Stocks Set For Shaky Start

US Markets tumbled thanks to dismal regional manufacturing data and after US jobless claims jumped to a nine month high. Indian markets might receive a jolt in the form of overseas cues when they open for trading on Friday morning.

Overseas markets

Taking a cue from US markets, Asia tumbled in the early morning trades. Japan's Nikkei fell 1.4% to 9,232.6 while Australian market was down by 1.14 pct at 4,428.10DStreet US based analyst Satish Bhogadi commenting on yesterday's trade in the US markets said "US economy is deteriorating gradually. We stick to our ealier S&P SELL target of 950. We see more pain in the second quarter as US Manufacturing slowdown will continue."

In another intersting M&A (Merger & Acquisition) deal world's largest computer chip maker Intel paid $48 per share to acquire antivirus company McAfee.The deal is valued at $7.68 billion.

Inflation worries ease

Food inflation eased to to 10.35 pct from 11.4 pct much to the relief of regulators. RBI went on a rate hiking spree to curb inflation. The reserve bank also hinted of another hike in September. Inflation is expected to further ease in the coming days.

“We may raise inflation forecast for India in our next Economic Outlook slated for September 28. It may depend on how Monsoon plays out,” said cheif economist of Asian Development Bank (ADB) Jong-Wha Lee.

Markets gung-ho

Indian markets are gung-ho on upbeat economic outlook. But troubles in the form of global economic situation, another round of rate hike from RBI await. We will see a gap down open today on the back of global cues but the intrinsic strength in the market is still bullish and it is highly unlikely we might end deep in the red.

Sector rotation continues it was Cement, Airlines and midcap pharma that shined on the street. Watch out for untouched sectors like Power, Infra, Paper, Metals, Telecom, Engineering and Sugar.

Large cap stocks might carry the baton

US Markets ended flat while Asian markets had a minor but steadily positive opening session thursday morning.

Among the global economic news China's crude steel production has begun a rebound after a three-month decline. This is positive for global steel makers too as china consumption too is increasing.

Blackstone group has agreed to invest $300 million, or RS13.50 billion, in unlisted energy firm Moser Baer Projects Pvt Ltd, the two companies said on Wednesday. The group will pick up a "significant minority stake" in Moser Baer Projects, Blackstone India chief Akhil Gupta told a news conference.

Blackstone started betting big on power sector. Last month the fund picked up 12.5 pct state in Monnet Ispat.

DStreet's market analyst Sridhar Iyer says "We are bullish on the power sector from a 1-2 year perspective. Alternative space looks attractive
while implementation concerns remain. Investors with a longer term horizon can invest in this space."

Large cap stocks will be the cynosure of all eyes as they have to play the pivotal role for markets to crack the much talked trading bands. Though it is extremely tough to clock new highs, the market looks excited.

Few sectors that have not participated in the current rallies include Power, Hotels, Paper etc. Keep an on these stocks

Asia off to a flyer, D-Street to open higher

Dalal Street will wake up to a pleasant wednesday morning breeze full of positive global cues.

BHP-Potash bid : What is the take away ?

BHP Billiton, a global mining major has surprised everyone bidding for Potash Corp. of Saskatchewan, world's biggest potash producer. Potash rebuffed the deal later. The key take away from this is the interest global majors are showing on Food industry. Recently Russia banned wheat exports citing drought as a reason. Indian agri commodity stocks are already on the run and analysts at DStreet are extremely positive on this space.

Nagarjuna Fertilizers & Chemicals Ltd., United Phosphorus Ltd. and Chambal Fertilisers & Chemicals Ltd. should see some interest on the back of this news.

Strong opening, how about the close ?

Markets will open strongly but latching on the gains is a tough thing. Given the market movement in the last 15 days Indian markets are clearly holding to a tight band. So as an investor let us not get too excited with the global positives.

Rumours that Cairn India Ltd. might see a counter bid from Oil & Natural Gas Corpn. Ltd. (ONGC) might keep the stock buzzing but we do not expect fireworks here. Sector rotation and catching up theory is in the works on dalal street. Stocks like New Delhi Television Ltd. (NDTV), India Infoline Ltd. were no where in the picture till yesterday.

