The reason lightning usually doesn't strike twice in the same place is that the same place isn't there the second time.
The stock market is here to stay no matter what strikes it. As if all the turbulence and volatility was not enough, investors and traders could have tough time today due to the nationwide bank strike. Ironically, if you wish to take some position (only if you have the money), banking is the sector to be in. The RBI meet next week (Jan. 29) will ensure that there is plenty of action in these counters. The flip side is F&O expiry could cause wild swings no matter which counter you enter.
Stock exchanges have had to alter their settlement schedules because of the bank strike. No clearing and settlement will take place today with banks across the country downing their shutters on a slew of issues. All trades executed on Jan. 24 and Jan. 25 will be settled on Jan. 28. In a nutshell, money could again be in short supply and may pose some more strain despite the bounce back across global markets.
And, though trading will continue as usual, one fears that traded volume will take a hit owing to the weak undertone and the bank strike. In addition, there are reports of brokers still not having recovered from this week's big sell-off. A couple of brokers are reportedly in trouble. The system is still not fully fit to resume a full fledged rebound as aftershocks of the global meltdown will continue to haunt the bulls. Meanwhile, the NSE has clarified that it has not allowed brokers to fund their pay in commitments in the form of shares with certain conditions.
Intra-day traders may continue to find life difficult for a while till the overall sentiment improves considerably and there is complete stability. This may take time. How long is anybody's guess. For long-term investors though, this is a big opportunity to prepare for a long haul, as the outlook on the Indian economy remains pretty good. We expect a firm opening on the back of strong global cues. Having said that, things will continue to be uncertain and choppy. One will have to continue to keep an eye on global markets for near-term direction of the market.
One big worry is the relentless selling by the FIIs. Unless there is a favourable change on this front, things will remain uncertain and volatile. FIIs were net sellers of 22.55bn (provisional) in the cash segment yesterday. On the other hand, domestic funds continued to pump money, and were net buyers of Rs11.17bn. In the F&O segment, FIIs were Rs25.42bn buyers. On Wednesday, foreign funds were net sellers of Rs24.99bn. With this, they have pulled out well over US$3.2bn in the past six days (excluding yesterday). Mutual Funds were net buyers of Rs8.77bn on Wednesday.
Results Today: Andhra Cement, Ashok Leyland, Atlanta, Barak Valley, BEML, BEL, BHEL, Century Textiles, Dalmia Cement, Dish TV, Dishman Pharma, Dr. Reddy's, Emkay Share, Federal Bank, Force Motors, Goa Carbon, Gujarat Industries & Power, ICRA, ING Vysya Bank, Jyoti Structures, Kale Consultants, KEI Industries, Marg Construction, Matrix Labs, Novartis, PTC India, REI Agro, Rico Auto, TVS Motor, UCO Bank, Unity Infraprojects, Voltas and Zee News.
Asian markets were trading mostly higher this morning. The Nikkei in Tokyo gained 367 points to 13,459 while the Hang Seng in Hong Kong surged 1049 points to 24,558. The Kospi in Seoul advanced 16 points to 1679 while the Straits Times in Singapore rose 66 points to 3119.
The Shanghai Composite in China was flat at 4715 and the Taiex in Taiwan was up 196 points to 7713.
US stocks ended higher on Thursday as investors continued bottom fishing after the recent drubbing. Announcement of a tentative economic stimulus package by the White House lifted the sagging spirits of the bulls.
Xerox Corp. and Lockheed Martin reported profit that topped analysts' estimates. Freeport-McMoRan Copper & Gold, Exxon Mobil and Alcoa led gains in commodities producers after China's economy posted a fourth- straight quarter of growth above 11%.
The S&P 500 climbed 13 points, or 1%, to 1,352.07, paring its decline this year to 7.9%. The Dow Jones Industrial Average, which yesterday fell 326 points before ending the day 299 points higher, added 108 points, or 0.9%, to 12,378.61. The blue chip gauge is still down 6.7% in 2008. The Nasdaq rose 44 points, or 1.9%, to 2,360.92, still off 11% in 2008.
Market breadth was positive. On the NYSE, winners topped losers three to two on volume of 2.17bn shares. On the Nasdaq, advancers beat decliners by more than four to three on volume of nearly 3bn shares.
Treasury prices fell, raising the yield on the 10-year note to 3.71% from 3.6% late on Wednesday. In currency trading, the dollar fell versus the euro and rose against the yen.
US light crude oil for March delivery rose $2.42 to settle at $89.41 a barrel in New York after the government reported a stronger-than-expected rise in crude supplies last week. COMEX gold rallied $22.70 to settle at $905.80 an ounce.
After the close, Microsoft, Sun Microsystems and Amgen reported their quarterly results. Microsoft reported higher quarterly sales and earnings that topped estimates, sending shares 5% higher in extended-hours trading.
Sun also reported higher quarterly profit that beat estimates. Shares were little changed after the close. Amgen reported higher earnings and weaker sales in the fourth quarter, both above analysts' expectations. Shares gained 5% in extended-hours trading.
