ome have half-baked ideas because their ideals are not heated up enough.
The heat is on, due to both, the soaring temperatures and runaway rise in inflation, which is now at a 44-month high. However, the bulls don't seem to be bothered much about spiraling prices, as can be gauged from Friday's advance. There have been several such instances when the market has ignored inflation figures and charted its own course upwards, only to correct in the following session sometimes. Half-baked ideas may occasionally spurt but don’t get carried away. Some reports suggest a big corporate group propped up the indices and forced the bears to cover their shorts. There is a case to be careful while interpreting any rally at this juncture. Negative factors are clearly outweighing the positive ones.
One good thing about Friday's rise was that FIIs were net buyers in cash as well as F&O. But, here again it remains to be seen if this is a turnaround or just an aberration. The overall mood is still cautious. In the near-term, we expect the market to remain rangebound and sideways as the bulls are yet to show any concrete signs of conviction. Today, we see a cautious to flat sort of an opening followed by another volatile day and stock centric action.
SBI and other banks will be in focus after the public sector giant decided to suspend loan disbursements for the purchase of tractors and other farm equipment. M&M is another stock to keep an eye on as a newspaper reports that it is eyeing Italian bike brands - Cagiva and Agusta. Essar Oil may be under pressure amid reports that its Vadinar refinery will not get 100% tax holiday.
Tech Mahindra may be in action as a business daily reports that it is likely to bag a big order from BT. The company's Q4 net profit was down as it had to make upfront payment to the British company for the exclusive deal. Orbit Corp. may gain amid reports that Kotak Mahindra group is in talks to buy a prime property from the realty firm for over Rs6bn.
Another real estate player, Parsvnath could also advance after a financial newspaper reported that it is close to bagging Rs18.5bn Nanocity project in Chandigarh. Maruti and other auto makers might rise as the car market leader has decided to hike prices by up to Rs18,000.
FIIs were net buyers of Rs4.76bn (provisional) in the cash segment on Friday while local institutions poured in Rs3.92n. In the F&O segment, foreign funds were net buyers of Rs7.59bn.
Key Results Today: Bank of Baroda, Bharat Forge, BOC India, Dr. Reddy's, GMR Infra, GNFC, ICI India, JK Cement, Mukand, RPG Cables, Suzlon, TTML and Whirlpool India.
US blue chip shares managed to eke out marginal gains on Monday, with the S&P 500 index touching a five-month high, thanks to a stronger-than-expected economic indicators. But weakness in technology stocks dragged the Nasdaq into the red.
US technology stocks fell after SanDisk said record energy prices hurt sales. The S &P 500 advanced to the highest level since January, boosted by oil companies. SanDisk tumbled the most since March after the largest maker of flash-memory cards said April sales were soft.
Goldman Sachs, Morgan Stanley and Lehman Brothers led financial shares lower after Citigroup cut earnings estimates on Wall Street's biggest firms. Exxon Mobil and Chevron gained, sending energy shares to a record and boosting the Dow Jones Industrial Average, as crude climbed above $127 a barrel.
The S &P 500 finished flat at 1,426.63. The Dow rose 41.36 points, or 0.3%, to 13,028.16. The Nasdaq Composite Index was down 12.76 points, or 0.5%, to 2,516.09.
Market breadth was negative. About 15 stocks retreated for every 14 that rose on the New York Stock Exchange.
US stocks struggled early in the morning on record commodity prices and a weak outlook from home improvement retailer Lowe's. But, stocks turned higher late morning after the release of the April index of leading economic indicators (LEI), which gained 0.1% in April versus forecasts for a flat reading.
Microsoft and Yahoo are discussing a possible deal that would include the purchase of the Internet giant's search business, following Microsoft's failed attempt to buy the Internet company earlier this month.
SanDisk reportedly made bearish comments about its sales outlook at a JP Morgan technology conference. The comments weighed on the shares of SanDisk and other technology stocks.
Amazon.com shares jumped 7.6% after Goldman Sachs resumed coverage of the company with a buy rating and boosted its six-month price target to $98 from $75, according to reports.
