Cool at the top!
“The heights charm us, but the steps do not; with the mountain in our view we love to walk the plains.”
The heat is increasing on the bourses too and after reaching a certain height, expect some cooling. It’s a well known fact now that the NSE has upstaged the BSE, Asia's largest exchange, as a leading exchange in the country. The NSE added another feather in its cap yesterday with its benchmark NIFTY making a new all-time high ahead of BSE's SENSEX, which still has some 200 points to go before it hits a new historic peak. Given the current momentum the SENSEX could also achieve the new milestone this week itself. What's been heartening about the rally in the last few days is that there is broad base participation, and even the generally subdued Small-Cap and Mid-Cap indices are moving up.
Another encouraging thing to note yesterday was that the turnover was better than Friday. Generally, on the first day of the week, the turnover is lower than the last trading day of the previous week. Market breadth was also positive. Though FII inflows are not spectacular like in April, they seem to be still holding up. Barring an odd negative surprise, results have been pretty good.
Inflation has cooled off substantially from a two-year high hit in early part of February. There is talk that the RBI may in fact roll back the previous CRR hikes and cut SLR as well. As a result, we expect the market to remain firm and a major crack is ruled out at least in the near term. However, there may just be a few bumps ahead before the SENSEX hits a new high. And, even after that expensive valuations and lack of further buying support from FIIs may make it tough for the bulls to sustain the rally.
Global markets continue to remain on a strong wicket despite a few worries like the health of key economies of the US, Japan and China. Every day we hear about a few multi-billion-dollar deals, indicating that global liquidity remains strong. But, a major concern is the recent spurt in oil prices with the benchmark Brent crude crossing the $70 per barrel mark yesterday. Today, we expect the market to open cautious to slightly higher. Thereafter we may see some profit booking at higher levels.
On Wall Street, the S&P 500 briefly crossed its record close on Monday, but stocks ended mixed with the Dow Jones Industrial Average slipping from its peak. The S&P 500 added 2.35, or 0.2%, to 1525.10. The index rose as high as 1529.87, above its closing record of 1527.46. The Nasdaq Composite Index gained 20.34, or 0.8%, to 2578.79. The Dow Jones Industrial Average decreased 13.65, or 0.1%, to 13,542.88.
In the day's biggest deal, wireless telecom Alltel agreed to a private equity buyout worth almost $25bn. Alltel shares jumped 7%. General Electric confirmed that it was selling its plastics business to Saudi Basic Industries for around $11.6bn. GE shares rose modestly. Hologic said it would buy women's health care provider Cytyc for $6.2bn in cash and stock. Shares of Hologic, which makes medical equipment, slumped 7%, while Cytyc shares gained 23%. But, Yahoo shares slipped after The Wall Street Journal reported the company was considering paying up to $1bn for social networking site Bebo.
US light crude oil for June delivery rose $1.33 to settle at $66.27 a barrel on the New York Mercantile Exchange. The front-month contract was trading 2 cents higher at $66.89 a barrel in extended trading in Asia. A report showed that gasoline prices are now at an all-time high, even when adjusted for inflation.
COMEX gold for June delivery added $1.80 to $663.80 an ounce. Treasury prices ticked higher, lowering the yield on the 10-year note to 4.78% from 4.81% late on Friday. In currency trading, the dollar gained versus the euro and the yen.
European shares slipped. The pan-European Dow Jones Stoxx 600 index fell 0.2% to 393.35, after hitting a fresh multi-year high of 395.28 in the session. The German DAX Xetra 30 closed up 0.2% at 7,619.31, the UK's FTSE 100 slipped 0.1% to 6,636.80 and the French CAC-40 lost 0.2% at 6,089.91.
In the emerging markets, the Ibovespa in Brazil advanced 0.7% to 52,423 while the IPC index in Mexico added 0.1% at 30,708 and the RTS index in Russia gained 0.4% to 1866.
Asian markets are trading a bit mixed this morning, with the Hang Seng declining by 67 points to 20,860 while the Nikkei in Tokyo is up 72 points at 17,629. The Kospi in Seoul is up 3 points at 1631 while the Straits Times in Singapore rose by 25 points to 3540 and the Taiex in Taiwan advanced 40 points to 8182.
Celebration were back on Dalal Street as Bulls were back to its record breaking habit as NSE Nifty closed at new all time high. The Oil & Gas index led from front with FMCG and PSU stocks following smoothly. The Sugar stocks today again were back in action as it attracted buying interest. Even the small cap index was in line with the frontline indices gaining 1.1%. However, Technology and select Auto stocks dragged.
Tata Steel, BPCL and Reliance Industries were among the major gainers and Tata Motors, Wipro and Satyam Computer were the major losers among the 50-scrip’s of NSE Nifty. Finally, the 30-share Sensex surged 115 points to close at 14418. NSE-50 Nifty gained 46 points ending at 4260 adding 46 points.
Jindal Steel declined 1.2% to Rs3162. The company announced its Q4 result with net profit at Rs2.03bn (up 35%) and sales (up 56%) at Rs10.54bn. The scrip touched intra- high of Rs3227 and a low of Rs3110 and recorded volumes of over 51,000 shares on NSE.
