If you have built castles in the air, your work need not be lost;
that is where they should be. Now put the foundations under them.
Spikes of green may lead you to dream and build castles in the air. At the same time don’t forget the nightmares of recent months which could return at the drop of a hat. The bulls haven't had two successive days of strong rally in a while. That might change today. We expect the Indian market to extend Monday's smart pull-back after last week's big crash. Given the positive mood across global markets, the Indian bulls are unlikely to fall behind, though they already had a strong day in office on Monday. We expect yet another strong opening.
Having said that, there are still some doubts over the revival in sentiment, as credit markets are still frozen and liquidity remains a thorny issue. The Indian economy is also going through a bit of a rough and tough period and there will be challenges ahead. Monday's rally too was more due to covering of short positions rather than fresh buying. FIIs continued to be negative on India, as they net sold shares worth over Rs10bn (provisional) in the cash segment and purchases by local funds too fell over the previous sessions. There may be some more short covering in today's session, but one must not go overboard and start loading up on shares, as things could turn weaker again. Work towards a stronger portfolio which can weather future storms.
The Dow Jones Industrial Average registered its biggest single day point gain in recorded history on Monday. It gained 11%, as did the S&P 500 index and the Nasdaq. Leading European stock indices also logged solid gains. The Bovespa in Brazil was up a whopping 14.7%, though Russia's RTS index was probably the exception, as it fell 6.3%. Asian markets too have continued their good work of Monday, led by Japanese shares. The Nikkei in Tokyo has shot up by 13% as it resumed trading after a day's break. The Hang Seng was up 2.5% after surging by 10% on Monday. Indian ADRs have posted strong gains as well.
FIIs were net sellers of Rs10.61bn (provisional) in the cash segment on Monday while the local institutions pumped in Rs5.82bn. In the F&O segment, the foreign funds were net buyers at Rs23.82bn. On Friday, FIIs were net sellers of Rs23.23bn in the cash segment, taking their total outflows this year to more than $10.6bn.
Key Results Today: Honeywell Automation, IFCI, Jay Bharat Maruti, Jubilant Organosys, NDTV, Sonata Software, Gruh Finance and South Indian Bank.
After eight days of mayhem, US stocks bounced back with a vengeance, as investors cheered extraordinary efforts by nations across the globe to fight off the biggest financial crisis in decades.
The Dow Jones Industrial Average logged its biggest daily point jump on record, after global actions over the weekend, and on Monday revived confidence in the financial sector and credit markets.
The three major US stock indexes gained more than 11% each after the Federal Reserve said that central banks would offer banks unlimited amount of dollars and Europe said it would guarantee bank loans.
The Dow Jones Industrial Average shot up 936.42 points, or 11.1%, to finish at 9,387.61. It took the blue-chip US index until 1965 to gain 937 points, some 69 years after its creation.
The session marked the Dow's fifth-largest daily percentage gain, topping the 11.15% gained in late 1987.
The Dow earlier rose more than 975 points during the final 30 minutes of trade, giving the blue-chip index its biggest intraday gain ever, exceeding the 503.45-point intraday jump that came Sept. 30, and the 6.5% intraday percent gain on July 24, 2002.
The Standard & Poor's 500 index added 104 points, or 11.6%, its best one-day point gain ever. That was also the best percentage gain since Sept. 1932 and the fourth-best overall.
The Nasdaq Composite index added almost 195 points, the 10th best day on a point basis. The gain of 11.8% was its second-best ever, after a gain of 14.2% on Jan. 3, 2001, right near the end of the tech bubble.
US stocks were buoyant as investors worldwide welcomed a global effort to unfreeze the credit market and get money flowing through the system again.
Monday's rally increased market value by US$1.2 trillion, the largest single-day paper value gain ever. That cut in half the US$2.4 trillion in market value lost in the recent eight-session bloodletting.
Last week was the Dow's worst ever, ending a stunning eight-session selloff that knocked off a whopping 2,400 points off the blue-chip indicator. That represented a 22% decline in the Dow, something not seen since at least the 1930s.
Whether the rally can continue in the near term is unclear, as analysts debate whether the global markets put in a bottom on Friday. Right now, the experts are divided on this issue.
Gains were broad based, with all but 3 of the Nasdaq 100 gaining and all but 1 of the Dow 30 rising. The Dow's biggest gainer was General Motors (GM), which surged 33% amid reports that it has held merger talks with Chrysler.
