he strength of a nation derives from the integrity of the home.
Bears feel at home again and the reasons are nothing new. Looks like again we are writing only global issues. But unless that is sorted, there is nothing much to write home about. We expect a lower opening today and much more volatility than yesterday. The US housing woes are far from over. Alan Greenspan says US housing market is a long way from bottoming out. Federal Reserve Chairman Ben Bernanke painted a bleak picture of the world's biggest economy. However, both Bernanke and Treasury Secretary Henry Paulson are confident that the US will be able to ward off a recession. But, former Fed chief Greenspan says the US economy is on the brink of recession. In fact he has warned that economic conditions would continue to deteriorate until housing prices stabilized.
So, seems like we are back to square one, with all the negative talk going around about the health of the US economy. We need not say more on what's going on in the US and elsewhere. But, the periodic bad news on the US and other developed economies will continue to cast its shadow on our market. As a result, we will see intermittent bouts of buying and selling amid reduced market-wide participation. It is tough for anybody to predict the market's direction in such a backdrop. It will be safe to say that in the near-term, the outlook remains uncertain while over the longer term, India will continue to be among the strongest emerging markets.
FIIs were net buyers of only Rs609.9mn (provisional) in the cash segment on Thursday. Local institutions were net buyers of Rs2.05bn. In the F&O segment, FIIs were net buyers of Rs29.7bn yesterday. FIIs were net buyers of Rs16.92bn in Index Futures and Rs4.75bn in single Stock Futures. On Wednesday, FIIs pumped in Rs3.49bn into the cash segment. Mutual Funds were net buyers of Rs77mn on the same day.
Most Asian markets are trading down this morning after Fed chief Bernanke's grim remarks about the state of the US economy, the region's largest export market. Banks and technology companies led the fall.
The Nikkei in Tokyo was down 202 points or 1.5% at 13,423 while the Hang Seng in Hong Kong slid 476 points or 2% to 23,545. The Kospi in Seoul dropped 17 points or 1% to 1680 while the Straits Times in Singapore was virtually flat at 3041.
The Shanghai Composite in China tumbled 92 points or 2% to 4459 and the Taiex in Taiwan was fell by just 20 points or 0.25% to 7845.
About six stocks fell for each that gained on MSCI's Asian benchmark, which dropped 1% to 142.72 at 10:01 a.m. in Tokyo. Declines trimmed the benchmark's first weekly gain this year to 1.4%.
US shares slipped on Thursday after Federal Reserve Chairman Ben Bernanke acknowledged that a steep slowdown is underway in the world's largest economy amid the ongoing turmoil in the housing and credit markets.
JPMorgan Chase, Bank of America and Citigroup led declines in 29 of 30 members of the S&P 500 Diversified Financials Index. Intel dropped for the first time in six days. All 10 industry groups in the S&P 500 declined, halting the market's longest rally of the year.
The S&P 500 dropped 18 points, or 1.3%, to 1,348.86. The Dow Jones Industrial Average slid 175 points, or 1.4%, to 12,376.98. The Nasdaq slumped 41 points, or 1.7%, to 2,332.54.
About five stocks declined for every one that rose on the New York Stock Exchange.
After the close, data networking provider Brocade Communications posted quarterly earnings that fell from a year ago but nonetheless topped forecasts.
Friday brings a host of economic reports, including the NY Empire State manufacturing report before the start of trade and the University of Michigan consumer sentiment report shortly after the start.
Bernanke told the Senate Banking Committee that the outlook for the US economy has worsened recently and that the risks to growth remain to the downside. The Fed chief also said that the prospects could improve later in the year and that the housing sector mess and a weak jobs market will hurt consumer spending.
Bernanke said that big banks could end up taking more writedowns due to the problems with bond insurers. Stocks tumbled in response, with financial, homebuilder and retail stocks leading the decline.
Treasury Secretary Henry Paulson argued that the US economy should be able to avoid a recession, due to the combination of monetary policy and the fiscal stimulus plan announced by the Bush government.
The December trade gap narrowed more than expected, causing the 2007 trade gap to drop for the first time in six years. The number of Americans filing new claims for unemployment fell more than expected last week. And home prices continued to plunge in the last quarter of 2007, posting the biggest quarterly drop ever recorded by the National Association of Realtors.
