The more I saw of foreign countries the more I loved my own.
Even as Indians around the world celebrated the 60 years of independence, global equity markets received a fresh bout of pounding.
With credit market worries continuing to linger, the Dow lost over 350 points in two days and slipped below 13,000 levels. The Dow is down more than 1,100 points, or over 8%, since hitting an all-time high above 14,000 almost a month ago. The S&P 500 is down over 9% since hitting its all-time high around the same time. The Nasdaq has fallen 9.6% from its 2007 high.
Markets have also slumped in other parts of the world amid mounting concerns over the wider ramifications of the subprime mortgage crisis in the US.
As a result, we will witness a gap down opening for sure. We would urge caution as the local sentiment is entirely at the mercy of global developments. This may continue for a while despite the strong fundamentals of the Indian economy and strong outlook for corporate earnings growth. FIIs continue to be net sellers, which will also affect the mood on the bourses.
Global subprime woes will weigh on real estate firm IVR Prime Urban Developers Ltd., whose shares are due to list on the bourses today.
US stocks plunged anew on Wednesday with the Dow Jones Industrial Average closing at a four-month low as reports of more trouble for Countrywide Financial, America's biggest mortgage lender, revived worries about the credit and home loan markets.
Countrywide tumbled 13% after Merrill Lynch said it could face effective insolvency should creditors force it to sell assets at depressed prices.
The S&P 500 dropped for a third day, losing 19.84 points, or 1.4%, to 1,406.70. The Dow slumped 167.45 points, or 1.3%, to 12,861.47, sending the 30-stock blue chip benchmark below 13,000 for the first time since April. The Nasdaq Composite Index dived 40.29 points, or 1.6%, to 2,458.83.
Yields on three-month Treasury bills declined the most since 1989 as investors sought the safety of government debt. The dollar weakened to a four and a half month low against the yen as investors sold riskier assets funded by loans in Japan.
The benchmark index for US stock volatility, called the VIX, exceeded 30 for the first time since April 2003.
The July consumer price index (CPI) rose modestly, as expected, in terms of both overall and core inflation. The NY Empire State index, a regional manufacturing report, was stronger than expected. July industrial production and capacity utilization both increased, as did net foreign purchases.
US light crude oil for September delivery rose 95 cents to settle at $73.33 a barrel on the New York Mercantile Exchange, gaining after a weaker-than-expected weekly oil inventories report and amid worries about a tropical storm approaching the Texas coast.
COMEX gold for December delivery ended unchanged at $679.70 an ounce. Treasury prices inched higher, lowering the benchmark 10-year note yield at 4.71% from 4.72% late on Tuesday. In currency trading, the dollar rose versus the euro and fell versus the yen.
European shares closed lower for the second straight day. The pan-European Dow Jones Stoxx 600 index fell 0.2% to 365.73. The UK's FTSE 100 slipped 0.6% to 6,109.30 and the French CAC-40 gave up 0.7% at 5,442.72. The German DAX 30 bucked the trend to close up 0.3% at 7,445.90.
Stocks in Latin America slid on Wednesday. Brazil's Bovespa index fell 3.2% to 49,285.30, its first close under the 50,000-points level since May 2. Mexico's IPC index of 35 stocks shed 2.6% to 28,140.73, marking its second straight close under the 29,000 level. Chile's stock market was closed for a holiday.
Asian markets were down sharply this morning. Japanese stocks dropped to the lowest since November, led by Mitsubishi UFJ Financial Group on concern that the US subprime problem will derail growth in the world's largest economy.
Toyota Motor and other regional exporters dropped after the yen strengthened to the highest since March against the dollar.
The Nikkei 225 Stock Average slid 522 points at 15,953 while the Hang Seng in Hong Kong was down 634 points at 20,741. The Kospi in Seoul was down 120 points at 1697 while the Straits Times in Singapore dropped 124 points to 3148 and the Taiex in Taiwan was down 268 points at 8324.
Markets ended on a flat note though managed to hold on to the 15kmark led by gains in the Index heavyweights like ONGC, Bharti Airtel and HDFC Bank. After opening on a flat note key indices were unable to take off, as it struggled for direction throughout the trading session. Volumes continued to drop as turnover in Cash segment fell 5.1% and in F&O segment declines 10%. Among the 30-scrip’s of Sensex 14 scrip’s were up and 16 scrip’s ended lower. Finally, the BSE 30-share Sensex closed flat at 15,000 and NSE Nifty also closed flat at 4370.
Bharti Airtel marginally gained by 0.5% to Rs856. According to reports the company is considering setting up a mobile-phone unit in Vietnam. The scrip touched an intra-day high of Rs861 and a low of Rs843 and recorded volumes of over 3,00,000 shares on NSE.
