Monthly Investment Picks - March 2008
Monday, March 03, 2008
BSE Bulk Deals to Watch - March 3 2008
This data was last updated on Monday, March 03, 2008 7:03:03 PM
Deal Date Scrip Code Scrip Name Client Name Deal Type * Quantity Price **
3/3/2008 531137 GEMSTONE INV HEMANT MADHUSUDAN SHETH B 17560 28.07
3/3/2008 531913 GOPAL IRON MIHIR B SHAH S 50000 13.10
3/3/2008 531784 KADAMB CONST KEHEMS CONSULTANTS PVT LTD S 15000 33.25
3/3/2008 505523 MAH IND LEAS GLOBAL FILM AND BORD CASTING L B 40000 28.58
3/3/2008 532728 MALU PAPER DIAMANT INVESTMENT AND FINANCE S 150000 30.17
3/3/2008 507813 NAT.OXYGEN RAJIV ARORA B 28235 63.50
3/3/2008 507813 NAT.OXYGEN RAJIV ARORA S 43547 64.12
3/3/2008 511551 NETWO ST BRO ANKUSH VYAPAAR PRIVATE LIMITED B 100000 134.64
3/3/2008 532675 PRITHVI INFO RAKHI TRADING PVT LTD B 92798 250.40
3/3/2008 511413 SHARYAN RESO ZAINAB WAHEDNA B 108000 254.00
3/3/2008 532948 TULSI EXTRU MANSUKH STOCK BROKERS LTD B 83404 105.73
3/3/2008 532948 TULSI EXTRU RAJEEV GUPTA B 73415 104.89
3/3/2008 532948 TULSI EXTRU MANSUKH STOCK BROKERS LTD S 83404 105.80
3/3/2008 532948 TULSI EXTRU RAJEEV GUPTA S 73415 105.00
NSE Bulk Deal Watch - March 3 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
03-MAR-2008,BANKBARODA,Bank of Baroda,TCI CYPRUS HOLDING LIMITED,BUY,8565106,365.00,-
03-MAR-2008,FIEMIND,Fiem Industries Limited,AMON PANICHKIVALKOSIL,BUY,71198,68.32,-
03-MAR-2008,ONMOBILE,OnMobile Global Limited,WARD FERRY MANAGEMNT LIMITED,BUY,300000,568.10,-
03-MAR-2008,PUNJABCHEM,Punj Chem & Crop Prot Ltd,SURENDRA AGARWAL,BUY,50000,162.32,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,A K G SECURITIES AND CONSULTANCY LTD.,BUY,74096,105.65,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,ASHU GUPTA,BUY,84933,105.36,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,CPR CAPITAL SERVICES LTD.,BUY,69594,105.50,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,MANISH VRAJLAL SARVAIYA,BUY,261447,106.47,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,MUKESH BHAGAT,BUY,73548,105.09,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,PASHUPATI CAPITAL SERVICES PVT. LTD.,BUY,65336,106.39,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,RAJEEV GUPTA,BUY,83883,104.89,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,RUPESH KIRIT DALAL,BUY,76080,104.90,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,SANJAY BHANWARLAL JAIN,BUY,81504,105.26,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,SUPRATIK STOCKS AND SECURITES PVT.LTD.,BUY,91951,105.83,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,TRANSGLOBAL SECURITIES LTD.,BUY,142984,106.45,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,V J PATEL INVESTMENT,BUY,68296,106.25,-
03-MAR-2008,VESUVIUS,Vesuvius India Ltd,HDFC ASSET MANAGEMENT COMPANT LTD,BUY,201400,230.00,-
03-MAR-2008,BANKBARODA,Bank of Baroda,GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD,SELL,8565106,365.00,-
03-MAR-2008,MALUPAPER,Malu Paper Mills Limited,DIAMANT INVESTMENT AND FINANCE LIMITED,SELL,123463,30.16,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,A K G SECURITIES AND CONSULTANCY LTD.,SELL,69096,105.35,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,ASHU GUPTA,SELL,84933,105.33,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,CPR CAPITAL SERVICES LTD.,SELL,69594,105.68,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,MANISH VRAJLAL SARVAIYA,SELL,261447,107.10,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,MUKESH BHAGAT,SELL,73548,105.24,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,PASHUPATI CAPITAL SERVICES PVT. LTD.,SELL,65336,106.40,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,RAJEEV GUPTA,SELL,83883,104.91,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,RUPESH KIRIT DALAL,SELL,76080,105.18,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,SANJAY BHANWARLAL JAIN,SELL,81504,105.31,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,SUPRATIK STOCKS AND SECURITES PVT.LTD.,SELL,91951,105.99,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,TRANSGLOBAL SECURITIES LTD.,SELL,142984,106.49,-
03-MAR-2008,TULSI,Tulsi Extrusions Limited,V J PATEL INVESTMENT,SELL,36822,108.36,-
Nifty March 2008 Futures at a discount
Turnover in F&O segment declines
Nifty March 2008 futures were at 4882, at a discount of 71 points as compared to spot closing of 4953.
