+ve Script : Mindtree
Buy PATNI-379 for a target 387-396 stop loss 372
Buy Mphasis-504 for a target 520-531 stop loss 497
Buy Cummins-293 for a target 299-306 stop loss 288
Buy Hindoilexp-199 above 203 for a target 209-214 stop loss 198
This is list of 10 strong futures:
Nifty is in Up Trend.
NIFTY FUTURES (F & O):
Selling may continue up to 4376-4378 zone for time being.
Sell if touches 4618-4620 zone. Stop Loss at 4678-4680 zone.
Short-Term Investors:
Bullish Trend. 3 closes above 4473 level, it can zoom up to 4988 level by non-stop.
Stop Loss Triggered. 3 closes below 4473 level, it can tumble up to 4215 level by non-stop.
BSE SENSEX:
Lower opening expected. Recovery should start.
Short-Term trend is Bearish and target at around 14235 level on down side.
Maintain a Stop Loss at 15973 level for your short positions too.
Buy SRF LTD (NSE Cash)
Uptrend to continue.
If crosses & sustains at above 154 level then uptrend may continue.
Keep a Stop Loss at 137 level for your long positions too.
Buy WIPRO LTD (NSE Cash)
If crosses & sustains at above 536 level then uptrend may continue.
Keep a Stop Loss at 500 level for your long positions too.
Global Cues & Rupee
The Dow Jones Industrial Average closed at 9,337.95. Down by 32.12 points.
The Broader S&P 500 closed at 1,007.10. Down by 3.38 points.
The Nasdaq Composite Index closed at 1,992.24. Down by 8.01 points.
| FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| FII | 10-Aug-2009 | 2539.36 | 3179.28 | -639.92 |
| DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| DII | 10-Aug-2009 | 1188.3 | 1102.16 | +86.14 |
Stocks slipped Monday as investors pulled back ahead of a two-day Federal Reserve meeting and following a big rally that pushed the Dow and S&P 500 to 9-month highs.
The Dow Jones Industrial Average fell 32.12 points, or 0.34%, to 9337.95, the Standard & Poor's 500 slid 3.38 points, or 0.33%, to 1007.10 and the Nasdaq Composite tumbled 8.01 points, or 0.40%, to 1992.24.
"We are in a mild profit-taking mode after a rally, and we are also nearing September, the historically worst month for stocks," Art Hogan, chief market analyst at Jefferies, told Reuters.
Most of the banking sector followed State Street lower but Citigroup CITIGROUP INCC 3.94 0.09 +2.34% NYSE Quote | Chart | News | Profile [C 3.94 0.09 (+2.34%) ] gained more than 2 percent. Bank of America and JPMorgan also advanced after a report showed U.S. banks are poised to make $38.5 billion from customer overdraft fees this year and as they're also likely to benefit from all the new car buying that has resulted from the "Cash for Clunkers" program.
Merck (MRK, Fortune 500) shares gained 1.7% after Goldman Sachs upgraded it to "buy," from "not rated" according to published reports.
McDonald's (MCD, Fortune 500) reported that sales at stores open a year or more, a retail metric known as same-store sales, rose 2.6% in July, raising hopes that it will see a strong third quarter. Shares gained almost 2%.
Freddie Mac (FRE, Fortune 500) shares surged 128% in active trading Monday, one day after the government-run home mortgage lender reported its first quarterly profit in two years. The company, along with Fannie Mae (FNM, Fortune 500), was saved from extinction last year amid the credit market collapse after receiving billions in government aid. Fannie Mae gained 51%.
But a variety of economically sensitive shares fell, including Dow components Alcoa (AA, Fortune 500), DuPont (DD, Fortune 500), 3M (MMM, Fortune 500), Boeing (BA, Fortune 500) and Caterpillar (CAT, Fortune 500). Other Dow losers included Cisco Systems (CSCO, Fortune 500), Travelers (TRV, Fortune 500) and Walt Disney (DIS, Fortune 500).
