscription keeps stock up. Bharti closed up by 5.83%, MTNL up by 7.52%, VSNL up by 4.30%.
Technically Speaking: Strong session through out the day, Sensex closed above 20k. Sensex touched intraday high of 20,333 and low of 20,019. Overall breadth was in favor of Advances, where the Advances stood at 1933, while Declines at 907. The turnover was pretty good at Rs 8179 cr. Sensex has broke away from its Resistance at 20000, we might look towards 21000 by the end of the week, if no negative news falls in.
Trading Calls
Buy MRPL with a stop loss of Rs 128 for a target of Rs 200
Buy Union Bank with a stop loss of Rs 180 for a target of Rs 236
Buy Radico Khaitan only on declines with a stop loss of Rs 160 for a short-term target of Rs 203.
Morning Call
Market Grape Wine :
In House :
Nifty at a supp of 5924, 5880 and 5800 with resis at 6020 and 6060
Intra Day: Buy Bankbaroda above 401 with a TGT of 420 and a SL of 394
Buy JP Hydro above 118 with a TGT of 129 and a SL of 114
F&O: Buy LITL above 605 with a TGT of 620 and a SL of 597
Buy Suntv above 395 with a TGT of 410 and a SL of 388
Out House :
Markets at a support of 19786 & 19656 levels with resistance at 20112 & 20282 levels .
Buy : RIL & REL
Buy : GujFluro & INOX Bullet
Buy : JpAsso & Jphydro
Buy : Infy & Wipro
Buy : SKumar & ABAN
Buy : IBUllsreal & IDFC Bullet
Buy : JindalPower & RPL
Buy : Kotak & SBIN
Buy : IOlBroad bullet
Dark Horse : IOL Broad , RNRL , IBullReal , IDFC , INOX , Essaroil , RIL , SBIN & JpHydro
Bullet for the Day : Gujfluro & IDFC with strict stop loss .
Grey Market - Aries Agro, Manaksia, Porwal Auto
eClerx Services 270 to 315 40 to 50
BGR Energy 425 to 480 350 to 360
Transformers & Rectifiers 425 to 465 350 to 360
Brigade Enterprises 351 to 390 60 to 70
Jyothy Lab. 690 230 to 240
Burnpur Cement Ltd. 12 5 to 6
Edelweiss 825 675 to 700
Renaissance Jewellery 150 40 to 45
Kolte Patil 145 75 to 85
Kaushalya Infra 60 11 to 13
SVPCL 42 - 5 to -7
Aries Agro 120 to 130 30 to 35
Manaksia Ltd. 140 to 160 40 to 50
Porwal Auto Components 68 to 75 15 to 20
Labels:
Aries Agro,
Grey Market,
Manaksia,
Porwal Auto Components,
SVPCL
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Market may remain choppy
The market is expected to stay cautious ahead of the crucial US Federal Reserve meet scheduled after Indian market hours today, 11 December 2007, to consider interest rates. Fed is expected to cut Fed funds rate by at least 25 basis points. Recent data showing strong job creation by the US private sector in November 2007 has eased US recession worries.
Meanwhile, oncerns on the political front resurfaced once again yesterday, 10 December 2007 after communist allies warned the government against going ahead with a civilian US nuclear deal. Communist parties, a key ally of the ruling Congress party-led coalition, fired a fresh salvo on Sunday, 9 December 2007, asking the government to stop talks on a controversial nuclear deal with a UN nuclear watchdog.
Asian markets were trading higher today, 11 December 2007. Hong Kong's Hang Seng (up 1.15% at 28,828.65), Japan's Nikkei (up 0.71% at 16,038.01), Taiwan's Taiwan Weighted (up 0.25% at 8,619.31), Straits Times (up 0.37% at 3,566.19), South Korea's Seoul Composite (up 0.47% at 1,915.40) and Shanghai Composite (up 0.37% to 5,180.29), all edged higher
US markets ended higher yesterday, 10 December 2007 ahead of Fed rate decision. The Dow Jones Industrial Average gained 101.45 points, or 0.74%, to 13,727.03. The Standard & Poor's 500 index shot up 11.30 points, or 0.75%, to 1,515.96. The Nasdaq Composite index advanced 12.79 points, or 0.47%, to 2,718.95.
Back home, the 30-share BSE Sensex slipped 35.32 points or 0.18% to 19,930.68 in volatile trade on Monday, 10 December 2007. The broader S&P CNX Nifty lost 13.7 points or 0.23% at 5,960.60 on that day.
As per provisional data, foreign institutional investors (FIIs) sold shares worth a net Rs 192.19 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 230.15 crore on Monday, 10 December 2007.
FIIs were net sellers to the tune of Rs 251.46 crore in the futures & options segment on Monday, 10 December 2007. FIIs were net sellers of index futures to the tune of Rs 46.62 crore and they bought index options worth Rs 60.90 crore. They were net sellers of stock futures to the tune of Rs 247.54 crore and sold stock options worth Rs 18.20 crore.
