Weak Global Cues but Diwali sparkle
Nothing travels faster than the speed of light with the possible exception of bad news, which obeys its own special laws.
After the pre-Diwali fireworks that saw the Sensex blaze past the 20,000 mark and the Nifty scale the 6,000 peak, things have suddenly gone quiet this week. A confluence of factors have converged to force the bulls into the retreat mode. One, FII inflows have tapered off sharply - both in the cash as well as the F&O segment. Two, we have had a string of bad news from the US housing sector. As a result, global equity markets have been hammered amid renewed concerns over the deteriorating health of the US economy.
Among the other factors include lack of positive news, as second quarter results are behind us. And with the rupee showing no signs of weakness, there are fears that the RBI and the Government could unleash fresh round of measures to stem the losses for the exporters, especially in the labour intensive sectors. So, there may be some more curbs in the pipeline to check the non-stop inflows of foreign money.
Growing calls from analysts about expensive valuations is another factor that has halted the bulls in their tracks. Against the background of extremely weak global cues, we expect the local stock indices to open sharply lower. Unless there is a recovery in Asian or European markets later in the day, the bulls' dream of having a cracker of a Diwali may just remain so. Still, don't write off the bulls just yet.
But, tread cautiously as these are volatile times. Stick to stock centric approach. Don't fall prey to rumours and be saddled with poor quality stuff. Since the long-term outlook is upbeat, one can look at buying from a long-term perspective at every fall. Be very selective and less aggressive.
This Diwali may not turn out to be as sparkling as one would have wanted it to be, but one can reap the benefits of the ongoing bull run on Indian bourses for many years to come. So, don't despair as the future surely appears pretty bright. Happy Diwali and wish you all a prosperous and profitable new year.
UTV Software could be in the limelight amid media reports that Walt Disney, which currently holds a little over 14% in the media and entertainment major, could be looking at acquiring majority control.
US stocks tumbled on Wednesday as credit market fears continued to take its toll on Wall Street. US stocks erased all of their gains since the Federal Reserve's Sept. 18 interest-rate cut, after New York expanded its probe of the mortgage industry, GM posted a record loss and the dollar slumped.
Washington Mutual declined the most in 20 years after New York Attorney General Andrew Cuomo said there was a pattern of collusion in the bank's home-loan appraisals. Fannie Mae posted its steepest drop since 2005 and Freddie Mac sank to a seven-year low after Cuomo subpoenaed the two biggest US providers of mortgage financing. GM slid after writing down $39bn in tax benefits.
The S&P 500 Index lost 45 points, or 2.9%, to 1,475.62, its biggest drop since Aug. 9 and lowest level since Sept. 12. The Dow Jones Industrial Average retreated 361 points, or 2.6%, to 13,300.02. The Nasdaq Composite Index dived 76 points, or 2.7%, to 2,748.76, the largest decline since Feb. 27.
Market breadth was negative. More than 12 stocks fell for every one that gained on the New York Stock Exchange.
Treasury prices rallied as stocks swooned, lowering the yield on the benchmark 10-year note to 4.33%, from 4.37% late on Tuesday.
Oil prices soared to an all-time trading high of $98.62 a barrel. But a run-up towards $100 a barrel stalled after the weekly US inventory report revealed that supplies fell less than expected. Light, sweet crude for December lost 33 cents to settle at $96.37 a barrel on the New York Mercantile Exchange after setting a new trading high during the session.
Gold prices continued to head higher, nearing the all-time high of $850 an ounce last reached in January 1980. COMEX gold for December gained $10.10 to $833.50 an ounce. And, the battered greenback continued to slide to a new record low against the euro, while the dollar also fell sharply against the yen.
Morgan Stanley announced it would take $3.7bn loss on the firm's subprime mortgage exposure. After the closing bell, Cisco delivered better-than-expected earnings, but shares of the network equipment maker fell over 9% in after-hours trading. The world's largest insurer AIG posted a 27% drop in its quarterly results, hurt by the correction in the US housing market and tighter credit conditions.
European markets lost ground for the fourth time out of five sessions. The pan-European Dow Jones Stoxx 600 index declined 0.8% to 375.76, bringing losses for the index to about 3% since Nov. 1. The FTSE 100 fell 0.85% to 6,835, the French CAC-40 slipped 0.5% to 5,683.22 and the German DAX 30 lost 0.4% at 7,799.62.
