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Friday, December 22, 2006

STRATEGY INPUTS FOR THE DAY


Make your own way

The world makes way for the man who knows. where he is going.

Will the market go up, down or sideways? The easy answer is it will go down, up and sideways depending on where you are. All this happens not over a quarter or year but in a single trading session. At the end of it all you have a more or less muted ending. Just when the Thursday closing gained some confidence, we have the global cues which give the bears a chance to remain in the reckoning. The choppiness is likely to continue. Positions may get lighter and the F&O expiry next week would keep the market directionless. A lot of portfolio shuffling may be attempted as 26 more securities get added to the F&O segment from the start of the January series. With an extended weekend ahead, the bulls will hope for some jingle on the way.

FIIs were net buyers of Rs2.53bn (Provisional) in the cash segment yesterday. In the F&O segment, they offloaded scrips worth Rs2.35bn. On Wednesday, foreign funds withdrew Rs3.65bn from the cash segment. Mutual Funds were net buyers on the same day at Rs4.6bn.

In global news, US stocks fell following concerns of a slowing economy after a report showed an unexpected drop in manufacturing in the Mid-Atlantic region. A warning on inflation, from Richmond Federal Reserve Bank President Jeffrey Lacker also weighed on the sentiment.

The Dow Jones was down 42.62 points at 12,421.25. The broader S&P 500 index was down 5.23 points and the Nasdaq Composite was down 11.76 points at 2,415.85.

Stocks were flat early in the session but turned lower around midday after the Philadelphia Federal Reserve Bank's monthly survey posted a big decline in December.

The US Commerce Department said GDP grew at a slower pace in the third quarter than previously estimated. The third-quarter GDP expanded at a 2% annual rate, less than the 2.2% estimated last month. Economists had forecast a 2.2% gain.

Crude oil futures fell $1.06, or 1.7%, to close at $62.66 a barrel in New York trade. Gold futures were under pressure for a second day in a row. The February contract finished down $3.20 at $621.10 an ounce. The dollar was stuck in a tight-range in thin pre-holiday trade. The greenback rose 0.1% against the euro but fell 0.03% against the yen.

Among the Indian ADRs, VSNL was up close to 2%. There are reports that the Tata Group firm is eyeing a US-based company in manages data services. Infy gained 1.6%, Tata Motors rose 1.5%, HDFC Bank slid 2.4%, ICICI Bank shed 1.7% and MTNL climbed 1.9%.

European shares declined in sparse trading. The UK-based FTSE 100 closed down 0.2% to 6,183.70. The French CAC-40 fell 0.1% to 5,510.39 and the German DAX Xetra 30 declined 0.2% to 6,573.96. The pan-European Dow Jones Stoxx 600 eased 0.2% to 364.01.

Asia stocks were mixed this morning. Japan's Nikkei 225 Index was down 0.1% at 17,023.29. The Hang Seng in Hong Kong was up 36 points at 19,259. Markets in the region fell in South Korea, New Zealand, China and Indonesia while they gained elsewhere.

Asian mining shares dropped, led by BHP Billiton and Sumitomo Metal Mining, amid reports that demand for commodities may be weakening, pushing copper prices to an eight-month low. A measure of six metals traded on the London Metal Exchange (LME), including copper and zinc, slid 1.9%. Copper prices fell 3.1%.

In the emerging market space, the Bovespa in Brazil was down 0.3% at 43,385 while the IPC index in Mexico advanced by 0.6% to 25,546 and the RTS index in Russia lost 0.1% to 1864.

Major Bulk Deals:
Blackstone Asia has bought Bombay Rayon Fashions; Merrill Lynch has picked up Classic Diamond; Bear Stearns has sold Polyplex and Royal Orchid Hotels; Reliance Capital has purchased Ramakrishna Forgings; Deutsche Securities has bought Sharyans Resources; Fidelity has picked up Texmaco; CLSA has purchased United Spirits.

Market Volumes:
The turnover on NSE was down by 20.7% to Rs79.37bn. BSE Auto index was the major gainer and gained 1.85%. BSE Consumer Durable index (up 1.59%), BSE Metal index (up 0.75%), BSE Pharma index (up 0.71%) and BSE Oil & Gas index (up 0.37%) were among the other major gainers. However, BSE Bank index lost 0.40%.

Volume Toppers:
TTML, Indiabulls, IFCI, SAIL, Tech Mahindra, India Cements, Sobha Developers, Ashok Leyland, ITC, NTPC, HLL, Hindalco, Moser Baer, Reliance Industries, Unitech, Tata Steel, IVRCL Infrastructure and Satyam Computer.

Delivery Delight:
3i Infotech, Bharti Airtel, Bombay Dyeing, BRFL, Cambridge Solutions, Glenmark Pharmaceuticals, GVK Power & Infrastructure, Hindalco Industries, India Infoline, Maharashtra Seamless, Mahindra & Mahindra Financial, M&M, Mahindra Gesco, Maruti, McDowell & Co, Nicholas Piramal, Titan Industries, Union Bank of India and UTI Bank.

Upper Circuit Filters:
Anant Raj industries, Educomp, Industries, NIIT Ltd, India Infoline, Champagne Indage, Crest Animation, DS Kulkarni, Gemini Communication, Navin Fluorine and Provogue.

Brokers Recommendations:
KPIT Cummins – Buy from Citigroup

Long Term Investment:
M&M

Major News Headlines:
Ranbaxy, Cadila, win approval to market Simvastatin tablets in USA
Satyam’s BPO unit secures $25mn animation order
JSW Steel plans to spend Rs20bn to produce high grade steel
IDBI, LIC sign MoU for financing core projects
Moser Baer forays into Home Video segment
Gail India Board approves interim dividend of 55%
Ansal Properties to develop Rs200bn project near Delhi
Govt approves selling residual stake in Maruti
Blackstone, Anil Ambani ask banks to lend $15bn for Hutch
BHEL gets contract worth Rs1.65bn
Union Bank, BoI & Dai-ichi Life join hands for Life Insurance JV