Desperately seeking stability!

A truly stable system expects the unexpected, is prepared to be disrupted, waits to be transformed.

Some stability appears on the horizon with most global markets posting gains overnight and Asian markets too holding their ground. The bulls failed to hold on to their gains on Thursday amid continuing worries about the impact of global meltdown on the local market. The rally also lacked conviction due to the lower traded volumes. This probably implies that it was more of a short covering than fresh buying. The market breadth was also marginally positive. It would be wise to wait for the current weak phase to pass before taking a fresh call. Avoid fresh long positions.

The outlook for today is positive at open, but avoid fresh buying unless you are taking position for the long term. Defensive stocks like HLL and potential doublers like RPL could be accumulated for the long haul.

Though, the subprime woes in the US and trouble in the credit markets are unlikely to have a direct bearing on India, indirectly, it may affect foreign inflows. So, the writing is on the wall: Keep a close watch on the trend in FII inflows. A sharp reversal in fund flows to emerging markets could lead to a fresh carnage worldwide. Though India is insulated due to its local-centric economy, the growing integration with the global markets will ensure some pain in the short term.

Players with weak hearts and equally weak portfolio should be careful while long-term investors should cash in on the opportunity. Give yourself a much needed break after a rollercoaster ride. In fact, the movie 'Cash' opens in theaters today. It is a story of a bunch of thieves who pull off a daring heist involving priceless diamonds. As investors, take your time identifying priceless stocks you could add to your portfolio. Avoid the 'daring' part for the time being.

Car makers like Maruti, Tata Motors and M&M may come under some pressure amid reports that the Urban Development Ministry has sought a special tax on four-wheelers, citing lack of adequate infrastructure. Deccan Aviation will also be in action as SEBI has sought details on funding from the UB Group. Petronet LNG is also likely to be in focus as the company will move the Supreme Court to vacate the stay given by the Ahmedabad High Court restraining it from adopting a new pricing formula. TV18 could also gain amid reports that it proposes to buy 50% in MTV Networks India for Rs2bn.

US stocks rallied for the third time this week after consumer and media companies reported better-than-forecast earnings. The S&P 500 added 6.39 points, or 0.4%, to 1472.2. The Dow Jones Industrial Average rose 100.96 points, or 0.8%, to 13,463.33 and the Nasdaq Composite Index increased 22.11 points, or 0.9%, to 2575.98.

The yield on the benchmark 10-year Treasury note fell 2 basis points to 4.77%. The dollar weakened 0.2% against the euro on speculation that a government report tomorrow will show US companies added fewer jobs in July.

Subprime concerns resurfaced after mortgage lender Accredited Home Lenders Holding revealed in a SEC filing it was not certain it would continue to operate. Shares of the company tumbled nearly 38%. Adding to the subprime related woes, a report stated that American Home Mortgage Investment Corp. will shut shop on Friday, just two days after the mortgage lender said it was considering liquidating its assets.

The US subprime-market rout has got a long way to go, says Jim Rogers. Further losses may be in store even as shares rebounded this week, says Rogers.

Oil prices remained near record highs reached earlier this week as US light crude for September delivery rose 40 cents to $76.93 a barrel on the New York Mercantile Exchange. The front-month contract was quoting 4 cents lower at $76.82 a barrel in extended trading in Asia.

Treasury prices climbed, lowering the yield on the benchmark 10-year note at 4.77% from 4.79%. The dollar fell versus the euro and gained against the yen. COMEX gold for December gained 70 cents to $676.60 an ounce.

European shares advanced, spurred by better than expected earnings from the likes of Unilever, Nokia, France Telecom and Societe Generale. Investors also picked up shares in the beleaguered financial services sector after a raft of high-profile banks, including Credit Suisse reported strong profit growth.

The pan-European Dow Jones Stoxx 600 index rose 0.7% to 376.56. The German DAX 30 closed up 0.8% at 7,534.13, the French CAC-40 increased 0.5% to 5,682.07 and the UK's FTSE 100 advanced 0.8% to 6,300.30.

Most major Latin American equity markets rose. In Sao Paulo, the benchmark Bovespa index finished up 457 points, or 0.8%, at 54,690.02. Mexico's IPC index rose 1.2% to 30,394.81 and Argentina's Merval rose 0.4% to 2,186.64. In Santiago, the benchmark IPSA finished flat at 3,326.45. Among the other emerging markets, the RTS index in Russia gained 0.5% to 1956.

Asian markets were trading marginally higher this morning. The Nikkei in Tokyo was flat at 16,980 while the Hang Seng in Hong Kong too was static at 22,442. The Kospi in Seoul climbed 20 points to 1874 and the Straits Times in Singapore was down 7 points at 3427.

Markets ended marginally up after witnessing a seesaw trading session. After a jerky start key indices took off as Sensex gained almost 200 points touching an intra-day high of 15134. However, later as the session progressed selling pressure in the heavyweights like Infosys, ONGC, Tata Motors and HDFC Bank dragged the benchmark Sensex to hit a low of 14896. Shares of Auto and Technology witnessed profit booking while Realty and Banking stocks were in the limelight.

Finally, BSE 30-share Sensex gained 50 points to close at 14985 hitting an intra-day low of 14896. NSE-50 added 10 points to close at 4356 touching an in intra-day high of 4399 and a low of 4327.

