If America shows weakness and uncertainty, the world will drift toward tragedy. That will not happen on my watch. – George Bush.
With no major events to look forward to in the near term and due to the heightened uncertainty surrounding the US economy, the market here will remain sideways with no specific bias. We will continue to witness regular bouts of advances and declines till a fresh event - local or global - pushes the market players into action again either way. We keep hearing bad news from the global financial majors as well as regulators and experts on the US sub-prime crisis. This is unlikely to go away in a jiffy and will cap any sharp movement on the way up. At the same time, the downside too doesn't appear to be much. As a result, the key indices will remain stuck in a range for the short term.
FII inflows have also slowed considerably, though they continue to storm the primary market, as can be seen from the strong response to big-ticket IPOs like Mundra Port, Religare and now Edelweiss. This also confirms that interest from overseas investors remains unaffected by the recent regulatory curbs imposed on P-Notes and renewed volatility across global markets. In a nutshell, the medium to long-term outlook remains robust owing to the now well articulated 'India Shining' story.
In the near term, the action will be concentrated on the small-cap and mid-cap counters as can be seen from last week's spurt in some of these counters. Having said that one must be extra careful with these stocks as they tend to be pretty volatile and risky. Select large caps will also remain in the thick of things based on the news flow. Today, we expect a cautious to slightly higher opening and another choppy trading with lots of stock-based action.
Essar Oil will remain in the limelight. After market hours on Friday, the company announced that it no longer was planning to delist the shares from local bourses. Instead, it announced a US$6bn expansion plan for its Vadinar refinery. Essar Oil will raise part of the funds from a preferential allotment to promoters at Rs200 per share.
VBC Ferro Alloys could be another stock that might see some action amid market grapevine of a placement at Rs450 per share. The company is also holding substantial shares of Konaseema Gas Power and Orissa Power. Of this, Konaseema is slated to come out with an IPO. Karuturi Networks is likely to rise as billionaire investor George Soros has bought 1.4 million shares of the floriculture company.
Also watch out for stocks like Ashok Leyland, BILT, Yes Bank and Gujarat State Petronet Ltd.
Oswal Chemical might also perk up on news that it may sell its Chembur property to Reliance Capital. Plethico Pharma is likely to gain amid reports that it could announce an acquisition in the US. Gitanjali Gems may also advance as the company is expected to make 'an important' announcement today. Last week, an overseas brokerage firm also came out with a 'buy' report on the stock.
US stocks posted their first weekly gain this month after investors speculated that the worst of Wall Street's mortgage losses could be over and Wal-Mart boosted its earnings forecast.
Financial stocks rebounded from two weeks of declines after Goldman Sachs said it was not planning a significant write down. Wal-Mart surged the most since March 2003 after the world's largest retailer lured customers with discounts.
The Standard & Poor's 500 Index added 0.4% to 1,458.74. The Dow Jones Industrial Average rose 1% to 13,176.79, and the Nasdaq Composite Index gained 0.4% to 2,637.24. The Russell 2000 Index of small companies retreated for a third straight week, losing 0.4% to 769.50.
Crude oil lost 1.3% last week, only the second weekly decline since August. Gold lost 5.7%, the most since March, on speculation the dollar will rebound from record lows, reducing the appeal of the precious metal as an alternative investment.
European shares closed lower on Friday. The pan-European Dow Jones Stoxx 600 index lost 0.9% at 362.72. The UK's FTSE 100 declined 1.1% to 6,291.20, the German DAX 30 shed 0.7% to 7,612.26 and the French CAC-40 dropped 0.7% to 5,523.63.
In the emerging markets, the Bovespa in Brazil finished flat at 64,609 while the IPC index in Mexico jumped 1.6% to 29,631. The RTS index in Russia was down 1.3% at 2189 and the ISE National 30 index in Turkey rose by nearly 1% at 68,826.
Asian stocks were mostly up this morning but not all that much. The Morgan Stanley Capital International Asia Pacific Index advanced 0.3% to 158.90 as of 11:27 a.m. in Tokyo. Seven of 10 industry groups rose on the index, which slid 2.5% in the previous two days.
Japan's Nikkei 225 Stock Average added 0.3% to 15,197.82. Most stock benchmarks in the region gained, with Australia's S&P/ASX 200 Index climbing 1.3%. South Korea's Kospi lost 0.5%, while key indexes in Hong Kong, China, Taiwan and New Zealand were little changed.
Yet again bulls failed to make a come back on Friday as markets ended on the receiving end for third consecutive trading session. Although the
Finally, benchmark Sensex lost 86 points to close at 19,698. NSE Nifty closed flat at 5,906.
Among the non index gainers, Essar Oil was yet again the star performer, the scrip gained over 22% to close at Rs192. The Fertilizer stocks were also in the limelight led by Nagarjuna Fertilizer and Chambal Fertilizer.
