The supreme function of reason is to show that some things are beyond reason.
The rise so far may be beyond reason. And if the markets have to consolidate, (we’ve been expecting it for some time now) there is no need to pinpoint reasons. But thoughts that come in when weakness is likely to set in include quarterly results, political uncertainty and stretched valuations. How the bulls will react in the event of mid-term polls only time will tell. Given the strong fundamentals of the Indian economy and solid growth momentum for corporate earnings, the market should be fine after a temporary blip.
The sharp spurt off late has taken the main indices to all-time highs practically everyday for the last couple of days. Lock in some gains at every rise in counters which have run too fast. Stay invested in quality stocks, irrespective of the market cap, as the medium to long-term outlook is still positive. Get out of weak stocks or the ones that haven't lived up to your expectations.
Today, we expect a positive start and a choppy day of trade. Global markets had a pretty good outing on Tuesday, especially in Asia. The Dow Jones, meanwhile has crossed the 14k mark. Expect some buying to come into pharma counters in the coming days. Cipla, Ranbaxy, Divi’s Lab are showing positive signals.
US stocks ended mixed on Tuesday after a volatile session. Disappointing news on auto sales and the housing sector prompted investors to take a breather after the previous day's rally, when the Dow Jones Industrial Average closed at an all-time high of 14,087.55.
Financial shares climbed to the highest since July after Commerce Bancorp agreed to be bought by Canada's Toronto-Dominion Bank and Citigroup said it will purchase the rest of Japanese brokerage Nikko Cordial.
Homebuilders had their biggest two-day gain since August amid growing optimism that the contagion from the subprime-mortgage losses is waning.
Seven stocks advanced for every five that declined on the New York Stock Exchange.
The Dow lost 40 points, or 0.3%, to 14,047.31. The S&P 500 finished little changed at 1,546.63, and the Nasdaq Composite Index rose by 6 points, or 0.2%, to 2,747.11.
US stocks moved lower after the National Association of Realtors reported a bigger-than-expected decline in the August pending home sales, which slipped to its lowest level on record.
The report failed to boost the broader stock market, which has been betting that weak economic data would force the Federal Reserve to continue cutting interest rates. However, more rate cuts this year may not be in the cards.
Treasury prices gained, lowering the yield on the 10-year note to 4.53% from 4.55% late on Monday. In currency trading, the dollar rebounded against the euro and gained versus the yen, which helped send commodity prices lower.
Oil prices recovered slightly from an early selloff but remained lower. Crude prices fell 19 cents to settle at $80.05 a barrel on the New York Mercantile Exchange. COMEX gold for December delivery fell sharply after last week's run-up, falling $17.80 to settle at $736.30 an ounce.
European shares advanced. The pan-European Dow Jones Stoxx 600 index increased 0.5% to 382.70, with banks leading the advancers, followed by gains in the construction sector. The French CAC-40 advanced 0.5% to 5,799.27 and the German DAX 30 rose by 0.3% to 7,946.79. The UK's FTSE 100 closed down 0.1% at 6,500.40.
In the emerging markets, the Bovespa in Brazil was down 0.5% at 62,017 while the IPC index in Mexico gained nearly 2% to 31,451. The RTS index in Russia surged by 3% to 2108 and the ISE National-30 index in Turkey added 1.1% to 69,522.
Asian stocks were trading mostly higher this morning. The Nikkei in Tokyo was up 8 points at 17,055 and the Hang Seng in Hong Kong shot up by 273 points to 28,472. The Straits Times in Singapore advanced 45 points to 3838.
The Morgan Stanley Capital International Asia-Pacific Index added 0.6% to 167.16 as of 10:54 a.m. in Tokyo, after a four-day, 4.8% rally that lifted the benchmark to a record. Financial stocks contributed the most to today's gains.
Benchmarks climbed elsewhere in Asia, except for New Zealand. Markets in South Korea and China are shut for holidays today.
In a volatile trading session markets managed to make a comeback ending in positive territory. Key indices extended their longest winning streak in more than a year led by the Oil & Gas and Pharma stocks. Vital support was yet again provided by the Reliance pack of stocks led by REL, R Com, RNRL and RPL. However, IT, Auto and Banking stocks were offloaded. Finally, BSE 30-share benchmark Sensex ended 37 points higher to close at 17,328. NSE Nifty added 47 points to close at 5,068.
M&M advanced 1% to Rs759 after the company announced their September sales figure which was at 19,871 units (up 8.7%). The scrip touched an intra-day high of Rs777 and a low of Rs755 and recorded volumes of over 9,00,000 shares on NSE.
Hero Honda dropped 2% to Rs732. The Company’s September sales rose 4.6% to 314,000 units. The scrip touched an intra-day high of Rs762 and a low of Rs727 and recorded volumes of over 2,00,000 shares on NSE.
TVS Motors advanced 1% to Rs70 on October sales outlook. The company announced that sales would rise 20% from September. The scrip touched an intra-day high of Rs73 and a low of Rs70 and recorded volumes of over 13,00,000 shares on NSE.
