You can't let one bad moment spoil a bunch of good ones.
For the bulls, bad moments seem to carry on longer. While they did manage to recoup their losses on Wednesday, the bulls are suddenly finding life difficult. Crude oil is on fire, the rupee keeps depreciating and inflation shows no sign of cooling. Governments and central banks the world over are grappling with a slew of headwinds. So, while on one hand economic growth is slowing, inflation remains at highly elevated level. Prices of several other commodities - both industrial and foods - have also shot through the roof.
What's worse, most governments and central banks are running out of options to tackle the emerging challenges. In India, we have a peculiar situation where the Government is bent on appeasing the masses due to political compulsions. SBI's withdrawal of circular suspending loans on farm equipment like tractors is a classic case in point. The oil marketing companies, which are desperately trying to cut losses by either suspending new LPG connections or rationing of fuels may well face a similar fate.
Against this backdrop, we see renewed risks for the market. The upside looks capped, and chances of a fresh round of selling have increased. Today, we expect a slight gap-down opening due to weakness across global markets. It will take some doing for the bulls to repeat Wednesday's stellar performance when they managed to bounce back after a lower opening.
FIIs were net sellers of Rs7.77bn (provisional) in the cash segment on Wednesday while local institutions were net buyers of Rs4.53bn. In the F&O segment, foreign funds were net sellers of Rs8bn. On Tuesday, foreign funds were net sellers of Rs3.2bn in the cash segment. Mutual Funds offloaded stocks worth Rs4.9bn.
Key Results Today: Bajaj Holdings & Investment, Balaji Tele, Core Projects, Cummins India, Dalmia Cement, Dishman Pharma, Havell's India and Moser Baer.
Asian stocks fell for a third day today, extending a global slump, after oil rose to a record and the Federal Reserve signaled it is done cutting interest rates.
Nintendo and Canon led consumer-electronics makers lower. Qantas Airways and Korean Air Lines retreated among airlines after crude climbed above $135 for the first time, boosting costs.
The MSCI Asia Pacific Index fell 1% to 150.49 as of 11:34 a.m. in Tokyo, with almost four stocks dropping for each that climbed. All 10 industry groups declined. All of Asia's benchmark indexes retreated, with Japan's Nikkei 225 Stock Average declining 1.2% to 13,762.27.
US stocks sank on Wednesday as crude oil surged further on a surprising weakness in government's weekly fuel supply report. Sentiment also got hit after the minutes from the Federal Reserve's last meeting showed policy makers were reluctant to cut rates.
The Fed also forecast worse economic conditions ahead, but could still find it tough to cut rates any further. The Fed also lowered its economic growth forecast for the year. At the same time, it raised its projections for inflation and unemployment.
Citigroup, Bank of America and JPMorgan Chase sent financial shares to their lowest since April 15. Target led retailers to their worst decline in a month and an index of airlines slid to an all-time low as crude climbed above US$133 a barrel.
Shares of Moody's Corp. slumped the most since 1999 after the credit ratings company said it is investigating whether it mistakenly assigned AAA ratings to debt securities that later fell in value.
The S&P 500 slumped 22.69 points, or 1.6%, to 1,390.71. The Dow Jones Industrial Average slid 227.49 points, or 1.8%, to 12,601.19. The Nasdaq Composite Index dived 43.99 points, or 1.8%, to 2,448.27.
Market breadth was negative. Four stocks retreated for every one that rose on the New York Stock Exchange.
US light crude oil for July delivery set a closing record of $133.17 in New York Mercantile Exchange trading, up more than $4 a barrel - and then proceeded to march to another record intraday high of $134.10 in electronic trading after the settlement.
Oil prices spiked after the government's weekly inventories report showed a surprise drop in crude and gasoline supplies and a weaker-than-expected buildup in distillates, used in heating oil. Oil has been climbing lately amid supply concerns and weakness in the dollar.
The US national average price for a gallon of regular unleaded gas rose to a record US$3.807 from the previous day's high of US$3.80, according to AAA.
Stocks in Europe fell on record crude prices, resulting in sharp losses for automakers and airlines. The pan-European Dow Jones Stoxx 600 index fell 0.9% to 323.16 as crude-oil prices run up as high as $132.08 a barrel. The UK's FTSE 100 edged up 0.1% to 6,198.10, while the German DAX 30 fell 1.1% to 7,040.83 and the French CAC-40 dropped 0.5% to 5,027.55.
