Bulls set to swing

Win as if you were used to it, lose as if you enjoyed it for a change.

The bulls will hope to get back to their winning ways after taking a break on Wednesday. Global weakness has not caused a major dent to the sentiment as yet. We may see the main stock indices touching new highs. Though provisional data shows marginal net sale figure by the FIIs on Wednesday, it may just be an aberration rather than a potential change in trend.

Coming to today's session, we expect a smooth rollover in the F&O segment. Despite, Wednesday's weakness, bulls continue to have an edge over the bears. Some consolidation or correction going ahead could always take place. The derivative settlement is also likely to increase the intra-day gyrations. A few key results may also have some bearing on the direction of the market today.

The outlook on the Indian economy is strong with inflation softening considerably from a two-year high hit in January. Interest rates seems to have stabilised, albeit at a higher level. The RBI is unlikely to jack up key short-term lending rates at the upcoming review of its annual policy, on July 31. However, the abundant liquidity in the banking system and the non-stop rise in the rupee may prompt some kind of a response from the central bank. One has to watch out for that.

Globally, the housing market crisis and trouble in the credit markets in America, higher crude oil prices and overheating in China are some of the key issues to keep an eye on. Also, interest rates may go up in key economies like the UK, Europe and Japan over the next few months. The uncertainty over what could be the next move by the Federal Reserve is also keeping investors across the globe on tenterhooks.

Wipro may be in action amid reports that the company, along with Coke and Danone are in the race for acquiring Bisleri, the popular bottled water business from Ramesh Chauhan. Sun Pharma will attract some attention as Sanofi Aventis has sued the domestic pharma major to prevent it from launching a generic version of the French drug maker's blockbuster cancer treatment Eloxatin.

Public sector Oil Marketing Companies (OMCs) will be in focus amid media reports that pressure is mounting on the Government to raise local retail prices of petrol and diesel following the spike in crude oil prices. Firstsource is the stock to watch out for as the BPO firm is reportedly eyeing a big-ticket acquisition in the US. Karuturi Networks is also expected to be in the limelight as a financial daily reports that it is looking at acquisitions in the US.

US stocks managed modest gains on Wednesday on the back of positive earnings from Amazon.com and Boeing, while investors shrugged off credit and housing market jitters. Energy shares rallied on a surge in oil prices.

The S&P 500 added 7 points, or 0.5%, to 1518.09. The Dow Jones Industrial Average advanced 68 points, or 0.5%, to 13,785.07. The Nasdaq Composite Index gained 8 points, or 0.3%, to 2648.17.

In its so-called Beige Book report, the Federal Reserve revealed modest economic growth in the United States, and further declines in homebuilding and real estate in most regions.

Early gains quickly vanished after the National Association of Realtors said that the pace existing home sales fell more than expected in June.

Adding pressure to stocks was news that private equity firm Cerberus Capital was experiencing difficulties tapping debt markets for the $20bn needed for the purchase of Chrysler fanned credit market fears.

Oil prices surged above $75 a barrel in New York. US light crude soared $2.34 to $75.90 a barrel on the New York Mercantile Exchange. Treasury prices edged higher, leaving the yield on the 10-year note at 4.9%, down from 4.91% on Tuesday. The dollar gained against the euro and the yen.

European stocks closed lower as investors reacted with dismay to earnings and outlooks from Volvo, Randstad and Siemens and the postponing of a sale of Chrysler's bonds.

The pan-European Dow Jones Stoxx 600 lost 0.9% to 385.80. The German DAX 30 declined 1.5% to 7,692.55 and the French CAC-40 fell 1.2% to 5,837.11. The UK's FTSE 100 dropped 0.7% to 6,454.30.

Major Latin American equity markets closed mixed. Mexican stocks succumbed to pressure from a weak report on US housing sales while Brazilian equities pushed through the sluggish data to finish higher.

In Sao Paulo, the Bovespa stock index closed up 207 points, or 0.4%, at 56,001.30. In Mexico City, the IPC index fell 359 points, or 1.1%, to 31,103.53. The Merval index in Argentina finished nearly flat at 2,242.78. But the IPSA index in Chile fell 30 points, or 0.9%, to 31,103.53.

