You can determine how confident people are by listening to what they don't say about themselves.
Political developments seem to be hush hush for now. With a confidence vote coming up next week, it’s best not to speak about failing monsoon and other concerns. After suffering at the hands of the bears for several days, the bulls finally have something going for them. Crude oil has come off the boil this week, losing nearly $16 per barrel in the past three sessions alone. The US market has rallied over the past couple of days. The Dow Jones Industrial Average has gained almost 500 points in the last two days. Inflation, which was expected to cross 12%, has managed to spring a surprise. It has inched up only marginally, to 11.91%. FIIs too were net buyers on a provisional basis on Thursday.
All these factors could prompt the bulls to extend the euphoric phase at least for the day. Suddenly one is reminded about the 1000-point milestones the Sensex crossed in record time. We may well do a 1000-point gain in few sessions if all goes well. The spoilsport could be the Asian markets, which haven't quite run ahead this morning. We expect a positive opening in our market, purely on the back of sharply lower oil prices and lower than expected inflation. Any short-term spurt could be seen more to exit or rebalance your portfolio.
A few big-ticket companies are slated to announce their results today. They will have a bearing on the sentiment, as will the trend across global markets. Plus, the upcoming 'Trust Vote' on Tuesday will keep the bulls on tenterhooks. The UPA is trying hard to garner the requisite numbers to see them through the trial of strength in the Lok Sabha. On the other hand, the likes of BJP, Left and BSP are attempting to derail their efforts. According to newspaper reports, the vote is too close to call. The anxiety over the event may check further gains and the indices could cool off from the top.
Wipro has reported a consolidated net profit of Rs907.80 crore versus Rs871.60 crore in the previous quarter. This translates into a 4.2% sequential growth. Net sales for the quarter are Rs5981.10 crore versus Rs5691.90 crore, reflecting a Quarter on Quarter growth of 5%. The company expects its Q2 Global IT Revenues to come in at $1,089mn.
FIIs were net buyers of Rs3.1bn (provisional) in the cash segment on Thursday. The local institutions pumped in Rs1.68bn. In the F&O segment, the foreign funds were net buyers of Rs25.98bn. On Wednesday, FIIs were net sellers of Rs2.1bn in the cash segment. Mutual funds were net sellers of Rs315mn on the same day.
Results Today: Allahabad Bank, Apollo Tyres, BEML, Chennai Petro, Cipla, GE Shipping, GTL Infra, Gujarat NRE Coke, IDFC, Ingersol Rand, Jaiprakash Associates, Kirloskar Bros., Max India, Sasken, Satyam, Shree Cement, Sical Logistics, Sona Koyo, Ultratech Cement and Wipro.
US stocks rallied for a second day after crude oil dropped below $130 per barrel for the first time in more than a month. Financial shares surged anew, buoyed by JP Morgan Chase' results, which beat forecasts.
Stocks jumped at the open, buoyed by strong earnings from JPMorgan. But the major gauges quickly pared those gains as crude oil shot up. The main indices briefly dipped into negative territory before rebounding as oil prices fell to their lowest levels in more than a month.
US bank shares have been pounded in the last few weeks amid fears of further weakness in the financial sector. So, there is a massive sigh of relief that while these numbers are not necessarily good, they are a little better than expectations.
No major economic reports are due on Friday. As a result, investor sentiment may be tested by some disappointing earnings released after the market's close.
US stock-index futures retreated after Google, AMD, Merrill Lynch and Microsoft missed analysts' profit estimates, indicating that the Wall Street's two-day rally may be short-lived.
IBM posted earnings that beat analysts' expectations, but shares still fell less than 1% in after-hours trading. Citigroup, which posted a 9.1% gain, will report earnings Friday morning.
JPMorgan said its second-quarter profit plunged 53% due to $1.1bn in writedowns. But the bank, which incurred a large loss from acquiring embattled investment bank Bear Stearns, still managed to beat Wall Street projections. Its shares jumped 13.5%
Government-backed mortgage finance giants Fannie Mae and Freddie Mac also rose for the second consecutive session.