State Street ( STT - news - people ) shares fell 2.4%, after an SEC filing indicated the asset manager's $625 million reserve for exposure to subprime-related investments may not be sufficient. Apparently the firm is concerned that its reserve may fall short of covering fees and penalties related to litigation and investigations by regulators.
Bankrupt telecom equipment maker Nortel Networks ( NRTLQ - news - people ) announced Chief Executive Mike Zafirovski will step down, and its board will be culled to three members from nine, on the heels of rising losses as it attempts to shed assets.
Microsoft ( MSFT - news - people ) shares lost 0.6%, after the tech heavyweight agreed to sell its Razorfish digital advertising firm to France's Publicis for approximately $530 million in cash and shares. Under the deal, Microsoft commits a minimum amount to spend each year on digital strategy, creative and marketing services from Razorfish.
The insurer American International Group rose 9%.
The materials sector of the S&P fell the most, losing 2.3%, weighed down by Nucor corp. /quotes/comstock/13*!nue/quotes/nls/nue (NUE 47.01, -0.09, -0.19%) and AK Steel Holding /quotes/comstock/13*!aks/quotes/nls/aks (AKS 20.37, +0.06, +0.30%) , both off more than 4%.
Stocks like Macy's (M: 15.21, -0.78, -4.88%) and Aeropostale (ARO: 35.86, -1.64, -4.37%) tumbled after electronics retailer Best Buy (BBY: 37.67, -2.106, -5.29%) was cut from "buy" to "neutral" by Goldman Sachs. The analysts said Best Buy faces increased competition and challenges related to its product mix.
JCPenney, which report earnings later in the week, down more than 3 percent.
EBay (EBAY: 22.49, -0.03, -0.13%) and General Motors unveiled a promotion to sell GM cars and trucks online in California for one month. GM said consumers will be able to use the eBay micro site, which is set to launch Tuesday, to compare and shop between different dealerships.
Priceline.com (PCLN: 150.24, 18.92, 14.41%) climbed 14% to 52-week highs after the online travel agent said its net income jumped 35% during the second quarter. Lifted by a 12.8% jump in gross bookings, the company beat the Street with an adjusted-profit of $2.02 per share and an 18% jump in revenue to $603.7 million.
Sysco (SYY: 25.03, 0.17, 0.68%) disclosed a 5.6% slide in net income and a steeper-than-expected decline of 6.6% in revenue. The food distributor posted an adjusted-profit of 50 cents a share, topping the Street's view by a penny.
YRC Worldwide (YRCW: 2.69, 0.43, 19.03%) closed up 19% after the International Brotherhood of Teamsters agreed to new concessions in an effort to keep the transportation service provider out of bankruptcy. YRC said the teamsters agreed to an additional 5% wage cut and an 18-month suspension of union pension fund contributions.
Virgin Mobile USA (VM: 4.7, -0.17, -3.49%) beat the Street with a second-quarter profit of 23 cents per share. However, the phone carrier, which is being acquired by Sprint Nextel (S: 3.71, -0.088, -2.32%), said its operating revenue slid 3.8% to $307.6 million, missing estimates. Virgin said it remains confident in its guidance for both its adjusted earnings and free cash flow for 2009.
Hormel Foods (HRL: 38.23, 2.09, 5.78%) hit a 52-week high after the food processor boosted its full-year guidance, citing better-than-expected sales and lower feed costs. The maker of Spam said it expects to earn $2.36 to $2.42 a share, compared to the Street's view of $2.29.
Dish Network (DISH: 19.3, 0.88, 4.78%) reported an 81% plunge in quarterly profit, but the struggling satellite TV provider posted its first net subscriber gain in five quarters. Dish disclosed EPS of 14 cents and in-line revenue of $2.9 billion.
EchoStar (SATS: 15.97, 1.17, 7.91%), formerly a Dish unit, more than doubled its profit to $1.18 a share. The satellite TV provider's revenue tumbled 21% to $383.1 million.
