Stretching his hand out to catch the stars, he forgets the flowers at his feet.
With bulls and the bears appearing to be unsure of their plan of action, it might help to take a fresh approach to your investments. While it is good to take a long term approach in equities, no harm in picking up some flowers (stocks for short term) on the way, keeping it in your vase as long as they look good and fresh and getting rid of it they moment it loses appeal. For picking stars, you have all the time and India Infoline research to help you. Selective buying can be done at lower levels. But, be sure to lock in some gains after every spurt. The key levels to watch on the Nifty are 4150 on the downside and 4650 on the higher side.
The bulls are constrained by concerns over deteriorating macro-economic picture, persistent FII outflows and grim global scenario. The bears are edgy due to the correction in the commodity complex, particularly in crude oil, which is powering the current rally in equities. As a result, the market may remain sideways for a while until we get a fresh trigger, for a move either way. The market is precariously poised at this stage, and the risk of a sharp dip and an upsurge are evenly balanced.
Global factors will continue to drive the sentiment, along with local issues such as fears of another round of monetary tightening. Corporate earnings, politics and of course the Indo-US nuke deal are some of the other key events.
Today, we expect the market to extend Friday's late rebound, purely on the basis of a global rally. Crude oil, which surged above $121 per barrel on Aug. 21, has slid back to $114 levels. The bulls may end on a high note today, and perhaps during the week if oil doesn't rebound again.
We will have the F&O expiry on Thursday. The rollovers have been quite low, reinforcing the view that neither the bulls nor the bears are willing to carry forward their positions into September. So, no major upheavals are expected on the derivative side of the market.
FIIs were net sellers of Rs2.39bn (provisional) in the cash segment on Friday. Local institutions were net buyers of Rs4.5bn. In the F&O segment, the foreign funds were net sellers of Rs5.94bn. On Thursday, the FIIs were net sellers of Rs2.78bn in the cash segment. Mutual Funds were net sellers of Rs975mn.
Tata Motors will remain in the thick of things due to the ongoing Singur imbroglio and other fundamental factors. Kolte Patil could come under some pressure amid reports that its JV plans with a UK firm for hospitality business are in disarray. Zensar Tech might gain amid reports of the company scouting for acquisitions abroad. CCCL is likely to advance as it has emerged as the lowest bidder for Terminal building works at the Chennai airport in partnership with Canada's Herve Pomerleau International.
Jet Airways could be in action amid reports of a merger with low-cost arm JetLite and another round of hike in air fares. Cement stocks might attract some attention as reports suggest companies are likely to raise prices soon. Steel companies will remain in focus amid continuing friction with the Government over product prices. Ditto with sugar shares, as the Government is considering moves to check rising prices.
Asian stocks were up smartly this morning, helping the region's benchmark index rebound from a two-year low, after oil slumped and on speculation that a possible investment in Lehman Brothers will ease concerns over credit losses.
The MSCI Asia Pacific Index gained 1% to 122.84 as of 10:06 a.m. in Tokyo, rebounding from a four-week, 8.5% decline that sent the index to the lowest since July 24, 2006. Energy companies were the only gauge to decline among the index's 10 industry groups.
The Nikkei in Tokyo was last up 1.8% while the Hang Seng in Hong Kong jumped by nearly 3%. The Shanghai Composite in China gained 1.25% while the Kospi in Seoul rose 0.6%. The Straits Times in Singapore was up 1% while the Taiex in Taiwan advanced 1.4%.
US shares jumped on Friday after oil prices slumped and the dollar strengthened. Shares of financial companies advanced amid growing speculation over the buyout of Lehman Brothers. Encouraging comments from Federal Reserve chairman Ben Bernanke on inflation also boosted sentiment at the end of a tough week.
The S&P 500 Index added 14.48 points, or 1.1%, to 1,292.20. The Dow Jones Industrial Average rallied 197.85 points, or 1.7%, to 11,628.06. The Nasdaq Composite rose 34 points or 1.4% to end at 2,414.
Market breadth was positive and volume was light. Only 888mn shares changed hands on the New York Stock Exchange, the fewest for a full trading session since December 26, 2007. Volume this week was 35% less than the year-to-date average.
The Dow posted a 0.3% weekly drop, while the Nasdaq was down 1.5%. The S&P 500 shed 0.5% over the past five days, its first weekly drop since July.
Oil prices slid, erasing the previous day's rally, as a stronger US currency weighed on dollar-denominated commodity prices.
US light crude oil for October delivery fell US$6.59 or 5.4% to settle at US$114.59 per barrel on the New York Mercantile Exchange, posting its biggest one-day slide in dollars since 1991. Crude oil has tumbled since peaking at US$147.27 per barrel on July 11.