In economic data, construction of single-family homes fell 5.3% to the slowest pace since January 1991. The Philadelphia Fed Index, a regional manufacturing survey, posted a reading of minus 16.3 in July, worse than economists' expectations.
Initial jobless claims rose by 18,000 last week, although the jump was smaller than economists had forecast. The four-week moving averages of initial jobless claims and continued claims from those already receiving benefits both fell slightly.
Oil prices fell $5.31 to settle at $129.29 a barrel, bringing the contract's three-day decline to nearly $16 a barrel. One reason for Thursday's slide was a 7.6% plunge in natural gas prices. But, the average price of regular unleaded gasoline remained at the all-time high of $4.114 a gallon.
In currency trading, the dollar sank against the euro as inflation worries in both the U.S. and in the European Union mounted. The dollar gained against the Japanese yen, however.
COMEX gold for August delivery rose $8 to settle at $970.70 an ounce. Gold has crept back near record levels recently after falling into the $800 range in the past few months.
Treasury prices fell on Thursday, bringing the yield on the benchmark 10-year note up to 4.04% from 3.95% late on Wednesday.
European shares also gained strongly. The pan-European Dow Jones Stoxx 600 index jumped 2.9% to 276.27, its biggest one-day point rise since April 1. The UK's FTSE 100 closed up 2.6% at 5,286.30, while Germany's DAX 30 rose 1.9% to 6,271.27 and the French CAC-40 advanced 2.8% to 4,225.99.
Markets started off with smart gains thanks to firm global cues and dropping crude oil prices which slipped to US$134/bbl. Indian bourses snapped sustained selling which was seen for 5 straight trading sessions. The interest rate sensitive stocks saw buying interest with BSE Bankex, BSE Auto and BSE Realty index among the major gainers. Finally the Sensex rallied 536 points to close at 13,111 and the Nifty surged 130 points to close at 3,947.
Among the 30-scrips of Sensex, RIL, L&T, HDFC, SBI and ICICI Bank are among the major gainers. However, the laggards were Tata Steel and Ranbaxy.
In the overall market, 1,536 stocks advanced and 1,081 stocks declined. Whereas, 74 stocks were unchanged.
Shares of Polaris rallied by over 15% to Rs78 after the company announced that it approved the commencement of starting real estate business. The scrip touched an intra-day high of Rs80 and a low of Rs68 and recorded volumes of over 18,00,000 shares on NSE.
Hindustan Zinc gained by 0.8% to Rs531. The company announced that it decreased prices of zinc and raised lead. The price of zinc was cut by Rs3,400 to Rs90,500 per metric ton. Lead price was raised by Rs2,800 to Rs96,000 per ton. The scrip touched an intra-day high of Rs550 and a low of Rs518 and recorded volumes of over 51,000 shares on NSE.
MindTree Consulting surged by over 7% to Rs366. The company reported a first-quarter loss of Rs129.6mn after setting aside US$12mn for derivatives losses. The Bangalore-based company posted a net income of Rs206.2mn in the year-earlier period. On the other side, sales rose 37% to Rs2.22bn. The scrip touched an intra-day high of Rs375 and a low of Rs331 and recorded volumes of over 85,000 shares on NSE.
ICRA ended with smart gains up by 1.6% to close at Rs631. The company announced that it has signed MoU with Vijaya Bank which ICRA will assign ratings to the Bank's loans and its other exposures under the standardized approach of RBI's New Capital Adequacy Framework for Basel-II. The scrip touched an intra-day high of Rs631.
KLG Systel surged by over 7% to Rs315 after the company announced that it signed an investment agreement with IBM Daksh Business Process Services Pvt Ltd (IBM Daksh) for investment of Rs120mn in its subsidiary viz. KLG Power Ltd.
The subscription Price is Rs608.96 per share for 1,97,057 Equity Shares of Rs10/- each, equivalent to 1.19% of the total share capital of KLG Power Ltd on fully diluted basis. The investment shall be made on fulfillment of conditions precedent in the Investment Agreement.
The scrip touched an intra-day high of Rs335 and a low of Rs300 and recorded volumes of over 78,000 shares on NSE.
