The way the markets move one really can't give an explanation every time. If you get into some momentum counters, be geared to move out after you've made some quick bucks. The indicators from the derivative side of the market are encouraging for the bulls.
The rollover in July was much lower than the average in the last six months. This may be interpreted as bears chose to let their short positions expire. What's more, August futures saw good amount of addition on Friday, with a simultaneous jump in their premium. The recent upswing may continue, provided crude oil doesn't shoot up, and there is no major negative news. The market will be volatile amid continued uncertainties, both on local and global fronts.
In terms of the levels, the Nifty can rise a few hundred points. One should take advantage of this short-term spurt, albeit carefully.
For the day, the weakness across global markets could derail the momentum temporarily. The market could turn sideways ahead of Tuesday's Fed meeting. The US central bank is likely to maintain status quo on interest rates. Central banks of the UK and Europe will also take a call on interest rates on Thursday.
Crude oil remains the biggest variable as of now. Expectations are it could fall further, which of course should be good for global equity markets in general. But, negative surprises on this front are not ruled out either.
Certain large counters, which open weak today may well bounce back after the Fed meet is out of the way (without any negatives). Be ready to cash on them if your risk taking ability is high.
FIIs were net sellers of Rs5.87bn (provisional) in the cash segment on Friday and the local funds pumped in Rs3.96bn. In the F&O segment, the foreign funds were net buyers of Rs1.96bn. On Thursday, FIIs were net buyers of Rs5.97bn in the cash segment.
Aditya Birla Nuvo, Hanung Toys, Hanil Era Textiles, Pioneer Embroideries and Supreme Industries will declare their results today.
Asian stocks are mostly down this morning, led by automakers and raw-material producers, after Nissan posted a 43% drop in profit and metal prices declined. The MSCI Asia-Pacific Index lost 1.2% to 129.07 as of 10:54 a.m. in Tokyo, adding to its 1.3% drop on Aug. 1. More than two stocks retreated for each that gained.
The Nikkei in Tokyo was down 133 points or 1% at 12,961 while the Hang Seng in Hong Kong slipped 232 points or 1% at 22,629. The Kospi in Seoul dropped 39 points or 2.5% at 1534 while the Straits Times in Singapore declined 29 points or 1% to 2876.
The Shanghai Composite in China was down 23 points or 0.8% at 2779 while the Taiex in Taiwan shed 12 points or 0.2% at 6990. Australia's S&P/ASX 200 index in Sydney was down 9 points or 0.2% at 4895.
US stocks slipped on Friday after the unemployment rate touched a four-year high amid continuing job losses in the world's biggest economy. A big second quarter loss by GM coupled with yet another month of sour auto sales added to the gloom on the last day of a highly volatile week.
The Dow Jones Industrial Average was down by 52 points or almost 0.5% at 11,326.32, and the S&P 500 index fell by 7 points or nearly 0.6% to shut shop at 1,260.31. The tech-heavy Nasdaq Composite index dropped by 15 points or 0.6% to finish at 2,310.96.
All the three major US indexes were off their day's lows, and ended the week virtually unchanged. The Dow lost 0.4%, the S&P 500 finished 0.2% higher, and the Nasdaq ended almost flat.
Crude oil prices rose $1.02 to end the week at $125.10 per barrel on the New York Mercantile Exchange, after being up as much as $4 on renewed concerns about Iran's nuclear program.
Retail gas prices fell for the 15th straight day. Regular unleaded gas fell 1.1 cents to a nationwide average price of $3.898 a gallon.
In currency trading, the dollar rose to nearly a six-week high against the euro on a slightly better-than-expected jobs report, but the US currency lost ground against the Japanese yen.
COMEX gold for December delivery fell US$5.20 to $917.50 an ounce. In the bond market, Treasury prices closed higher. The 10-year note was up slightly, sending the yield down to 3.93%.
The US Labor Department reported a less-than-expected net loss of 51,000 jobs in July. Wall Street economists had been forecasting a loss of 70,000-75,000 jobs. Nevertheless, it was the seventh straight month of job losses, bringing year-to-date total to 463,000.
The unemployment rate rose to 5.7% from 5.5% in June, which was worse than the 5.6% rate economists were looking for.
The Commerce Department reported that construction spending fell by 0.4% in June. Non-residential spending jumped up, but sluggish residential sales dragged on the reading.
GM reported a second-quarter net loss of $15.5bn, due in large part to restructuring costs. Revenue fell to US$37.7bn from $45.8bn a year earlier, and far below analysts expectations of revenue of $44.6bn. GM shares fell almost 8%.
GM also announced that its auto sales sank 26% in July, which was a much sharper decline than the 16% drop forecast by auto industry web site Edmunds.com. The drop in auto sales was led by a 35% decline in SUVs and pickup trucks.
Ford said its July vehicle sales fell 14.9%, which was almost twice as much of a drop as was predicted Edmunds.com. The company's stock fell 3%. Toyota reported a 12% fall in its auto sales, the 10th straight month in which sales have declined. SUV sales dropped 24% and pickup sales slid 32%. The company's stock was down more than 1%.
