Daily Market Outlook - Sep 11 2007
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Tuesday, September 11, 2007
Pre Market Watch
Indian market is likely to have a positive opening as the Asian market is trading mixed and US market closed mixed. On Monday, the Indian markets ended flat, as BSE Sensex closed little higher by 6.41 points at 15,596.83 while Nifty slipped by 1.65 points to close at 4,507.85. We expect the market to remain range bound during the trading session.
On Monday, the US market closed in mixed. The Dow Jones Industrial Average grew by 14.47 points to close at 13,127.85. The Nasdaq Composite Index fell by 6.59 points to close at 2,559.11. The S&P 500 index decreased by 1.85 points to close at 1,451.70.
Indian ADRs ended in mixed. In technology sector, Patni computers grew by (1.94%) while Wipro slipped by (2.12%) along with Infosys and Satyam by (1.82%) and (1.23%) respectively. In banking sector, HDFC bank and ICICI bank advanced by (1.59%) and (0.68%) respectively. VSNL grew by (0.51%) while MTNL closed lower by (0.28%).
The major stock markets in Asia are trading mixed. Japan''s Nikkei trading higher by 39.43 points to trade at 15,804.40. Hang Seng grew by 42.80 points to trade at 24,042.50. Taiwan weighted advanced by 65.84 points to trade at 9,003.42. Singapore Strait times trading up by 36.27 points at 3,478.14.
Today, Nifty has support at 4,467 and resistance at 4,570 and BSE Sensex has support at 15,510 and resistance at 15,760.
Sideways movement to continue
After registering marginal gains in yesterday's trades the market is expected to be remain subdued following the mixed global cues. The market may witness sideways movement during intra-day trades. However, the current net inflows from FIIs may help the sentiment to turn positive. The Nifty could test 4,490 on the downside and may test higher levels at 4,550 and on breaching this level may test the short-term target of 4,620, while the Sensex has a likely support at 15,250 and may face resistance at 15,700.
US indices little changed on Monday, on concerns about economy and worries about big rate cut form Fed officials next week. While the Dow Jones gained marginally by 14 points at 13128, the Nasdaq slipped seven points to close at 2559.
Most of the Indian ADRs barring few ended at lower levels on the US bourses. Wipro slipped 2% while Infosys, Satyam, Dr Reddy's Lab, MTNL and Rediff were down by 0.50% to 1% each. However, Tata Motors, ICICI Bank, HDFC Bank, VSNL and Patni computers gained around 1%.
Crude oil prices in the global market extended their upward trend, with the Nymex light crude oil for October series jumping by 79 cents at $77.49 a barrel. In the commodity space, the Comex gold for December delivery moved up by $2.50 to settle at $712.20 a troy ounce.
Market to head higher
The market is expected to head higher today, on positive global cues. However profit booking may emerge at higher levels as the first meeting of the UPA-Left committee on the Indo-US nuclear deal is likely to take place anytime before 14 September 2007. The meeting date was speculated to be somewhere between 10 to 14 September 2007.
Most of the Asian markets were trading higher today, 11 September 2007. Japan's Nikkei (up 0.25% at 15,804.40), Hang Seng (up 0.18% at 24,042.50), Taiwan's Taiwan Weighted (up 0.74% at 9,003.42) and Singapore's Straits Times (up 1.05% points at 3,478.14) gained. However Shanghai Composite was down 0.32% to 5,338.38.
US shares finished a volatile session with small gains yesterday, 10 September 2007 as investors grappled with the possibility that the Federal Reserve might not lower interest rates as much as they hope. The Dow Jones industrial average rose 14.47 points, or 0.11%, to 13,127.85. Broader stock indexes fell. The Standard & Poor's 500 index slipped 1.85 points, or 0.13%, to 1,451.70, and the Nasdaq Composite index declined 6.59 points, or 0.26%, to 2,559.11.
