Market may see stock-specific activity

Select side counter surged on Tuesday (10 April) even as Sensex ended little changed on that day. If this is any indication, stock specific activity has started based on Q4 results expectations.

Overall Q4 results are expected to be strong. More important that Q4 results is what the company managements say about the outlook for the current financial year (FY 2008). Citigroup expects overall corporate earnings growth to moderate to 15-16 percent in the current and next year, while FY 2007 (year ended 31 March 2007) could be the fifth straight year of 25-30 percent earnings growth.

IT bellwether Infosys kickstarts the earnings season on Friday 13 April. The rupee’s sharp surge in late-March 2007 - early April 2007 against the US dollar and mixed reports from the US economy, have raised concerns that the FY 2008 guidance by Infosys may turn out conservative. Infosys unveils full year guidance at the beginning of the financial year along with Q4 March results.

Firm global markets and FII inflow may keep domestic bourses firm in the near term. Asian stocks edged higher on Wednesday (11 April), with Seoul hitting a record high for the sixth straight session, but Tokyo's Nikkei lagged gainers after weak Japanese manufacturing data cast doubt on capital spending. Nikkei was up 0.08%. The data reinforced expectations that the Bank of Japan will not be in a hurry to raise rates.

Other Asian stock markets were encouraged by gains on Wall Street. Key benchmark indices in Hong Kong, China, South Korea and Singapore were up by between 0.06% to 1.1%.

US stocks edged higher on Tuesday (10 April) as a rebound in oil prices lifted energy shares and Citigroup gained on expectations of big job cuts. The Dow Jones industrial average rose 4.71 points, or 0.04 percent, to end at 12,573.85. The Standard & Poor's 500 Index gained 3.78 points, or 0.26 percent, to 1,448.39. The Nasdaq Composite Index advanced 8.43 points, or 0.34 percent, to 2,477.61.

FIIs have resumed buying ahead of the corporate earnings season. They were net buyers to the tune of Rs 569.40 crore on Monday (9 April), the day when Sensex had surged 322 points on firm global bourses. They were net buyers to the tune of Rs 567.50 crore on 5 April. As per provisional data, FIIs were net buyers to the tune of Rs 350 crore on Tuesday 10 April, the day when Sensex had gained 12 points.

FIIs were net buyers to the tune of Rs 114 crore in index-based futures on Tuesday. They were net buyers to the tune of Rs 60 crore in individual stock futures on that day.

Oil prices steadied on Wednesday after gains on Tuesday as investors turned attention to Iran's nuclear activities and dwindling gasoline stocks in the United States, the top consumer. US crude for May delivery was down 2 cents at $61.87 a barrel.

US Market closes higher for straight eighth session

Dow's 8 day winning streak could have been snapped if not for 1.6% and 1% rise in Exxon Mobil and Citigroup shares

US Market posted its first eight-straight day gains in current year on Tuesday. While Dow was up for the 8th consecutive day, S&P 500 was up for the 6th consecutive day. Dow recorded its longest winning streak since March 2003. With a lack of corporate news and scheduled economic data, a sense of caution prevailed among investors that typically precede the start of earnings season. But market gains were modest at the day’s close. But Dow's streak would have been snapped if not for 1.6% and 1% rise in Exxon Mobil and Citigroup shares respectively.

Among the nine sectors finishing in positive territory, Energy was the only one posting a respectable gain though its 1.4% advance was mainly due to a rebound in oil prices.

17 out of 30 stocks closed higher on Tuesday. For the day (10 April, Tuesday) the Dow Jones Industrial Average closed higher by 4.71 points at 12573.85, Nasdaq higher by 8.43 points at 2477.61 and S&P 500 higher by 3.78 points at 1448.39. Exxon Mobil, Citigroup, Intel and Boeing were the main Dow winners while H-P, United Technologies, Wal-Mart and Du-Pont were the main Dow losers.

With this continuous 8 days of winning streak, Dow is up by 0.9% for 2007. Nasdaq is up by 2.6% and S&P 500 is up by 2.1%.

Among blue chips, Alcoa rose 0.09% before its results after the close. Alcoa was the best performing Dow component during the first quarter. Alcoa is up more than 16% so far in 2007 and tops among the 30 Dow stocks. Citigroup rose 1.6% ahead of a presentation tomorrow on job cuts. The New York Times reported that the bank will cut or reassign 26,000 positions.

Warning from Seagate Technologies leaves investors questioning Tech sector’s growth prospects

When market opened in the morning, stocks opened with little fanfare. Of the six sectors trading higher, Energy was the only one posting a respectable gain; but its modest 0.5% advance was also at the expense of rising oil prices. Absence of leadership from the influential Tech sector minimized market gains.

But within an hour of trading, market improved its stance and the same came from a turnaround in Technology. It was fueled primarily by several analyst upgrades (Oracle).

However, Seagate Technology warning that Q3 revenue will miss forecasts left investors questioning the Tech sector’s growth prospects. Tech is expected to be one of the S&P 500's biggest earnings drivers this year. A 37% drop in Q2 net sales orders at D.R. Horton also imparted some sort of nervousness among investors. Seagate Tech shares fell 6.2% to $22.

After witnessing their biggest slide in 3 months yesterday, crude futures gained marginally today. Crude-oil futures for light sweet crude for May delivery closed at $61.89/barrel (higher by $0.38/barrel or 0.62%) on the New York Mercantile Exchange. Crude prices were mainly pulled up higher today by gasoline prices, on speculation that the weekly government report tomorrow will show U.S. gasoline stockpiles declined for a ninth week. A surge in natural-gas futures, which followed comments from the U.S. Department of Energy that demand would remain strong through the summer, also boosted energy prices.

In the broad market for equities, there were 1.331 billion shares exchanging hands on the New York Stock Exchange and 1.867 billion trading on the Nasdaq stock market. Advancing issues outpaced decliners by 5 to 3 on the NYSE and by 16 to 13 on the Nasdaq.

After the close, Alcoa came out with its earnings report beating Wall Street estimates with a 9% earnings gain. The company earned 79 cents a share after excluding restructuring charges as against Wall Street’s expectations of 77 cents a share. Revenue was up 11% to $7.9 billion. Earnings were driven by higher metal prices and sales in the aerospace, building and construction and industrial product markets.