The NSE's futures & options (F&O) segment turnover was Rs 36,591.82 crore, which was lower than Rs 49,083.49 crore on Friday, 29 February 2008.
Reliance Industries (RIL) March 2008 futures were at discount, at 2296, compared to the spot closing of 2306.
Steel Authority of India (Sail) March 2008 futures were at discount, at 228.05, compared to the spot closing of 230.75.
Reliance Natural Resources (RNRL) March 2008 futures were at discount, at 123.75, compared to the spot closing of 124.75.
In the cash market, the S&P CNX Nifty lost 270.50 points or 5.18% at 4953.
Rupee falls to 5 month low
Ends at 40.39/40
Rupee dropped to its lowest level in five months on Monday as a sell-off in the stock markets heightened fears of capital outflows, while January trade data showed the deficit more than tripling from a year ago.
Rupee ended at 40.39/40, its lowest finish since Sept. 18, and down 1 percent from Friday's close of 40.01/02. It was the biggest single-day percentage fall in four months. The rupee has fallen more than 2 percent so far in 2008.
Sun Outage - Market timings changed
From March 4 to March 18 2008 - Market timings will be as below
MARKET OPEN 09:55 AM to 11:45 AM
BREAK 11:45 AM to 12:30 PM
MARKET RESUME 12:30 PM to 04:15 PM
CLOSING SESSION 04:35 PM to 04:45 PM
Market sells off on global cues
Investors wealth on Monday plummeted by as much as Rs 2.73 lakh crore in a day, led by giants like RIL and DLF, as the benchmark Sensex nosedived by 900 points.
The combined market capitalisation of all the listed companies on the Bombay Stock Exchange dropped to Rs 56,14,884.87 crore from Rs 58,87,846.18 crore on Friday.
The BSE Sensex settled at 16,677.88 points as against 17,578.72 on Friday last. Analysts attribute the meltdown to weak global cues and the budget after-effects.
"The downfall was mainly because of global cues on concern of US recession, besides budget also had its negative impact. Concerns over uncomfortable US data and a further interest rate hike in the Fed meet on March 10, suggests that US is going towards major recession," Taurus Mutual Fund Managing Director R K Gupta said.
The 30-share index, Sensex, accounted for nearly 42 per cent of the total market cap. The combined market valuation of the 30-blue chips also decreased by Rs 1,27,343 crore to Rs 23,18,914.14 crore.
Among the blue chip stocks, corporate behemoth Reliance Industries was the biggest loser with the firm's market cap falling over Rs 22,000 crore to Rs 3,35,029 crore. The RIL scrip ended down six per cent at Rs 2304.75.
Other major losers include -- country's largest real estate firm DLF, State Bank of India, NTPC as their market value decreased between Rs 11,000 to 10,000 crore.
Dlf's market cap decreased to Rs 1,21,844 crore, losing over Rs 11,200 crore. Sector wise, the banking stocks suffered the brunt of the meltdown with the BSE Bankex settling down 6.72 per cent at 9,434.44.
Analysts have advised retail investors to stay away from the markets as there is uncertainty and they should wait till the markets stabilise.
Post Market Commentary - March 3 2008
The Indian market closed with heavy losses on the back of heavy selling pressures across the sectoral indices. The market tumbled as the insurer American International Group Inc posted a record loss that led to the worries of more write-downs in the pipeline. The market opened on a sad note tracking the weak cues from the global markets and kept on hovering in the negative territory throughout the trading session. From the sectoral front, all the sectoral indices closed in red. The BSE Sensex closed lower by 900.84 at 16,677.88 and NSE Nifty fell by 270.5 points to close at 4,953. Following the benchmark indices, the BSE Mid Cap and Small Cap also closed lower by 315.54 points and 389.78 points at 7,364.85 and 9,238.35 respectively. The market breadth was weak as 2330 stocks closed in red while 396 stocks closed in green.
The Capital Goods index declined 936.89 points to close at 15,182.63. Major losers are Suzlon Energy (10.40%), BHEL (8%), Siemens (7.64%), Praj Inds (7.40%), L&T (5.09%).
The BSE Metal index fell by 940.65 points to close at 15,798.87. Losers are SAIL (9.65%), Ispat Inds (7.60%), Jindal Steel (7.23%), Sterlite Inds (6.44%), Hindalco (6.43%).
