Speed breakers ahead...don't be ignorant
Ignorant men don't know what good they hold in their hands until they've flung it away.
After enjoying a 'Marvelous Monday' the bulls could face a few speed-breakers today as global cues are not that encouraging. The ongoing consolidation will continue with intra-day gyrations and stock specific movement due to the paucity of immediate triggers. The rupee continues to pose major challenges for exporters, especially for IT companies. FII inflows have turned volatile. One positive thing for the market could be stability in interest rates and a gradual drop in headline inflation. Also, the monsoon is likely to hit Kerala a week earlier on May 24, though its progress and spatial distribution remains a mystery as always. Global equity markets are also more or less on firm footing. Still, concerns remain over the US, Chinese and Japanese economies besides the global imbalances. We expect a cautious to lower opening and a choppy day ahead.
Thermax will be under pressure amid reports that US-based Purolite has filed a corporate espionage suit against the Pune-based engineering company. But remember this case has been on for some time. Dabur India is also likely to face some resistance as a financial daily reports that its proposed acquisition of Singapore-based Unza has hit a roadblock. The political drama unfolding in Tamil Nadu will continue to weigh on Sun TV. Pyramid Saimira Theatre might gain amid reports that a London-based media and entertainment group will invest Rs1bn in the digital theatre company's asset management arm. HDFC and Sparsh BPO could be in action as reports say the home finance major is all set to make an exit from Intelenet Global Services, the BPO firm it founded with TCS. Intelenet owns 51% stake in Sparsh. Keep an eye on Suzlon as it has announced its results.
FIIs were net sellers of Rs853.2mn (provisional) in the cash segment yesterday while the domestic institutional investors were net buyers at Rs17.9mn. In the F&O segment, foreign funds pumped in Rs7.92bn. FIIs were net sellers to the tune of Rs3.36bn in the cash segment on Friday. Mutual Funds were net buyers at Rs752mn on the same day.
On Wall Street, technology and financial stocks slumped on Monday, dragging down the Nasdaq Composite index and limiting gains for the Dow Jones Industrial Average. The S&P 500 lost 2.7 points, or 0.2%, to 1503.15. The Nasdaq slipped 15.78 points, or 0.6%, to 2546.44. The Dow rose 20.56 points, or 0.2%, to 13,346.78.
The undertone was less upbeat, as investors welcomed the majority stake sale in Chrysler to a private equity firm, but were reluctant ahead of a slew of economic reports. Tuesday's CPI data and its inflation-tracking component will kick off a busy week that includes reports on manufacturing, housing and consumer sentiment.
Also, investors decided to take it a bit easy after the recent rally, which had sent the Dow to an all-time high and lifted the S&P 500 and Nasdaq to more than six-year highs.
US light crude oil for June delivery rose 9 cents to settle at $62.46 per barrel on the New York Mercantile Exchange. The front-month contract was quoting 18 cents higher at $62.64 a barrel.
COMEX gold for June delivery fell $2.20 to settle at $670.10 an ounce. Treasury prices slipped, lifting the yield on the 10-year note to 4.69% from 4.67% late on Friday. In currency trading, the dollar slipped against the euro and rose against the yen.
European shares ended lower. The pan-European Dow Jones Stoxx 600 index declined 0.2% to 388.96. The German DAX Xetra 30 fell 0.3% to 7,459.61, the French CAC-40 lost 0.4% at 6,026.42 and the UK's FTSE 100 slipped 0.2% to 6,555.50.
Major Latin American markets also ended down. Mexico's IPC slumped 292 points, or 1%, to 29,766.33, edging back from its record of 30,058.75 set on May 11. In Brazil, the Bovespa tumbled 392 points, or 0.8%, to 50,510.76.
Asian markets were trading mixed this morning. The Nikkei in Tokyo was down 121 points while the Hang Seng in Hong Kong advanced 54 points to 21,033. The Kospi in Seoul added 3 points to 1609 and the Straits Times in Singapore shed 10 points to 3490.
Profit booking likely
It was bulls’ day out as strong global cues boosted the domestic markets to end on a firm note. Further Met department announced that the monsoon rains would arrive at Kerala on 24th May lifting the sentiments of the investors on D-Street. Markets witnessed all round buying across the sectors with Banking index leading from the front, others like Metal, Oil & Gas and Capital Good indexes followed suit. Finally, the 30-share benchmark Sensex 169 points to close at 13965. NSE Nifty was up 57 points to close at 41354.
The Dow Jones had a triple-digit gain on Friday, The Dow climbed 111.09 points or 0.8% to 13,326.22
Asian markets rose for the first time in three days this morning following a tepid reading on wholesale inflation. The Nikkei in Tokyo was up 124 points at 17,678 while the Hang Seng in Hong Kong shot up by 511 points to 20,979.
SBI, Glaxo and Tata Steel were the major gainers, however Dr Reddy’s Lab, Dabur and Britannia were the major losers among the 50-scriop’s of NSE Nifty.
Shah Alloys surged by over 5.5% to Rs88 after the company announced its plans to enter Automobiles Manufacturing. The scrip touched intra- day high of Rs89 and a low of Rs85 and recorded volumes of over 23,000 shares on NSE.
TV18 gained by 1% to Rs721 after the company announced that they have entered in accord with Infosys BPO. The scrip touched intra- day high of Rs745 and a low of Rs721 and recorded volumes of over 20,000 shares on NSE.
