Indian stocks to open with marginal gains: Thursday Market Preview

Investors are in no hurry and prefer to wait for positive triggers

The domestic market is likely to open with marginal gains as its Asian peers were mostly higher in early trade on Thursday, riding on the optimism in the US on Wednesday. US markets ended higher overnight amid a volatile trading session which saw the Dow and the S&P 500 breaking their eight- and seven-day losing streaks, respectively. Stocks rose on speculations that the Federal Reserve might consider a new stimulus programme to boost the sagging economy. The SGX Nifty was down 12.50 points at 5,417 compared to its previous close of 5,429.50.

Back home, the release of the weekly food inflation data might give the local market some direction as trade progresses.

The fall in the indices which began on 1st July 2011 may take a pause for now with the easing of debt issues in the US. The Nifty which hit a 27-day intra-day low yesterday may see a small rally up to the 5,500 level.

Extending its fall for the second day on global concerns, the market opened lower on Wednesday. The Nifty resumed trade at 5,402, down 55 points from its previous close, and the Sensex opened at 17,970, down 140 points, well below the 18,000 mark for the first time in 28 days.

The indices traded sideways till noon after which the market fell to its intra-day low. At the day’s lows the Nifty was at 5,379, below the psychological 5,400 level for the first time in 27 days, while the Sensex dipped to 17,860.

Weaker-than-expected results from realty major DLF and telecom giant Bharti Airtel added to the woes. But buying in select stocks in the post-noon session resulted in a marginal recovery, and helped the indices to the day’s highs. At the intra-day high, the Nifty was at 5,423 and the Sensex touched 18,006. But selling pressure resulted in the market coming off the highs and the indices moved sideways in subsequent trade.

The market closed down for the second day in a row with the Nifty settling at 5,405, down 52 points, and the Sensex at 17,941, a loss of 169 points.

Markets in the US closed in the green, ending a week’s losing streak with support from technology stocks. However, analysts cautioned that the economic situation within the country and across Europe is expected to keep investors cautious.

In economic news, a report showed that service industries expanded in July at the slowest pace since February 2010 as orders and employment contracted. The Institute for Supply Management’s index of non-manufacturing businesses fell to 52.7 in July from 53.3 in the previous month. The reading was below economists’ forecast for a 53.5 rise in July.

In stocks news, Research In Motion gained 4.89% after the smartphone maker unveiled five new BlackBerry models, Google gained 1.48% and Intel rose 1.39%.

The Dow gained 29.82 points (0.25%) at 11,896.44. The S&P 500 added 6.29 points (0.50%) at 1,260.34 and the Nasdaq rose 23.83 points (0.89%) at 2,693.07.

Markets in Asia were mostly higher in early trade today with the Nikkei 225 index gaining strength after the Japanese government intervened in the currency market to weaken the yen. However, concerns about the pace of the global economic growth kept investors guarded.

The Shanghai Composite gained 0.45%, the Hang Seng rose 0.11%, the Jakarta Composite climbed 0.36%, the KLSE Composite advanced 0.42% and the Nikkei 225 surged 0.90%. On the other hand, the Straits Times shed 0.09%, the Seoul Composite fell 0.19% and the Taiwan Weighted declined 0.24%.

Back home, India’s seasonal monsoon will be ‘below normal’ in August and September and could affect farm output in parts of the country, according to weather scientists. The annual rain season began on a good note with June receiving 111% falls, followed by a slump in July which witnessed 86% rains.

While the weather office sees 46% probability of below normal (86-94% of LPA) rainfall in the next two months, the probability of deficient rains (less than 85% of LPA) is 27%. Weather scientists said that the model error of 8% for August-September forecast would mean that some areas may get 98% rain while it may be 82% in other places.

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Edelweiss MF launches 'Edelweiss Select Midcap Fund'

The scheme seeks to invest 80% to 100% of the net assets in equity and equity related securities of companies ranked between 101 to 300

Edelweiss Mutual Fund has launched Edelweiss Select Midcap Fund, an open-ended equity scheme, with an objective to generate long term capital appreciation from a portfolio predominantly comprising of equity and equity related securities of mid cap companies.

"The quant model of the fund will help to capture the market trend by analyzing the factors that are currently driving stock performance. It will also make the fund process oriented, adaptive in nature and will result in consistent performance across time periods," said Vikaas M Sachdeva, chief executive of Edelweiss Asset Management Co, in a release.

The scheme seeks to invest 80% to 100% of the net assets in equity and equity related securities of companies falling in Top 101 to 300 companies by market capitalization listed in India, up to 20% of the net assets in equity and equity related securities of other companies listed in India and up to 20% of the net assets in debt and money market instruments. It will not invest in securitized debt.

The new fund offer (NFO) of the scheme opens on 4th August and will close on 18th August. The minimum application amount is Rs5,000. Investors will have the choice of two options growth and dividend. Further, the dividend option offers dividend reinvestment, payout and sweep facilities.

