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Thursday, February 14, 2008
Post Market Commentary - Feb 14 2008
The market closed with handsome gains by creating a rally across the sectoral indices. The market opened on a firm note taking the strong favoring cues from the global markets i.e. an unexpected rise in US retail sales in Janurary 2008 that gave a boost to the domestic market. In the domestic front, the central government approved the proposal for a hike in retail fuel prices i.e. Rs 2 per litre for petrol while Re 1 for diesel. The Small Cap and Mid Cap also joined the rally with the benchmark indices to post strong gains. From the sectoral front, CG, Oil & Gas and Metal remained the centre of attraction as most buying was seen from these counters. The BSE Sensex closed higher by 817.49 points at 17,766.63 and NSE Nifty grew by 272.55 points to close at 5,202. The BSE Mid Cap and Small Cap closed up by 377.19 points and 358.06 points at 7,452.72 and 9,407.76 respectively.
BSE CG grew by 1,140.36 points to close at 16,282.17. Gainers are Praj Inds (14.42%), BHEL (12.63%), Punj Lloyd (10.52%), Suzlon Ener (7.83%), L&T (7.03%), Seimens (5.90%).
BSE Metal index surged 847.58 points to close at 15,621.89 as Jindal Stainless (10.72%), Jindal Steel (10.21%), Hindalco Inds (9.20%), Bhushan Steel (9.11%) closed higher.
BSE Oil & Gas index advanced by 755.38 points to close at 10,932.36. Scrips that gained are Essar Oil (16.21%), HPCL (14.81%), IOCL (13.83%), RPL (13.56%) and BPCL (10.86%).
BSE Realty index grew by 714.66 points to close at 10,143.55 as Ansal Infra (15.73%), Phoenix mill (11.22%), Unitech (10.28%), Indbul Real (8.86%), Omaxe (8.01%) closed in green.
BSE Bankex index closed higher by 471.02 points at 10,614.09. Gainers are IOB (7.67%), Union bank (6.81%), Yes bank (6.29%), Allahabad bank (5.96%), ICICI bank (5.74%).
BSE Power index increased by 280.58 points at 3,729.16 as GMR Infra (12.41%), Reliance Ener (9.63%), Crompton Greaves (9.79%), Torrent Power (7.33%).
Sensex rallies on buoyant overseas markets
The market held firm above the 17,450 level for almost the entire trading session, as strong US and Asian markets created a perfect platform for investors. After registering a gain of 341 points yesterday, the market resumed with a huge positive gap of 316 points at 17,265. The Sensex quickly moved up on sustained buying in realty, power, oil and capital goods stocks and the index touched the day's high of 17,838 towards the close. The Sensex finally ended the session at 17,767, up 817 points. The broad-based Nifty ended the session at 5,202, up 573 points.
Among the sectoral indices, the power index led the upsurge on the Bombay Stock Exchange (BSE) with gains of 8.14% at 3,729 followed by the BSE Realty index (up 7.58% at 10,144), the BSE PSU index (up 7.55% at 8,352), the BSE CG index (up 7.53% at 16,282) and the BSE Oil & Gas index (up 7.42% at 10,932). The market breadth was extremely positive. Of the 2,794 stocks traded on the BSE, 2,068 stocks advanced, 684 stocks declined and 42 stocks ended unchanged.
Out of the 30 Sensex stocks, 29 managed to end in the green. BHEL was the leading gainer and soared 12.63% at Rs2,232. Reliance Energy jumped 9.63% at Rs1,708, Reliance Communications shot up by 9.26% at Rs610, Hindalco advanced 9.20% at Rs164, ONGC moved up by 8.66% at Rs1,026, L&T added 7.03% at Rs3,507 and NTPC gained 6.84% at Rs201. However, Infosys slipped marginally at Rs1,547.
Over 2.67 crore Reliance Natural Resources shares changed hands on the BSE followed by Jaiprakash Associates (1.86 crore shares), Reliance Petroleum ( 1.46 crore shares), Ispat Industries ( 1.13 crore shares) and Nagarjuna Fertilisers (1.05 crore shares).
Jaiprakash Associates registered a turnover of Rs501 crore on the BSE followed by RNRL (Rs339 crore), Reliance Power (Rs303 crore), Reliance Capital (Rs237 crore) and Reliance Petroleum (Rs230 crore).
Sensex vaults 817 points as global markets rally
Strong global cues set up a solid platform for Indian market to surge today. The rally in global markets was triggered by an unexpected rise in US retail sales in January 2008 that helped ease recession worries in the world's largest economy.
Capital goods and power stocks were in demand. Oil and gas stocks perked up on reports the Indian government has raised retail fuel prices to ease losses at state-run oil marketing firms. 29 out of 30 stocks from the Sensex pack gained. The market breadth was strong.
European markets, which opened after Indian market, were trading firm. Asian markets, which opened before Indian market, ended on a firm note.
The 30-share BSE Sensex rose 817.49 points or 4.82% at 17,766.63, recording its fourth biggest rise in percentage terms. Sensex’s rally of 817.49 points today is its fifth biggest single day rise in point terms.
Sensex gained 888.94 points at the day's high of 17,838.08, at the fag end of the trade. Sensex was up 316.05 points at the day's low of 17,265.19, hit in opening trade.
