Concern should drive us into action and not into depression.
The sea of red across most global markets would sure drive Indian investors into depression. The Dow fell to its worst June since the Great Depression. Most market participants would just be watching the screen for the initial minutes till some stability returns. The daredevils may hope to make some quick bucks in the melee. (We can’t advise you to take such risks). Yet, there are those who would like to invest and these are times you can pick up small quantities of once upon a time very large cap stocks. Those who have the money, it would be time for action rather than depression.
But things are definitely not getting any better on the global or domestic front. Sonia Gandhi may have given her go ahead to the PM for pushing ahead with the nuke deal. But nobody could care about it today. After the initial choppiness, market will spare a thought for the inflation numbers which will officially be announced around noon. No great expectations of a cool down here. In fact it could only get worse for the coming weeks.
Crude oil prices hit a record high of US$140.39 in a rally after OPEC president in a comment said that prices could rise as high as $170/bbl in the coming months. A weaker dollar also helped fuel the rally.
Asian markets have slipped sharply this morning, following US markets overnight tumble that reflected rising worries over spiraling inflation. This would be Asian markets’ worst first half of the year since 1992. Japan's Nikkei 225 Stock Average slipped 2.22% to 13,515.12, while Hang Seng index dropped 2.2%.
The US Dow Jones industrial average fell to a 21-month low on back of record rise in crude oil prices. Sentiments were further dampened after Goldman Sachs' reports painted a gloomy picture for the financial sector.
In Europe, heavyweights fell to their lowest close since late March, driven by a sharp turn down in global financial shares. Banking stocks were badly battered turning out to be the worst performers on the FTSE 100 index. HSBC, Standard Chartered and Royal Bank of Scotland all fell between 4 to 7%.
The FTSE 100 closed at 5,518.2 losing 147.90 points or 2.61%, making this its lowest close since March 20, 2008, and its biggest one-day fall in over a month.
Even the Australian stocks slumped in early trading Friday following a sharp cut on Wall Street. Banking stocks were hit the hardest. Mining giants BHP Billiton and Rio Tinto fell about 3% each. The S&P/ASX 200 index fell 82 points or 1.55% to close at 5,225.
China's Shanghai Composite plunged 3.2% to 2,809.31 in the early minutes, and Singapore's Straits Times Index gave up 1.8% to 2,927.51. Taiwan's Weighted Index slumped 3.5% to 7,539.28.
In Asian currency trading, the U.S. dollar strengthened to 106.94 yen from 107.87 yen late on Thursday.
Back to the Indian corporate events, Jet Airways could be under further pressure following reports that it may post Rs20bn loss in two years.
Most leading banks have hiked PLR. Except for bargain hunting at lower levels, pressure would remain on bank stocks. SBI hiked its PLR to 12.75% effective from June 27, 2008. Union Bank raised its PLR to 13.25% effective from July 1, 2008.
Meanwhile, Axis Bank has acquired 2.5% stake in HCC arm Lavasa for Rs2.5bn.
Other media headlines of the day include:
Sun Pharma launches hostile Taro bid. (BS)
Essar Steel loses Esmark race to Severstal.(BS)
ONGC Videsh, along with Lakshmi Mittal will invest $155mn in a gas block in Trinidad and Tobago and another $282mn in two exploration blocks in Brazil. (Mint)
Aban Offshore wins $55mn deal to drill wells. (Mint)
Icra arm ties up with US firm to offer services. (Mint)
Vedanta to raise $1.25bn via bonds. (BS)
Essar plans Rs48bn power plant in Vadinar. (BS)
Lanco Group plans wind energy foray. (BL)
HT Media acquires stake in realty major Sunil Mantri. (BL)
Satyam, Saciformix to help drug companies with data management. (BL)
ITC exits greeting cards business. (BL)
RCom unveils Motorola’s new CDMA handset. (BL)
RBI allows Ranbaxy promoted Fortis to exit NBFC business. (BL)
GMR’s Turkey project achieves financial closure. (BL)
Stone India develops pantograph for double stack container trains. (BL)
Mastek chooses Chennai for its delivery centre. (BL)
Holcim increased its stake in ACC by 3% to 46%. (ET)
Court fines Ansal Properties & Infrastructure Rs2.73mn for not handing over an apartment on time. (ET)
Reliance Retail launches its sixth retail super store in Ahmedabad. (ET)
Markets extended its winning streak to third straight trading session as bulls were in control for major part of the day. The index heavyweight Reliance Industries was the leading stock which drove Nifty to close above the 4,300 mark and the Sensex above the 14,400 level.
Finally, the BSE benchmark Sensex gained 201 points to close at 14,421 and the Nifty index gained 63 points to close at 4,315.
However, the whole of June series was a disappointing one for the bulls as the benchmark Sensex lost 12% and the Nifty fell 11% during the June series.
The Mid-Cap and the Small-Cap index were down 15% and 13% respectively. Among the BSE Sectoral indices, The Realty index was down 28%, Metal and Capital Goods index was down 16%.
Among the major draggers were, National Aluminum (down 30%), DLF (down 28%), Unitech (down 28%), Hindalco (down 24%), SBI (down 17%), Tata Steel (down 16%) and ICICI Bank (down 13%).
BHEL lost gained ground and slipped by half a percent to Rs1437. The company announced that it secured order worth Rs5.06bn from ONGC to upgrade and supply new equipment for onshore drilling rigs. The scrip touched an intra-day high of Rs1470 and a low of Rs1408 and recorded volumes of over 3,00,000 shares on NSE.
