A late surge in US stocks, allowed the Dow to post a back-to-back triple digit rally.
The Dow Jones Industrial Average added 121 points at 10,139. The S&P 500 gained 10 points at 1070, while the NASDAQ finished up by 16 points at 2175.
That sets the tone for our markets to open higher in the morning but it is going to be a litmus test for the markets. 5350-70 regions will be full of booby traps.
US markets were bolstered by a larger-than-expected drop in initial weekly jobless claims and a buoyant June retail sales data (Same–store sales). Obviously the sales look better because two holidays, the Memorial Day holiday and The Independence Day holiday sales have been added in June, which were not a part of the June sales last year. This apart, the Same-store sales numbers have to be taken with a pinch of salt. In one of the weekend articles, we will explain why.
The Bank of England kept its base interest rate at a record low of 0.5% for the 17th consecutive month and continued to leave its asset-purchasing program on hold. The European Central Bank also held rates steady.
Earlier in the day, International Monetary Fund raised its 2010 global growth forecast to 4.6% from 4.1%. The IMF said that while economic recovery will likely be faster than expected, Europe's debt crisis could stall the rebound.
The IMF also raised India’s economic growth forecast for 2010 to 9.4%. IMF’s forecast has been received well because GDP growth during the March quarter was only 8.6%. It implies that growth in the rest of the quarters will be much higher.
Today being a Friday, the bulls will like the week to close on a strong note. But a crossing of the important levels like 5366 looks rather premature. The markets will like to read the hand out by Infosys first, before it makes up its mind. For that we will have to wait till next week.
The bottom line is, unless the Nifty crosses the 5400 humps, don’t be in any hurry.
Godrej Industries and Gail look better placed for the day.
Disclosure : No holdings or trading positions in stocks mentioned or recommended to clients
Src: HDFCSEC
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Heard on the Street: Top insurer sells shares in D-Street favourite SBI
State Bank of India (SBI) remained a favourite among investors on Thursday, despite concerns over hardening interest rates.
According to the market buzz, there was some churn in the stock among foreign institutional investors, driving up the stock by 2.3% to Rs 2,356.75 on higher-than-average volumes in a firm market on Thursday.
But domestic institutions took a contrarian view on the stock, as it is felt that upsides are likely to be limited from these levels. Brokers said an insurance major was a seller in the stock on Thursday.
It is also speculated that the stock has been accumulated by a group of operators as a trading bet in the near-term. The stock is expected to outperform other bank stocks, brokers said.
Vadilal Inds gains 13% as takeover talk triggers rally
Shares of Vadilal Industries, a dairy product and food-processing company, have risen over 40% in less than two weeks, on market talk that the company could be a possible acquisition target for any large FMCG player looking to consolidate its position in the sector.
On Thursday, the stock rose 13% to close at Rs 144.95, after hitting a 52-week high of Rs 149 intra-day. Vadilal Industries’ revenues have improved steadily over the past few years, helping it gain a decent market share in milk and dairy products segments.
Dealers tracking the counter rule out the possibility of a hostile takeover, since the promoters own 61% in the company.
The company reported an earnings per share of Rs 8 for FY10. While the share price has more than trebled over the past one year, institutional investors have not shown any interest so far.
(Contributed by Nishanth Vasudevan & Vijay Gurav)
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May go to 4200 if Nifty breaks 4900: Daryl Guppy
Commercial Vehicles
Reliance Industries, Asian Paints, Tata Chemicals
Daily Market Outlook - July 9 2010
Daily Technical Report - July 9 2010
Src: HDFCSEC< ET and DP BLOG and etc
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