Nothing is as simple as we hope it will be.
Looks like we are in for another volatile week, which is going to be a shorter one, as the markets will be shut on Wednesday on account of Ganesh Chaturthi. The bulls will be hoping that the elephant-headed lord will bring luck to them, having been battered for most of the year so far. Technical and derivative indicators seem to be much more positive than those for the cash segment, which is constantly being bogged down by local and global issues. The market will be under pressure at the start of trading today following the sharp fall in US shares on Friday and weak beginning across Asian markets. With nearly no local triggers to bank on this week (barring the second NSG meet on Thursday) the market's direction will hinge on global factors. Taking a medium to long-term call is fraught with risks given the high level of uncertainty over local as well as global factors. Instead, one should focus on daily or weekly outlook and trade accordingly.
Major events to keep a eye on this week will be the legal tussle between the Ambani brothers. There are reports that the two siblings may settle their long-standing dispute over gas supply out of the court. This is still very much in the realm of speculation, and there is as yet no official confirmation of the same from either of the Ambani camps. Another big-ticket development will be the impending pullout of the Tatas, unless of course Mamata Banerjee decides to relent. Tata Motors will also decide on the terms of the now curtailed rights issue on September 2.
A waiver from NSG for India (perhaps with some riders) may temporarily boost sentiment, particularly the companies that stand to gain from the Indo-US deal. The immediate concern is the potential threat to the US oil and refining facilities in the Gulf of Mexico from Hurricane Gustav. Crude oil will continue to have a bearing on movements across global equity markets.
It's tough to say whether inflation and interest rates have peaked out, and how deep is the slowdown in economic growth. One can say the same for the health of the US and other major global economies, as also for the financial turmoil currently underway. Liquidity is very low and FIIs still appear to be negative on India. As a result, the market will remain volatile amid lack of a clear trend. One should adopt a wait and watch strategy, as global and local fundamentals are still fragile.
Airlines will be in focus as public sector oil companies have slashed the ATF prices by 16%. Reports suggest that none of the airlines are ready to cut air fares as they are still suffering badly. Auto and cement companies will hog the limelight as they release their monthly sales figures. Auto sales are expected to be under pressure. Resurgere Mines & Minerals will make its debut today. Its IPO was subscribed just 1.2 times. The issue price is Rs 270 per share.
FIIs were net sellers of Rs3.65bn (provisional) in the cash segment on Friday. Local institutions were net buyers of Rs2.8bn. In the F&O segment, the foreign funds were net buyers of Rs15.85bn. On Thursday, the foreign funds were net buyers of Rs1.4bn in the cash segment.
Asian stocks fell the most in almost two weeks, led by automakers and technology companies, on renewed concern that faltering US economic growth will hurt demand for the region's exports.
The MSCI Asia Pacific Index slipped 1.2% to 123.85 at 10:07 a.m. in Tokyo, poised for its largest drop since Aug. 19. All 10 industry groups retreated, with a measure including automakers posting the largest drop.
Japan's Nikkei 225 Stock Average fell 1.3% to 12,909.97. Stock indexes also declined elsewhere in Asia and Australia. Malaysia and Vietnam are closed today for holidays.
US stocks tumbled on Friday in the wake of PC major Dell's disappointing earnings, a big drop in personal income and weakness in consumer spending. Anxiety over the impact of hurricane Gustav on oil prices also unnerved investors ahead of the extended weekend.
After three straight sessions of gains, the Dow Jones Industrial Average dived 171.22 points, or 1.5%, to end at 11,543.96. The S&P 500 index slid 17.84 points, or 1.4%, to close at 1,282.84. The Nasdaq Composite Index plunged 44.12 points, or 1.8%, to 2,367.52.
All of the Dow's 30 components closed in the red. Technology paced the declines among the 10 industry groups in the S&P 500 index, down 1.9%.
Market breadth was negative while trading volume was light with many market participants leaving for home early ahead of the three-day holiday weekend. All US financial markets will be closed on Monday for a Labor Day holiday.
Trading volume had set new lows for the year for five straight days before yesterday.
The Dow was down 0.7% on the week but managed a modest monthly gain of 1.5%. The S&P fell 0.7% on the week but gained 1.2% in August. The technology-laden Nasdaq dropped 2% in the week but was up 1.8% for the month.
August is only the third up month for the S&P 500 since October of last year, when it hit an all-time high of 1565.15.
Bond insurer MBIA was the biggest S&P 500 gainer in the month, rising nearly 173%, while Fannie Mae and Freddie Mac were the two biggest losers, falling 40.5% and 45% respectively.
