You never know how a horse will pull until you hook him up to a heavy load.
The bulls have been pulling themselves out of most global concerns. Strong support from both overseas as well as domestic institutions saw bulls staging the expected comeback despite weak global cues. Today, we see a higher opening as most Asian markets appear to be holding firm in the face of the looming threat of a recession in the US, the region's biggest overseas market. Our market should be alright for the day unless there is fresh weakness in Asian or European markets later. Street smart signs may indicate that markets may remain firm till the mega IPO of Reliance Power gets out of the way. But, remain on guard for a reversal anytime. For the day enjoy the gains.
If liquidity remains strong our market should not face too many issues in combating global concerns that seem to spring up every now and again. Corporate results will have a say on money flows as would the outcome of meetings by the Fed and the RBI. The undertone continues to be positive though valuations have reached unchartered territories, prompting many market observers to raise the red flags.
BHEL has decided to modify the scope of the proposed JV with NTPC to include manufacturing and supply of equipment for power plants and other infrastructure projects in India and abroad. BHEL had signed an agreement with NTPC on Dec. 17, for setting up a JV for EPC business.
The equity shares of Manaksia Ltd. will get listed today.
Results Today: Kopran, Patel Engineering, Prism Cement, Shree Cement, Supreme Industries and TVS Electronics. Shares of Refex Refrigerants might gain as the company has reported a 53% growth in topline and 47% in the bottomline for the quarter ended December.
Consolidated Construction Consortium has received orders worth Rs1.84bn for construction of buildings and factories in Karnataka, Rs683.9mn in Tamilnadu during December. The total orders received total Rs2.52bn.
Clutch Auto is launching host of new products for the International and domestic markets with technologies to suit arduous Indian operating conditions and to meet diverse customer requirements.
US stocks ended mixed on Monday with the Nasdaq registering its seventh consecutive decline while the broader market managed slim gains on the back of strength in drugmakers and utilities.
The key indices were highly choppy through the day given the mounting worries over the state of the world's largest economy while some buying crept in following the big falls on Friday. The S&P 500 swung between gains and losses at least 35 times during the day.
Investors also considered comments about the economy from President George W. Bush, Treasury Secretary Henry Paulson and a Federal Reserve official, as well as news of an incident between Iran and the US military.
Eli Lilly, Biogen and Celgene helped push healthcare companies to their biggest advance in five months. FPL Group led gains in utilities. AT&T and Altria climbed after Deutsche Bank and Goldman Sachs advised purchasing the stocks.
The S&P 500 Index advanced 5 points, or 0.3%, to 1,416.18, rebounding from its worst start to a year since 2000. The Dow Jones Industrial Average rose 27 points, or 0.2%, to 12,827.49. The Nasdaq lost 5 points, or 0.2%, to 2,499.46, hurt by a 10% drop in chip maker Nvidia.
About six stocks rose for every five that fell on the New York Stock Exchange.
Shortly before the close, the major indexes were down sharply, until a last-minute advance propelled the Dow and S&P 500 into positive territory and helped the Nasdaq cut losses.
President Bush and Treasury Secretary Paulson said that US economic indicators were sending mixed signals and that they were considering whether a stimulus was needed. "We're all focused on this," Paulson told the New York Society of Security Analysts. This is a decision the President still has to make, Paulson said.
Meanwhile, Atlanta Fed president Dennis Lockhart said negatives in the US economy were picking up speed and market experts were worried about further deterioration. Lockhart is not a voting member of the Fed's 2008 policy committee, but will be an alternate for the upcoming Jan. 29-30 meeting.
Adding to the volatility was news from the US military that five Iranian boats harassed three US naval ships in international waters over the weekend. Iran denied that the matter was a serious incident. The White House said it will confront such behavior if Iran threatens the US or its allies.
US light crude oil for February fell $2.82 to settle at $95.09 a barrel on the New York Mercantile Exchange. COMEX gold for February delivery fell $3.50 to settle at $859.60 an ounce.
