Psychological, don't get illogical!

The major psychological insight I’ve arrived at in life is that the psyche isn’t logical. - Anonymous.

The psyche of the bulls is hard to explain. There appears to be no end in sight to the liquidity deluge that has propelled the main Indian stock indices closer to all-time highs. But, leave no room for complacency as the market could not sustain gains on Tuesday and lack of participation by the broader market perhaps tells a different story. The frenzied, mindless euphoria of January 2008 is missing. People are more cautious and a little skeptical too. The worry of course is continuous selling by our local institutions.



The start today looks good as Asian markets that are open for trading are in the green. Markets in China, South Korea and Taiwan are shut due to holidays. Whether early morning gains will stay is anybody’s guess. US stocks closed nearly flat, reversing afternoon gains as the Fed left rates unchanged near record low. The FOMC didn’t announce any asset purchase plan but said it is ready to do more to stimulate a sluggish US economy. So, clearly there are problems on the external front even as the domestic story looks promising.

The FIIs were net buyers of Rs23.12bn in the cash segment on Tuesday (provisionally), according to the NSE web site. Local funds were net sellers of Rs12.6bn. In the F&O segment, the foreign funds were net sellers at Rs21.76bn. The FIIs were net buyers of Rs18.78bn in the cash segment on Monday, according to SEBI data. Mutual Funds were net sellers of Rs2.08bn on the same day.

Meanwhile, India's market capitalisation as a proportion of the world market cap has risen to 3.34% at $1.55 trillion. This is higher than 3.12% share India enjoyed at the market peak of January 2008.

Important News Snippets For The Day:

Nord Imperial, the Russian subsidiary of ONGC, has entered the fray to bid for the Trebs and Titov deposits.

Ranbaxy has received an exclusive six month marketing opportunity to sell a generic version of Japanese drugmaker Eisai’s drug for Alzheimer’s in the US.

GMR group does not plan to pursue the opportunity of developing Medina airport in Saudi Arabia.

IOC has earmarked US$1bn for the acquisition of good quality producing or developing E&P assets abroad.

IOC will invest Rs470bn in FY11 in creating more refining capacity, pipeline network, marketing infrastructure and raising quality.

BHEL has got a contract worth Rs26.65bn to set up a 1,200 MW coal fired power plant at Chhattisgarh.

Jindal Steel and Power is investing Rs440bn as part of its expansion plans for setting up two 6mtpa steel plants in Orissa and Jharkhand.

Volkswagen may extend its global partnership with Suzuki in India by tapping the manufacturing and design facilities of Maruti Suzuki in India.

Suzlon Energy has bagged order of Rs11.5bn from Kolkata’s Techno Electric Group to develop over 202.2MW wind power projects.

The Government plans to advance the Rs80bn follow on public offer of SAIL, by a month, to gain from robust market conditions.

JSW Bengal, a subsidiary of the JSW Steel, plans to merge with its parent company once the 10mn tons plant starts operation.

Jet Airways and IBM have signed a 10-year US$62mn business transformation and information technology services agreement.

Essar Oil has hiked the retail price of petrol at its outlets by 27 paise a litre.

Malaysia based Astro All Asia Networks would acquire a 49 per cent stake for US$40mn in NDTV subsidiary, NDTV Lifestyle.

Moser Baer plans to double its photovoltaic capacity to 240 MW by FY11 end, and add an incremental 220MW during FY12.

Mahindra Satyam will announce its audited financial results for the FY10 on September 29.

Suven Life Sciences has secured two patents from the US patent office for its New Chemical Entities (NCEs) for the treatment of disorders associated with neurodegenerative diseases.

Key members of the empowered group of ministers (EGoM) may reject TRAI’s recommendation to link 2G spectrum price beyond 6.2 MHz with the recently concluded 3G spectrum auction price.

According to CMIE, India's GDP is expected to grow at 9.2% in FY 11 on the back of spurt in economic activities.

According to the Steel Secretary, P.K. Misra, the Ministry is not in favour of hiking import duty of steel to tackle the problem of cheap imports.