AMD was the second biggest gainer, rising 49%, while a slew of retailers were in the top 20, bouncing back thanks in part to the impact of government stimulus package. JC Penney, Limited Brands, Dillard's and the Gap all gained 20% in August.
Friday brought encouraging readings on the economy, including a spike in a key regional manufacturing index, the Chicago PMI, and improvement in the University of Michigan's consumer sentiment index for August.
But these reports were overshadowed by the other downbeat data.
Personal income plunged in July as the impact of the USUS$90bn economic stimulus plan tapered off. The drop was the biggest monthly decline in nearly three years. But personal spending rose in line with expectations, due to higher prices.
Shares of Dell tumbled 13.8% after the PC maker reported a 17% drop in profit as margins were hurt by efforts to build out its consumer products and overseas markets. The company said that continued conservatism from some US customers is spreading to western Europe and some Asian countries.
Microsoft Corp. said that it was going to acquire Web-based survey company Greenfield Online for US$486mn in cash, or US$17.50 a share. That tops a previous bid by buyout firm Quadrangle of US$15.50 a share.
Potential threat to oil production facilities in the Gulf of Mexico from Tropical Storm Gustav cast its shadow over Wall Street. Gustav is expected to make landfall in the Gulf of Mexico on Tuesday. Oil facilities in the gulf are responsible for about 25% of US oil production.
US oil for October delivery hit US$118.76 per barrel on the New York Mercantile Exchange, before retreating to close at US$115.49, a decline of 10 cents. Prices have been rising of late after tumbling more than 20% off record highs of over US$147 a barrel hit in mid-July.
Retail gas prices rose overnight for the first time in more than a month, according to a survey of gas station credit-card activity. Gas prices are down nearly 11% from all-time highs hit in mid-July, but remain 33% above last summer's levels.
In the bond market, Treasury prices fell, raising the yield on the benchmark 10-year note to 3.82% from 3.78% late on Thursday. The dollar rose versus the euro and fell against the yen. COMEX gold for November delivery fell US$2 to settle at US$833.20 an ounce.
European shares ended Friday, the week and the month with gains. The Dow Jones Stoxx 600 index climbed 0.3% to 288.18. The pan-European stock-market index logged a weekly gain of about 1.5%. The Stoxx 600 closed out a low-volume August with a rise of just over 3%. UK's FTSE 100 traded 0.6% higher at 5,636.60 and Germany's DAX 30 rose slightly to 6,422.30. A 7% rally in shares of retail major Carrefour sent the French CAC-40 up 0.5% at 4,482.60.
In the emerging markets, Brazil's Bovespa was up 1.2% at 55,680 while Mexico's IPC index gave back 0.6% to 26,290. The RTS index in Russia dropped 0.5% to 1646 and the ISE National-30 index in Turkey was down 0.9% to 49,256Market may continue momentum
Indian market ended with healthy gains as bulls put on a stellar show on Friday. A surprising decline in inflation figures, inline GDP numbers and firm global cues lifted the sentiments on Dalal Street. All round buying was witnessed in scrip’s across the sectors which saw the benchmark BSE Sensex and the NSE Nifty index to close above the 14,500 and 4,350 mark respectively.
All the BSE Sectoral indices ended in the green, the BSE Bankex index (up 6.2%), BSE Realty index (up 4.7%) and BSE Metal index (up 3.5%) were among the top gainers. Even the Mid-Cap and the Small-Cap indexes attracted buying, the BSE Mid-Cap index rose 2.4% and the Small-Cap index gained 1.5%.
Shares of Ispat Industries surged by over 4.5% to Rs25 after reports stated that the company is planning to invest Rs32bn for setting up a coke plant, pellet plant and power plant at the company’s Dolvi complex. The scrip touched an intra-day high of Rs25.2 and a low of Rs24.2 and recorded volumes of over 75,00,000 shares on NSE.
Shares of BHEL rallied by over 5% to Rs1702 after the company announced that it won an Rs11.55 order from GVK Power & Infrastructure Ltd. Two coal-based units each generating 270 megawatts of electricity will be supplied to GVK's Goindwal Sahib Power
Project in Punjab, announced the company. The scrip touched an intra-day high of Rs1721 and a low of Rs1652 and recorded volumes of over 3,00,000 shares on NSE.
Shares of Gammon Infrastructure gained 1.1% to Rs94 after the company announced that it secured letter of allotment for a Project worth Rs8bn for designing, constructing, financing, operating and maintaining on BOT basis a major bridge across the river Godavari connecting Rajahmundry and Kovvur in Andhra Pradesh. The scrip touched an intra-day high of Rs110 and a low of Rs92 and recorded volumes of over 1,00,000 shares on NSE.