IFCI surged by over 7% to Rs56 amid reports that the Board of Directors of the company would meet on August 4 to consider inviting bids from the interested strategic investors. Among the prominent names doing the rounds are Barclays, Citigroup, Lehman Brothers, BNP Paribas and Deutsche Bank. The scrip touched an intra-day high of Rs57 and a low of Rs53 and recorded volumes of over 8,00,00,000 shares on NSE.

Gujarat Ambuja advanced by 1.3% to Rs130 after the company's July sales rose 20% to 1.39mn tons. The scrip touched an intra-day high of Rs135 and a low of Rs127 and recorded volumes of over 5,00,000 shares on NSE.

Hindustan Dorr was locked at 5% upper circuit to Rs113.75 after the company announced that it has secured Rs700mn order from Bharat Oman refineries. The scrip touched an intra-day high of Rs113.75 and a low of Rs106 and recorded volumes of over 16,000 shares on NSE.

Bharati Shipyard slipped by 1.5%to Rs552 after the company announced that it secured a repeat order worth Rs1.77bn from UP Offshore (BAHAMAS) Ltd. The scrip touched an intra-day high of Rs569 and a low of Rs533 and recorded volumes of over 82,000 shares on NSE.

Nitin Fire spurred by over 2.5% to Rs409 after the company announced that it has secured Rs5mn order from Indraprastha. The scrip touched an intra-day high of Rs418 and a low of Rs398 and recorded volumes of over 1,00,000 shares on NSE.

Auto stocks further lost ground on back of fall in monthly sales figures. Hero Honda dropped by 2.4% to Rs652 after the company's July sales fell 15% to 201191 units, Tata Motors was down by 2.4% to Rs651 after the company's sales figures dropped 6.6% in July to 42,098 units. However, M&M slipped by 2.5% to Rs675 despite posting strong growth in its July sales. The company sold 19163 units in July posting 45.8% growth.

IT stocks also were on the receiving end as selling pressure dragged them lower. Wipro lost by over 3% to Rs462, TCS was down by 2% to Rs1095, Infosys slipped by 1.6% to Rs1899 and Satyam Computer ended 1% lower to Rs465.

Metal stocks shined brightly led by gains in index heavyweight Tata Steel as the scrip gained by 2.6% to Rs639; Hindalco was up by 0.5% to Rs159 and Hindustan Zinc added 0.5% to Rs707. However, SAIL lost by 0.5% to Rs143.

Power stocks perked up led by gains heavyweight, REL gained by 2.1% to Rs752, Suzlon was up by 2.3% to Rs1230, NTPC advanced by 1.6% to Rs162. However, Tata Power lost 1% to Rs693.

Banking stocks ended with strong gains. Frontline stock SBI surged by 3% to Rs1592, ICICI Bank was up by 1.2% to Rs901 and PNB added 1.7% to Rs494. OBC, Corp Bank and Syndicate Bank were the top gainers among the Mid-Cap stocks.

Fund Activity:

FIIs were net sellers of Rs5.38bn (provisional) in the cash segment on Thursday. At the same time, local institutions were net buyers of Rs2.83bn. In the F&O segment, FIIs were net buyers at Rs11.78bn.

On Wednesday, FIIs offloaded Rs9.83bn from the cash segment. Mutual Funds were net sellers of Rs1.48bn.

Major bulk Deals:

Goldman Sachs has bought Gitanjali Gems; Citigroup has purchased Karuturi Networks; Principal MF has sold SRF Polymers.

Insider Trades:

UTV Software Communications Limited: FMR Corp. and its direct and indirect subsidiaries and Fidelity International Limited (FIL) and its direct and indirect subsidiaries has purchased from open market 50490 equity shares of the company on 30th July, 2007.

Shringar Cinemas Limited: Mr. Balkrishna Shroff, Director has purchased from open market 10000 equity shares of the
company on 1st August, 2007.

KEC International Limited: SBI Mutual Fund under its various schemes has purchased from open market 122350 equity
shares of the company on 30th July 2007.

Lower Circuit:

Rama Pulp, IID Forgings, Tanla, IOL Broadband, Easun Reyrolle, Hindustan Oil Exploration, Murli Industries and BF Utilities.

Upper Circuit:

Jai Corp, Prism Cement, Shree Precoated, Karuturi Networks, DMC International, Anant Raj Industries and Hindustan Dorr

Delivery Delight (Rising Price & Rising Delivery):

Birla Corp, Prism Cement, IOB, Gujarat NRE Coke and GTC Industries.

Abnormal Delivery:

Pfizer, UB, Corporation Bank, Balaji Telefilms and Divi's Labs.

Major News & Announcements:

Nitin Fire gets Rs5mn order from Indraprastha Gas

Punj Lloyd to acquire 25.1% in Pipavav Shipyard for Rs4.03bn

Punj Lloyd wins order worth Rs6.66bn

ACC July sales at 1.64mn tons (up14.6%)

JSW Steel July production at 237,000 tons (up 18%)

Sundaram Fastener acquire Germany's PUT Grundstucks for Euros 30,000

Hindustan Dorr gets order from Bharat Oman Refineries

GMR Infrastructure selects Apollo for medical centre at Hyderabad airport.