Too few rejoice at a friend's good fortune. - Aeschylus.
If trend is the friend, then bulls may look at some more rejoicing on the street. Festive fervour is picking up in India and the bulls appear in high spirits going by last week’s breakout above 5600. July IIP data has beaten all expectations and will set the pace for today’s session. Chinese economic reports have also encouraging. Banks will be in focus on the announcement of new global banking rules for capital and liquidity.
India has of late outperformed the world and may continue to advance. The NSE Nifty might cross 5700 soon and could even take a shot at 5800 if global cues are supportive. FII flows have not been an issue and won’t be one given the healthy prospects for the Indian economy.
Watch out for monthly Inflation data (Sept. 14), the RBI meet (Sept. 16) and Advance Tax numbers this week. The recent short squeeze might continue for a while, leading to further upside. It may be prudent to lighten one’s portfolio and stick to large caps, and defensives as some correction is bound to happen at higher levels.
FIIs were net buyers of Rs9.88bn in the cash segment on Thursday (provisionally), according to the NSE web site. Local funds were net sellers of Rs2.01bn. In the F&O segment, the foreign funds were net sellers at Rs20.37bn. The foreign funds were net buyers of Rs4.62bn in the cash segment on Sept. 8, according to SEBI data. Mutual Funds were net sellers of Rs1.05bn on the same day.
Important News Snippets For The Day:
Dr Reddy's plans to spend Rs16bn for capacity expansion in two years.
HCL Tech bags 3year IT infra deal from New Zealand government.
PowerGrid Corporation Rs80bn FPO is set to enter the market in the second week of November 2010.
Reliance Industries agrees to sign a gas supply contract with Essar Oil.
Gujarat NRE Mineral Resources is set to offer 25% of its equity to the public. The company is the controlling stake holder in Gujarat NRE Coke.
IOC plans to rope in a strategic investor for its proposed Rs100bn project at Ennore, Tamil Nadu.
IVR Hotels & Resorts, a SPV formed by IVRCL Assets & Holdings plans to promote Rs50bn township project at Sriperumbudur.
DLF plans to invest Rs9bn in a luxury residential project in Chennai.
Natco Pharma does not rule out a settlement over the patent issue with Celgene.
Crompton Greaves has entered into an agreement with the Spainbased ZIV Aplicaciones Tecnologia to set up a JV in India to manufacture substation automation systems.
Ess Dee Aluminium reopens the Hoera unit of India Foils Ltd after six years.
India’s Industrial Production rose to 13.8% in July, registering the highest in two months and exceeding market expectations of 7.8%.
The government plans to review the New Investment Policy of 2008 in order to overhaul the production of the urea sector by attracting more investments and reviving the sick fertiliser units.
Asian Markets on Monday:
Asian stocks rose, driving the region’s benchmark index to a four-month high, commodities climbed and the yen weakened as higher-than-estimated industrial output in China boosted optimism in a global economic recovery.
The MSCI Asia Pacific Index rose 1% to 123.05 as of 11:32 a.m. in Tokyo, on course for its highest close since May 4. Oil climbed to $77.30 a barrel and copper increased for the first time in three days.
The yen depreciated against 14 or its 16 major counterparts, trading at 84.13 per dollar. Futures on the Standard & Poor’s 500 Index gained 0.7%.
China’s industrial production rose 13.9 percent in August from a year earlier, more than the 13% median estimate of economists, a statistics bureau report showed on Sept. 11.
Consumer prices jumped 3.5%, the most in 22 months, as food costs climbed, and retail sales rose 18.4%.
On Sept. 10, a report in the US showed that inventories climbed in July by the most in two years.
Japan's Nikkei 225 Stock Average was up 1% at 9,331 while Australia's S&P/ASX 200 index was up 1.2% at 4,657.
Hong Kong shares advanced early after Chinese data released over the weekend reaffirmed market hopes for a soft-landing for the mainland economy and strengthened expectations of a delayed interest rate hike.