Biocon surged by over 3.5% to Rs489 after the company announced that they have completed sale of Enzymes unit to Novozymes. The scrip touched an intra-day high of Rs502 and a low of Rs471 and recorded volumes of over 5,00,000 shares on NSE.
Alphageo India was frozen at 5% upper circuit to Rs512.7. The Board of Directors of the company has approved selling warrants to founders. The scrip touched an intra-day high of Rs512.7 and a low of Rs470 and recorded volumes of over 10,000 shares on BSE.
Omaxe advanced by 0.4% to Rs334 after the company announced that its unit would apply for Unified access service for 22 circles. The scrip touched an intra-day high of Rs341 and a low of Rs331 and recorded volumes of over 1,00,000 shares on NSE.
PSU stocks recorded smart gains. NTPC rose by over 6.5% to Rs206, Union Bank was up by over 6% to Rs173 and Chennai Petroleum added 3% to Rs287.
Pharma stocks were in momentum led by gains in heavyweight, Ranbay advanced by 1.5% to Rs440 and Dr Reddy’s Lab added 1.5% to Rs659, Biocon was up by 3.5% to Rs489, Lupin gained 1.5% to Rs596.
Banking stocks were under pressure. ICICI Bank slipped by 0.5% to Rs1057, SBI was down by 2.6% to Rs1894 and HDFC Bank declined 1.7% to Rs1411. Syndicate Bank, Andhra Bank and PNB were the major losers among the Mid-Cap stocks.
Refinery stocks were in the limelight after the Indian Refiners announced that they have raised Jet fuel prices by 4.2% for October. HPCL advanced by 3.4% to Rs275, BPCL surged 5.6% to Rs377 and IOC added 4.6% to Rs492.
Stocks in News:
Reliance Retail plans to enter insurance, travel and NBFC businesses.
TCS to use Germany as its base to become the top ten IT companies in Europe.
GSPC to invite final bids for 20-30% stake dilution in its KG basin offshore gas find.
Tata Steel plans to raise prices of some of its products due to rising demand.
Jain Irrigation will invest nearly Rs500mn to set up pipes and drip irrigation manufacturing facility in Tamil Nadu.
Singapore has agreed to allow SBI and ICICI Bank to launch full banking operations under the CECA with India.
The Tatas may sell their stake in tea plantation business and are in talks with overseas investors.
VSNL plans Rs10bn spend for WiMax out of its total capex budget of Rs25bn.
Tata Tea rejected Cadbury’s offer to acquire its global beverages business.
Indo Asian Fusegear is in talks with SEBs, corporations and utilities in North India to for taking up power distribution network on franchise basis.
IFC plans to invest in Karnataka Bank to support network expansion and asset growth.
ICICI Bank to raise US$11bn in the next 12 months to fund its expansion abroad and credit growth in India.
Bajaj Auto management will meet with the company Union to resolve ongoing dispute between workers and the management.
DLF plans to extend its retail footprint to tier II and tier III cities, indicates an investment of Rs25bn.
DLF plans to develop an integrated township spread over 9,178 acres on the outskirts of Bangalore at an investment of Rs600bn.
L&T has floated a new arm L&T Power Projects to foray into the power generation business.
BSNL has announced plans to offer CDMA mobile services in class-A cities, beginning with Kolkata.
BHEL will have to shell out additional Rs4bn for acquiring the ailing Bharat Heavy Plates and Vessels.
Two foreign shipping companies, Zim, Israel and Mediterranean Shipping Co, Geneva have indicated to pick up stake in ABG Heavy Industries.
The Government is in advanced stage of finalizing standard bid documents for inviting PPP in the transmission sector through tariff based competitive bidding.
Average room rates of star hotels may rise by 15-20% during the coming festive season.
The Government to invest Rs100bn in five new deep sea ports during the 11th Five year plan.
Cement manufacturers hike prices in North India by 2% wef October 1.
IMF projects 8% mid-term growth for India.
Entry level bike sales have been slowing on falling rural demand.
The railways is likely to extend its 30% discount for construction, cement and steel companies on empty flow direction for freight carriage till December.
Fund Activity:
FIIs were net buyers of Rs17.22bn (provisional) in the cash segment on Monday and the local institutions pulled out Rs9.3bn. In the F&O segment, foreign funds were net sellers of Rs12.99bn.
On Friday, FIIs were net buyers to the tune of Rs34.93bn in the cash segment. This figure includes a slew of big bulk deals. With this, the net investment by overseas investors in the past eight days has risen to US$3.6bn.
Major Bulk Deals:
h.
Upper Circuit:
Binani Industries, RIIL, Tourism Finance, Bag Film, Raj Tele, Karutari Network, Swan Mills, Ruby Mills, DS Kulkarni, Jai Corp and Marksans.
Lower Circuit:
IID Forgings and Bombay Burmah.