Crude oil prices surged to near a record high on Tuesday, 11 September 2007 after attacks on oil and natural gas pipelines rocked the world's fifth largest crude producer Mexico, ahead of an OPEC meeting to determine production policy. US light crude rose 40 cents to $77.89 a barrel and is now near its record high of $78.77 hit on 1 August 2007. London Brent crude rose 36 cents to $75.84.
As per provisional data, foreign institutional investors (FIIs) sold shares worth a net Rs 190.15 crore, while domestic institutional investors (DIIs) were net buyers of shares worth Rs 9.82 crore on Monday, 10 September 2007.
The BSE 30-share Sensex rose 6.41 points or 0.04% at 15,596.83, on Monday, 10 September 2007. It is now 272.02 points away from its all time high of 15,868.85 hit on 24 July 2007.
The S&P CNX Nifty declined 1.65 points or 0.04% at 4,507.85, on Monday, 10 September 2007.
Trading Calls
Nifty (4508) Supp 4485 Res 4535
Buy RCom (544)
SL 539 Target 552, 556
SL 539 Target 552, 556
Buy Kotak Bank (747)
SL 741 Target 762, 765
SL 741 Target 762, 765
Buy Chennai Petro (285)
SL 280 Target 295, 297
SL 280 Target 295, 297
Sell Sterlite (602)
SL 608 Target 590, 588
SL 608 Target 590, 588
Sell HCL Tech (294)
SL 299 Target 286, 283
SL 299 Target 286, 283
Tuesday twists and turns
We will not tire, we will not falter, and we will not fail. - (George Bush, Speech after 9/11 attacks)
The bulls managed to brush aside the global weakness yesterday to end flat. The small-cap and mid-cap shares did even better. The traded volume and turnover were down, as is generally the case on the first day of the week. What is interesting is that FIIs were net sellers on a provisional basis. They were also net sellers in the F&O segment. Despite this, we expect the Indian market to weather the subprime-related storm due to strong economic fundamentals and good traction in earnings growth. Having said that the market remains vulnerable to global volatility, especially in the form of fund flows from overseas investors. In addition, we have to grapple with the ongoing political uncertainty, which is far from over and could lead to mid-term polls early next year.
Today, we see a cautious to positive opening. With its usual twists and turns it may yet be another range bound kind of session. Although we advocate some caution, one can accumulate quality stocks at every dip as the long-term outlook is upbeat.
Shares of Motilal Oswal Financial Services Ltd. will get listed on the bourses today. The stock is expected to open with a 10-15% premium to the issue price of Rs 825 per share. It may even touch Rs1,000 if the momentum is good. Market grapevine is that a large corporate house through its associates may mop up some shares today. Rallis India and United Phosphorus plan to bid for Japan's Arysta LifeScience Corp., according to a report.
IFCI is expected to be in action as a financial daily reports that private equity major Blackstone is eyeing the state-run term lender. Also keep an eye on Bartronics, Bongaigaon Refinery, Ranbaxy and Voltas for the coming days. Sun Pharma could be under pressure as US-based Sepracor and the University of Massachusetts have sued the Indian drugmaker to prevent it from launching a generic version of anti-allergic treatment Clarinex. Rajesh Exports could advance amid reports that it is looking at buying jewellers in South India.
US shares closed mixed on Monday after a fairly volatile session, as worries about the downturn in the housing sector and its wider fallout on the economy continued to weigh on investors. Two Federal Reserve officials suggested that the US economy may be faltering because of the housing slump.
Countrywide Financial fell to a four-year low, leading declines in the Standard & Poor's 500 Index, after Merrill Lynch said bond market losses continue to handicap the largest US mortgage company.
Home Depot's warning that real estate prices won't recover until late next year sent the biggest home-improvement retailer to the lowest level in three weeks.
The S&P 500 lost 1.85 points, or 0.1%, to 1,451.7. The Nasdaq Composite Index declined 6.59 points, or 0.3%, to 2,559.11. McDonald's and American Express led the Dow Jones Industrial Average up 14.47 points, or 0.1%, to 13,127.85.
