He who would leap high must take a long run.
After consolidating for the first three days, the bulls are back on their feet. The undertone remains broadly positive though some softening shouldn’t surprise anyone. Today, the key indices could see a sprinted start. US stock benchmarks have made their highs for the year. The Nikkei in Japan too has hit a new peak for 2009.
Global investors responded to a slew of better than expected earnings and macroeconomic data in late July by pumping fresh money into a broad range of asset classes. EPFR Global-tracked equity funds posted inflows of $9.5bn - the highest weekly tally since mid-June, 2008. The economic picture is brightening up, both in India and abroad. Earnings have exceeded expectations across the globe. Risk appetite seems to be back in flavour. Liquidity was never an issue, though too much of it is definitely not healthy.
The feel good has its flip side too. Crude oil and other commodities are also climbing. Food prices remain elevated despite headline WPI inflation being in the red for seven successive weeks. Monsoon remains a joker in the pack and could fuel inflationary expectations if rain Gods refuse to relent.
The local bulls have to retain their energy for a longer run before leaping to new highs. Companies too have to show meaningful appreciation in the topline to warrant an upgrade. Economic data also has to be persistently good. All in all, we will continue to witness fluctuations in stock prices over the next few weeks and months. It is not going to be a one-way street where only the bulls will dominate. The bears might also get opportunities to stage a come back. A big crash in not expected and markets' direction will hinge on daily dose of news.
Results Today: Aban Offshore, ABB, Adlabs, Anant Raj, Arvind, Aurobindo Pharma, Bombay Dyeing, Britannia, Deccan Chronicle, Dish TV, Divi's Lab, Dredging Corp., Edelweiss, Federal Bank, Gammon India, GMR Infra, GE Shipping, Gujarat Flurochemicals, Gulf Oil, Hindalco, Hotel Leela, Indiabulls Financial, Indian Hotels, MTNL, NALCO, Orchid Chem, RCOM, Reliance Capital, Suzlon, Syndicate Bank, Tata Power, TVS Motor, Unitech and Videocon.
FIIs were net buyers of Rs3.67bn in the cash segment on Thursday on a provisional basis while the local funds pulled out Rs2.87bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net sellers at Rs3.39bn. On Wednesday, the foreign funds were net buyers of Rs1.39bn in the cash segment. Mutual Funds were net sellers on the same day at Rs2.92bn.
US stocks rallied on Thursday, with the key indices hitting their highest levels in nearly nine months. Investors welcomed the latest batch of better-than-expected profits and forecasts besides a report that suggested that the labor market is starting to stabilize.
The Dow Jones Industrial Average rose 83 points, or 0.9%, to 9,154.46, ending at its best level since Nov. 4. It was also the highest close for the blue-chip index in 2009. The S&P 500 index added 11 points, or 1.2%, to 986.75, ending at its highest point since Nov. 4. The Nasdaq gained 16 points, or 0.8%, to 1,984.30, its highest close since Oct. 1. The major gauges had managed bigger gains earlier in the session, but lost a little momentum by the close.
Stocks gains were broad-based Thursday, with 25 of 30 Dow components rising.
Shares of Dow component GE gained nearly 7%. Goldman Sachs upgraded it to "buy" from "neutral" after legislators appeared to back down on the question of whether GE should separate itself from its troubled finance unit GE Capital. A variety of financial shares gained.
Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.60% from 3.66% late on Wednesday.
US light crude oil for September delivery rose $3.57 to settle at $66.72 a barrel on the New York Mercantile Exchange.
In currency trading, the dollar gained versus the euro and fell against the Japanese yen.
COMEX gold for December delivery rose $7.60 to settle at $937.30 an ounce.
The number of Americans filing unemployment claims for a week or more, a measure known as continuing claims, slipped by more than expected. According to a Labor Department report, continuing claims dipped to 6.2 million last week, from a revised 6.25 million the previous week, for their lowest level since mid-April and short of forecasts for 6.3 million.
The continuing claims report overshadowed the regular weekly jobless claims report, which showed a bigger-than-expected rise to 584,000. However, that rise was largely related to seasonal issues related to auto plant shutdowns.
Two Dow components reported results on Thursday morning. Oil behemoth Exxon Mobil reported a steep drop in second-quarter income due to weaker demand and falling oil and gas prices. Weaker quarterly earnings missed estimates on weaker revenue that topped estimates. Shares fell 1%.
Dow component Travelers also reported weaker profit that missed forecasts. But the financial company also boosted its full-year earnings forecast. Shares fell 2%.
Among other companies reporting results, telecom Motorola posted higher quarterly earnings that topped forecasts on weaker revenue that missed. The company shipped 14.8 million phones in the quarter, nearly half what it shipped a year ago, but more than what analysts expected. Shares gained 9.4%.
Friday brings the biggest economic report of the week, the first reading on second-quarter gross domestic product growth. GDP is expected to have shrank at a 1.5% annualized rate, according to forecasts. GDP shrank at a 5.5% annualized rate in the first quarter.
The Chicago PMI, a regional reading on manufacturing, is due shortly after the start of trading. Quarterly results from Dow component Chevron.
