The only reason why we ask other people how their weekend was is so we can tell them about our own weekend.
We would have loved to say, Thank God, its Friday and relax for the weekend. But, speculation on Reliance Power’s bonus ratio, which will be decided on Sunday will hold center-stage. Buzz is that some short covering could take place and the Reliance Power stock may end above its issue price today.
But global markets are not very supportive for the time being. We expect a weak opening, unless Asian markets stage a rebound before the opening bell. IT stocks may remain in the limelight in the near term in case the rupee remains weak. Watch out for Centurion Bank of Punjab amid reports that it will be acquired by HDFC Bank, though both the companies have yet not confirmed any merger talks.
Shipping and auto parts companies may also be in action amid reports of some favourable proposals in store in the upcoming budget for the two sectors. Jai Corp. and Infotech Enterprises may also attract some attention on positive news flow. Bank of Rajasthan could be in action on expectations of a placement at a significant premium.
We mentioned yesterday not to get swayed by a day's rally as it could prove to be short-lived. Global indices are dancing to the beat of the daily dose of news coming from Wall Street. So, if one day some encouraging data or earnings report pushes the US shares up, the very next day a fresh set of weak economic reports will undo all the good work of the previous day. The markets remain volatile and it becomes tough to take a confident directional call.
The best way to beat the current uncertainty is to adopt a stock specific approach. Intra-day trading has turned pretty risky with the main indices fluctuating wildly. We expect the trend to continue for a while, even as head for a big budget week. We will also have the F&O expiry next Thursday. Keeping these two key events in mind, one should be a little bit more careful. Having said that, there are plenty of long-term opportunities on offer for the more daring of the bulls.
FIIs were net buyers of Rs2.09bn (provisional) in the cash segment yesterday while local institutions pulled out Rs1.41bn. In the F&O segment, FIIs were net buyers of Rs3.76bn. On Wednesday, they were net buyers of Rs567mn. Mutual Funds were net sellers of Rs1.91bn on the same day.
Asian stocks fell, with a region's benchmark set for its seventh weekly drop this year, on renewed concern about the health of the US economy. Toyota had its longest losing streak in almost five weeks, and Samsung declined the most in more than a week.
The MSCI Asia Pacific Index fell 1.2% to 142.82 at 11:24 a.m. in Tokyo. All 10 industry groups on the measure declined. The index is down 9.6% this year.
Last time we checked, the Nikkei in Tokyo was down 264 points or 1.9% at 13,423 while the Hang Seng in Hong Kong slumped 435 points or 1.8% to 23,187. The Kospi in Seoul was down 29 points at 1674 and the Straits Times in Singapore fell by 28 points at 3026.
The Shanghai Composite in China was down 115 points at 4411 and the Taiex in Taiwan was down 40 points at 8045.
US stocks slumped on Thursday on the back of a weak manufacturing report that stoked fresh worries that the world's biggest economy is on the brink of a recession, if it's not already in one.
All the three major indexes notched up losses of more than 1%, after a report showed that manufacturing activity in the Philadelphia area shrank the most in seven years. The grim data countered early momentum sparked by gains in technology shares.
The Philadelphia Fed index, a regional reading on manufacturing, tumbled to -24.0 from -20.9 in January. Wall Street economists had been looking for the gauge to improve a bit in the month. Negative readings suggest contraction in the sector.
The latest report follows a similarly bleak reading on manufacturing in the New York area that was released earlier this week, adding to mounting concerns that the US economy is fast slipping towards a recession.
Exxon Mobil, Chevron and GE declined, helping erase a 76-point gain in the Dow Jones Industrial Average. Target led losses in retailers after Citigroup told clients to sell the shares. SunTrust Banks fell the most in two months on a reduced credit outlook by S&P's and Oppenheimer's prediction of an imminent takeover.
The S&P 500 Index dropped 17.5 points, or 1.3%, to 1,342.53, its steepest loss since Feb. 14. The Dow slid 143 points, or 1.2%, to 12,284.3. The Nasdaq Composite slipped 27.32 points, or 1.2%, to 2,299.78.
Market breadth was negative. About four stocks fell for every one that rose on the New York Stock Exchange.
Weekly jobless claims declined last week, but the four-week moving average - seen as a more accurate indicator of the labor market - rose to levels not seen since October 2005 in the aftermath of Hurricane Katrina.
Analysts noted that claims offices in California, the largest state in the US, were closed for one day last week for a state holiday, giving laid off workers one less day to file claims.
Crude oil futures dropped for the first time in six days, falling 1.5% to close near the US$98-a-barrel mark, as government data showed that US crude inventories have risen more than expected.
