Market may decline on weak global cues

The market may edge lower tracking weak Asian markets, which were being battered by a stronger yen, higher oil prices and worries about the U.S. economy. With December 2007 quarterly results season around the corner, investors may stay on sidelines before taking fresh positions.

Asian markets were trading lower today, 4 January 2008. Japan's Nikkei (down 4.03% at 14,691.41), Singapore's Straits Times (down 0.13% at 3,392.68), South Korea's Seoul Composite (down 0.62% at 1,841.33) edged lower. However, Hong Kong's Hang Seng (up 0.51% at 27,025.54) and Sanghai Composite (up 0.60% to 5,352), rose

Markets in the United States ended flat on Thursday, 3 January 2008. The Dow Jones industrial average was up 12.76 points, or 0.10%, at 13,056.72. The Standard & Poor's 500 Index was unchanged at 1,447.16. The Nasdaq Composite Index was down 6.95 points, or 0.27%, at 2,602.68.

Back home, the 30-share BSE Sensex settled 120.10 points or 0.59% lower at 20,345.20, on Thursday 3 January 2008. Sensex had hit a record high of 20,529.48 in late trade on 2 January 2008. The S&P CNX Nifty declined marginally by 0.85 points or 0.01% to 6178.55 on Thursday 3 January 2008. It struck all-time high of 6230.15 in intra-day trade yesterday.

As per provisional data, foreign institutional investors (FIIs) sold shares worth a net Rs 244.56 crore, while domestic institutional investors (DIIs) were net buyers of shares worth Rs 526.65 crore on Thursday, 3 January 2008.

FIIs were net sellers of Rs 907 crore in the futures & options (F&O) market on Thursday, 3 January 2008. They were net sellers of Rs 1,132 crore in stock futures, Rs 109 crore in index futures and Rs 25 crore in stock options. They were net buyers of Rs 359 crore in index options.

Crude oil for February delivery rose to $100.09 in intraday trading in New York yesterday, the highest since trading began.

Pre Open Market Commentary

The Indian market on today is likely to have a positive opening as the US market closed mixed. Yesterday the market closed he session a negative territory after struggling a lot through out the trading session. The cues from the global markets are not in favor that led the domestic market to open a weak and the cautiousness prevailed in the market through out the session. The BSE Sensex closed lower by 120.10 points at 20,345.20 and NSE Nifty closed flat at 6,178.55. We expect that the market may look for cues to take direction during the trading session. Also, the declaration of inflation figures by the government will give some further direction to the market.

On Thursday the US market closed mixed. The Dow Jones Industrial Average (DJIA) closed marginally higher by 12.76 points at 13,056.72 while Nasdaq slipped by 6.95 points to close at 2,602.68 and S&P 500 index closed flat at 1,447.16

Indian ADRS closed mixed. In technology sector, Wipro grew by 0.62% while Patni Computers fell by (1.87%) along with Infosys by 1.22% and Satyam by (1.13%). In banking sector, HDFC bank and ICICI bank rose by (0.82%) and (0.56%%. MTNL increased by (2.41%) while VSNL dropped by (0.47%).

The major stock markets in Asia are trading weak. Japan''s Nikkei is trading lower by 616.37 points at 14,691.41 along with South Korea''s Seoul Composite trading down by 11.10 points at 1,841.33 while Hong Kong''s Hang Seng is trading higher by 138.26 points at 27,025.54.

The FIIs on Thursday stood as net seller both in equity as well as in debt. The gross equity purchased was Rs4,083.80 Crore and the gross debt purchased was Rs93.30 Crore while the gross equity sold stood at Rs4,328.30 Crore and gross debt sold stood at Rs182.90 Crore. Therefore, the net investment of equity reported was (Rs244.50) Crore and net debt was (Rs89.60Crore).

Today, Nifty has support at 6,081 and resistance at 6,257 and BSE Sensex has support at 20,594 and resistance at 20,046.

