A Scout is never taken by surprise; he knows exactly what to do when anything unexpected happens.”
Last week's terror strikes failed to have any major impact on market sentiment. The main indices managed to advance after a choppy session. The rally seemed to taper off towards the close amid anxiety over today's RBI policy meeting. Weakness in European markets also may have prompted the bulls to turn a little cautious. And, rightly so. Wall Street witnessed another big sell-off amid nagging worries over the US financial sector and its impact on the world's biggest economy. Asian markets this morning are down 2-3.5%. FIIs were net sellers of over Rs7bn (provisional) yesterday. Given this kind of a backdrop, we expect a soft opening in our market.
Trading may turn volatile ahead of the RBI's quarterly policy announcement around noon. A small hike in either Repo Rate or CRR is on the cards, and has already been discounted by the markets. Having said that, RBI Governor Y.V. Reddy has this habit of springing a surprise almost every time. It remains to be seen if he does it again today. Even if he does, hopefully the surprise will be on the positive side for banks and the markets. So be ready with your picks because Dr. Reddy seems more steady for now.
Results Today: Adhunik Metaliks, Akruti City, Areva T&D, Ashok Leyland, Balaji Tele, BOB, BEL, Bombay Dyeing, Cadila Healthcare, Cairn India, Corporation Bank, Deccan Chronicle, Deepak Fertilizers, D.S. Kulkarni, Elecon Engineering, Essar Shipping, Evinix, Finolex Industries, Gail India, GHCL, GSK Consumer, GMR Infra, Godawari Power, Godrej Industries, Gokaldas Exports, GVK Power, Harrison Malayalam, Hero Honda, Hexaware, HPCL, Hotel Leela, ICRA, India Infoline, IRB Infra, Jet Airways, Matrix Labs, Mercator Lines, Mukand, National Fertilizers, NDTV, NTPC, Omaxe, Orient Paper, Praj Industries, Punj Lloyd, Rajesh Exports, Ranbaxy, RCF, Shoppers' Stop, Sunil Hitech, Syndicate Bank, TV 18, Thomas Cook, UTV, Venus Remedies and Visa Steel.
FIIs were net sellers of Rs7.22bn (provisional) in the cash segment on Monday and the local funds pumped in Rs4.57bn. In the F&O segment, the foreign funds were net sellers of Rs6.37bn. On Friday, FIIs were net sellers of Rs5.46bn in the cash segment.
Asian stocks fell on Tuesday after the IMF said there is no end in sight to the correction in US housing sector even as energy costs are spiraling. The Nikkei in Tokyo was down 2.15% at 13,066 while the Hang Seng in Hong Kong fell 2.5% to 22,114.
The MSCI Asia Pacific Index fell 2% to 131.33 as of 10:54 a.m. in Tokyo. About 16 stocks retreated for each that rose. Financial stocks accounted for 34% of the index's decline.
US stocks tumbled on Monday as worries about the economy and the troubled financial sector overshadowed the announcement of a rescue plan for mortgage giants Fannie Mae and Freddie Mac.
Financial stocks were among the blue chips hit the hardest, with insurance giant AIG down 12%. Shares of Citigroup fell 7.5%, Bank of America sank 5.1%, and Wachovia tumbled 6%. Bond insurer Ambac was the biggest loser for the day, falling 19%.
Merrill Lynch, AIG and Fannie Mae led financial shares to a third straight drop after the IMF warned that worsening credit conditions may prolong the economic slowdown in the US. Verizon slid to an almost two-year low on a bigger-than-estimated decrease in home-phone lines.
Tyson Foods tumbled the most in six weeks after profit sank 92% on higher feed costs.
The S &P 500 Index slumped 23.39 points, or 1.9%, to 1,234.37, its lowest level since reaching an almost three-year low on July 15. The Dow slid 239.61 points, or 2.1%, to 11,131.08. The Nasdaq Composite Index dived 46.31 points, or 2%, to 2,264.22.
Market breadth was very negative. Four stocks fell for each that rose on the New York Stock Exchange.
US indices had finished slightly higher in the previous session on encouraging reports from the housing and manufacturing sectors.
