The bird hunting a locust is unaware of the hawk hunting him.
Technically and even sentimentally speaking, the bulls are on a roll, with the key indices posting strong gains in the past couple of weeks. The market has recovered smartly on the back of a firm global trend. The bulls have chosen to overlook the CRR hike, rising inflation, mixed corporate results and soaring oil prices. The RBI will announce its annual monetary policy tomorrow, and there is a fair chance of the central bank maintaining its hawkish stance. Inflation rose further to 7.33% for the week ended April 12 versus 7.14% in the previous week. Experts are divided whether the RBI will go for a 25 bps increase in short-term rates. The market could get a jolt if it does announce a small rate hike. On the other hand, a status quo may prove to be a shot in the arm for the bulls.
The current intermediate uptrend is most likely to persist, however, the rally may face some resistance as FIIs have largely been in the sidelines. Globally, we may well have a 25 bps rate hike from the Federal Reserve, on April 30. But, our market will only be able to react to the Fed decision and to whatever comments it makes on May 2, as the markets will be shut on Thursday on account of Maharashtra Day. Wall Street will also brace for a few key economic reports - first-quarter GDP data, ISM's Manufacturing report and the jobs data.
So, we are in for a cracker of a week in terms of big-ticket events. Plus, the results will continue to pour in over the next few days. Some more results are expected next month too. The slew of events and results will keep the bulls on tenterhooks, though they would certainly like to carry on the good work of the past two weeks. Today, we expect the market to open higher owing to positive global cues. The Nifty is likely to cross its 200 day moving average of 5150. But, it remains to be seen if it manages to sustain that level.
Key Results Today: 3M India, Akruti City, Allied Digital, Alok Industries, Bata India, BOC India, CESC, Clutch Auto, Consolidated Construction, Cords Cable, Diamond Cables, Dwarikesh Sugar, Eicher Motors, Euro Ceramics, Finolex Cables, Glenmark Pharma, Godrej Consumer, GSS America, Hexaware, Hikal, Hindustan Unilever, Indian Overseas Bank, IDFC, Ingersol Rand, KPIT Cummins, Monnet Ispat, Nirma, Nitco Tiles, Plethico Pharma, Reliance Energy, RNRL, Sesa Goa, Shiv-Vani Oil, Strides Arcolab, Subros, Sunil Hitech, TV18, Thomas Cook India, Titagarh Wagons, Welspun Gujarat and Wockhardt.
M&M could be in action as it's Board will meet on May 3 to consider a proposal from prospective investor(s) for private placement of securities.
FIIs were net buyers to the tune of Rs3.13bn (provisional) in the cash segment on Friday while local institutions were net sellers of Rs754.7mn. In the F&O segment, foreign funds were net buyers of Rs12.23bn.
Asian markets rose this morning, sending the region's benchmark to a three-month high. The MSCI Asia Pacific Index gained 0.9% to 150.63 as of 10:37 a.m. in Tokyo, headed for its highest close since Jan. 15. Financial stocks had the biggest increase among the index's 10 industry groups.
Japan's Nikkei 225 Stock Average added 1% to 13,995.15. Brother Industries, the maker of fax machines and printers, soared the most in almost two years after Mizuho Securities Co. upgraded its stock rating.
US blue chip shares rose on Friday, with the Dow Jones Industrial Average closing at a nearly 4-month high. The Dow added 0.3% to end at 12,891.86, closing at its highest point since January 3. The broader Standard & Poor's 500 index added 0.7% to a three-month high of 1,397.84. The Nasdaq Composite index lost 0.3% to close at 2,422.93. The three major stock gauges ended moderately higher on the week, too.
US stocks slipped throughout the session Friday on surging oil and gas prices, a weak consumer sentiment number and Microsoft's outlook, following a two-day rally that had left the Dow at a multi-month high. But by the late afternoon, investors had shrugged off most of the day's losses, with strength in financials, retailers and other areas of the market sparking a recovery.
US light crude oil for June delivery jumped $2.46 on supply concerns to settle at $118.42 a barrel on the New York Mercantile Exchange. The national average price for a gallon of regular unleaded gas hit an all-time record of $3.577, AAA reported.
COMEX gold for June delivery rose 30 cents to settle at $889.70 an ounce. The dollar rose versus the euro and the yen. Treasury prices fell, raising the yield on the benchmark 10-year note to 3.87% from 3.82% late on Thursday.
