Stay lighter, burn brighter
Whenever you see darkness, there is extraordinary opportunity for the light to burn brighter.
Things have been pretty volatile off late and the direction remains uncertain in the immediate future. That may be the case most of the time but the bulls seem to have adopted a wait-and-watch approach ahead of the budget. One need not read too much into this event. The F&O expiry is also keeping the bulls on tenterhooks besides adding to the choppiness. Reports suggest the rollover on the derivative side has been lower vis-a-vis the last few months. There are worries on hardening interest rates and spiraling inflation. Valuations are not cheap either by historical or relative standards.
What is heartening is that FII inflows have been good without being too spectacular. They have pumped in well over $700mn in the cash segment in February so far despite the volatility and the recent crash. Global cues remain benign. Again, there is a lack of clarity on interest rate movement in Japan. The BOJ is to announce its decision today and its anybody's guess as to what the central bank has in store for the world markets. Most probably the BOJ will maintain status quo, which would be good for global liquidity but only for the time being. We expect a cautious opening once again and another volatile session.
SKF India is a stock to watch out for. The company will declare its results today. Moreover, on Friday, the company is expected to announce a product launch at their manufacturing unit in Chinchwad, Pune. SKF India will also declare its results today and so will Blue Dart Express.
Autoline Industries will consider an interim dividend; issue of share warrants to promoters, directors and other eligible entities at a price not less than Rs400 per share; acquisition of the remaining 49% stake in Autoline Dimensions Software and proposal for acquisition of domestic / foreign company.
Deccan Chronicle's Board will meet today to consider and approve the setting up of a Special Purpose Vehicle (SPV), a 100% subsidiary, to launch the Bangalore Edition of Deccan Chronicle.
Phoenix Mills will consider and discuss Merger(s) of Company(ies) having similar line of business. Its Board will also consider and discuss raising of funds through preferential issue, Qualified Institutional Placement (QIP) or any other mode.
US shares closed slightly higher on Tuesday with the Dow Jones Industrial Average carving out yet another record added 19 points or 0.15% to shut shop at 12,786.64, closing at a record high for the second session in a row. The blue-chip barometer also hit a record trading high during the session.
The broader S&P 500 was up 4.14 points or 0.3% at 1,459.68, and closed at a six and a half year high, taking out the previous high from last week. The tech-fueled Nasdaq added 16.73 points or 0.7% to finish at 2,513.04, closing at its highest point in six years, taking out its previous record from January. The Russell 2000 advanced 7.96 point to 826.11. The small-cap index gained 1% and closed at an all-time high.
After the close, Dow component Hewlett-Packard reported quarterly sales and earnings that increased from a year ago and topped estimates. The company also forecast fiscal-year 2007 sales and earnings in a range that beats analysts' forecasts. However, investors took a "sell the news" response and sent shares about 1% lower in extended-hours trading.
Wal-Mart reported higher quarterly earnings that topped forecasts on sales that missed estimates. The retailer also issued upbeat current-quarter forecasts. Wal-Mart shares gained 3%.
US light crude oil for March delivery tumbled $1.49 to $57.90 a barrel on the New York Mercantile Exchange. COMEX gold for April delivery fell $11.80 to $661 an ounce. While the decline in commodity prices boosted sentiment, it also weighed on oil and gold stocks, which in turn limited the advance for the broader market. Treasury prices inched higher, lowering the yield on the benchmark 10-year note to 4.68% from 4.70% on Friday. In currency trading, the dollar gained versus the euro and the yen.
European markets lost ground. The pan-European Dow Jones Stoxx 600 index lost 0.5% to 380.42. The UK's FTSE 100 closed down 0.5% at 6,412.30, the German DAX Xetra 30 slipped 0.1% to 6,982.91 and the French CAC-40 eased 0.5% to 5,713.45.
Asian stocks were mostly higher early Wednesday, but gains were capped by cautious trading ahead of a key decision on interest rates from the Bank of Japan. The Nikkei 225 Index was up as much as 0.08% at 17,952.91.
The Morgan Stanley Capital International Asia-Pacific Index gained less than 0.1% to 146.85 as of 10:47 a.m. in Tokyo. Benchmarks rose in markets open for trading, except in Australia and New Zealand. Markets are closed in China and Taiwan for the Lunar New Year holiday.
In the emerging markets, Mexican stocks finished nearly flat. Mexico's IPC index finished at 28,589.66, a slip from its closing high of 28,590.17 on Monday. Brazilian markets were closed for the second straight day for the Carnival holiday.
Investors steered clear of China for a second straight week in mid-February, shifting their focus to smaller, more defensive regional markets as Chinese authorities talked down their country’s equity markets and stressed their willingness to curb excessive valuations, says Emerging Portfolio Fund Research (EPFR).
But Asia remains their preferred corner of the emerging markets universe: Asia ex-Japan Equity Funds took in $664.1mn for the week ending February 14, accounting for 94% of the net inflows into all emerging markets equity funds, adds the Boston-based firm that tracks worldwide fund flows.