Caution should be exercised

The market is likely to remain volatile amid worries about the possible recession in US and mixed Asian markets in current trades. The presence of strong bullish sentiment may help the market to turn positive. However, the FIIs have turned net sellers of equities in the last session may weigh on the investor sentiment. The Nifty could test higher levels at 6,260 and may dip around 5,850, while the Sensex has a likely support at 19,500 and may face resistance at 21,000.

US indices finished marginally weak on Thursday as investors mulled a jump in factory orders, near record oil and gold prices. While the Dow Jones gained 13 points at 13,057, the Nasdaq dropped 7 points to close at 2,603 on weakness in tech stocks.

Few Indian ADRs closed with marginal gains on the US bourses. MTNL gained over 2% while Wipro, Tata Motors, ICICI Bank, HDFC Bank and Rediff gained over 1% each. However, Infosys, Satyam, Dr Reddy's Lab and VSNL shed around 1-2% each.

Crude oil prices moved down, with the Nymex light crude oil for February delivery slipped by 44 cents at $99.62 a barrel. In the commodity segment, the Comex gold for February series added $9.10 to settle at $869.10 a troy ounce.

US Market ends flat and mixed

Technology stocks drag down market and indices give up all of earlier gains

US Market ended flat but mixed today, Thursday, 03 January, 2008 ignoring a couple of better-than-expected economic reports. After staying in the green for almost entire day, stocks witnessed sell-off in the last hour of trading. Dow, still managed to eke out small gain at the end. Nasdaq ended in the red.

Crude prices continued to hover around the $100/barrel mark. Commodities rallied for the second straight day. Seven out of ten sectors managed to end in the green, the exceptions being Financials, Consumer Staples, and Consumer Discretionary.

The Dow Jones industrial Average ended the day with a gain of 12.76 points at 13,056.72. The Nasdaq Composite Index, finished lower by 6.95 points at 2,602.68. S&P 500 finished unchanged at 1,447.16.

Twenty out of thirty Dow stocks ended in the green today. Altria, United Technologies, CocoCola, AT&T and Pfizer were the top gainers. GM, Wal-Mart and American Express were the main Dow laggards.

Stocks today opened modestly higher following a better than expected private employment report. The ADP employment came in modestly better than expected, which gave the stock market a slight boost. The ADP said private employment grew 40K in December, compared to the expected 33K rise.

Also, the Department of Commerce reports that November factory orders rose by 1.5%. Market expected orders to rise by 1%.

But technology sector continued to play the spoilt sport today. And due to tech stocks, indices were dragged down in spite of some encouraging economic data.

Auto companies declare mixed December sales

In the automobile sector, Ford, Toyota and General Motors reported lower December sales. Chrysler and Honda Motor reported small gains. Ford and GM shares ended lower today.

Merck edged lower today after the drugmaker said it would pay as much as $702 million to Switzerland's Addex to license a potential schizophrenia treatment.

Indian ADRs ended mixed today. MTNL and Tata Motors ekded out some gains around 1%. Dr Reddys was the top loser shedding 2.5%.

Commodities rally for second consecutive day

Crude prices crossed the $100/barrel mark once again during intraday trading today, but gave up earlier gains and closed finally lower for the day. Crude oil fell after weekly inventory report by Energy Department showed that U.S. gasoline and diesel inventories rose as refineries increased operating rates. Today crude-oil futures for light sweet crude for February delivery closed at $99.12/barrel (lower by $0.50/barrel or 0.5 %) on the New York Mercantile Exchange.

Volume on the New York Stock Exchange topped 1.3 billion, while more than 1.9 billion shares traded on the Nasdaq. Declining stocks outpaced those advancing by roughly 8 to 7 on the NYSE, while decliners also ran ahead of advancers on the Nasdaq, by about 3 to 1.

Tomorrow will be another day when investors will focuss on the economic reports to set the tone of trading. December's unemployment and payroll data are due tomorrow before market opens. December's ISM Services Index will hit the wires just after market opens.