Elsewhere in tech, Research In Motion RESEARCH IN MOTION LIMITEDRIMM 73.28 -3.81 -4.94% NASDAQ Quote | Chart | News | Profile [RIMM 73.28 -3.81 (-4.94%) ] shares skidded nearly 5 percent, its third-straight decline, after UBS downgraded its rating on the stock to "neutral" amid worries that Verizon Wireless, one of RIM's largest customers, might launch its own iPhone.
Oil and gold:
U.S. light crude oil for September delivery fell 13 cents to settle at $70.93 a barrel on the New York Mercantile Exchange. Oil prices have been gaining in recent weeks on bets that the global economy is stabilizing.
COMEX gold for December delivery fell $12.60 to settle at $946.90 an ounce.
Bonds:
Treasury prices rallied, lowering the yield on the benchmark 10-year note to 3.77% from 3.84% late Friday. Treasury prices and yields move in opposite directions.
The U.S. government is auctioning $75 billion in debt this week as part of its efforts to fuel the economic recovery and manage the budget deficit.
What to expect:
TUESDAY: Two-day Fed meeting begins; wholesale trade; Treasury 3-year auction; Earnings from Applied Materials.
WEDNESDAY: Weekly mortgage applications; international trade; weekly crude inventories; Treasury 10-year auction; Fed announcement; Earnings from Macy's.
THURSDAY: Retail sales; weekly jobless claims; import/export prices; business inventories; Treasury 30-year auction; Earnings from Wal-Mart, Kohl's and Nordstrom.
FRIDAY: CPI; industrial production; consumer sentiment; Earnings from JCPenney.
Tuesday Look Ahead: Watching the Dollar
The Fed starts a two-day meeting Tuesday, and there are just a few economic reports, including productivity and costs at 8:30 a.m., and wholesale trade at 10 a.m. The NFIB's small business survey is reported at 7:30 a.m.
Traders are also watching the Treasury's auction of $37 billion in 3-year notes at 1 p.m.
The dollar gained for a third day against a basket of currencies. Commodities, especially gold and other metals, moved lower.
"The bears held themselves together. The dollar started to exert its influence," said Art Cashin, director of floor operations at UBS. He said stock market bears though won't have an advantage as they head into Tuesday, and right now it's a toss up as to which direction dominates.
"The stock market benefited greatly from weakness in the dollar. It would seem natural that if it were to rally, it would put pressure on stocks," said Cashin. The dollar staged an interesting intraday reversal Friday after better than expected jobs data, sparking a debate about whether the dollar is now going to trade along with perceived relative strengthening in the U.S. economy instead of against the idea of recovery.
Cashin said it is important to see whether the dollar's rise is more than a short-lived phenomena and how other financial markets relate to it. As the dollar firmed Monday, stocks and assets that rode higher with it, weakened. The commodities-related materials sector was the worst performer, down 1.6 percent. Second worst was consumer discretionary, down 1.2 percent, followed by a 1.1 percent decline in industrials, another group sensitive to the global reflation trade.
The dollar index was 0.3 percent higher at 79.212. It was also 0.3 percent higher against the euro, at $1.4142. Traders were also watching the Chinese stock market, down for a fourth day and another metric for the global economic recovery.
Bonds traded higher and yields fell along the curve Monday.
Larry Summers, President Obama's chief economic adviser, speaks at noon at a National Bureau of Economic Research event. He is expected to speak for 30 minutes and then take questions for another 30 minutes.
President Obama participates in a town hall on health care in New Hampshire.
General Motors holds an 8 a.m. press briefing.
Frank DiPascali, who helped run Bernard Madoff's investment advisory operation, is expected to plead guilty to fraud and could become a central witness against others in the fraud case.
Shares in Daiichi Sankyo Co. (4568) extended their winning streak to seven days Tuesday, buoyed by hopes for the drugmaker's new anti-influenza agent CS-8958, or laninamivir.
Shares in Nippon Shinyaku Co. (4516) gained ground early Tuesday, but quickly pared some gains before the lunch break.