ITD Cementation surged by over 2.5% to Rs525 after the Board of Directors of the company announced that it would consider rights issue of equity shares on 21st May. The scrip touched intra- day high of Rs540 and a low of Rs482 and recorded volumes of over 8,000 shares on NSE.
Cadila edged higher by 0.5% to Rs323 after the company purchased out Joint Venture stake in Sarabhai Zydus Animal Health. The scrip touched intra- day high of Rs327 and a low of Rs322 and recorded volumes of over 16,000 shares on NSE.
EKC rallied by over 7% to Rs1170 after the company announced that they would consider stock split and plans to raise funds on 21st May. The scrip touched intra- day high of Rs1180 and a low of Rs1107 and recorded volumes of over 4,00,000 shares on NSE.
IVRCL Infrastructure surged by over 2% to Rs314 after the company secured Rs3.83bn order. The scrip touched intra- day high of Rs318 and a low of Rs312 and recorded volumes of over 12,00,000 shares on NSE.
Banking stocks ended with smart gains. Index heavy weight ICICI Bank was up by 2.6% to Rs870 and HDFC Bank edged higher 0.4% to Rs995. Canara Bank, Union Bank and OBC were the major gainers among the Mid-Cap stocks.
FMCG stocks witnessed buying interest. Frontline stock HLL gained by over 3.5% to Rs192, Tata Tea was up by 2% to Rs796, Marico advanced by 1.7% to Rs58 and Colgate added 0.5% to Rs370.
Capital Good stocks also were on the move. Praj Industries surged over 6% to Rs498, L&T was flat at Rs1687, Gammon advanced by 3.8% to Rs346 and BHEL advanced 0.5% to Rs2451.
Pharma stocks had a fair session. Matrix Labs rose over 11.5% to Rs224 on optimism it will receive more orders from its biggest shareholder, Mylan Labs agreed to buy Merck KGaA's generic-drug unit in Europe, Aurobindo Pharma was up by over 4.5% to Rs722, Glaxo advanced 4% to Rs1242 and Apollo Hospital added 2.5% to Rs491.
Insider Trades:
Network 18 Fincap Limited: Reliance Capital Limited has purchased from open market 2555003 equity shares of Network 18 Fincap Limited on 10th May, 2007
Indus Fila Limited: Reliance Long Term Equity Fund - Scheme of Reliance Mutual Fund has sold in open market 184375 equity shares of Indus Fila Limited on 7th May, 2007
Indo Rama Synthetics (India) Limited: HDFC Mutual Fund:- i) HDFC Equity Fund, ii) HDFC Growth Fund, iii) HDFC Prudence Fund has purchased from open market 185000 equity shares of Indo Rama Synthetics (India) Limited on 10th May, 2007.
BSE Bank index was the major gainer and gained 2.45%. BSE Oil & Gas index (up 2.31%), BSE PSU index (up 2.16%), BSE Metal index (up 1.95%) and Capital Good index (up 1.12%) were among the other major gainers. However, BSE Auto index lost 0.04%.
Volume Toppers:
Nagarjuna Fertilizer, RNRL, RPL, IFCI, TTML, Balrampur Chini, DCB, Hotel Leela, Dena Bank, IB Real Estate, SAIL, R Com, Dish TV, Idea, Hindalco, PFC, Tata Steel and MTNL
Upper Circuit:
LOK Housing, K Sera Sera, Goldstone Technology, Tele Data Informatics, Garnet Construction, Tera Software, DCHL, Mercator Lines, Sparsh BPO and Thomas Cook
Delivery Delight:
ABB, APIL, ACC, Aurobindo Pharma, BILT, Balrampur Chini, Bank of India, BEML, BPCL, CEAT, Chambal Fertilisers, Cipla, GAIL, Grasim, HDFC Bank, Hindalco Industries, HDFC, India Cements, IOC, IDBI, LIC Housing Finance, Punjab National Bank, Reliance Capital and SBI.
Abnormal Delivery:
Titan Industries, India Cements, GAIL, Federal Bank, UTI Bank, Bombay Dyeing, Tata Tea, I-Flex Solutions, SCI, CEAT and SAIL.
Stock Futures with largest increases in OI:
Bongaigaon Refinery, Dr Reddy's Laboratories, Patni Computer, Indian Oil Corp, Indian Bank, Nagarjuna Fertilizers, RPL, Dabur India, Corp Bank and Cummins India.
Stock Futures with Decreases increases in OI:
Chennai Petroleum Corp, Cipla, Nagarjuna Construction, Triveni Engg, GAIL India, Crompton Greaves, HLL, Maruti, Bajaj Hindusthan and Zee Telefilms.
Results Today:
Havells India, Su-Raj Diamonds, Sun Pharma, TTML and VSNL.
Results Corner:
LIC Housing Finance Q4 profit at Rs891.4mn (up 115%), revenue at Rs4.54bn (up 28%).
Brokers Recommendation:
SBI – Buy from Merrill Lynch with target of Rs1400.
Long Term investment:
Patel Engineering.
Major News Headlines:
Shah Alloys plans to enter automobiles manufacturing
TV18 ties up with Infosys BPO
ITD Cementation Board to consider rights issue on 21st May
IVRCL gets Rs3.83bn order
Cadila buys out JV stake in Sarabhai Zydus Animal Health
Reliance Capital acquires 5% stake in Network 18
Punj Lloyd gets contract from GAIL worth Rs1.22bn
Sterlite plans to raise as much as $2bn in the US to fund new power plant
Man Industries to list FCCBs on Singapore Exchange