News Snippets - Jan 4 2008

News Snippets:

Ford selects Tata Motors as the preferred bidder for its Jaguar and Land Rover brands. (ET)

Carrefour to tie-up with Mukesh Ambani led Reliance group for its retail foray in India. (ET)

Tata Motors plans to assemble its small car in Thailand with an investment of Rs8-9bn. (ET)

Mahindra’s Logan to be cheaper by Rs30,000. (ET)

United Spirits buys distribution rights of Dalmore Single Malt in the US for US$58mn. (ET)

Honda Motorcycles and Scooters (HMSI) sales up 20% yoy in December 2007 to 71,098 units. (ET)

Satyam is looking at expansion in South America and USA and smaller cities in India. (ET)

Ashok Leyland has developed India’s first CNG engine for buses, employing multipoint fuel injection. (ET)

Reliance Industries and HPCL were among those that submitted financial bids for reviving sugar mills in Bihar. (ET)

Poor transport links in Bihar are likely to delay NTPC’s plans to expand generating capacity by 1,000MW at Kahalgaon. (Mint)

Reliance Power is evaluating plans to start manufacturing power generation equipment. (Mint)

The Delhi High Court said that any decision by the government to allocate GSM spectrum to Reliance Communications will be subject to its final order. (BL)

Hindustan Organic Chemicals is looking for a JV partner to expand its chemical manufacturing facility in Maharashtra. (BL)

Oil India to invest Rs45.75bn in exploration by end of 2009-10. (BL)

Soaring crude oil prices may compel IOC to sell Rs20bn oil bonds. (BL)

Indo Asian Fusegear to double switchgear capacity; expects revenues to rise by 40% in current fiscal. (BL)

GVK may commission Jegurupadu phase II and Gauthami power plants by middle of 2008. (BL)

Grasim Industries to foray into FMCG segment to operate in three categories; skin care, home care and baby care. (FE)

Reliance Retail enters into Rs1.4bn land deal in Bandra, Mumbai to set up its first Reliance Trends premium apparel store. (FE)

IOC proposes to revise its current exploration and production strategy (E&P) before bidding for E&P blocks under NELP VII. (FE)

ONGC shuts its unit near Mumbai leading to cut in gas supplies to power and Fertilizer plants. (FE)

RCF diversifies in to Rapid wall production. Intends to manufacture 1.4mn sq. mt of wall panels annually. (FE)

SBI raises the deposit rates by 25-175 basis points. (BS)

GDL to raise Rs3bn for rail freight subsidiary. (BS)

Govt has scrapped import duty and reduced customs duty on over 4,800 items to improve trade in South Asia. (ET)

The meeting of the GoM looking into the aviation policy remains inconclusive. (BL)

SEBI proposes listed companies to make only minimal incremental disclosure to issue debt instrument either public offer or private placement. (FE)

Government is mulling options, including a marginal increase in fuel prices to reduce under recoveries by PSU Oil firms. (FE)

TRAI recommends auction of mobile television spectrum and also proposes allowing up to 71% FDI in Mobile TV services.
Iron, Cement, Power units to get 92mt coal to ensure much needed long tern linkages. (BS)

Short Term Trading Calls

Buy Petronet LNG with stop loss of Rs 110 for a target of Rs 146.

Buy Power Grid Corporation with a stop loss of Rs 140 for short-term target of Rs 170.

Buy Neyveli Lignite with stop loss of Rs 240 for a target of Rs 325.

Morning Call - Jan 4 2008

Market Grape Wine :

In House :

Nifty at a supp of 6146 and 6095 with resis at 6217 and 6255.Can hold on to long position till NIFTY holds 6020

Intra Day: Buy Bajajhind above 293.60 with a TGT of 304 and a SL of 289

Buy DLF above 1101 with a TGT of 1130 and a SL of 1087

F&O: Buy Peninsulaland above 156 with a TGT of 168 and a SL of 151

Buy Relcap with SL



Out House :

Markets at a support of 20012 & 20134 levels with resistance at 20432 & 20591 levels .

