Back to square one

To profit from good advice requires more wisdom than to give it. Wilson Mizner.

Yes, there is some profit to be made from the global rebound this morning, but one should not get carried away as the advance may run out of steam after a while. We expect a positive start following further improvement in risk tolerance worldwide. Early gains may not hold though and the market may once again turn choppy and rangebound. Near-term sentiment may remain at the mercy of global events even as earnings continue to trickle in, both here and overseas. Monsoon will be the next big event on the domestic calendar.

Meanwhile, the Government has been able to ward off the Opposition challenge in parliament and has passed the Finance Bill. It is also set to garner much more from the 3G-BWA auctions than what had been estimated earlier. So, the fiscal deficit for FY11 may look a tad better. The challenge is to maintain fiscal discipline by cutting wasteful spending rather than relying on extraordinary income.

April was a dull month for Indian equities, as the main indices were stuck in a range. A breakout from the current range may continue to elude us unless we have a major global rally. So, it would be wise to stay cautious though there is no need to panic. Be selective and careful in picking stocks, especially the small- and mid-cap ones.

Results Today: ABB, Adani Power, Allahabad Bank, Alok Inds, Bank of Maharashtra, Gateway Distriparks, GVK Power, HCL Info, HCC, IDBI Bank, IFCI, India Cements, IRB Infra, Moser Baer, NDTV, Reliance Capital, Sintex, Tata Elxsi, TTML, Tech Mahindra, Titan, Uco Bank and Vijaya Bank.

FIIs were net buyers of Rs904mn in the cash segment on Thursday on a provisional basis, according to NSE web site. Local institutions were net buyers of Rs2.67bn.

Indian markets staged a smart come back on Thursday after losing sharply in the last two trading sessions. “Federal Reserve’s decision of leaving key interest rates unchanged and IMFs promise to increase the 45bn-euro aid package for Greece to as much as 120bn-euros over three years lifted the sentiments on Dalal-Street”, says Amar Ambani, Vice President Research IIFL.

Markets were volatile on account of F&O expiry with the BSE Sensex gyrating over 130 points and the NSE Nifty swinging almost 50 points from their respective intra-day high’s and low’s.

The Mid-Cap and Small-Cap Banks and the Auto stocks were in demand, even the Realty stocks which were badly beaten down in the past two days were back. Metals and the Oil & Gas stock also attracted buying interest.

The BSE Sensex advanced 123 points to end at 17,503 and NSE Nifty gained 39 points to close at 5,254. Among the 30 components of Sensex, 19 ended in the positive terrain and 11 ended in the red.

Markets in Asia ended in the red; the Nikkei in Japan was closed, Australia's S&P/ASX was down 0.8%, the Hang Seng index in Hong Kong was down 0.8% and Shanghai SE Composite ended lower by 0.3%.

On the other hand, European indices were trading with positive bias, the DAX in Germany was up 0.4%, the CAC 40 index in France was up 0.7% and the FTSE in the UK was up 0.5%.

Among the BSE sectoral indices, the BSE Realty index was top gainer; the index gained 2.2%, followed by BSE Consumer Durables index up 2% and Banking index up 1.8%. Even the Mid-Cap and the Small-cap index lost 1.1% and 1.3% respectively.

Outside the frontline indices, the big gainers in the broader market were Corp Bank, Jet Airways, Cummins India, Yes Bank and Andhra Bank. On the other hand, losers included Marico, IOB, Petronet LNG and Mphasis.

Jindal Steel & Power is reportedly planning to acquire Shaheed Iron & Steel of Oman in a transaction valued at ~US$500mn, media reports stated. According to reports, the deal will be completed by May 7. The scrip rose by 1% to end at Rs743. It opened at Rs739 it touched an intra-day high of Rs748 and a low of Rs738 and recorded volumes of over 0.85mn shares on NSE.

Shares of LIC Housing Finance shot up by over 5% to end at Rs949 after media reports stated that the company may seek a banking license. The scrip opened at Rs907 it touched an intra-day high of Rs949 and a low of Rs907 and recorded volumes of over 2.1mn shares on NSE.

Shares of Carborundum Universal advanced by 2.5% to end at Rs192 after the company announced that it sold a land and building property in Chennai City for a consideration of Rs236mn. The scrip opened at Rs182 it touched an intra-day high of Rs195 and a low of Rs182 and recorded volumes of over 26,000 shares on NSE.

Shares of Essel Propack gained by over 3% to end at Rs49.60 after the company reported quarterly profit of Rs87mn as compared with a loss of Rs51mn a year earlier. The scrip opened at Rs49 it touched an intra-day high of Rs51 and a low of Rs49 and recorded volumes of over 0.3mn shares on NSE.

Hanung Toys announced that the board of directors will meet on April 29, 2010 to consider further issue of capital in domestic or foreign markets including but not limited to make private placement of equity shares to Qualified Institutional buyers (or QIP) and / or Global Depository Receipts ("GDRs"), Foreign Currency Convertible Bonds ("FCCBs"), and / or any other financial instruments convertible into Equity Shares, or giving the holder a right to subscribe to Equity Shares including fully / partly convertible debentures, bonds, warrants, whether attached to other securities or otherwise, subject to necessary approvals / permissions as may be required.

Shares of Hanung Toys gained by 3% to end at Rs261. The scrip opened at Rs255 it touched an intra-day high of Rs267 and a low of Rs254 and recorded volumes of over 1.8mn shares on NSE.