Among the other emerging markets, the RTS index in Russia shed 0.1% to 2047.

It is a mixed picture in Asian markets this morning. The Nikkei in Tokyo was down 46 points at 17,811 while the Hang Seng in Hong Kong was up 141 points at 23,502. The Kospi in Seoul was flat at 2004 and the Straits Times in Singapore dropped 6 points at 3627.

The Morgan Stanley Capital International Asia Pacific Index lost 0.4% to 160.03 as of 10:44 a.m. in Tokyo, after falling 0.5% yesterday. Australia's S&P/ASX 200 Index dropped 1%, the only other loser among markets open for trading.

Bears were back on the street ahead of F&O expiry as a volatile session in red. Global weakness and profit booking in the Realty, Auto, Capital Good and Metal stocks dragged the benchmark Sensex below the 15700mark and NSE Nifty below the 4600mark. Cement stocks led the downfall after reports stated that trade practices regulator ordered an investigation into an alleged price manipulation by top 14 cement manufacturers. Even broader market i.e. Mid-Cap and the Small Cap indexes also were on the receiving end. However, FMCG index was the only index that ended in green led by heavyweight ITC and Hindustan Lever. Finally, BSE 30-share Sensex slipped 95 points to close at 15699. NSE-50 Nifty lost 32 point to close at 4588.

ONGC gained by 2% to Rs934 after the company announced its Q1 result with net profit at Rs46.1bn (up 12%). However, its net sales were at Rs136.88bn (down 6.2%). The scrip touched an intra-day high of Rs940 and a low of Rs905 and recorded volumes of over 13,00,000 shares on NSE.

Reliance Capital surged by over 3.5% to Rs1243 after the company announced its Q1 group result with net profit at Rs3.25bn (up 187%) and net sales at Rs11.11bn (up 212%). The scrip touched an intra-day high of Rs1255 and a low of Rs1190 and recorded volumes of over 30,00,000 shares on NSE.

SAIL lost by over 5% to Rs153. The company announced its Q1 result with net profit at Rs15.25 (up 10%) and net sales at Rs80.4 (up 6.3%). The scrip touched an intra-day high of Rs161 and a low of Rs152 and recorded volumes of over 1,00,00,000 shares on NSE.

Educomp Solutions rallied by over 7.5% to Rs2408 after the company announced that it has signed agreement with Government of Chattisgarh to set up centers in 323 locations. The scrip touched an intra-day high of Rs2433 and a low of Rs2200 and recorded volumes of over 9,00,000 shares on NSE.

Nagarjuna Construction was down by 3% to Rs202. The company announced that it has secured a Civil Construction Contract valued at Rs2.85bn comprising of Design, Engineering, Construction, Development of a Road Project from Pondicherry to Tindivanam. The scrip touched an intra-day high of Rs208 and a low of Rs200 and recorded volumes of over 22,00,000 shares on NSE.

Cement stocks lost ground amid news that trade practices regulator MRTPC has ordered an investigation into an alleged price cartelisation by top 14 cement manufacturers. ACC dropped by over 4.5% to Rs1065, Grasim was down by 2% to Rs2966 and Gujarat Ambuja declined over 4% to Rs128.

IT stocks also were under the pressure as forward contracts in the foreign exchange market has turned into discounts from premium and the rupee also constantly strengthening against the dollar as it hit a nine-year high of 40.27 per dollar. Satyam Computer dropped by over 5.5% to Rs487, Wipro was down by 1.5% to Rs498, Polaris declined by 4% to Rs125 and i-Flex declined 3% to Rs2267.

Capital Good stocks were on the receiving end as of profit booking dragged them lower. ABB lost by 1.2% to Rs1134, BHEL was down by over 2.5% to Rs1786 and L&T dropped by over 3.5% to Rs2568.

FMCG stocks stood firm in a choppy market led by gains in the heavyweight ITC as the scrip surged by over 9% to Rs165 on speculation that cigarette sales will beat estimates, Hindustan Unilever gained by 1% to Rs201 and Colgate edged higher by 0.5% to Rs371 and Dabur marginally added 0.3% to Rs100.