The BSE Oil & Gas index dropped by 610.05 points at 10,422.11 as RPL (7.56%), Essar Oil (6.81%), Aban Offshore (6.58%), Reliance Inds (6.24%), RNRL (6.10%) closed in negative.
The Realty index closed lower by 611.72 points at 8,953.95 as DLF (8.44%), Penland (8.16%), Parsvnath (6.27%), Ansal Infra (6.22%), Unitech (5.50%) closed in red.
The Bankex index slipped by 679.29 points to close at 9,434.44 as PNB (9.65%), Kotak bank (9.07%), SBI (8.83%), Axis bank (7.70%), Union bank (7.49%) closed lower.
The Power index fell by 233.19 points to close at 3,437.75 as Suzlon Ener (10.40%), GMR Infra (8.44%), Tata Power (6.78%), NTPC (6.34%), CESC (6.17%), Reliance Power (4.32%) closed lower.
From the IT index, Aptech (6.83%), Satyam (5.11%), Infosys 4.84%, Wipro (3.44%) and HCL Tech (1.75%) cloed in red.
Market Close: Common man happy but not investors!
It was extremely a bad day for Indian market started with a gap down on the back of weak cues from the global markets. From the day?s start Banking, FMCG, Capital Goods and Power stocks witnessed huge selling pressure, ended with maximum losses. Market continued to roll down and suffered lot without any mark of recovery. Investors preferred to be more cautious on the economical growth story. No sign of value buying was seen in whole day. It was a second biggest fall ever at index, ended down by over 5%. As the day progressed, losses mounted at every passing hour till the day ends with Sensex 900 points down. Hike in short term capital gains tax in recent budget resulted in lower participation from the retail investors. There was complete absence of buying witnessed in market. Mid and Small caps had no excuse to closed lower by 4% indicating that selling is not just restricted to frontline stocks. Asian markets closed on weaker trends while Europe also trading in the same waves.
Sensex closed down by 939 points at 16639.539. Weighing on the Sensex are losses in SBI (1923.4,-9 percent), BHEL (2101.25,-8 percent), HDFC (2590,-8 percent), RIL (2304.75,-6 percent) and ICICI Bk (1023,-6 percent). Losses are restricted by gains in HLL (232.1,+2 percent), Cipla (211.45,+2 percent), Hero Honda (775.85,+1 percent), Ranbaxy (450.55,+1 percent) and Maruti (874.3,+1 percent).
On the bad days like this Sun Pharma shined up after the news that gets USFDA nod to market generic Demadex tablets which was much awaited. Demadex, torsemide tablets prescribed for treating edema associated diseases. Torsemide is a diuretic, indicated for the treatment of edema associated with congestive heart failure, renal disease, or hepatic disease. These torsemide tablets have annual sales of approximately 35 million dollars (Rs 139.26 cr) in the US. Use of torsemide tablets has been found to be effective for the treatment of hypertension. Sun Pharma was one among the few stocks ended in green.
Suzlon Energy was on hot targeted stock after company announced a retrofit program to resolve blade-cracking issues discovered during the operations of some of its turbines in the US. The retrofit program involves the structural strengthening of 1,251 (417 sets) blades on S-88 (2.1 MW) turbines of which 930 blades are already installed while the remaining blades are in transit or inventory. The retrofit program will be carried out by maintaining a rolling stock of temporary replacement blades to minimize the downtime for operational turbines and will be completed over a period of six months. The program will utilize its blade manufacturing and service facility for US blades in Pipestone, Minnesota. The total estimated cost of the retrofit program is estimated at Rs 100 cr for which a provision will be made in 4QFY08. Suzlon ended down by 10% following the news.
Technically speaking: Broader markets traded weak in line with the global markets. Sensex made an intraday high at 17228 and low at 16635. On the volume front ended with low participation at Rs 5090 cr. Market breadth was in the hands of Decliners at 2331 against the Advances of 400. At this juncture support is seen at 16450 support and resistance at 17500-17800 levels. Markets look good for selective buying at current levels. Short term traders can buy the index stocks with a holding period of one month.
Sensex tanks 901 points in global sell-off, Budget blues
The key benchmark indices witnessed an unabated selling pressure across sectors, mirroring weakness in the global stock markets. 26 out of 30 stocks from the Sensex pack were in the red. Even the mid-and small-cap stocks tumbled, as reflected in the poor market breadth.
Asian markets, which opened before Indian markets, ended on a weak note. European markets, which opened after Indian markets, were trading lower. A global sell-off was triggered today after weak US data on Friday, 29 February 2008 and a record loss of insurer American International Group Inc fuelled worries that there are more write-downs to come.
