Getting rational!

There is nothing so disastrous as a rational investment policy in an irrational world.

Markets have never been known to be rational. But there is some relief for households and corporates alike as sugar prices are getting rational. It remains to be seen if the Government manages to lower prices of other essential commodities as well. The relief may turn out to be temporary as ad-hoc measures can have only a limited impact on inflation. In any case, one should brace for a gradual and calibrated rise in interest rates.

We expect a flat start today after Monday’s advance. Overall, the market will be choppy and rangebound. Technically, 5300 continues to be a major hurdle for the Nifty. If it is breached convincingly, the Nifty could head for 5400-5420. Support is likely at 5180-5200. A spate of stock-specific action will persist so avoid taking a broader view for now. For some time, the market may seem to go nowhere but individual stocks could have their moments of glory.

Asian shares are flat in a quiet trade, as investors await key earnings from across the globe. Gains in commodity-sector firms, helped European stocks end higher. US markets were shut due to the Martin Luther King Jr. holiday.

Results Today: Aditya Birla Money, BASF India, Elder Pharma, ENIL, JK Lakshmi Cement, MRPL, Mindtree, Novartis India, SRF, Swaraj Engines, Tata Elxsi and Tata Power.

FIIs were net buyers in the cash segment on Monday at Rs1.52bn on a provisional basis. The local funds were net sellers of Rs214.6mn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers at Rs128.2mn. As per the SEBI figures, FIIs were net sellers of Rs8.9bn in the cash segment on Friday.

European shares ended higher on Monday, with gains for commodity-sector firms and Richemont fueling a rebound from last week's earning-related retreat. After ending a four-week winning streak with a 1.5% drop last week, the pan-European Dow Jones Stoxx 600 index rose 0.7% to close at 258.21. Miners were in the lead as metal futures advanced.

The UK's FTSE 100 index rose 0.7% to end at 5,494.39, while Germany's DAX index climbed 0.7% to settle at 5,918.55 and the French CAC-40 index advanced 0.6% to finish at 3,977.46.

Currency strategists at Citigroup said that they expect continued pressure on the euro until Greece's fiscal situation becomes clearer. "The European Union appears prepared to go to the brink to force Greece to undertake a decisive fiscal adjustment. If this doesn't take place, we ultimately expect a rescue, by one way or another," they said.

The Euro held its ground versus the dollar but slipped to a four-month low versus the British pound as European finance ministers prepare to discuss Greece's debt problems. Greek banks were lower.

Chocolate maker Cadbury climbed 1.8% to 807.5 pence per share after reports that Kraft Foods Inc. is preparing to raise its bid to around 820 pence a share, ahead of Tuesday's bid deadline.

Dubai government says its $10bn bailout from Abu Dhabi will be half the amount it had been expecting.

Risk appetite is still strong as speculation of strong Chinese data later in the week drove the dollar and yen lower

Indian markets started off the week with modest gains on Monday as bulls continued its northbound journey. Sentiments got a fillip after IT major TCS and banking heavyweights like HDFC Bank and Axis Bank delivered impressive quarterly numbers. The PSU stocks like Andrew Yule, EIL, NMDC, FACT also hogged the limelight on account of disinvestment buzz.

Auto and the Consumer Durables were among the other major gainers. The Mid-Cap and the Small-Cap stocks also attracted fair buying interest.

The BSE Sensex gained 87 points to end at 17,641 after touching a high of 17,712 and a low of 17,505. The Nifty added 23 points to end at 5,275.

Equity markets in Asia ended in the red. The Nikkei in Japan was down 1.2%, while Australia's S&P/ASX ended marginally higher by 0.2%. The Shanghai SE Composite was up 0.4% and Hang Seng index in Hong Kong was down 0.9%.

In Europe, stocks were trading higher. The DAX in Germany was up 0.5% and the CAC 40 index in France was up 0.4%. The FTSE in the UK was up 0.5%.
Coming back to India, among the BSE sectoral indices, the Banking index was the top gainer, adding 2.5%, followed by the PSU index that was up 2% and the BSE Auto index was up 1.7%. The BSE Mid-Cap index edged higher 0.5% while BSE Small-Cap index added 0.6%.

Among the 30-components of Sensex, 19 stocks ended in the positive terrain and 11 ended in the red. HDFC Bank, Hero Honda, ICICI Bank, M&M and Wipro were among the top gainers.

On the other hand, Grasim, Tata Steel, Tata Power and Sun Pharma were among the top losers.

Outside the frontline indices, the big gainers in the broader market were Hindustan Copper, NMDC, UCO Bank, RCF and MRPL. On the other hand, losers included Madras Cem, Jet Airways, Ultratech Cem and Balrampur Chini.

Shares of Gail surged 3% to end at Rs439 after the company announced its Q3 results with net profit of Rs8.59bn for the quarter ended December 31, 2009 as compared to Rs2.53bn for the quarter ended December 31, 2008.

Total Income has increased from Rs60.46bn for the quarter ended December 31, 2008 to Rs63.31bn for the quarter ended December 31, 2009.

GAIL India also announced that it plans to raise Rs50bn in the year starting April 1, including Rs20bn in overseas bonds and Rs15bn in overseas borrowings, R.K. Goel, director of finance, was quoted as saying. The company is also planning to buy a 4% stake in the Myanmar-China gas pipeline, Chairman B.C. Tripathi was quoted as saying.

Shares of ABG Shipyard rose over 5.5% to end at Rs315 after reports stated that the company may sell its entire 15.2% stake in Great Offshore to a PE fund within six months.

"The talks are in the initial stage and may take 5 to 6 months for closure," ABG Shipyard CEO Dhananjay Datar was quoted as saying. ABG Shipyards recently through one of its units, Eleventh Land Developers had acquired 5.7m shares of Great Offshore through an open offer.

SAIL announced that it has reduced long product prices by Rs3,000 per metric ton last week, stated reports. Shares of SAIL slipped by 1.1% to end at Rs234, the scrip opened at Rs237 it touched an intra-day high of Rs237.60 and a low of Rs233 and recorded volumes of over 0.6mn shares on BSE.

Shares of Triveni Engineering shot up by over 6% to end at Rs120 after the company announced that its board of directors will meet on January 20, 2010, to consider evaluate and decide the options for restructuring the Company's businesses. The scrip opened at Rs111 it touched an intra-day high of Rs122 and a low of Rs111 and recorded volumes of over 0.95mn shares on BSE.

Infotech Enterprises announced that the company's wholly owned subsidiary in the US, Infotech Enterprises America Inc., has acquired the Illinois based Daxcon Engineering Inc., a Company engaged, inter alia, in the business of providing product design engineering services to original equipment manufacturers.

The Company also signed a long term agreement with Hamilton Sundstrand Corporation (HSC), a subsidiary of United Technologies Corporation, to provide embedded software and electronic engineering design services by setting-up a "Centre of Excellence (CoE)" in Bangalore.

This is a new four year contract and will enable Infotech to work with all HSC divisions across multiple disciplines and projects in a real-time engineering environment with an opportunity to add 400 engineers over the next three years.

Shares of Infotech Enterprises surged by over 3.5% to end at Rs306. The scrip opened at Rs299 it touched an intra-day high of Rs311 and a low of Rs299 and recorded volumes of over 42,000 shares on BSE.