The nice thing about standards is that there are so many of them to choose from.
The government has expressed displeasure at Fitch’s recent ratings. But they better be prepared for further downgrades in the coming weeks. Don’t want to sound extra cautious on a day markets may remain positive. But one hears of headwinds now more often than anything else. For a change we are set to see some greenery in the market. The tailwinds this time are crashing oil prices and rising global equities. Nothing has really changed overnight except for some reports and assurances here and there.
Like we saw Ranbaxy recovering after a clarification so are the Fannies and Freddies of the world having fun as they were helped by Fed comments. They moved up around 30% as Bernanke said they are in no danger of failing. Of course the Fed may have said many things in the past which we would not like to revisit. But like they say, no harm in enjoying a fine day. Wells Fargo jumped the most since at least 1980 after reporting profit of 53 cents a share and record revenue of $11.5 billion, leading the S&P 500 Financials Index to a record 12% jump.
Back to our market, no more inflation Friday noon’s to worry about. Given the accuracy of the leaks, the information now will be available to everyone at 5pm on Thursdays. But don’t be surprised if the expectations start floating around during the last half an hour today.
After shedding over 1,400 points in the last five trading sessions a green opening with a gap is a welcome sign. FIIs remain on the sidelines. The overseas investors have to resume their shopping spree. That may take a while to happen as macroeconomic fundamentals continue to remain weak. Inflation numbers will be declared at 5pm on Thursdays starting today. This will avoid the Friday noon volatility. Oil marketing companies could be in the limelight following the fall in crude prices.
Courage or conviction is nowhere around. Profit booking at higher levels may come in sooner than one expects. This time there is a carrot called confidence vote which may allow people to extend their long positions hoping to strike oil. That reminds us oil came crashing again. In fact it has fallen around $10 in two days and don’t be surprised if you hear the I’d told you so about this till it spurts again.
The US government's weekly inventory report indicates record high gasoline prices may be reducing US energy consumption. OPEC on Tuesday released a report which more or less shows that global demand for 2009 would be less than it was in 2008. Doesn’t take really long to write another report though!
Light sweet crude oil for August delivery closed at $134.60 a barrel, down $4.14 on the New York Mercantile Exchange.
After all the battering in recent times, US stocks improved their standards. The Dow Jones gained 277 points to close 2.5% higher. This was one of the largest one-day increases in the Dow since April 1 (this year). Of course this rally is after closing at its lowest level since July 21, 2006 on Tuesday. So nothing to get overexcited about.
The Standard & Poor's 500 added 2.5% as it bounced back from its lowest close since Nov. 2, 2005. The Nasdaq was up 3.1%. The US indices were choppy at start following a CPI (Consumer Price Index) report, which zoomed beyond 5% in the past year. This was the biggest annual jump in over 17 years.
Asian stocks are in the green for the first time this week. Japan's Nikkei is up over a percent around the 12,900 levels.
In currency trading, the dollar bounced back after setting an all-time low versus the euro Tuesday and slipping to a $2 level against the British pound.
The government’s plans to put a price band to check steel prices could see pressure on the steel companies. Meanwhile a report states that steel companies may hike prices after the three-month freeze ending August 7.
While markets speculate Citi’s stake in HDFC is up for sale, Deepak Parekh, Chairman, HDFC, has clarified that he is not aware of any plan that Citi may sell its stake.
It was another bad day for Indian bourses on Wednesday. Market extended loses to fifth straight trading session as bulls were unable to hold on to early gains.
Markets started off the day on a positive note, shrugging off weak cues from the US and the Asian markets. However, as the day progressed markets erased early gains as bears took over after benchmark index hit an intra-day high of 12,935. From there on markets showed no signs of recovery till the last hour of the trading session to close below previous day’s close.
Finally the Sensex lost 100 points to close at 12,575 and the Nifty was down 44 points to close at 3,816.
Ranbaxy Labs was the talk of the day as the stock staged a sharp rally on Wednesday after the company announced the agreement with Daiichi Sankyo Co. is binding and it’s on track. Ranbaxy is continuing to seek approvals to take the transaction forward.
Daiichi Sankyo Co earlier had agreed to buy 34.8% stake of Ranbaxy Laboratories, and a portion of about US$1bn of preferential stock. The Japanese drugmaker also have to offer to buy a further 20% from shareholders, under the Indian takeover rules.
The stock finally surged 15% to close at Rs470 hitting an intra-day high of Rs476 and a low of Rs417 recording volumes of over 1,00,00,000 shares on NSE.
PFC surged by 6.5% to Rs114 after the company announced its Q1 results. The company posted an increase in total income increased from Rs11.458bn for the quarter ended June 30, 2007 to Rs14.416bn (up 25%) for the quarter ended June 30, 2008. However, net profit was at Rs2.97bn for the quarter ended June 30, 2008 (down 4%) as compared to Rs3.09bn for the quarter ended June 30, 2007.
The scrip touched an intra-day high of Rs114 and a low of Rs105 and recorded volumes of over 7,00,000 shares on NSE.
TTML declined by over 5.5% to Rs22 after the company announced its Q1 results with a net loss of Rs347.154mn for the quarter ended June 30, 2008 as compared to net loss of Rs284.288mn for the quarter ended June 30, 2007.The total income increased from Rs4096.012mn for the quarter ended June 30, 2007 to Rs5048.928mn for the quarter ended June 30, 2008.