The BSE Sensex tumbled 900.84 points or 5.12% to 16,677.88 registering its second biggest single day point loss on a closing basis. It was also Sensex’s second biggest single day fall in percentage terms. BSE Sensex’s fall of 1,408.35 points or 7.41% to 17,605.35 on 21 January 2008 is its biggest ever fall in record.
The broader CNX S&P Nifty fell 270.50 points or 5.18% at 4953.
As per provisional data, FIIs sold shares worth a net Rs 711.31 crore today. Domestic funds bought shares worth a net Rs 80.47 crore.
The Indian economy is currently witnessing a moderation in growth from a solid growth last year mainly due to sluggish consumption growth. Concerns also remain about possible spike in inflation. Analysts reckon that the finance minister (FM) has targeted these two areas in Union Budget 2008-09, which he unveiled on Friday, 29 February 2008.
FM seeks to revive consumption growth through higher disposable income in the hands of the middle class through rejit in personal income tax slabs, which will result in sustantial tax saving for individual tax payers.
Analysts also reckon that the implemention of the Sixth Pay Commission, which will result in hike in salaries of government employees, will aid consumption growth. The Sixth Pay Commission was constituted in October 2006 to recommend comprehensive changes in salary structure of the government employees.
The measures aimed at inflation control include a major fillip to agricultral and irrigation sector to boost farm prodution, across the board cut in Cenvat to 14% from 16% and specific excise duty cuts. Brokerage IDFC-SSKI Securities in a post-budget report has maintained its earnings growth estimates for 30-Sensex firms. It expects 16.5% compounded annual growth rate (CAGR) in earnings of Sensex firms over FY 2008 (year ending March 2008) to FY 2010 (year ending March 2010).
The change in tax treatment of the Securities Transaction Tax (STT) in the budget, meanwhile, may impact arbitrage volumes on the bourses. STT will now be treated like any other deductible expenditure against business income for the assesse. This is against the current practicse whereby an assesse gets 100% rebate for STT paid against the tax liability for the year. A fall in arbitrage will result in decline in liquidity on the bourses.
Further, traders, domestic funds and some foreign institutional investors (FIIs) are likely to be hit by a hike in short term capital gains tax on sale of shares to 15% from 10%, which amounts to a massive 50% hike in the tax rate. Another fallout of the hike may be that some of traders and funds may pre-pone their sales of equities before the higher short term capital gains tax becomes applicable from 1 April 2008.
The BSE Mid-Cap index was down 4.11% at 7,364.85, while the BSE Small-Cap was down 4.05% at 9,238.35. Both these indices outperformed the Sensex.
The market breadth was poor: on BSE, 396 advanced as compared to 2330 that declined. 40 stocks remained unchanged.
BSE clocked a turnover of Rs 5090 crore as against Rs 6,721.65 crore on Friday, 29 February 2008.
Nifty March 2008 futures were at 4882, a discount of 71 points as compared to spot closing of 4953.
The NSE's futures & options (F&O) segment turnover was Rs 36591.82 crore, which was lower than Rs 49,083.49 crore on Friday, 29 February 2008.
India's largest private sector firm by market capitalization and oil refiner Reliance Industries (RIL) fell 6.24% to Rs 2304.75.
The BSE Bankex fell 6.72% to 9,434.44. It underperformed the Sensex. ICICI Bank (down 6.10% at Rs 1,024.45), State Bank of India (down 8.83% at Rs 1,923.40), Punjab National Bank (down 9.65% at Rs 545.85), Kotak Mahindra Bank (down 9.07% at 728.70), Bank of India (8.48% at Rs 329.05) and Axis Bank (down 7.70% at Rs 940.30), declined.
The BSE Power index fell 6.35% to 3,437.75. It underperformed the Sensex. Suzlon Energy (down 10.40% at Rs 252.05), Tata Power (down 6.78% at Rs 1,306.05), CESC (down 6.17% at Rs 500.55), Reliance Energy (down 5.24% at Rs 1,485.55), Torrent Power (down 5.17% at Rs 140.35) and Reliance Power (down 4.32% at Rs 412), slipped.
The BSE Realty index fell 6.39% to 8,953.95. It underperformed the Sensex. DLF (down 8.44% at Rs 714.70), Parsvnath Developers (down 6.27% at Rs 251.85), Ansal Properties & Infrastructure (down 6.22% at Rs 202), Housing Development & Infrastructure (down 5.97% at Rs 805.20), Mahindra Lifespace Developers (down 5.92% at Rs 536.70), Indiabulls Real Estate (down 5.78% at Rs 596.25) and Unitech (down 5.50% at Rs 339.50), skid.
