To know the road ahead, ask those coming back.
The road ahead is filled with enough opportunities and threats. There now appears to be an intense slugfest underway between the bulls and the bears, with the key indices witnessing yo-yo movement over the past few sessions.
Strength in select large caps has lifted the Sensex and the Nifty to new lifetime peaks, but (as always) it remains to be seen whether the bulls can extend the winning run. The rally in small-caps and mid-caps seems to have dissipated a little bit of late, and we continue to advocate caution in this space.
Today, we see a positive opening after yesterday's marginal fall and overnight gains in the US and other global markets. Volatility is a given these days and so is the stock centric action.
Reliance Power IPO opens today. RIL has announced a new gas find (didn’t we hint about such announcements a few days ago). So, expect the Reliance counters to remain in the limelight.
The biggest threat at this point in time is the looming recession fears in the US and now also in Japan. At the same time, EU is worried about inflation and is reluctant to cut rates. Then there is the overheated Chinese economy that may pose some challenges. Commodity prices like oil, gold and select metals have gone through the roof. Global food prices are also pretty high. So, we have a unique situation where global growth may slow down, and at the same time inflation will remain high.
As far as India is concerned, the Government and the RBI have managed to keep inflation in check through various means, and there is no major danger from it as of now. In fact, there is a growing feeling that local interest rates may cool off slightly in the next few months. That will be good for the economy and markets. As a result, we expect our market to remain firm in the face of potential adversity emerging from the global markets. Having said that, much will then depend on the liquidity factor, especially the flows from the overseas investors. Budget will also have a bearing on the sentiment as will the policy meetings of the Federal Reserve and the RBI.
Results Today: ANG Auto, Apollo Tyres, DCW, Eskay Knit, Gremac Infra, JK Lakshmi Cement, Jubilant Organosys, Morepen Labs, Orient Paper, PSL, Sutlej Textiles, TRF and Vakrangee Software.
Among yesterday's results, IDFC, KLG Systel, Omnitech, Exide, Texmaco and Asian Star have posted good growth in topline as well as bottomline.
TTK Healthcare says that it has has disposed off its Printing Division's property consisting of land (admeasuring about 5,400 sq. mts.) and a building situated at No.328, GST Road, Chromepet, Chennai.
US stocks rebounded from Friday's sell-off, sending the Dow Jones Industrial Average and Nasdaq Composite Index to their biggest gains this year, after IBM's earnings beat forecasts. IBM rose the most in five years and triggered the steepest advance in technology shares since November.
Newmont Mining, the world's second-largest gold miner, and Halliburton, the second-biggest oilfield services company, gained as gold and oil advanced, helping the market rebound from three straight weeks of losses.
The S&P 500 Index, off to its worst start for a year since 1991, added 15 points, or 1.1%, to 1,416.25. The Dow rose 172 points, or 1.4%, to 12,778.15. The Nasdaq advanced 38 points, or 1.6%, to 2,478.3.
Market breadth was positive. Two stocks advanced for every one that fell on the NYSE.
Gold for February delivery reached an all time high of $915.90 before settling at $903.80 an ounce in New York as the dollar sank against the euro and yen.
Treasury prices rose, with the yield on the 10-year note falling to 3.78%, from 3.8% late on Friday. US, light crude oil for February delivery rose $1.55 to $94.24 a barrel in New York.
Credit Suisse issued a note, upgrading the US equity market to "overweight" in anticipation of aggressive rate cuts by the Federal Reserve. At the same time, the report downgraded European stocks based on the ECB's reluctance to cut rates.
European shares snapped a three-session losing streak after IBM announced better-than-expected earnings and strong outlook. European software major SAP also posted higher-than-expected software revenue growth.
The pan-European Dow Jones Stoxx 600 index rose 0.3% to 344.78. UK's FTSE 100 closed up 0.2% at 6,215.70, while the German DAX 30 advanced 0.2% to 7,732.02 and the French CAC-40 gained 0.6% at 5,403.51.
In the emerging markets, the Bovespa in Brazil was up 0.45 at 62,187 while the IPC index in Mexico fell 0.4% at 28,607. The RTS index in Russia gained 1.1% at 2339 and the ISE National-30 index in Turkey dropped 0.8% to 65,586.
Asian markets were trading mixed this morning. The Nikkei in Tokyo was up 67 points at 14,178 while the Hang Seng in Hong Kong added 42 points at 26,510. The Kospi in Seoul was flat at 1766 while the Straits Times in Singapore rose 15 points to 3233. The Shanghai Composite in China was down 21 points while the Taiex in Taiwan spurted by 334 points to 8507.