European stocks ended lower on Friday. The pan-European Dow Jones Stoxx 600 ended 1.2% lower to 280.24, with commodity producers leading the retreat. UK's FTSE 100 fell 1.1% to 5,354.70, while Germany's DAX 30 shed 1.3% to 6,396.46 and the French CAC 40 dropped 1.8% to 4,314.34.
In the emerging markets, the Bovespa in Brazil slumped 3.15% to 57,630 while the IPC index in Mexico was down 2% at 26,959. The RTS index in Russia slid 1.3% to 1941 and the ISE National-30 index in Turkey rose 1.2% to 53,436.
Market may extend gains
Markets started off the August series with a bang on Friday. After opening with a negative bias key indices bounced back smartly in the afternoon trades. Momentum continued through out the trading session led by gains in the Capital Goods, Oil & Gas, Power and Banking stocks.
Even the Sugar stocks attracted buying interest. Also the Mid-Cap and the Small-Cap stocks ended with healthy gains. The Telecom stocks also gained momentum after telecom ministry announced 3G spectrum. Stocks like MTNL were among the notable gainer.
Finally, the benchmark Sensex ended 300 points higher to close at 14,656 and Nifty gained 80 points to close at 4,413.
Among the 30-components of Sensex, 22 stocks were in green and 8 stocks were in red. Reliance Industries, HDFC, Infosys and SBI were among the major gainers. On the other hand, RCom, Tata Power and Hindustan Unilever were among the major laggards.
TVS Motors slipped by 1% to Rs31.5. The company posted 13% growth registering two wheeler sales at 118,545 units in July 2008 against 105,366 units in the corresponding period of the previous year.
During the month, the company's motorcycle sales posted 22% growth recording 54,042 units in comparison to 44,392 units recorded in July 2007. Sales witnessed a quantum increase with notable contributors from all models especially Apache RTR and StaR.
Maruti declined by over 2.5% to Rs560. The company announced that it sold 58,543 units in July 2008 posting a rise of mere 1.09% as compared to 57,909 units in July 2007.
During the month, the A3 segment (constitutes, SX4, Esteem and Swift Dzire) grew 36.8% recording 6,009 units as compared to 4,394 units in July 2007. The scrip touched an intra-day high of Rs567 and a low of Rs474 and recorded volumes of over 2,00,000 shares on NSE.
ICICI Bank gained by 1.2% to Rs642. The bank announced that it raised interest rates by 75bps. The scrip touched an intra-day high of Rs651 and a low of Rs610 and recorded volumes of over 23,00,000 shares on NSE.
Moser Baer declined by 2.5% to Rs90. The company announced its Q1 results with net profit of Rs1,039.8mn for the quarter ended June 30, 2008 as compared to Rs96.4mn for the quarter ended June 30, 2007.
Total Income decreased by 0.67% to Rs4,968.8mn for the quarter ended June 30, 2008 from Rs5,002.8mn for the quarter ended June 30, 2007. The scrip touched an intra-day high of Rs92 and a low of Rs87 and recorded volumes of over 5,00,000 shares on NSE.
Opto Circuits surged by over 6% to Rs320 after the company announced that consolidated sales of the group stood at Rs1.77bn for the quarter as against Rs965mn for the corresponding period in the previous year, an increase of 83.80%.
Consolidated profit after tax for the current quarter stood at Rs449.9mn as against Rs278.1mn for the corresponding period in the previous year, higher by 61.77%. The scrip touched an intra-day high of Rs323 and a low of Rs302 and recorded volumes of over 48,000 shares on NSE.
Jindal Steel & Power gained by 2% to Rs2111 after reports stated that plans to invest Rs120bn through a combination of equity and debt for its proposed 2,640MW thermal power plant at Raigarh in Chattisgarh. The project would be undertaken by the JSPL's subsidiary, Jindal Power, added reports.
The scrip touched an intra-day high of Rs2142 and a low of Rs2020 and recorded volumes of over 1,00,000 shares on NSE.
DLF declined by 2% to Rs520. The company announced its Q1 net results with net profit rose 21% to Rs7,009.9mn for the quarter ended June 30, 2008 as compared to Rs5,792.7mn.
Total Revenue increased from Rs12,071.1mn for the quarter ended June 30, 2007 to Rs14,938.6mn for the quarter ended June 30, 2008, registering rise of 23.7%. The scrip touched an intra-day high of Rs525 and a low of Rs480 and recorded volumes of over 25,00,000 shares on NSE.