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Share prices may eke out a small gain: Wednesday Closing Report

Look for a resistance of 5,500 on the Nifty

The fall in the indices which began on 1st July 2011 may take a pause for now with the easing of debt issues in the US, which also helped stock futures trade higher today. The Nifty which hit a 27-day intra-day low today may see a small rally up to the 5,500 level.

Extending its fall for the second day on global concerns, the market opened lower this morning. The Nifty resumed trade at 5,402, down 55 points from its previous close, and the Sensex opened at 17,970, down 140 points, well below the 18,000 mark for the first time in 28 days. Realty, capital goods, auto and banking stocks were under pressure in early trade.

The indices traded sideways till noon after which the market fell to its intra-day low. At the day’s lows the Nifty was at 5,379, below the psychological 5,400 level for the first time in 27 days, while the Sensex dipped to 17,860.

Weaker-than-expected results from realty major DLF and telecom giant Bharti Airtel added to the woes.

Buying in select stocks in the post-noon session resulted in a marginal recovery, and helped the indices to the day’s highs. At the intra-day high, the Nifty was at 5,423 and the Sensex touched 18,006. But selling pressure resulted in the market coming off the highs and the indices moved sideways in subsequent trade.

The market closed down for the second day in a row with the Nifty settling at 5,405, down 52 points, and the Sensex at 17,941, a loss of 169 points.

The advance-decline ratio on the National Stock Exchange (NSE) was 608:1108.

The broader indices also ended lower, but did better than the benchmark. The BSE Mid-cap index fell by 0.33% and the BSE Small-cap index declined by 0.66%.

The BSE Metal index (up 0.30%) and BSE Fast Moving Consumer Goods index (up 0.26%) were the only gainers in the sectoral segment. The top losers were BSE Capital Goods (down 2.65%), BSE Auto (down 1.45%), BSE Healthcare (down 1.02%), BSE IT (down 1%) and BSE Consumer Durables (down 0.93%).

Reliance Infrastructure (up 2.76%), ITC (up 0.90%), Tata Power (up 0.71%), Hindalco Industries (up 0.52%) and ONGC (up 0.45%) were the major gainers on the Sensex. The losers were led by Larsen & Toubro (down 4.33%), Tata Motors (down 3%), DLF (down 2.15%), Bajaj Auto (down 2.03%) and Jindal Steel (down 2.01%).

The top performers on the Nifty were SAIL (up 3.18%), Reliance Infra (up 2.50%), Sesa Goa (up 2.25%), BPCL (up 1.76%) and Tata Power (up 1.14%). The draggers were L&T (down 4.23%), Tata Power (down 2.95%), Axis Bank (down 2.87%), Bajaj Auto (down 1.94%) and DLF (down 1.89%).

Gold hit a new all-time high on Wednesday, rising by Rs640 to Rs24,330 per 10 grams on heavy buying by stockists and driven by a rally in the overseas market. Silver also rose on industrial demand and increased by Rs1,500 to Rs60,100 per kg.

Markets in Asia were also lower for a second consecutive day with the easing of US debt concerns that brought some economic problems to the forefront. Data released on Tuesday which showed a fall in US consumer spending and decline in factory output across the world, signals a slowdown in the world economy.

Recovering from its early losses, the Shanghai Composite shed 0.03%, the Hang Seng plunged 1.91%, the Jakarta Composite declined 0.99%, the KLSE Composite fell 0.63%, the Nikkei 225 tumbled 2.11%, the Straits Times tanked 1.47%, the Seoul Composite dived 2.59% and the Taiwan Weighted slipped 1.49%.

Back home, foreign institutional investors were net sellers of stocks worth Rs201.68 crore on Tuesday. On the other hand, domestic institutional investors were net buyers of equities worth Rs139.88 crore.

As a direct fall-out of the iron ore mining scam in Karnataka, JSW Steel today said it has closed down two blast furnaces of about 2.3 million tonnes steel production capacity at its Vijayanagar plant in Bellary district due to the unavailability of iron ore. JSW Steel, whose iron ore requirement stands at about 60,000 tonnes per day, sources about half of its requirement from the Bellary-Hospet region and has about two-three days stock left. The share price closed 5.50% higher at Rs709.70 on the NSE.

Venus Remedies has received its first patent from the US PTO for its novel research product, Vancoplus. With the grant of this patent, which is valid up to December 2027, the company is set to tap the US market. The stock fell 2.14% at Rs241.90 on the NSE.

Housing Development Finance Corporation, India’s leading mortgage lender, has hiked its retail prime lending rate on housing loans by 50 basis points (bps). The new rates are effective from 1st August. The hike in retail lending rate reflects tight monetary conditions and is in line with the recent increase in key interest rates by the Reserve Bank of India (RBI). The scrip fell by 0.66% to close at Rs680.50 on the NSE.

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