Crude oil traded near $88 a barrel in New York after falling the past two days on speculation slowing growth in the U.S. will trim demand and help increase stockpiles. Crude oil for January delivery was at $88.12 a barrel, up 26 cents, in after-hours electronic trading on the New York Mercantile Exchange in Singapore. Brent crude oil for January settlement fell 60 cents, or 0.7%, to close at $88.04 a barrel on the London-based ICE Futures Europe exchange.
Pre Market Watch
The Market is likely to have positive opening as the global cues are in favor. The market closed with moderate losses on Friday as the investors avoid taking fresh positions ahead of the US Federal Reserve meeting that is to be held on Tuesday. The market opened marginally higher but pared all its gains as the profit booking prevails. On Monday, the BSE Sensex closed lower by 35.32 points at 19,930.68 and NSE Nifty fell 13.3 points to closed at 5,960.60. We expect the market to remain choppy and would look for cues to take a direction during the trading session.
On Monday, the US market closed in positive territory. The DJIA closed higher by 101.45 points at 13,727.03. The S&P 500 index grew by 11.30 points to close at 1,515.96 and NASDAQ closed up by 12.79 points to close at 2,718.95.
Indian ADRs ended in mixed. In technology sector, Patni computers grew by 3.45% along with Wipro by 3.17%,Infosys by 1.79% and Satyam by 0.89%. In banking sector, ICICI bank advanced by (0.93%). In telecommunication sector, MTNL and VSNL dropped by (1.19%) and (0.39%) respectively. Sterlite industries fell by (1.26%).
The major stock markets in Asia are trading firm. Hang Seng is trading higher by 327.55 points at 28,828.65. Japan''s Nikkei is trading up by 113.62 points at 16,038.01. Taiwan Weighted is trading at 8,619.31 up by 21.28 points. Seoul Composite is trading up by 8.98 points at 1,915.40. Singapore Strait Times inched up by 13.11 points at 3,566.19.
The FIIs stood as the net buyer on Monday both in equity as well as in Debt. The gross equity purchased was Rs4,752.30 Crore and the gross debt purchased was Rs987.50 Crore while the gross equity sold stood at Rs4,747.10 Crore and gross debt sold stood at Rs497.50 Crore. Therefore, the net investment of equity reported was Rs5.20 Crore and net debt was Rs490 Crore.
Today, Nifty has support at 5,908 and resistance at 6,039 and BSE Sensex has support at 19,773 and resistance at 20,278.
Rate cut hopes boosts US Markets
Market ignores disappointing news in the financial front hoping that Federal Reserve will surely deliver tomorrow
US Market started the week on a strong note today, Monday, 10 December, 2007 after the financial sector provided good support to the broader market. Expectations that Federal Reserve will cut federal funds rate (the rate banks charge each other on overnight loans ) rates tomorrow by another twenty-five to fifty basis points bringing overall rate below 4% also imparted some fresh enthusiasm among investors. Couple of bad bews in the financial market did not disrupt today’s tone of trading. Nine out of ten economic sectors posted gains today.
The rate cut chances kept sellers at bay for almost the entire day. The Dow Jones industrial Average ended the day with a gain of 101.45 points at 13,727.03. The Nasdaq Composite Index, finished higher by 12.79 points at 2,718.95. S&P 500 finished higher by 11.3 points at 1,515.96.
Twenty-seven out of thirty Dow stocks ended in green today. Caterpillar, Mc Donalds, JP Morgan and Citigroup led the group of Dow winners. Boeing, AT&T and Pfizer were the only three Dow laggards.
McDonald's shares posted a handsome gain after the company reported an 8.2% increase in global comparable sales that exceeded the consensus estimate which called for a 4.9% increase. Caterpillar moved up on analyst comments about its strong market position in China.
Among some disheartening news in the financial sector, Swiss bank UBS announced today it will write-down $10 billion in losses on subprime lending, and expects to post a net loss in the fourth quarter.
Indian Technology ADRs register maximum gains
On the economic front, October pending home sales rose 0.6%, topping the consensus estimate that called for a drop of 1.0%. The prior reading was revised to +1.4% from +0.2%. Pending sales were down 18% on a y-o-y basis.
Indian ADRs closed mixed today but majority ended in green. Technology stocks led the way with Wipro Tech, Infosys Tech and Patni Computers scoring the maximum gains. The three stocks soared by 3.4%, 1.8% and 3.5% respectively today.
Crude prices were quite volatile at Nymex today. But prices ultimately gave up earlier gains and ended lower today. Prices rose today earlier in the day when dollar weakened against rivals but then gave up all its gains and closed lower for the day on anticipation of another interest rate cut. Crude-oil futures for light sweet crude for January delivery closed at $87.86/barrel (lower by $0.42/barrel or 0.5%) on the New York Mercantile Exchange. Prices reached a high of $89.75/barrel earlier in the day.
Volume on the New York Stock Exchange neared 1.2 billion shares, and advancing stocks outpaced those falling by a nearly 2-to-1 ratio. On the Nasdaq, 1.8 billion shares exchanged hands, and advancers topped decliners roughly 8 to 7.
Tomorrow, investors will focus on Federal Reserve's interest rate decision at its policy-setting meeting to help set the tone of trading during the session. Policymakers are widely expected to lower rates, as weakness in the housing and credit markets continue to weight on investor sentiment and the overall economy. The decision will be out at 2.15 pm E.T.