Opto Circuit spurred by over 3.5% to Rs360 after the company declared that they would consider sale of shares to select investors on 24th May. The scrip touched intra- high of Rs363 and a low of Rs329 and recorded volumes of over 1,00,000 shares on NSE.
IVRCL Infrastructure was down by Rs331. The company announced that they have secured orders worth Rs5.51bn. The scrip touched intra- high of Rs338 and a low of Rs326 and recorded volumes of over 23,00,000 shares on NSE.
i-flex's dropped by 1.5% to Rs22179 Its unit Mantas secured order from Korea Exchange Bank. The scrip touched intra-high of Rs2249 and a low of Rs2156 and recorded volumes of over 53,000 shares on NSE.
Ranbaxy gained by 0.5% to Rs400 after the company receives approval to market Ran-Pravastatin in Canada. The scrip touched intra- high of Rs405 and a low of Rs399 and recorded volumes of over 4,00,000 shares on NSE.
Banking stocks continued its firm trend led by gains in the index heavy weight HDFC Bank the scrip gained by 3.5% to Rs1106, SBI was up over 1.6% to Rs1348. OBC, Corp bank and Canara Bank were the major gainers among the Mid-Cap stocks.
Pharma stocks also were in god health. Lupin advanced by 0.5% to Rs718, Ranbaxy edged higher by 0.5% to Rs400, Wockhardt rose over 2% to Rs415. However, Dr Reddy’s Lab lost 1.1% to Rs659.
Technology stocks continued to be on the receiving end. Satyam Computer dropped by 2% to Rs448, Wipro declined 1.7% to Rs534 and Infosys was down by over 1% to Rs1960. Mphasis BFL, Rolta and HCL Tech were the major losers among the Mid-Cap stocks.
Select Auto stocks also witnessed selling pressure. Tata Motors fell 2.2% to Rs725, Bajaj Auto further dropped by 1.7% to Rs2248, Hero Honda dropped 0.6% to Rs681 and Ashok Leyland edged lower by 0.5% to Rs37.
Insider Trades:
Mercator Lines Limited: Mr. Anil Khanna, Director has sold in open market 6000 equity shares of Mercator Lines Limited on 16th and 17th May, 2007.
Adlabs Films Limited: Manmohan Shetty has purchased from open market 200000 equity shares of Adlabs Films Limited on 15th May, 2007.
Sector Movements:
BSE Oil & Gas index was the major gainer and gained 3.05%. BSE Metal index (up 2.46%), BSE FMCG index (up 2.01%) and BSE PSU index (up 1.60%) were among the other major gainers. However, BSE Auto index lost 0.48%.
Volume Toppers:
TTML, IFCI, RNRL, RPL, SAIL, Cairn, NTPC, Ashok Leyland, Dena Bank, Hotel Leela, Tata Steel, R Com, Gujarat NRE, Idea, Reliance Capital, ITC and Dish TV.
Upper Circuit:
Marg Construction, Tripex Overseas, Mefcom Agro, Oudh Sugar, Vyapar Industries, GHCL, Teledata Eicher Motors, GTC Industries, GMR Industries, Sical Logistics and VIP Industries.
Delivery Delight:
APIL, Balrampur Chini Mills, Bank of Baroda, BPCL, CEAT, Colgate, HDFC, ITC, ONGC, PNB, RIL, SBI, Tisco and VSNL.
Abnormal Delivery:
Reliance Capital, National Aluminium, Federal Bank, Century Textiles, Dr Reddys Labs, OBC, IDBI, GNFC, Kesoram Industries, Nagarjuna Fertilizers and CEAT.
Stock Futures with largest increases in OI:
TCS, Tata Power, Tata Tea, Titan, Tata Motors, TVS Motors and Union Bank of India.
Stock Futures with largest decreases in OI:
Federal Bank, Rolta, Nicholas Piramal, Kotak bank, Kesoram Industries, Deccan Aviation, IDFC and Indian Bank.
Results Today:
Alembic, Adhunik Metalik, Automotive Stampings, NDTV, Mukand, Pidilite Industries, Punjab Tractors and Transport Corporation of India and ZF Steering.
Results Corner:
Parsvnath Q4 profit at Rs1.3bn (up 251%), revenues at Rs4.1bn (up 68%)
Jindal Steel Q4 profit at Rs2.03bn (up 35%) and sales (up 56%) at Rs10.54bn
SAIL Q4 profit at Rs19.02bn (up 72%) and net sales at Rs99.84bn (up 13.7%
Brokers Recommendation:
Dr Reddy’s Labs – Outperform with target of Rs840.
Long Term investment:
Financial Technologies
Major News Headlines:
Satyam signs multiyear contract with Hawker Beechcraft
Gammon signs MOU with Macquarie for Chennai Airport bid
Ranbaxy gets nod to market Ran-Pravastatin in Canada
I-Flex's Mantas gets order from Korea Exchange Bank
IVRCL Infra gets orders worth Rs5.51bn
Dwarikesh Sugar to mull issuing warrants to founders on 28th May
Turkish Regulator to approve Refinery construction at CEYHAN, to be build by CALIK, IOC
Opto Circuits to mull sale of shares to select investors on 24th May
Twilight Litaka buys brands from Sami Labs.