Nokia reported a 44% jump in net profit and said it had reached its goal of 40% market share in handset sales. The company also said that while it expects continued growth in 2008, first-quarter growth would slow from the last quarter of 2007. Shares jumped 12.5%.
On late Wednesday, Qualcomm reported strong fiscal first-quarter results and forecast second-quarter and full-year profit in line with forecasts. Shares jumped over 10% in active Nasdaq trade.
European shares posted their biggest one-day advance in nearly five years, as investors seized upon strong results from Nokia and others to pick up battered shares. The pan-European Dow Jones Stoxx 600 index climbed 5.2%, or 16.05 points, to 322.08, the most it has risen in one day in percentage terms since a 5.6% rise logged in March 2003.
UK's FTSE 100 closed up 4.8% at 5,875.80, while the German DAX 30 surged 5.9% to 6,821.07 and the French CAC-40 jumped 6% to 4,915.29.
All the emerging markets closed up. The Bovespa in Brazil shot up almost 6% to 57,463 while the IPC index in Mexico added 1% to 27,905. The RTS index in Russia gained 5.15% to 1988 while the ISE National-30 index in Turkey rose 6.3% to 57,053.
Bull bear slugfest continue
Bears once again showed their strength today shrugging off bulls off the bourses. After staging a strong come back in the previous session and starting off the day in style bulls were not able to hold on to their gains as markets wiped off all its early gains on back of weak cues from the Asian markets and all round profit booking.
The upward trend short lived and markets turned volatile gyrating almost 1,000 points between its days high and low, The benchmark Sensex dropped 372 points to close at 17,211 and NSE Nifty slipped 169 points to close at 5,034.
Reliance Industries was down 2.5% to Rs2488. According to reports the company is eyeing a larger pie of $25bn global plastic industry may rollout expansion plans soon. Reports have also stated that its retail subsidiary entered into a joint venture with Citigroup to offer retail finance The scrip touched an intra-day high of Rs2645 and a low of Rs2435 and recorded volumes of over 48,00,000 shares on NSE.
Hindustan Zinc slipped 12.2% to Rs568 after the company announced that they lower zinc prices to Rs1,01,900 per ton and cut lead prices to Rs1,12,500 per ton. The scrip touched an intra-day high of Rs650 and a low of Rs550 and recorded volumes of over 1,00,000 shares on NSE.
HB Stockholdings was locked at 5% lower circuit. The company announced that it increased its stake in DCM Shriram Industries Ltd to 35,23,143 equity shares comprising 23.03% of it total equity through open market purchases. The scrip touched an intra-day high of Rs94 and a low of Rs88.70 and recorded volumes of over 13,000 shares on NSE.
BHEL was down 2.5% to Rs2090. The company declared that they secured order worth Rs24.75bn. The company announced that it would set up 600MW Thermal power unit. The scrip touched an intra-day high of Rs2260 and a low of Rs2075 and recorded volumes of over 11,00,000 shares on NSE.
Madras Cement gained 2% to Rs3707. The company announced that they would consider buy back offer on Jan 31. The scrip touched an intra-day high of Rs4200 and a low of Rs3585 and recorded volumes of over 6,000 shares on NSE.
Essar Shipping was locked at 5% lower circuit to Rs189.45. Reports stated that the company may merge Essar Group’s exploration and drilling business. The scrip touched an intra-day high of Rs209.35 and a low of Rs189.45 and recorded volumes of over 28,00,000 shares on NSE.
Jet Airways slipped 2.6% to Rs719. The company announced that they planned to set up two new subsidiaries maintenance, repair and overhaul and flight-catering unit. The company is also looking for other funding sources according to reports. The scrip touched an intra-day high of Rs796 and a low of Rs705 and recorded volumes of over 43,000 shares on NSE.
Tata Tea advanced by over 7.5% to Rs728 following reports that the company opened it first out-of-home segment first outlet ‘Chai Unchai’ in Bangalore. The scrip touched an intra-day high of Rs744 and a low of Rs685 and recorded volumes of over 3,00,000 shares on NSE.
HCL Technologies dropped 4.2% to Rs230. The company announced that it has been selected as the provider of a mobile and remote working solution to Wiltshire Police. Valued at 4mn USD, the partnership will last for five and a half years, including an initial six month implementation period. The scrip touched an intra-day high of Rs252 and a low of Rs225 and recorded volumes of over 11,00,000 shares on NSE.
SBI gained 1% to Rs2343. The company announced that they have purchased 91% stake in Global Trade Finance, for Rs5.25bn. SBI acquired the stake from three of the four promoter shareholders of GTF at a price of Rs75 per share, according to reports. The scrip touched an intra-day high of Rs2399 and a low of Rs2300 and recorded volumes of over 13,00,000 shares on NSE.