Market may open firm
The market is likely to open on a positive note tracking firm Asian markets in current trades and the gains in the US markets. The global crude oil prices trading near $88 and strong FII inflows may boost the market sentiment. Among the local indices, the Nifty could test 6,200 on the upside and may slip to 5,750 on the downside. The Sensex has a likely support at 19,300 and may face resistance at 21,000.
US indices jumped on Monday on better-than-expected pending home sales report and possible interest-rate cut from the Federal Reserve. While the Dow Jones gained 101 points to close at 13727, the Nasdaq moved up by 13 points at 2719.
Barring few most of the Indian ADRs followed the US markets and ended with gains. Patni Computer surged by 3.45% and Wipro jumped 3.17% while, Infosys, Satyam, Dr Reddy's, Tata Motors, ICICI Bank gained over 0.5%-1%. However, MTNL, VSNL and Rediff shed around 1% each and HDFC Bank remained unchanged.
In the crude oil front, the Nymex light crude oil for January series slipped 42 cents to close at $87.86 per barrel. The bullion Comex gold for February delivery climbed $13.30 to settle at $813.50 a troy ounce.
Daily Trading Calls
Nifty (5961) Sup 5928 Res 6041
Buy Bombay Dyeing (734) SL 728 Target 744, 748
Buy OBC (284) SL 280
Target 292, 295
Buy Aptech (432) SL 427
Target 441, 445
Buy India Cements (303) SL 298 Target 311, 313
Sell Crompton Greaves (410) SL 415 Target 401, 399
Bulls well Fed!
Winners make a habit of manufacturing their own positive expectations in advance of the event.
After Monday blues, the bulls would hope Tuesday turns better. With US stocks closing higher ahead of Fed meeting today, the bulls may just have their way initially. All said and done, it is an event risk for bulls and bears. We expect the Sensex and the Nifty to open higher, though things may cool down yet again as FII inflows have been quite erratic in recent times. Small-cap and mid-cap shares may remain in momentum. While the going is good remember, most of these scrips have rallied due to speculation rather than any dramatic shift in their fundamentals.
Banks and builders led the rally in US after investors in Singapore and the Middle East agreed to inject $11.5bn into UBS and pending home sales unexpectedly advanced. Moreover, Wall Street is expecting at least a 25 basis points cut in the benchmark federal funds rate when the FOMC meets later today. Having said that, the rate cut is already showing in stock prices if one goes by the rally over the past few days.
So, in that sense, there may not be much to cheer if the widely anticipated 25 bps rate cut does materialise. Given some of the positive economic reports of late, the Fed may not be inclined to please bulls with a larger 50 bps reduction. But, if it does, global markets will rally, albeit briefly.
World markets will wait to listen the comments from the FOMC on the health of the US economy amid the current housing sector meltdown and an indication of how interest rates will move in the next few months.
Stocks like Financial Technologies and Bharat Forge are expected to see action in the coming days.
US stocks rose on Monday as investors welcomed a stronger-than-expected pending home sales report and braced for Tuesday's expected interest-rate cut from the Fed.
Financial shares in the Standard & Poor's 500 Index climbed to the highest level in a month, boosted by JPMorgan Chase and Citigroup. DR Horton, the largest US homebuilder, gained after contracts to buy previously owned homes increased for a second month.
Energy producers and miners advanced on speculation that a Fed rate cut will spur demand in the world's biggest economy.
The S&P 500 added 11 points or 0.8%, to 1,515.96. The Dow Jones Industrial Average advanced 101 points, or 0.7%, to 13,727.03. The Nasdaq Composite Index gained 13 points, or 0.5%, to 2,718.95.
Ahead of the meeting, pending home sales index showed a rise of 0.6%, versus forecasts that sales would fall 1%. After the close of trade, mortgage lender Washington Mutual said it was cutting its dividend and more than 3,000 jobs in the wake of the housing and credit market crisis.
In corporate news, UBS said it will write down about $10bn related to the credit market crisis and will borrow about $11.5bn from Singapore and Middle-East investors.
Troubled bond insurer MBIA said it will receive a $1bn investment from private equity firm Warburg Pincus. Shares jumped around 13%. McDonald's reported November sales at its stores open a year or more rose 8.2%, well above estimates. Shares gained nearly 3%.
MGI Pharma rallied nearly 20% after the drug company agreed to be bought by Japanese drug company Eisai for $3.9bn in cash.
Treasury prices slipped, boosting the yield on the 10-year note to 4.15% from 4.1% late on Friday. In currency trading, the dollar fell versus the euro and was little changed against the yen.
US light crude oil for January delivery fell 42 cents to settle at $87.86 a barrel on the New York Mercantile Exchange. COMEX gold for February delivery rallied $13.30 to settle at $813.50 an ounce.
European markets advanced. The pan-European Dow Jones Stoxx 600 index rose 0.6% to 375.06, building on strong gains made on Friday. France's CAC-40 advanced 0.6% to 5,750.92, while the UK's FTSE 100 closed up 0.2% at 6,565.40. The German DAX 30 topped the 8,000 mark for the first time since the start of November, rising 0.5% at 8,033.36.