The biggest single day gain in Sensex in both point terms and percentage terms was registered on 25 January 2008, when the barometer index had risen 1139.92 points or 6.62% to 18361.66.
The broader CNX S&P Nifty rose 272.55 points or 5.53% at 5202.
The BSE Mid-Cap index outperformed the Sensex, rising 5.33% to 7,452.72. The BSE Small-Cap underperformed the Sensex, rising 3.96% to 9,407.76.
The market breadth was quite strong: On BSE, 2057 advanced as compared to 697 that declined. 41 stocks remained unchanged.
BSE clocked a turnover of Rs 5714 crore compared to Rs 5,818.88 crore on Wednesday, 13 February 2008.
The Nifty February 2008 futures were at 5187, at a discount of 15 points as compared to the spot closing of 4929.45.
The NSE's futures & options (F&O) segment turnover was Rs 37973.36 crore, which was higher than Rs 37555.25 crore on Wednesday, 13 February 2008.
India's biggest power equipment maker in terms of revenue Bharat Heavy Electricals surged 12.63% to Rs 2232 after it won a Rs 200-crore contract for supplying oil field equipment to Oil & Natural Gas Corporation.
India’s largest private sector firm by market capitalization and oil refiner Reliance Industries rose 5.35% at Rs 2514.70.
The BSE Capital Goods index rose 7.53% to 16,282.17. Larsen & Toubro spurted 7.03% to Rs 3,507.15, Praj Industries surged 14.42% to Rs 168.25, Crompton Greaves moved up 9.79% to Rs 307.80 and Suzlon Energy rose 7.83% to Rs 338.15.
Engineering and construction firm Punj Lloyd flared up 10.52% to Rs 366.50. Sembawang Engineers and Constructors, a unit of Punj Lloyd, has bagged a Singapore dollar 400 million contract to build part of the Marina Bay Sands integrated resort in Singapore.
The BSE Power index rose 8.14% to 3,729.16. It outperformed the Sensex. GMR Infrastructure surged 12.41% to Rs 165.75, Reliance Energy soared 9.63% to Rs 1,708.15, Power Grid Corporation of India moved up 8.71% to Rs 103, Torrent Power moved up 7.33% to Rs 146.50, NTPC flared up 6.84% to Rs 200.75 and Tata Power climbed 5.12% to Rs 1,275.80.
Oil refinery and marketing stocks surged on reports the government has raised prices of petrol and diesel by Rs 2 per litre and Rs 1 per litre respectively effective Thursday, 14 February 2008 midnight.
The BSE Oil & Gas index was up 7.42% at 10,932.36. It outperformed the Sensex. HPCL soared 14.81% to Rs 297.60, Indian Oil Corporation jumped 13.83% to Rs 536.75, BPCL rose 10.86% to Rs 465, Mangalore Refineries & Petrochemicals (MRPL) climbed 8.23% to Rs 86.75, Chennai Petroleum moved up 6.72% to Rs 295.55 and Bongaigaon Refinery and Petrochemicals rose 8.22% to Rs 63.20.
The BSE Bankex rose 4.64% to 10,614.09. It underperformed the Sensex. ICICI Bank spurted 5.74% to Rs 1,162.35, Indian Overseas Bank soared 7.67% to Rs 176.20, Union Bank of India flared up 6.81% to Rs 196.80, HDFC Bank moved up 4.91% to Rs 1,539.10 and State Bank of India rose 4.17% to Rs 2,205.15.
The BSE IT index rose 0.94% to 3,843.50. It underperformed the Sensex. Wipro moved up 1.41% to Rs 415.75, Satyam Computer gained 1.31% to Rs 438.40 and TCS rose 0.60% to Rs 874.15. However, Infosys Technologies fell 0.12% to Rs 1547.30.
Essar Oil (up 16.21% to Rs 214), Reliance Petroleum (up 13.56% to Rs 164.55), Steel Authority of India (up 7.57% to Rs 213.75), Centurion Bank of Punjab (up 2.59% to Rs 49.45), advanced on reports of their inclusion in a number of Morgan Stanley Capital International (MSCI) indices. The inclusion of these firms in the MSCI gauges may increase demand for these stocks by fund managers whose funds track the indices.
Anil Dhirubhai Ambani Group firm Reliance Power rose 5.31% to Rs 370.05 on volume of 82.93 lakh shares on BSE. On Monday, 11 February 2008, the stock had debuted at Rs 547.80, a premium of Rs 21.73% over the IPO price of Rs 450.
Jewellery manufacturer Renaissance Jewellery jumped 9.28% to Rs 96.60 after the company said it bought a New York-based jewellery wholesaler, JBR Inc, though its unit Renaissance Jewelry New York, Inc. for an undisclosed sum.
State run oil & gas supplier GAIL India rose 3.23% to Rs 410.90 after the company signed an initial deal with Russian gas producer ITERA to jointly develop city gas supply and petrochemicals projects in Russia and the CIS countries.
Jaiprakash Associates clocked highest turnover of Rs 502.03 crore on BSE. Reliance Natural Resources (Rs 339.64 crore), Reliance Power (Rs 303.41 crore), Reliance Capital (Rs 237.76 crore) and Reliance Petroleum (Rs 230.28 crore), were the other turnover toppers on BSE in that order.