Auto stocks, which bucked the weak sentiments in early trades, soon dipped into red in the later half of trading session. The BSE Auto index fell 0.80% to 4,848.05. It outperformed the Sensex. Escorts (down 2.63% at Rs 103.55), TVS Motor (down 2.40% at Rs 42.65), Ashok Leyland (down 1.74% at Rs 36.80), Mahindra & Mahindra (down 1.23% at Rs 684.25), Bajaj Auto (down 1.08% at Rs 2,255.50) and Tata Motors (down 1.01% at Rs 693.15), dipped.
However, Hero Honda Motors (up 1.26% at Rs 774.10) and Maruti Suzuki (up 0.82% at Rs 874.30), rose. The auto stocks were in demand as cut in excise duties in the Union Budget raised expectation of pick up in sales in coming months.
Among the side counters, India Infoline (down 10.81% at Rs 996.25), Indiabulls Financial Services (down 10.78% at Rs 548.80), Reliance Capital (down 10.29% at Rs 1,631.10), Adlabs Films (down 9.66% at Rs 757.90) and Steel Authority of India (down 9.65% at Rs 230.80), declined.
Essar Oil clocked the highest turnover of Rs 257.71 crore on BSE. Reliance Petroleum (Rs 237.78 crore), Onmobile Global (Rs 234.85 crore), Reliance Industries (Rs 230.46 crore) and Reliance Capital (Rs 208.06 crore), were the other turnover toppers on BSE in that order.
Reliance Petroleum recorded the highest volume of 1.41 crore shares on BSE. Reliance Natural Resources (1.21 crore shares), IFCI (1.09 crore shares), Essar Oil (1.01 crroe shares) and Nagarjuna Fertilisers and Chemicals (99.69 lakh shares), were the other volume toppers on BSE in that order.
In Europe, key indices in UK, France and Germany declined between 1.26% to 1.53%.
Asian markets were trading on a weak note today, 3 March 2008. Key indices in Japan, Hong Kong, South Korea, Singapore, and Taiwan fell between 1.78% to 4.49%. However, China's Shanghai Composite rose 2.06%.
US Market slumped on Friday, 29 February 2008. The Dow Jones industrial average tumbled 315.79 points, or 2.51%, to 12,266.39. The Standard & Poor's 500 index fell 37.05 points, or 2.71%, to 1,330.63 and the Nasdaq composite index slipped 60.09 points, or 2.58%, to 2,271.48.
Banking, reality and power lead market slump
Continuing the bear trend the market witnessed another round of frenzied selling with major correction in index heavyweights—with the banking, reality and power stocks shaving off over 901 points during intra-day trades. After resuming 351 points lower at 17,228, the market remained under the grip of sustained selling pressure. Extensive correction in heavyweights--banking, reality, power, consumer goods and public sector unit stocks-- in noon trades dragged the index below the 16,700 mark to the day's low of 16,634. The Sensex finally ended the session at 16,678, down 901 points, while the Nifty shed 271 points to close at 4,953.
The breadth of the market was negative with 1,599 declines, 395 advances and 38 stocks ending unchanged. All the sectoral indices had a weak outing. The BSE Bankex index slipped sharply and dropped 6.72% followed by Reality index (down 6.35%), the BSE Power index (down 6.35%), the BSE CG index (down 5.81%), the BSE PSU index (down 5.71%), BSE Metal index (down 5.62%) and the BSE Oil & Gas index (down 5.53% etc.
Out of 30 Sensex stocks, 26 stocks lost ground and 4 managed to end with steady gains. Among the major losers, SBI slumped 8.83% at Rs1,923.40, DLF plummeted 8.44% at Rs714.70, HDFC tumbled 8.25% at Rs2,571.35, BHEL shed by 8.00% at Rs2,099, Hindalco crashed 6.43% at Rs189.90, NTPC dropped 6.34% at Rs188.95, RIL lost 6.24% at Rs2,304.75 and ICICI Bank declined nearly 6.10% at Rs1,024.45. Reliance Communications, Reliance Energy, Satyam, L&T, Infosys, ITC, HDFC Bank, Bharti, Tata Steel and Grasim fell over 3-5% each. However, Cipla gained 2.12% at Rs211.65, Hind Utilities, Ranbaxy and Maruti Suzuki ended marginally higher over 1%.