Treasury prices fell, raising the yield on the benchmark 10-year note to 3.8% from 3.72% late on Wednesday. The dollar fell versus the yen and euro. US light crude oil for March delivery rose $2.19 to settle at $94.46 a barrel in New York. COMEX gold for April delivery rose 60 cents to settle at $910.80 an ounce.
Stocks in Europe closed mixed. The pan-European Dow Jones Stoxx 600 index ended with a gain of 0.1% at 323.66. The French CAC-40 ended up 0.1% at 4,858.65, while the German DAX 30 closed 0.2% lower to 6,962.28 and the UK's FTSE 100 finished flat at 5,879.30.
In the emerging markets, the Bovespa in Brazil was down 1.2% at 61,818 while the IPC index in Mexico fell 0.6% to 29,138. The RTS index in Russia was up 1% at 2025 and the ISE National-30 index in Turkey gained 1.6% at 57,010.
Will the momentum continue?
It was second straight day of gains as benchmark Sensex rallied over 800 points extending its gains fuelled by positive cues from the international markets and buying momentum in the index heavyweights like RIL, ICICI Bank and L&T. Bulls were all over the bourses, even the Mid-Cap and the Small-Cap stocks participated in the Valentine’s Day party. Finally, the 30-share Sensex closed at 17,766 surging 817 points. The NSE Nifty closed at 5,202 adding 272 points.
Overall about 2,057 stocks advanced, 697 stocks declined while 41 stocks remained unchanged. Among the BSE 30 index 39 stocks advanced while 1 stock declined.
Anant Raj Industries came off its days high on back of profit booking; the stock slipped 0.3% to Rs339. The company announced that they would start $300mn overseas share sale. The scrip touched an intra-day high of Rs348 and a low of Rs335 and recorded volumes of over 36,000 shares on BSE.
Essar Oil further rallied by over 16% to Rs214 after the stock was included in MSCI India Index. The scrip touched an intra-day high of Rs215 and a low of Rs196 and recorded volumes of over 1,00,00,000 shares on NSE.
Punj Lloyd surged by over 10% to Rs365 after the company announced that it secured contract worth Rs11.2bn from Marlna Bay Sands Pte Ltd, Singapore. The scrip touched an intra-day high of Rs368 and a low of Rs340 and recorded volumes of over 42,00,000 shares on NSE.
EID Parry advanced by 3% to Rs174 after the company said that they have acquired 51% stake in Phytoremedies Biolabs. The scrip touched an intra-day high of Rs177 and a low of Rs170 and recorded volumes of over 6,000 shares on NSE.
BHEL rallied by over 13% to Rs2228 after the company announced that it secured oilfield equipment contract from ONGC. The scrip touched an intra-day high of Rs2256 and a low of Rs2050 and recorded volumes of over 12,00,000 shares on NSE.
Gail gained 3% to Rs440 after the company said that they have signed a pact with ITERA Oil and Gas Company of Russia for cooperation in hydrocarbon sector. The scrip touched an intra-day high of Rs413 and a low of Rs405 and recorded volumes of over 13,00,000 shares on NSE.
Deepak Fertilizers advanced by over 10% to Rs129 after the company launched the ‘Clean Development Mechanism Project’ at its manufacturing plant in Taloja. The project will address the widespread concern on global warming, by reducing the Green House Gas (GHG) emission through the Clean Development Mechanism (CDM) which forms part of the Kyoto Protocol. The project will be implemented within a span of six months. The scrip touched an intra-day high of Rs134 and a low of Rs120 and recorded volumes of over 4,00,000 shares on NSE.
Orchid Chemicals surged by over 6.5% to Rs245 following the company that they received USFDA approval for Granisetron Generic Formulation. The scrip touched an intra-day high of Rs248 and a low of Rs234 and recorded volumes of over 2,00,000 shares on NSE.
Madras Cement shot up by over 6% to Rs3680 after the company announced its offer to buy back shares at Rs4,200 per piece. The scrip touched an intra-day high of Rs3800 and a low of Rs3515.