Treasury prices climbed, lowering the yield on the 10-year note to 3.835 percent from 3.89 percent late Thursday. In currency trading, the dollar gained versus the yen and the euro.
European shares could not hold early gains for the second session in a row, as fears of a recession hurt companies exposed to economic shifts, such as metal producers, technology providers and construction firms. The pan-European Dow Jones Stoxx 600 index closed 0.2% lower at 351.27. The French CAC-40 advanced 0.1% to 5,452.83, and the German DAX 30 added 0.1%, rising to 7,817.17. The UK's FTSE 100 ended 0.2% lower at 6,335.70.
In the emerging markets, the Bovespa in Brazil was down 0.4% at 60,772 while the IPC index in Mexico tumbled 0.6% at 28,152 and the ISE National-30 index in Turkey finished flat at 66,150.
Asian markets, barring Japan were trading higher this morning. The Nikkei in Tokyo was down 41 points at 14,458 while the Hang Seng in Hong Kong advanced 415 points to 27,594. The Kospi in Seoul was flat at 1832 while the Straits Times in Singapore rose 16 points to 3369. The Shanghai Composite in China added 57 points at 5450 and the Taiex in Taiwan was up 105 points at 7988.
Bulls hope to stand firm
Weak cues from the International markets triggered a sell off in the early trades dragging the benchmark Sensex to slip to a low of 20,438. However, after staging a bounce back, the Sensex remained choppy in the mid afternoon session before gaining momentum led by the Banking, FMCG and the Realty stocks. Even the Sugar stocks were in the limelight. Finally, 30-share Sensex closed at 20,812 gaining 125 points and Nifty ended at 6,279 up 4 points.
Sugar stocks had a sweet session after reports stated that Ethanol may get ‘declared goods’ status in Budget. Sakhti Sugar rallied by over 19% to Rs110, Renuka Sugar surged by over 4.5% to Rs1081, Rana Sugar was locked at 5% upper circuit to Rs23.85 and Balrampur Chini surged by over 5% to Rs122.
Hikal spurred by over 7.5% to Rs492 after the company announced that it entered into an agreement with Pfizer for APIS. The scrip has touched an intra-day high of Rs512 and a low of Rs465 and has recorded volumes of over 58,000 shares on NSE.
Su-Raj Diamonds ended flat at Rs97. The company announced its plans to sell Rs3.62mn shares to promoters. The scrip touched an intra-day high of Rs102 and a low of Rs95 and recorded volumes of over 3,00,000 shares on NSE.
L&T gained 1% to Rs4282 after the company announced that it secured order of more than Rs13bn from Cairn. The scrip touched an intra-day high of Rs4315 and a low of Rs4190 and recorded volumes of over 8,00,000 shares on NSE.
Vikas WSP was frozen at 10% upper circuit to Rs65.50 after the company announced that it acquired 1,985 acres of Farm land in Rajasthan. The scrip touched an intra-day high of Rs65.5 and a low of Rs59 and recorded volumes of over 16,00,000 shares on NSE.
Bartronics India was up 7.5% to Rs284 after the company announced the successful issuance of US$50mn zero coupon unsecured foreign currency convertible bonds. The bonds have a maturity of 5 years and are convertible at a price of Rs290 which represents a premium of around 20% over the current market price. Silverdale Services Limited, London, was the sole Lead Manager for the offering. The scrip touched an intra-day high of Rs294 and a low of Rs258 and recorded volumes of over 5,00,000 shares on NSE.
Bihar Tubes advanced 4% to Rs208 after the board of directors of the company would consider Preferential warrant sale on January, 15 2008. The scrip touched an intra-day high of Rs217 and a low of Rs199 and recorded volumes of over 1,00,000 shares on NSE.
ICICI Bank spurred by over 6% to Rs1362 after media reports stated that the company would list its 100% subsidiary ICICI securities. The scrip touched an intra-day high of Rs1379 and a low of Rs1234 and recorded volumes of over 72,00,000 shares on NSE.