In the emerging markets, the Bovespa in Brazil was down 1.55% at 63,500 while the IPC index in Mexico slid 2.8% to 29,582. The RTS index in Russia rose 0.5% at 2280 and the ISE National-30 index in Turkey fell 1.7% at 71,049.
Most Asian markets are deeply in the red this morning, extending a global rout after the dollar plunged and US financial companies disclosed mounting credit-market losses.
The Morgan Stanley Capital International Asia-Pacific Index slumped 2.7% to 162.87 as of 12:17 p.m. in Tokyo, the steepest slide since Aug. 17. The Nikkei 225 Stock Average lost 2.3% in Japan, where the government today reported a bigger-than-expected drop in machinery orders.
Hong Kong's Hang Seng Index tumbled 3.2%, the region's worst performance today. All markets open for trading declined. BHP Billiton and PetroChina led commodity producers lower after copper prices fell and crude oil slid from a record.
MARKET...
Seems no big Loss...
Markets ended in red for third straight day as bulls once again gave up early gains in a volatile trading session. After a strong start bears took over the bourses as key indices fell on back of selling pressure in the IT and the Banking stocks.
Among the Sensex pack, Infosys, ICICI Bank, HDFC Bank and Rcom were among the major losers. While, RIL, BHEL, SBI and M&M were among the major gainers. Finally, benchmark Sensex lost 110 points to close at 19,289. NSE Nifty closed flat at 5,782.
SBI gained 2% to Rs2262 after the company announced that they have forayed into gold retailing. The scrip touched an intra-day high of Rs2329 and a low of Rs2181 and recorded volumes of over 17,00,000 shares on NSE.
Ambuja Cements gained 1.1% to Rs145 after the company announced that their dispatches for October 2007 was up by 3.6% yoy to 1.48mn tons. The scrip touched an intra-day high of Rs149 and a low of Rs143 and recorded volumes of over 18,00,000 shares on NSE.
Reliance Energy slipped 1.5% to Rs1820. Reports stated that the company is leading in bids for Indira Gandhi International Airport metro link. The scrip touched an intra-day high of Rs1900 and a low of Rs1755 and recorded volumes of over 33,00,000 shares on NSE.
NTPC edged higher by 0.3% to Rs240. The company announced that it has formed Joint Venture with Railways for setting up 1,000MW captive power plant at Nabinagar. The scrip touched an intra-day high of Rs246 and a low of Rs234 and recorded volumes of over 75,00,000 shares on NSE.
Aurobindo Pharma was down 2.8% to Rs540 after the company reported minor fire at production block. The company also announced that it secured US approval to sell Finasteride and Atenolol tablets. The scrip touched an intra-day high of Rs558 and a low of Rs540 and recorded volumes of over 23,000 shares on NSE.
L&T edged lower by 0.3% to Rs4111. The company announced that they have priced $400mn GDS offering $100-GDS. The scrip touched an intra-day high of Rs4298 and a low of Rs4061 and recorded volumes of over 17,00,000 shares on NSE.
Glenmark Pharma slipped 1% to Rs485. The company approved selling generics biz to unit. The scrip touched an intra-day high of Rs502 and a low of Rs478 and recorded volumes of over 4,00,000 shares on NSE.
IT stocks were badly beaten up; the BSE IT index dropped 4.3% after rupee rose to the highest in almost a decade; it hit a high of Rs39.18 per dollar. IT bellwether Infosys was the top loser, the scrip was down by over 6% to Rs1741, Satyam Computer slipped 4% to Rs434, Wipro dipped 2% to Rs477 and HCL Tech fell 3.5% to Rs295.
Wipro slipped 2% to Rs477. Reports stated that the company is eyeing IP markets in Japan, Asia pacific region. The scrip touched an intra-day high of Rs487 and a low of Rs469 and recorded volumes of over 5,00,000 shares on NSE.
Patni dropped over 4% to Rs328. According to reports the company aims to double revenues from Europe. The scrip touched an intra-day high of Rs348 and a low of Rs325 and recorded volumes of over 6,00,000 shares on NSE.
Oil & Gas stocks also were in momentum led by gains in the index heavyweights like Reliance Industries, the scrip was up by over 4% to Rs2770. HPCL, BPCL and IOC also joined the party later in the session, HPCL rose over 4.5% to Rs258, IOC was up over 3.5% to Rs503 and BPCL added 1.2% to Rs348.
Sugar stocks were in the limelight led by gains in Bajaj Hindustan the scrip rose over 15% to Rs215, Balrampur Chini surged by over 12% to Rs88 and Renuka Sugar added 3.5% to Rs769.