The University of Michigan's consumer sentiment index for April was revised down to 62.6 from 69.5 in March, a 26-year low reflecting the impact of higher fuel prices and falling housing prices.
In other news, the Government said it will begin distributing the economic stimulus payments four days earlier than initially planned, sending out the first 800,000 checks on Monday.
European shares ended higher on Friday for the third day in a row. The pan-European Dow Jones Stoxx 600 index rose 1.3% to 321.70, with technology shares leading the charge. The French CAC-40 rose 1% to 4,978.21 and the German DAX 30 climbed 1.1% to 6,896.58. The UK's FTSE 100 gained 0.7% to 6,091.40.
In the emerging markets, the Bovespa in Brazil climbed by nearly 1% to 65,187 while the IPC index in Mexico shed 2.3% to 31,009. The RTS index in Russia was up 1.3% at 2129 and the ISE National 30 index in Turkey gained 1.1% at 54,636.
Bulls look to extend gains
After Thursday’s decline, bulls made a strong come back on Friday a strong close in the US market and a firm start in equity markets across Asia lifted the sentiment on Indian bourses. The sentiment further improved after telecom major Bharti Airtel beat the street estimates.
Bulls shrugged off the spike in the inflation figures lifting the Nifty index above the 5100 mark and the Sensex index above the 17k mark. India’s Inflation rate was at 7.33% for the week ended April 12 as compared to 7.14% last week.
Finally, the BSE benchmark Sensex ended 404 points higher to close at 17,125 and the Nifty index ended 111 points higher to 5,111.
Overall about 1,253 stocks advanced; 1,454 stocks declined while 56 stocks remained unchanged. Among the 50-Nifty 39 stocks ended in green and 11 stocks ended in red.
RCom surged by over 8% to Rs577 following reports stating that the company bought 90% stake in UK-based WiMax operator, eWave World. The scrip touched an intra-day high of Rs580 and a low of Rs533 and recorded volumes of over 37,00,000 shares on BSE.
Bharti Airtel rocketed to Rs925 by gaining over 9.5% after the company announced its Q4 net profit at Rs18.53 (up 39%) and net sales rose by 45% to Rs78.19. The scrip touched an intra-day high of Rs941 and a low of Rs845 and recorded volumes of over 23,00 000 shares on BSE.
Reliance Industries was up by over a percent to Rs2624 after reports said that the company received government approval to start drilling at an oil & gas field that it found in 2006. The scrip touched an intra-day high of Rs2633 and a low of Rs2561 and recorded volumes of over 7, 90, 000 shares on BSE.
Hindustan Zinc gained by over 5.5% to Rs669 as reports stated that it would set-up two smelters for Rs36bn. The scrip touched an intra-day high of Rs674 and a low of Rs642 and recorded volumes of over 1,30,000 shares on BSE.
HCC slipped by 4.5% to Rs125. The company posted a net profit after tax of Rs1087.7mn for the year ended March 31, 2008 up 37% and total income increased 30% to Rs31207.5mn for the year ended March 31, 2008. The scrip touched an intra-day high of Rs134 and a low of Rs121 and recorded volumes of over 15,00,000 shares on BSE.
ABB edged lower by 0.8% to Rs1170. The company announced Q1 result with net profit at Rs1.18bn (up 37%) and revenues at Rs15.5bn (up 16.5%). The scrip touched an intra-day high of Rs1207 and a low of Rs1145 and recorded volumes of over 1,00,000 shares on BSE.
EID Parry rallied by over 18% to Rs255 after reports stated that the company would sell 47% stake in Parryware for Rs7.25bn. The scrip touched an intra-day high of Rs258 and a low of Rs213 and recorded volumes of over 7,00,000 shares on BSE.
Tata Motors ended flat at Rs639. According to reports, the company is in the process of entering into a technology tie-up with a Japanese government agency to covert its generators to dual fuel systems. The scrip touched an intra-day high of Rs648 and a low of Rs635 and recorded volumes of over 1,00,000 shares on BSE.
With a strong start to the May series, on Monday bulls would look to extend gains. However, with indices approaching the 200 DMA it markets would face some resistance.