The scrip touched an intra-day high of Rs24 and a low of Rs21 and recorded volumes of over 37,00,000 shares on NSE.
Shares of ZF Steering Gear dropped from its high and finally ended at Rs136 down 4.7%. The stock had surged by over 8% to Rs165 the most in almost 14 months after ~10% of its equity shares changed hands in a single transaction. The stock had hit an 52-week high of Rs252.95 on July 17, 2007 and 52-week low of Rs125 on July 16, 2008.
Shares of EPIC Energy slipped 1.4 percent to Rs141. The company announced the acquisition of Sathian Sun Power Systems, (Sathian), a Salem, Tamil Nadu based solar energy products company.
This acquisition would help Epic to execute similar projects in other States, where it has a substantial presence. Epic operates in Maharashtra, Gujarat, Andhra Pradesh, Kerala, Karnataka, Tamil Nadu, Uttar Pradesh, Chhattisgarh and Rajasthan. The scrip touched an intra-day high of Rs150 and a low of Rs140 and recorded volumes of over 1,00,000 shares on NSE.
Parsvnath declined by 4.5% to Rs103 after the company announced that it acquired 38% stake in Nano City project in Haryana. The company also said that it would invest RsUS$100mn through equity, debt. The scrip touched an intra-day high of Rs111 and a low of Rs99 and recorded volumes of over 9,00,000 shares on NSE.
Shares of BGR Energy rallied by over 13% to close at Rs247 after the company announced that the power projects division of the company has secured a contract from Rajasthan Rajya Vidyut Utpadan Nigam Ltd ("RRVUNL"), Rajasthan for the 2 x 600MW Kalisindh Thermal Power Project. The contract value is Rs49bn and will be executed over 39 months for Unit - I and 42 months for Unit - II.
The scrip touched an intra-day high of Rs258 and a low of Rs216 and recorded volumes of over 12,00,000 shares on NSE.Sterlite plans to raise up to US$1.6bn loan. (Mint)
M&M to buy a major portion of two-wheeler maker Kinetic Motor Company's assets in a deal valued at Rs1.1-1.2bn. (BS)
Deccan aviation to convert from a low-cost airline into a value carrier. (ET)
Thermax bags Rs8.2bn boiler order to supply boilers for the captive co-generation plant. (FE)
Renault-Nissan JV may form an alliance with Bajaj Auto for production of e-vehicles. (ET)
ONGC plans to relinquish the Barmer-Sanchor CBM (coal bed methane) block it now jointly holds with Gujarat State Petroleum Corporation. (BL)
HCL Tech buys UK BPO firm Liberata Financial Services (LFS) for US$2mn. (ET)
Citigroup and Warburg may pick up 15% stake in Ansal API dadri project. (ET)
Parsvnath picked up 38% stake in Nano City project. (BL)
Unitech raises US$300mn abroad for its global property fund. (BS)
Ginger hotels to invest Rs1bn to add six new hotels in CY08. (ET)
Titan to venture into eyewear segment with launch of Titan Eye Plus. (ET)
MP government and IL&FS to sign Rs200bn deal on making the state a heavy power equipment manufacturing hub. (BS)
Ranbaxy Laboratories said that the probe by the US Department of Justice will not jeopardise its deal with Japanese pharmaceutical company Daiichi Sankyo. (BL)
Reliance Retail to open 50-60 i-stores across the country in the current fiscal. (ET)
Jet Airways to pull out from BKC deal. (ET)
GSPC discovers gas reserves in KG Basin. (ET)
NMDC seeks higher prices for iron ore export on account of soaring input cost. (ET)
SCI to receive navratna status.
BGR Energy Ltd received Rs50.2bn contract from Rajasthan Vidyut Utpadan Nigam Ltd, the electricity generation company of Rajasthan’s electricity Board. (BL)
BHEL has bagged Rs1.6bn order from a UAE firm for supply of two gas turbine generating units. (BL)
Nagarjuna Construction to invest up to Rs5bn in airports and ports. (BL)
IOB to raise Rs4bn Tier II capital. (BL)
TRF Ltd won Rs4.1bn turnkey order from Damodar Valley Corporation. (BL)
Bank of Baroda plans to add 91 new branches by September. (FE)
Gitanjali to invest US$16mn for setting up watch manufacturing unit and retail outlets. (FE)
Economic Front Page
India`s outward FDI was up 29.6% at US$17.4bn in FY08. (BS)
DOT may put a lock-in period to restrict start-up telecom companies to sell a majority stake. (ET)
India plans to build eight 700MW nuclear plants. (Mint)
The Kerala government completed the land acquisition process for the International Container Transshipment Terminal (ICTT) project at Vallarpadam. (BS)
Government to raise cap on professional tax to Rs75bn from current Rs25bn. (ET)
Mr Kamal Nath clarified that the EoU status will not be withdrawn. (BL)
The Centre plans to make additional free sale quota (FSQ) releases in order to calm down prices. (BL)
Delhi-Mumbai dedicated rail freight corridor to be ready by 2013. (ET)
DOT has deferred to finalise the one-time spectrum charges for GSM operator holding spectrum beyond 6.2MHz limits. (ET)
TRAI has given its nod to DOT on a proposal to increase spectrum usage charges by 1% of adjusted gross revenue. (FE)