Being happy doesn't mean that everything is perfect. It means that you've decided to look beyond the imperfections.
The local bulls have decided to look beyond the budget. The FM’s statements on disinvestment and clarifications on the borrowing programme, coupled with reports of encouraging progress in monsoon have allowed bulls to raise their glasses. A simultaneous rally across global markets has added fuel to the fire.
Spirits are not high when a discount sale is underway in the market; rather happy hours are when you can sell at a profit. The Fed’s minutes released give reason to cheer, though there is nothing fresh about the assessment of the US economy. Still, words like recession may soon end could provide some more ammunition to the bulls. We expect a positive opening, but it would be wise to cash in on the rally rather than get in.
Performance chasing my perk up sentiment for some time but the morning euphoria may not last all day. Assessing the market trend has become quite a task given the heightened volatility. Several more bouts of rallies and reversals could follow in the coming weeks and perhaps months before there is stability.
China's gross domestic product (GDP) expands by 7.9% in the second quarter, beating estimates for a 7.7% expansion, thanks to rising domestic consumption and a strong increase in industrial activity. Consumer and wholesale prices, however, sink lower.
FIIs were net buyers of Rs2.55bn in the cash segment on Wednesday on a provisional basis while the local funds too picked up shares worth Rs2.72bn. In the F&O segment, the foreign funds were net buyers at Rs9.65bn.
Results Today: Bajaj Holdings, Bajaj Auto, Exide, ICI India, JK Tyre, L&T, Mid-Day Multimedia, Nitin Fire, Novartis India, Opto Circuits, Polaris, Swaraj Engine, Welspun Gujarat and Zee Entertainment.
US stocks jumped on Wednesday, with all three major indices rising at least 3% after Intel's forecast for a second-half pickup and the Federal Reserve's improved outlook reassured wary investors.
The Dow Jones Industrial Average gained 256 points, or 3.1%, to 8616.21. The S&P 500 index added 27 points, or 3%, to 932.68. The Nasdaq Composite index rose 63 points, or 3.5% to 1862.90.
Both the Dow and Nasdaq saw their best one-day point gains in nearly four months. The S&P 500's gain was the best in two months.
Intel reported profit and revenue late on Tuesday that dipped from a year ago, but surpassed forecasts. Also, the chipmaker predicted better revenue growth in the third and fourth quarters thanks to improved demand for personal computers. Intel shares jumped 7% and boosted other big tech stocks.
While the start to the financial results was positive, it is too early to pop the champagne regarding second-quarter results. S&P 500 profits are expected to have fallen around 36% in the second quarter versus a year ago, according to the latest Thomson Reuters forecast.
Worries about the corporate earnings outlook and the health of the economy have been a drag on stocks over the last month following a three-month rally that lifted the S&P 500 by 40%.
The rally on Wednesday intensified after the Federal Reserve said that the end of the recession might be on the horizon. The Fed released the minutes from the last policy meeting and the forecast through 2010. Information reviewed at the meeting showed that the US economy remained weak, although the pace of the decline seemed to be lessening. In its forecast, the Fed said that the unemployment rate could top 10% this year, but it also said that the recession may soon end.
Oil stocks jumped in line with the underlying commodity prices.
Goldman Sachs reported a bigger-than-expected quarterly profit due to strength in its fixed income and trading businesses.
Citigroup, Bank of America and JPMorgan Chase report results either on Thursday or Friday. Goldman and the other three bank stocks rallied, along with other big financial firms - American Express, Morgan Stanley and Wells Fargo. The KBW Bank index gained 4.3%.
The consumer price index (CPI), a measure of consumer inflation, edged up 0.7% in June after rising 0.1% in May, according to a government report released in the morning. Economists had thought it would rise 0.6%. So-called core CPI, which strips out volatile food and energy prices, grew 0.2% versus a rise of 0.1% in May. Economists thought it would rise 0.1%.
Industrial production fell 0.4%, according to another government report, versus forecasts for a drop of 0.6%. Industrial production fell 1.2% in May. Capacity utilization dipped to 68% from 68.2% in the previous month. Economists thought it would dip to 67.9%.
Treasury prices fell, raising the yield on the benchmark 10-year note to 3.56% from 3.47% on Tuesday.
In currency trading, the dollar fell against the euro and gained versus the Japanese yen.
US light crude oil for August delivery rose $2.02 to settle at $61.54 a barrel on the New York Mercantile Exchange.
COMEX gold for August delivery rose $16.60 to settle at $939.10 an ounce.
JPMorgan Chase releases its quarterly financial report before the start of trading on Thursday. Google and IBM report results after the close. Small-business lender CIT Group will also be in focus. The federal government could be set to announce a bailout of the struggling company within the next 24 hours.
On the economic front, the Philadelphia Fed index, a monthly manufacturing report, is due shortly after the start of trading. RealtyTrac's report on foreclosure filings in the first half of the year is due in the morning. Additionally, the weekly jobless claims report from the Labor Department is on tap.
European shares staged a broad-based advance, with technology stocks leading the rally. The pan-European Dow Jones Stoxx 600 index rose 2.7% to 208.89. The UK's FTSE 100 index climbed 2.6% to 4,346.46, while Germany's DAX index rose 3.1% to 4,928.44 and the French CAC-40 index advanced 2.9% to 3,171.27.