Indowind Energy advanced 3% to Rs159 after reports stated that the company would raise Rs250 cr-300 cr Via QIP. The scrip touched an intra-day high of Rs166 and a low of Rs151 and recorded volumes of over 4,00,000 shares on NSE.
ABG Shipyard slipped 1.5% to Rs978. The company announced its Q3 result with net profit at Rs47cr (up 60%) and net sales at Rs274cr (up 54.8%). The scrip touched an intra-day high of Rs1035 and a low of Rs967 and recorded volumes of over 1,00,000 shares on NSE.
Parsvnath rallied by over 8.5% to Rs574 after the company announced that it secured contract worth Rs900mn to build Ashram at Shirdi. The scrip touched an intra-day high of Rs598 and a low of Rs520 and recorded volumes of over 84,00,000 shares on NSE.
What the FIIs are doing
FIIs were net buyers of Rs15.43bn (provisional) in the cash segment on Monday while the local institutions pumped in Rs3.28bn. In the F&O segment, foreign funds were net sellers of Rs7.29bn.
On Friday, FIIs were net buyers of Rs5.09bn in the cash segment. Mutual Funds were also net buyers of Rs6.17bn on the same day.
News Snippets:
ICICI Bank and ADAG Group are planning to set up syndicates in London’s Lloyd’s Market, one of the larges reinsurance markets in the world. (FE)
The Power Ministry has asked Reliance Power to advance commissioning of units at Sasan UMPP. (FE)
Pantaloon Retail is planning to increase Future Money outlets from 95 to 400 by 2010. (FE)
ICICI Bank is planning to list its investment banking and broking subsidiary, ICICI Securities. (ET)
The Government’s move to allow GAIL to market entire PMT gas has impacted gas supplies to GSPC and Gujarat Gas. (BL)
Reliance Energy and GMR are the only Indian companies short listed for buying US$2bn Tuas Power owned by Temasek. (ET)
ADAG is to tie up with US lignite miner, North American Coal Corporation to ensure fuel supply to its 28,200 MW projects. (ET)
Gitanjali Gems has purchased ‘Nakshatra’ brand from Diamond Trading Company (DTC) for Rs1bn. (ET)
Nitco Tiles is planning to set up a new tile manufacturing unit in Gujarat. (ET)
The proposal of merger of State Bank of Saurashtra with the State Bank of India will be taken up by the Cabinet on January 10. (ET)
Fortis Financial Services is planning to make an application to RBI to surrender its NBFC licence. (ET)
Sical Logistics has received Madras High Court approval to demerge its non-logistics business into a separate subsidiary. (ET)
GNFC plans to invest Rs780mn for setting up six eco-friendly wind power generators. (BL)
RNRL may buy out some mines in Indonesia and Australia for dedicated fuel supplies to support the Krishnapatnam UMPP. (BL)
Cranes Software has announced the acquisition of US based specialized auto consulting and product development firm, Engineering Technology Associates. (BL)
States have arrived at a consensus to bring about uniform duty structure for liquor across the country. (ET)
The Finance Ministry is understood to have allocated Rs310bn for fertilizer subsidies and concessions during FY09. (ET)
Cement manufacturers in Tamil Nadu have agreed to take a decision on reducing prices before February 10. (ET)
FDI inflows into the country surged to US$15.7bn in FY07 and the target for FY08 is US$30bn. (BL)
The Empowered Group of Ministers will meet on January 17, to discuss fuel price hike. (BL)
ULCRA would be completely scrapped in the country as AP, West Bengal and Jharkhand agree to repeal the act. (BL)
The Government has denied plans to privatize Dabhol project. (FE)
The Government would consider tax sops to promote low cost housing in the country. (FE)
The Maharashtra Government has agreed to withdraw export duty on ethanol. (FE)
Newsprint prices may increase by ~20% yoy in FY08. (BS)
The Government is set to import 1.2mn tons of vegetable oils in the first quarter of 2008. (BS)