However, Brazilian and Mexican stocks fell. In Brazil, the benchmark Bovespa index fell 0.3% to 65,446. In Mexico City, the IPC index of 35 most-traded issues fell nearly 0.3%, or 86 points, to 31,182.75. Argentina's Merval edged up 0.3% to 2,244.97 and Chile's IPSA fell 1.3% to 3,252.11.
In other emerging markets, the RTS index in Russia surged by nearly 2% to 2330 and the ISE National 30 index in Turkey was up 0.3% at 72,149.
Asian markets were mostly higher this morning. The Nikkei in Tokyo was up 107 points at 16,032 while the Hang Seng in Hong Kong rallied 391 points to 28,892. The Kospi in Seoul gained 8 points to 1914 and the Straits Times in Singapore added 14 points to 3567.
China's inflation accelerated to the fastest pace in almost 11 years, supporting US Treasury Secretary Henry Paulson's case that a stronger yuan is needed to help cool the economy.
Choppiness to continue
Indian stock benchmarks closed in the red after a promising start, as weakness in select world markets and fresh bad news related to the slump in US housing sector weighed on the sentiment ahead of tomorrow's Fed meet. However, select small-cap and mid-cap stocks bucked the general market trend.
Though, a 25 basis point cut from the US central bank is more or less guaranteed, global investors are keen to hear what the Fed policy makers have to say on the outlook for the world's biggest economy and further movement in borrowing costs there.
European stocks advanced for a fourth day, led by banks and construction companies, after UBS said it will shore up capital by selling stakes to investors and Lafarge announced plans to expand in the Middle East.
Asian stocks fell for the first time in four days after writedowns by UBS raised concern losses from US subprime investments will widen.
The benchmark BSE Sensex closed at 19,930, down 35 points or 0.2% over the previous close. It touched a high of 20,095 and a low of 19,834 after opening at 20,074. On Friday, it had closed at 19,966.
The NSE Nifty fell by about 14 points or 0.2% to shut shop at 5960. Meanwhile, the CNX Midcap index was up 0.85% at 8547. The BSE- Small-Cap index surged by 1.7% to 11,530.
Market breadth was positive. On the BSE, 2061 shares rose while 805 shares lost ground and 37 remained static.
Among the top gainers within the Sensex were Hindalco (2.6%), ICICI Bank (2.1%), Infosys (1.8%), DLF (1.4%) and Bharti Airtel (1.1%). The big losers in the Sensex were TCS (2.4%), BHEL (2.4%), Cipla (2%), HDFC (1.7%), HDFC Bank (1.65%), NTPC (1.6%) and Hindustan Unilever (1.4%).
What the FIIs are doing
FIIs were net sellers of Rs1.92bn (provisional) in the cash segment on Monday while the local institutions net sold shares worth Rs2.3bn. In the F&O segment, foreign funds were net sellers of Rs2.5bn on the same day.
On Friday, FIIs were net buyers of just Rs52mn in the cash segment. Mutual Funds were net buyers of Rs711mn on the same day.
Stocks in News:
Tata Motors and M&M have reportedly submitted revised bids for acquiring the Jaguar and Land Rover brands from Ford.
Bharti Airtel offers Rs26.5bn bid for pan India GSM spectrum.
Essar Oil is believed to be close to acquiring a majority stake in Kenya Petroleum Refinery.
Reliance-ADAG plans to launch its DTH service in March.
Tata group and Engineers India have entered into a 50:50 JV for engineering consultancy and construction projects.
RIL is reportedly planning to expand Jamnagar SEZ by over 1,000 hectares.
UBI, OBC and Dena Bank to mull rights issues to meet Basel-II norms.
Lanco Infratech has reportedly ended EPC contracts with BHEL for Nagarjuna power project in Mangalore.
CESC raises $150mn through QIP offering at Rs618 a share.
Pfizer is the first MNC to receive HIV drug patent in India.
Tata Teleservices has filed a petition against TDSAT asking it to direct GSM operators to return excess spectrum beyond the contracted 6.2 MHz.
IVRCL Infra is understood to be planning an investment of $1bn to acquire companies providing oil-field infrastructure services.
Aftek to get Rs8bn by divesting its 24.7% stake in search engine Seekport.
Patel Engineering to raise up to $5bn abroad.
UCO Bank to float follow-on issue in March.
Reliance Retail in talks to acquire India Book Distribution Bombay Ltd. (IBD).
Bharti Airtel to launch its retail venture by March in north India.
Mico integrates Indian subsidiaries with global business.
Diamond Cables to raise Rs2.5bn through issuance of FCCBs.
The Government may consider a marginal hike in petrol and diesel prices with a simultaneous reduction in excise duty.
The Government is considering a hike in the IT exemption limit and a rejig in slabs.
Sugar mills to get interest free loans to help them pay cane arrears to the farmers.
Commerce Minister Kamal Nath has sought scrapping of fiscal incentives provided to power manufactures for UMPPs.
The Government plans to make quoting of PAN mandatory for investment products in the banking and insurance sectors.
