Weak open...choppy day in store
Opportunity often comes in disguised in the form of misfortune, or temporary defeat.
We may see a weak opening thanks to the meltdown in China. The bulls may look at using this as an opportunity to still buy. The choppiness on account of F&O expiry tomorrow will also keep cause a see saw on the bourses. The Chinese government has tripled the stamp duty on securities transactions. The Shanghai Composite index is down 4%. Other Asian markets are also down with the Hang Seng down over 200 points.
US stocks resumed trading after an extended weekend with the main indices clocking modest gains. Oil has cooled off a little is now under $64 per barrel. With the derivative settlement tomorrow, and no major concerns, the bulls may try to retain their edge over the bears. As usual, there will be a lot of stock specific action. One stock that could take a hit would be real estate firm Orbit Corp amid reports of some accounting mismanagement. On the other hand, Ranbaxy might gain after having won a legal battle against Pfizer in Norway.
MIC Electronics, Insecticides India and McDowell Holdings will make their debut on the bourses today.
The inflow of money has been persistent of late, both overseas as well as local institutions. The undertone has improved over the past few weeks on the back of strong corporate earnings, lower inflation and firm global markets. There have been some worries over the state of the economies in the US, China and Japan, but even those have not dented the confidence of the local bulls. The liquidity factor has improved over the past couple of months. As a result, the key indices have rebounded from the lows struck in the Feb-March crash.
Even the small-cap and mid-cap shares have started rising in the last several days. Traded volume and market breadth have been better, though it could be due to the squaring of positions ahead of Thursday's F&O expiry. The fact that big-ticket issues like DLF and ICICI Bank are hitting the market in the next few weeks has also given a fillip to the investor sentiment. A big worry at this moment is the unprecedented appreciation in the rupee versus the dollar and its fallout on export-oriented sectors like IT.
US stocks rose on Tuesday at the end of a tumultuous session influenced by more M&A news, falling oil prices, a strong consumer confidence report and news that China was looking to cool its booming stock market.
The S&P 500 rose 2.38, or 0.2%, to 1518.11. The index set a record close of 1527.46 in March 2000. The Dow Jones Industrial Average added 14.06, or 0.1%, to 13,521.34. The Nasdaq Composite Index climbed 14.87, or 0.6%, to 2572.06. US markets were closed yesterday for the Memorial Day holiday.
Real estate shares surged on the $13.5bn takeover of Archstone-Smith Trust. Avaya, the world's biggest maker of corporate telephone equipment, climbed the most in almost two years on a report it may be acquired.
US light crude oil for July delivery slumped $2.05 to settle at $63.15 a barrel on the New York Mercantile Exchange, sliding as supply concerns waned. COMEX gold rose $2 to settle at $663.40 an ounce. Treasury prices slipped, raising the yield on the 10-year note to 4.88% from 4.86% on Friday. In currency trading, the dollar was little changed versus the euro and the yen.
Chinese stocks have plunged this morning from a record after the government tripled the stamp duty on securities transactions, a move seen as an attempt to slow the booming stock market. The CSI 300 Index fell 110.61, or 2.7%, to 4057.68 as of 10:30 a.m. in Shanghai, after initially tumbling as much as 6.3%. The measure has almost doubled this year, the best performance of 90 global benchmarks.
Markets registered strong closing towards the end. Subdued Asian markets compelled the key indices to open on a flat note, however buying interest in the frontline stocks like BHEL, R Com, Reliance Industries, Tata Motors and L&T lifted the markets as the day moved along. Finally, the 30-share Sensex ended higher by 110 points to close at 14508. NSE-50 Nifty gained 36 points to close at 4293. Nocil, GE Shipping, Ashapura Minechem, Nirma and PFC were the star performers of the day.
Satyam Computer gained by 1% to Rs474 after the company forms strategic partnership in Asia Pacific with Oracle. The scrip touched intra-day high of Rs475 and a low of Rs452 and recorded volumes of over 22,00,000 shares on NSE.
Bajaj Electrical rallied by over 10% to Rs588 after the company recommended bonus issue in ratio of 1:1. The scrip touched intra-day high of Rs625 and a low of Rs545 and recorded volumes of over 1,00,000 shares on BSE.
3i Infotech gained by 1% to Rs310 after the company announced that they would acquire 50.5% stake in AOK IN-House BPO Service. The scrip touched intra-day high of Rs314 and a low of Rs301 and recorded volumes of over 12,00,000 shares on NSE.
Tata Steel edged higher by 0.7% to Rs630, after the company declared that they would build 4.5mn Ton Factory in Vietnam. The scrip touched intra-day high of Rs633 and a low of Rs621 and recorded volumes of over 16,00,000 shares on NSE.