In the emerging markets, the Bovespa in Brazil slid 1.7% to 72,294 while the IPC index in Mexico was down 1.3% at 31,126. The RTS index in Russia gained 0.6% to 2467 while the ISE National 30 index in Turkey fell 0.75% to 50,360.
Bulls to dance to global cues
It was a flat finish to a day that started off with negative bias. Indian bourses had a weak start mirroring overnight losses in the US markets. Going forward even the Asian markets were trading weak. However, bulls managed to stage come back in the afternoon trades on back of a swift recovery seen in the Asian markets coupled with a positive start in equity markets across Europe.
Among the 30-scrips of Sensex, Reliance Industries, Tata Steel, ITC and BHEL were among the major gainers. On the other hand, HDFC, ICICI Bank, HDFC Bank and Infosys were among the major laggards.
Among the BSE Sectoral indices, BSE Oil & Gas index led from the front gaining 2.3%. Other’s like BSE Metal index (up 1.2%), BSE PSU index (up 1%) and BSE Capital Goods index (up 0.8%). On the other hand, BSE Bankex index (down 1.5%) and Pharma index (down 0.6%).
Finally, the BSE benchmark Sensex ended 12 points higher to close at 17,243 and the Nifty index gained 12 points to close at 5,117.
Overall about 1,710 stocks advanced; 1,007 stocks declined while 77 stocks remained unchanged. Among the 50-Nifty 27 stocks ended in green and 23 stocks ended in red.
HDIL ended down by 3.6% to Rs811. The company posted a net profit of Rs7082.50mn for the quarter ended March 31, 2008. Total Revenue is Rs9894.90mn for the quarter ended March 31, 2008.
The Company has posted a net profit of Rs14105.00mn for the year ended March 31, 2008 as compared to Rs5418.20mn for the year ended March 31, 2007. Total Revenue has increased from Rs12165.10mn for the year ended March 31, 2007 to Rs24323.20mn for the year ended March 31, 2008. The board of directors of the company also announced that it approved 2 bonus shares for every 7 shares held. The scrip touched an intra-day high of Rs865 and a low of Rs805 and recorded volumes of over 47,00,000 shares on BSE.
GMR Infrastructure ended flat at Rs151. The company announced that it posted a net profit of Rs373.60mn for the quarter ended March 31, 2008 as compared to Rs123.70mn for the quarter ended March 31, 2007. Total Income has increased from Rs227.50mn for the quarter ended March 31, 2007 to Rs644.40mn for the quarter ended March 31, 2008.
The company posted a net profit after tax of Rs626.90mn for the year ended March 31, 2008 as compared to Rs28.80mn for the year ended March 31, 2007. Total Income has increased from Rs339.00mn for the year ended March 31, 2007 to Rs1122.00mn for the year ended March 31, 2008. The scrip touched an intra-day high of Rs152 and a low of Rs145 and recorded volumes of over 31,00,000 shares on BSE.
Kesoram Industries gained by a percent to Rs361 as the company is reportedly planning to spend Rs25bn for expanding its tyre and cement capacity by 2009.
According to report, the company is setting up three new tyre units in the northern state of Uttaranchal to take tyre-making capacity to 734 metric tons per day from 252 metric tons. The company will add another 1.65mn tons to its cement making capacity, taking it to 6.2mn tons per annum by 2008 from 4.5mn tons now. The scrip touched an intra-day high of Rs364 and a low of Rs352 and recorded volumes of over 12,000 shares on BSE.
Firstsource rallied by over 7% to Rs43 after the company said that it won 3-year outsourcing contract from Bharti Airtel. The scrip touched an intra-day high of Rs45 and a low of Rs40 and recorded volumes of over 12,00,000 shares on BSE.
SBI gained by half a percent to Rs1661 after the bank said that they would resume tractor loans with immediate effect. The scrip touched an intra-day high of Rs1677 and a low of Rs1631 and recorded volumes of over 2,00,000 shares on BSE.
Cairn India hit an intra-day high of Rs342, the scrip witnessed profit booking and ended flat at Rs327. Reports stated that the company would explore oil and gas in Rajasthan Hadauti region. The scrip touched an intra-day high of Rs342 and a low of Rs324 and recorded volumes of over 96,00,000 shares on BSE.
