GDP numbers could effect
With the F&O expiry out of the way, the market will look to the global markets and FII trend for near-term direction. We expect a cautious to positive opening and another volatile day of trade ahead of the weekend. The second-quarter GDP numbers will be released at noon. A private survey of economists sees GDP growing at less than 9% in the July-September quarter. A number better than this could have a positive impact on the sentiment, albeit only briefly. Inflation will also be announced at around the same time, though it is expected to be well under control in the absence of fuel price hike.
November wasn't a particularly memorable month for the bulls due to renewed concerns over the sub-prime crisis in the US and selling by the FIIs. Overseas investors offloaded stocks worth over US$1bn in the cash segment. Though this may not be too significant an amount to lose one's sleep over, it did have a bearing on the sentiment. The lack of any big positive trigger also acted as a deterrent for the bulls to continue the buying spree. As a result, the Sensex and the Nifty have gained only about 1-2% each this month.
The lackluster trend may not change much in December, as year-end issues and the SEBI curb on P-Notes is likely to keep the FIIs at bay. Plus we will have the daily dose of news on the housing sector in the US and its implications on global financial markets. Incidentally, real estate stocks with exposure to Maharashtra, particularly Mumbai may remain in the limelight following the scrapping of the Urban Land Ceiling and Regulation Act by the state assembly.
Dec. 11 is a crucial day for world markets, as the Federal Reserve will meet to assess the impact of the previous rate cuts and consider further monetary easing. Right now, Wall Street is betting on a 25 basis point reduction in the benchmark fed funds rate. Though, positive economic reports, like yesterday's upwardly revised GDP numbers (4.9% growth in Q3), could dim the prospects of another rate cut from the Fed.
As far as India is concerned, rising interest rate differential with the US is good news, as it improves the outlook on foreign capital inflows. But, FII selling in the month of November shows that it may not necessarily be the case.
Goldman Sachs, Citigroup and Bear Stearns have sold El Forge; IDFC Infrastructure Funds has sold a large chunk of shares in Gujarat State Petronet. However, it is not known as yet as to who was the buyer of these shares; Citigroup and Lehman Brothers have picked up Indo Asian Fusegear; Morgan Stanley has purchased Prajay Engineers Syndicate while CLSA has sold the stock; HSBC Financial has sold Vyapar Industries.
US stocks rose for a third day on Thursday, ending marginally higher. More than three stocks fell for every two that rose on the New York Stock Exchange as the Russell 2000 Index of smaller companies dropped 0.5%.
The Standard & Poor's 500 Index finished nearly flat at 1,469.72. This is the first time since Sept. 14 that the benchmark has gained three consecutive days. The Dow Jones Industrial Average added 22 points, or 0.2%, to 13,311.73. The Nasdaq Composite Index rose 5 points, or 0.2%, to 2,668.13.
US stock indexes had weakened due to rising oil prices and a 99% drop in profit at Sears Holdings and then declined further after the Commerce Department said that builders cut prices the most in 26 years in October, boosting sales of new homes.
The US Government also reported a rise in weekly jobless claims to near two-year highs, along with an upward revision in third-quarter US economic growth to 4.9%.
Crude futures rallied as much as $4 a barrel after a fire crippled a key pipeline bringing Canadian oil into the US. On the New York Mercantile Exchange, crude futures ended up 39 cents at $91.04 a barrel, after rising $4.55 to an intraday high of $95.17 a barrel in electronic trade earlier.
Elsewhere on the NYMEX, Gold for December delivery fell $5 to finish at $795.3 an ounce. The dollar held gains against the euro. Treasury prices rallied, with the benchmark 10-year yield falling to 3.939%.
Gains from copper miners offset lower travel stocks and retail weakness in Europe. The pan-European Stoxx 600 index, which on Wednesday scored its second-best single-day rise of the year, tacked on another 0.5% to end at 365.72.
