There are no speed limits on the road to excellence.
Speed is the name of the game these days, whether its cricket, transport, business or even the stock market. But, the sun outage could be the speed breaker which could aid the bears. Today, we expect a higher opening, and a volatile day ahead.
The bulls were on fire last week, thanks largely to the aggressive rate cuts announced by the Federal Reserve to tackle the housing sector slowdown and avert a bigger crisis. Equity markets rallied across the globe amid optimism that the Fed will swing into action again to pump-prime the economy and revive consumer confidence.
That spells good news for emerging markets like India, as global investors will resume their buying spree of high-yielding assets. In fact, according to Emerging Portfolio Funds Research, investors poured in close to $1.8bn into global emerging markets equity funds during the third week of September. Having said that in Asia (ex-Japan), most of the inflows went into China-centric funds.
Still, India doesn't have to despair, as FIIs have resumed their shopping spree in the past several days. More money will continue to pour into India, given its long-term economic prospects and strong momentum in corporate earnings growth. The rupee is at a nine-year peak, and will remain strong amid relentless inflow of foreign money, both portfolio and direct. As a result, IT shares will remain under pressure.
Though software shares have been out of favour over the past few months, long-term investors could look at top five companies in this space at further declines. As far as the broader market is concerned, we may see the Sensex crossing 17k shortly, but beyond that investors should be careful as valuations are not cheap and most of the good news in already in the price.
Exit stocks that had underperformed recently and rallied last week. Get out of shares that have run too much ahead of fundamentals. Buy them back when they correct in the next two weeks or so. With the F&O expiry scheduled for Thursday, we could face more volatility. Also, with the result season just round the corner, the market may turn choppy.
Peninsula Land's Board has approved the issue up to 6,00,00,000 shares of Rs2 each to Domestic / Foreign Investors / Institutional Investors / Foreign Institutional Investors / Qualified Institutional Buyers, etc. through a public issue / Qualified Institutional Placement and / or any other instruments.
US stocks posted the biggest weekly gain since March, pushing the Dow Jones Industrial Average to within 181 points of a record, after the Federal Reserve cut its benchmark interest rate by 50 basis points.
The Dow gained 0.4% to end at 13,820.19 and the broader S&P 500 index added around 0.5% to 1525.75. The tech-heavy Nasdaq Composite index gained 0.6% to 2671.22.
On the week, the S&P 500 advanced 2.8%, putting the index 1.8% away from its July all- time high. The Dow added 2.8%. The Nasdaq rose 2.7%.
Oracle reported higher quarterly earnings and revenue that topped Wall Street estimates. The business software leader also reported a large jump in sales of new software licenses, that topped forecasts. That gave a boost to technology stocks.
Nike also reported higher quarterly earnings and revenue that beat expectations, thanks to a tax benefit and a boost from the weak US dollar.
Treasury prices rose, bouncing back after several down days. The gain lowered the yield on the 10-year note to 4.62% from 4.7% late on Thursday. COMEX gold for December delivery fell $1 to settle at $738.90 an ounce.
In currency trading, the dollar fell to a new record low against the euro and slipped against the yen. On Thursday, it stood at equal value with the Canadian dollar for the first time in more than 30 years.
US light crude oil for November delivery fell 16 cents to settle at $81.62 a barrel on the New York Mercantile Exchange. The October contract settled the previous day at $83.32, ending at a record high for the fourth session in a row.
European shares advanced. The pan-European Dow Jones Stoxx 600 index rose 0.5% to 376.88. The German DAX 30 closed up 0.8% at 7,794.43, while the UK's FTSE 100 climbed 0.4% to 6,456.70 and the French CAC-40 added 0.2% to 5,700.65.
In the emerging markets, the Bovespa in Brazil gained 1.6% to 57,799 while the IPC index in Mexico rose 0.3% at 30,583. The RTS index in Russia advanced 0.55% to 2026 and the ISE National-30 index in Turkey put on 0.4% at 68,444.
Asian stocks rose for a fourth day, led by raw-materials producers, on expectations of high demand and increase in earnings. Japan, Taiwan and Korea markets are shut today. The Hang Seng Index set new record intraday high of 26,071.57. The Hang Seng was up 0.9% in early minutes.
The Morgan Stanley Capital International Asia-Pacific excluding Japan Index gained 0.3% to 509.18 at 9:59 a.m. in Hong Kong, set for a third straight record. The index rallied 5.6% in the previous three sessions after the Fed cut its key interest rate by half a percentage point to bolster growth in the US. BHP Billiton climbed to a record on speculation that it will announce a large gold discovery.
Key indices scaled new peaks as yet another historic session was marked. The run prolonged led by the Reliance group stocks. RNRL, RPL, RIIL were the visible out performers for the day. Among the sectoral gainers, OIL & Gas was the top gainer followed by Realty index. However, FMCG and Pharma witnessed selling pressure. Finally, BSE 30-share benchmark Sensex ended 216 points higher to close at 16564. NSE Nifty surged 90 points to close at 4837.
