When you doubt your power, you give power to your doubt.
No doubt power stocks will be in action yet again, as Power Grid Corporation of India makes its debut on the bourses today. The mini-ratna PSU major attracted huge response during its IPO, which was heavily subscribed by all class of investors. The company has set an issue price of Rs52. A premium of Rs30-40 is being talked about in the market.
But coming to the broader market, trading will continue to be volatile, as the signals emanating from the global markets are quite mixed. Plus, we have a whole host of events ahead of us, that could have a bearing on the market's direction going forward. A crucial meeting of the committee set up by the Government to sort out the differences with the Left parties over the Indo-US nuclear deal is taking place today. We also have meetings of both, the Federal Reserve and the RBI at the end of the month. Before that, we will have the quarterly earnings to deal with.
As a result, the market will remain choppy at least this month, though the bias remains positive. Avoid big-ticket purchases as of now unless one is prepared to hold on to the stock(s) for the long term. Short-term traders will face some difficulty amid high intra-day gyrations. Stay light cause Manic Mondays could give you the jitters.
What could add more sparkle to Power Grid debut is the fact that power generation shares like Reliance Energy, NTPC and Tata Power have been on a roll recently, on the back of announcement of a mega IPO by Reliance Power, a subsidiary of Reliance Energy. The Government appears aggressive on adding new generation capacity and these companies will power ahead. Other companies linked to the power sector like the power equipment manufacturers and turnkey contractors will also benefit from the Centre's continued thrust. So much so that UTI MF has relaunched its Petro Sector fund as UTI Energy Fund. So, watch out for some fireworks today, not only on the Power Grid counter but also in all stocks having some exposure to the red-hot sector.
Lanco Infratech has bagged an order worth Rs730mn from Tirupati Tirumala Devasthanams, Thirupati for Construction of Sri Venkateswara Vedic University at Alipiri, Tirupati.
Karnataka Bank's Board will meet today, to consider raising of capital through a preferential allotment and issue of Upper Tier 2 instruments through private placement. Separately, reports say that IFC, the private equity arm of World Bank, is likely to buy a 4-5% stake in the Mangalore-based bank.
Sinclairs Hotels' Board will meet on Oct. 11, to consider a preferential issue of shares and / or other instruments to promoters and strategic investors.
US stocks managed modest gains on Thursday, recovering from early declines, as investors remained cautious ahead of Friday's big monthly jobs report. Stocks had fallen in the morning as investors considered weak reports on the labor market and manufacturing sector. But the sentiment improved later in the day.
The Standard & Poor's 500 Index added 3 points or 0.2%, to 1,542.84. The Dow Jones Industrial Average increased 6 points to 13,974.31. The Nasdaq Composite Index gained 4 points, or 0.2%, to 2,733.57.
Market breadth was positive. On the New York Stock Exchange, winners beat losers 5 to 3 on volume of 810mn shares. On the Nasdaq, advancers topped decliners 8 to 7 on volume of 1.33bn shares.
In currency trading, the dollar gained versus the euro after the interest rate decision. COMEX gold for December delivery rose $8.10 to settle at $743.80 an ounce. Treasury prices inched higher, lowering the yield on the 10-year note to 4.51% from 4.56% late on Wednesday.
Oil prices reversed course, turning higher. US light crude for November delivery rose $1.50 to settle at $81.44 a barrel on the New York Mercantile Exchange.
After the close, Research in Motion reported higher quarterly earnings and revenue that beat expectations and boosted its current-quarter profit forecast. However, its shares fell more than 7% in extended-hours trading owing to profit booking.
Alcoa said it will sell two of its divisions and that it will restructure another one. Shares of the Dow component slipped 1% in extended-hours trading.
European shares ended mostly higher, as gains in the banking sector offset weakness in the mining sector. The Bank of England and European Central Bank kept interest rates on hold, as expected.
The pan-European Dow Jones Stoxx 600 index advanced 0.2% to 384.49. The U.K.'s FTSE 100 closed up 0.2% at 6,547.90. The French CAC-40 finished virtually flat at 5,804.39, and the German DAX 30 dipped 0.1% to 7,944.99.
In the emerging markets, the Bovespa in Brazil rose 0.5% to 60,407 while the IPC index in Mexico was down 0.3% at 31,078. The RTS index in Russia fell 0.1% to 2090 and the ISE National-30 index in Turkey was up 1.4% at 69,599.
Asian markets were trading mixed this morning. The Nikkei in Tokyo was down 28 points at 17,063 while the Hang Seng in Hong Kong surged by 566 points to 27,504. The Straits Times in Singapore gained 13 points at 3797 and the Kospi in Seoul dropped 10 points to 1993.
Indian stocks market indices fell from all time highs as bears finally managed to stage a small come back. Markets snapped its longest winning streak in almost four years after index heavyweights like ICICI Bank, HDFC and ONGC witnessed selling pressure. Further, IT stocks were yet again under pressure after rupee appreciated to the strongest in more than nine years.
Despite, weak cues from the International markets, benchmark index managed to recoup almost 280 points towards the end on back of gains in the Metal and Capital Good stocks.