The German DAX 30 rose 0.5% to 7,765.19 and the French CAC-40 advanced 0.7% to 5,598.11, while the UK's FTSE 100 gained 0.7% to 6,349.10.
Latin American stocks finished higher. The Bovespa rose 0.7% to 62,156.34. Mexico's IPC rose 0.4% to 29,399.92. Chile's IPSA gained 0.5% to 3,176. Argentina's Merval rose 0.3% to 2,236.39.
In other emerging markets, the RTS index in Russia rose 0.6% at 2180 and the ISE National 30 in Turkey fell 0.2% at 67,406.
Asian stocks were mostly up this morning, helping a regional index to its best weekly gain in two months, after copper prices climbed to a one-week high and Credit Suisse raised its recommendation on some Japanese steel makers.
BHP Billiton climbed to a three-week high. JFE Holdings, the world's third-largest steel maker, jumped the most in two months.
The MSCI Asia Pacific Index added 0.6% to 161.64 as of 10:02 a.m. in Tokyo, set for its highest close since Nov. 15.
An index of mining companies and steel makers jumped 1.5%, the biggest advance among 10 industry groups. The benchmark is up 4.4% this week, the most since the five days ended Sept. 28. Gains helped trim the MSCI index's November loss to 6.1%, its worst monthly performance since May 2006.
Japan's Nikkei 225 Stock Average gained 0.7% to 15,623.06. Stock indices rose in other Asian markets open for trading, except New Zealand. The Philippines is closed for a holiday today.
MARKET...
Bulls seems to continue
After losing ground for two trading sessions bulls managed to make a come back on F&O expiry day. Markets opened with a positive gap following overnight gains in the US and the Asian markets, however late selling on back of F&O expiry dragged the benchmark Sensex to hit a low of 18,930. Finally, 30-share Sensex ended 64 points higher to close at 19,003 and Nifty closed 17 points lower at 5,634.
Among the 30-scrips of Sensex ICICI Bank, Reliance Industries, HDFC Bank and SBI were among the major gainers. While, Rcom, BHEL and REL were among the major laggards.
JP Associates edged higher by 0.3% to Rs1798 after the company announced that they have planned to sell a part of its road-construction unit to raise funds for Rs55bn expressway from New Delhi to Agra. The scrip touched an intra-day high of Rs1865 and a low of Rs1773 and recorded volumes of over 23,00,000 shares on NSE.
Prime Focus marginally gained 0.3% to Rs1798 after the company announced that they would buy Logic Studious for $43mn. The scrip touched an intra-day high of Rs1310 and a low of Rs1100 and recorded volumes of over 17,000 shares on NSE.
DLF ended flat at Rs8801. The company clarified that they have no plans to buy Escorts Faridabad Land. The scrip touched an intra-day high of Rs919 and a low of Rs874 and recorded volumes of over 19,00,000 shares on NSE.
Surya Chakra Power surged by over 5% to Rs42 after the board of Directors of the company approved to raise $100mn overseas. The scrip touched an intra-day high of Rs43 and a low of Rs39 and recorded volumes of over 21,00,000 shares on NSE.
Satra Properties dropped over 3.5% to Rs282. The company announced their plans to raise Rs7bn and would also invest Rs500mn in Sharvan. The scrip has touched an intra-day high of Rs295 and a low of Rs270 and has recorded volumes of over 1,00,000 shares on NSE.
Sugar stocks pared their gains as were unable to hold on to their momentum. Reports stated that government may grant further sops for Sugar mills to clear cane arrears. Balrampur Chini slipped 1% to Rs92, Renuka lost 6% to Rs668 and Sakhti Sugar lost 4% to Rs69.
Real Estate stocks were back in the limelight after Maharashtra Assembly cleared repealing of the Urban Land ceiling Act according to reports. Orbit Corp rose over 5.5% to Rs750, Peninsula Land gained 0.3% to Rs127, Bombay Dyeing gained 2.6% to Rs685 and Akruti added 4% to Rs1155.