Reliance Natural Resources reported highest volume of 2.67 crore shares on BSE. Jaiprakash Associates (1.86 crore shares), Reliance Petroleum (1.46 crore shares), Ispat Industries (1.13 crore shares) and Nagarjuna Fertilisers and Chemicals (1.05 crore shares), were the other volume toppers on BSE in that order.
In Europe, key indices in UK, France and Germany rose by 0.16% to 0.85%.
Asian markets ended on a firm note today, 14 February 2008. Key indices in Hong Kong, China, Japan, Taiwan, Singapore and South Korea were up by 1.37% to 4.27%.
US Markets rallied on Wednesday, 13 February 2008 after a surprise rise in retail sales in January 2008. The Dow Jones industrial average gained 178.83 points, or 1.45%, to 12,552.24. The S&P 500 index rose 18.35 points, or 1.36%, to 1,367.21, and the Nasdaq Composite index advanced 53.89 points, or 2.32%, to 2,373.93.
Meanwhile, as per reports Dominique S. Kahn, managing director of the International Monetary Fund said yesterday, 13 February 2008 that emerging economies such as India, which are expanding rapidly, are not insulated from the impact of a slowdown in the US and will feel the pinch sooner or later.
Kahn, who is on a three-day visit to India, also underlined the need for a global solution to the problem of financial crisis, which could have a ripple effect on several economies.
Today's Pick - Thermax
We recommend a buy in Thermax from a short-term perspective. It is clearly evident from the charts of Thermax that the stock has been enjoying a bull run from its July 2006 low of Rs 206. However, after touching life high of Rs 968 in November 2007, the stock is currently in a corrective medium-term downtrend. The stock’s medium-term downtrend has retraced at 50 per cent fibonacci retracement of its prior up-trend that is around Rs 550. On February 13, the stock jumped up by 10 per cent, accompanied by above average volume. With this up move, the stock appears to have resumed the uptrend. The bullish divergence in the daily momentum indicator supports this resumption of the uptrend. The daily momentum indicator had recovered from the oversold region and is on the verge of entering the neutral region. Also the weekly oscillator has entered the neutral region from the bearish zone. Moreover, the long-term uptrend is still in place. We are bullish on the stock in the short-term. We expect the stock’s up move to continue further to our target price of Rs 770 in the short-term. Investors with a short-term perspective can buy the stock with stop-loss at Rs 550 levels.
Pre Session Commentary - Feb 14 2008
The Indian Market is likely to have a positive opening due to strong cues from the global markets. On Tuesday, the Indian market closed on an upbeat note backed by heavy buying across the sectoral indices scrips. The market opened with a bang taking the favoring cues from the global markets. The market pared some of its early gains towards the mid session but again gained the momentum towards the final trading hours of the session. The Small Caps remained out of favor as they reported most selling across the counters. The large Caps breached the five-day losing trend to close with hand some gains. The BSE Sensex closed higher by 341.13 points at 16,949.14 and NSE Nifty grew by 91.2 points to close at 4,929.45. We expect that the market may trade higher during the trading session.
On Wednesday, the US market closed in green. The Dow Jones Industrial Average (DJIA) closed higher by 178.83 points at 12,552.24. S&P 500 index grew by 18.35 points to close at 1,367.21 and NASDAQ closed up by 53.89 points at 2,373.93.
Indian ADRS ended in positive. In technology sector, Satyam grew by (1.48%) along with Infosys by (0.53%). In banking sector, HDFC bank and ICICI bank increased by (4.39%) and (2.38%) respectively. MTNL rose by (1.91%).
The major stock markets in Asia are trading strong. Hang Seng is trading higher by 706.66 points at 23,876.21 along with Japan''s Nikkei trading up by 364.74 points at 13,433.04 and Taiwan Weighted is trading at 7,772.07 up by 221.52 points.
The FIIs on Wednesday stood as net seller in equity while buyer in debt. The gross equity purchased was Rs3,440.20 Crore and the gross debt purchased was Rs103.60 Crore while the gross equity sold stood at Rs3,555.30 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was (Rs115.10 Crore) and net debt was Rs103.60 Crore.
Today, Nifty has support at 4,836 and resistance at 5,054 and BSE Sensex has support at 16,657 and resistance at 17,482.
Market may advance on strong global cues
The market may advance following strong global markets. All Asian markets were trading with gains today, 14 February 2008. Hang Seng (up 3.05% at 23,876.21), Japan's Nikkei (up 2.79% at 13,433.04), Shanghai Composite (up 1.04% to 4,537.38), Taiwan's Taiwan Weighted (up 2.93% at 7,772.07), Singapore's Straits Times (up 2.91% at 3,035.31) and South Korea's Seoul Composite (up 2.55% at 1,673.40) all edged higher.
US Markets rallied on Wednesday, 13 February 2008 after a surprise gain in January retail sales and a tech rally led by Apple materials, which beat earnings forecast. The Dow Jones industrial average gained 178.83 points, or 1.45%, to 12,552.24. The S&P 500 index rose 18.35 points, or 1.36%, to 1,367.21, and the Nasdaq Composite index advanced 53.89 points, or 2.32%, to 2,373.93.
Back home, the market breached its five-day losing streak to post gains on Wednesday, 13 February 2008 on the back of strong global cues and buying support in large-caps. The 30-share BSE Sensex surged 341.13 points or 2.05% at 16,949.14 on Wednesday, 13 February 2008. The broader CNX S&P Nifty rose 91.20 points or 1.88% at 4929.45 for the day.