Buy : RIL bullet

Buy : RNRL & REL

Buy : JpAsso & Jphydro bullet

Buy : Kotak Bank & YesBank

Buy : HdfcBank & IcicBnak

Buy : IBUllsreal & IBullsFin

Buy : EssarOil book profits at higher level

Buy : SBIN

Buy : Aban & RelCap

Dark Horse : RIL , JPAsso , REL , Jphydro , RNRL , IBullReal , BindalAgro & SBIN

NTPC

NTPC

Daily Technical Analysis- Jan 4 2008

Nifty — The index opened on a flat note and saw rangebound movement throughout the day’s trading. It ended the day with loss of 1 point.

Trading around 6185 — The index is trading around 6185 levels (high of 13 December 2007), a close above the 6185 level will see index exhibit further strength.Intra day index has support around 6126-6100 levels, intra day declines
should find support around these levels. On the upside resistance levels are 6230- 6270. Intra-day strength can be expected on index sustaining above 6185 levels.

Conclusion — Expect intra-day strength above 6185 levels.

Daily Trading Calls - Jan 4 2008

Nifty (6179) Sup 6097 Res 6229

Buy BPCL (542) SL 536 Tgt 553, 556

Buy Mah Seamless (626) SL 620 Tgt 638, 642

Buy Voltas (254) SL 250 Tgt 264, 266

Sell VSNL (718) SL 725 Tgt 704, 702

Sell Lupin (614) SL 620 Tgt 603, 601

Stream-line your portfolio

In the confrontation between the stream and the rock, the stream always wins, not through strength but by perseverance.

A number of otherwise rock solid stocks seem to be lackluster even as the market is touching new highs. So are the bulls running out of steam? For the day we expect the main indices to kick of the proceedings on a cautious note given the mixed global cues and uncertainty surrounding the US economy. But, things might just get better as the day wears on.

Keep an eye on what's happening in Asian and European markets for further direction. Side counters - many of them with dodgy background - may continue to dominate the large caps. Be highly alert at this stage, as this speculative buying binge cannot go on forever.

With Reliance Power IPO coming soon and market cap ‘war’ between the Ambani brothers is likely to intensify over the next few weeks. So, expect some heightened activities and possible news flow on the Reliance counters.

The Sensex was down 0.6% while the Nifty closed flat. Gains in Cairn, BPCL, Tata Power, Suzlon and RPL - which are not there in the Sensex - enabled the Nifty to avoid bigger losses. On the other hand, weakness in IT shares - owing to a weak dollar - hurt the Sensex. With the indices near all-time high levels, this kind of churning is only to be expected.

Auto, IT, Textiles and Cement sectors may lag behind due to sector-specific headwinds while Power, Oil & Gas, Infrastructure and Capital Goods shares will remain in the limelight.

Next week select auto stocks could gain as some announcements may be made at the Auto Expo. Select Banking, Pharma, Real Estate and Metal stocks could be looked at for investment purpose. This is for the medium to long term horizon.

NOCIL, which has been hitting upper circuits for the past several days, could see some softening. The company has clarified that NOCIL is not a part of Mukesh Ambani led Reliance Industries and NOCIL Petrochemicals is not a subsidiary of it. Therefore, the question of shareholders of NOCIL getting new shares of NOCIL Petrochemicals does not arise at all. The company further clarified that NOCIL does not own large tract of land in the Thane Belapur Industrial belt in Navi Mumbai as wrongly stated in a newspaper article, dated Dec. 24.

Vishal Retail's Board will meet on January 11, to consider and discuss raising of further capital through various available mechanisms in India. Adani Enterprise will consider fund-raising options in a Board meeting today. Ashapura Minechem will consider a preferential allotment. Dewan Housing Finance will mull fund-raising and enhancing FII investment limit.

