Late to bed and late to wake will keep you long on money and short on mistakes.
Waking up late these days may save you some stress. There’s nothing much to do in the markets at start especially, when one wakes up most mornings to see red ticks across global markets. Ideally, with valuations relatively attractive, it would have been a better buying opportunity. But investors of all hues (barring some FIIs) are suffering from acute lack of confidence and conviction.
Though the scene at the start looks pretty gloomy, there is a silver lining. FIIs were net buyers of Rs5.13bn (provisional) in the cash segment on Friday, when the Sensex and the Nifty both lost 3% each. This may just provide the much-needed succor to the bulls in the time of real crisis.
Lots of fresh shorts are being added these days, so there is a hope of a pull back in the form of short-covering later. Don’t much read too much into any rebound despite the relatively better valuations. Shopping spree can start only after a sustained buying effort from both, the overseas as well as local funds. The market may remain choppy with mostly a negative bias in the near term, though the long-term trend remains positive as ever.
FIIs were also net buyers of Rs5.84bn in the F&O segment on Friday.
On Thursday, the foreign funds were net sellers of Rs1.3bn in the cash segment. Mutual Funds were also net sellers of Rs2.8bn on the same day.
Most Asian markets are trading lower this morning. The Nikkei in Tokyo was down 1.4% at 12.599 while the Hang Seng in Hong Kong fell 1.2% to 22,232. The Kospi in Seoul dropped 1.8% to 1633 while the Straits Times in Singapore dived2% to 2808.
The Shanghai Composite in China slumped 2.3% to 4201 and the Taiex in Taiwan shaved off 1.9% to 8367.
The MSCI Asia Pacific Index slumped 1.2% to 137.95 at 10:16 a.m. Tokyo, set to close at its lowest since Jan. 23. Materials and industrial stocks led declines among the index's 10 industry groups.
US stocks slipped again on Friday, with the Dow Jones Industrial Average falling to the worst levels in nearly 18 months after a grim February employment report and more financial sector troubles heightened recession fears.
Financial shares had their steepest slump in the Standard & Poor's 500 Index. Citigroup and AIG helped send the Dow below 12,000 for the first time since January. Nine of 10 S&P 500 industries slipped.
US non-farm payrolls fell by 63,000 in February, the second straight decline in employment, the Labor Department reported on Friday. It was the largest drop in payrolls since March 2003. Wall Street economists were looking for a gain of about 20,000.
The unemployment rate fell to 4.8% from 4.9%, versus forecasts for a rise to 5%. But the drop was a result of less people being in the workforce.
The Dow lost 1.2%, falling to its lowest point since Oct. 11, 2006. The S &P 500 fell 0.8%, closing at its lowest level since Aug. 23, 2006. The Nasdaq Composite shed almost 0.4% and ended at its lowest point since Sept. 11, 2006.
All three major indices had posted gains through the late morning, before turning lower and tumbling through the afternoon.
The S&P 500 slid 2.8% last week to 1,293.37, the lowest close since August 2006. The Dow lost 3%, the biggest weekly loss in a month, to 11,893.69. The Russell 2000 Index, a measure of companies with a median market value 96% less than the S&P 500, dropped 3.8% to a two-year low of 660.11.
Investors are now betting that the weak labor market would forced the Fed's hands yet again when its policy makers meet on March 18. The FOMC is likely to aggressively cut interest rates at the meeting.
Meanwhile, the Fed said it was taking more steps to try and ease the liquidity crunch by increasing the amount of money it would make available to banks in its auctions on March 10 and 24.
President Bush's top economic advisor said that the US economic growth could fall into negative territory this quarter. President Bush, also speaking in the afternoon, said "it's clear our economy has slowed."
JP Morgan Chase said in a note that the US economy is two months into a recession.
US light crude oil for April delivery fell 32 cents to settle at $105.15 a barrel in New York, after touching an all-time trading high of $106.54 earlier. Oil prices ended the previous session at a record high of $105.47.