As per provisional data, foreign institutional investors (FIIs) purchased shares worth Rs 9.40 crore on Wednesday, 13 February 2008. Domestic institutional investors (DIIs) were net buyers of shares worth Rs 23.59 crore on that day.
FIIs were net buyers to the tune of Rs 1,701.55 crore in the futures & options segment on Wenesday, 13 February 2008. They were net buyers of index futures to the tune of Rs 1,083.99 crore and bought index options worth Rs 18.18 crore. They were net buyers of stock futures to the tune of Rs 603.59 crore and sold stock options worth Rs 4.21 crore.
Meanwhile, as per reports Dominique S. Kahn, managing director of the International Monetary Fund said yesterday, 13 February 2008 that emerging economies such as India, which are expanding rapidly, are not insulated from the impact of a slowdown in the US and will feel the pinch sooner or later. Kahn, who is on a three-day visit to India, also underlined the need for a global solution to the problem of financial crisis, which could have a ripple effect on several economies.
Market may add gains but volatility remains key factor
The Market may log gains due to return of hopes amongst the investors. The firm trend in US markets, gain in European markets and rise in Asian indices trend in the present trades could move up the local indices in early trades. However, caution should be exercised as strong volatility remains the major concern. Among the indices, the Nifty could test higher levels around the 5000-6000 range, while on the downside it has a key support around 4700. The Sensex has a likely support at 16320 and may face resistance at 17200.
Major US indices rose on Wednesday for the third session in a row, as strong January retail sales report helped investors set aside recent worries about the recession . While the Dow Jones flared up by 179 points at 12552, the Nasdaq moved up by 54 points to close at 2374.
Except Wipro all the Indian ADRs traded firm on the US bourses. HDFC Bank led the pack with gains of over 4% while, Dr Reddy's, Tata Motors, MTNL, Infosys and Satyam closed with the gains of 1-2% each.
The Nymex light crude oil for March delivery gained by 49 cents to close at $93.27 a barrel. In the commodity space, the Comex gold for April delivery slipped by 90 cents to settle at $910.20 an ounce.
Morning Call - Feb 14 2008
Market Grape Wine :
In House :
Nifty at a supp of 4901 and 4842 with resis at 5020 and 5078
Mkt likely to remian positive for the next 2~3 trading sessions with front line shares expected to participate in the rally
Outlook positive: Reliance Ind
Cash: Buy ACC above 746 with a TGT of 769 and a SL of 739
Buy Satyam above 433 with a TGT of 455 and a SL of 429
F&O: Buy RELCAP above 1820 with a TGT of 1900 and a SL of 1795
Buy TATASteel above 760 with a TGT of 780 and a SL of 749
Out House :
Markets at a support of 16786 & 16663 levels with resistance at 17271 & 17575 levels .
Buy : RIL & RelCap
Buy : Tisco & Sail
Buy : SBIN & IciciBaak
Buy : Bhel & SesaGoa
Buy : Acc & Grasim
Buy : IBullsReal & Ibulls
Buy : SKumar & Geship
Buy : Infy & Wipro
Dark Horse : Bhel , RELCAP , INFY , IciciBank , RIL , Sbin , & HLL
Latest Grey Market Premium - Discount
Rural Electrification 90 to 105 10 to 12
GSS America InfoTech 400 to 440 Discount
KNR Construction 170 Discount
On Mobile Global 440 9 to 10
Bang Overseas 207 6 to 8
Shriram EPC 300 Discount
IRB Infra 185 13 to 15
Manjushree Extrusion 45 Discount
Tulsi Extrusions 85 10 to 12
Good Retail sales data lifts US Market
Good earnings reports and encouraging retail sales data help market close higher for third straight day
Technology, telecom and energy stocks pushed US Market considerably higher today, Wednesday, 13 February, 2008. Right from the very start, positive sentiment dominated the market after couple of good earnings reports and encouraging retail sales data. All ten of the major economic sectors finished in positive territory. Today’s advance marked the stock market's third consecutive advance.
Before market opened today morning, The Dept. of Commerce said January retail sales grew by 0.3%, and also grew by 0.3% excluding autos. Market was in fact expecting a decrease of 0.3% for retail sales, and rise of 0.2% when excluding autos.
The Dow Jones industrial Average ended the day with a gain of 179 points at 12,552. The Nasdaq Composite Index, finished higher by 54 points at 2,374. S&P 500 finished higher by 18 points at 1,367.
Twenty-five out of thirty Dow stocks ended in the green today. American Express led the group of Dow winners with shares soaring by almost 4%. For the Nasdaq, it was Applied Materials whose stock today climbed by almost 10%.
CoCo Cola and Applied Materials beat earnings expectation
With regard to earnings, Coca-Cola and Applied Materials topped expectations. CoCo Cola reported 79% quarterly profit growth and said that it expects to enjoy a "good" 2008, but surprisingly its shares were among the Dow's laggards, and finished off 0.9%.
Applied Materials, which is the largest supplier of chipmaking equipment said that profit fell but still came in better than analysts expected. The stock gave technology sector a very good boost today.
On the technology front, Yahoo stock advanced more than 1% today on rumours that the company is in talk with Rupert Murdoch’s Newscorp to ward off Microsoft’s take-over proposal.