Shares in Chubu Electric Power Co. (9502) lost further ground Tuesday, after a major earthquake earlier that morning halted the firm's Hamaoka nuclear power plant's No. 4 and No.5 reactors in Shizuoka Prefecture.
Japanese stocks bucked a regional downtrend and rose Tuesday morning, as investors awaited the outcome of the Bank of Japan's monthly policy meeting later in the session for clues to the nation's economic recovery.
The central bank is widely expected to keep rates on hold, and it has already extended liquidity-boosting steps at its last meeting. As a result, investors' main focus will be on whether the bank tweaks the language of its cautious statement that the Japanese economy is improving.
"The BOJ is anticipated to leave rates unchanged at 0.1%, and while some economic indicators -- including machine orders, industrial production, and manufacturing PMI -- have shown signs of improvement, the central bank is likely to continue focusing on risks stemming from persistently weak domestic demand and deflation," said Terri Belkas, a currency strategist at DailyFX.com.
Government data on Monday showed Japanese core machinery orders jumped more than forecast, as did the nation's current-account surplus. But going forward, the outlook for orders -- considered a leading indicator of corporate capital spending -- was unclear.
"Japan's economic conditions have stopped worsening. Public investment is increasing, and exports and production are picking up.
Business sentiment, especially of large manufacturing firms, has stopped deteriorating," the BOJ said in a statement after last month's unanimous decision to leave rates on hold.
"On the other hand, business fixed investment is declining sharply," the bank said in the June statement, "mainly reflecting weak corporate profits."
Last month, the BOJ said it would maintain its outright purchases of corporate bonds and commercial paper from financial institutions through year's end, as well as continue extending loans collateralized by securities. These special liquidity-boosting measures had been scheduled to expire in September.
It also slightly trimmed its median forecast for real gross domestic product for the fiscal year ending in March 2011, to a contraction of 3.4%, compared with its previous forecast for a fall of 3.1%. But it raised its outlook for the core consumer price index to a 1.3% drop from 1.5% fall.
The BOJ last cut its target rate for unsecured overnight call money in December, when it reduced it from 0.3%.
Ahead of the policy statement, the U.S. dollar was buying 96.92 yen, down from 97.15 yen in late North American trading on Monday.
BOJ keeps rates on hold, keeps cautious economic view
The Bank of Japan kept interest rates on hold on Tuesday and maintained its cautious view on the economy, as deepening deflation and weak corporate spending threaten its forecast for a modest economic pick-up later this year.
The decision to keep rates on hold at 0.1 percent was made by a unanimous vote, as widely expected.
BOJ Governor Masaaki Shirakawa will hold an embargoed news conference and his comments are expected to come out some time after 4:15 p.m. (0715 GMT).
The BOJ said in a statement that annual falls in consumer prices were accelerating in reaction to last year's spike in oil prices. But the bank repeated that the pace of fall would narrow in the latter half of this fiscal year ending in March 2010.
The BOJ stuck to its view that Japan's economy has stopped worsening and was set for a pick up due to a sharp rebound in industrial output.
The BOJ voted last month to extend by three months the September deadline for its unconventional measures aimed at easing corporate funding strains. Markets have thus expected no new announcement from the central bank on policy measures.
Japan's economy is expected to have grown 1.0 percent in April-June after four straight quarters of contraction, a Reuters poll showed. But economists expect any recovery to be fragile as uncertainty over the global economic outlook keeps companies and households from boosting spending.
In South Korea, the KOSPI traded flat as investors digested news that the central bank had left interest rates steady at a record low of 2 percent -- a move that was widelyexpected. Meantime, SK Energy tumbled over 2 percent after it delayed plans to build an oil production facility.
Australia's S&P/ASX 200 was off its early lows but the index was still down 0.1 percent. Helping to cushion losses in the market, shares of JB Hi-Fi surged over 6 percent after it reported a 45 percent rise in full-year profit.