For the second day running, the bulls marched ahead in style, aided by firm global trend coupled with encouraging progress in southwest monsoon. Even the results announced by some of the domestic companies were pretty good, bolstering the confidence further. Earlier, global equity markets had been buttressed by better-than-expected results of Goldman Sachs and Intel.
With today’s smart advance, the BSE Sensex has now recouped almost 900 points while the NSE Nifty has recovered nearly 260 points in last couple of days. The two-day rally is in stark contrast to the grim mood that set in post the budget, though the near-term trend still appears to be uncertain.
Realty, Metals, Power and Capital Goods stocks hogged the limelight and even the Mid-Cap and the Small-Cap stocks joined the party.
The Sensex finally surged by 400 points or 2.8% to end at 14,253 after touching a high of 13,299 and a low of 13,891. The index had opened at 13,917 against the previous close of 13,853.
The NSE Nifty shot up by 134 points or 3.2% to shut shop at 4,245.
Asian markets ended in the positive terrain. The Nikkei in Japan gained 0.3% at 9,269, Australia's S&P/ASX ended higher by 1.5% at 3,924. The Hang Seng index rose by 2% to 18,258.
In Europe, stocks were trading in the green. The FTSE in the UK was up 1.4% at 4,297. The DAX rose 1.6% at 4,861 and the CAC 40 gained 1.4% at 3,125.
Coming back to India, among the BSE sectoral indices, the BSE Realty index was the top gainer, surging by an impressive 8%, followed by the BSE Metal index that was up 5.6%. The BSE Power index rose 5% and BSE Capital Goods index was up 4.7%.
The BSE Mid-Cap index jumped 4.1% and the BSE Small-Cap index rose 4.5%.
Within the Sensex, the major gainers were Hindalco, JP Associates, DLF, Hero Honda, BHEL, Tata Steel, Tata Motors and RCOM. Infosys was the only loser among the 30-components of Sensex.
Outside the frontline indices, the top gainers included Bhushan Steel, Indiabulls Real Estate, Lanco Infra, Ackruty City, Opto Circuits, IFCI, Welspun Gujarat and RNRL.
Among the big losers in the broader market were Jubilant Organosys, EIH, KSK Energy, Union Bank, Max India and GTL.
Shares of Adani Enterprise shot up by over 8% to Rs801. Adani Power, a power project development company promoted by Adani Enterprises is entering the capital markets with an IPO of 301,652,031 equity shares of Rs10 each for cash at a price to be decided through a 100% book-building process. The issue opens on July 28 and closes on July 31.
Shares of Indiabulls Real Estate rallied by over 13% to Rs215 after reports stated that Indiabulls Power, a 100% subsidiary of Indiabulls Real Estate, is planning to raise Rs15bn through an IPO in August. The company has filed its draft red herring prospectus with SEBI.
Indiabulls Power plans to offer ~340mn equity shares for sale in the primary market. Following the move Indiabulls Real Estate’s holding will drop down from the current 71.4% to 57.8%.
The stock opened at Rs193 and made an intra-day high of Rs224 and a low of Rs193. Total traded volumes stood at 6.9mn shares on BSE.
Bharti Airtel and MTN Group are expected to confirm the details of the deal in the coming weeks, media reports stated. MTN, on July 6 had announced that it was still in talks with Bharti about a possible merger.
Shares of Bharti Airtel gained by 1% to Rs780. The stock opened at Rs794 and made an intra-day high of Rs794 and a low of Rs777. Total traded volumes stood at 0.29mn shares on BSE.
Shares of IDBI Bank surged by over 5.6% to Rs100 after the bank posted a net profit of Rs1718.30mn for the quarter ended June 30, 2009 as compared to Rs1597.60mn for the quarter ended June 30, 2008.
The total Income has increased from Rs27561.50mn for the quarter ended June 30, 2008 to Rs42189.10mn for the quarter ended June 30, 2009.
Shares of Infotech Entreprises have shot up by 15% to Rs202 after the company posted net profit of Rs462.6mn as compared to Rs245.6mn for the quarter ended 30th June 2008.
The net sales stood at Rs2326mn for the quarter ended 30th June 2009 as compared to Rs2006.1mn for the quarter ended 3oth June 2008.
Shares of 3i Infotech surged by over 4% to Rs72 after the company announced that it has entered into an agreement with Yucheng Technologies Ltd (Yucheng) (the JV partner of the company in China) to acquire the 49% stake from Yucheng in order to make Elegon Infotech Ltd a wholly owned subsidiary of the Company in China.
The stock opened at Rs70 and made an intra-day high of Rs73 and a low of Rs70.45. Total traded volumes stood at 0.5mn shares on BSE.
Shares of OnMobile Global climbed over 13% to Rs516 after the Company signed business agreements with Telefonica Internacional, S.A.U. Spain (Telefonica), for exclusive and non-exclusive market rights, thereby enabling the Company to deploy various Valde Added Services including RBT, Music radio, Soccer portal, Voice Search, and several other VAS services in the Latin American telecommunication markets where Telefonica operates over the next few years.
Most of the major VAS services will be launched by Telefonica on an exclusive basis with OnMobile.