History is the version of past events that people have decided to agree upon.
The headlines may scream that the bulls made a strong start to the new year after being through horrific times last year. However, the devil is always in the detail. And, it shows that trading volume and turnover fell sharply from Wednesday. What may lure gullible investors is the fact that around 450 shares (mostly small-cap and mid-cap) were locked at upper circuit. One should be extremely careful while buying scrips with questionable background. In any case, there are enough doubts whether the recent spurt in the market can sustain given the uncertain environment and lack of strong FII inflows.
Continuous fall in inflation may bring some cheer, as it heightens expectations of rate cuts. But one cannot overlook other weak data points like the BoP slipping into a deficit and exports falling for a second month. Auto sales remained sluggish in December. Reports say the Government may announce its second stimulus package on Saturday. There is no official confirmation of the same. The RBI may also join the pump-priming effort, but by how much is the moot point. Even if the anticipated events do materialise, they may provide only a temporary fillip. Anxiety over corporate earnings may takeover after a brief rally.
Coming to today's outlook, we expect the market to open on a cautious note after Thursday's sudden spurt. Markets in Hong Kong, Singapore and Seoul are up 1-2% , but they were shut yesterday. Several global markets will continue to observe an extended New Year holiday though the US will resume trading today.
The key indices may turn sideways after what looks like a flat opening. Though the undertone has improved of late, the market lacks vigour and strength to rise too far from here. The upside appears capped as selling may kick in at higher levels. A rangebound pattern is what looks to be the best bet.
Foreign and domestic funds were net buyers on Thursday at Rs920.4mn and Rs1.6bn, respectively, according to provisional data from the NSE.
Most global markets were shut for New Year on Thursday.
In Asia, the Hang Seng in Hong Kong was last up 2% at 14,684 while the Straits Times in Singapore was up 1.7% at 1791. The Kospi in Seoul was last seen up over 1% at 1140.
Important News:
Finance ministry has asked the DoT to double the floor price for 3G and wireless broadband spectrum. (ET)
Steel makers have decided not to reduce steel prices in January. (FE)
Ranbaxy has missed its December 2008 deadline to launch an anti migraine drug as the US regulator has not given its approval. (ET)
Kingfisher Airlines, India's second-largest airline, has slashed 20% cent of its domestic flights and is now operating around 440 flights. (BS)
Shipping Corporation of India (SCI) plans to invest around US$3bn for acquiring 40 ships to double its tonnage capacity to around 10mn dwt by 2015. (BL)
Matrix Labs received final approval from USFDA for its ANDA for stavudine capsules (FE)
Government stake in UCO Bank to decline due to capital restructuring scheme. (FE)
GACL’s shareholders have disapproved governments decision to contribute 30% of pre-tax profits for various social projects. (ET)
Jindal Stainless buys chrome ore assets in Middle East and Europe. (ET)
Hotel Leelaventure plans to launch 3 hotels this year. (ET)
Infosys may integrate IT & BPO operations to cut costs and add value. (ET)
NMDC proposes 10m ton steel plant in Karnataka. (FE)
NPCIL-NTPC to ink JV pact for two nuclear power plants. (FE)
Hindustan Construction advances phase II work of Lavasa project. (FE)
NTPC plans to bid for the upcoming UMPPs. (BL)
Bajaj Auto plans to launch a new motorcycle this month, targeted at the ‘Sports Commuter’ segment. (BL)
Alok Industries has decided to increase its proposed rights issue by 50% to Rs4.5bn from the earlier Rs3bn. (BS)
GAIL India buys LNG from Shell India at $11.7 per mmbtu to fill supply gap. (BS)
Maytas Infrastructure will continue to execute Hyderabad Metro Project. (BS)
GSPC is set to reduce prices of retail gas following sharp reduction in energy prices globally. (BS)
Bulls started off the year 2009 with an upbeat, as Indian benchmark indices ended the first trading session of the year with healthy gains. After a steady start and trading in a range in the first half of the day, markets surged higher surging past the 3,000 mark.
Sentiment got a boost as the country’s inflation fell to a 10-month low in the third week of December due mainly to falling fuel prices, the Government said on Thursday. The annual inflation rate stood at 6.38% in the week ended Dec 20 versus 6.61% in the previous week. It was more or less in line with expectations of 6.35-6.45%.
The late rally was also led by the realty, metals, capital goods and IT stocks. Also the mid-cap and the small-cap stocks were in demand again. Finally, the BSE benchmark Sensex ended at 9,910 adding 263 points and the NSE Nifty index ended at 3,033 advancing 74 points.
All the BSE Sectoral indices ended in the positive terrain with BSE Realty index (up 7.5%), BSE Metal index (up 6%), BSE Capital Goods index (up 5%) and BSE IT index (up 4.1%).
Market breath was positive, 1,992 stocks advanced against 504 declines, while, 63 stocks remained unchanged.
Shares of Omaxe advanced by 3.7% to Rs66 after reports stated that the company received an order worth Rs2bn to build two jails in Punjab. The scrip touched an intra-day high of Rs67 and a low of Rs64 and recorded volumes of over 82,000 shares on NSE.
Shares of PTC India have gained by 1% to Rs69 after reports stated that the company would set up a joint venture with Singapore-based firm Asian Infratech for identifying and acquiring companies overseas. The scrip touched an intra-day high of Rs71 and a low of Rs69 and recorded volumes of over 1,00,000 shares on BSE.
Shares of Alok Industries surged by over 6% to Rs19 after the company announced that it has planned to increase size of proposed rights issue. The company said that, the board of directors of the company would meet on January 3 to discuss over the size of rights issues. The scrip touched an intra-day high of Rs19.4 and a low of Rs18 and recorded volumes of over 5,00,000 shares on NSE.