RNRL a unit of India's second-largest utility by market value, sky rocketed by over 35% to Rs76 in a single trading session on reports the company has applied for a license to distribute natural gas to households and cars and buses. The scrip has touched an intra-day high of Rs79 and a low of Rs57 and recorded volumes of over 20crore shares on NSE.
Reliance Energy also gained by over 2.5% to Rs1009 after reports stated that the company applied to the oil ministry for permission to sell gas in Mumbai, New Delhi and its suburbs Noida and Gurgaon. The scrip has touched an intra-day high of Rs1033 and a low of Rs982 and has recorded volumes of over 35lakh shares on NSE.
Financial Technology advanced by 1% to Rs2712 after the company secured the approval from CERC to set up a national level power exchange – Indian Energy Exchange. The scrip touched an intra-day high of Rs2808 and a low of Rs2690 and recorded volumes of over 1,00,000 shares on NSE.
Simplex Infrastructures slipped by 1.7% to Rs392. The company announced that they have bagged orders worth Rs8bn in four business segments. The scrip touched an intra-day high of Rs419 and a low of Rs390 and recorded volumes of over 1,00,000 shares on NSE.
Alfa Laval India slipped 1.2% to Rs1021. Reports stated that the company has received a contract worth Rs364.5mn for a black liquor evaporation plant of West Coast Paper Mills. The scrip touched an intra-day high of Rs1039 and a low of Rs1020.
ITC declined by 1.6% to Rs190. According to reports the company has planned addition of a new line expanding its paper division’s capacity by March 2008. The scrip touched an intra-day high of Rs194 and a low of Rs187 and recorded volumes of over 60,00,000 shares on NSE.
Garware Offshore slipped 0.5% to Rs185. Reports stated that the company has allotted 0.5mn shares to shareholders on a preferential basis. The scrip touched an intra-day high of Rs189 and a low of Rs184 and recorded volumes of over 18,000 shares on NSE.
IT stocks witnessed a bounce back on back of value buying. Infosys gained 1.4% to Rs1825, TCS advanced by 1.5% to Rs1017, Wipro gained 1% to Rs438 and Rolta added 5.9% to Rs526.
Stocks in News:
NTPC plans to raise power generation capacity from 27,100MW to 50,000MW by 2012 and targets 50mn ton coal production from captive coal blocks.
Bharti Airtel gets license to start direct-to-home services, to invest Rs1.5bn in the first phase to launch nation-wise operations.
Nalco to raise about Rs9bn of overseas debt to fund the second phase of its expansion program.
The government has cleared two transmission line projects of Reliance Energy; Investments in the projects would be to the tune of Rs35bn.
DLF emerges as the highest bidder at Rs66bn for setting up Tidel-II, the second IT and ITES SEZ in Chennai.
HDFC may cut home loan rates, sees 50 bps reduction in its cost of funds as compared to last month.
JSW Steel plans increasing US pipe output by 75% to 0.35mn ton next year and may increase to 0.5mn ton by March 2009.
Usha Martin group has acquired UK based BPO company Converso. The acquisition is expected to bring synergies in customer care and billing solutions between Ushacomm, Eppixcomm and Converso.
Hindustan Zinc plans major expansion to take its total capacity to one million ton and add 110MW to its total wind power capacity.
Oil companies top in advance tax payment.
PMO in favour of assigning Chiria mines to SAIL; asks Jharkhand government to ensure the same.
Centre may allow Coal India to import about 15mn tons of coal after the announcement of new coal sale policy expected this week.
Fund Activity:
FIIs were net buyers of Rs7.62bn (provisional) in the cash segment on Friday and the local institutions pulled out Rs2.78bn. In the F&O segment, foreign funds were net buyers of Rs13.81bn.
On Thursday, FIIs were net buyers to the tune of Rs16.3bn in the cash segment. Mutual Funds were net buyers of Rs2.33bn on the same day.
Major Bulk Deals:
Standard Chartered MF has bought ACE; Birla MF has picked up Balaji Telefilms; Macquarie Bank and T. Rowe Price have purchased Gujarat NRE Coke; Reliance Industries has bought ICI India while Prudential ICICI has sold it; Bear Stearns has picked up Karuturi Networks; Citigroup has purchased Macmillan while HDFC MF has sold the stock; Citigroup has bought Shree Precoated Steels; Goldman Sachs has sold Visa Steel.
Upper Circuit:
Atlanta, Gremac Infrastructure, McNally Bharat, Ruby Mills, Victoria Mills, IID Forgings, Jai Corp, RIIL.
Lower Circuit:
SSI and Tourism Finance.