Bankex stocks came under the grip of sharp hammering. Punjab National Bank crumbled 9.65% at Rs545.85, Kotak Bank slumped 9.07% at Rs728.70, SBI dropped 8.83% at Rs1,923.40 and Bank of India declined by 8.48% at Rs329.05. Canara Bank, Axis Bank, Union Bank, Yes Bank, BOB, Allahabad Bank, ICICI Bank, and Centurion Bank of Punjab shed around 5-7% each.
Reality stocks too declined sharply. DLF dropped 8.44% at Rs714.70, Peninsula Land lost 8.16% at Rs88.40, Pasrsvanath slipped by 6.27% at Rs251.85, Ansal Infrastructure fell 6.22% at Rs202 and Anant Raj slumped 5.99% at Rs300. HDFC, M&M, Indiabulls Reality and Unitech dipped over 5-7% each.
Over 1.41 crore Reliance Petroleum shares changed hands on the BSE followed by RNRL (1.21 crore shares), IFCI (1.09 crore shares), Essar Oil (1.01 crore shares) and Nagarjuna Fertilisers (0.99 crore shares).
Market may open lower
The market may open lower on weak global cues. Asian markets were trading weak today, 3 March 2008. Japan's Nikkei (down 3.98% at 13,062.15), Hang Seng (down 2.77% at 23,656.36), Taiwan Weighted (down 2.07% at 8,238.45), Straits Times (down 2.81% at 2,941.45), South Korea's Seoul Composite (down 2.72% at 1,665.01) edged lower.
US Market slumped on Friday, 29 February 2008, after a series of economic reports stirred recession fears. The Dow Jones industrial average tumbled 315.79 points, or 2.51%, to 12,266.39. The Standard & Poor's 500 index fell 37.05 points, or 2.71%, to 1,330.63 and the Nasdaq composite index slipped 60.09 points, or 2.58%, to 2,271.48.
Back home, the 30-share BSE Sensex declined 245.76 points or 1.38% at 17,578.72 on Friday, 29 February 2008 after the finance minster (FM) P Chidambaram announced a hike in short term capital gains tax on sale of shares to 15% from 10%, in Union Budget 2008-09. S&P CNX Nifty fell 61.6 points or 1.17% to 5,223.50 on that day.
The 30-share BSE Sensex gained 229.65 points or 1.32% to 17,578.72, in the week ended 29 February 2008. The S&P CNX Nifty advanced 112.75 points or 2.20% to 5223.50, in the week.
However Sensex is down 3,628.05 points or 17.10% from a record high of 21,206.77 hit on 10 January 2008. The barometer index is down 2708.27 points or 13.34% in calendar 2008 so far.
The wholesale price index rose 4.89% in the 12 months to 16 February 2008, higher than the previous week's rise of 4.35%, government data showed on Friday, 29 February 2008.
As per provisional data, foreign institutional investors (FIIs) sold shares worth Rs 334.87 crore on Friday, 29 February 2008. Domestic institutional investors (DIIs) were net buyers of shares worth Rs 742.79 crore on that day
FIIs were net sellers of Rs 523.24 crore in the futures & options segment on Friday, 29 February 2008. They were net sellers of index futures to the tune of Rs 1,084.92 crore and bought index options worth Rs 737.39 crore. They were net sellers of stock futures to the tune of Rs 179.85 crore and bought stock options worth Rs 4.13 crore.
Crude oil prices rose marginally today, 3 February 2008, finding support from a sharp decline in the U.S. dollar. U.S. light crude for April delivery rose 10 cents to $101.94 a barrel. London Brent crude was unchanged at $100.10
Morning Call - March 3 2008
Market Grape Wine :
In House :
Nifty at a supp of 5135 and 5050 with resis at 5245 and 5310
Nifty likely to remain in the range of 5050~5370
Cash: Sell Reliance below 2450 with a TGT of 2390 and a SL of 2475
Sell Tatasteel below 802 with a TGT of 775 and a SL of 810
F&O: Sell Reliance below 2461 with a TGT of 2400 and a SL of 2500
Sell AIRDECCAN below 170 with a TGT of 158 and a SL of 176
Out House :
Markets at a support of 17272 & 16876 and resistance at 17676 & 17786 levels .
Buy : Tisco and Sail at dips
Buy : EssarOil at dips
Buy : Sterlite at dips
Buy : RIL at dips
Buy : SKumar at dips
Buy : Sbin at dips
Dark Horse : Essaroil , Aban , SBIN , Centextile , RPL & PunjLLoyd
Short Term Trading Calls
Buy IFCI with a stop loss of Rs 60 for short term target of Rs 72
Buy Aurobindo Pharma Ltd on declines with SL - Rs 290 for short term target of Rs 360-375
Buy Essar Oil with a stop loss of Rs 220 with a target Rs 350.