Auto stock were in reverse gear as heavyweight Bajaj Auto fell over 3.5% to Rs2353, Tata Motors was down by 2.8% to Rs726, M&M dropped 1.7% to Rs781 and Maruti declined 1.2% to Rs809.

Pharma stocks were in poor health. Glenmark lost 2.6% to Rs687, Dr Reddy's Lab was down by 1.7% to Rs660, Cipla declined 1.2% to Rs186 and Ranbaxy lost 1% to Rs346.

Results Today:

ABB, Alfa Laval, Apollo Tyres, Apar Industries, AstraZeneca Pharma, Bajaj Electricals, Balaji Telefilms, Bharti Airtel, Crompton Greaves, Cummins India, Dabur Pharma, Dena Bank, EIH, Everest Kanto, Federal Bank, Gayatri Projects, GSK Consumer, GSK Pharma, Gujarat State Petronet, Gujarat Gas, Hikal, ICRA, Indraprastha Gas, ING Vysya Bank, Jyoti Structures, Lanco Infratech, MRF, Maruti, Patni, Punjab Tractors, Rajesh Exports, Shree Renuka Sugars, RPG Transmission, Shree Ashtavinayak, Subex, Sterlite Optical, Taj GVK Hotels, Tata Power, VIP Industries and West Coast Paper.

Fund Activity:

FIIs were net sellers of Rs354.7mn (provisional) in the cash segment on Wednesday. On the other hand, local institutions were net buyers at Rs1.5bn. In the F&O segment, FIIs were net sellers at Rs11.75bn.

On Tuesday, FIIs poured in Rs12.86bn in the cash segment. Mutual Funds were net sellers of Rs3.68bn.

Major bulk Deals:

Birla Sunlife has bought Esab India; Merrill Lynch has picked up Fact Enterprise; Citigroup and Goldman Sachs have purchased Fedders Lloyd; Reliance Capital has bought ICRA; Goldman Sachs and fidelity have purchased Lloyd Electric; Merrill Lynch has picked up Modison Metals and Abn Amro Bank has sold Suryachakra Power.

Insider Trades:

Gitanjali Gems Ltd: Goldman Sachs Investments (M) I Limited has purchased from open market 1000000 equity shares of the company on 19th July, 2007.

Lower Circuit:

Hindustan Oil exploration, Kothari Products, Prism Cement, IID Forgings and Vakran Software.

Upper Circuit:

Ganesh Forgings, TCI Industries, Anant Raj Industries, Oil Country and Jaybharat Textiles

Delivery Delight (Rising Price & Rising Delivery):

Indian Hotels, NDTV, IDFC, Ashok Leyland and HCC.

Abnormal Delivery:

Punjab Tractors, Adlabs, CESC, GAIL and L&T.

Major News & Announcements:

Infosys wins a seven-year, US$250mn contract from Philips

ONGC Q1 profit at Rs46.1bn (up 12%) and net sales at Rs136.88bn (down 6.2%)

Bombay Dyeing Q2 net profit at Rs691mn(up 100%), net sales at Rs3.04bn (up 6%)

Yes Bank Q1 profit at Rs360mn (up 113%) and revenue at Rs3.48bn (up 169%)

APIL Q1 profit at Rs175mn (up 50%), revenue at Rs2.5bn (up 8.2%)

Educomp Solutions signs agreement with Govt of Chattisgarh

BHEL wins Rs4.31bn order from IOC

Nagarjuna Construction secures order worth Rs2.85bn

Chambal Fertilizers Q1 profit at Rs617mn (up 92%) and revenue at Rs6.4bn (up 20%)

Nicolas Piramal Q1 net profit at Rs343.9mn (down 32%) and sales at Rs3.95bn (down 0.17%)

PNB Q1 net profit at Rs4.25 (up 15.4%) and revenue at Rs37.95bn (up 29.8%)

SAIL Q1 profit at Rs15.25bn (up 10%), net sales at Rs80.4bn (up 6.3%)

Reliance Capital Q1 group profit at Rs3.25bn (up 187%), net sales at Rs11.11bn (up 212%).