Confidence comes not from always being right but from not fearing to be wrong.
We had said farewell to highs around a week back and markets have only added over a thousand points. Yesterday's highly volatile trade has taken most market participants by surprise. Weak hearted souls may have even skipped a beat as the bulls did an intra-day bungee jump. When penny stocks look set to gain attention don’t expect them to turn to pounds. In fact they could get pounded along with select mid-caps in the coming days. And don’t be surprised if we seek a Black Monday next week.
Quarterly results, RBI's mid-term review, this month's Fed meeting, the political battles between the Congress and the Left and of course liquidity are the events to watch out for.
We expect another choppy day. The key indices could fall on the back of weakness across global markets, led by Wall Street. Though the Sensex could cross 18,000 shortly, one should wait for the results before making fresh large commitments. Retail investors should be particularly careful, as volatility is likely to be quite high. For the near term, use any rally to lighten your positions, and every dip to add small quantity of sound stocks. Avoid aggressive purchases unless there is a sharp fall.
PS. The overoptimistic bulls have a word of advice for the bears. Those who missed the rally from the Sensex levels of 5200, don’t worry, the Nifty is around there.
US stocks fell the most in a week, led by technology companies, after Morgan Stanley told investors to sell shares of Intel and Advanced Micro Devices.
Intel declined the most in a month. Micron Technology posted its steepest drop in a year after the largest US memory-chip maker reported a third straight quarterly loss. ConocoPhillips, the third-biggest US oil company, tumbled after saying its refining margins narrowed last quarter.
The Standard & Poor's 500 Index lost 7.04, or 0.5%, to 1,539.59. The Dow Jones Industrial Average slid 79.26, or 0.6%, to 13,968.05. The Nasdaq Composite Index decreased 17.68, or 0.6%, to 2,729.43.
US stocks fell in the morning as investors considered mostly in-line reports on the service sector, and private sector employment, ahead of Friday's jobs report. But in the afternoon, stock losses accelerated a bit, with technology, commodity and material stocks leading the pull back.
Market breadth was negative. On the New York Stock Exchange, losers beat winners 5 to 3 on volume of 1.24 billion shares. On the Nasdaq, decliners topped advancers 3 to 2 on volume of 1.88 billion shares.
Oil prices were volatile after a mixed weekly oil inventory report. US light crude for November delivery fell 11 cents to $79.94 a barrel on the New York Mercantile Exchange, after having seesawed through the morning.
COMEX gold for December delivery fell 60 to settle at $735.70 an ounce. Treasury prices slipped, lifting the yield on the 10-year note to 4.56% from 4.53% late on Monday. In currency trading, the dollar fell versus the euro and inched higher versus the yen.
European shares closed higher after a day of volatile trading as investors weighed Deutsche Bank's encouraging comments against losses from oil giants and declines for EADS shareholder Lagardere.
The pan-European Dow Jones Stoxx 600 index added 0.2% to 383.65, with downside limited by another strong performance in the banking sector, up 1.1%. The UK's FTSE 100 closed up 0.5% at 6,535.20, while the German DAX 30 inched 0.1% higher to 7,955.30 and the French CAC-40 gained 0.1% at 5,806.18.
In the emerging markets, the Bovespa in Brazil tumbled 3% to 60,099 while the IPC index in Mexico shed 0.9% to 31,178. The RTS index in Russia lost 0.7% at 2092 and the ISE National-30 index in Turkey gave up 1.3% to 68,635.
Most Asian markets were down this morning. The Nikkei in Tokyo was down 100 points at 17,098 and the Hang Seng in Hong Kong slumped by 371 points to 27,108. The Straits Times in Singapore gained 10 points to 3765 and the Kospi in Seoul dropped 8 points to 2005.
BHP Billiton slid after crude oil closed below $80 a barrel in New York for the first time in more than a week. Posco fell after its biggest one-day gain in more the five years prompted South Korea's stock exchange to caution investors about buying the stock.
The Morgan Stanley Capital International Asia Pacific Index, set to close lower for the first time in six days, lost 0.7% to 165.33 at 10:54 a.m. in Tokyo. All markets open for trading in the region declined, except Singapore.
After coming close to the 18k mark, the benchmark BSE Sensex turned extremely choppy, as investors locked in some gains amid concerns about high valuations. The benchmark BSE index swung by over 650 points intra-day and recovered nearly 600 points from the days low. Resl Estate, IT, Oil & Gas, Power and Capital Goods shares did particularly well. Pharma stocks ended in the red. The Sensex closed at 17,847, up 518 points or 2.9%. The NSE Nifty ended at 5,210 adding 142 points.
Ambuja Cement slipped 2% to Rs145 after the company announced its September sales at 1.29mn tons (down 3.7%) and production at 1.27mn tons (down 4.5%). The scrip touched an intra-day high of Rs149 and a low of Rs144 and recorded volumes of over 18,00,000 shares on NSE.
ACC gained 1.5% to Rs1228 after the company announced its September sales at 1.55mn tones (up 10.7%) and production at 1.55mn tones (up 13.9%). The scrip has touched an intra-day high of Rs1261 and a low of Rs1175 and recorded volumes of over 9,00,000 shares on NSE.