Tata Steel sets up holding company for overseas assets.(BL)
Aditya Birla Group announced cement dispatches increased 3.1% YoY during April-July 2008.(FE)
DLF Assets plans to raise US$1bn by PE placements and some debt.(DNA)
BSNL board clears the company's US$10bn proposed IPO.(ET)
NTPC plans to add 16,000MW in the 12th Plan; to invest Rs640bn for setting up four units of 4,000MW each.(FE)
GSPC bids for three oil and gas offshore blocks in Egypt.(BL)
Goa Carbon to invest Rs7bn to build factory and expand its coke plant.(BS)
Mahindra Farm Equipment Sector witnessed a 7% growth in tractor sales in July 2008.(FE)
ING Vysya Bank increases PLR by 50bps; Union Bank of India may also raise the same by 25-50bps.(BL)
NTPC may enter into an agreement with three Oman based companies to set up power projects in the Gulf country.(Mint)
Essar Realty Holdings wins the bid for building a Rs5bn five star hotel, utility centre and a multiplex at the upcoming Multimodal International Hub Airport in Nagpur.(ET)
Areva T&D draws up Rs5bn capital expenditure plan for current fiscal.(BL)
MTNL plans 3G rollout within three months.(TOI)
ITC is setting up a super deluxe luxury hotel in Chennai at a cost of Rs12bn.(BL)
MCX defers its IPO; says to wait for right market conditions.(TOI)
Dabur India to invest Rs2.5bn to invest in greenfield facility. (BS)
Reliance Communciations starts GSM service in Delhi on a soft launch basis by offering connections to its employees.(TOI)
SAIL and Nagpur based Manganese Ore India to set up a ferro alloys plant in Bhillai at a cost of Rs4bn.(FE)
Mahanagar Gas in discussions with four prospective gas suppliers for the supply of one million cubic meters per day of gas at a price of US$4 6 per million BTU.(BS)
Reliance Infratel is likely to defer its IPO plans as the approval by SEBI is set to expire son.(Mint)
Shipping Ministry grants relief to ONGC on the issue of the age of vessels it hires.(TOI)
Daiichi Sankyo said its open offer to acquire 92.5mn shares of Ranbaxy might under go a change.(DNA)
Tata motors and Maruti in talks to adjust production to demand due to slowdown in sales.(ET)
LIC's new business premium falls 12% YoY in Q1 FY09.(BL)
Emami may acquire personal and healthcare companies in UK and South Africa.(BS)
Suzlon Energy plans to raise a total of Rs50bn through issue of various securities.(BL)
HDFC Property Ventures is investing US$20-25mn in South India's largest central business district mall developed by Nitesh Estates in Bangalore.(ET)
Daiichi Sankyo defers open offer to acquire additional 20% in Ranbaxy due to delay in approval from SEBI (BS)
Air India and its low-cost arm AI Express are planning to hike passenger fares by at least 10 per cent.(FE)
Dr Reddy's to set up facility for opium-based drugs at Vizag.(BL)
US FDA approves Aurobindo Pharma's sterile injection formulation line.(BL)
Videocon group says it has obtained licence to start its DTH services and expects to launch it by mid-September.(DNA)
Reliance Capital has launched a wholly-owned subsidiary Reliance Equity Advisors to offer the entire bouquet of private equity services.(ET)
MRPL phase III expansion is likely to be completed by end of 2011.(BL)
Offshore funds to pick up 40% equity in MLR Motors which is setting up a greenfield automotive plant in Hyderabad.(DNA)
Koutons Retail to invest Rs3bn for expanding its new family stores along with outlets for its casual wear brand.(BL)
Delhi-based Dalmia Cement Bharat may hike prices by RS20-30 per bag in the next few months.(ET)
Economy Front page
DoT announces guidelines for the auction of 3G spectrum; reserve price for auction at Rs20bn.(TOI)
CDMA players can get 3G spectrum without participating in any auction.(BL)
Government considering a Rs40bn market intervention fund to provide states with interest-free loans to augment food grains and edible oil availability.(BS)
Exports rise 23.5% YoY in June 2008 while imports increased by 25.9%; trade deficit at US$30bn in Q1 FY09.(BL)
Dot seeks more spectrum from defence forces for Delhi and Mumbai.(BL)
Telecom Minister says number portability would first start in the four metros in next two months and subsequently roll out in rest of the country over the next 6-12 months.(FE)
Steel prices likely to increase by Rs1,500-3,000 per tonne after the moratorium to hold prices ends on August 7.(FE)
RBI decides to discontinue interest subsidy on rupee export credit from September 30, 2008.(BL)
IAEA approves by consensus a nuclear safeguards agreement with India.(BS)
Telecom operators who miss out on the first round of 3G auctions will have to pay a much higher price for the same when they are auctioned at a later stage. (ET)
Finance Ministry proposes norms to relax for pricing of ADRs and GDRs.(TOI)
Board of Approval for SEZs approves 29 SEZs including six in-principle approvals.(BL)
New Finance Bill to bar fund managers from investing overseas. (BS).
Capital adequacy norms for NBFCs with asset size of Rs1bn and above increased to 12% from current 10%.(BL)
Defence Procurement Policy, 2008 sets a list of offset defence products.(BS)
Government likely to make it mandatory to dope petrol and diesel with 20% ethanol. (BS)
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