One who adapts his policy to the times prospers; one whose policy clashes with the demands of the times does not. - Niccolo Machiavelli.
The public spat between SEBI and IRDA about who should regulate ULIPs could cast its ugly shadow on the sentiment. Bulls and bears may prefer to adopt a wait and watch policy despite firm global cues. The role of the Government will now take center stage and voices will get louder for a financial sector super regulator. A protracted battle and a war of words may ensue, something the markets don’t need right now.
We may still see a higher opening as most global markets have advanced since we closed trading last Friday. IIP data (to be issued today) and monthly inflation (to be released on Thursday) will be closely followed in the run up to the RBI policy next week. The IT pack will in the spotlight ahead of tomorrow’s Infosys results.
The NSE Nifty is expected to top 5400 and levels of 5500 are being talked about widely. But, the ride won’t be all that smooth and some bumps are bound to make that task more difficult for the bulls.
The Dow briefly broke through 11000, though it failed to hold above that milestone at close on Friday. Fading worries over the debt-laden Greece coupled with encouraging reports on the US economy helped European stocks rise on Friday.
Asian markets are also mostly in the green amid media reports of an EU bailout for Greece. The euro gained today for a third day against the dollar and commodities jumped after European governments unveiled a plan to halt Greece’s fiscal crisis.
The yuan is likely to remain in the spotlight this week, with expectations that Beijing is ready to let the currency rise. But we are still a long way from a full yuan float, given uncertainty on how the currency would respond.
After reaching dizzying heights upwards of 18,000 levels in the previous trading session, the BSE Sensex stumbled largely due to weak global markets. Stocks across the globe came under pressure amid fresh worries over Greeks financial condition. Part of the selling at higher levels could also be attributed to jitters surrounding high valuations. In addition, a spate of headwinds like elevated inflation, impending rise in interest rates and a fragile global economy played spoilsport. "With Greece financial woes intensifying, market players preferred to book some profit ahead of the eventful results season kicking off next week", says Amar Ambani VP Research India Infoline. Offloading was seen across the board. The Oil & Gas, Metals and the Bank stocks were among the major losers which dragged the BSE Sensex and NSE Nifty index over 300 and 90 points fro their respective 52-week highs. In addition, advance-decline ratio turned in favor of the bears for the first time in three days. Out of total 2957 stocks on the BSE, 1678 stocks declined as against 1198 advancing stocks while, 81 remained unchanged. Finally, the BSE Sensex lost 256 points to end at 17,714 and NSE Nifty fell 70 points to close at 5,304. Among the 30 components of Sensex, 19 ended in the positive terrain and 11 were in the red. Asia markets ended in the red, the Nikkei in Japan slipped 1.1%, Australia's S&P/ASX edged lower by 0.6%. Shanghai SE Composite ended lower by 0.3% and Hang Seng index in Hong Kong was down 0.3%. European indices as well were under pressure, the DAX in Germany slipped 1%, the CAC 40 index in France was down 1% and the FTSE in the UK slipped 1.1%. Coming back to India, among the BSE sectoral indices, the BSE Oil & Gas index was top loser, the index fell 2%, followed by BSE Metal index down 1.9% and Bank index down 1.6%. Even the Mid-Cap and the Small-Cap index ended in the red. On the other hand, BSE Consumer Durables index gained 2.2% and BSE Realty index added 0.6%. Outside the frontline indices, the big losers in the broader market were Central Bank, Idea, IRB Infra and Bharat Forge. On the other hand, losers included Jain Irrigation, PNB, Ispat Ind and LITL. Kotak Mahindra Bank which replaced the Cement major Grasim Industries ended marginally lower by 0.2% at Rs783. On the other hand, shares of Grasim slipped 1.7% to end at Rs2846. Shares of Sun Pharma slipped by 1.4% to end at Rs1773. The company announced that USFDA has granted its subsidiary an approval for its Abbreviated New Drug Application (ANDA) to market a generic version of GlaxoSmithKline’s Wellbutrin SR® Extended Release tablets. Shares of Moser Baer edged higher by 0.5% to end at Rs75 after the company announced the commissioning of its largest Thin Film solar farm with an installed capacity of 1 MW at Chandrapur in Maharashtra. It has been set up using amorphous silicon Thin Film technology which is best suited for the Indian climatic conditions and is connected to the 33 KVA local grid. The project will give much better returns (Rs/kWh) to the investors as compared to other technologies available in the country. Shares of Aptech surged by over 3% to end at Rs175 after the company announced that it would offer 1.7mn shares at Rs216 each to Enam Securites Pvt and 18 other buyers. That’s a 27% premium from yesterday’s closing price. The scrip opened at Rs172 it touched an intra-day high of Rs185 and a low of Rs171.5 and recorded volumes of over 0.94mn shares on BSE. Aban Offshore announced that a contract has been signed with Brunel Shell Petroleum Sendirian Berhad for the deployment of the jack-up rig Deep Driller 8 offshore Brunei for firm period of 4 years plus four optional periods of 1 year each. The estimated revenues from the firm period of the deployment is about US$159mn (equivalent to Rs7.16bn). The deployment is likely to commence during the third quarter of calendar year 2010. Shares of Aban Offshore hit a high of Rs1269 post the announcement however ended flat at Rs1246. Shares of United Spirits ended flat at Rs1336. The company yesterday announced that it has crossed the milestone of clocking a sales volume of 100mn cases for the fiscal year ended March 31, 2010. This achievement makes United Spirits the world’s second-largest spirits company by volumes, dislodging Paris-headquartered Pernod Ricard.