Book profit partially in our BTST call
of Jindal Steel & Power up by 2%
Today, we expect the market to open firm in line with the global trend. Thereafter, the key indices’ move will hinge on how the institutions behave. Indian markets will be shut on Thursday for Moharam. So, we do not rule out some softening later in the day. Satyam will continue to hog the limelight ahead of the company's Board meeting on January 10.
The current rebound can be attributed to a growing belief that most bad news is reflected in stock prices. So, one has to look beyond the first few months of the New Year and build a base for the anticipated recovery in the second half. Having said that, the jury is still out on whether the market saw a bottom in October. Experts are divided over whether those lows will be hit again. As a result, the best strategy is to take each day as it comes rather than look too far ahead.
Tata Motors was down 1.2% to Rs784. According to reports Ford selected the company as the preferred bidder for its Jaguar and Land Rover brands. The scrip touched an intra-day high of Rs812 and a low of Rs722 and recorded volumes of over 4,00,000 shares on NSE.
BHEL gained 1.8% to Rs2544 after the company declared that they secured export order for transformers. The scrip touched an intra-day high of Rs2560 and a low of Rs2461 and recorded volumes of over 6,00,000 shares on NSE.
Today, we see the market opening flat to slightly positive. There may be some cooling at higher levels. On the whole, we expect some choppiness after the recent spurt.
After a year of headwinds, the bulls got some tailwind as the New Year brought some cheer with the key indices rising three days in a row. The Sensex and the Nifty closed above key psychological levels, aided by strong buying by FIIs as well as local institutions. Some short covering also propelled Monday's strong gains. The Fiscal Stimulus Package II and RBI's aggressive monetary easing have heightened hopes for a better year ahead. More fiscal measures could be announced in the Vote-On-Account next month to ensure a faster economic recovery.
The undertone has definitely improved a notch or two, so we hope. The optimism stems from the belief that India is better placed than most economies, and global funds may find it hard to resist. A big concern is the health of India Inc. In this context, the upcoming results will prove to be a litmus test and set the tone for the months ahead. Among the other events to watch out would be the shift in regime in the US.
After surging past the 3100 levels, markets would carry forward the momentum atleast in the today's morning trades. However, profit booking at higher levels cannot be ruled out.
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Today, the market will open higher due to strength across global markets. Investors should consider booking profits at every given opportunity, as the recent spurt doesn’t suggest end of the bear phase as yet. At the same time, downside risks have also eased, pointing to a rangebound trading in the short to medium term. One may undertake long-term purchases once there is clear evidence of a turn around.
Later in the month, the quarterly results may spoil the party, especially if there is any major negative surprise. In any case, the intermediate uptrend may run out of gas after a while in the absence of fresh catalysts. In this context, the trend in FII flows will play a crucial role. Buying support from local funds will be more than welcome.With rate cuts and other additional measures announced bulls would carry forward the momentum atleast in the opening trades today. However, one should not get carried away in this swing but wisely use the opurtunity to exit and book some profits.
Buy Aban
Repor Rate cut
To reduce the repo rate under the liquidity adjustment facility (LAF) by 100 basis points from 6.5 per cent to 5.5 per cent with immediate effect.
Reserve Repo Rate
To reduce the reverse repo rate under the LAF by 100 basis points from 5.0 per cent to 4.0 per cent with immediate effect.
Cash Reserve Ratio - CRR Rate
To reduce the cash reserve ratio (CRR) of scheduled banks by 50 basis points from 5.5 per cent to 5.0 per cent from the fortnight beginning January 17, 2009.
The CRR cut is not immdiate but atleast its happening this si the only gfactor that will put some money in banks hand which in turn can be used by banks for various purpose , So this cut will release 20,000 crore.We can expect more rate cuts in lending loansfrom various banks.
Repo Rate CutsDate Cuts
10/10/2008 9%
10/22/2008 8%
11/03/2008 7.5%
12/06/2008 6.5%
02-Jan-2009 5.5%Since Sep, Repo Rate has been reduced by 350 bps.
CRR History
Date Cuts
10/10/2008 9%
10/13/2008 7.5%
10/16/2008 6.5%
11/10/2008 5.5%
12/06/2008 unchanged
02-Jan-2009 5%Since Sep, CRR has been reduced by 400 bps.
Reverse Repo Rate
Date Cuts
12/06/2008 5% (reduced by 100 bps)
02-Jan-2009 4%
2009 started with all good news, let's hope this year goes as good as 2007 or better then that. It was one month before that the government approved that IIFCL can borrow up to 10000 rore in Tax free bonds which will be lend to infrastructure projects that are public and private partnership , As these projects are having high time getting long term loan from banks , Because Banks are also in need of money IIFCL might recapitalise banks through this .So they did not even fully get the 10000 crore now Indian Government has approved for the second stimulus package that India Infrastructure Finance Company Ltd (IIFCL) to raise Rs 30,000 crore for refinancing projects mainly in the highway and port sectors.This will really help in financing big projects in turn will help the industry grow and also bring very good number of Job openings. Let's hope for the best year ahead.
Happy New Year !
Continuous fall in inflation may bring some cheer, as it heightens expectations of rate cuts. But one cannot overlook other weak data points like the BoP slipping into a deficit and exports falling for a second month. Auto sales remained sluggish in December. Reports say the Government may announce its second stimulus package on Saturday. There is no official confirmation of the same. The RBI may also join the pump-priming effort, but by how much is the moot point. Even if the anticipated events do materialise, they may provide only a temporary fillip. Anxiety over corporate earnings may takeover after a brief rally.
Most global markets were shut for New Year on Thursday.
FIIs were net buyers of Rs2.15bn (provisional) in the cash segment on Tuesday while the local institutions poured in Rs3.75bn. In the F&O segment, the foreign funds were net buyers at Rs6.44bn. The foreign funds were net sellers at Rs103mn in the cash segment on Monday while Mutual Funds, on the other hand pumped in Rs1.61bn.
Buy EKC
Sell Wipro
Over the short-term, focus will be on quarterly corporate earnings, as well as the much-awaited second round of stimulus. The RBI is likely to cut rates further, but the timing and the size of the same is uncertain. Reports suggest that the central bank is not inclined to be aggressive this time around. This may disappoint the markets.
Buy Tata Power
Buy HDIL
Buy Indian Bank