European equities staged a broad-based rally on Thursday, hitting a fresh eight month high as a string of mostly well-received corporate earnings convinced investors the recent run should continue. The pan-European Dow Jones Stoxx 600 index rose 2.2% to close at 225.25, taking out the previous 2009 closing high set on Monday.
On a regional level, the French CAC-40 index climbed 2.1% to settle at 3,435.49, the UK's FTSE 100 index rose 1.8% to end at 4,631.61 and Germany's DAX index advanced 1.7% to finish at 5,360.66..
After consolidating in the past couple of trading session, bulls were back in action on F&O expiry. After starting off on a flat note, markets gains momentum as the day progressed. The IT, FMCG, Banking and the Telecom stocks were among the top gainers. Even the Mid-Cap and the Small-Cap stocks were in demand which saw the NSE Nifty ends above the 4550 levels yet again.
However, the Oil & Gas, Power and Metals stocks were under pressure.
The BSE Sensex surged 214 points to end at 15,387 after touching a high of 15,410 and a low of 15,065. The index opened at 15,148. The NSE Nifty surged 58 points to shut shop at 4,571.
In Asia, the Nikkei in Japan ended up by 0.5 at 10,165, while Australia's S&P/ASX ended higher by 1.7% at 4,190. The Hang Seng index in Hong Kong was up by 0.5% to end at 20,234. Shanghai index in China gained 1.6% to end at 3,321.
In Europe, stocks were in momentum. The FTSE in the UK was up 1.2% at 4,605. The DAX was up 0.7% 5,305 and the CAC 40 was up 1.1% at 3,405.
Coming back to India, among the BSE sectoral indices, the IT index was the top gainer, gaining 3%, followed by the FMCG index that was up 2.7%. The BSE Bankex index up 2.2% and the BSE Teck index was up 1.5%.
The BSE Mid-Cap index gained 0.5% and the BSE Small-Cap index gained 0.8%.
Within the Sensex, the major gainers were TCS, HUL, Wipro, HDFC, SBI, ICICI Bank and HDFC Bank. Among the major losers were Sun Pharma, BHEL, Reliance Industries, Hindalco and RCom.
Outside the frontline indices, the top gainers included REC Ltd, Mphasis, Ashok Leyland, Tech M, Rolta and OFSS.
Among the big losers in the broader market were Divi’s Lab, PNB, Gujarat NRE, IRB Infra, Titan and Crompton Greaves.
Shares of Great Offshore further gained by 1.6% to Rs465 after ABG Shipyard announced that it raised its open offer price to Rs450 per share from Rs375.
ABG hiked its stake in the Great Offshore by over 5% picking up stake in a block deal from the open market. The block deal takes ABG's total shareholding in the company to 7.32% from 2.02% earlier, added reports.
The stock opened at Rs465 and made an intra-day high of Rs469 and a low of Rs461. Total traded volumes stood at 0.2mn shares.
IOC has posted a net profit of Rs36.82bn for the quarter ended June 30, 2009 where as the same was at Rs4.15bn for the quarter ended June 30, 2008.
Total Income is Rs606.8bn for the quarter ended June 30, 2009 where as the same was at Rs891.4bn for the quarter ended June 30, 2008.
Comparative figures for the quarter ended June 2008 do not include the figures of Bongaigaon Refinery and Petrochemicals Ltd , which was merged with IOC on March 25, 2009. Accordingly, the same are not strictly comparable.
The stock surged 4% to end at Rs556, it had opened at Rs540 and made an intra-day high of Rs464 and a low of Rs540. Total traded volumes stood at 0.38mn shares.
M&M has posted a net profit of Rs4bn for the quarter ended June 30, 2009 as against Rs1.59bn in the same quarter last year. Total income for the reporting quarter is Rs42.66bn versus Rs33.32bn in the quarter ended June 30, 2008.
The results for the current quarter include the figures of the erstwhile subsidiaries Mahindra Holdings & Finance Ltd. and Punjab Tractors Ltd., which merged with the company. Hence, the figures of the current quarter are not comparable with those of the first quarter of the previous fiscal year.
The stock surged 1.2% to end at Rs852, it had opened at Rs845 and made an intra-day high of Rs859 and a low of Rs832. Total traded volumes stood at 0.58mn shares.
SBI posted Net Profit of Rs23303.7mn for the quarter ending on June 30, 2009 against Rs16407.9mn for the quarter ending on June 30, 2008.
Total Income of Rs210415.1mn for the quarter ending on June 30, 2009 against Rs162030.7mn for the quarter ending on June
The stock surged 4% to end at Rs1722, it had opened at Rs1654 and made an intra-day high of Rs1734 and a low of Rs1644. Total traded volumes stood at 0.83mn shares.
SAIL has posted a net profit of Rs13.26bn for the quarter ended June 30, 2009 as compared to Rs18.35bn for the quarter ended June 30, 2008.
The total income has decreased to Rs96.93bn for the quarter ended June 30, 2009 from Rs112.28bn for the quarter ended June 30, 2008.
The stock surged 3% to end at Rs175, it had opened at Rs169 and made an intra-day high of Rs176 and a low of Rs165. Total traded volumes stood at 3.8mn shares.