Finally, BSE 30-share benchmark Sensex ended 111 points lower to close at 17,735. NSE Nifty ended flat to close at 5,208.
Exide Industries edged higher by 0.7% to Rs67 after the company announced that they would invest Rs250mn in local Smelter. The scrip touched an intra-day high of Rs67 and a low of Rs65 and recorded volumes of over 2,00,000 shares on NSE.
EKC slipped by 1.8% to Rs242. The company announced that they have planned to sell shares worth Rs 1bn. The scrip touched an intra-day high of Rs251 and a low of Rs239 and recorded volumes of over 3,00,000 shares on NSE.
Dabur India advanced 1.6% to Rs109 after reports stated that the company would announce entry in to new business segment. The scrip touched an intra-day high of Rs113 and a low of Rs106 and recorded volumes of over 1,00,00,000 shares on NSE.
Ranbaxy marginally gained by 0.7% to Rs442 after the company declared they acquired approval to sell Clarithromycin for Oral Suspension. The scrip touched an intra-day high of Rs449 and a low of Rs436 and recorded volumes of over 16,00,000 shares on NSE.
I-Flex advanced by 1% to Rs1909 after the company announced that they would invest Rs100mn in I-Flex Processing Services. The scrip touched an intra-day high of Rs1947 and a low of Rs1880 and recorded volumes of over 68,000 shares on NSE.
Educomp Solutions slipped 2.1% to Rs2902. The company announced that they are in accord with Singapore's Raffels Institution. The scrip touched an intra-day high of Rs2979 and a low of Rs2855 and recorded volumes of over 81,000 shares on NSE.
Banking stocks were on the receiving end on back of selling pressure in the index heavy weight, ICICI Bank, the scrip declined 1.7% to Rs1068, HDFC bank was down by 1% to Rs1409 and SBI edged lower by 0.3% to Rs1905. OBC Corp bank and Canara Bank were the major losers among the Mid-Cap stocks.
Capital Good stocks ended on a firm note. BHEL gained 1% to Rs2091, Siemens surged over 3.5% to Rs1423 and Punj Lloyd added 0.3% to Rs321.
IT stocks were under pressure after rupee rose to the strongest in more than nine years. Wipro was down by 1.8% to Rs462, Infosys edged lower by 0.3% to Rs1998 and NIIT Technology dropped over 8% to Rs135.
Metal stocks were shinning brightly. Frontline stock Tata Steel advanced 3% to Rs865, Bhushan Steel was up by 2% to Rs940, Jindal Steel surged by over 17% to Rs6291 and JSW Steel spurred by over 5% to Rs911.
Reliance Power plans to offer 5% to an overseas power utility or a private equity fund in addition to selling 10% through an IPO.
The DoT has allocates additional spectrum to BSNL for GSM mobile services in 17 circles.
DLF is in talks with private equity firms for raising Rs20bn.
Reliance Industries may join GAIL and HPCL to set up a mega 1mtpa petrochemical complex in Visakhapatnam.
Parsvnath Developers is in talks with global financial investors for divesting equity in its SEZ projects.
International Financial Corporation (IFC) is likely to pick up 4-5% in Karnataka Bank.
Tata Motors' next generation versions of Indica, Indigo and Sumo will hit market in 2008.
JSW Energy close to acquiring coal mines in Australia and Indonesia.
Hindustan Motors has earmarked Rs2.95bn for upgrading its Uttarapara plant which makes the Ambassador.
The West Bengal Government has signed a MoA with Videocon Industries and Jai Balaji Industries for setting up steel and power capacities with investments worth Rs310bn.
Kingfisher Airlines expects to break-even by the first half of FY09.
GoAir has scaled down expansion plans and plan an IPO or stake sale upto 26% by 2009.
The RBI has increased the limit for bond issuances under MSS from Rs1,500bn to Rs2,000bn for the current fiscal.
The TRAI introduces a cap of Rs5 per pay channel in monthly cable bills for cable TV homes in non-CAS areas.
The RBI has asked banks not to dispose off NPAs at prices below the value of the securities available.
The Government may relax ECB norms for infrastructure sector.
Rainfall in June-September 2007 has been 5% above normal.
Fund Activity:
FIIs were net buyers of Rs4.57bn (provisional) in the cash segment on Thursday while the local institutions pulled out Rs6.64bn. In the F&O segment, foreign funds were net sellers at Rs19.55bn.
On Wednesday, FIIs were net buyers to the tune of Rs31.62bn in the cash segment. With this, the net investment by overseas investors in the past 10 days has touched US$4.87bn.
Major Bulk Deals:
HSBC Financial has bought Bihar Tubes and Nitco Tiles; Fidelity has purchased CESC while Reliance Capital has sold it; Merrill Lynch has picked up Parekh Aluminum; UBS has purchased Pioneer Investcorp; Sundaram MF has sold Spanco Telesystems; DSP Merrill Lynch has sold Sparsh BPO.
Upper Circuit:
RIIL, Bag Films, AMD Metplast, Victoria Mills, Jai Corp, Dhanlakshmi Bank and IID Forgings.
Lower Circuit:
Malu Paper, KEI Industries and Swan Mills.
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