Stock market - In the short run it's a voting machine, but in the long run it's a weighing machine
The voting may take some time as investors remain undecided whether to vote for the bulls or bears. US markets may have reached buying levels according to Warren Buffett’s metrics. But they continue to falter and so does our market. Key indices have been in a range over the past few sessions and the trend may continue.
Today, we see a cautious start given the weakness across global markets. Depending on the news flow and global markets, our indices too may tend to swing either way. Inflation may cool to its lowest level in almost a year as we see it around 5.3 pc. This could bring a rebound.
The best way to tackle the current indecisive trend is to take each day as it comes.
Among major results today, we expect ACC to report a top-line growth of 2.8% to Rs18.3bn. The OPM is likely to witness a 400bps dip. The bottom-line is expected to be around Rs2.26bn.
According to Warren Buffett, US stocks are a logical investment when their total market value equals 70% to 80% of Gross National Product and that seems to have happened in the US.
Stock specific action will continue in stocks like Polaris which is rumored to bag a large order. Wireless India and Dish TV seem to have caught speculators attention but we wouldn’t expect you to venture in wild speculation.
Bhel could bag a Rs8bn deal from the railways. The IT sector woes continue as Nasscom says it has missed its target. The slowdown in the economy seems to have taken its toll with half a million jobs being lost in India. The RBI is now expected to effect rate cuts after the interim budget which is scheduled mid-February.
Metals and realty stocks came to the rescue of bulls, as traders were quick to lap up on stocks for short-term gains. While outlook on both these sectors remains weak, there could be a temporary rebound in select stocks here, especially those which have melted more.
The Dow Jones closed below the 8k mark for the third time this calendar year as fears continued to swirl around Bank of America’s nationalization. Also, weak earnings from Walt Disney and Kraft Foods and a sell off in the banking sector added to worries about the impact of the recession. The Dow Jones lost 121 points, or 1.5%. The Standard & Poor's 500 index fell 6 points, or 0.8% while the Nasdaq was a tad lower dipping by a solitary point.
Disappointing corporate results and economic reports remain the order of the day. Cisco Systems reported lower quarterly sales and earnings but beat expectations.
President Obama announced new rules on that caps compensation for executives at $500,000 for firms which get federal bailout money. The economic stimulus package is being debated in the Senate this week.
Among other important headlines today:
Tata Motors has reportedly failed to pay its vendors and suppliers. Meanwhile, Eaton Corporation has signed an agreement with Tata Motors for supply of heavy duty synchronized transmission up to 2014.
ONGC is set to revive its 15mn ton Rajasthan refinery plan.
Cairn India plans to invest US$3.8bn in Rajasthan fields.
PTC India plans to mobilize Rs12bn through QIP.
Ashok Leyland has announced it will rework its LCV tie up with Nissan.
The company reported a sharp drop in its January sales to 2,444 against 9,112 units a year ago.
ATE has dismissed Reliance Power’s petition against Lanco Infratech challenging the expansion of the Anpara project. (Mint)
Diageo is seeking a greater stake in United Spirits Ltd than sub-15% offered to it earlier.
Reliance Infrastructure and HCC are in the race for developing the Worli-Haji Ali sea link project.
State Government has ordered an inquiry into violations of the Maharashtra Ceiling on Agricultural Holdings Act by HCC’s Lavasa.
Markets ended the day with modest gains yet again. It has been the second straight day where key indices have lost ground towards the end. The slide was led by selling witnessed in the consumer durables, Pharma and select IT stocks. The BSE benchmark Sensex slipped nearly 140 points and the NSE nifty index declined almost 40 points from their respective day’s high. Finally, the Sensex rose 52 points to close at 9,201 and the Nifty rose 19 points to close at 2,803.
Among the 30-components of Sensex, 19 stocks ended in the green and 11 stocks ended in the negative terrain. Among the major gainers in the Sensex were DLF, Tata Steel, Sterlite, JP Associates and Maruti. On the other hand, major losers were Ranbaxy, ICICI Bank, Hindalco and Reliance Infra.
Shares of PTC India declined by 5% to Rs62. The board of directors of the company approved raising of funds upto Rs12bn through the Qualified Institutionals Placement ( NCDs upto Rs4bn plus Warrants of upto Rs8bn) and at such price and terms to be decided by a Committee of Directors. The scrip touched an intra-day high of Rs71 and a low of Rs61 and recorded volumes of over 4,00,000 shares on BSE.
Shares of RPL gained by a percent to Rs84.1. According to reports, Chevron Corp. may sell its 5% stake in the company. The scrip touched an intra-day high of Rs85 and a low of Rs82 and recorded volumes of over 35,00,000 shares on BSE.
Shares of Satyam Computer ended lower by 6% to Rs50. According to reports, L&T may offer as much as Rs50 per share.
L&T had earlier tripled its stake in Satyam to 12%. The scrip touched an intra-day high of Rs56 and a low of Rs48 and recorded volumes of over 26,00,000 shares on BSE.
Shares of Balrampur Chini declined by 3% to Rs58 after reports stated that it expects its BHEL sugar output to fall 38% in the year to September 2009. The scrip touched an intra-day high of Rs61 and a low of Rs55 and recorded volumes of over 22,00,000 shares on BSE.
Shares of WWIL sky rocketed by over 77% on the back of huge volumes. The stock opened at Rs9.7 and finally ended at Rs17.1 after hitting an intra-day high of Rs18.2 and a low of Rs9.70 and recorded volumes of over 70mn shares on BSE.
Shares of Akruti City advanced by 3.5% to Rs827. The company announced that its promoters pledged 5% equity to Hi-Tech housing projects. The scrip touched an intra-day high of Rs839 and a low of Rs781 and recorded volumes of over 1,00,000 shares on BSE.
With no local triggers to play for, the market remains at the mercy of global trends and daily news- flow. Expect a lot of stock specific action. Volatility will continue to test even the most seasoned traders.