The bulls are set to flirt in the market. How long the romance lasts no one knows but no harm in staying happy for the day. Bear in mind, don't commit too much at first sight in markets or otherwise.
Today we might see even the side counters joining the Valentine's Day party. But don't get trapped by any rally and start buying aggressively again. The near-term outlook remains murky despite the slight improvement in the sentiment. Any upside should be used as an opportunity to exit weak counters. Medium-to long-term purchases could be in quality stocks only.
The Dow Jones Industrial Average is up 2.5% in two days. Other global markets have also done well or at least hasn't fallen much. Our market also rallied yesterday in line with the global upswing. However, the breadth was still negative and the small-caps and mid-caps continued to struggle. In short, the advance wasn't convincing as investors remain apprehensive about a sustained rise from these levels. We may see the same trend continuing over the next few days before there is any stability. This may happen just ahead of the Union Budget.
On the F&O side, Nifty (February) futures discount decreased to 20 points from 43 points and around 16.37 lakh shares were shed in open interest. Total open interest in the market was Rs65,946 crore. The FIIs turned net buyers of Rs1084 crore in Index Futures and by Rs603 crore in Single Stock Futures.
FIIs were net buyers of Rs94mn (provisional) in the cash segment on Wednesday. Local institutions were net buyers of Rs235.9mn. In the F&O segment, FIIs were net buyers of Rs17.02bn yesterday. On Tuesday, foreign funds pulled out Rs1.15bn from the cash segment. Mutual funds were also net sellers of Rs984mn on the same day.
Asian markets have surged this morning, spurred by the overnight rally on Wall Street. The Nikkei in Tokyo was up 364 points at 13,433 while the Hang Seng in Hong Kong advanced 809 points to 23,979. The Kospi in Seoul gained 44 points to 1676 while the Straits Times in Singapore rose 88 points to 3038. The Shanghai Composite in China was up 48 points to 4538 and the Taiex in Taiwan jumped 208 points to 7758.
The Bank of Japan is expected to keep interest rates unchanged at the conclusion of the two-day meeting on Friday. The central bank's nine-member policy board is widely expected to hold the benchmark short-term interest rate unchanged at 0.5%. That rate is the lowest in the developed world.
But speculation is growing that the Japanese central bank may ease its previous stated policy of gradually raising rates as it focuses on the risks of a global economic slowdown and tallies the recent shakeout in Japanese financial markets.
US stocks rallied on Wednesday after a surprisingly strong January retail sales report helped soften worries that a weakening consumer demand could send the already struggling economy into a recession.
The S&P 500 Index added 18.35 points, or 1.4%, to 1,367.21, its biggest gain in two weeks. The Dow Jones Industrial Average climbed 178.83 points, or 1.5%, to 12,552.24. The Nasdaq increased 53.89 points, or 2.3%, to 2,373.93.
Market breadth was positive. Four stocks rose for every one that fell on the New York Stock Exchange.
Some Wall Street watchers say the US market may have bottomed out on January 23, when the Dow hit a trading low of 11,644. Since then, stocks have rallied, and as of Wednesday afternoon, the Dow was more than 7% off the Jan. low.
Applied Materials climbed the most in five years and helped push the Nasdaq to its best gain since November. Exxon Mobil and ConocoPhillips led oil shares higher after the Commerce Department said rising prices at filling stations spurred an unexpected increase in retail sales last month.
Retail sales rose 0.3% versus forecasts for a drop of 0.3%. Sales, excluding autos rose 0.3%, versus forecasts for a rise of 0.2%. A separate report showed that December business inventories rose 0.6%, topping forecasts.
On the corporate front, investors were enthused by the better-than-expected earnings from chipmaker Applied Materials and Dow component Coca-Cola.
Additionally, reports suggested that News Corp. is in talks with Yahoo! about combining MySpace and other online properties. A potential deal would give News Corp. a stake in Yahoo! and perhaps help the company fend off Microsoft's $44.6bn unsolicited takeover offer.
A latest Merrill Lynch global survey shows that fund managers are more worried about a US recession than in the previous month. They are also keeping more cash than in previous months and are the most worried about stocks since the aftermath of the 9/11 terrorist attacks.