Greater China shares were mixed, with the Taiwan Weighted index and Hang Seng both down about 0.3 percent while the Shanghai Composite gained 0.2 percent.
HSI 20772.48 -157.04 -0.75% (08.37 AM IST)
Shares in Hong Kong were little changed in early trading, while those in Shanghai edged slightly higher as investors reacted to a barrage of economic data for July, including consumer and industrial inflation figures that came in broadly as expected, while industrial output and fixed-asset investment grew at a weaker-than-expected pace. Hong Kong's Hang Seng Index was up 0.02% at 20,934.13 in early action, while Shanghai's Composite Index added 0.4% at 3,262.89.
Singapore's Straits Times resumed trade after a long weekend to climb more than 1 percent as investors were pleased with the citystate's final GDP reading showing the economy grew by a seasonally-adjusted 20.7 percent in the second-quarter from the previous three months. This was stronger than an initial estimate of 20.4% growth.
China industrial output slows, retail sales rise
China's industrial output and investments in fixed assets grew at a smaller-than-expected rate in July, while retail sales ticked higher, according to government data released Tuesday. Industrial production expanded 10.8% in July over the year-earlier month, against expectations of a 11.7% increase forecast in a Reuters poll. Urban fixed-asset investment rose 32.9% in the first seven months of the year, falling short of expectations and also slowing from a 33.6% growth in the first half of 2009. But monthly retail sales rose by 15.2%,following a 15% increase in June. Consumer prices dropped 1.8% from the year-earlier period, while producer prices declined 8.2%, in line with expectations.
China's July CPI falls 1.8 %, PPI drops 8.2%
China's consumer price index (CPI), a main gauge of inflation, dipped 1.8 percent in July from a year earlier, the National Bureau of Statistics (NBS) announced Tuesday.
This marked the sixth consecutive month of decline since the index dropped 1.6 percent in February, the first fall since October 2002.
The index was unchanged compared with June, according to the NBS. The CPI fell 1.7 percent in June year on year.
The country's producer price index (PPI), a major measure of inflation at the wholesale level, fell 8.2 percent year on year in July, according to the NBS. It showed a month-on-month increase of 1 percent.
The July decline compared with a 7.8-percent drop in June and 7.2-percent drop in May year on year.
China's imports, exports continue falling in July
China's imports and exports continued falling in July from a year earlier, the General Administration of Customs announced here Tuesday.
Exports dropped 23 percent year on year last month while imports were 14.9 percent lower than a year earlier.
China urban fixed-asset investment up 32.9% in first seven months
China's urban fixed-asset investment rose 32.9 percent in the first seven months of this year from a year earlier, the National Bureau of Statistics announced Tuesday.
China's industrial output up 10.8% in July
China's industrial output accelerated 10.8 percent in July from a year earlier, after gaining 10.7 percent in June the National Bureau of Statistics said at a press conference Tuesday.
China's power output up 4.8% in July
China's power generation expanded 4.8 percent in July from a year earlier, the National Bureau of Statistics (NBS) said Tuesday.
Fed meeting:
This week, the focus is on the Federal Reserve, which concludes its two-day policy meeting Wednesday.
The central bank is expected to hold rates steady at historic lows near zero. Yet, as usual, investors will be focused on what the bank will say in its statement, particularly about the health of the economy, any risk of inflation and what its exit strategy may be after putting so much stimulus into the financial system.
In line with comments from Federal Reserve Chairman Ben Bernanke, the central bank is not really worried about inflation yet. Hepburn said the bankers are not likely to say much about an exit strategy until later in the year.
The consumer will also be in focus this week, with economic reports on inflation, and profit reports from Wal-Mart Stores (WMT, Fortune 500) and other retailers. Wal-Mart shares bucked the sector trend, ticking higher, despite comments from JPMorgan that the retail giant won't see same-store sales growth for the second quarter as summer business was weak.
Wall Street advanced Friday after the government's July jobs report showed unemployment fell for the first time in a year.
Ahead of the meeting, Treasury prices were slightly higher and the dollar was weaker against the yen and stronger against the euro.