Indian ADRs closed mixed today. HDFC Bank and ICICI Bank were the two topmost gainers closing up by 4.4% and 2.4% respectively.
Energy sector gave the late day push to stocks today after crude closed marginally higher.
Crude prices erased earlier loss and finally closed higher for the day today. Prices initially fell after government report showed that crude inventories for last week rose less than expected. But the strong retail numbers for January, 2008 knocked off recession concerns once again and crude glided up. Crude-oil futures for light sweet crude for March delivery today closed at $93.27/barrel (higher by $0.49/barrel or 0.5%) on the New York Mercantile Exchange. The price earlier rose to an intraday high of $93.9 earlier and fell to a low of $91.9.
As per the weekly inventory report by EIA today, U.S. crude inventories rose for a fifth week, up 1.1 million barrels to 301.1 million barrels in the week ending 8 February. Market was expecting a rise of 2 million barrels. U.S. crude imports averaged 9.7 million barrels per day last week, down 777,000 barrels per day from the previous week. U.S. refineries operated at 85.1% of their operable capacity last week, up from the previous week's 84.3%.
Volume on the New York Stock Exchange topped 1.4 billion, while nearly 2.2 billion shares traded on the Nasdaq. On the NYSE, two stocks gained for each issue on the decline, while gainers topped decliners 3 to 1 on Nasdaq.
Tomorrow, Fed Chairman Bernanke and Treasury Secretary Paulson are scheduled to testify on the economy and financial markets before the Senate Banking Committed in Washington. In terms of economic reports, the international trade balance and weekly jobless claims data are due before tomorrow's open.
Trading calls - Feb 14 2008
Nifty 4929 Supp 4800 Ress 5200
Buy Cairn (205) SL 201
Target 215, 218
Buy IOC (471) SL 468
Target 481, 485
Buy Sesa Goa (3118) SL 3088 Target 3178, 3183
Sell IOB (164) SL 168
Target 155, 152
Sell Wipro (410) SL 415
Target 399, 396
Valentine’s Day….No bears please!
Deceiving others. That is what the world calls a romance – Oscar Wilde.
The bulls are set to flirt in the market. How long the romance lasts no one knows but no harm in staying happy for the day. Bear in mind, don’t commit too much at first sight in markets or otherwise.
Today we might see even the side counters joining the Valentine's Day party. But don’t get trapped by any rally and start buying aggressively again. The near-term outlook remains murky despite the slight improvement in the sentiment. Any upside should be used as an opportunity to exit weak counters. Medium-to long-term purchases could be in quality stocks only.
The Dow Jones Industrial Average is up 2.5% in two days. Other global markets have also done well or at least hasn't fallen much. Our market also rallied yesterday in line with the global upswing. However, the breadth was still negative and the small-caps and mid-caps continued to struggle. In short, the advance wasn't convincing as investors remain apprehensive about a sustained rise from these levels. We may see the same trend continuing over the next few days before there is any stability. This may happen just ahead of the Union Budget.
On the F&O side, Nifty (February) futures discount decreased to 20 points from 43 points and around 16.37 lakh shares were shed in open interest. Total open interest in the market was Rs65,946 crore. The FIIs turned net buyers of Rs1084 crore in Index Futures and by Rs603 crore in Single Stock Futures.
FIIs were net buyers of Rs94mn (provisional) in the cash segment on Wednesday. Local institutions were net buyers of Rs235.9mn. In the F&O segment, FIIs were net buyers of Rs17.02bn yesterday. On Tuesday, foreign funds pulled out Rs1.15bn from the cash segment. Mutual funds were also net sellers of Rs984mn on the same day.
Asian markets have surged this morning, spurred by the overnight rally on Wall Street. The Nikkei in Tokyo was up 364 points at 13,433 while the Hang Seng in Hong Kong advanced 809 points to 23,979. The Kospi in Seoul gained 44 points to 1676 while the Straits Times in Singapore rose 88 points to 3038. The Shanghai Composite in China was up 48 points to 4538 and the Taiex in Taiwan jumped 208 points to 7758.
The Bank of Japan is expected to keep interest rates unchanged at the conclusion of the two-day meeting on Friday. The central bank's nine-member policy board is widely expected to hold the benchmark short-term interest rate unchanged at 0.5%. That rate is the lowest in the developed world.
But speculation is growing that the Japanese central bank may ease its previous stated policy of gradually raising rates as it focuses on the risks of a global economic slowdown and tallies the recent shakeout in Japanese financial markets.
US stocks rallied on Wednesday after a surprisingly strong January retail sales report helped soften worries that a weakening consumer demand could send the already struggling economy into a recession.
The S&P 500 Index added 18.35 points, or 1.4%, to 1,367.21, its biggest gain in two weeks. The Dow Jones Industrial Average climbed 178.83 points, or 1.5%, to 12,552.24. The Nasdaq increased 53.89 points, or 2.3%, to 2,373.93.
Market breadth was positive. Four stocks rose for every one that fell on the New York Stock Exchange.
Some Wall Street watchers say the US market may have bottomed out on January 23, when the Dow hit a trading low of 11,644. Since then, stocks have rallied, and as of Wednesday afternoon, the Dow was more than 7% off the Jan. low.
Applied Materials climbed the most in five years and helped push the Nasdaq to its best gain since November. Exxon Mobil and ConocoPhillips led oil shares higher after the Commerce Department said rising prices at filling stations spurred an unexpected increase in retail sales last month.