Fertilizer stocks got a boost after India’s cabinet approved a new pricing policy for potash and Phosphate fertilizers. The new policy will set rates for 17 items. Chambal Fertilizer rallied by over 6.5% to Rs81, Nagarjuna Fert surged by over 6% to Rs40, RCF was up by over 3.5% to Rs55 and GSFC was up 5% to Rs162.
SBI gained by 1% to Rs1216. The Bank has restored its Benchmark Prime Lending Rate (referred as SBAR) to 12.75% p.a. with effect from June 27, 2008. The scrip touched an intra-day high of Rs1227 and a low of Rs1191 and recorded volumes of over 4,00,000 shares on NSE.
Apollo Hospitals edged lower by half a percent to Rs489. Reports that the company intends to spin off its pharma retailing business into a separate company. The scrip touched an intra-day high of Rs503 and a low of Rs492 and recorded volumes of over 2,000 shares on NSE.
Amtek Auto ended flat at Rs249. Reports stated that the company through its subsidiary Amtek Transportation Systems Ltd has signed a JV agreement with American Railcar Industries Inc based in St Charles, Missouri. The scrip touched an intra-day high of Rs264 and a low of Rs247 and recorded volumes of over 67,000 shares on NSE.
Aban Offshore slipped by 1% to Rs3121. The company announced that it received a letter of intent from a leading operator for the deployment of the jack-up rig Deep Driller 2 offshore Malaysia for a 3 well programme.
Further, a LoI has been received from another leading operator for the deployment of the jack-up rig Deep Driller 2 offshore Malaysia for a 6 firm well plus one optional well programme. The scrip touched an intra-day high of Rs3239 and a low of Rs3081 and recorded volumes of over 76,000 shares on NSE.
Reliance Infrastructure gained by 1.2% to Rs960 after reports stated tha the company has entered into an agreement with US consultant Black & Veatch (B&V) to maximise efficiency in implementation, maintenance and operation of the twin 4000 mw Sasan and Krishnapatnam ultra mega thermal ventures being executed by ADAG company, Reliance Power.
The scrip touched an intra-day high of Rs971 and a low of Rs931 and recorded volumes of over 6,00,000 shares on NSE.
Idea Cellular slipped by a percent to Rs100. The company on Wednesday announced that it would buy 40.8% stake in Spice Telecommunications in an all cash deal worth Rs27bn at Rs77.3 per share. Idea would pay an additional Rs5.4bn to the promoters of Spice group as non-compete fee. The scrip touched an intra-day high of Rs104 and a low of Rs98 and recorded volumes of over 33,00,000 shares on NSE.
- Holcim increased its stake in ACC by 3% to 46%. (ET)
- SBI hiked its PLR to 12.75% effective from June 27, 2008. (ET)
- Union Bank raised its PLR to 13.25% effective from July 1, 2008. (ET)
- Court fines Ansal Properties & Infrastructure Rs2.73mn for not handing over an apartment on time. (ET)
- Reliance Retail launches its sixth retail super store in Ahmedabad. (ET)
- Shringar Cinemas, rebranded as Fame India to foray into film production. (ET)
- Tata BP Solar, a JV between Tata Power and BP Solar, invests Rs4bn to manufacture 180MW of solar cells and 125MW of solar modules. (ET)
- ICICI Venture-owned RFCL set to acquire Italian Company Carlo Erba SPA. (ET)
- Bharti Airtel, Vodafone Essar and BSNL will have to delay its launch of 3G services unless 3G spectrum get vacated. (ET)
- Tata Steel plans to form an international company for consolidating its raw material assets spread across the world. (ET)
- Tata Steel’s standalone net profit rose 11% to Rs46.87bn while, revenues grew 11% to Rs179.85bn. (ET)
- Tata Steel to supply critical parts to Tata Motors for Nano. (ET)
- BHEL secures Rs5.06bn oil rigs contract from ONGC. (ET)
- Axis Bank acquires 2.5% stake in HCC arm Lavasa for Rs2.5bn. (ET)
- Canara Bank opens first biometric ATM in Maharashtra in Dharavi and ninth Biometric ATM in India. (ET)
- Union Bank of India signs MoU with Myanmar Foreign Trade Bank for routing border-rade transactions. (ET)
- Maharashtra Seamless in race to acquire Indonesian iron ore mining firm for ~Rs3bn. (ET)
- J&K Bank enters in to strategic alliance with Sundaram BNP Paribas Mutual Fund. (FE)
- Hotel Leela plans to enter the mid-market segment by 2013. (FE)
- Tatas, Nalco to ink JV agreement to set up a US$3bn aluminum smelter and power plants in South Africa. (FE)
- Government approves cruise shipping policy; targets tourism sector. (Mint)
- Inflation seen rising at 11.42% (BS)
- S&P cuts India’s growth forecast to 7.8% (Mint)
- 8.62mn wireless subscribers have been added during May 2008 as against 8.21mn last year. (ET)
- Total wireless subscriber base stood at 277.92mn at the end of May 2008. (ET)
- FDI inflow in April rose by 127% to US$3.7bn over the same month of the previous year. (ET)
- Manufacturing sector received 53% of total FDI. (ET)
- Government may fix green power quota for power distribution companies. (ET)
- State finance ministers sets up an expert committee to examine VAT structure and deviations. (ET)
- Government announces concession scheme for decontrolled phosphatic and potasic fertilizers. (ET)