About five stocks dropped for every two that rose on the New York Stock Exchange.
US stocks started on a positive note due to Intel's improved profit outlook, but the early advance proved unsustainable. The US stock market is bound to remain very choppy in the lead up to the Federal Reserve's meeting, on Sept. 18.
Crude oil rose to within 50 cents of a record on speculation that rising demand and restricted OPEC production may tighten fourth-quarter supplies. Oil rallied in the last half hour of trading in New York after spending almost the entire day with sharp losses.
Light, sweet crude for October delivery rose 79 cents to settle at $77.49 a barrel on the New York Mercantile Exchange, rebounding from earlier losses of more than $1 a barrel.
Treasury prices rose, adding on to Friday's big rally on continued bets that the Fed will need to cut interest rates when it meets next week. The advance lowered the yield on the 10-year note to 4.32% from 4.38% late on Friday.
In currency trading, the dollar fell versus the euro and rose against the yen. COMEX gold for December delivery rose $2.50 to $712.20 an ounce.
European stocks ended lower. The pan-European Dow Jones Stoxx 600 index fell 0.9% to 362.23, after moving back and forth between positive and negative territory throughout the session. The UK's FTSE 100 closed down 0.9% at 6,134.10, the French CAC 40 fell 0.8% to 5,386.43 and the German DAX 30 lost 0.8% to 7,375.44.
Latin American equities fell as well. Brazil's Bovespa index slid 3.5% to 52,652.57. In Mexico, the IPC lost 1.2% to 29,892.18. The Merval in Argentina fell 1.1% to 2,018.16, and Chile's IPSA lost 1.4% to 3,155.56. In other emerging markets, the RTS index in Russia closed flat at 1898 while the ISE National-30 index dropped 1.2% to 60,951.
Asian markets were trading flat to slightly higher after a weak start. The Nikkei in Tokyo gained 39 points to 15,804 while the Hang Seng in Hong Kong was flat at 24,001 and the Kospi in Seoul too was nearly unchanged at 1836.
Markets bounced back as bulls managed to make a comeback in the late trades. Yet another jolt from the global markets, especially from the US dragged the Indian bourses to start with a gap down. However, positive opening from the European markets and recovery in Hong Kong’s Hang Seng index lifted the sentiments. Mid-Cap stocks led as the index gained by 1%.
However, Volumes were lower; turnover in NSE cash segment fell 10.1% and in F&O segment dropped 3.4%. Finally, BSE 30-share benchmark Sensex gained 6 points to close at 15596. NSE Nifty ended flat at 4507.
RIL, ITC, SBI and Bharti Airtel were the leading movers. On the other hand, Infosys, ICICI Bank, ONGC and HDFC were the major laggards among the Sensex stocks.
BHEL edged higher 0.3% to Rs1889 after the company along with NTPC Ltd, the country's biggest utility has planned to form a company to build power plants. The scrip touched an intra-day high of Rs1900 and a low of Rs1844 and recorded volumes of over 4,00,000 shares on NSE.
Hindustan Zinc slipped by 0.2% to Rs712. India's largest producer of zinc lowered prices of the metal for the third time in eight days to match global rates. The rate was lowered by 2.1% to Rs136,300 per metric ton. The scrip touched an intra-day high of Rs715 and a low of Rs700 and recorded volumes of over 59,000 shares on NSE.
Jet Airways fell by 1.5% to Rs889. Reports have stated that the nation's biggest domestic carrier will raise air fares across all categories by Rs200 as demand rises. The scrip touched an intra-day high of Rs916 and a low of Rs876 and recorded volumes of over 3,00,000 shares on NSE.
Bharti Airtel gained by 0.6% to Rs853 after the company secured license from Singapore to offer Global Connectivity. The scrip touched an intra-day high of Rs857 and a low of Rs835 and recorded volumes of over 6,00,000 shares on NSE.