Gem and Jewellery stocks were in momentum after Jewelry exports from India rose 21% in the ten months ended January on back of increase in sales of diamonds. Exports rose to $16.87bn from $13.96bn a year earlier. Gitanjali Gems gained 3.2% to Rs282, Renaissance Jewellery was up 9% to Rs96 and Suraj Diamond surged 5% to Rs62.
Hindustan Zinc advanced by over 7% to Rs567 after the company said that it raised lead prices by 7.6% to reflect an increase in global rates. The company increased the price of the metal to Rs134,600 per metric ton from 14th February, a gain of Rs9,500. The price of zinc remained unchanged at Rs108,700 a ton. The scrip touched an intra-day high of Rs574 and a low of Rs545 and recorded volumes of over 71,000 shares on NSE.
Stocks In News:
Bhilwara Energy Ltd. (BEL) is presently developing power projects with a total capacity of about 2717 MW. BEL is also considering bidding for additional power projects and may go for a private placement. RSWM holds 24.16% stake in BEL while HEG owns 35.79%.
NTPC has has signed a Joint Venture agreement with Bihar State Electricity Board (BSEB) for building a 1980 MW (3X660MW) coal based thermal power project in Bihar. NTPC and BSEB will have equal shareholding (50:50) in the proposed JV.
Sagar Cements says it plans to establish a cement plant of around 5mn tons a year capacity in Karnataka. Apart from this, the company is also looking for setting a cement plant in Oman in joint venture with a local partner.
News Snippets:
LN Mittal and Farallon Capital invest Rs15.8bn for 28.6% stake in Indiabulls Power Services. (ET)
NTPC to invest US$40bn over the next five year, to transform itself into an integrated regional energy player. (BL)
NYSE to pick up 5% stake in MCX. (ET)
Mastek likely to buy a US-based IT firm System Task Group International for US$30mn. (ET)
Satyam Computer to add 3,000 employee’s by March end. (BS)
L&T Infotech has put its IPO plans on hold. (ET)
L&T wins an order from Qatar worth Rs3.11bn. (ET)
Haldia Petrochemicals is set to buy L&T 51% stake in HPL Cogeneration. (ET)
TCS plans to reach revenue of US$800mn-US$1bn from domestic market. (BS)
IOC to launch its marine fuel business globally. (FE)
Nirma set to mop up Rs15bn via QIP. (BS)
BHEL gets Rs2bn order from ONGC. (BS)
Wipro Infotech bags US$50mn 5 year outsourcing contract from Pantaloon retail. (BS)
Spanco Telesystems acquires Great IT for an undisclosed amount. (BS)
Orchid Chemical gets US FDA nod for Granisetron Hydrochloride tablets. (FE)
Sun Pharma receives tentative approval from US FDA for generic Depakote. (FE)
DE Shaw Valence picks up 5.7% stake in Orient Express Hotels. (FE)
Wipro may buy a German based company in next 6 months. (DNA)
Tata’s and Boeing enter into a JV, to outsource and manufacture defence-related aero space component work in India. (ET)
HPCL to shut gas oil unit at its Vizag refinery for 10 days. (DNA)
Kirloskar Brothers is looking to buy a European based pump manufacturing and marketing companies. (DNA)
Shree Cement plans to set up a cement plant of 2MT per annum at a cost of Rs20bn. (BL)
EID Parry buys 51% stake in Phytoremedies. (BL)
Jubilant Energy discovers Oil and Gas in Cauvery basin. (BL)
Maruti Alto has crossed 1mn production mark. (FE)
PFC to enter financial advisory services. (BL)
Economy Front Page
The Government hikes petrol and diesel prices by Rs2 per litre and Re1 per litre respectively. (ET)
Steel companies agree to roll back price hike with immediate effect. (ET)
The DoT plans to change spectrum usage charges levied on telecom companies, to a fix percentage of revenue for each category circles. (ET)
PM panel suggest reduction in import duty from 10% to 5% in machinery and introduction of mechanism for textile sector. (FE)
PM says Indian can sustain 9% GDP growth. (BS)
RBI denies a rate cut in short-term citing high inflation. (ET)
Agriculture ministry has proposed 1%cess on direct taxes and 2% on indirect taxes. (ET)
Export from IT and ITES based SEZ to double in FY09. (BL)