Vishal Exports' Board has approved the proposal to demerge the 'Wind Farm Project' in Rajasthan and Tamilnadu, on a going concern basis, to Vishal Wind Project Ltd., Ahmedabad. Post the merger with Rain Calcining with itself, Rain Commodities has allotted 3,48,61,286 shares to the shareholders of Rain Calcining in the ratio of 2:7.

Alps Industries has set up a wholly owned subsidiary called Alps Energy to make investments in various energy projects. This will be the vehicle for the company’s investments in the energy sector. The company is currently negotiating with several parties for acquisition of allotted hydel power projects in Uttarakhand and Himachal Pradesh. In addition, the company is also making direct bids for projects yet to be allotted.

US shares closed virtually unchanged on Thursday as investors absorbed a positive report on factory orders, near record oil and gold prices and a stronger-than-expected reading on private sector employment ahead of Friday's government jobs report.

Retailers and carmakers declined on the back of the weak private job report and disappointing auto sales heightened concerns about consumer spending in the world's biggest economy.

Walgreen dropped after the largest US drugstore chain reported lower December sales than some analysts estimated. GM and Ford fell after sales slipped. Monster Worldwide, the largest provider of job listings, decreased after reporting a decline in its employment index for last month.

Market breadth was mixed. About two stocks fell for every one that rose on the New York Stock Exchange. On the Nasdaq, decliners topped advancers by over three to two on volume of 1.94 billion shares.

The S&P 500 was unchanged at 1,447.16. The Dow Jones Industrial Average added 13 points to 13,056.72. The Nasdaq Composite Index dropped 7 points or 0.3%, to 2,602.68.

Treasury prices rose, lowering the corresponding yields. The dollar fell versus the yen and euro. Oil prices briefly hit a record trading high above $100 a barrel before retreating. Gold prices closed at a new high.

Investors will also be reacting to the results from Thursday's Iowa caucuses, which kick off the 2008 presidential election. However, Wall Street's reaction is expected to be muted until the White House race intensifies further.

Stocks in Europe declined with cautious outlooks from British retailers Next and DSG International underscoring investor worries about economic growth amid record crude oil prices and continuing weakness in the housing sector. The pan-European Dow Jones Stoxx 600 index fell 0.3% to 358.94. The UK's FTSE 100 closed up 1% at 6,479.40, the German DAX 30 index shed 0.5% to 7,908.41 and the French CAC 40 index declined 0.1% to 5,546.08.

In the emerging markets, the Bovespa in Brazil was up 0.1% at 62,891 while the IPC index in Mexico rose 0.6% at 28,860. The ISE National-30 index in Turkey was down 2.4% at 67,546.

Asian markets were trading mixed this morning. The Nikkei in Tokyo was down 616 points at 14,691 and the Hang Seng in Hong Kong was up 256 points at 27,143. The Kospi in Seoul was down 12 points at 1840 and the Straits Times in Singapore added 7 points at 3403.

Bulls likely to bounce back

Weak global cues coupled with selling pressure in the index heavyweights dragged the benchmark Sensex lower in the opening trades. Though, bulls staged a come back led by the Oil & Gas majors, Power and PSU stocks, key indices were unable to hold on to their gains as further selling in even the Mid-Cap and the Small-Cap stocks and negative cues from the European markets dragged markets to end in red. Finally, 30-share Sensex closed at 20,345 slipping 120 points and Nifty ended flat at 6,178.

Asian Electronics gained 0.3% to Rs548 after the board of directors of the company approved raising Rs3bn. The scrip touched an intra-day high of Rs585 and a low of Rs541 and recorded volumes of over 1,00,000 shares on NSE.

Supreme Infrastructure slipped 0.5% to Rs181. The company announced that they secured Rs719.9mn order. The scrip touched an intra-day high of Rs194 and a low of Rs179 and has recorded volumes of over 2,00,000 shares on NSE.

ACC, India's biggest cement maker by capacity has slipped by 1.6% to Rs1005 after the company announced that its December sales declined 6% to 1.57mn tons from 1.67 million tons a year earlier. The scrip touched an intra-day high of Rs1028 and a low of Rs1001 and recorded volumes of over 1,00,000 shares on NSE.