The GSM mobile operators added 5.8mn new subscribers in November taking its total user base to 165.8mnFII buying slows down
Inflow of Rs 5.20 crore on 7 December 2007
Foreign institutional investors (FIIs) bought shares worth net Rs 5.20 crore on Friday, 7 December 2007, compared to their buying of Rs 822.40 crore on Thursday, 6 December 2007.
FIIs inflow of Rs 5.20 crore on 7 December 2007 was a result of gross purchases of Rs 4752.30 crore and gross sales Rs 4747.10 crore. The 30-share BSE Sensex rose 170.13 points or 0.86% to 19,966 on that day.
FII inflow in December 2007 totaled Rs 3523.20 crore (till 7 December 2007). FII inflow in calendar year 2007 totaled Rs 69,430.50 crore (till 7 December 2007).
There are a total of 1,186 FIIs registered with the Securities & Exchange Board of India (Sebi).
Bulk Deal Watch
10-DEC-2007,APTECHT,Aptech Limited,GMO - ERISA POOL,BUY,648000,423.73,-
10-DEC-2007,CADILAHC,Cadila Healthcare Ltd.,DALI LIMITED,BUY,1881355,292.00,-
10-DEC-2007,DHAMPURSUG,DHAMPUR SUGAR MILLS LTD,MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. SVB,BUY,355000,80.87,-
10-DEC-2007,DWARKESH,Dwarikesh Sugar Industrie,MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. SVB,BUY,162000,74.13,-
10-DEC-2007,BALRAMCHIN,Balrampur Chini Mills,CITIGROUP GLOBAL MARKETS MAURITIUS PRIVATE LIMITED,SELL,1400000,102.82,-
10-DEC-2007,CADILAHC,Cadila Healthcare Ltd.,HSBC GLOBAL INVESTMENT FU NDS MAURITIUS LTD,SELL,1630029,292.00,-
10-DEC-2007,EUROCERA,Euro Ceramics Limited,MACQUARIE BANK LIMITED,SELL,100000,245.85,-
10-DEC-2007,VIDEOIND,Videocon Industries Limit,MACQUARIE BANK LIMITED ,SELL,1454053,598.93,-
Today's Pick - Zenith Computers
We recommend a buy in Zenith Computers at current market price. From the weekly chart of Zenith Computers, we note that it has been trending downwards since the May 2006 high of Rs 113. However, the stock found support around Rs 38 in November 2007 and bounced up and penetrated the medium-term down trendline.
We see that the stock’s price action from July 2007 has formed an inverse head and shoulders pattern with neckline at Rs 50. On December 10, the stock broke out of this pattern by gaining 5 per cent, accompanied with heavy volume. With this break through, the stock has closed above 200-day moving average line. The weekly momentum indicator is displaying positive divergence and the daily momentum indicator is featuring in the bullish region. Moving average convergence divergence has entered the positive region from negative, showing bullish momentum. The immediate support for the stock is pegged at Rs 43.5 and the next support is at Rs 38. Short-term investors can buy the stock while keeping their stop-loss at Rs 45. We expect the stock’s current up move to continue further to the inverse head and shoulders target of Rs 62 in the short-term.
Via Businessline
Daily Technical Analysis
Nifty — The index opened on a flat note and saw range-bound movement throughout the day’s trading session. It ended the day with a loss of 13 points.
Range-bound trading — The index saw range-bound trading throughout the day. The index faces resistance around the 6012 level; intra-day strength can be expected on the index sustaining above 6012 levels. On the downside the index has support around 5894; lower support is around 5826 (10 dma).
Conclusion — Expect intra-day strength above 6012 levels.
Essars make a comeback
Till some time back, they were the outcasts on stock exchanges.
But the three Essar group companies, managed by the Ruia brothers Shashi and Ravi, have burst to the fore, ramping up gains at such a clip it could make them the biggest gainers of 2007 in percentage terms.
Christmas has certainly come early for the group, whose market capitalisation has almost quadrupled in just a month.
The spotlight of this year’s bull run has thus far has been on the Ambani brothers with shares of their companies rising to historic highs, which gave shareholders and themselves paper wealth of legendary proportions.
Now it’s the turn of the Ruia brothers and three of their companies — Essar Oil, Essar Shipping and Essar Steel.
Between November 7 and December 7, the market capitalisation of the three companies rose by an eye-popping Rs 33,793 crore or more than $8 billion, with nothing changing at the ground level.
The perception in the market of the Essar group being not friendly to the shareholders grew even as the group charted out a delisting process that envisaged yanking shares from Essar Steel, Essar Oil and Essar Shipping off the bourses.
“They have burst into action because the overhang of delisting has lifted considerably,” said Vinod Kumar Sharma, director and head of research at Anagram Securities.
Essar Oil, which recently announced plans to more than double its refining capacity in Jamnagar - next-door to Mukesh Ambani’s mega refinery ventures — rose almost 400% in just one month, to Rs 302 per share, on Friday.
Essar Shipping has gained 139% to Rs 94.60 in the same period, while Essar Steel, the company whose delisting was halted by the Securities Appellate Tribunal last week, rose 48.63% to Rs 67.85, much higher than the delisting price of Rs 48 per share.