The dollar touched a fresh record low against the euro on the weak jobs report, and fell to its lowest level versus the yen in three years.
COMEX gold for April delivery fell $2.60 to $974.50 an ounce. Gold prices, along with other dollar-traded commodities, have surged in response to the weak greenback. But after a big rally, prices have retreated for the last two sessions.
Treasury prices rallied, lowering the yield on the benchmark 10-year note to 3.54% from 3.58% late Thursday as investors sought the relatively safer-haven of government debt. Bond prices and yields move in opposite directions
European shares ended last week on a downbeat note. The pan-European Dow Jones Stoxx 600 index fell 1.1% to 307.98. The UK's FTSE 100 closed down 1.2% at 5,699.90, while the German DAX 30 lost 1.2% to 6,513.99 and the French CAC-40 dropped 1.3% to 4,618.96.
In the emerging markets, the Bovespa in Brazil was down 1.8% at 61,867 while the IPC index in Mexico was down 0.4% at 28,612. The RTS index in Russia dropped 1.8% to 2012 and the ISE National-30 index in Turkey slid 2.3% to 51,436.
No relief for bulls
It was bears day out, as they dominated throughout the trading session. After the Sensex opened with a huge negative gap of over 300 points, unabated selling saw the index slip below the 16k mark. Sensex closed at the lowest level since September 18, 2007. The fall could be attributed to a melt down in the global equity markets. Finally, the 30-share Sensex closed at 15,542 dropping 566 points. The NSE Nifty closed at 4,771 losing 149 points.
The banking index posted its biggest weekly fall since May 2004, the index fell over 15.5% after finance minister yesterday said banks should consider lowering rates on housing loans up to Rs2nm as part of the government's efforts to boost economic growth.
REL plummeted by over 14% to Rs1250. The company on Wednesday said that the board of directors of the company approved a Rs20bn share buyback at a maximum price of Rs1,600 each. The scrip touched an intra-day high of Rs1459 and a low of Rs1248 and recorded volumes of over 38,00,000 shares on NSE.
Maruti Suzuki was down by 1.5% to Rs926. According to reports the company by March end will be able to roll out 0.17mn units per annum from the new facility, up 70% from the current installed capacity. The scrip touched an intra-day high of Rs938 and a low of Rs873 and recorded volumes of over 15,00,000 shares on NSE.
DLF slipped 4.4% to Rs651. Reports stated that the company planned to invest Rs4.1bn for setting up an asset management company. The scrip touched an intra-day high of Rs680 and a low of Rs645 and recorded volumes of over 33,00,000 shares on NSE.
NIIT Technologies dropped by over 6% to Rs112. The company announced its partnership with the Centre for Development of Advanced Computing (C-DAC), Noida, to offer value added application services through the Software as a Service mode of delivery. The scrip touched an intra-day high of Rs117 and a low of Rs109 and recorded volumes of over 3,00,000 shares on NSE.
TTML after hitting an intra-day low of Rs29 recovered and was down by 8% to Rs31 after the company announced that it may sell up to 49% stake in Mobile-Tower unit and short listed 15 potential investors in Tower arm. The scrip touched an intra-day high of Rs33 and a low of Rs29 and recorded volumes of over 1,00,00,000 shares on NSE.
Punj Lloyd was down by over 8.5% to Rs299. The company said that its consortium has been awarded the Sabah Sarawak Gas Pipeline Project for an approx. value of US$500mn by PETRONAS Carigali Sdn Bhd, a subsidiary of Petronas, the State Oil and Gas Major in Malaysia. The scrip touched an intra-day high of Rs324 and a low of Rs295 and recorded volumes of over 31,00,000 shares on NSE.
Eicher Motors was down by 3% to Rs270. The company said that it recorded a total sale of 2,799 units of commercial vehicles during February 2008, translating into a year-to-date growth of 7%. The scrip touched an intra-day high of Rs280 and a low of Rs265 and recorded volumes of over 34,000 shares on NSE.