Lowe's reported weaker earnings that topped estimates on lower revenue that missed estimates due to the impact of the struggling US economy and slumping housing market. Lowe's also warned that full-year results won't meet forecasts. Shares fell 2.6%.
US light crude oil for June delivery rose 76 cents to settle at a record $127.05 per barrel in New York after hitting an all-time trading high of $127.82 on Friday. The national average price for a gallon of regular unleaded gas rose to a record $3.794, according to AAA. It was the 12th straight record high.
COMEX gold for August delivery rose $6.10 to settle at $910.20 an ounce. The dollar rose versus the euro and yen. Treasury prices gained, lowering the yield on the 10-year note to 3.83% from 3.84% late on Friday.
European shares ended higher for the fourth straight session on Monday. The pan-European Dow Jones Stoxx 600 index ended 0.9% higher at 332.87. The FTSE 100 index in London climbed 1.1% to 6,376.50, while Germany's DAX 30 index advanced 1% to 7,225.94 and the French CAC-40 index rose 1.3% to 5,142.10.
In the emerging markets, the Bovespa in Brazil was up 0.9% at 73,438 while the IPC index in Mexico climbed nearly 1% at 31,796. The RTS index in Russia gained 0.4% at 2487 while the ISE National 30 index in Turkey lost 0.3% to 52,455.
Bulls may remain in control
It was the third straight trading session of gains for the bulls. Again it was firm cues coming in from the International Equity markets and buying momentum in the Metal and the Banking stocks that kept the markets in green.
Markets slightly lost ground and slipped into red as trader and investors reacted to an unexpected rise in India’s Inflation numbers. Inflation rate was 7.83% in week ended May 3 against expectation of 7.55%. However, later bulls made a come back shrugging off rising inflation figures tracking the positive start in the European markets.
Finally, the BSE benchmark Sensex ended 81 points higher to close at 17,434 and the Nifty index gained 42 points to close at 5,157.
Reliance Industries was up by 0.5% to Rs2,635. According to reports the company is in talks with three overseas oil companies to bid for oil and gas blocks in the seventh round of NELP. The scrip touched an intra-day high of Rs2,646 and a low of Rs2,601 and recorded volumes of over 6,00,000 shares on BSE.
Lupin gained by 5% to Rs676 as there were reports stating that it was looking for acquisitions in US and emerging markets to expand its overseas operations. The scrip touched an intra-day high of Rs689 and a low of Rs624 and recorded volumes of over 4,00,000 shares on BSE.
Cadila surged by over 1.5% to Rs314 as the company on Thursday announced that it secured nod from US FDA to market four products. The scrip touched an intra-day high of Rs317 and a low of Rs308 and recorded volumes of over 9,000 shares on BSE.
Texmaco has gained by 2% to Rs1626 after the board of directors of the company announced that they would split each share in to 10. The scrip has touched an intra-day high of Rs1677 and a low of Rs1560 and has recorded volumes of over 55,000 shares on BSE.
SAIL surged by over 7% to Rs185 after the company announced its Q4 net results with profit at Rs23.80bn (up 25.1%) and net sales were at Rs135.5bn. There were also reports stating that the company would set-up a processing unit in Himachal Pradesh The scrip has touched an intra-day high of Rs189 and a low of Rs172 and has recorded volumes of over 94,00,000 shares on BSE.
Rcom gained by a 2% to Rs601 after reports stated that the company announced that they secured Rs30bn loan from China Development Bank to fund its nationwide GSM foray. The scrip touched an intra-day high of Rs607 and a low of Rs587 and has recorded volumes of over 28,00,000 shares on BSE.