Retail gas prices dropped overnight, extending the downward trend for a 36th day, according to a survey of gas station credit-card activity.
In the bond market, Treasury prices fell, raising the yield on the benchmark 10-year note to 3.86% from 3.83% late on Wednesday. COMEX gold for October delivery fell US$10.90 to US$824.10 an ounce.
European shares gained on Friday, buoyed by strength in banks, autos and airlines. The pan-European Dow Jones Stoxx 600 index gained 1.4% to 282.29 as banks snapped a three-session losing streak. The UK's FTSE 100 climbed 1.7% at 5,462.70, while Germany's DAX 30 advanced 1.6% to 6,335.65 and the French CAC-40 rose 1.6% to 4,374.17.
Emerging markets finished mixed. Brazil's Bovespa was down 0.15% to 55,850 while Mexico's IPC index was up 1.3% at 26,875. The RTS index in Russia gained 1.2% to 1701 and the ISE National-30 index in Turkey rallied 3.3% to 50,513.
Markets may advance further
It was a sweet end to the last trading session of the week with key indices finishing on a positive note. However on the whole Sensex and Nifty lost over 2% during the week.
Markets players shrugged off spike in the inflation, crude oil prices and weak Asian markets and ended with healthy gains.
Volatility was visible throughout the trading session; however, buying momentum in the metal, banking and FMCG stocks kept the uptrend going.
Among the 30-components of Sensex, 24 stocks were in the green and only 6 stocks were in red. Reliance Industries, HDFC, Infosys and HDFC Bank were among the major gainers. On the other hand, Satyam, L&T and NTPC were among the major laggards.
Finally, the benchmark Sensex gained 157 points to close at 14,401 and Nifty ended 43 points higher to close at 4,327.
Shares of BEML have gained by a percent to Rs726 after the Railway Board announced that it is placing developmental order for six rakes. These SS EMUs will be replacing the existing corten steel EMUs in a phased manner now running in Mumbai and Chennai suburbs. The total requirement is of 3000 cars with a business potential of Rs50bn in the coming years.
The scrip touched an intra-day high of Rs740 and a low of Rs718 and recorded volumes of over 6,000 shares on BSE.
Tata Motors ended 2% higher to Rs425. The company announced that it is planning to move the small car plant from West Bengal if protests against the company continue in the state. The scrip touched an intra-day high of Rs428 and a low of Rs410 and recorded volumes of over 1,00,000 shares on BSE.
Shares of PVR Ltd gained by over 2% to Rs193 after the company announced that M/s. Sunrise Infotainment Pvt. Ltd. a 100% Subsidiary of PVR Ltd which operates a Six Screens Multiplex with 1,783 seats, has been granted the exemption from the payment of Entertainment Tax, by the Maharashtra Government for a period of five years w.e.f. August 20, 2008.
The exemption available to the Multiplex is as under:
For the first three year exemption is available 100% of the entertainment tax and for the Fourth & Fifth year Exemption is available 75% of the Entertainment tax. The current entertainment tax on the cinema ticket is 45% of the admission price.
The scrip touched an intra-day high of Rs203 and a low of Rs186 and recorded volumes of over 43,000 shares on BSE.
Shares of IOC declined by over 4% to Rs396 after Fitch Ratings today affirmed IOC’s Long-term foreign currency Issuer Default Rating at 'BBB-' (BBB minus), its National Long-term issuer rating at 'AAA(ind)', and revised the Outlook on both ratings to Negative from Stable. The scrip touched an intra-day high of Rs404 and a low of Rs392 and recorded volumes of over 1,00,000 shares on BSE.
Shares of Era Infra lost ground and slipped by 1% to Rs478 after the company announced that the company (Construction & Contracts Division) has bagged a contract worth Rs1.11bn for Up-gradation, renovation and new construction for Commonwealth Games 2010 in J N Stadium Sports Complex, New Delhi. SH. The scrip touched an intra-day high of Rs493 and a low of Rs472 and recorded volumes of over 26,000 shares on BSE.