Commodity producers such as Cnooc paced the gains. The Hang Seng Index added 1.3% to 21,530.78 and the China's Shanghai Composite
added 0.1% to 2,666.83.
Banking stocks also rose in line with a rally in regional lenders after new capital norms agreed by global regulators were less stringent than feared.
The Basel Committee on Banking Supervision, representing regulators from 27 nations, more than doubled its capital requirements for banks, giving lenders as long as eight years to comply in full, as part of efforts to prevent financial crises.
US Markets on Friday:
US stock benchmarks rose marginally on Friday amid light trading volume. US stock indices barely ended the week higher amid a few encouraging economic reports even as most investors remain nervous about future prospects.
The Dow Jones Industrial Average rose 15 points last week, closing at 10,463 on Friday. The S&P 500 added 5 points to end at 1,109, and the tech-heavy Nasdaq Composite index advanced 10 points to 2,243.
After hovering all day around 10,448 level, the Dow rallied late on Friday to rise slightly higher.
All the three US stock indexes posted gains on Wednesday and Thursday following Tuesday's losses.
Trading volume was exceptionally light during the shortened holiday week. US stock markets were closed on Monday for Labor Day, and trading was low on Thursday and Friday due to Rosh Hashanah.
The dollar fell against the euro, but rose against the British pound and the Japanese yen.
Oil futures for October delivery climbed $2.20 to settle at $76.45 a barrel, after reports of a pipeline leak and the government's latest supply report spurred speculators to short-cover their oil positions.
Gold for December delivery dipped $4.40 to settle at $1,246.50 an ounce.
The yield on the 10-year Treasury note rose to 2.8% from 2.76% late on Thursday.
A government report showed that wholesale inventories rose 1.3% in July, following an upwardly revised 0.3% increase the month before. Investors took the unexpected rise as a positive sign for the economic recovery.
In a White House press conference, President Barack Obama continued his push for a $350 billion jobs recovery plan and a small business tax cut currently stalled in Congress.
Shares of Nokia gained more than 2%, after the mobile phone maker named Stephen Elop - the head of Microsoft's business division - as its CEO. Elop will begin as president and CEO on Sept. 21, replacing Olli-Pekka Kallasvuo.
Pacific Gas & Electric tumbled more than 8% after a gas pipeline in California exploded and erupted into flames. The blast occurred in San Bruno, near San Francisco, after a gas transmission line owned by the company ruptured. The cause of the rupture is still being investigated.
European Markets on Friday:
European stock indices ended the week on a subdued note, with Deutsche Bank falling sharply on a report that the German bank is planning to sell new shares. Nokia shares gained after it appointed a new chief executive.
The pan-European Stoxx Europe 600 index slipped 0.2% to 264.70, paring gains for the week to 1.7%.
The UK's FTSE 100 index closed up 0.1% at 5,501.64 and the French CAC 40 index added 0.1% to 3,725.82, while the German DAX 30 index lost 0.1% to 6,214.77.
Shares of Deutsche Bank were among the worst performers, dropping 4.6% in Frankfurt after reports that the group could raise as much as 9 billion euros ($11.4 billion) by selling shares.
The money could be used to fund the purchase of more shares in Deutsche Postbank, in which Deutsche Bank already holds a 30% stake, and could also be used to strengthen capital levels.
Other European banks lost ground as the Deutsche Bank report re-ignited worries about the likely impact of tougher capital rules.
Nokia rose after the world's largest maker of mobile phones named a new chief executive and president. Nokia said that Microsoft executive Stephen Elop will take over from Olli-Pekka Kallasvuo later this month.
Auto stocks also gained after French car makers Renault and PSA Peugeot Citroen both announced they will pay back €1 billion of the €3 billion loans they each received from the French government.
The repayment plans, which are earlier than initially expected, sent shares in Peugeot and Renault up 1.8%.