Reliance Communication marginally slipped 0.3% to Rs543. The company announced that they have started blackberry Service in India. The scrip touched an intra-day high of Rs545 and a low of Rs534 and recorded volumes of over 26,00,000 shares on NSE.
Cement stocks were in momentum. ACC gained by 0.6% to Rs1093, Ambuja Cement surged by over 3% to Rs144, Mangalam Cement was up by over 4.5% to Rs194 and India Cement added 1.3% to Rs270.
Select Capital Good stocks ended with smart gains. ABB gained by 1.4% to Rs1217, BHEL was up by 0.2% to Rs1889 and Punj Lloyd added 1.5% to Rs309. However, L&T declined 0.6% to Rs2577.
FMCG stocks ended higher led by gains in the index heavyweight, ITC advanced nearly by 4% to Rs184, Tata Tea was up by 2% to Rs775, McDowell gained 2.5% to Rs1581 and Nirma added 0.3% to Rs165.
Banking stocks also managed to stage a come back led by gains in the index heavyweights like SBI, the scrip was up by 1.3% to Rs1640, PNB gained by 0.8% to Rs493 and Union Bank added 1.1% to Rs147. However, ICICI Bank slipped by 1% to Rs910.
IT stocks were on the receiving end as Indian rupee yet again strengthened against the USD Satyam Computer slipped by 1.6% to Rs442, Wipro was down by 2.7% to Rs465, TCS slipped by 2.7% to Rs1047 and Infosys lost 2% to Rs1871.
Oil PSUs stocks also gained momentum amid reports that the Government would go for a marginal fuel price hike shortly. HPCL surged by over 3.5% to Rs241, BPCL was up by 3.5% to Rs315. However, IOC edged lower by 0.3% to Rs403.
Stocks In News
Sun Pharma says that USFDA has granted final approval for the company’s ANDA to market its generic version of Wyeth’s Protonix, pantoprazole tablets. These strengths of Protonix have annual sales of about USD 2.3bn.
UCO Bank plans to raise Rs.2bn through Equity or debt, targets 20% credit
growth.
Power Finance Corp (PFC) to raise Rs5bn through bond issue in local markets. The RBI had earlier rejected its application to raise $200mn from overseas markets.
Reliance Industries to pump in Rs100bn in Positra Port and Special Economic Zone.
Yes Bank to foray into retail broking space, to incorporate separate subsidiaries for banking business.
Fund Activity:
FIIs were net sellers of Rs1.9bn (provisional) in the cash segment on Monday and the local institutions pumped in Rs98.2mn. In the F&O segment, foreign funds were net sellers of Rs5.16bn.
On Friday, FIIs were net buyers to the tune of Rs5.8bn in the cash segment. Mutual Funds were net sellers of Rs1.88bn on the same day.
Major Bulk Deals:
Lotus Global has bought Alpa Labs; Kotak Mahindra has picked up Emkay Shares; Morgan Stanley has purchased Escorts; Citigroup Global has bought Noida Toll Bridge while CLSA has sold it; Goldman Sachs has sold Searle (India) and Ubs Securities has sold Welspun Gujarat.
Upper Circuit:
Marksans, Emkay Share, Usher Agro, Godawari Power, Tanla, Taneja Aerospace, Bajaj Electrical, IID Forgings, Empire Industries.
Delivery Delight (Rising Price & Rising Delivery):
GSK Pharma, Sundaram Clayton, Gail India and Pratibha Industries.
Abnormal Delivery:
Apollo Tyres, Bharat Forge, Essar Shipping and Syndicate Bank.
Major News & Announcements:
Hindustan Unilever terminates talks with Temptation Foods
Bharti secures license from Singapore to offer Global Connectivity
HSBC, Canara Bank, OBC to form insurance company
Satyam to expand in Europe, Asia Pacific
R Com starts blackberry Service in India
Marg Construction to sell shares to Bennett, Coleman & Co.