Ambuja Cements was down 2% to Rs145. The company declared its sales rose 7% to 1.49mn tons from 1.39mn tons in the corresponding period a year earlier. The scrip touched an intra-day high of Rs148 and a low of Rs144 and recorded volumes of over 19,00,000 shares on NSE.

Jindal Steel gained 2% to Rs16,211 after the company announced that it secured Bolivia approval for TPA steel plant and would invest $2.1bn in mine, Steel plant. The scrip touched an intra-day high of Rs16,360 and a low of Rs15,660 and recorded volumes of over 1,00,000 shares on NSE.

Hero Honda raced ahead by 1.6% to Rs710. The company announced that sales in December fell 5% to 2,40,532 motorcycles and scooters compared with 2,52,462 units a year earlier. The scrip touched an intra-day high of Rs721 and a low of Rs688 and recorded volumes of over 7,00,000 shares on NSE.

MTNL was up 0.2% to Rs211 after reports stated that the company would get a nationwide license from the government to provide mobile services. The scrip touched an intra-day high of Rs217 and a low of Rs209 and recorded volumes of over 71,00,000 shares on NSE.

Burnpur Ltd., one of the large integrated private sector cement companies in the eastern region, started trading at Rs19 on the BSE against the issue price of Rs12. The scrip rallied by over 285% to close at Rs46. The scrip has touched an intra-day high of Rs49 and a low of Rs17 and recorded volumes of over 11,00,00,000 shares on BSE. The scrip topped second on the BSE turnover toppers’ list for the day.

The company came out with a Public Issue of 3,18,25,100 equity Shares of Rs10/- each. The price band was been fixed at Rs10 - 12 per share.

The company’s IPO was over subscribed by more than 15 times. The funds generated from the IPO would be used by the company for funding its expansion program. The company worked out Rs500crore expansion cum backward integration plan to be executed over a period of 2/3 years.

BGR Energy, supplier of systems and equipment for the power, oil & gas, refinery, petrochemical and process industries got listed at Rs801 on the BSE against the issue price of Rs480.

The scrip ended at Rs901 translating in to a premium of 87%. The scrip touched an intra-day high of Rs940 and a low of Rs801 and recorded volumes of over 43,00,000 shares on NSE.

The company entered the capital market with a public issue of 91.36 lakh shares of Rs10 each. It fixed the price band at Rs425 - 480 per share. The issue was subscribed 119.54 times.

What the FIIs are doing

FIIs were net sellers of Rs2.4bn (provisional) in the cash segment on Thursday while the local institutions pumped in Rs5.27bn.

In the F&O segment, foreign funds were net sellers of Rs9.08bn.

On Wednesday, FIIs were net sellers of Rs2.4bn in the cash segment.

Technicals Daily - Jan 4 2008

Technicals Daily - Jan 4 2008

Gremach Infra, Ganesh Housing

Gremach Infra, Ganesh Housing

Market Outlook - Jan 4 2008

Market Outlook - Jan 4 2008

Sasken Communications

We recommend a buy in Sasken Communication Technologies at current market price. From the weekly chart of Sasken Communication Technologies it is clearly evident that it had been on a long-term downtrend between June and November 2007 (from a high of Rs 584 to a low of Rs 250). However, the stock found support around Rs 250 in mid of November 2007, which is a historically key support level and began to trend up. During the course of this up-trend, the stock crossed over th We 21-day and 50-day moving average line and later penetrated a significant resistance level of Rs 305 during end of December 2007. We notice that volumes are rising for the past one week. The daily momentum indicator is featuring in the bullish zone and the weekly momentum indicator has recovered for the oversold region. The daily moving average convergence divergence is progressively rising in the positive region. The immediate support for the stock is at Rs 310 and the next support is at Rs 250 levels. The short-term investors can buy the stock with stop at Rs 310. We expect the stock rally up to the resistance level of Rs 395 in the short-term.

Via BL