Treasury prices fell, raising the yield on the benchmark 10-year note to 3.72% from 3.66% late on Tuesday. In currency trading, the dollar gained versus the yen and was little changed versus the euro.
US light crude oil for March delivery rose 49 cents to $93.27 a barrel on the New York Mercantile Exchange, gyrating after a weaker-than-expected weekly oil inventories report. COMEX gold for April delivery fell 90 cents to $910.20 an ounce.
Stocks in Europe closed with modest gains. Markets see-sawed late in the session, but the pan-European Dow Jones Stoxx 600 index ended the day 0.1% higher at 323.30. The German DAX 30 rose 0.1% to 6,973.67, while the French CAC-40 gained 0.3% to 4,855.40. The UK's FTSE 100 index lost ground, ending the day 0.5% lower at 5,880.10, after losses in the banking sector.
In the emerging markets, the Bovespa in Brazil rose 1.3% to 62,590 while the IPC index in Mexico . The RTS index in Russia was up 1.2% at 2004 while the ISE National-30 index in Turkey jumped 3% to 56,087.
Market to remain edgy
It was a day of relief for the bulls as markets snapped five day losing streak. The large caps came to the rescue lifting the markets to close in green. However, the Mid-Cap and the Small-Cap stocks continued to be on the receiving end. Finally, the 30-share Sensex closed at 16,949 gaining 341 points. The NSE Nifty closed at 4,929 adding 91 points.
Overall about 768 stocks advanced, 1,940 stocks declined while 34 stocks remained unchanged. Among the BSE 30 index only 23 stocks advanced and 7 stocks declined.
Cords Cable Industries Ltd, started trading at a discount on the bourses, it got listed at Rs130 against its issue price of Rs135. However, immediately gained momentum to hit an intra-day high of Rs151 finally the stock ended at Rs139 gaining over 3% hitting a low of Rs110 recording volumes of over 89,00,000 shares on NSE.
The public offering of Cords Cable was subscribed nearly 5 times. The issue received bids for 153 lakh shares against 30.85 lakh shares on offer. At the cut off price, 25.31 lakh bids were received. The price band of the offering was Rs125-135 per share.
Cords Cable manufactures cables up to 1.1 KV for various applications including industrial, utility and buildings. The company plans to utilise the issue proceeds to part finance its expansion and also to diversify its business.
Bihar Tubes was down by 3.4% to Rs122. The company announced that it secured order worth Rs150mn approx from government of Himachal Pradesh, Irrigation & Public Health Dept. Shimla. Commenting on the order, Mukesh Jain, President (Marketing) of the Company said, "Regular orders from prestigious Government agencies like BHEL, I&PH Deptts. State Governments not only shows our quality and commitment but also demonstrates Bihar Tubes Ltd as significant player of the Industry." The scrip touched an intra-day high of Rs131 and a low of Rs121 and recorded volumes of over 31,000 shares on BSE.
Engineering major Thermax rallied by over 8% to Rs630 following reports that the company is strengthening its presence in the water treatment business, plans to look at opportunities from the development of new cities, SEZ and upgradation of the municipal water treatment facilities.
Reports also stated that Thermax has entered into a technical collaboration with Babcock & Wilcox Power Generation Group (B&W PGG), to foray into manufacturing and supply of utility boilers of up to 800MW used to power thermal plants. The scrip has touched an intra-day high of Rs639 and a low of Rs583 and recorded volumes of over 91,000 shares on NSE.
Hindustan Unilever slipped 1% to Rs192 after the company announced its Q4 result with net profit at Rs6.31bn vs Rs5.11bn (post extraordinary). The company posted a 1-time gain of Rs774.5mn. The company's net sales was at Rs36.9bn vs Rs31.6bn. The scrip touched an intra-day high of Rs199 and a low of Rs190 and recorded volumes of over 27,00,000 shares on NSE.
Tata Communication surged by over 4.5% to Rs468 after the company announced that it would spend $2bn on expansion. The scrip touched an intra-day high of Rs473 and a low of Rs455 and recorded volumes of over 51,000 shares on NSE. Tata Communications will leverage its Tata Global Network (TGN) and unique experience of operating in emerging markets in Asia and Africa to deliver a new world of globally managed communications solutions.