Light, sweet crude for April delivery, the new front-month contract, declined $1.47 to close at $98.23 a barrel in New York. Earlier, it fell to an intraday low of $96.87. Natural gas moved lower despite that its inventories fell.
The Energy Information Administration reported that US crude inventories rose 4.2mn barrels in the week ended Feb. 15, outstripping the increase of 3.2mn barrels that analysts had expected.
Gold futures closed with gains after soaring to a new record high of $958.40 an ounce, boosted by weakness in the US dollar and the metal's appeal as a hedge against inflation. Gold for April delivery rose $11.40 to end at $949.20 an ounce in New York. Earlier, gold had surged to a new record high of $958.40.
April platinum futures also hit a record, climbing as high as $2,194.80 an ounce. Platinum finished up $49.40 at $2,188.20 an ounce.
Treasury prices rallied, lowering the yield on the benchmark 10-year note to 3.77% from 3.9% late on Wednesday. In currency trading, the dollar fell versus the euro and the yen.
European shares rebounded yesterday. The pan-European Dow Jones Stoxx 600 index rose 0.7% to 322.43. The French CAC-40 climbed 1% to 4,858.85, while the UK's FTSE 100 closed up 0.7% at 5,932.20 and the German DAX 30 added just 0.1% to 6,904.85.
In emerging markets, the Bovespa in Brazil was flat at 63,792 while the IPC index in Mexico gained 0.5% at 29,361. The RTS index in Russia was up 2.2% at 2065 and the ISE National-30 index in Turkey advanced 1.35% to 58,170.
Global cues to dictate trend
In a volatile trading session, markets managed to end with smart gains. It was the Metal and the IT stocks that were in limelight on Thursday. The IT stocks were in demand as a strong demand for dollars from importers and a lack of fresh inflow into the market led the spot rupee to breach the crucial barrier of 40.00 and hit a five-month low of 40.21/22 to a Dollar. However the banking stocks were on the receiving end.
After hitting a low of 17,482 benchmark index managed to bounce back nearly 250 points from thereon, led by gains in the frontline stocks like Infosys, Satyam, Tata Steel, RIL and Hindalco. Finally, the 30-share Sensex closed at 17,734 adding 117 points. The NSE Nifty closed at 5,191 gaining 37 points.
Overall about 1,461 stocks advanced, 1,248 stocks declined while 74 stocks remained unchanged. Among the BSE 30 index 21 stocks advanced while only 9 stocks declined.
Among the BSE Sectoral indices, BSE IT index (up 4.7%), BSE Metal index (up 3.8%), BSE Pharma index (up 1.4%), BSE FMCG index (up 0.6%). However, BSE Bankex index (down 1.2%)
Hexaware Technologies was up by 10% to Rs79. The scrip came off its days high after the company announced financial results for fourth quarter and Full-Year 2007. Financial year ended December 31, 2007, Revenue from operations stood at Rs10,398.03mn ($ 252.94 mn). Y-O-Y increase of 35.1% in $ terms. Y-O-Y increase of 22.6% in Rs terms. Net Profit after Tax was Rs1,100.74mn before minority interest and exceptional items. Net Profit after Tax was Rs72.29mn after minority interest and exceptional items. The scrip touched an intra-day high of Rs82 and a low of Rs73 and recorded volumes of over 68,00,000 shares on NSE.
SBI dropped 1.4% to Rs2178. According to reports, the Government plans to float special bonds which will be used to subscribe to the Rs167bn rights issue of. The scrip touched an intra-day high of Rs2235 and a low of Rs2125 and recorded volumes of over 7,00,000 shares on NSE.
Simplex Infrastructure was down 2.3% to Rs635. The company said that it has secured order worth Rs3.02bn in Oman. The scrip touched an intra-day high of Rs659 and a low of Rs615 and recorded volumes of over 8,000 shares on NSE.
Hindustan Zinc gained over 2% to Rs612 after the company said that it raised lead prices for a third time in eight days. Lead prices were raised by Rs3,300 to Rs1,38,500 per metric ton. However, the company left Zinc prices unchanged at Rs1,08,700 per ton. The scrip touched an intra-day high of Rs624 and a low of Rs601 and recorded volumes of over 42,000 shares on NSE.