BASF India advanced by over 3% to Rs285 after the German parent of the company increased its offer price for the local unit by 9.5% to Rs3,000 per share. The parent company will buy about 6.3mn shares or a 22.3% stake. The scrip touched an intra-day high of Rs297 and a low of Rs285 and recorded volumes of over 6,00,000 shares on NSE.
Tata Power surged by over 4.5% to close at Rs999. The company announced that it may invest in two coal mines overseas to supply as much as 4mn tons of the fuel. Mines in Australia, Indonesia or Mozambique would meet half the additional 8mn tons of coal Tata Power needs by 2013 to fuel a five-fold increase in generating capacity
Tata Power invested US$1.2bn in two Indonesian mines last year, joining JSW Energy Ltd. and Adani Enterprises Ltd. in securing overseas supplies as coal prices soared. The scrip touched an intra-day high of Rs1008 and a low of Rs944 and recorded volumes of over 3,00,000 shares on NSE.
Gujarat State Petroleum advanced by over 6% to Rs56 after media reports stated that the company plans share sale by December 2008. The scrip has touched an intra-day high of Rs58.5 and a low of Rs54.8 and has recorded volumes of over 3,00,000 shares on NSE. Reliance Industries has begun arbitration proceedings against Reliance Communications(RCom) over the first right of refusal for RCom Shares.(BS)
Reliance Power may have to bid again for UP plants.(BS)
GSPC to invest Rs40bn to produce oil and gas from the block it discovered in the Krishna-Godavari basin.(BS)
M&M is mulling a launch of CNG variants in its large pick-up models.(BS)
McNally Bharat Engineering has received an order worth Rs2.46bn from Vedanta Alumina.(BS)
Indoco Remedies to launch 40 drugs in the domestic market within a year.(BS)
Hindalco Industries has signed five banks to raise US$1.2bn.(BS)
MindTree has raised Rs1bn to meet its operational and capital expenditure.(BS)
Nalco to import coal to avoid reducing output.(BS)
Tata Power may invest in two coal mines overseas to seek 4mtpa of fuel.(DNA)
Polaris Software to foray into real estate.(DNA)
Nagarjuna Construction plans to invest Rs5bn in airport and port construction.(DNA)
Tata Steel to hike capacity at Jamshedpur by 35% .(DNA)
ICI India to set up decorative paints plants to augment capacity.(DNA)
ADAG Group to foray into healthcare services.(ET)
Abbot Laboratories has filled a suit against Dr Reddy’s Laboratories for infringing the patent of Depakote ER.(BS)
Essar Global plans to pick up stake worth Rs5.9bn in Asia MotorWorks Holdings Ltd.(BS)
P&G drags HUL to Advertising Standards Council of India over fairness cream television commercial.(TOI)
MMTC-Indiabulls get government nod for starting national level commodities exchange.(TOI)
SKS Microfinance ties-up with Bharti Airtel to offer mobile banking.(BL)
Hindustan Zinc cuts zinc and lead product prices by Rs3,400 and Rs2,800 respectively.(BL)
MCX may come with an IPO in August 2008.(BL)
PowerGrid Corp Transmission plans to set up transmission line in Myanmar.(FE)
Rasna seeks JV for entering new foreign markets.(BL)
Economic Front Page
Inflation rose to 11.91% for the week ended July5.(BS)
Cement makers may cut capacity utilization by 8% in this financial year.(BS)
Sugar prices decontrol may miss October date on account of rising inflation and nearing election.(DNA)
Government is planning to scrap Press Note 1(PN1) to allow foreign companies to invest in sectors where they already have a JV without obtaining an NOC.(ET)
Steel companies likely to hike prices of HRC and CRC by 15-20% next month.(ET)
Government mulls export ban on flat steel products and iron ore to check prices.(FE)
Department of Telecommunications is examining proposal to auction around nine licences for 3G services.(BS)
DCGI may extend Pharma export licence tenure form one year to three years.(ET)
Government plans to distribute pulses at a subsidies rate.(TOI)
Oil PSUs seek revision of environment clearance guidelines.(FE)