Educomp Solutions gained by 1.7% to Rs4103 after the company on Tuesday announced that it acquired 51% stake in US based Learning.com for US$24.5mn. The scrip touched an intra-day high of Rs4125 and a low of Rs3999 and recorded volumes of over 32,000 shares on BSE.
IOC gained by 0.5% to Rs408 following reports that the company plans to enter retail marketing business in Turkey along with setting up a 15 mtpa greenfield refinery and a petrochemicals complex. The scrip touched an intra-day high of Rs413 and a low of Rs399 and has recorded volumes of over 56,000 shares on BSE.
Corporate News
SBI to resume tractor and farm equipment loans, reversing its decision to stop lending for farm equipment. (BL)
RIL to pick up 50% stake and will invest Rs7bn in Rewas port connectivity project of Indian Railways. (ET)
ONGC planning to sell 30-40% stake in the two blocks won in Vietnam in 2006. (BS)
ONGC infuses Rs50bn in western offshore fields. (FE)
Bharti Airtel has signed a US$35mn, three-year outsourcing agreement with Firstsource Solutions. (ET)
M&M signs non-binding pact with Kinetic Motors in its bid to acquire 76% in the company, valued at Rs1.2bn. (ET)
BSNL awards US$90mn contract to Motorola. (BL)
IOC, BPCL and HPCL have stopped issuing new LPG connections to household consumers, defying government orders. (ET)
PFC to call for proposals for the 4,000MW Tilaiya UMPP at Orissa. (BL)
Infosys hires consultant to chalk out revamp plan. (BL)
Employees of Infosys Technologies to pass certification programs to be conducted every March, to get promoted. (BS)
Lanco Infra gets US$150mn IFC credit for power projects. (BL)
Ranbaxy begins operations in Yemen. (BL)
Dabur Pharma gets FDA nod for prostrate cancer drug. (BL)
Satyam Computers and GE Healthcare to support customers deploying healthcare IT solutions based on GE Centricity enterprise software.
GMR Infrastructure to diversify into corporate jet business and would invest Rs8bn for the same. (BL)
IOC seeks nod to raise borrowing limit to Rs800bn. (BL)
IFCI has acquired 46.7% shareholding of Mohan Exports Group in Foremost Factors Ltd in a transaction valued at about Rs116mn. (BL)
NMDC and three other Indian firms in talks with Australia’s Rio Tinto Group to buy a new technology to smelt low grade iron ores and even wastes. (BL)
Standard Chartered Bank to consider listing on the Indian Stock Exchanges. (ET)
Ranbaxy Laboratories sold off its land and building to its group companies at Rs900mn and bought 24.9% stake at Rs934mn in its other group company Shimal Labs. (ET)
ArcelorMittal in talks to take over Macarthur Coal of Australia. (ET)
Reliance Retail in talks with four foreign food suppliers including US based Dole and Chiquita, Sadia of Brazil and Doux of France for alliances. (ET)
The GMR group plans to increase its equity stake in South Africa’s Homeland Energy, a company that owns coal mines, from 10% to 50%. (ET)
Consumer goods companies like LG Electronics, Godrej Appliances etc. to raise prices of products like televisions and refrigerators by 5%.to offset increase in raw material cost. (BS)
West Asian telecom companies Etisalat and Qatar Telecom have approached Videocon Industries for tie-ups in India. (BS)
Essar Steel Holdings may raise its bid after Russian steel maker OAO Severstal matched its offer of US$17 a share for acquiring US based Esmark. (BS)
UTI AMC plans to revive its US$500mn IPO which it shelved earlier this year when markets plunged. (BS)
BEML Midwest acquired its first mine in Mozambique and is close to acquiring another in Indonesia.
Economic News
Number of passengers passing through Indian airports grew at ~11% in the first quarter of the calendar year against ~28% growth recorded in the first three months of 2007.
State Coal Ministry announced no intentions of increasing prices this year. (ET)
Indian Post has tied up with US-based postal solutions provider Pittney Bowes to offer enhanced mailing services. (ET)
Government is considering re-allocating wheat in place of rice for the Targeted Public Distribution System (TDPS), as part of its measures to control inflation and augment the availability of essential commodities. (BS)
Power Ministry says that it will be able to achieve 80,000MW of capacity addition in the 11th plan. (FE)