Markets to remain choppy
Markets ended a choppy session on flat note. However, the second rung of stocks were in the limelight also the Power and the Realty stocks witnessed buying interest. However, the pivotals and select Auto stocks were under pressure. Cues from the Asian and the European markets also were not that encouraging.
The Asian markets ended with a negative bias and the European markets also posted a lackluster opening. Among the index heavyweights Reliance Industries and RCOM were the major gainers. However, telecom major Bharti Airtel and leading lender ICICI Bank were among the major laggards. Finally, 30-share Sensex closed at 20,728 losing 99 points and Nifty ended flat at 6,206.
Porwal Auto engaged in the manufacturing and marketing of S.G. (Ductile) Iron and Grey Cast Iron Castings and components starting trading at Rs85 on BSE against the issue price of Rs75. The scrip ended at Rs79 translating into a premium of 6%.
The company had come out with an initial public offer of 50 lakh shares of Rs10 each and its issue subscribed just 1.03 times. The price band of the Rs10 face value share was Rs68-75 per share. The company raised Rs34crore - Rs37.50crore.
The present manufacturing capacity for casting components is 9000 MT per annum and plans are under implementation to expand further to a capacity 27600 MT per annum by June 2008. The scrip touched an intra-day high of Rs120 and a low of Rs76 and recorded volumes of over 1,00,00,000 shares on NSE.
JP Associates has surged by over 5% to Rs469 after reports stated that the company secured the Rs300bn Ganga expressway project, to be built from Greater Noida to Balia. The total length of the expressway will be 1,000 km and will be completed in four years. The government has allocated around 63,110 hectare land for the project UP CM Mayawati is believed to lay the foundation stone for the project.
JP Associates also on January 12, 2008 announced its Q3 results. The company’s fiscal third-quarter profit rose 53%. Net income rose to Rs1.56bn in the three months ended Dec. 31 from Rs1.02bn in the year-earlier period. The scrip touched an intra-day high of Rs490 and a low of Rs460 and recorded volumes of over 1,00,00,000 shares on NSE.
ICICI Bank slipped 2% to Rs1410. According to reports the company may cut interest rates on home loans for new and existing customers in the first quarter of the next financial year starting April on expectations interest rates will fall. The scrip touched an intra-day high of Rs1455 and a low of Rs1380 and recorded volumes of over 51,00,000 shares on NSE.
Energy Development advanced by over 5.5% to Rs293 as the company has entered in an accord with government of Arunachal to develop 5 hydro electric projects. The scrip touched an intra-day high of Rs299 and a low of Rs277 and recorded volumes of over 52,000 shares on NSE.
IQMS Software is locked at 5% lower circuit to Rs5.32. The company announced that it bagged a contract for the outsourcing of 35 seater Equity Research on 24*7 basis. The contract value is directly linked to the output of the research work churned by the Company. The equity research outsourcing (ERO) set up by the Company is going to cater to the requirements of FII's / FI's / Institutions and Mutual Funds. The scrip touched an intra-day high of Rs5.32 and a low of Rs5.32 and recorded volumes of over 3,00,000 shares on NSE.
Glenmark Pharma gained over 6% to Rs577 after the company announced that that its lead candidate for Type II Diabetes GRC 8200 has received the International Non-proprietary Name (INN) "Melogliptin", from the World Health Organization (WHO). The scrip touched an intra-day high of Rs582 and a low of Rs545 and recorded volumes of over 2,00,000 shares on NSE.
Tanu Healthcare was locked at 5% upper circuit to Rs10.84 after the board of directors of the company approved Rs100mn preferential issue. The scrip touched an intra-day high of Rs10.84 and a low of Rs9.82 and recorded volumes of over 1,00,000 shares on NSE.
BHEL was up 1.7% to Rs2474 after the company announced that it spend Rs32bn to boost capacity. The scrip touched an intra-day high of Rs2484 and a low of Rs2438 and recorded volumes of over 4,00,000 shares on NSE.
SBI gained 1.2% to Rs2463. The company announced that it planned to raise Rs167.36bn in rights offer at Rs1,590 per share and would offer 1 share for every 5 held as rights. The scrip touched an intra-day high of Rs2536 and a low of Rs2441 and recorded volumes of over 13,00,000 shares on NSE.
Lok Housing surged by over 3.5% to Rs321 after the company announced that they would sell warrants to founders at Rs354 per share. The scrip touched an intra-day high of Rs329 and a low of Rs306 and recorded volumes of over 4,00,000 shares on NSE.