Deepak Jasani, head of retail research, HDFC Securities, reasons the rise partly to the inclusion of Essar Oil in the futures & options segment.
“It helped matters. There are more technical reasons than fundamental to explain the rise,” said Jasani.
He believes that after Reliance Petroleum’s runaway rise, the market was in the lookout for similar stories and discovered that Reliance Petroleum had a neighbour next door which was not short on ambition.
What this Essar rally does is that it unlocks value for the promoters to spearhead another round of mega-expansion in oil, steel and shipping sectors.
Li ka Shing, the Hong Kong-based entrepreneur who partnered them in Hutch Essar (now Vodafone Essar), had helped the Ruias unwittingly unlock value, when he sold his stake to the European telecom services company.
They have secured an assurance of a minimum $5 billion for their minority stake in the second-biggest GSM cellular telephony provider.
But some small investors would be ruing. For selling out before the rally sparked after holding out for years, for the Essar projects to fructify.
In the dramatic fag-end pole vault to stock market riches, the Ruias are the biggest gainers by virtue of their 80% thereabout holdings.
There are failings in the group which analysts perceive. And the most common is what Vinod K Sharma talks about, which is not willing to share “timely information” with the outside world.
A lot of small investors would have sold their stock, when the share prices started inching up, says Sharma.
But the biggest challenges remain, of completing projects and wrapping financial closures on time. But with the changing fortunes on the bourses, the savvy brothers may be pulling off a major turnaround not only in stock market fortunes but also in taking a big leap to a business house of standing.
Via DNA
Speculation driving counters
Speculation may be an integral part of trading in the stock market, but the growing frenzy in an increasing number of stocks maybe a cause for concern for investors, particularly retail players.
A sharp rally in some of the biggest outperformers during the past few weeks has raised many eyebrows as their gains have not been supported by sufficient delivery-based volumes. Brokers fear that excessive speculative interest, which is also reflected in huge non-delivery-based volumes in these counters, could be driving these shares to new highs. In such a situation, it may make sense for small investors to stay out of the madness and take a call only after valuations come down to reasonable levels.
"Intra-day volumes of above 80% in a particular stock is surely something to worry about. Investors should be wary of investing in those stocks witnessing a sudden upswing after remaining out of market favour for years," said Karvy Stock Broking vice-president Ambareesh Baliga.
Tracking trading patterns in high-momentum stocks showed that some of them including Reliance Capital (RCL), Essar Oil, Ispat Industries, Reliance Natural Resources (RNRL) and Bhushan Steel have attracted delivery-based volumes much lower than the average ratio of around 50% for all BSE-listed stocks. RCL, Essar Oil and Bhushan Steel, in fact, saw delivery-based volumes lower than 10% on a few days in the past one month.
For instance, out of the total 4.9 lakh RCL shares traded on BSE's cash segment on Friday, trading in only 43,603 shares, or 9%, resulted in deliveries while transactions in the remaining 91% were squared off without taking delivery. The RCL stock has risen 16% in the past one month when delivery-based volumes ranged between 7.5% (November 27) and 27%. The scrip scaled a new peak of 2,525 on Tuesday and closed with a small loss of 1.2% at Rs 2,399 on Friday.
Essar Group stocks, particularly Essar Oil, have taken the market by surprise with their performance in the past few weeks. Essar Oil had zoomed 37% to close at Rs 121 on November 14 when only 15% of the traded quantity was delivered in the market. Essar Oil has, in fact, shot up 356% in the past one month. Confirming that speculative activity has increased significantly, a Delhi-based broker said, "The trend is not healthy for the market as speculative trading creates false volumes and misleads genuine investors."
The frenzied action in these stocks is mostly triggered by strong rumours or expectations of major development in respective companies. Analysts, however, warn that investors should not fall pray to such rumours unless the concerned company is fundamentally sound with high growth visibility and good management. Many a time in the past, investors had burned their fingers by chasing penny stocks, displaying unwarranted exuberance.
High level of speculative activity has also been evident in new listings, particularly those where the offers met with overwhelming public response, attracting subscription several times higher than the size. Speculators apparently have made a killing in many of the past successful IPOs, anticipating huge demand from prospective investors on listing. Listed on November 27, Mundra Port attracted delivered-based volumes of 25% on that day, which fell to 11% on November 30, the lowest since its listing. Since November 27, the stock has risen 14% to close at Rs 1,099.5 on Friday when the counter saw delivery-based volumes of 15.8%.
Dollar weakness keeps precious metals shining
Chances of another interest rate cut puts more shine on gold
Dollar slipping against its rival currencies continued to impart shine to precious metals today, Monday, 10 December, 2007. The dollar fell against the euro, as investors positioned for tomorrow’s expected Federal Reserve interest rate cut. Gold generally moves in the opposite direction of the U.S. currency.
Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices. Rising crude increases inflationary pressures and vice versa. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.
Comex Gold for February delivery rose $13.3 (1.7%) to close at $813.5 an ounce on the New York Mercantile Exchange today. Last week, prices rose by more than 1.4%. On, 7 November, prices had touched $848/ounce. It was the highest price after a record $873 on 21 January, 1980.