Bharti Airtel dropped sharply on report of Vodafone stake sale however the stocks recovered gaining 1% to Rs836. The scrip has touched intra-day high of Rs846 and a low of Rs805 and has recorded volumes of over 14,00,000 shares on NSE.
Capital Good stocks ended with smart gains. BHEL advanced by 4.5% to Rs2857; L&T gained by 4% to Rs1856, Punj Lloyd surged by over 2.8% to Rs196 and ABB gained 2.8% to Rs4580.
The Pharma stocks look to be in pink of health. Lupin surged by over 2.5% to Rs720, Ranbaxy was up by 2.1% to Rs391, Sun Pharma advanced 3.5% to Rs1106 and Cipla spurred 4.8% to Rs218.
Auto stocks also recorded smart gains. Tata Motors gained by 1.1% to Rs740, Hero Honda advanced 1% to Rs688 and Ashok Leyland added 0.4% to Rs37.
Sectoral Movement:
BSE Capital Good index was the major gainer and gained 2.81%. BSE Pharma index (up 1.70%), BSE Consumer Durable index (up 1.59%), BSE Oil & Gas index (up 1.17%) were among the other major gainers. However BSE FMCG index lost 0.22%.
Volume Toppers:
RNRL, IFCI, Nagarjuna Fertilizers, RPL, Orbit Corp, TTML, Unitech, Dish TV, Petronet LNG, R COM, PFC, Idea, SAIL, Binani Cement, ITC, Hotel Leela, Cipla, JP Hydro and Redington India.
Upper Circuit:
Hindustan Oil, Zensar Technology, Shree Ashtavinyak, Ashapura Minechem, Redington India, Godrej Industries, Eicher Motors, UTV Software, RIIL, Karuturi Network, Hindustan Dorr, Gemini Communication, Shree Precoated and UTV Software.
Delivery Delight:
ABB, BEL, Bombay Dyeing, CEAT, Crompton Greaves, Gujarat Alkalies, HLL, Jain Irrigation, Lupin, M&M, ONGC and Wipro
Abnormal Delivery:
Bajaj Auto, Titan Industries, HCL Technologies, CEAT, Nicholas Piramal, Jindal Steel & Power Ltd, Associated Cement Co, Hindalco, ICICI Bank and Tata Chemicals.
Results Today:
Crompton Greaves, Engineers India, Hindustan Motors, Lloyd Steel, Kamat Hotels, NTPC, Rain Calcining, Tata Chemicals, Tata Power, Ucal Fuel and Welspun India.
Results Corner:
L&T Full year profit at Rs14.03bn (up 38%), Full year net sales at Rs175.79bn (up 19.1%) and to pay Rs2 as final dividend
HPCL Q4 net down (72%) at Rs5.5bn, total income (net of excise) at Rs220.46bn (up 5.2%) and a recommends a final dividend of 120%
Thermax Q4 net profit at Rs697.3mn, revenue at Rs8.32bn (up 73%)
Brokers Recommendation:
IOC – Outperformer from Man Financial with target of Rs550
Long Term investment:
R Com
Major News Headlines:
Govt may consider removing levies for exporters
Easun Reyrolle's Board to meet on May 30 to consider results, stock split
Tata Steel to build 4.5mn Ton Factory in Vietnam
Donear Industries to meet on 4th June to consider GDR/ADR issue
3i Infotech acquires stake in three local BPO firms
Tantia Constructions gets orders worth Rs1.78bn
Satyam & Oracle forms strategic partnership in Asia Pacific
Vodafone to sell Bharti stake by March for $1.6bn: reports
Bajaj Electrical recommends 1:1 bonus
Ansal Properties signs MOU with India Realty and Noor Capital of UAE
PTC signs MoU with Infrastructure Finance Company Ltd. (IIFC)
Aurobindo Pharma gets US FDA approval for Cefprozil Tablets
Sanghvi movers to split each share in to five
Indraprastha Gas Ltd (Q4 FY07) - Investment Update
Indraprastha Gas Ltd reported a stellar performance in Q4 FY07 on back of stronger than expected volume growth in the CNG segment. The PNG segment too witnessed robust growth on increased domestic connections. Going ahead with expansion into new territories such as Greater Noida, Ghaziabad, Sonepat and Panipat, the volumes of both CNG and PNG could spur up. We are revising our estimates to build in higher growth expectations of CNG volumes, lower growth expectations of PNG volumes and better efficiency in operations leading to better operating margins. We maintain our BUY rating with a target price of Rs154, based on 12x P/E multiple on FY09 estimated earnings of Rs12.8, yielding an upside of 26.1%.