Renuka Sugar rallied by over 12% to Rs1240 after the company announced that they would consider stocks split on January 23, 2008. The scrip touched an intra-day high of Rs1266 and a low of Rs1075 and recorded volumes of over 6,00,000 shares on NSE.
What the FIIs are doing
FIIs were net sellers of Rs2.58bn (provisional) in the cash segment on Monday while the local institutions were net sellers of just Rs1.94bn.
On Friday, FIIs were net buyers of Rs1.14bn in the cash segment. Mutual Funds were net sellers of Rs2.74bn on the same day.
News Snippets:
Reliance Industries has announced a new gas discovery in the Krishna Basin. (ET)
ONGC has struck gas in the Mahanadi basin for the third time. (BL)
Reliance Energy and Anil Ambani have purchased 32mn shares of Reliance Power at Rs450 per share. (BL)
Essar group has bought Peninsula Land’s Kurla commercial project for Rs12bn. (ET)
Delhi High Court has declined to stay the Government’s decision to allocate GSM spectrum to RCOM. (BL)
Power Ministry has blamed BHEL for time over run and slippages in various projects. (FE)
HPCL is planning to raise Rs4.8bn via oil bonds sale. (FE)
HCC has emerged as the lowest bidder (Rs375mn) for building India’s first strategic crude reserve facility in Visakhapatnam. (BS)
Ashok Leyland is putting off its expansion plan by two years, which would have increased its production capacity by at least 50%. (Mint)
ITC Foods will add frozen foods products to its exports line and introduce flaxseed biscuits in India in a few months. (Mint)
Jet Airways may soon be allowed to fly to US, Canada via China. (BS)
Eicher Motors has agreed to transfer its trucks division to the proposed JV with Sweden’s Volvo for Rs4bn in cash. (DNA)
Koutons Retail is acquiring a 51% stake in Delhi based Upper Class, which has a strong foothold in ladies apparel business. (ET)
Suzuki has tied up with Mundra Port for setting up country’s first dedicated car export terminal. (ET)
Cummins Group will invest US$300mn through its ten subsidiaries in India to expand its capacities. (ET)
A mix of domestic and foreign funds have picked up 13% stake in Simplex Infrastructure for Rs4bn. (ET)
Maytas Infrastructure is planning an investment of US$3bn in BOT projects. (ET)
Godawari Power and Ispat has raised Rs1bn via a QIP issue. (ET)
Lok Housing will issue 5mn convertible warrants to promoters at a price of Rs354. (ET)
Ansal Housing has received approval from shareholders to raise Rs720mn via preferential issue to promoters. (BL)
ONGC is open for strategic tie-ups for its Rs265bn Kakinada refinery project. (BL)
MIC Electronics will acquire Power Electronics and an entertainment company engaged in lighting solutions for digital theme parks. (BL)
PNB is planning to raise Rs3bn via issue of tier-I perpetual bonds on private placement basis. (BL)
IDBI may launch its insurance business with two products by February 2008. (BL)
Jet Airways has signed agreements to lease five more Boeing 737 planes. (BL)
Aksh Optifibre is in the fray for the rollout of VoIP services by BSNL nationally. (DNA)
Dhanalakshmi Bank plans to raise ~Rs2bn through a rights issue. (BS)
Allahabad Bank plans to add 115 branches over the next 8-10 months and 65 in FY08. (DNA)
Delphi-TVS, the joint venture between Delphi and TVS group may get Bajaj-Renault-Nissan car orders. (DNA)
Vodafone-Essar has slashed local call rates of both post and pre paid tariffs to Re1 per minute across all its circles. (BS)
Telecom Minister says priority for allotment of spectrum to new entrants will be determined by who deposits the licence fee first. (ET)
Decision on fuel price hike will be made by the group of ministers on January 17: Deora (ET)
Government might consider reducing excise duties on two-wheelers and three-wheelers. (ET)
Government is set to issue new FII registration norms, under which non-International Organization of Securities Commission compliant jurisdiction may not be able to register as FIIs here. (ET)
Department of Fertilizer has sought Rs500bn from finance ministry as subsidies for FY09. (BL)
Government is open to allowing exporters to invoice their orders in Indian Rupees. (FE)
Government is planning to make it easier for foreign companies to remit money from India as royalties, license fees and other payments. (FE)
GoM plans to review kerosene and LPG prices. (BS)
Rubber imports likely to rise by 12% yoy to 95,000 tons during FY08. (BS)