Delhi High Court dismisses COAI’s petition challenging government’s decision to allow Reliance Communications to offer both CDMA and GSM services under a single license. (DNA)
Star Union Dai-ichi, a proposed new insurance venture promoted by Bank of India, Dai-ichi and Union Bank, to begin operations with a capital base of Rs2.5bn.(BL)
M&M is looking at launching hybrid & biofuel SUVs in the US.(ET)
NTPC plans to stay out of Reliance Industries-RNRL legal dispute.(BS)
Yes Bank plans to launch its asset reconstruction business by year-end.(Mint)
Maharashtra chief minister has offered to host Tata Motors’ Nano project in the state.(ET)
Tata Tea is scouting for acquisitions in the US and Russia.(DNA)
Lavasa Corp, an HCC group company, plans to raise more funds through an IPO.(FE)
Aditya Birla Nuvo firms up its fertilizer plans.(BS)
New Silk Route, 3i and Kotak join the race to acquire Star India’s stake in Balaji Telefilms.(ET)
Air India sees a loss of US$459mn for FY08.(FE)
Piramal Life Sciences gets approval from drug controller to take forward its clinical trial on two of its molecules in India.(TOI)
Lanco Infratech to foray into solar sector.(BL)
Centre is likely to go ahead with the IPO of Satluj Jal Vidyut Nigam.(DNA)
A proxy battle breaks out for control of Gujarat Heavy Chemicals.(BS)
Bharti Airtel is studying the possibility of entering the digital cinema business.(BS)
Reliance Industries and Reliance Infrastructure are only two companies to have qualified for US$8bn coal into oil project.(TOI)
Marico shelves price hike plan.(ET)
BSEL Infrastructure Realty will develop a high-rise residential apartment complex in Malaysia.(BL)
Videocon says it would go ahead with its proposed Rs80bn LCD and semi-conductor production facility in Maharashtra.(FE)
Take Solutions to invest Rs300mn in a new facility in the SEZ at Shriram Gateway near Chennai.(BL)
ONGC Videsh may take a Russian partner to counter Chinese firm Sinopec in the battle for acquisition of Imperial Energy.(FE)
Phoenix Mills is setting up a Rs8.5bn mall and IT park in Chennai.(BL)
MCX to launch futures trading in three farm products by next month.(TOI)
Tata Motors to cut Jaguar, Land Rover production.(BS)
GVK-promoted Mumbai International Airport is likely to get approval from civil aviation ministry for hiking aeronautical charges by 10%.(DNA)
Daiichi-Ranbaxy FDI plan may be placed before Cabinet Committee on Economic Affairs.(BL)
Air fares likely to go up further by 10% according to CEO of Jet Airways.(FE)
Commercial vehicle maker Eicher Motors says its has finalized JV deal with Swedish truck maker A B Volvo for making trucks and buses.(DNA)
Radico Khaitan to launch two premium brands in the next fifteen months.(ET)
Tata Motors launches new version, ‘Indica Vista’, of its flagship passenger car.(BL)
Opto Circuits in talks to acquire European firm.(ET)
Zensar Technologies is scouting for acquisitions in Germany or Switzerland.(ET)
Jetlite may merged with Jet Airways this year.(ET)
Tatas in the lead for Tamil Nadu SEZ.(TOI)
California Software Co., a Chennai-based software services firm, is close to buying a UK-based firm for US$60mn.(DNA)
ONGC Videsh mulls buying institutional holding in Imperial Energy.(BS)
JK Lakshmi Cement lines up Rs10bn for 5 RMC plants.(BS)
Hindalco Industries has got 50% of its Rs49.9bn rights issue underwritten.(BS)
Tata Motors seeks concession in Uttarakhand.(BS)
Aksh Optifibre plans to close funding worth US$50-80mn to finance its IPTV rollout.(DNA)
Economy Front page
Government mulls launching a scheme for supply of 0.4mn tonnes of subsidized pulses, with a subsidy component of Rs 10,000 per tonne.(BL)
Government is considering re-imposition of 15% export duty on flat steel products.(ET)
Corporate tax collections between April to July 2008 witnessed combined growth rate for advance tax and TDS at 40.3% as against 34.3% in the same period last fiscal.(FE)
Power import policy on cards to boost hydropower development in Himalayan-rim countries for facilitating electricity inflows into India.(BL)
Railways to invest Rs6.5bn to improve port connectivity.(BS)
Railways to commercialize surplus land; to generate Rs40bn in 2008-09.(FE)
IRDA notifies major changes in the investment norms for insurers that will help companies diversify risks.(ET)
DoT set to allocate start up spectrum to companies in Maharashtra, Mumbai, Kolkata and Madhya Pradesh.(Mint)
NCAER projects moderation in GDP growth to 7.8% for current fiscal from earlier estimate of 8.8%.(TOI)
Government set to decontrol pricing of coal, including coal from captive mines.(ET)
Government may release additional sugar in open market.(ET)
SEZ investments to cross Rs2tn by end of 2009.(FE)
Government asks steel companies to cut prices in line with falling global trend.(BL)
Gujarat to float agro-business policy soon.(BS)
Commerce ministry says deemed export benefits can be enjoyed by mega power plants if international competitive bids norms are followed either at the stage power selling or engineering contracts.(ET)
Government pushing to implement the deadline for implementing mandatory blending of 10% ethanol in petrol to next year.(BL)