Love works in miracles every day: such as weakening the strong, and strengthening the weak; making fools of the wise, and wise men of fools; favouring the passions, destroying reason, and in a word, turning everything topsy-turvy.
Bulls are in love with the markets. Miracles seem to be happening everyday for the bulls. Fasten your seat belts as the markets are set to take you on a topsy-turvy ride today. Last evening's plans to deal with the F&O expiry may change given the developments in the global markets. September, which is historically a bad month did prove to be different this time. The big question today would be to what extent the roll overs will take place. The coming series will be a key one due to the quarterly results.
Thanks to an upbeat finish on Wall Street, equity markets have rallied across the globe. Indian bourses will also witness a ripple effect of the bullish undertone in the world markets. The bears could read the writing on the wall and run for cover (short covering in F&O) today, giving the bulls further ammunition to take the indices to new orbits.
Skeptics may feel the market is running ahead of fundamentals (we too think so), but when FIIs pour in close to $2bn (only cash segment) in just six days flat, the indices are naturally going to go only one way, that is up. Some market observers are of the view that portfolio investment into emerging markets will remain strong going ahead. Ride this wave of optimism with whatever you are willing to risk. Be careful in choosing the stocks. We won't get fed up of repeating not to get fooled into buying poor quality or similar seeming companies.
We see a gap-up opening on the back of the bullish trend across the world. The F&O expiry may make things a bit volatile. The extended session will keep bulls on bears on tenterhooks. But its advantage bulls as they get on to a fine start.
Some market observers expect India to be re-rated further compared to other emerging markets. Though the recent upsurge has been owing to buying in select index heavyweights, particularly the Reliance shares, other stocks are likely to catch up soon. A lot of foreign investors are said to be sitting on the sidelines to enter emerging markets like India. As long as the liquidity factor is favourable, the bulls will remain in command, barring a few hiccups here and there. These obstacles may come in the form of political upheavals or announcements by the RBI/Government to check the run-away rise in the rupee.
US stocks rallied the most in a week after General Motors agreed on a contract with the United Auto Workers and Bear Stearns rallied on speculation that billionaire investor Warren Buffett was interested in buying a stake in the battered Wall Street firm.
GM climbed to the highest since July after cutting a deal that will allow the largest US automaker to get rid of $50bn in health-care costs. Bear Stearns jumped the most in six weeks on a New York Times report that Buffett may provide capital to stem losses from the housing slump.
The Dow Jones Industrial Average gained 99.50 points, or 0.7%, to 13,878.15. The Dow ended the session 122 points away from its all-time high above 14,000, which it hit in July. The S&P 500 Index added 8.21 points, or 0.5%, to 1,525.42 and the Nasdaq Composite Index increased 15.58 points, or 0.6%, to 2,699.03.
US financial shares posted their biggest gain since Sept. 19, the day after the Federal Reserve cut its benchmark interest rate by 50 basis points. Stocks also rose after a larger-than-forecast decrease in durable goods orders stoked expectations of more rate cuts.
Oil prices rose in the afternoon, erasing morning losses. US light crude oil for November delivery rose 77 cents to settle at $80.30 a barrel in New York. Prices had fallen in the morning after a government report showed a surprise increase in weekly crude supplies. Last week, the October contract settled at a record high of $83.32.
Treasury prices ended the session flat after bouncing throughout the day. The yield on the 10-year note stood at 4.62%, unchanged from late on Tuesday. In currency trading, the dollar fell to another record low versus the euro before bouncing back a bit, and also gained versus the yen. COMEX gold for December delivery fell $3.30 to settle at $735.50 an ounce.
European markets advanced buoyed by strength in the financial-services sector as bid speculation boosted UK mortgage lender Northern Rock and Nordic stock exchange operator OMX received a higher takeover offer. The pan-European Dow Jones Stoxx 600 index rose 0.7% to 375.02. The German DAX 30 closed up 0.5% at 7,804.15, the French CAC-40 rose 0.9% to 5,690.77 and the UK's FTSE 100 advanced 0.6% to 6,433.00.
All the emerging markets closed higher. The Bovespa in Brazil rose 1.5% to 59,715 while the IPC index in Mexico ended flat at 30,303. The RTS index in Russia surged by 2% to 2049 and the ISE National-30 index in Turkey was up 2.7% at 68,915.
Asian markets were trading sharply higher this morning. The Nikkei in Tokyo rallied 252 points to 16,688 while the Hang Seng in Hong Kong surged 420 points to 26,850. The Straits Times in Singapore rose 39 points to 3689 and the Kospi in Seoul gained 17 points to 1936.
Historic trading session ended flat, after benchmark Sensex surged pass yet another milestone in early trades. Within minutes after trading started the Sensex crossed the 17k mark rising by over 100 points from previous close. The index took merely 6 days to reach the landmark. Wild intra-day gyrations were witnessed throughout the trading session ahead of F&O expiry. Volumes also fell as turnover in the F&O segment dropped 6.1%. Finally, BSE 30-share benchmark Sensex ended 22 points higher to close at 16,921. NSE Nifty ended flat at 4,940.
Pfizer jumped by over 5% to Rs716. According to reports the company has been asked by NPPA to reduce prices of two drugs, Benadryl and Caladryl. The scrip touched an intra-day high of Rs750 and a low of Rs686 and recorded volumes of over 68,000 shares on NSE.
Ranbaxy Laboratories slid 0.5% to Rs422 after reports stated that the company would market Australian drug manufacturer, Sirtex Medical’s, cancer drug in the country. The scrip touched an intra-day high of Rs430 and a low of Rs421 and recorded volumes of over 9,00,000 shares on NSE.