Comex Silver futures for March delivery gained 34.5 cents (2.4%) at $14.85 an ounce. Prices touched 26 year high on 7 November, after reaching $16.275. The metal has climbed 15% this year.
In the currency market today, the dollar index, which tracks the performance of the dollar against a basket of other major currencies, dropped 0.3% to 76.10. The Federal Reserve is expected to cut interest rates by a quarter-percentage point on Tuesday for a third straight meeting.
In the energy market, oil prices fell by 42 cents to close at $87.86/barrel.
Gold had climbed 28% this year till date as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Dollar is still 11% down against the euro this year.
In 2006, silver had jumped 46% while gold gained 23%.
Dollar had been witnessing a free fall since Federal Reserve cut interest rates in September. On 31 October, 2007, Federal Reserve again cut the fed funds rate by a quarter-point to 4.50% and said that the recent spike in commodity prices may put renewed upward pressure on inflation. Prior to that, Federal Reserve had cut interest rates by half percentage point on 19 September, 2007.
At the MCX, gold prices for February delivery closed at Rs 10,337 per 10 grams. The closing price is Rs 129 (1.3%) higher as against previous closing price. Prices rose to a high of Rs 10,376 per 10 grams and fell to a low of Rs 10,217 per 10 grams during the day’s trading.
At the MCX, silver prices for March delivery closed Rs 285 (1.5%) higher at Rs 19,439/Kg. Prices opened at Rs 19,168/kg and went to a high of Rs 19,500/Kg during the day’s trading.
Crude prices drop amid volatility
Crude prices give up earlier gains
Crude prices were quite volatile at Nymex today, Monday, 10 December, 2007. But prices ultimately gave up earlier gains and ended lower today. Prices rose today earlier in the day when dollar weakened against rivals but then gave up all its gains and closed lower for the day on anticipation of another interest rate cut.
For the day ending Monday, 10 December, 2007, crude-oil futures for light sweet crude for January delivery closed at $87.86/barrel (lower by $0.42/barrel or 0.5%) on the New York Mercantile Exchange. Prices reached a high of $89.75/barrel earlier in the day. Prices reached a high of $99.2 on 21 November. Prices are up 42% from a year ago.
In the currency market today, the dollar index, which tracks the performance of the dollar against a basket of other major currencies, dropped 0.3% to 76.10. The Federal Reserve is expected to cut interest rates by a quarter-percentage point on Tuesday for a third straight meeting.
Brent crude oil for January settlement fell $0.60 (0.7%) to $88.04 on the London-based ICE Futures Europe exchange.
Natural gas, heating oil and gasoline – all drop
Natural gas in New York declined on an outlook for higher-than-normal temperatures and lower demand. Gas for January delivery fell 12.3 cents (1.7%) to settle at $7.032 per million British thermal units.
Against this backdrop, January reformulated gasoline fell 1.89 cents to end at $2.2501 a gallon and January heating oil dropped 2.73 cents to $2.4774 a gallon.
Attacks on oil facilities in Middle East and tight supplies from OPEC have bolstered crude prices this year. As per the U.S. Energy Information Administration, tight global energy supplies are expected to keep energy prices high through 2008.
At the MCX, crude oil for December delivery closed lower at Rs 3456/barrel, lower by Rs 18 (0.5%) against previous day’s close. Natural gas closed at Rs 279/mmtbu as against previous close of Rs 282.9/mmtbu, higher by Rs 3.9/ mmtbu.
Nifty December futures at premium
Turnover in F&O segment declines
Nifty December 2007 futures were at 5979, at a premium of 18.40 points as compared to the spot closing of 5960.60.
The NSE's futures & options (F&O) segment turnover was Rs 47,277.77 crore, which was lower than Rs 61,359.41 crore on Friday, 7 December 2007.
Mangalore Refinery & Petrochemicals December 2007 futures were at discount, at 144, compared to the spot closing of 144.50.
Reliance Energy December 2007 futures were at premium, at 1966, compared to the spot closing of 1945.40.
Essar Oil December 2007 futures were at premium, at 300.95, compared to the spot closing of 299.30.
In the cash market, the S&P CNX Nifty lost 13.70 points or 0.23% at 5,960.60.
Small-caps rally as market awaits Fed rate cut
The market took a pause after the three-session rally, as the flat close in US markets and subdued Asian markets triggered a sell-off in frontline stocks. All round buying in the last three sessions had helped market to add over 400 points to the Sensex. However, the down trend in international markets on the back of more subprime losses hitting the US financial sector, despite an expected rate cut in Federal Reserve created a perfect platform for the traders to sell short frontline stocks. The market resumed with a gap of 109 points at 20,075, however, the mood turned cautious as trading progressed. But, the small-caps witnessed the strong buying support during the intra-day trades. Rain Commodities, Lanco Industries, Ero Ceramics and Abhishek Industries hit their upper circuit limits. The Sensex slipped to its day's low of 19,834 by afternoon on sustained selling in heavyweights, FMCG and power stocks. The Sensex finally ended the session with a marginal recovery at 19,931, down 35 points. Broad-based Nifty closed the session at 5,961, down 14 points.