US Markets slump again
The last two days of the week play the spoilsport for the market
Friday, 29 February, 2008 spoilt the overall sentiment of the US Market for the last week that ended on that same very day. Barring that day, indices would have registered good gains for the week. Economic reports and Federal Chairman Ben Bernanke’s testimonies at Capitol Hill for two straight days made the main headlines for the week.
At Chairman Bernanke's testimony at Capitol Hill, Bernanke continued to emphasize downside risk to growth more than inflation. However, he said upside risks to inflation are greater than a month ago, noting commodity price gains. He said that this might cause an increase in the Fed's outlook on inflation.
The Dow Jones Industrial Average lost 115 points for the week. Tech - heavy Nasdaq lost 32 points. S&P 500 lost 22 points.
On Monday, 25 February, a rally was spurred by news that Standard & Poor's has reaffirmed the credit ratings of two key bond insurers whose financial outlook has been at the center of investor anxiety in recent months. Standard & Poor's took MBIA off CreditWatch and assigned a negative outlook. Additionally, the ratings agency affirmed the 'AAA' financial strength rating of Ambac Financial. Shares of MBIA and Ambac rose 20% and 16% respectively on that very day.
On Tuesday, 26 February, IBM spurred a good rally in the market and the stock was up nearly 4% after the tech giant raised its 2008 earnings forecast due to the positive impact of a $15 billion stock buyback plan. The Dow Jones industrial Average ended the day with a gain of 115 points.
On Wednesday, 27 February, US Market witnessed sea saw trading for the entire day but ultimately ended higher for the day. Federal Reserve Chairman, Ben Bernanke today hinted that Fed in all possibility will go for another soft landing in its next meeting thereby reducing interest rates by another 50 bps.
Unlike Wednesday, the stock market suffered a noticeable setback on Thursday, 28 February. The sell off was attributed in part to concerns about the banking industry that were sparked by Fed Chairman Bernanke's observation before the Senate Banking Committee that there will probably be some bank failures as a result of the financial market turmoil.
Thursday's weakness spilled over to Friday where the trading action reflected the release of pent-up angst about the financial sector's problems specifically and the economy in general. The Dow gave up more than 300 points on that day.
Grey Market - Rural Electrification, Gammon Infra
Rural Electrification 105 23 to 25
GSS America InfoTech 400 Discount
V. Guard Ind. 82 10 to 12
Gammon Infra 167 to 200 25 to 30
Pre Market Watch - March 3 2008
The Indian Market is likely to have a negative opening, as the cues from the global markets are not in favor. On Friday, The Indian market made a smart recovery towards the final trading hours of the session to pare most of its losses. The market tumbled in the mid session as the finance minister announced a hike in short term capital gains tax to 15% from 10% earlier. The finance minister kept the corporate tax and the tax on securities transaction tax unchanged. Auto stocks gained as the government reduced excise duty on small cars to 12% from 16%. Government cut excise duty on hybrid cars to 14%, from 24%. India''s wholesale price index (WPI) rose 4.89 % in the 12 months to 16 February 2008 over the same period last year from the previous week''s rise of 4.35%. The BSE Sensex closed lower by 245.76 at 17,578.72 and NSE Nifty fell by 61.6 points to close at 5,223.50. We expect that the market may remain cautious during the trading session
On Friday, the US market was closed in negative. The Dow Jones Industrial Average (DJIA) closed lower by 315.79 points at 12,266.39 along with NASDAQ closed down by 60.09 points at 2,271.48 and S&P 500 index fell by 37.05 points to close at 1,330.63.
The major stock markets in Asia are trading weak. Japan''s Nikkei is trading lower by 322.49 points at 13,603.02 along with Hang Seng trading down by 260.02 points at 24,331.67 and Taiwan''s Weighted trading down by 49.32 points at 8,412.76.
The FIIs on Friday stood as net seller in equity as well as in debt. The gross equity purchased was Rs3,655.60 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs4,184.90 Crore and gross debt sold stood at Rs428.20 Crore. Therefore, the net investment of equity reported was (Rs529.30) Crore and net debt was (Rs428.20 Crore).
Today, Nifty has support at 5,106 and resistance at 5,274 and BSE Sensex has support at 17,088 and resistance at 17,934.
Market may slip in early trades
The market may slip initially following overnight slump in the US markets and in the major Asian indices taking a sharp dip in morning trades may pull down the domestic indices in early trades.On the technical front, the Nifty could test higher levels at 5370 and may find support at 5100, while the Sensex may face resistance at 17670 and find support at 17440.
US indices fell sharply on Friday as investors took the opportunity of booking profits. While the Dow Jones dropped 316 points at 12266, the Nasdaq declined 60 points to close at 2271.