Cinevistaas was frozen at 5% upper circuit to Rs69.05 after the Board of Directors of the company announced that it would consider stock split on Aug 20. The scrip touched an intra-day high of Rs69.05 and a low of Rs67.40 and recorded volumes of over 58,000 shares on NSE.
Apar Industries was up by 1% to Rs223 after the company’s unit secured Rs1.3bn contract. The scrip touched an intra-day high of Rs235 and a low of Rs218 and recorded volumes of over 37,000 shares on NSE.
Ranbaxy edged lower by 0.3% to Rs373. Novartis AG, Europe's third-biggest drugmaker, sued the company to block U.S. sales of a generic version of the blood-pressure medicine Diovan. Ranbaxy, The scrip touched an intra-day high of Rs380 and a low of Rs372 and recorded volumes of over 7,00,000 shares on NSE.
Advanta India rallied by over 11% to Rs882 after RBI announced that it allowed overseas Funds to buy 49% of the company. The scrip touched an intra-day high of Rs952 and a low of Rs800 and recorded volumes of over 5,00,000 shares on NSE.
SBI was up by 0.2% to Rs1615. Reports stated that nation's biggest lender, could raise about Rs145bn selling shares later this year. The scrip touched an intra-day high of Rs1636 and a low of Rs1604 and recorded volumes of over 12,00,000 shares on NSE.
Auto stocks were in reverse gear. Hero Honda slipped by 1.2%to Rs652, M&M was down by 1.5% to Rs678 and Maruti slipped by 1.1% to Rs823. However, Bajaj Auto was up by 0.3% to Rs2386.
Capital Good stocks also pared its gains on back of profit booking. Gammon India was down by 0.4% to Rs424, L&T slipped by 0.6% to Rs2420, BHEL dropped 1.3% to Rs1687 and Punj Lloyd slipped 0.4% to Rs270.
Realty index was the top gainers as the index was up by 1.19%. DLF advanced by 1% to Rs603, Unitech was up by 1.6% to Rs507, Akruti gained by 2.6% to Rs535.
Banking stocks gained momentum on back of fresh buying interest. HDFC Bank up by 1% to Rs1147, SBI gained by 0.2% to Rs1615 and ICICI Bank added 0.5% to Rs878. Bank of India, PNB and Syndicate Bank were the major gainer among the Mid-Cap stocks.
Consumer Durable stocks also were among the top gainers. Titan Industries rose over 2% to Rs1174, Videocon Industries was up by 3% to Rs379, Gitanjali Gems added 1.8% to Rs259.
Fund Activity:
FIIs were net sellers of Rs3.32bn (provisional) in the cash segment on Tuesday and the local institutions pumped in Rs3.09bn. In the F&O segment, FIIs were net buyers at Rs3.44mn. On Monday, foreign funds pulled out Rs5.2bn from the cash segment. Mutual Funds were net buyers at Rs228mn on the same day.
Major Bulk Deals:
Fidelity MF has picked up Alembic while Macquaire Bank and HSBC Financial have sold it; Religare Securities has bought Alfa Transformers; Lotus Global has purchased Ankit Metal; Reliance Capital has bought Dredging Corporation while Merrill Lynch and Macquaire Bank have sold the stock; Lotus Global has sold IKF Tech; Prabhudas Liladhar has picked up Jindal Hotel; LIC has sold Kirloskar Electronics; Morgan Stanley has bought Pearl Fashion while Fidelity has sold the stock; Morgan Stanley has also picked up Praj Industries; JM Financial MF has sold Sujana Metal; Reliance MF has purchased Trent; Macquire Bank has sold UTV Software.
Lower Circuit:
Kalpataru Power, Action Finance and Anant Raj Industries.
Upper Circuit:
Assam Company, Atlanta, LML, Jai Corp, Tourism Finance, ETC Networks, Zuari Industries, Aarti Industries, Balasore Industries, Bil Care, ION Exchange, Genus Overseas and Diamond Cables.
Delivery Delight (Rising Price & Rising Delivery):
BPCL, Crompton Greaves, Cummins India, HCL Tech, Hindalco, IPCL and Jet Airways.
Abnormal Delivery:
BEML, Suzlon, Rolta, Alok Industries, Rajesh Exports, GTL and Greaves Cotton.
Major News & Announcements:
Apar Industries unit secures Rs1.3bn contract
Cinevistaas Board to consider stock split on Aug 20
Euro Ceramics Board to consider raising funds on Aug 18
Amara Raja Board approves expanding Industrial Battery unit
Petron Engineering gets contract for fired heaters
Sunil Hitech gets order worth Rs1.12bn
Sterlite Optical gets contract from BSNL
Pratibha Industries venture secures Rs1.38bn contract
EKC hires Origo Sino-India to expand in China
Solar Explosives gets Rs1.12bn order.