HCL Technologies surged by over 3% to Rs276 after reports stated that the IT solutions provider has acquired CapitalStream, a US-based lending automation solutions provider, for Rs1.6bn in an all-cash deal. The scrip touched an intra-day high of Rs289 and a low of Rs273 and recorded volumes of over 9,00,000 shares on NSE.
i-flex Solutions edged lower by 0.3% to Rs1056 after the company announced that Volkswagen Bank selected Daybreak Lending Suite for its consumer lending business in the Netherlands. With aggressive targets for business growth, the bank decided to replace its legacy system with i-flex's proven and state-of-the-art lending solution. The scrip touched an intra-day high of Rs1106 and a low of Rs1040 and recorded volumes of over 62,000 shares on NSE.
Goldstone Technologies gained by 1% to Rs222 on announcement that it has launched commercial operations in Thailand. In Thailand, Goldstone Technologies has launched its IPTV services, in partnership with Synap Media & Infotech Co. Ltd, a business group which is aspiring to have a strong presence in the hospitality industry in the country. The scrip touched an intra-day high of Rs226 and a low of Rs216 and recorded volumes of over 46,000 shares on NSE.
News Snippets:
Adlabs, DLF, Parsvnath among the 25 bidders for redevelopment of Chanakya theatre. (Mint)
Deccan Aviation plans on raising Rs16bn capital. (Mint)
RCom acquires African firm for US$500mn to offer telecom access services in Uganda. (Mint)
Wockhardt to look at alternative avenues to fund its hospital network. (BL)
Hexaware Technologies reports Rs810mn loss on forex deals. (BL)
Alstom Projects wins export orders worth Rs5,920mn. (BL)
Simplex Infrastructures is awarded orders of Rs3,020mn for construction of six flyovers. (BL)
Madhucon Projects to transfer its BOT projects to a holding company. (BL)
L&T gets Cairn Engineering Services contract for pipeline project. (BL)
Hydro S&S Industries to supply plastic compounds and Caparo to make the body of Tata Motors’ Nano. (BL)
Glenmark Pharma’s arthritis drug enters clinical trial phase. (BL)
Kalyani Steel plans to set up Rs65bn steel and power plant in West Bengal. (BS)
Essar group to add an average of three stores a day to reach 1450 numbers by year end. (BL)
Patni Computers targets Japan market to double revenues in three years. (BL)
Infosys unveils first Latin American subsidiary to enhance service to clients in US. (BL)
Blackstone raises stake in
Gokaldas Exports to 68%. (BS)
Bharat Electronics plans JV with Israeli firm. (BS)
HDIL sells a commercial building project in Andheri, Mumbai for Rs9bn. (BS)
Bajaj Auto to list demerged entities in April 2008. (BS)
PNB and Vijaya Bank begin process of exiting JVs with US based Principal group. (BS)
Tatas may hive-off loss making Jaguar into separate entity. (ET)
HDFC Bank likely to takeover Centurion bank of Punjab in an all stock deal. (ET)
HDFC Bank plans to raise US$1bn from overseas markets for its global expansion plans. (ET)
Dutch Court restrains Ranbaxy Labs from launching generic version of Lipitor in the country before November 2011. (ET)
Goldstone Tech launches IPTV service in Thailand in partnership with Synap Media & Infotech. (ET)
Tata Tele to foray into enterprise solution space in US and UK. (ET)
Aditya Birla group in race to acquire personal loans and mortgage business of GE Money India. (ET)
Cabinet approves the proposal to issue special marketable securities to subscribe to the right issue of SBI. (ET)
Aditya Birla Nuvo to raise funds through issue of warrants to promoter group companies on preferential basis. (FE)
Dun & Bradstreet enters into agreement with Bank of Maharashtra. (FE)
REC IPO gets oversubscribed 4.13 times. (FE)
Teledata Informatics to raise Rs5bn through qualified institutional placement basis. (FE)
Economic Front Page:
Rising rubber prices hit tyre manufacturers. (BS)
The cabinet clears US$125mn subsidy for exporters. (Mint)
Railway Minister likely to reduce both passenger fares and freight rates. (ET)
The DoT rejects TRAI’s proposal that service providers, who do not get support from USOF, be provided subsidies for their rural rollouts. (ET)
Steel Minister to meet major steel producers next week to sort out issues pertaining to their mega investment plans. (ET)
The Government to modify the process of regulating prices of medicines outside the scope of their price control. (ET)
The Government likely to remove cap on overseas investments made by domestic companies. (FE)
The Government approves Rs5bn additional package in form of interest subventions for exporters. (FE)
Railway Minister to announce the use of high axle load wagons of 25 tons for transporting more varieties of commodities. (FE)
MMRDA to launch bidding for the second and third corridor of Mumbai Metro Railway Project in next3-4 months. (FE)