Corporate News
Jindal Steel & Power proposed 2mn ton steel plant in Bolivia will start production in 2011.(BS)
NMDC plans to set up a 3mn ton steel plant on its own in Chattisgarh; JV partner SAIL opts out.(BL)
DLF to invest Rs13bn to expand multiplex business.(BS)
Government approves an oil and gas development plan of Reliance Industries in its D6 block off the east coast.(FE)
Hero Honda plans to enter the retail finance market.(ET)
SAIL to hold prices at present levels without levying raw material surcharge imposed by other producers.(BL)
Indian Oil is re-looking its plans to acquire an overseas exploration company as oil & gas assets get dearer.(BS)
Iron ore exporter Sesa Goa to consider stock split and bonus share issue at its board meeting on April 28.(FE)
ICICI Bank makes additional provisions of US$45mn for mark to market losses on its credit derivative obligations and credit-linked note portfolio in February and March 2008.(BS)
INOX plans to increase its properties to 67 from 22 by 2010 with an investment of Rs5bn. (ET)
Reliance Industries set to acquire a majority stake in an oil block in Peru.(BL)
Hinduja Group to invest US$10bn in various power projects across India in the next 10 years. (TOI)
United Bank of India has decided to submit a fresh proposal for restructuring its Rs15.3bn capital in the next two months. (DNA)
Coal blocks lying unused with Coal India to be auctioned off to steel and cement companies.(BL)
HDFC Bank makes a provision of Rs1bn on currency derivative trades.(FE)
Nalco to invest US$1bn to put up smelters and a power plant in Iran.(DNA)
Biocon to set up its own R&D subsidiary arm in the current fiscal.(Mint)
Cairn India has managed to extract 200mn barrels of oil from Andhra reserves which were estimated at 101 mn barrels.(ET)
Essar E&P, a subsidiary of Essar Oil, has bid for two shallow water offshore blocks in Australia.(BL)
Reliance Communication to invest Rs10bn on international data centres in the country.(BS)
Hinduja group-ONGC Videsh combine has won approval of Iran for taking stakes in the oil & gas fields in the Persian Gulf.(ET)
Indian Oil’s Rs250bn Paradip refinery could be delayed due to escalating costs.(DNA)
Pyramid Saimira is looking at raising Rs15-18bn by listing its film production business.(ET)
Government allocates 2MHz additional spectrum to Bharti Airtel in Tamil Nadu.(Mint)
ICICI Bank has applied for a license to set up a non-banking finance company.(ET)
Satyam plans to set up its first offshore development centre in Gujarat.(BS)
Wipro has started offering legal process outsourcing services. (ET)
Reliance Industries plans to set up agri goods terminals in nine cities with an initial investment of Rs10bn.(FE)
Kuwait’s Zain and UAE’s Emirates Telecommunications Corp. join South Africa’s MTN and Russia’s Altimo in the race to acquire 25-30% stake in Unitech’s new telecom venture.(ET)
Hindujas may acquire majority stake in French firm Valeo. (TOI)
Economic News
SEBI allows mutual funds to invest in real estate.(BS)
TRAI recommends raising the foreign investment limit in news channels and FM radio to 49%.(FE)
RBI may relax asset classification norms for infrastructure loans to push lending for the sector.(BS)
TRAI recommends a hike in the foreign direct investment limit to 74% in key broadcast services.(BL)
Government may go for complete decontrol of sugar by scrapping all curbs in one go, instead of the earlier plan for phased decontrol.(ET)
Government says that fixed-line telephony will be exempted from licence fee.(ET)
TRAI suggests to DoT that only existing mobile and universal access service license holders (2G) should be allowed to bid for 3G services.(TOI)
FMCG prices increase 10% on higher input costs.(BS)
Government is finalizing a system to prevent generic versions drugs from getting marketing nods for patented drugs.(ET)
Television prices may rise by 12% on the Government’s decision to levy an anti-dumping duty on imported colour picture tubes. (ET)
Government is set to remove import duty on pig iron, mild steel, met coke; to levy 10% export duty on bars, rods, HR coils, CR coils, galvanized steel products, pipes and tubes.(ET)
IRDA has sought a five year freeze on service tax to be charged on life insurance companies who offer Ulips.(ET)
Government wants private steel companies to voluntarily reduce prices to pre-April levels or face stringent fiscal or policy measures.(ET)