Edelweiss Capital ended lower by a 1.5% to Rs797. The company announced that it posted a net profit of Rs100.10mn for the quarter ended March 31, 2008 as compared to Rs53.10mn for the quarter ended March 31, 2007. Total Income has increased from Rs201.90mn for the quarter ended March 31, 2007 to Rs712mn for the quarter ended March 31, 2008. The scrip touched an intra-day high of Rs841 and a low of Rs792 and has recorded volumes of over 1,00,000 shares on BSE.Corporate News M&M is likely to buy a controlling stake in Italy’s Stile Bertone. (ET)
ONGC Videsh plans to relinquish its onshore exploration block in Ghadames basin, Libya, in favour of the National Oil Co. of that country. (BL)
Reliance Industries in talks with two overseas companies for a foray into hospitality. (ET)
Reliance Retail close to break even in its first full year of operations. (Mint)
ONGC subsidy on auto and cooking fuel to rise by 17.5% in 2007-08. (FE)
Maharashtra government is reconsidering the bid by Reliance Energy for the Rs60bn Mumbai Trans Harbour link. (BS)
Mittal Energy Investments, Total of France and HPCL are likely to invest Rs320bn each in the proposed Petro hub project in AP. (ET)
United Spirits is expected to go in for local bottling of Whtye & Mackay scotch whisky. (ET)
RCOM is set to launch DTH services in 4,000 towns. (ET)
GAIL may become a consortium partner in the Pakistan-India portion of the Iran-Pakistan-India gas pipeline project. (BL)
State owned oil marketing companies want to pay ONGC & Oil India, in oil bonds. (FE)
The Left parties have opposed any move by the Centre to relax FDI norms to facilitate the Bharti-MTN deal. (FE)
Reliance Infratel dilutes 5% stake in pre-IPO placement. (FE)
Ceat decides to set up Rs6bn greenfield radial facility in Gujarat. (BL)
BSEL Infrastructure Realty has signed a MoU with the Government of Malaysia for development of the proposed Iskandar metropolis at an investment of Rs180bn. (BL)
Ranbaxy has started operations in Yemen by tying up with a local firm, Pharma. (ET)
Aditya Birla group to invest Rs4bn in its retail business under group company Aditya Birla Nuvo.(ET)
Quippo Telecom Infrastructure is likely to buy 49% stake in Tata Telecom Teleservices.(TOI)
OnMobile Global to buy a French company in the area of speech recognition software.(BL)
Kinetic Motors in talks with a PE fund and other automakers, in addition to M&M, to raise Rs1.5bn.(Mint)
TRAI asks Government to prescribe contingent rollout obligations and seek additional bank guarantees from Reliance Communications and Tata Teleservices.(BS)
Allahabad Bank plans a rights issue for raising
Tier I capital without diluting government stake.(DNA)
UTI MF may defer its IPO to July in view of financial turmoil in global markets.(FE)
Tata group plans to enter the business of operating and managing ATMs through Tata Communications.(Mint)
Tata Investment to raise Rs7.2bn through a rights issue of zero coupon convertible bonds.(ET)
HSBC acquires 73.2% stake in IL&FS Investsmart for Rs11bn in cash.(BL)
Pidilite Industries exploring possibilities to acquire majority stake in European or US companies.(BS)
Gateway Distriparks plans to double the capacity of its cold storage warehouses. (DNA)
Himatsingka has disclosed a MTM loss of Rs1.75bn (as on March 10, 2008) on a derivative deal with HDFC Bank, for which it has sued the bank. (BS)
Bombay Dyeing is considering demerging its real estate business into a separate company. (DNA)
Tata Coffee is eyeing an acquisition in Russia. (DNA)
Raymond has re-launched its popular brand Be and plans to re-open Be: apparel stores. (ET)
Videocon Industries plans to make mobile handsets. (DNA)
Reliance BIG Entertainment, part of the ADAG group, to invest US$1bn in the Indian film and end entertainment business.(ET)
Global Steel Holdings plans to invest US$450mn to double its capacity at Delta Steel Company in Nigeria to 2.4mtpa.(ET)
HCL Technologies in talks for an acquisition in the life sciences space.(DNA)
Godrej group and Videocon Industries sounded out on a possible bid for GE’s appliances division.(ET)
Bahrain Telecommunications may acquire a listed Indian operation.(Mint)
Hyundai plans to launch a US$3,500 car in India by 2012.(TOI)
Shree Precoated Steels decides to hive off its steel business into a separate company.(ET)
Mercator Lines enters into coal mining business through its subsidiary in Singapore.(DNA)
Bharti Airtel to start its Sri Lanka operations this year.(ET)
Omaxe plans to foray into Dubai property market.(ET)