MRF advanced by 1.8% to Rs3575. According to reports, the company is awaiting the approval of the Ministry of Defense, expects Government to provide financial assistance. The scrip touched an intra-day high of Rs3575 and a low of Rs3493 and recorded volumes of over 2,000 shares on NSE.
Shares of Reliance Capital surged by over 3% to Rs2136 after the company announced that it launched operations in the UK and Ireland to tap the Indians living in Europe, stated reports. The scrip touched an intra-day high of Rs2143 and a low of Rs2075 and recorded volumes of over 7,00,000 shares on NSE.
Shares of Bharti Airtel gained by over 4% to Rs837 after reports stated that the company plans to roll-out IPTV and DTH service simultaneously before this year end. The scrip touched an intra-day high of Rs843 and a low of Rs806 and recorded volumes of over 10,00,000 shares on NSE.
Union finance ministry advises GAIL and NTPC to infuse additional equity of Rs4.8bn each in the Dabhol power project.(FE)
ONGC may rope in Rosneft Oil Company of Russia as its local partner in Imperial Energy in case of a successful acquisition.(BL)
BSNL announces it would launch 3G services across the country by the end of this year.(DNA)
ONGC may acquire five onshore blocks spread over 16,500 sq.km in West Bengal.(BS)
Shyam Telecom is the first of the new telecom players to get pan-India spectrum for launching mobile services.(ET)
Gammon Infrastructure receives a Rs8bn bridge construction project from Andhra Pradesh government.(BL)
Ispat Industries has floated a company to start iron ore mining in Brazil.(ET)
Reliance Industries to start production at KG Basin in a few months. (BS)
Dishman Pharma to invest Rs5bn in the next two years on developing two SEZs.(BL)
SAIL may go in for ECBs to fund equipment imports for its ongoing expansion plans.(BS)
Alok Industries in talks with PE firms to raise Rs3bn for a 25% stake in its real estate development project in Mumbai.(Mint)
Reliance Industries scraps its plans to transfer 80% stake in D-6 block in KG Basin gas field, to its subsidiaries.(ET)
Idea Cellular has earmarked Rs8bn from its IPO proceeds for acquisitions and expansions.(BS)
NMDC plans to invest Rs230bn in next six years on various projects including setting up a greenfield steel plant.(BL)
Reliance Industries receives an US$400mn loan guarantee approved by the EXIM Bank of the US.(TOI)
UTI Mutual Fund plans to rope in strategic investors without diluting the majority stake of promoters; IPO likely to be delayed.(Mint)
Tata Motors to decide price for its proposed Rs42bn rights issue on September 2.(TOI)
Gammon India plans to consolidate all its real estate projects under Gammon Realty, which it plans to list on bourses.(Mint)
Dr Reddy’s facing significant pressure on its business in Germany as regulations and growing competition drive down prices.(DNA)
Ranbaxy Laboratories loses a patent case against Pfizer in Denmark which involves selling of Lipitor.(BS)
BHEL receives an Rs11bn contract from GVK Power for setting up 2x270MW electricity generating units.(ET)
Heavy Engineering Corporation and BHEL to sign a MoU for a proposed joint venture.(FE)
West Bengal government grants SEZ status to JSW Bengal Steel promoted by the Sajjan Jindal group.(FE)
Steel pipe maker PSL set to diversify in to SEZ development.(BL)
Larsen & Toubro will raise US$400mn from overseas market to fund its new business.(BS)
ONGC firms up plan for North Tapti offshore field.(BL)
DoT to sign an agreement with BSNL for providing village telephones to the newly identified 50,000 villages in census 2001.(ET)
Tata Steel is looking at acquiring iron ore deposits in Laos.(BS)
Satyam Computers pursuing four acquisition opportunities; all deals in the US$50mn plus range.(BL)
Government asks Bharti group to seek FIPB approval for its upcoming DTH services.(FE)
Indian Oil Corp and Oil India combine on the look out for partners to participate in the next bidding round for oil & gas exploratory assets in Australia.(BL)
Hindalco hires ten banks to arrange for an US$1bn loan to refinance its debt.(BS)
Shriram Properties proposes to float a separate division to develop malls. (ET)
ADAG subsidiary Global Wind Energy to manufacture wind farm equipment. (BS)
Reliance Retail plans 200 wholesale stores by March 2009.(Mint)
Deccan airlines to be renamed ‘Kingfisher Red’.(DNA)
Many foreign companies seek presence in Dishman Pharma group’s pharmaceutical and chemical SEZ.(BS)
Havells India plans to spend Rs500mn on R&D.(BL)
Government to set up new company to warehouse the shares of Larsen &Toubro and ITC. (ET)