Retail sales rose 0.3% versus forecasts for a drop of 0.3%. Sales, excluding autos rose 0.3%, versus forecasts for a rise of 0.2%. A separate report showed that December business inventories rose 0.6%, topping forecasts.
On the corporate front, investors were enthused by the better-than-expected earnings from chipmaker Applied Materials and Dow component Coca-Cola.
Additionally, reports suggested that News Corp. is in talks with Yahoo! about combining MySpace and other online properties. A potential deal would give News Corp. a stake in Yahoo! and perhaps help the company fend off Microsoft's $44.6bn unsolicited takeover offer.
A latest Merrill Lynch global survey shows that fund managers are more worried about a US recession than in the previous month. They are also keeping more cash than in previous months and are the most worried about stocks since the aftermath of the 9/11 terrorist attacks.
Treasury prices fell, raising the yield on the benchmark 10-year note to 3.72% from 3.66% late on Tuesday. In currency trading, the dollar gained versus the yen and was little changed versus the euro.
US light crude oil for March delivery rose 49 cents to $93.27 a barrel on the New York Mercantile Exchange, gyrating after a weaker-than-expected weekly oil inventories report. COMEX gold for April delivery fell 90 cents to $910.20 an ounce.
Stocks in Europe closed with modest gains. Markets see-sawed late in the session, but the pan-European Dow Jones Stoxx 600 index ended the day 0.1% higher at 323.30. The German DAX 30 rose 0.1% to 6,973.67, while the French CAC-40 gained 0.3% to 4,855.40. The UK's FTSE 100 index lost ground, ending the day 0.5% lower at 5,880.10, after losses in the banking sector.
In the emerging markets, the Bovespa in Brazil rose 1.3% to 62,590 while the IPC index in Mexico . The RTS index in Russia was up 1.2% at 2004 while the ISE National-30 index in Turkey jumped 3% to 56,087.
Market to remain edgy
It was a day of relief for the bulls as markets snapped five day losing streak. The large caps came to the rescue lifting the markets to close in green. However, the Mid-Cap and the Small-Cap stocks continued to be on the receiving end. Finally, the 30-share Sensex closed at 16,949 gaining 341 points. The NSE Nifty closed at 4,929 adding 91 points.
Overall about 768 stocks advanced, 1,940 stocks declined while 34 stocks remained unchanged. Among the BSE 30 index only 23 stocks advanced and 7 stocks declined.
Cords Cable Industries Ltd, started trading at a discount on the bourses, it got listed at Rs130 against its issue price of Rs135. However, immediately gained momentum to hit an intra-day high of Rs151 finally the stock ended at Rs139 gaining over 3% hitting a low of Rs110 recording volumes of over 89,00,000 shares on NSE.
The public offering of Cords Cable was subscribed nearly 5 times. The issue received bids for 153 lakh shares against 30.85 lakh shares on offer. At the cut off price, 25.31 lakh bids were received. The price band of the offering was Rs125-135 per share.
Cords Cable manufactures cables up to 1.1 KV for various applications including industrial, utility and buildings. The company plans to utilise the issue proceeds to part finance its expansion and also to diversify its business.
Bihar Tubes was down by 3.4% to Rs122. The company announced that it secured order worth Rs150mn approx from government of Himachal Pradesh, Irrigation & Public Health Dept. Shimla. Commenting on the order, Mukesh Jain, President (Marketing) of the Company said, "Regular orders from prestigious Government agencies like BHEL, I&PH Deptts. State Governments not only shows our quality and commitment but also demonstrates Bihar Tubes Ltd as significant player of the Industry." The scrip touched an intra-day high of Rs131 and a low of Rs121 and recorded volumes of over 31,000 shares on BSE.
Engineering major Thermax rallied by over 8% to Rs630 following reports that the company is strengthening its presence in the water treatment business, plans to look at opportunities from the development of new cities, SEZ and upgradation of the municipal water treatment facilities.
Reports also stated that Thermax has entered into a technical collaboration with Babcock & Wilcox Power Generation Group (B&W PGG), to foray into manufacturing and supply of utility boilers of up to 800MW used to power thermal plants. The scrip has touched an intra-day high of Rs639 and a low of Rs583 and recorded volumes of over 91,000 shares on NSE.
Hindustan Unilever slipped 1% to Rs192 after the company announced its Q4 result with net profit at Rs6.31bn vs Rs5.11bn (post extraordinary). The company posted a 1-time gain of Rs774.5mn. The company’s net sales was at Rs36.9bn vs Rs31.6bn. The scrip touched an intra-day high of Rs199 and a low of Rs190 and recorded volumes of over 27,00,000 shares on NSE.
Tata Communication surged by over 4.5% to Rs468 after the company announced that it would spend $2bn on expansion. The scrip touched an intra-day high of Rs473 and a low of Rs455 and recorded volumes of over 51,000 shares on NSE. Tata Communications will leverage its Tata Global Network (TGN) and unique experience of operating in emerging markets in Asia and Africa to deliver a new world of globally managed communications solutions.
Bajaj Auto lost 2.8% to Rs2016. Reports stated that company announced feasibility study on a possible joint venture for its small car project would be completed by early March,2008. The scrip touched an intra-day high of Rs2150 and a low of Rs1995 and recorded volumes of over 1,00,000 shares on NSE.