SRF spurred by over 5% to Rs151 on reports that the company would set up a new polyster industrial yarn spinning unit with an annual capacity of 14500 tonnes at its existing Gumminipoondi plant in Tamil Nadu. The scrip touched an intra-day high of Rs151 and a low of Rs144 and recorded volumes of over 5,00,000 shares on NSE.
PFC slipped 1% to Rs202. Reports stated that the company has invited preliminary bids from prospective developers for setting up a 4,000MW project at Tilaiya in Jharkhand. The scrip touched an intra-day high of Rs208 and a low of Rs201 and recorded volumes of over 10,00,000 shares on NSE.
GAIL was up by over 3% to Rs374 on reports that the company would consider bonus issue and stock split. The scrip touched an intra-day high of Rs390 and a low of Rs362 and recorded volumes of over 30,00,000 shares on NSE.
BHEL edged lower by 0.5% to Rs1993. The company declared that they have secured contract worth Rs7.6bn. The scrip touched an intra-day high of Rs2020 and a low of Rs1982 and recorded volumes of over 7,00,000 shares on NSE.
Sugar stocks recorded sweet gains on reports that sugar mills would be given interest- free loans against excise payments. Renuka Sugar surged by over 1% to Rs706, Bajaj Hindustan added 0.7% to Rs189 and Rana Sugar added 1% to Rs19.
Banking stocks were in the limelight on hopes that RBI would cut interest rates following Federal Reserve way. ICICI Bank surged by over 2.5% to Rs1020, SBI advanced by 2.3% to Rs1849 and PNB added 1.4% to Rs535. OBC, Union Bank and Corp Bank were the major gainers among the Mid-Cap stocks.
IT stocks recorded smart gains after reports stated, the IT firms indicated that billing rates for new contracts will go up by 3-4% and the old one by 2-3%, to rein in margin pressure. Infosys surged by 3.5% to Rs1833, TCS advanced by 4.5% to Rs1047 and Satyam gained 4.8% to Rs457.
Power stocks witnessed profit booking. REL slipped by 5% to Rs1034, PFC was down by 1% to Rs202 and Tata Power lost 0.5% to Rs834.
Oil marketing stocks were in momentum as reports stated that the government would issue Rs12tn worth of oil bonds to the oil marketing companies. HPCL surged by over 4.5% to Rs278, IOC was up by over 7% to Rs468 and BPCL added 4.5% to Rs365.
Stocks in News:
Atlas Cycles, C&C Construction, Deccan Aviation and Sakthi Sugar will announce their results today.
State Bank of India cuts home loan rates by 75bps
The oil ministry has proposed a 12.5% hike in the price of natural gas sold by ONGC to power and fertilizer units from Rs3.2per scm to Rs3.6per scm.
Shipping Corporation of India is investing Rs30bn to build country's largest shipyard.
Bank of India may dilute 5% government stake through QIP.
Videocon is planning to set up a semiconductor and LCD complex near Mumbai at an investment of Rs80bn.
Videocon has applied for mobile licenses in all 22 telecom circles in the country and is likely to rope in Verizon as JV partner.
Reliance Energy is planning to restructure its business under three verticals - utility, infrastructure and real estate.
Pantaloon Retail plans to spin off its subsidiary, Future Ventures, as a separate company and raise Rs200bn through IPO and private placement.
Bharati Shipyard and the Apeejay Surendra group plan to set up a ship manufacturing unit in Orissa with an investment of Rs22bn.
Nagarjuna Construction has forecast that its profits will rise by 32% yoy in FY08 on increased highway orders and contract to build India’s biggest steel furnace.
Japanese trading firms Mitusui & Co and Mitsubishi Corp are likely to take stake in an aromatics unit planned by MRPL.
Russian conglomerate Sistema has acquired a 10% stake in Shyam Telelink, the unlisted telecom services arm of Shyam Telecom group.
Apollo Hospitals is planning set up 50 hospitals across the country and plans to invest Rs200-350mn in each of the facilities.
Vijay Mallya is picking up 50% stake in Epic Aviation, the Bend Oregon based small aircraft manufacturer in his personal capacity.
India’s iron ore export to China decreased by 26.5% to 4.59mn tons in August.
India's crude oil production in August was 2.8% less than the target of 2.95mn tons.
The country’s textiles exports are expected to fall short by over 16% from the target of US $25bn for FY08.
DTH players may be allowed partial exclusivity of content.
Sugar industry may get interest free loans equivalent of excise payments.
Fund Activity:
FIIs were net buyers of Rs7.28bn (provisional) in the cash segment on Wednesday and the local institutions pulled out Rs7.01bn. In the F&O segment, foreign funds were net sellers of Rs5.85bn.
On Tuesday, FIIs were net buyers to the tune of Rs15.5bn in the cash segment. With this, their net investment in Indian shares in the past six days has risen to more than US$1.93bn.
Major Bulk Deals:
Macquarie Bank has sold Asian Granito; Deutsche Securities has sold Balrampur Chini; BNP Paribas has picked up GV Films; IDBI has sold Jaiswal Neco; Bear Stearns has bought Kamat Hotels while HSBC Financial has sold the stock; Deutsche Bank AG has sold Karuturi Networks; Lotus Global Investment has sold Kashyap Tech; Merrill Lynch has sold Praj Industries (Tata Sons has picked up a 14.7% stake in the company from promoters and from the market); Merrill Lynch has purchased Sujana Metal; Kotak Mahindra UK has picked up Tera Software while selling Zen Tech; Citigroup has bought TVS Motor while Merrill Lynch and Morgan Stanley have sold the stock.
Upper Circuit:
RIIL, Bag Films, Jayant Agro, Jay Pee Hotel, Swan Mills, IID Forgings, Ruby Mills, Jai Corp and Marathon Nextgen.
Lower Circuit: