Dubai debt concerns mounting, Dead Cat bounce on cards

November has created ripples among Indian investment community especially the second half of the month was night marish on massive profit booking by FII's. Nifty lost nearly 9 pct from the top.

While Wall Street is closed on Thursday on account of Thanks Giving, Asian markets opened marginally in the green on Friday.

Dubai - Debt concerns

Last November Dubai World, the conglomerate with emirate’s government as one of the shareholder, startled global markets by delaying payments on its debt. In September, Dubai World struck a deal with its creditors to restructure about $24.9 billion of liabilities. While Dubai World’s agreement with lenders helped improve sentiment, concerns over debt loads in the emirate have not gone away.

In recent weeks, Dubai Group has reportedly missed loan payments. We do not expect Dubai debt concerns to raise alarms.

Dalal Street - Oversold?

No doubt Nifty and Sensex are oversold, we believe there will be a surprise rally soon. Nifty might lose another 100-150 points from the current levels. We see this sell-off as the final oppurtunity for investors to get on board. Except for IIP data none of the concerns expressed in the recent days including scams, war tensions, FII year end selling has any role to play in the growth of the economy.

Investors likely to panic on Housing loan Scam, Govt. plays it down

Indian equities are going through a rough phase with negative news flow hitting the street, resulting in a big underperformance when compared to global peers. Wall Street finished in green yesterday with gains of above one percent.

Asian markets are trading marginally in the green today.

Negative news flow

It all started with weak IIP Data, followed by 2G-Scam, Korean tensions and the latest being housing loan scam. Government yesterday announced this is a case of bribery and has nothing to do with the system. The quantum of scam is reported to be nearly Rs 2,000 Crore.

Which started as a correction is likely to extend as a slide. The housing loan scam is no big deal in countries like India and is well known to the investing community. But the timing of the news is a concern. We are witnessing a massive sell-off almost every day by the FIIs.

While for today Nifty might inch towards 5900 levels, where the second Max pain is located. Overall it is advisable for investors to start cherry picking at a very slow pace and continue the job on all further downsides

F&O Expiry to add fuel to Korean fire

Dalal Street is likely to open marginally in the green and might hit the roller coaster again, thanks to the Futures & Options expiry slated for tomorrow.

US Markets sank Tuesday as a clash in the Korea peninsula was added to the list of uncertainties weighing on investors. The Dow Jones Industrial Average fell

142.21, or 1.27%, to 11, 036.37 and the S&P 500 lost 16.81, or 1.40%, to 1,181.03. The Nasdaq dropped 37.07, or 1.46%, to 2,494.95.

Asia developed cold feet on Wednesday morning with Nikkei sliding 1.18 pct while Shangai is trading in the green.

DII Buying

It is interesting to see the Domestic Institutional Investors (DII) picking stocks during the panic session on Wednesday. The next rally we believe will be triggered by DIIs and FIIs who are selling now to cash their chips for the year end may have to pay premium for buying Indian equities.

Coal India

Coal India Ltd. is open to acquiring U.S.-based Massey Energy Co , the Business Standard reported on its website Tuesday, citing the Indian company's chairman, Partha Bhattacharyya.

Market Outlook

Though Indian Markets are not out of woods, Investors can start cherry picking with the expectation of another 4-5 pct downside in the Indices. Only bravehearts can trade in this market.

It would be interesting to see if Nifty closes around 6000 or 5900 levels for the expiry.

Mumbai realty stocks likely to witness further interest

Dalal Street is likely to open in the red on Tuesday morning on negative global cues with consolidation the name of the game after a big move yesterday. Wall Street recovered from a 100 point loss on Dow Jones. After hours Hewlett-Packard posted strong quarterly results.

Nikkei is closed today on account of a holiday while rest of the Asian markets are trading in the red Tuesday morning.

Stocks in News :


* The Dainik Jagran group, publishers of India’s third-largest Hindi daily, has bought a stake in Chennai-based EdServ, an education and placement company.

* RPG group-owned Zensar Technologies acquired US-based infrastructure management company PSI Holding , which operates under the name Akibia, in an allcash deal of $66 million, the Indian software exporter said at a conference on Monday.

Markets - Next move critical

The next move of the Market is critical. With expiry on Thursday, major slide in the indices can be ruled out. volatility is likely to stay there but do not expect major moves in the market for the next three trading sessions.

Mumbai realty stocks are likely to be in limelight after Navi Mumbai airport news yesterday. Also stocks like GVK, GMR might see some interest too.

China ups Reserve Ratio, Asian Markets trade in green

Irish government said Sunday that it will start formal negotiations with the European Union and the International Monetary Fund over a financial rescue package, pushing speculators to look forward to other European countries like Portugal and Spain.

Portugal is seen as the next domino likely to fall once Ireland’s debt crisis is resolved, but the true showdown will pit bond-market vigilantes against Spain. We believe if Spain goes down, that would be the end of the bull run across the globe.

On Friday US Markets closed in the green after China’s central bank, the People’s Bank of China, announced the year’s fifth hike in the reserve requirement ratio by 50 basis points effective November 29.

Asian Markets are trading in the green today with the exception of China.

Dalal Street : Whats happening ?

Indian Markets are in no mood to take any positive global cues and ready to slide on the slightest negatives cues. Key technical levels were breached and we might see more sell-off in the coming days. Year FII selling is blamed to be one of the reasons for the current slide, there is no buying support for the markets on every slide.

While a target of 5600 is doing rounds, it is too early to come out with targets. Investors should stay cautious and pick good stocks at lower levels. We continued our Wait and Watch mode and believe the current volatility gives no room for traders.

While global markets go ga ga, Dalal Street sees a soft opening

US Markets had a field day on Thursday as worries about Ireland's debt situation eased and better than expected jobless claims data.

Asian markets are trading higher on Friday on global cues. Barring Dalal Street rest of the global markets clocked decent gains on Thursday. Looking at Singapore Nifty at 07:00 AM IST today, the cues suggest another volatile day and traders are cautious to take positions to the upside.

Yesterday's rocky session caught traders on the wrong foot and we advice investors to stay put and cherry pick stocks at lower levels. While the current sell-off is not driven by any fundamental reasons, the year-end profit booking seems to have advanced and Chinese rate hike fears is just an excuse.

Midcaps to stay weak

During the current conditions Midcaps and Smallcaps will be out of favour and action will be more focussed on Largecap stocks. It is indeed a good time to add quality midcap stocks.

Inflation data is softening and thats good news for investors. The data will relieve RBI from considering another rate hike in the near term. FIIs were net sellers in Index Futures, Index Options and in Cash segment.

We expect market to open flat despite amazing global cues and staying short at these oversold levels might be a little tricky but certainly momentum is not showing any bullish moves.

Nikkei, the only Asian market weathering the storm

Bears are likely to dictate terms in the early session when Dalal Street opens for trade on Thursday morning on weak Asian cues.

Except for Japanese market Nikkei, rest of the Asian markets were hit really hard in the past one week. Wall Street closed the day flat on good retail sales numbers.

Traders eyeing technicals

While Nifty has huge support at 5970 level the next major support stands at 5840, we still believe that Bulls have an out and out chance in today's trade to protect the major support level today.

Traders should keep an eye on next week's F&O expiry. For now the "Max Pain" for Nifty stands at 6000 levels and it is worth noticing that FIIs were net buyers in Index options and Index Futures on Wednesday.

Chinese rate hike fears are overblown and we expect things to settle down soon. Investors are adviced to start adding stocks to their kitty but avoid buying at a single price inorder to tackle market corrections

Calm after storm, Dalal Street to open flat

Mumbai stocks are most likely to open marginally in the green after Asian markets are trading positively on Ireland bail out news. Japan's gross domestic product grew 0.9% in the July-September quarter, picking up from 0.4% growth in the previous three months, pushing Japanese stocks higher.

Irish Bailout

While till yesterday Irish officials were denying EU bailout, Germany pushed to accept a bailout and help reverse a bond sell-off across the euro-region’s periphery.

Dalal Street - Subdued open on cards

We expect Indian markets to open in the green after severe battering in the last two trading sessions. It is not advisable to go short at higher levels atleast for today. One should be cautious with commodity stocks along with Banking stocks.

While Finance minister's comments about 9 pct growth might not bring too much cheer from the market, dead cat bounce might bring in some gains to the market. We believe the trend would be clear only after Wednesday and one should be cautious in the next three trading sessions.

We do not have a second thought in saying this correction is just a passing cloud and Indian markets will be back on track soon

GMR might sell Intergen stake to China's Huaneng Power

Dalal Street might be heading for another gap down open despite of flattish global cues on the the last trading day for the weak, thanks to hectic selling in Index futures by the FIIs.

Wall Street received a jolt in the form of Cisco's weak estimates but recovered from the lows of the day. Asian markets are trading down marginally.

GMR to sell Intergen stake

Chinese utility company Huaneng Power emerged the highest bidder for the purchase of 50 per cent stake in InterGen, which was put on the block by GMR. Investment banking sources say Huaneng one of the largest power companies in China is known to have put in a bid for as much as $1.5 billion.

GMR bought the stake for $1.1 billion in October 2008.

Intensive Selling

Yesterday's afternoon session reminded the days of Euro crisis and we witnessed a big round of basket selling. We believe the selling is something related to domestic factors and nothing to do with global crisis or Kospi's slide in yesterday's trade. Year end profit booking is one thing we can think of and slow down of inflows due to holiday season might added weight to the selling.

Current selling should be treated as a good oppurtunity for adding fundamentally sound counter

Diwali boosts October car sales, US Dollar loses steam

Wall Street closed marginally higher on wednesday as the US Dollar slipped from one month highs against other major global currencies. The Fed’s plan to buy U.S. bonds in a bid to push interest rates down to spur spending and bank lending has had the dollar weakening against other currencies, making U.S. exports less expensive to holders of other currencies.

Asian markets are trading in the green with Nikkei leading the way on weaker Yen. Australia's unemployment rate unexpectedly rises to 5.4%, a little above estimates.

October car sales surge

October sales increased 38% to 182,992 vehicles from 132,615 a year earlier, according to data issued Wednesday by the SIAM (Society of Indian Automobile Manufacturers), an industry lobby group. October was the fifth-straight month of record car sales, outpacing the previous high of 169,082 sales in September.

In other news IT giant Infosys Technologies Ltd , India's second-largest outsourcing firm, said on Wednesday it was looking for acquisitions in Japan.

Nifty - News highs a teaser

Markets are finding it tough to spike from the last three trading sessions. We believe the cheap dollars will continue to flow into Dalal Street and it is just a matter of time we see new highs. A strong Realty and Infrastructure stock rally is round the corner. Place your bets here.

Expect Indian markets to trade positively today and volatility might die down

Tata Motors stellar Q2 likely to push Indices higher

Dalal Street is likely to open in the green today and make an attempt to conquer new highs after Tata Motors announced excellent Q2.

Wall Street suffered a rare pullback on Tuesday as bank stocks dropped and worries about Europe's debt mess continue to resurface, sparking heavy selling of the closely-watched euro.

Asian markets are trading in the green and is likely to boost Dalal Street.

Tata Motors - Superb Q2

Tata Motors reported its highest-ever quarterly profit, boosted by a 43% jump in revenue at the Jaguar Land Rover unit in the UK, topping analysts forecasts. Shares zoomed nearly 3% to a record high of Rs 1,271 on the BSE. The company announced the results after market hours.

Tata Motors saw its total revenue increase 37% to Rs 28, 782 crore in the quarter. Tata Motors CFO C Ramakrishnan attributed the increase in earnings to strong volume growth across trucks, buses and cars, price increases and continued cost reduction efforts.

Hindaclo's Q2 - Inline with expectations

India’s largest aluminum producer Hindalco Industries posted a 26% increase in standalone net profit due to higher realisations from aluminum during the second quarter. The company’s net profit jumped to Rs434 crore in the July-September quarter as against Rs344 crore a year earlier.

Stock might witness a cool-off in today's trade.

Markets - All time highs ?

Markets are all set to conquer all time highs and might even shoot up further in the coming days. After the final hour push into the positive territory, Nifty looks strong for an upmove. Realty and Infrastructure are the two dark horse sectors on the street. Keep an eye

SBI Q2 below estimates, Bank stocks might witness pressure

Dalal Street is likely to open marginally in the negative territory on account of flattish global cues and below par Q2 numbers from the banking giant State Bank of India.

Wall Street closed flat on Monday as US Dollar rose sharply against a basket of currencies.

Officials from several countries have criticized the Fed's bond-buying program amid concerns that it will spark asset bubbles in emerging economies. Representatives in Germany, Brazil, South Africa and China have voiced objections to the plan and argued that it could lead to a surge in commodity prices.

Asian markets are trading in marginally the red on Tuesday morning.

State Bank of India disappoints

State Bank of India's Q2 net profit turned was at Rs 2,501.37 crore, up from Rs 2,490.04 crore a year earlier. The poor show was due to meeting higher provisioning norms. Both the treasury and corporate banking faired poorly.

The dismal show might hit the banking sector badly and one should wait and see how the street takes the numbers.

All time highs in question ?

With poor results from SBI, it would be a herculean task for the markets to cross the highs now. We believe only one stock should make the difference and it is none other than Reliance Industtries which is looking terrific on charts. Other stock that grabbed our attention yesterday was Unitech on the positive side.

We believe it is only a matter of time before the Markets conquer new highs. Stay invested

Coal India listing today, PSU stocks might hog limelight

On expected lines US Ferderal Reserve promised new $600 billion bond-buying spree to rescue US economy from further slide.

This is the second time the Fed has engaged in quantitative easing, as it snapped up $1.7 trillion in mostly housing-related assets between December 2008 and March 2010.

While the US Economy is growing at snail's pace, high 9.6% rate of unemployment might push the economy into deflation.

Asian Markets spurt

Japan's Nikkei is trading up 180 points (2 pct) on weaker Yen while Australia jumped half percent. In a surprising move Canadian government late Wednesday rejected Anglo-Australian miner BHP Billiton’s $38.6-billion bid for Potash Corp. of Saskatchewan.

All eyes on Coal India

Coal India is likely to list around Rs 280 levels (current grey market price) against the offer price of Rs 245. After initial selling pressure, the stock might take off but do not expect move beyond Rs 320 levels.

While QE2 had a positive impact on global markets, Nifty is looking bullish at these levels except for it has to close above this level one more time.

QE2 policy minutes to decide global market direction

Dalal Street might open marginally in the green, discounting the 25 bps Repo and Reverse Repo rate hike from RBI.

Wall Street closed up on Tuesday on anticipation of the stimulus that has helped fuel a rally of nearly 12% in the Dow since the end of August as well as a swoon in the dollar. The dollar continued to slump on Tuesday.

Asian markets are trading flat to positive on Wednesday morning.

Soverign Debt - Staging a come back ?

The debt crisis that shook the world six months back seems to be back in the reckoning. On Tuesday, Irish credit costs surged to a record high and bond prices tumbled. Credit-default spreads, popularly called as CDS for Irish sovereign debt jumped 22 basis points to 5.20 percentage points, and hit 5.30 percentage points, a record high.

Lets get our heads turned towards Europe in the coming days.

RBI delivers, Will US Fed deliver ?

All eyes will be eagerly watching Ben Bernanke's policy decision after 02:15 PM EST. Fed is expected to announce a new program of bond buying, known as quantitative easing (W'Street is referring to this policy as QE2), because they are worried the economy could slip into deflation.

DStreet US Analyst Satish Bhogadi says "We expect the Fed to lend helping hand for one last time i.e using QE2. Stock markets might see another rally. Though interest rate futures suggest US might not raise rates till 2012, we believe there is a surprise in store in the first half of 2011."

Expect a positive session today

All roads lead to Reserve Bank policy meeting

Wall Street closed flat despite of higher ISM data, on concerns that Fed might not adopt aggressive quantitative easing. Asian stocks are mixed, waiting for a response from US Federal Reserve, expected on Wednesday 03rd November.

RBI policy meeting

India's central bank RBI will unveil credit policy on back of higher inflation, gush of liquidity. We expect RBI to let go with a minor hike of 25 basis points this time. But RBI might talk tough on inflows which will daunt the markets.

DStreet experts are extremely bullish, the way RBI is handling the situation and all roads are leading to a golden era for Indian equities. We have a long and strong target of 35000 for Sensex by 2014 based on earnings growth and higher valuation India might command. But we are afraid we might hit the levels much earlier.

Stay invested but before pumping new funds we advice investors to wait till Diwali which might give us crystal clear picture of the impact of Fed QE2 (Quantitative Easing).