NTPC gained 1.5% to Rs187 following reports that the company initiated talks with GE Energy Financial Services of the US, Kyushu Electric Power Company of Japan and Brookfield Power Corporation of Canada for setting up a joint venture company to undertake renewable power generation. The scrip touched an intra-day high of Rs192 and a low of Rs183 and recorded volumes of over 76,00,000 shares on NSE.
News Snippets:
Reliance Industries discovers gas in KG deepwater block. (Mint)
Reliance Infratel commits to Rs78bn exports in eight years. (Mint)
Elder Healthcare to market VLCC’s male grooming products. (Mint)
HUL’s net profit rises by 24% yoy in quarter ended December 2008. (Mint)
Jain Irrigation signs pact with Israel water firm Mekorot Water Company for infrastructure projects in India. (Mint)
DLF wins title sponsorship rights of IPL Twenty20 for Rs2bn for five years. (BL)
Hero Honda expects flat sales for FY08 on account of financing issues. (BL)
NTPC’s US$250mn project in Sri Lanka to begin next year. (BL)
Gail signs pact with ITERA Oil and Gas Company of Russia for cooperation in hydrocarbon sector. (BL)
Jubilant Group to grow retail presence in southern cities. (BL)
Paramount Airways in talks to buy wide-body aircraft. (BL)
Bharti Airtel consumer base reaches 60mn. (BL)
Air India and Jet Airways plan to buy 60 Boeing wide-body aircrafts. (BS)
Gujarat State Petroleum Corporation (GSPC) seeks permission for exploration in Saurashtra-Kutch region. (BS)
Eicher Motors’ January 2008 sales decline by 17% yoy. (BS)
Satyam Computers may win eight orders worth US$50mn. (BS)
Ranbaxy Laboratories to consider turning its research unit into a separate company. (BS)
Parsvnath and Indiabulls Real Estate to jointly bid for 10 prime locations offered by India Railways. (BS)
TVS Motor launches its first electric scooter for an ex-showroom price of Rs32,500. (ET)
PVR enters into an agreement with Thailand-based Cineplex Group for lifestyle entertainment. (ET)
Tata Communication, formerly known VSNL, to invest $2bn over the next three years to expand its submarine cable business. (ET)
Essar Shipping board approved merger of Mauritius-based Indian Shipping with the company. (ET)
Axis Bank reduces its benchmark prime lending rate by 25bps and mortgage reference rate has reduced by 50bps. (ET)
Japanese major NEC Electronics selects Wipro for semiconductor design services. (FE)
Fitch Ratings and PNB signs a MoU for bank loan ratings. (FE)
Crompton Greaves acquires 40% stake in their Indonesian joint venture PT Pauwels Trafo for US$10.7mn. (FE)
Mastek to raise US$40mn to fund its acquisition in US and UK before June 2008. (FE)
Reliance Money commences operations on the Dubai Gold and Commodity Exchange from Wednesday. (FE)
NTPC agrees to invest Rs4.75bn in Ratnagiri Gas & Power to increase capacity charge. (FE)
Gail plans to complete natural gas pipeline project, Vijaypur-Dadri and from Dadri to Bawana pipeline in best 24 months. (FE)
Economic Front Page
Mandatory for art funds to register with SEBI. (Mint)
Exports from SEZs grow 200% in two years. (BS)
DoT to impose one time entry fee for all spectrum allocation beyond 6.2Mhz. (ET)
Chandrasekhar Bhave to takeover as next chairman of SEBI. (ET)
Steel minister and steel manufacturers to meet on Feb 14, 2008 to discuss possibility of partial roll back in steel prices. (ET)
Pharma industry seeks extension of export related tax incentive for another five years. (ET)
The six key infrastructure industries production slips to 4% in December 2007, less than half 9% achieved a year ago. (FE)
The Cabinet Committee on Political affairs likely to consider raising petrol and diesel prices today. (FE)
Precious metals remain almost unchanged
Gold and silver prices marginally lower today as equities rally
Bullion metals were almost unchanged today, Wednesday, 13 February, 2008 and closed marginally lower for the day. Prices fell as rally in equities reduced the glitterness of the metal as alternate source of investment. Reports that imports of gold by India, world’s largest consumer of gold, declined in FY 2007 also led to the precious metal’s fall today. Silver prices also ended marginally lower for the day.
Prices had increased for four straight days before yesterday as crude prices rallied boosting the appeal of the precious metal as a hedge against inflation. Also, news of potential supply shortages in South Africa continued to boost the prices.
Gold generally moves in the opposite direction of the U.S. currency. Gold, as a dollar-denominated commodity, suffers from dollar strength.
Comex Gold for April delivery fell $0.30 (0.03%) to close at $910.8 an ounce on the New York Mercantile Exchange. On 30 January, 2008 prices had hit a high of $941 in the after hours trading. This year, prices have gained 9.5% till date. In January, prices gained 11%, the highest monthly gain since April 2006. Last week, gold prices closed higher by $8.8 (0.96%) against previous close of $913.5.
Today’s drop was second consecutive day of drop for bullion metal prices. Yesterday gold prices had dropped by more than $15/ounce.
Comex Silver futures for March today fell by 1.5 cents (0.02%) to $17.245 an ounce. Silver has gained 14.9% in 2008. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years. In January this year itself, prices climbed 14%.