Stocks opened lower as worries about the credit crisis were exacerbated by federal regulators shuttering two more regional banks on Friday. They came off their lows briefly after Treasury Secretary Henry Paulson laid out guidelines for banks seeking to issue covered bonds as a way to finance home mortgages.
Investors will see if the US market can rebound on Tuesday as a key measure of consumer confidence is due to be released shortly after the opening bell. Scores of earnings reports are also due before and after the market.
Government-sponsored mortgage finance giants Fannie Mae and Freddie Mac turned higher after the Senate approved a bill that could establish a rescue plan for the embattled firms. Shares of Fannie and Freddie both soared in morning, but turned sharply down by midday. Fannie fell 10.7% and Freddie sank 6.7%.
Oil prices rose $1.47 to $124.73 per barrel as traders weighed slumping demand with renewed concerns about Iran's nuclear capabilities. Nonetheless, crude is still about $24 below its high of $147.27 set on July 11.
The average price of gasoline in the US fell 1.2 cents to $3.958 per gallon.
In currency trading, the US dollar slipped against global currencies. The greenback fell against the euro, even as a measure of German consumer confidence fell to a more-than-five-year low.
COMEX gold for August delivery rose 90 cents to settle at $927.70 an ounce after fluctuating above and below the break even point for much of the day.
Treasury prices rose, sending the yield on the benchmark 10-year note down to 4.01% from 4.11% late on Friday.
Europe stocks ended lower, as German consumer confidence dropped to a five-year low, Citigroup downgraded the banking sector and Ryanair Holdings warned of the possibility of its first-ever annual loss. The pan-European Dow Jones Stoxx 600 closed 1.1% lower to 278.73.
In Germany, the benchmark DAX 30 fell 1.3% to 6,351.15. The French CAC 40 fell 1.2% to 4,324.45 and the UK's FTSE 100 slipped 0.8% to 5,312.60.
In the emerging markets, the Bovespa in Brazil dropped 0.6% to 56,869 while the IPC index in Mexico was down 1.3% at 26,732. The RTS index in Russia slipped 1.2% to 1928 and the ISE National-30 index in Turkey gained 1.9% to 46,990.
All eyes on RBI
After slipping for two consecutive trading sessions, Indian bourses ended with modest gains starting off the weak with a positive bias. Markets started off the day on a flat note and remained range bound for major part of the trading session. Finally, the benchmark Sensex gained 74 points to close at 14,349 and Nifty gained 20 points to close at 4,332.
Among the BSE Sectoral indices, BSE Oil & Gas index (up 1.5%), Capital Goods index (up 1.5%), BSE Realty index (up 1%). On the other hand, Metal index (down 1%) and BSE Power index (0.3%).
Sunil Hitech rallied by 3% to Rs196 after the company announced that it bagged fresh order worth Rs6.49bn in the first quarter of the financial year 2008-2009. The company said that at the end of first quarter of the present fiscal the Company is holding a strong consolidated order book position worth Rs13.74bn. The company bagged Engineering Procurement Contract (EPC) job for 30 MW works and 60 KLPD Distillery Plant with 6000 TCD sugar for Gangakhek Sugan & Energy Pvt Ltd, in District Parbhani. The work is worth Rs3.29bn. This is the biggest single order Sunil Hitech bagged since its inception which marked the entry of the company into EPC business.
Shares of L&T gained by over 3% to Rs2723 after the company announced its Q1 results with net profit at Rs5.02bn (up 33%) and revenues at Rs71bn (up 50%). The scrip touched an intra-day high of Rs2799 and a low of Rs2600 and recorded volumes of over 10,00,000 shares on BSE.
Dabur India gained by 1% to Rs92 after the company announced its Q1 results with net profit of Rs701.40mn (up 25%) as compared to Rs559.70mn for the quarter ended June 30, 2007. The total income increased 13.3% to Rs5,352.90mn from Rs4,720.50mn for the quarter ended June 30, 2008. The scrip has touched an intra-day high of Rs95 and a low of Rs91 and recorded volumes of over 6,00,000 shares on BSE.
Dish TV gained by a percent to Rs31.5. The company announced that it posted a net loss of Rs1.25bn for the quarter ended June 30, 2008 compared to a loss of Rs897.64mn in the same quarter last year. Total income for the quarter is Rs1.65bn as against Rs893.37mn in the quarter ended June 30, 2007. The scrip touched an intra-day high of Rs33 and a low of Rs31 and recorded volumes of over 18,00,000 shares on BSE.