Dow Theory shows buy signal but pullback due
Dow Theory, one of the oldest stock market forecasting methods, has shown a new buy signal: the Dow Jones Transportation Average joined the Dow Jones Industrial Average to close above January highs, according to Bank of America Merrill Lynch. However, the bank's analysts said on Monday that a momentum indicator known as breadth thrust, which focuses on the proportion of advancing to declining stocks, shows a pull-back of 15 to 20 percent this fall when combined with the Dow Theory buy signal.
Last week the broad-based S&P 500 index closed above 1000 for the first time in nine months and is now up around 50 percent since March lows, while the Dow Industrials recently saw their best five-month run since 1938. The run-up has left many investors trying to second guess if and when a correction is due.
"The Dow Jones Industrial Average closed above its January high in late July, and the Dow Jones Transportation Average closed above its January high on Friday," Merrill said in a research note. "According to the Dow Theory, this signals a new primary uptrend and is a bullish indicator for the market."
Dow Theory aims to identify the primary trends in stock markets, lasting from one year to several years. It stipulates that the industrials index must "confirm" a high or a low in the Dow Jones Transportation Average for a trend to last.
Breadth thrust indicates when the market moves from an oversold condition when a gauge of the proportion of advancing stocks moves above a certain level. Merrill's analysis shows that significant corrections have followed strong rallies when a breadth thrust has occurred at the market bottom.
"This analysis, along with the Dow Theory new buy signal, points to a more modest 15 to 20 percent pullback," said Merrill.
Merrill is watching a number of indicators to gauge whether the market is entering an immediate correction. These include investor sentiment gauges, the peaking of buying and rise in selling, loss of leadership in technology, the percentage of stocks above their 200-day moving average, and a peak in China's equity market.
They say stock charts indicate S&P 500 support levels, or levels at which the index should not easily fall below, at 930 to 900 and resistance levels, presenting a barrier to for the index on the way up, at 1055 to 1065.
INVESTMENT VIEW
The recent massive run-up in Real Estate stocks reminds of a fake bull run in Tech stocks post the fall of Year 2000. Few Developers, inspite of targeting 'affordable housing" are ever going to make money in Real Estate. By this logic HDIL, IBREL, Unitech and DLF may all be over-valued showing rosy prospects that do not seem to be the reality.
The Indian real estate markets have seen a sharp and meaningful correction in terms of decline in property prices, demand and transaction volumes over the last 2 years. We had highlighted the demand and supply disconnect in our report in August 2007 and how we believed that the real demand lies at the bottom of the pyramid.
The developers have started to make the right noises since the last two quarters and have announced their affordable housing plans but after looking closely at their present projects it appears that their price product matrix is again skewed towards margins, like it was 2 years back.
"The con is on" - Affordable is not exactly affordable
After assessing the current affordable housing projects of various developers, it appears that the con is on again and developers are again quoting unviable selling prices for these projects. A fairly large number of these projects are located in far flung locations which may lack basic amenities and recreational facilities.
Moreover, the affordability (in terms of willingness to pay) decreases as one moves away from the centre of the city and hence the price has to be fairly competitive as compared to those flats which are well within the city.
Most of the upcoming affordable housing projects are basically the residential projects planned by the developers on their land on the city outskirts. Some of the affordable housing projects that are currently on offer by major listed real estate developers will see that volume off take will be much lower than what most companies are projecting.
Looking at an example, say if the agricultural land cost in city outskirts is Rs 250 / sq ft, after land use conversion the cumulative land cost will come to Rs 313 / sq ft. As regards the cost of construction, in the present scenario an affordable housing dwelling may not cost more than Rs 900 / sq ft to the developer as the prices of cement, steel have come down in last 1 year and it will be a "no frills" kind of construction. Even if we add a developer margin of 30% on the total cost, the price per sq ft comes to Rs 1,576 per sq ft.
(Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.)
--
Arvind Parekh
+ 91 98432 32381