Essar group on look out for iron ore, coal mines in India, abroad.(Mint)
FIPB clears Rs1bn FDI proposal of JP Morgan.(FE)
GAIL completes the pipeline to transport gas from KG Basin.(ET)
SBI to offer US$1bn to Tata Power to help it acquire Senoko Power, Singapore’s largest power utility.(ET)
Hyundai Motor India developing a model in the 800cc segment which would be rolled out in the next three to four years.(DNA)
Economy Front page
Union finance ministry advises GAIL and NTPC to infuse additional equity of Rs4.8bn each in the Dabhol power project.(FE)
ONGC may rope in Rosneft Oil Company of Russia as its local partner in Imperial Energy in case of a successful acquisition.(BL)
BSNL announces it would launch 3G services across the country by the end of this year.(DNA)
ONGC may acquire five onshore blocks spread over 16,500 sq.km in West Bengal.(BS)
Shyam Telecom is the first of the new telecom players to get pan-India spectrum for launching mobile services.(ET)
Gammon Infrastructure receives a Rs8bn bridge construction project from Andhra Pradesh government.(BL)
Ispat Industries has floated a company to start iron ore mining in Brazil.(ET)
Reliance Industries to start production at KG Basin in a few months. (BS)
Dishman Pharma to invest Rs5bn in the next two years on developing two SEZs.(BL)
SAIL may go in for ECBs to fund equipment imports for its ongoing expansion plans.(BS)
Alok Industries in talks with PE firms to raise Rs3bn for a 25% stake in its real estate development project in Mumbai.(Mint)
Reliance Industries scraps its plans to transfer 80% stake in D-6 block in KG Basin gas field, to its subsidiaries.(ET)
Idea Cellular has earmarked Rs8bn from its IPO proceeds for acquisitions and expansions.(BS)
NMDC plans to invest Rs230bn in next six years on various projects including setting up a greenfield steel plant.(BL)
Reliance Industries receives an US$400mn loan guarantee approved by the EXIM Bank of the US.(TOI)
UTI Mutual Fund plans to rope in strategic investors without diluting the majority stake of promoters; IPO likely to be delayed.(Mint)
Tata Motors to decide price for its proposed Rs42bn rights issue on September 2.(TOI)
Gammon India plans to consolidate all its real estate projects under Gammon Realty, which it plans to list on bourses.(Mint)
Dr Reddy’s facing significant pressure on its business in Germany as regulations and growing competition drive down prices.(DNA)
Ranbaxy Laboratories loses a patent case against Pfizer in Denmark which involves selling of Lipitor.(BS)
BHEL receives an Rs11bn contract from GVK Power for setting up 2x270MW electricity generating units.(ET)
Heavy Engineering Corporation and BHEL to sign a MoU for a proposed joint venture.(FE)
West Bengal government grants SEZ status to JSW Bengal Steel promoted by the Sajjan Jindal group.(FE)
Steel pipe maker PSL set to diversify in to SEZ development.(BL)
Larsen & Toubro will raise US$400mn from overseas market to fund its new business.(BS)
ONGC firms up plan for North Tapti offshore field.(BL)
DoT to sign an agreement with BSNL for providing village telephones to the newly identified 50,000 villages in census 2001.(ET)
Tata Steel is looking at acquiring iron ore deposits in Laos.(BS)
Satyam Computers pursuing four acquisition opportunities; all deals in the US$50mn plus range.(BL)
Government asks Bharti group to seek FIPB approval for its upcoming DTH services.(FE)
Indian Oil Corp and Oil India combine on the look out for partners to participate in the next bidding round for oil & gas exploratory assets in Australia.(BL)
Hindalco hires ten banks to arrange for an US$1bn loan to refinance its debt.(BS)
Shriram Properties proposes to float a separate division to develop malls. (ET)
ADAG subsidiary Global Wind Energy to manufacture wind farm equipment. (BS)
Reliance Retail plans 200 wholesale stores by March 2009.(Mint)
Deccan airlines to be renamed ‘Kingfisher Red’.(DNA)
Many foreign companies seek presence in Dishman Pharma group’s pharmaceutical and chemical SEZ.(BS)
Havells India plans to spend Rs500mn on R&D.(BL)
Government to set up new company to warehouse the shares of Larsen &Toubro and ITC. (ET)
Essar group on look out for iron ore, coal mines in India, abroad.(Mint)
FIPB clears Rs1bn FDI proposal of JP Morgan.(FE)
GAIL completes the pipeline to transport gas from KG Basin.(ET)
SBI to offer US$1bn to Tata Power to help it acquire Senoko Power, Singapore’s largest power utility.(ET)
Hyundai Motor India developing a model in the 800cc segment which would be rolled out in the next three to four years.(DNA)