Corporate Front Page
Punj Lloyd led consortium receives US$500mn Sabah Sarawak Gas Pipeline project in Malaysia. (FE)
DLF defers Singapore listing of DLF Office Trust, the REIT of DLF Asset, till improvement in market conditions. (BS)
ACC to invest Rs36bn to expand capacity to 32mn tons by 2010. (FE)
M&M to invest Rs23bn in the next two years to develop new vehicles. (BS)
Reliance Industries keen to set up a petrochem complex in Qatar, especially for polymer production. (FE)
M&M, Bharat Forge and Hinduja group may be in race to acquire the main forging unit of Thyssenkrupp for US$1bn. (BS)
Tata Teleservices to divest 49% stake in its tower subsidiary Tata Teleservices Infrastructure. (TOI)
Grasim plans to set up two greenfield cellulose projects worth Rs16bn to augment capacity. (FE)
Reliance Industries to surrender three blocks in Kerala-Konkan basin as government decides against granting special status. (BL)
Patel Engineering plans to invest US$100mn over next two years to strengthen overseas operations. (BS)
Sobha Developers to start work on projects covering 12mn sq.ft space in the next fiscal. (BL)
TVS Motor forays into the three wheeler market by launching ‘TVS King’. (ET)
Arcelor-Mittal open to securing independent mines other than Chiria, which has seen many claimants, including SAIL. (BS)
BSNL to adopt franchisee model for rolling out WiMax services; invites bids for revenue sharing partnerships. (BL)
India Cements on look out for opportunities to invest in coal mines abroad and to acquire bulk cargo carriers. (BL)
Reliance Retail plans to open 300 jewellery stores across the country by FY12 with an investment of Rs10bn. (TOI)
Reliance Industries may form a JV with Coal India for its proposed coal-to-liquid project. (TOI)
SCI may form a shipyard JV with ABG Shipyard. (ET)
Mitsubishi Motors to manufacture its SUV ‘Outlander’ in India, through its JV with Hindustan Motors. (BS)
Adhunik Metaliks in talks with several PE players to offload 11% stake in its subsidiary, Orissa Manganese & Minerals. (ET)
Bhushan Steel plans a third JV agreement with Australia's Bowen Energy for coal exploration and mining. (FE)
Damodar Valley Corporation plans to add 5,000MW generation capacity during 12th plan at an investment of Rs200bn. (ET)
Reliance Life plans European buyout; in talks with two contract research organizations. (FE)
Jindal Photo to invest Rs3bn in Jindal India Powertech. (DNA)
Cadila Healthcare moves Delhi High Court against Baidyanath for using its trademark ‘Sugar Free’ on the latter’s product. (ET)
UCO Bank may cut home loan rates by 50bps. (ET)
Gateway Distriparks is eyeing to transport cars on container trains between Delhi and Chennai. (DNA)
Vimal, the textile brand of Reliance Industries, proposes to open 21 showrooms in the next two years. (ET)
Arcelor Mittal may consider listing on Indian bourses. (ET)
Economic Front Page
Government may increase FDI cap of 26% in the defence sector 50%.(ET)
Withdrawal of seven year tax holiday on gas production to have only marginal impact for NELP VII, say industry officials. (BS)
Government would soon seek cabinet approval for a proposal to list some of the profit making state-owned enterprises. (ET)
Prices for steel, iron ore, coking coal and copper are expected to increase between 15% to 65% from next month. (BS)
About 11,000MW of thermal power capacity is idle due to lack of coal supplies. (Mint)
Cabinet sanctions 10 new textile parks; existing norms for government support to continue. (BS)
RBI Governor says price stability remains top priority as inflation breaches the central bank’s tolerance limit of 5%. (BS)
SIDBI to launch Rs20bn risk capital fund for small and medium enterprises schemes. (ET)
Egyptian government has imposed a dumping duty for the next five years on new bus and truck tyres of Indian or Chinese origin. (DNA)