Rhythm is the basis of life, not steady forward progress…
After wild swings, the bulls seem to have things coming their way for the time being. With the Fed expectedly leaving rates steady, markets world over are enjoying the advance except for Hong Kong where stock market trading is closed as the outer bands of Severe Tropical Storm Kammuri threatens winds with speeds of 63 kilometers per hour or more.
The Indian market will pick up where it ended on Tuesday and open with a slight gap up. Use these gains to lighten your position. Instead of thinking slow and steady wins the race remember to exit fast when things appear steady.
The Federal Reserve left its key fed funds rate unchanged at 2%. The Fed said "economic activity expanded in the second quarter, partly reflecting growth in consumer spending and exports," and that it expects "moderate economic growth" over time. The Fed statement also said inflation "has been high" and remains a "significant concern."
Besides the balancing comments from the Fed, the cooling of crude may have led to the rally on Wall Street. We actually expect crude prices to turn choppy today as the US government releases its weekly energy inventory report. Moreover, Freddie Mac is due to report quarterly results before the opening bell in the US market. These developments may not keep the bulls in control for long.
Light, sweet crude for September delivery fell $2.24 to settle at $119.17 on the New York Mercantile Exchange. In the US markets, stocks skyrocketed with oil prices cooling and Fed’s words soothing for now.
The Dow Jones rose 2.9%, or 331 points. AIG, Bank of America and led gainers, while Chevron was the only Dow stock to fall. The broader Standard & Poor's 500 index was up 2.9%. The Nasdaq composite index rose 2.8%. Cisco Systems posted fiscal fourth-quarter earnings and revenue that topped analysts' forecasts.
Back home, on Tuesday, FIIs were net sellers of equities worth Rs3.97bn while domestic institutional investors were net buyers of equities worth Rs2.87bn, according to the provisional data released by BSE and NSE.
The Securities and Exchange Board of India (Sebi) has received proposals from three entities to set up currency futures in the country.
Tata Power Ltd. is reportedly among the six bidders for Singapore's Senoko Power, a report stated adding that Singapore's largest power utility, may be sold
for more than $3 billion.
Reports say oil producers may have to share the additional revenues earned by them as a result of sharp increase in oil prices, if the suggestions of a high-powered committee headed by Mr B.K. Chaturvedi, Member, Planning Commission, get accepted. Refiners have been excluded from such a levy, the report stated.
Bulls regained its hold over the Indian bourses reversing Monday’s losses. Markets started off on a flat note, however, slowly gained momentum as the day progressed. Buying activity further intensified following a sharp slide in crude oil prices. Crude Oil prices declined to touch a 3-month low of US$118 per barrel.
The rally was led by interest rate sensitive stocks. He banking stocks were in demand on expectations that the US Federal Reserve might keep interest rates untouched in today’s meeting. Like wise, even the Realty and the Auto stocks witnessed buying interest.
Finally, the benchmark Sensex ended 383 points higher to close at 14,961 and Nifty rallied 107 points to close at 4,502.
Ranbaxy lost ground and slipped by 1.5% to Rs516. Reports stated that Daiichi Sankyo Co., secured approval from the Indian Regulator SEBI to purchase shares in two local companies.
Daiichi Sankyo agreed on June 11, 2008 to buy the 34.8% stake of Ranbaxy from the founding Singh family and a portion of about US$1bn of preferential stock. Daiichi Sankyo must also offer to buy a further 20% from shareholders, under Indian takeover rules.
Ranbaxy announced that Daiichi open offer would start on August 16 and would close on September 04, 2008. The scrip touched an intra-day high of Rs542 and a low of Rs448 and recorded volumes of over 24,00,000 shares on NSE.
BHEL gained by 3.2% to Rs1770 after the company announced that it secured Rs25bn from Andhra Pradesh government for 800MW supercritical boilers. The scrip touched an intra-day high of Rs1777 and a low of Rs1711 and recorded volumes of over 4,00,000 shares on NSE.
Shares of Sesa Goa slipped by 6% to Rs3336 as reports stated that government may ask iron ore miners to sell the steelmaking raw material through long-term contracts instead of in the immediate-delivery market to curb inflation.