U.S. stocks rose today after a government report showed an unexpected increase in retail sales in January, 2008. Retail sales in the U.S. gained 0.3% in January. Market was expecting a drop in sales.
Gold also fell today after the Group of Seven officials meeting in Tokyo over the last weekend said they supported the International Monetary Fund's effort sell its gold reserves in order to invest in higher-yielding assets. The IMF is the third largest holder of gold in reserves after the U.S. Federal Reserve and the German central bank.
In the currency markets today, the dollar index, which tracks the performance of the greenback against a basket of six major currencies, was at 76.570, up from 76.473 in late U.S. trading Tuesday.
Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices. Rising crude increases inflationary pressures and vice versa. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.
Gold witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.
At the MCX, gold prices for April delivery closed lower by Rs 11 (0.09%) at Rs 11,585 per 10 grams. Prices rose to a high of Rs 11,624 per 10 grams and fell to a low of Rs 11,475 per 10 grams during the day’s trading.
At the MCX, silver prices for March delivery closed Rs 62 (0.28%) higher at Rs 22,102/Kg. Prices opened at Rs 21,930/kg and rose to a high of Rs 22,150/Kg during the day’s trading.
Crude prices give up earlier loss
Prices rise as crude inventories for last week rise less than expected
Wednesday, 13 February, 2008. Prices initially fell after government report showed that crude inventories for last week rose less than expected. But the strong retail numbers for January, 2008 knocked off recession concerns once again and crude glided up.
Crude-oil futures for light sweet crude for March delivery today closed at $93.27/barrel (higher by $0.49/barrel or 0.5%) on the New York Mercantile Exchange. The price earlier rose to an intraday high of $93.9 earlier and fell to a low of $91.9.
As per the weekly inventory report by EIA today, U.S. crude inventories rose for a fifth week, up 1.1 million barrels to 301.1 million barrels in the week ending 8 February. Market was expecting a rise of 2 million barrels. U.S. crude imports averaged 9.7 million barrels per day last week, down 777,000 barrels per day from the previous week. U.S. refineries operated at 85.1% of their operable capacity last week, up from the previous week's 84.3%.
On the petroleum products side, EIA reported gasoline supplies rose by 1.7 million barrels in the latest week, while distillate supplies, which include heating oil and diesel, fell by 100,000 barrels.
Brent crude oil for March settlement today rose $0.46 (0.5%) to $93.32 on the London-based ICE Futures Europe exchange. The London benchmark rose 54% in FY 2007, the most since 1999 when prices more than doubled.
Crude had ended FY 2007 substantially higher by $35 or 57%. It was crude’s biggest yearly gain in five years.
Natural gas rallies more than 13% this year
In a monthly report released yesterday, EIA said the world oil market is poised to ease over the next two years with production increases offsetting moderate growth in oil demand.
Natural gas price rose today. Natural gas has rallied more than 13% this year and is is 15% higher than a year ago. Natural gas for March delivery rose 5.1 cents (0.6%) to $8.487 per million British thermal units.
Against this backdrop, March reformulated gasoline rose 2.19 cent to $2.3899 a gallon, and March heating oil was almost flat at $2.615 a gallon.
Last Friday, two ministers of Organization of Petroleum Exporting Countries (OPEC) hinted that the cartel might go for a production cut in its next meeting at March, 2008. This spurted up crude prices and the same ended almost 4% higher on that day. At its 1 February meeting at Vienna, OPEC members decided to keep current output levels unchanged.
At the MCX, crude oil for February delivery closed at Rs 3,709/barrel, higher by Rs 29 (0.8%) against previous day’s close. Natural gas for February delivery closed at Rs 335.9/mmtbu, lower by Rs 1.4/mmtbu (0.41%).
FII selling continues
Outflow of Rs 115.10 crore on 12 February 2008
Foreign institutional investors (FIIs) sold shares worth net Rs 115.10 crore on Tuesday, 12 February 2008, compared to their selling of Rs 1845.50 crore on Monday, 11 February 2008.
FII outflow of Rs 115.10 crore on 12 February 2008 was a result of gross purchases of Rs 3440.20 crore and gross sales Rs 3555.30 crore. The 30-share BSE Sensex fell 22.90 points or 0.14% at 16,608.01 on that day.
FII outflow in February 2008 totaled Rs 628.80 crore (till 12 February 2008). FII outflow in calendar year 2008 totaled Rs 13,664.40 crore (till 12 February 2008).
There are a total of 1,284 FIIs registered with the Securities & Exchange Board of India (Sebi)
Nifty February 2008 futures at premium
Turnover in F&O segment increases
Nifty February 2008 futures were at 4930, at a premium of 0.55 points as compared to spot closing of 4929.45.
The NSE futures & options (F&O) segment turnover was Rs 37,555.25 crore, which was higher than Rs 36,223.5 crore on Tuesday, 12 February 2008.
Essar Oil February 2008 futures were at premium, at 195.25, compared to the spot closing of 184.
Tata Steel February 2008 futures were at premium, at 761.90, compared to the spot closing of 758.10.
ICICI Bank February 2008 futures were at premium, at 1108, compared to the spot closing of 1101.80.
In the cash market, the S&P CNX Nifty gained 91.20 points or 1.88% at 4929.45.
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