US light crude oil for November delivery settled up $3.49 to $81.19 a barrel on the New York Mercantile Exchange. On Friday, oil prices plunged more than $8 to a 13-month low.
Oil prices have tumbled on bets of slowing demand since the price of crude hit an all-time high of $147.27 a barrel on July 11. Gasoline prices decreased for the 26th consecutive day, according to a survey of credit card activity by motorist group AAA.
COMEX gold for December delivery tumbled $16.50 to $842.50 an ounce. In currency trading, the dollar slipped against the euro and the yen.
European stocks surged on Monday, as France, Germany, Spain, the Netherlands and Austria committed €1.3 trillion (US$1.8 trillion) to guarantee bank loans and take stakes in lenders, in a bid to prevent the collapse of the regional financial system.
A regional stock benchmark rebounded after a week in which it lost more than 20% of it's value in a global rout, as investors welcomed news that leading nations would continue to take steps in a coordinated fight against the credit crisis.
In the wake of policy makers' joint statements out of Washington and Paris, the Dow Jones Stoxx 600 index rose nearly 10% to 225.55 in one of its best-ever sessions.
The French CAC 40 index rose 11.2% to 3,531.50, while Germany's DAX 30 index jumped 11.4% to 5,062.45 and the UK's FTSE 100 index closed up 8.3% to 4,256.90.
In the emerging markets, the Russian markets dropped 6.3% to 791. Elsewhere, the Bovespa in Brazil was up by almost 17% at 40,829 while the IPC index in Mexico rose 11% to 22,095 and Turkey's ISE National 30 index gained close to 1.6% to 36,905.
Indian market started off the week with smart gains on the back of a strong rally witnessed in the equity markets across the globe. Sentiments were further lifted after the FM, P Chidambaram assured that the government is working on more measures to infuse liquidity in the banking system and increase the confidence of depositors and investors.
Interest rate sensitive stocks, which were under immense pressure in the previous week, witnessed buying momentum at lower levels. Finally, the BSE benchmark Sensex ended 781 points lower to close 10,309 and the NSE Nifty index surged 210 points to close at 3,490.
Among the 30 components of the Sensex, 28 stocks ended in the green and only 2 stocks ended with negative bias. ICICI Bank, L&T, Infosys and HDFC Bank were among the major gainers. However among the major laggards were, Ranbaxy and ONGC.
Among the BSE Sectoral indices, BSE Bankex index (up 12.5%), BSE Capital Gods index (up 10.3%), BSE Consumer Durables index (up 10.2%), BSE Power index (up 9%) and BSE Realty index (up 9%).
After sliding over 40% on Friday, Core Projects further plummeted by over 58% at Rs59 on the back of heavy selling pressure. The scrip touched an intra-day high of Rs164 and a low of Rs57 and recorded volumes of over 1,00,00,000 shares on BSE.
Core Project had hit 52-week of Rs464 on December 28, 2007 and 52-week low of Rs57.1 on October 13, 2008.
Tata Communications surged by over 6.5% to Rs448 after the company announced that it has entered into a strategic alliance with Internet Systems Consortium, Inc. (ISC), to provide best-in-class Domain Name System (DNS) Hosting Services for both enterprise and service provider customers, DNS provides critical functionality for the Internet. The scrip touched an intra-day high of Rs448 and a low of Rs395 and recorded volumes of over 57,000 shares on BSE.
Shares of Jaiprakash Associates surged by over 6% to Rs80 after the company announced that the board of directors would meet on October 21, 2008 to consider Rights Issue.
The scrip touched an intra-day high of Rs83 and a low of Rs76 and recorded volumes of over 71,00,000 shares on BSE.
Havells India gained by 4.5% at Rs226 after 1.7% of equity shares was traded in three block deals.
~996,750 shares were sold at Rs233 per piece on the NSE and the BSE. The scrip touched an intra-day high of Rs233 and a low of Rs217 and recorded volumes of over 7,00,000 shares on BSE.
Shares of GMR Infrastructure surged by over 7% at Rs63 after the company announced that it inaugurated special lounge with nap & shower facility at the Rajiv Gandhi International Airport (RGIA). This facility is a new concept in Indian airports, is now opened at RGIA. The scrip touched an intra-day high of Rs65 and a low of Rs61 and recorded volumes of over 92,00,000 shares on BSE.
Shares of Era Infra advanced by over 4% to Rs79.1 after the company announced that it won contract worth Rs1.13bn. The scrip touched an intra-day high of Rs85 and a low of Rs77 and recorded volumes of over 31,00,000 shares on BSE.