WHO adds 3 Ranbaxy aids drugs to distribution list
BHEL signs MoU with NTPC
Kirloskar Brothers buy Gondwana Engineers for Rs76.36mn
RIL buys Polyster assets of Malaysia based Hualon – ReportsMorning Call - Sep 11 2007
Market Grape Wine :
In House :
Nifty at a supp of 4473 and 4433 levels with resistance at 4530 and 4550 levels .
Buy : Intraday : Ranbaxy above 419 target 442 s/l of 414
Buy : Intraday : APIL target 780 s/l of 749
Buy : Intraday : in F&O Escorts above 110 target of 117 s/l of 107
Buy : intraday : kesoram : above 559 target 578 s/l of 551
Out House :
Markets at a support of 15342 & 15432 levels with resistance at 15696 & 15786 levels .
Buy : REL & RPL
Buy : RIL & Tisco bullet
Buy : Titan & Siemens
Buy : Hanun , IndiaInfo , Centextile & JpAsso bullet
Buy : IBulls , IbullsReal & DLF
Buy : JpHydro , TTML , Nagarfert & IFCI
Buy : NTPC & Gujambcem bullet
Buy : Aptech , Welsguj & Gitanjali & Aban
Dark Horse : RIL , REL, NTPC , Kotak , Kajaria , Aptech , Tisco , Gacl & Bharti
Asian Markets open positive
Asian stock markets opened positive on Tuesday (September 11) on speculation that higher prices for steel and crude oil will boost earnings. Japanese stocks after an early fall, regained strength and moved into the positive terrain; thus showing signs of volatility.
Posco and China Steel advanced after reports that some South Korean producers of the alloy are increasing prices. Hyundai Steel climbed as it raised prices for steel used in construction.
The Japanese benchmark index Nikkei gained 39.43 points, or 0.25%, to trade at 15,804.40.
Hong Kong`s index Hang Seng gained 130.83 points, or 0.55%, to trade at 24,130.53.
China`s Shanghai Composite gained 33.22 points, or 0.62%, to trade at 5,388.51.
Taiwan`s index Taiex gained 79.12 points, or 0.89%, to trade at 9,016.70.
South Korea`s KOSPI gained 2.32 points, or 0.13%, to trade at 1,838.19.
Singapore`s Straits Times gained 38.48 points, or 1.12%, to trade at 3,480.35
Nifty September 2007 futures at slight discount
Turnover declines further
The Nifty September 2007 futures settled at 4,500, a discount of 7.85 points as compared to spot closing of 4,507.85.
The NSE F&O turnover was Rs 37,333.48 crore as compared to Rs 38,666.44 crore on Friday, 7 September 2007. It has been declining from Rs 40,927.51 crore on 6 September 2007, despite 14 additional stocks started trading in the futures & options segment of NSE.
Reliance Industries September 2007 futures settled at premium, at 1990.50, compared to the spot closing of Rs 1985. It was the most active contract with turnover of Rs 1643.24 crore.
Reliance Petroleum September 2007 futures settled at premium, at 129.85, compared to the spot closing of Rs 129.05.
Tata Steel September 2007 futures settled at premium, at 696.70, compared to the spot closing of Rs 693.80.
In the cash market, the S&P CNX Nifty slipped 1.65 points or 0.04% at 4,507.85.
From 6 September 2007, 14 additional stocks started trading in the futures & options segment of NSE
The 14 stocks are 3i Infotech, Aptech, Bhushan Steel, Biocon, CMC, Havells India, Lakshmi Machine Works, NIIT Technologies, Nucleus Software, Sasken Communications, Tech Mahindra, Tulip IT Services, Welspun Gujarat Stahl Rhoren and Yes Bank.
The basket of stocks available in the derivatives segment has been on the rise. In May 2007, NSE had added 31 additional stocks in the F&O segment. NSE has also been adding some newly listed stocks in the F&O segment from the very first day of listing of these stocks. Recent inclusions were Central Bank of India and Puravankara Projects
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