The committee of secretaries reviewing prices of essential commodities has decided that high-grade iron ores should be made available to steelmakers at reasonable prices to check prices, reports added. The scrip touched an intra-day high of Rs3560 and a low of Rs3300 and recorded volumes of over 3,00,000 shares on BSE.
Nagarjuna Construction surged by over 4% to Rs134 after the company announced that it secured contract worth Rs4.4bn. The scrip touched an intra-day high of Rs136 and a low of Rs129 and recorded volumes of over 11,00,000 shares on BSE.
Aban Offshore edged higher by 0.3% to Rs2575 after the company announced that it received a Letter of Intent for deployment of the new built jack-up rig "Deep Driller 8" offshore India for a two firm well + two optional well program.
The firm period of the contract, is likely to last for 150 days with estimated revenue of US$30mn during the firm period. The scrip touched an intra-day high of Rs2639 and a low of Rs2565 and recorded volumes of over 78,000 shares on BSE.
Shares of Hindustan Motors rallied by over 4.5% to Rs28.2 after media reports stated that it would launch small commercial vehicle shortly. The scrip touched an intra-day high of Rs28.9 and a low of Rs26 and recorded volumes of over 12,00,000 shares on BSE.
Shares of Ashok Leyland rallied by over 9.5% to Rs21.8 after the company posted July sales at 6,202 units (up 11.2%) and July exports rose by 29.6% to 700 units. The scrip touched an intra-day high of Rs33 and a low of Rs28 and recorded volumes of over 53,00,000 shares on BSE.
- Bharti rejigs top management to focus on emerging business (ET)
- GMR Infra in race for development of Russai’s third largest airport at St Petersburg (ET)
- Reliance Infra expects borrowing cost to rise 200 bps (ET)
- JSW Steel not to increase prices this month (BS)
- Bajaj Auto-Renault deal limited to ultra low-cost car project (ET)
- BHEL bags first order to supply 800 mw supercritical units (ET)
- HCL Tech plans to invest US$3.2mn in a new delivery centre in North Carolina, US (ET)
- NTPC has signed a MoU for undertaking renewable power generation activities (ET)
- Thermax designs boiler to covert waste into usable energy (BL)
- GAIL to invest about Rs7.69bn in oil and gas exploration in India and abroad (BS)
- IOC to close three refinery units in Gujarat for maintenance from the last week of August (DNA)
- Satyam Computers is in acquisition talks with at least two firms in sports vertical (DNA)
- Power Ministry approves NTPC-BHEL venture (FE)
- ONGC scales up gas production in Tripura (FE)
- Aban Offshore receives contract to drill two wells and for two optional well programmes worth US$30mn (DNA)
- Coal India to offer 18 old mines for extracting coal in JV against its earlier decision to offer 26 mines (ET)
- NMDC seeks 50:50 JV with Rio Tinto to bid for global mining assets (BS)
- Aurobindo Pharma get final approval from US FDA to manufacture and market alendronate sodium tablets (BS)
- Nagarjuna Constructions bags new contracts worth Rs4.43bn (BS)
- Polaris sings a professional services agreement with AIG Global Services (ET)
- JSW Energy to invest Rs4.75bn in state project (BS)
- Coal India eyes mines in Mozambique and Indonesia (DNA)
- SCI receives navratna status (BL)
- Amara Raja Group to realign business by setting-up a holding company (BL)
- MMTC is scouting for strategic partners for its proposed SEZ (ET)
- Hindustan Motors to enter CV segment with the launch of a small truck shortly (DNA)
- Orient Papers to foray into newer domestic markets for its cement business (ET)
- Hindustan Copper receives miniratna status (DNA)
- State-owned NHPC gets Board approval for initial public issue (BS)
- AFL Logistics may offload 25% to PE investors (ET)
- IOL Netcom to raise US$20mn through GDR issue (DNA)
Economy Front page
- US Fed holds federal funds rate at 2% (ET)
- Crude oil hits 3-month low of US$118/barrel (BS)
- Oil Ministry demands oil bonds in advance for the second and third quarter of the current fiscal (BS)
- FDI in real estate may touch US$25bn in 10 years, as per Assocham (ET)
- Empowered Group of Ministers is considering allowing health insurance companies to be set-up with a start-up capital of Rs500mn (ET)