DStreet market analyst Sridhar Iyer says "We expect the midcaps to extend their run for the next 1-2 months with minor setbacks. October is the month to watch out for the Index stocks. We still find few bargains in the market in the midcap space.

Investors seek calm after yesterday's mini storm

Traders and investors are expecting a relatively quite start today after a stunning Bear raid on Dalal Street in the mid-market session on Monday.

US Economy in dolddrums

US markets closed flat yesterday after gap down open. While economic data released yesterday was mixed with manufacturing activity showing progress and home builder index raising doubts of a double dip.

DStreet's Boston based market analyst Satish Bhogadi says "US economic data in the past three months have clearly shows signs of fatigue and negative growth. We see both US economy and markets sliding for the next three to six months. We have a SELL on S&P with a target of 995"

Banks raising rates

While SBI raised both lending and deposit rates, ICICI bank raised prime lending rates by 50 basis points. Many banks are expected to follow with PLR hikes soon.

Music from midcaps

While we are yet to see the gush of retail money in the market, buying interest is slowly getting generated thanks to the melodious music from midcaps. Traditionally markets have seen heavy inflows in september and october.

Sector rotation, value unlocking, excellent quarterly numbers, land bank buzz are few of the reasons cited for the upmoves in the midcap space.

F&O traders

Traders who are either long or short Index futures might encounter a set back this month as Nifty is trading in extremely tight band. Traders make money when the markets are volatile

Another range bound trade on cards

Japanese GDP growth trigerred an early fall in Asian equities and India will be no exception when they open for trade Monday morning.

SKS Microfinance lists today

India's leading Microfinance company SKS Microfinance lists on bourses today. DStreet analysts predict that the SKS Microfinance’s shares will list above Rs 1100The company's IPO was a huge success as it was oversubscribed 13.69 times, as per data available with the National Stock Exchange. The issue has envinced interest in high profile investors like George Soros, venture capitalist Vinod Khosla and Infosys Technologies founder N R Narayana Murthy. Many FII's were reported to be queing to grab the stock from the open market as most of them returned empty handed due to higher subscription during the IPO

Macro concerns remain

While Indian economy continues to attract global investment community, we do have troubles in the form of global economic situation, currency fluctuations and another round rate hike in September.

While Nifty crossing 5500 levels is a real tough question to answer with majority taking the side of a trading band, midcap stocks will extend the bull run further. Realty is the latest sector that joined the bandwagon. Watch out for Mumbai based realty developers in today's trade along with Microfinance major SKS Micro

Range bound market

Options data depicts maximum Call OI at 5600 strike (10.08 million shares) while
on the Put side maximum OI stands at 5300 strike (11.9 million shares). On the
Call side, the Nifty 5600 and 5300 Call added about 1,300 lots. On the Put side,
the Nifty 5200 and 5300 Put added about 11,500 lots. Unwinding was seen to the
extent of about 5000 lots in Nifty 5400 and 5500 Call

Considering decent PCR-OI base at the 5400 strike and substantial buying by FIIs
in the cash segment for the last few days expect Nifty to take support on dips

The Nifty is likely to trade in the range of 5380-5450. The trading strategy would
be to create short positions if the Nifty resists at around 5432 levels for targets of 5415 and 5402. On the other hand, one can also create long positions if the Nifty
takes support at around 5400 levels

Nifty takes a shot at 5500

Indian equity markets when they open on Tuesday are likely to take a shot at another landmark i.e Nifty trying to hit the 5500 levels. With low participation from the retail investors markets are denying an oppurtunity for an entry at lower levels. While FII inflows are subdued, Domestic Institutions have seen net outflows in the past 2-3 months.

Interest in next generation stocks like Jubilant FoodWorks Ltd. and Talwalkars Better shows the risk apetetite has inadverently increased.

Government yesterday announced exemption of PSUs to achieve at least 25% public holding within three years.

While booming Indian economy is primarily driven by domestic consumption growth, global revival too added fuel to the fire. US economic growth started decelerating and W-Street is expecting another stimulus. Indian growth might slow down once central bankers across the world start raising rates. RBI has hinted one more rate hike in September.

The trading day is most likely to start flat with Nifty ready to take a stab at 5500 levels