Reliance Energy surged by over 7% to Rs1449 after its unit filed share sale document. The scrip touched an intra-day high of Rs1487 and a low of Rs1235 and recorded volumes of over 1,00,00,000 shares on NSE.
DLF rallied by over 16% to Rs892 after winning a contract with
Suzlon surged by over 5% to Rs1553 after the company announced that they have secured order to set up 150MW in Gujarat. The scrip touched an intra-day high of Rs1569 and a low of Rs1483 and recorded volumes of over 10,00,000 shares on NSE.
Flawless Diamond gained 0.3% to Rs96 after the company announced that they have received export order worth Rs325mn. The scrip touched an intra-day high of Rs103 and a low of Rs94 and recorded volumes of over 64,000 shares on BSE.
Everest Kanto surged by over 5% to Rs246 after the company announced that they would raise $35mn selling bonds. The scrip touched an intra-day high of Rs254 and a low of Rs230 and recorded volumes of over 14,00,000 shares on NSE.
Banking stocks also gained momentum towards the end. ICICI Bank advanced 2.8% to Rs1086, HDFC Bank was up by 1% to Rs1424 and SBI added 0.6% to Rs1907. However, Andhra Bank, Union Bank and Bank o f
Capital Good stocks gained smartly led by gains in the index heavyweights like L&T, the scrip was up by over 3% to Rs2903, BHEL rose over 4% to Rs2072 and Punj Lloyd added 2.5% to Rs321.
IT stocks staged a strong bounce back despite the rupee trading below the Rs40 per dollar mark. The index heavyweights like Infosys, the scrip surged over 5% to Rs2001, TCS was up by 3.6% to Rs1079, Wipro added 3.6% to Rs470 and Satyam Computer added 1.6% to Rs450.
Realty stocks were among the major gainers. The index was up by over 6%. DLF advanced 16% to Rs892, Akruti rose over 10% to Rs787, Parsvnath was up by 2.7% to Rs365 and Unitech added 3.5% to Rs327.
Stocks in News:
Ferro Alloys Corporation has been discharged by the
BIFR from the purview of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA).
Accordingly, Ferro Alloys Corp is no more a 'sick company' and is having a positive net worth of Rs837.50mn as of March 31, 2007.
ONGC will invest Rs57bn to increase production from its Mumbai High fields.
Ranbaxy is planning to set up a joint venture in China to manufacture active pharmaceutical ingredients.
SAIL's production of saleable steel grew by 18% in September 2007 over September 2006 to 1.1mn tons.
TCS is planning to increase its consulting business workforce five times to 4,000 globally by 2010.
Royal Dutch Shell will buy BPCL’s 45% stake in Bharat Shell Ltd for Rs1.45bn.
Neyveli Lignite is planning to spend Rs175bn for two projects: Mine-3 and thermal power station in Neyveli and mining and power project in Perambalur district.
Canara Bank has cut interest rates on housing loans by 50 basis points.
CapitaLand, Southeast Asia’s largest real estate investment trust is forming a 50:50 JV with D S Kulkarni Developers. CapitaLand will invest Rs7bn in the JV.
Bayer and Biocon may sign a pact involving co-development of new biotech drugs and research services.
Aban Offshore may sell its 20% stake in Norwegian company Petrojack to part finance its latest acquisitions.
HDFC Bank has capitalized its new NBFC at Rs45mn.
Jet Airways will start regular flights between India and the Gulf from early next year.
Gayatri Projects has bagged two construction orders worth Rs275mn.
Temptation Foods plans to acquire three companies for Rs1.8bn in addition to its plan to purchase Marico’s jam brand SIL and soy balls Meal Maker and Everfresh.
Capital gains tax for MNCs is likely to be reduced to 10%.
The Government is likely to exempt SEZ units from paying CST on supply of goods to domestic tariff area.
Additional spectrum for mobile companies will be available from November.
Imports of sensitive items increased by 0.9% during April-July 2007 compared to April-July 2006.
The Government is planning to allow FDI in retailing of Indian brands.
Private companies will be allowed to build small airports in West Bengal.
The Government is likely to review the limit on MSS bonds if asked by the RBI.
Rubber production for FY08 is expected to drop significantly due to heavy and untimely rains in Kerela..
Fund Activity:
FIIs were net buyers of Rs26.62bn (provisional) in the cash segment on Wednesday and the local institutions pulled out Rs2.22bn. In the F&O segment, foreign funds were net buyers at Rs24.43bn.
On Monday, FIIs were net buyers to the tune of Rs21.96bn in the cash segment. With this, the net investment by overseas investors in the past nine days has risen to more than US$4.1bn.
Major Bulk Deals:
Reliance Capital has bought Aksh Optifibre; Birla MF has picked up Arvind Mills; Citigroup has sold Century Bank of Punjab while Fidelity has purchased the shares of the private bank; UBS has picked up Elpro International; Credit Suisse has bought Gammon India; Morgan Stanley has purchased Murudeshwar Ceramics; Citigroup has bought Nirlon; HSBC has picked up Spice Telecom.
Upper Circuit:
RIIL, Bag Films, Zenotech Labs, Swan Mills, Karuturi Networks, Victoria Mills, Jai Corp, Genus Power and ABG Heavy.
Lower Circuit:
IID Forgings.