Sugar stocks gained slight momentum after UP government said that they would move SC against High Court order on cane prices. Renuka Sugar advanced 1% to Rs765, Balrampur Chini edged higher 0.2% to Rs85.
Fertilizer continued to be in the limelight as the government announced its plans to issue Rs75bn worth of bonds to pay for compensation to be awarded to fertilizer makers after officials agreed to sell farmers growing agents at below- market prices.
Chambal Fertilizer was the top gainer, the scrip gained over 28% to Rs72, Nagarjuna Fertilizer was up over 14% to Rs82, Deepak Fertilizer rose over 10% to Rs165 and GNFC added 8.5% to Rs190.
Orchid Chemical advanced by 4.7% to Rs238 after the company declared that it has secured US FDA approval for Cefpodoxime. The scrip touched an intra-day high of Rs240 and a low of Rs225 and recorded volumes of over 4,00,00 shares on NSE.
Satyam Computers edged higher 0.2% to Rs429. Reports stated that the company targets three $100mn deal globally. The scrip touched an intra-day high of Rs434 and a low of Rs415 and recorded volumes of over 20,00,000 shares on NSE.
Cambridge Solution surged 2.2% to Rs88 after the company announced that they would raise $40mn by selling securities. The scrip touched an intra-day high of Rs96 and a low of Rs85 and recorded volumes of over 78,000 shares on NSE.
Ranbaxy slipped 3% to Rs411 after the company declared that the company has recalled 75mn tablets of 600mg and 800mg dosages of Gabapentin from the
Ashok Leyland was up 0.5% to Rs41 after the company announced that it forayed in the 49-ton category with the launch of its new 4910TT truck which is currently dominated by Volvo and AMW. The scrip touched an intra-day high of Rs42 and a low of Rs40 and recorded volumes of over 92,00,000 shares on NSE.
Pantaloon Retail was trading flat at Rs671. Reports stated that the company has planned to hive-off its sports business into a new entity, Planet Sports Retail. The scrip touched an intra-day high of Rs685 and a low of Rs655 and recorded volumes of over 1,00,000 shares on NSE.
Info Edge edged lower by 0.3% to Rs1360. Reports stated that the company has planned to expand in
Stocks in News:
BSNL to rollout WiMax services in rural areas by 2010; to invest Rs20bn from the USO fund.
Sovereign Government funds of Singapore, Dubai and Abu Dhabi in the race to buy 5% stake in Reliance Power in pre-IPO placement.
Reliance Industries' D6 block in KG basin to start gas production at 2.8bcf per day from Q3 2008 instead of H1 2008.
United Spirits to invest Rs1.4bn to increase wine production capacity and launch 100 brands in four years.
ADAG group is planning to invest Rs15bn in airports in MP and AP.
Essar Oil to triple its annual oil refining capacity to 34mn tons by 2010; to invest Rs240bn.
The private equity arm of ICICI Bank plans to invest US$800mn in Jaypee Infratech, part of the Jaypee Group.
Essar Steel to delist from exchanges; promoters to buy back shares at Rs48 each.
Educomp Solutions to invest Rs20bn to ‘enable’ setting up of 150 schools over next four years.
Oil blocks acquired by ONGC-LN Mittal group combine in Nigeria may face regulatory scrutiny.
Deccan Aviation may wipe out accumulated losses of Rs7.8bn by June 2008, according to its CEO.
National carrier Air India unlikely to launch IPO before 2009.
Bank of Baroda to form a life insurance JV with Andhra Bank and British insurer Legal & General.
13 cement companies show interest in forming a JV with SAIL for a slag cement plant at Rourkela.
RBI panel recommends introduction of trading in currency futures on dedicated exchanges, initially only for resident Indians.
Jawaharlal Nehru Port Trust to invest Rs70bn in various expansion projects over the next 4-5 years.
Government owned oil marketing companies asked to consider new discounts on ATF prices to domestic airlines.
SEBI would amend regulations to allow mutual funds to short-sell securities.
FDI limit in insurance to stay at 26% till political consensus evolves, according to Ministry of Finance.
India needs to sign a fresh agreement if it wants to go ahead with its plan to purchase 5mn tons of LNG, says Iran.
Companies planning to build city gas distribution networks would have to go through a competitive bidding process.
TRAI issues guidelines to telecom companies on employing recovery agents for the collection of dues from their customers.
FII Investment Trend:
FIIs were net sellers of Rs3.63bn (provisional) in the cash segment on Friday while the local institutions pumped in Rs2.4bn.
In the F&O segment, FIIs were net sellers of Rs8.69bn.
Foreign funds were net buyers of Rs7.88bn in the cash segment on Thursday.
Mutual Funds were net buyers of Rs4.83bn on the same day.