Market looks tired; wait for a fall to buy

Withdrawal of support to the UPA government by its allies weakened the market rally towards the end of the day

Indian markets gained momentum throughout the day but selling pressure weighed heavily on markets later towards the day after the Samajwadi Party and the Rashtriya Janata Dal decided to withdraw support to the UPA government after earlier disrupting the proceedings in both Houses of Parliament demanding quotas for Dalits, backward classes and Muslims within the Women’s Reservation Bill. Both parties disrupted Question Hour in the Rajya Sabha over the non-implementation of the Ranganath Misra Commission report on minority welfare, leading to adjournment of the House.

During the day, index heavyweight State Bank of India (SBI) helped the bourses gain after the finance minister introduced a Bill in the Lok Sabha to allow the Bank to raise more capital from the market.

We expect the market to stay up tomorrow. However, the index looks tired, so wait for two-three days to buy.

At the end of the day, the Sensex rose 108 points from Friday’s close to 17,103, while the Nifty closed at 5,124, up 35 points.

At the end of the day, SBI rose 1% after a Bill, seeking to reduce the Centre’s shareholding in the Bank from 55% at present to 51% and to allow the Bank to raise more capital from the market through preference shares, was introduced in the Lok Sabha.

HT Media rose 1% after the company said that its unit, Hindustan Media Ventures, has filed draft papers with the market regulator for an initial public offer to raise up to Rs300 crore.

Syncom Healthcare rose 3% after the company signed a pact with Africa’s Advanced Techno Lab for marketing the company's product in Congo.

Man Industries (India) jumped 8% after the company secured an export order worth Rs950 crore from Kuwait for supply of 1.70 lakh tonnes of large diameter pipes.

Nagarjuna Construction Company rose 2% after the company secured new orders worth Rs1,221 crore.

Rama Paper Mills Ltd is setting up a power plant of 50MW in different phases by investing Rs200 crore. The stock was up 14%.

Nicco Corporation has entered into a memorandum of understanding with Hitachi Cables, Japan, to jointly develop and pursue business opportunities in the Indian cable market with focus on the speciality cable segment. The stock was up 5%.

The government will announce the industrial output data for the month of January 2010 on Friday, 12 March 2010. The data is expected to be robust after the infrastructure sector output—which accounts for 26% of industrial output—showed a growth of 9.4% in January 2010 from a year earlier. Industrial output grew 16.8% in December 2009.

Meanwhile, on Saturday, 6 March 2010, the Securities and Exchange Board of India (SEBI) mandated 100% application money for qualified institutional buyers (QIBs) in public issues from 1 May 2010, with a view to bringing about a level playing field for both large and small investors. In a move to bring greater stability and depth to the stock market, SEBI has decided in principle to allow stock exchanges to introduce physical settlement of equity derivatives. SEBI has also allowed, in principle, the introduction of equity derivatives contracts with tenures of up to five years as well as derivative products based on the volatility indices.

Rajan Bharti Mittal, the newly-elected president of industry body FICCI said that there’s no room for hardening of interest rates and the Reserve Bank of India should maintain the status quo on the rates to allow the industry to make fresh investments. He added that fresh investment announcements have begun across sectors and further increase in interest rates will only hamper economic growth.

During the day, Asia’s key benchmark indices in Hong Kong, South Korea, Singapore, Taiwan, Indonesia, China and Japan rose between 1.25%-1.97%.

According to data released by the Japanese finance ministry, Japan's current account surplus totalled 899.80 billion yen in January 2010, a sharp reversal from the 132.70 billion yen deficit a year earlier. The trade and services balance was 37.30 billion yen in the black, compared with 1.05 trillion yen in the red the previous year. The trade portion logged a surplus of 197.20 billion yen, while services posted a deficit of 159.90 billion yen. In the previous year, both categories were in the red, at 844.80 billion yen for trade and 212.40 billion yen for services. The income balance shrank 8.1% to 911 billion yen. Imports were up 7.1% year-on-year to 4.4 trillion yen, while exports surged 40.6% year-on-year to 4.6 trillion yen.

On Friday, 5 March 2010, the Dow Jones Industrial Average was up 122 points while the S&P 500 and the Nasdaq Composite were up 16 points and 34 points respectively.

As per media reports, US employers cut a net total of 36,000 jobs in February 2010, after jobs fell by 26,000 in January 2010. That was short of the expected 68,000 job loss, according to a consensus from economists. The unemployment rate, generated by a separate survey, held steady at 9.7%, versus forecasts for a rise to 9.8%. According to Federal Reserve data, consumer credit rose to $4.96 billion in January 2010, its first increase in a year and the largest for any month since mid-2008.

In premarket trading, the Dow was trading 18 points higher.


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