It is better to conquer yourself than to win a thousand battles. Then the victory is yours.
The war between the bulls and the bears seems to be one-sided for long. Nine nights of Navratri is set to culminate but there are no signs of survival, forget victory for the bulls. Indian financial markets are closed tomorrow on account of Vijaydashami, also known as Dussehra. It is considered an auspicious day to begin new ventures in life. Given the suffering most market players have undergone, one can only pray that things get better on a personal level. Conquer your fear and avoid the temptation of overcoming your losses in a hurry. Today, we expect another weak opening in the face of the sharp cuts across global markets. Lower level buying may set it in. Given Infosys’ results on Friday and other global developments which one has to contend with, it is prudent to avoid carrying any positions.
Sentiment-boosting measures announced by SEBI and the RBI failed to assuage concerns of a deepening financial malaise. Even the Finance Minister's bold and brave proclamation that the Indian economy has nothing to fear, but fear itself, failed to work its magic on the market. He believes that the GDP in the current fiscal will be around 8% and bounce back to 9% next year. However, it remains to be seen if those numbers will be attained in the face of a severe global credit crisis and sharp slowdown in the domestic economy. The IMF and many other economists warn that India will be hit by the current financial tsunami causing unprecedented destruction in the western world. There is no where to run, and nowhere to hide. The worst global financial crisis is underway and it’s anybody's guess how deep and long it will be. There could be considerable pain going ahead as the market desperately looks for some succour and of course a bottom.
As far as India is concerned, there is some encouraging news which says that the tight liquidity situation is likely to ease over the next few weeks. But, the RBI's constant intervention in the currency market and a busy bond auction calendar on the part of the Centre may undo some of that relief. Another positive news is that a few companies that had deferred their IPO plans are now confident enough to re-start the process all over again. Having said that, there is no guarantee that these public issues will get fully subscribed. Some of them may fare badly. Coming to the financial markets, though the liquidity condition is strained, credit offtake remains pretty strong as does the money supply, both of which are running way above the RBI's comfort levels. On top of that, inflation continues to be quite high despite dipping below 12%. The rupee too is under considerable pressure amid relentless selling of Indian stocks by the FIIs. Hence, it will be really tough for the RBI to take a call on cutting interest rates.
US stocks slumped further on Tuesday, declining for a fifth session in a row, as investors found little respite in the Federal Reserve's latest steps to ease frozen credit markets.
Stock benchmarks remained under pressure as minutes from the FOMC's last meeting revealed that rate cuts were discussed at the mid-September gathering, and after Fed chairman Ben Bernanke opened the door for a possible monetary easing soon.
The Fed step to buy commercial paper initially propelled the Dow Jones Industrial Average back above the 10,000 level, breached on Monday for the first time since October 2004.
The S &P 500 Index ended below 1,000 for the first time since 2003, on speculation that banks and real-estate companies are running short of money as the credit crisis worsens.
Bank of America tumbled 26% after cutting its dividend in half and saying it plans to sell $10bn in common stock to brace for a recession. Morgan Stanley, KeyCorp and JPMorgan Chase slid more than 10% as investors shrugged off signs the Fed will reduce interest rates.
General Growth Properties Inc., a mall owner, plunged 42% on concern it won't be able to repay debt.
The S&P 500 slid 60.66 points, or 5.7%, to 996.23, extending its 2008 tumble to 32% in the market's worst yearly slump since 1937. The Dow dropped 508.39 points, or 5.1%, to 9,447.11, giving it a 29% fall in 2008 that would also be the worst in 71 years. The Nasdaq lost 5.8% to 1,754.88.
Fed chief Bernanke's dour economic outlook in an afternoon speech added to the day's weakness. And a report showed consumer borrowing in August fell for the first time since January 1998.
The Fed said it will buy commercial paper, short-term debt that companies use to finance daily operations, from individual companies. Panicky investors have been less willing to buy this kind of debt lately, making it hard for companies to get the money they need to operate.
Credit markets remained tight, but showed some improvement from the previous day. Treasury prices inched lower, with the yields modestly higher. The dollar slumped versus other major currencies. Oil and gold prices gained.
After the close, aluminum maker Alcoa reported weaker quarterly sales and earnings that missed estimates due to a weakening in aluminum prices and demand. The Dow component also suspended its dividend. Alcoa stock fell 6% in extended-hours trading.
Treasury prices dipped, propelling the yields. The benchmark 10-year note fell, lifting the corresponding yield to 3.47% from 3.45% on Monday.
US light crude oil for November delivery settled up $2.25 to $90.06 a barrel on the New York Mercantile Exchange, after ending the previous session at an eight-month low. The price of gasoline decreased for the 20th consecutive day, according to a survey of credit card activity.