Sterlite Industries declined by 3.5% to Rs582 after the company announced its Q1 results with net profit at Rs3,579.3mn (up 77.7%) for the quarter ended June 30, 2008 as compared to Rs2,014.6mn for the quarter ended June 30, 2007. However, total income declined 0.8% to Rs31,426mn for the quarter ended June 30, 2008 from Rs31,658.5mn.
The scrip touched an intra-day high of Rs627 and a low of Rs572 and recorded volumes of over 7,00,000 shares on BSE.
Adani Enterprises gained by 1.5% to Rs644. The company announced that it registered a net profit of Rs669.70mn for the quarter ended June 30, 2008 as compared to Rs454.30mn for the quarter ended June 30, 2007. The total revenue increased from Rs19,437mn for the quarter ended June 30, 2007 to Rs23,959.30mn for the quarter ended June 30, 2008.
The scrip touched an intra-day high of Rs657 and a low of Rs608 and recorded volumes of over 55,000 shares on BSE.
Standard & Poor’s, lowered its short-term issue credit rating on ICICI Bank’s US$300mn US commercial paper (USCP) program to ‘A-1’ from ‘A-1+’.
ONGC has decided to foray into nuclear power production beginning with mining for uranium in collaboration with Uranium Corporation of India. (FE)
Tata Power and IOC have decided to float a new company for jointly developing a 1,000MW coal-based mega power project at Paradip in Orissa. (FE)
Britannia Industries may close some more of its manufacturing facilities and raise prices of its products to offset the rise in input costs. (BS)
Nava Bharat Venture and Maytas Infra led consortium has won the Rs118.14bn Hyderabad Metro Rail project. (FE)
Hindustan Unilever has tied up with a third-party logistics service provider to manage the entire back end distribution chain on behalf of its distributors. (ET)
Dr Reddy`s to form JV for off-patent drugs. (BS)
Infosys plans to cut dependence on the United States to ~40% from more than current 60%. (FE)
Rolta is close to acquiring a Chicago based IT firm for ~US$40-50mn. (ET)
M&M and Renault are discussing the possibility of selling cars made in Renault-Nissan’s manufacturing facility in Chennai through Mahindra-Renault. (ET)
Exide Industries to increase exports from its Sri Lankan subsidiary to India by 15-20% in FY09.
Titagarh plans wagons line expansion by 44% yoy in FY09 to 5,000. (BS)
BSNL is likely to use a portion of the IPO proceeds toward pension funds and training. (ET)
The country’s first mega power project in the private sector built by the O.P. Jindal group to go fully commercial by August 15. (BL)
Electrotherm to compete with high-powered petrol scooters. (BL)
Ashok Leyland to develop new range of trucks by 2012. (BL)
Great Offshore bagged an engineering contract worth Rs2.3bn from ONGC. (BL)
Ranbaxy has entered into an agreement with AstraZeneca Pharmaceuticals to launch an authorised generic of Omeprazole 40 mg capsules in the US.
Bajaj Auto unveiled three variants of Discover bike. (BL)
Kinetic Motor may not sell stake to M&M but may enter into an alliance to cash in on the M&M's huge network and expertise. (ET)
Tatas’ plan to enter into Chinese hospitality sector through the group company Taj International Hong Kong. (FE)
Economic Front Page
Madhya Pradesh government to go slow on mining lease for new investors. (BS)
RBI says that global inflationary pressures likely to remain. (BL)
DoT plans separate 3G policy for CDMA players. (BL)
New EU tariff preferences to benefit Indian gem, jewellery industry. (BL)
The upcoming third generation (3G) policy is likely to hit CDMA players. (ET)
India’s share in global service exports is expected to increase from current 2.7% to 6% by 2012. (ET)
Polluting power companies may have to pay carbon tax. (ET)
Trade deficit on a balance of payments basis has widened from US$63.2bn in 2006-07 to US$90.1bn in 2007-08. (FE)
The Punjab Government plans to spend Rs250bn on over 75 infra projects. (FE)