The breadth of the market was positive. Of the 2,903 stocks traded on the BSE, 2,061 stocks advanced, 805 stocks declined and 37 stocks ended unchanged. Most of the sectoral indices had a positive outing on the BSE. The BSE CD index surged 2.18% at 6,059 followed by the BSE Realty (up 2.13% at 11,823) and the BSE Bankex index (up 0.95% at 1,1487). However, the BSE CG index, the BSE FMCG index, the BSE HC index, the BSE Metal index and the BSE Power index closed with marginal losses.
Among the major Sensex gainers, Hindalco surged 2.63% at Rs193, ICICI Bank added 2.10% at Rs1,274, Infosys shot up by 1.76% at Rs1,748, DLF soared 1.44% at Rs1,026 and Bharti Airtel moved up by 1.13% at Rs970, while Reliance energy, ONGC, Bajaj Auto, Maruti Suzuki and Tata Steel closed with moderate gains. Among the laggards, TCS slipped 2.41% at Rs1,036, BHEL fell 2.40% at Rs2,677, Cipla lost 2.03% at Rs193, HDFC was down 1.67% at Rs2,872 and HDFC Bank lost 1.65% at Rs1,693.
Over 4.06 crore Tata Teleservices shares changed hands on the BSE followed by GV Films (2.92 crore shares), Ispat Industries (2.71 crore shares), Centurion Bank of Punjab (1.54 crore shares) and IFCI (1.42 crore shares).
Valuewise, Tata Teleservices registered a turnover of Rs232 crore on the BSE followed by Reliance Petroleum (Rs212 crore), Ispat Industries (Rs193 crore), Essar Oil (Rs183 crore) and IFCI (Rs150 crore).
Market Close: Lucklustre trend biggies stagnate, small caps move..
Globally a cautious approach also saw the same in Indian Indices as Domestic investors traded cautious ahead of fed meet. Fed meet is scheduled on December 11 and 25 bps rate cut by the Fed is already discounted in the market. Small and mid cap counters were the once active as buying continued helping thses to out perform the front line stocks. Suzlon was the exeption and rallied after the company announced private placement to the tune of Rs 2,700 cr in order to fund their capex plans. Reality, Banking and PSU counters were the big gainers. Ending in the negative territory were the stocks on the Metal, Power and FMCG counters. Oil marketing companies rallied as Govt Panel is considering a fuel price hike on Dec 14 which saw good interest these stocks. European indices gained strength after a weak start and continued to trade in green.
Sensex closed lower by 35 points at 19930.68. Weighing on the Sensex were the losses in TCS (1035.7,-2 percent), BHEL (2677.3501,-2 percent), Cipla (192.8,-2 percent), HDFC (2872.1499,-2 percent) and HDFC Bk (1693.2,-2 percent). Losses were restricted by gains in Hindalco (193.1,+3 percent), ICICI Bk (1273.75,+2 percent), Infosys (1748.45,+2 percent), Bharti Tele (970.45,+1 percent) and Rel Energy (1946.05,+1 percent).
Piramyd Retail is set to be acquired by Indiabulls Reality subsidiary. Indiabulls would pay Rs 75 per share for the 64% stake held by the promoters. Total deal size is of Rs 208 cr. An open offer of another 20% stake can be expected by Indiabulls. The growth of the organized retail in the country would continue to grow in double digits on yearly comparison. However, It is the margin levels that is a cause of worry. With the constant rise in the rentals, man power costs and other overheads the margins are expected to be under pressure. Entry of big industrial houses like Reliance, Tata, Bharti and Birla with deep pockets would further add to the competition on the retail counters. India Bulls is eyeing the Real estate part and not the Retail business. Better to aviod any enter here. However, Piramyd retail closed higher by 10% for the day while Indiabul reality closed higher by 3%.
Ceat tyres continued to zoom ahead of the delisting which is expected early next year. As per the restructuring plan approved by the Bombay high court holders of 4 shares of ceat tyres would be issued 3 new shares of ceat tyres and 1 new share of a new company that would be holding the group investments. New company would also be listed on the bourses. Post the implication of the restructuring scheme the growth can be expected from the tyres business. Company has takes the out sourcing strategy to increase its market share which currently is at 12%. Ceat imports tyres from china and from the global manufacturing units of Pirelli. Outsourcing is done of the low value added products which comprises mainly of 2 and 3 wheeler tyres. Transfer of operations from the Bhandup factory to the Nasik unit are going on as planned by the company. Company intends to sell a part of the Bahndup plant (6 acres) and the amt realized can be in the range of Rs 70-80 cr. This is also a reason for higher volumes witnessed on the ceat counter. Ceat fails to be a fundamentally strong company compared to other competitors. However, Trading upsides can be considered in ceat. Do read our note on Ceat to know more about the company. Ceat closed higher by 5%.
Technically Speaking: Sensex traded in a narrow range and volatile for the days. Sustainance above 20000 levels looks at an easy task. Sensex Support at 19725 and Resistance at 20080. Traders are advised to remain on the sidelines till the direction is clear.
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