COMEX gold for December delivery rallied $15.80 to settle at $882 an ounce. In currency trading, the dollar slipped against the euro after hitting a 14-month high against the European currency on Monday. The dollar also slipped against the yen, giving up earlier gains.
In a hugely volatile session, Europe stocks ended on Tuesday with moderate losses. One day after closing with the worst percentage loss on record, the pan-European Dow Jones Stoxx 600 index closed down 0.4% to 240.55. The index rose as much as 2.5% during the day - and fell up to 1.7%.
The UK's FTSE 100 index rose 0.2% to 4,596.42 and the French CAC-40 index advanced 0.5% to 3,732.22. Germany's DAX 30 index , however, fell 1.1% to 5,326.63.
Among the emerging markets, the Russian RTS index was down 0.95% to 858. Elsewhere, the Bovespa in Brazil was down 4.7% to end at 40,139 while the IPC index in Mexico tumbled 4% to 20,884 and Turkey's ISE National 30 index rose 0.2% to 39,498.
Indian market started the day with a positive gap after a huge cut in the previous trading session. The early spurt could be attributed to the central bank’s decision to cut cash reserve ratio by 50 bps.
Further, market regulator, SEBI’s decision to lift curbs on the issuance of the P-Notes by the FIIs lifted the sentiments on Dalal Street.
However, markets witnessed high volatility throughout the trading session. The benchmark index gyrated 680 points and the Nifty index swung 195 points between their respective high’s and low’s. Finally, the BSE benchmark Sensex ended 106 points lower to close 11,695 and the NSE Nifty index ended flat at 3,606.
Among the 30 components of the Sensex, 16 stocks ended in the red and 14 stocks ended with positive bias. L&T, HDFC Bank, ITC and TCS were among the major laggards. However, among the top gainers were, Reliance Industries, Bharti Airtel and NTPC.
Market breath was very weak, 1,802 stocks declined against 809 advances, while, 70 stocks remained unchanged.
Among the BSE Sectoral indices, BSE Capital Goods index (down 4%), BSE IT index (down 3%), BSE Bankex index (down 2.1%) and BSE Realty index (down 2%). Even the Mid-Cap and the Small-Cap stocks ended with losses. Both the indices lost over 2% each.
However, among the gainers were BSE Oil & Gas index (up 1.3%) and BSE PSU index (up 1%).
Shares of IVRCL Infra came off its day’s low and gained Rs21 after the company announced that it secured a lift irrigation order worth Rs4.99bn. The scrip touched an intra-day high of Rs207 and a low of Rs174 and recorded volumes of over 11,00,000 shares on BSE.
HOV Services surged by over 8% upper circuit at Rs65.4 after the board of directors of the company announced that it would meet on October 08, 2008, to review an offer received from Recap, LLC to purchase; all assets owned by HOV Services, LLC. The scrip touched an intra-day high of Rs66.5 and a low of Rs62.
Shares of Bharti Airtel advanced up by over 2.6% to Rs749 after the company announced that it would launch DTH services on October 9, 2008. The company also said that the TV service would be available in 62 Indian cities. The scrip touched an intra-day high of Rs766 and a low of Rs730 and has recorded volumes of over 11,00,000 shares on BSE.
Hindalco announced that one of the promoter M/s. IGH Holding Pvt. Ltd on October 06, 2008 have acquired 1,968,213 (Nineteen Lacs sixty eight thousands two hundred thirteen) Equity shares of Hindalco Industries Ltd from the Stock Exchanges.
Shares of Hindalco slipped by 1.6% at Rs94 touching an intra-day high of Rs98 and a low of Rs94 and recorded volumes of over 22,00,000 shares on BSE.
Shares of Cambridge Solutions hit 5% upper circuit at Rs65.5 after Xchanging Plc, a U.K. based back-office services provider agreed to acquire 75% of the company for ~US$147mn in stock and cash. The scrip touched an intra-day high of Rs65.5 and a low of Rs65.5 and recorded volumes of over 93,000 shares on BSE.
NTPC sparked up by over 4% to Rs175 after reports stated that Reliance Industries offered an out-of-court settlement to the company to resolve the dispute over gas supply from its Krishna-Godavari gas fields, off the southern India state of Andhra Pradesh. The scrip touched an intra-day high of Rs177 and a low of Rs169 and recorded volumes of over 22,00,000 shares on BSE.
Shares of TTML slipped 1.2% to Rs19.2. According to reports, Quippo Telecom Infrastructure was all set to strike a partnership with the hived-off tower arm of the company. The scrip touched an intra-day high of Rs20.5 and a low of Rs19 and recorded volumes of over 1,200,000 shares on the BSE.