Bajaj Auto lost 2.8% to Rs2016. Reports stated that company announced feasibility study on a possible joint venture for its small car project would be completed by early March,2008. The scrip touched an intra-day high of Rs2150 and a low of Rs1995 and recorded volumes of over 1,00,000 shares on NSE.
NTPC gained 1.5% to Rs187 following reports that the company initiated talks with GE Energy Financial Services of the US, Kyushu Electric Power Company of Japan and Brookfield Power Corporation of Canada for setting up a joint venture company to undertake renewable power generation. The scrip touched an intra-day high of Rs192 and a low of Rs183 and recorded volumes of over 76,00,000 shares on NSE.
News Snippets:
Reliance Industries discovers gas in KG deepwater block. (Mint)
Reliance Infratel commits to Rs78bn exports in eight years. (Mint)
Elder Healthcare to market VLCC's male grooming products. (Mint)
HUL's net profit rises by 24% yoy in quarter ended December 2008. (Mint)
Jain Irrigation signs pact with Israel water firm Mekorot Water Company for infrastructure projects in India. (Mint)
DLF wins title sponsorship rights of IPL Twenty20 for Rs2bn for five years. (BL)
Hero Honda expects flat sales for FY08 on account of financing issues. (BL)
NTPC's US$250mn project in Sri Lanka to begin next year. (BL)
Gail signs pact with ITERA Oil and Gas Company of Russia for cooperation in hydrocarbon sector. (BL)
Jubilant Group to grow retail presence in southern cities. (BL)
Paramount Airways in talks to buy wide-body aircraft. (BL)
Bharti Airtel consumer base reaches 60mn. (BL)
Air India and Jet Airways plan to buy 60 Boeing wide-body aircrafts. (BS)
Gujarat State Petroleum Corporation (GSPC) seeks permission for exploration in Saurashtra-Kutch region. (BS)
Eicher Motors' January 2008 sales decline by 17% yoy. (BS)
Satyam Computers may win eight orders worth US$50mn. (BS)
Ranbaxy Laboratories to consider turning its research unit into a separate company. (BS)
Parsvnath and Indiabulls Real Estate to jointly bid for 10 prime locations offered by India Railways. (BS)
TVS Motor launches its first electric scooter for an ex-showroom price of Rs32,500. (ET)
PVR enters into an agreement with Thailand-based Cineplex Group for lifestyle entertainment. (ET)
Tata Communication, formerly known VSNL, to invest $2bn over the next three years to expand its submarine cable business. (ET)
Essar Shipping board approved merger of Mauritius-based Indian Shipping with the company. (ET)
Axis Bank reduces its benchmark prime lending rate by 25bps and mortgage reference rate has reduced by 50bps. (ET)
Japanese major NEC Electronics selects Wipro for semiconductor design services. (FE)
Fitch Ratings and PNB signs a MoU for bank loan ratings. (FE)
Crompton Greaves acquires 40% stake in their Indonesian joint venture PT Pauwels Trafo for US$10.7mn. (FE)
Mastek to raise US$40mn to fund its acquisition in US and UK before June 2008. (FE)
Reliance Money commences operations on the Dubai Gold and Commodity Exchange from Wednesday. (FE)
NTPC agrees to invest Rs4.75bn in Ratnagiri Gas & Power to increase capacity charge. (FE)
Gail plans to complete natural gas pipeline project, Vijaypur-Dadri and from Dadri to Bawana pipeline in best 24 months. (FE)
Economic Front Page
Mandatory for art funds to register with SEBI. (Mint)
Exports from SEZs grow 200% in two years. (BS)
DoT to impose one time entry fee for all spectrum allocation beyond 6.2Mhz. (ET)
Chandrasekhar Bhave to takeover as next chairman of SEBI. (ET)
Steel minister and steel manufacturers to meet on Feb 14, 2008 to discuss possibility of partial roll back in steel prices. (ET)
Pharma industry seeks extension of export related tax incentive for another five years. (ET)
The six key infrastructure industries production slips to 4% in December 2007, less than half 9% achieved a year ago. (FE)
The Cabinet Committee on Political affairs likely to consider raising petrol and diesel prices today. (FE)
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