News Snippets:
- Land troubles may delay Sasan ultra mega power project developed by Reliance Power. (Mint)
- Reliance Industries and Gail in race for supplying 8mscmd of gas to Karnataka Power Corp’s 1,400MW power project at Bidadi. (Mint)
- NK Minda Group plans to invest Rs4bn for units in Chennai and Pune over next 18 months. (Mint)
- Britannia Industries plans to enter ready-to-eat foods and strengthen presence abroad. (Mint)
- Aditya Birla Retail looking for an IPO in 3-5 years. (Mint)
- M&M launches Scorpio Pik-up in Brazil. (Mint)
- Tata Motors’ mini truck to be launched in USA. (BS)
- Areva T&D bags Rs28bn order from Qatar General Electricity and Water Corporation. (BS)
- BHEL gets award of Rs25bn contract from Tamil Nadu Electricity Board. (BS)
- Pyramid Saimira plans Rs2bn investment on proposed SEZ. (BS)
- PBA Infrastructure secures Rs1.5bn order from Municipal Corporations of Greater Mumbai and Pimpri Chinchwad. (BS)
- Electrotherm India won orders worth US$14mn for furnaces and other accessories supply for a steel billet plant in Turkey. (BS)
- Patni Computers to consider a share buyback. (BS)
- Ansal Properties enters into tripartite agreement with subsidiary of Educomp Solutions to construct and develop school properties. (BS)
- Blue Dart appoints Yogesh Dhingra as COO. (BS)
- RCom plans to offer broadband in Bhutan. (BS)
- Adani Enterprises planning to add capacities in energy, real estate and agri businesses in next 3-5 years. (BS)
- JSW Steel gets into galvalume production. (BL)
- BSNL ties up with US firm SOMA for Wimax. (BL)
- TCS wins US$40mn New India Assurance deal. (BL)
- Sony Ericsson launches new handsets in Indian market. (BL)
- United Spirits plans acquisition to increase volumes by 33% to 100mn cases in 2-3 years. (BL)
- Reliance Retail in talks with global players for new store formats. (BL)
- PNB may take its wholly owned subsidiary PNB Housing Finance for a public offer in coming months. (BL)
- ING Vysya Life Insurance looks to raise Rs1bn more capital by March 2008. (BL)
- ICICI Bank ties up with UAE Xchange to promote its travel card. (BL)
- IOC may get Rs39.8bn subsidy from upstream companies. (BL)
- Gayatri Projects eyes projects in water, infrastructure and power. (BL)
- Sical Logistics close to buying freight forwarding company. (BL)
- Cadila Healthcare and US based Prolong Pharmaceuticals tie-up to develop anaemia drug. (BL)
- Spanco Telesystems plans SBU to market product that enables real time monitoring of vehicles. (BL)
- Rolta India agrees to buy Broech of US for Rs1.8bn. (BL)
- The proposed IPO of National Hydroelectricity Power Corporation (NHPC) to face hurdle on non compliance of regulatory clause. (FE)
- Infosys to develop information, communication technology to connect farmers with retailers. (FE)
- JSW Steel recommissions one of its galvanizing line. (FE)
- Monsanto India to sell Butachlor & Alachlor biz to Sinochem International for $8.4mn. (FE)
- RNRL applies for coal blocks to turn coal into gas. (FE)
- NDTV Imagine plans to make contemporary international cinema available to viewers through various platform. (FE)
- M&M in negotiations to take over the Belgian automotive gear maker VCST for ~Rs14bn including pound 125mn in debt. (ET)
- Aditya Birla Retail looking to foray in Consumer Durable, Footwear, fashion, books or music. (ET)
- Capgemini denies that Indian IT companies like Wipro may possibly be acquiring parts of the company. (ET)
- Concor looking for a major chunk of the air cargo biz in the country. (ET)
- Concor plans to build two air cargo complexes in Goa and the North east. (ET)
- ICICI Venture plans US$3bn infra fund to invest in road, port and Power projects. (ET)
- Areva T&D India looking to double its transformer capacity in India by 2010. (ET)
- SBI plans to buy 91% stake in GTF Global Trade Finance. (ET)
- Dr Reddy’s Lab, Sun Pharma lead US patent litigation race. (FE)
Economic Snippets
- EPF rate for 2007-08 kept unchanged at 8.5%. (Mint)
- Railways to invest Rs200bn in three years over 100 projects. (BL)
- Telecom industry seeks duty cut on wireless data cards. (BL)
- Finance Minister to take appropriate measures to curb certain kinds of capital inflow that are speculative in nature. (FE)
- Department of revenue and economic affairs agrees to waive STT on option where the right to buy or sell is not exercised. (FE)
- Civil aviation ministry in pact with Saudi Arabia government to enhance air traffic between two countries. (FE)
- TRAI orders telecom service providers to provide hard copy of the bill free. (FE)
- Existing DTH players decide to levy a carriage fee to limit the introduction of new channels. (FE)
- TDSAT defers the hearing of GSM operators’ petition against dual technology. (FE)
- Asian Development Bank (ADB) to provide a loan of $350mn to improve Urban Infrastructure in India’s Northern state of Uttarkhand. (FE)
- Applications from NBFC seeking no objection certificate (NOC) for branch expansion have to be registered with RBI on a case to case basis. (FE)
- The united forum of Banks unions have called a strike on January 25, 2008 to highlight their charter of demands. (ET)