Except MTNL, rest of the Indian ADRs bucked the positive domestic markets trend and instead fell in tune with the US indices. Satyam was the biggest loser and dropped over 6% while Infosys, Wipro, Tata Motors, ICICI Bank, HDFC Bank, Patni Computers and VSNL were down over 1-5% each.
Crude oil prices in the US market edged lower, with the Nymex light crude oil for April 08 delivery rising by 75 cents to close at $101.84 per barrel. In the commodity segment, the Comex gold for April series gained $7.50 to settle at $975 an ounce.
Market likely to witness selloff
Near-Term indicators on charts are pointing to further weakness in the market, with the Nifty yet to close above a crucial resistance level of 5,368 points (though it was tested last Wednesday). With global markets also ending lower on Friday, the market should see another round of sell-off.
Technically, the Nifty has support at 5,181 (10-day exponential moving average (EMA)). But the index, last week, moved below 5,181 twice, which can be treated as an early indication of another round of sell-off.
Further on the lower side, the Nifty has strong support at 5,052 (200-day simple moving average). A close below this level for more than two days can cause a major sell-off, and in that case the Nifty may test 4,803.6 (the previous bottom recorded on February 11) first and then could move down towards the panic bottom of 4,448.5, which recorded on January 22.
If the Nifty manages to close above 5,368, it can negate the downtrend in the short run, and can take the index towards 5,600 levels. The index will need a lot of support from heavyweights like Reliance Industries, ICICI Bank, ONGC and Bharti Airtel.
Reliance Industries is the lone counter with strong supports at the moment. But if the stock falls below the Rs 2,375-level, then it may find support only at Rs 2,304, because the 3-,9- and 18 simple moving average combination can give a sell signal.
Other heavyweights such as ONGC, Bharti Airtel, Wipro, ACC, Reliance Communication, Infosys Technologies, and Grasim are already trading below their respective 200-day moving averages. If there is another fall, these stocks may face a severe sell-off.
Stocks, which are trading very close to their 200-day simple moving average, are NTPC Rs 202.55 (200 DMA), Satyam Rs 431(200 DMA), Glaxo Rs 1,105 (200 DMA), ICICI Bank Rs 1,063 (200 DMA) and Unitech Rs 339 (200 DMA). In a sell-off, these stocks can be targeted by the bear operators and once these stocks fall below their support levels, a steep fall is expected.
And stocks, which are currently trading far from their 200-day moving averages, but may come closer to their respective 200-DMA in a fall, are Reliance Industries, SBI, Tata Steel, L&T and HDFC. So, investors should be careful before they commit to long positions at this stage.
Last Friday, major world markets were ended lower, with majority of the Indian ADRs (American Depository Receipts) are closing sharply lower. The interesting point to note is that except HDFC Bank, the rest of the ADRs closed below their respective 200-day moving averages, indicating further weakness in ADR markets. The 200-DMA for some of the ADRs are ICICI Bank $53.87, MTNL $7.9 and Tata Motors $18.02.
In case there is a rally, then Hindustan Unilever and Ranbaxy are the candidates for buying because their weekly technical indicators are showing a ‘buy’ signal. Shares such Maruti and Mahindra & Mahindra will face resistance at Rs 898 and Rs 731.70, respectively. Once these levels are breached, only then can these stocks lend support to the Nifty.
In Nifty futures, the March series were trading with a huge discount of around 80 points, suggesting that market participants have taken short positions on index contracts in anticipation of a major correction, a view that is further supported by the buying in Nifty’s out-of-the-money put options. The rise in Nifty volatility and limited activity in stocks futures segment to frontline stocks are all pointing out weakness of the markets.
Via ET
Trading Calls - March 3 2008
Nifty (5223) Supp 5050 Res 5303
Buy Aurobindo Pharma
Buy Maruti
Buy Hero Honda
Buy Sesa Goa
Buy L&T
Testing times…Gap down open!
You can't choose the ways in which you'll be tested.
The nerves of investors, traders and speculators are all being tested alike. The big event (union budget) is behind us now. Any hopes of a post budget rally will be laid to rest for the time being given the weak close on Wall Street and the expected gap-down opening today. A recovery in Asian/European markets may lead to some rebound in local indices. Long-term investors can chip away at quality stocks at lower levels. It’s a different matter that lower levels just get lower after you bought the stock. To add to the woes, the market will observe sun outage from March 4 to March 18. Traditionally, the key indices tend to be lackluster during this period, not to mention the extra hours most of us need to put in. The same trend may prevail this time around too.
You may once again start concentrating on your own portfolio, which in all probability is yet to fully recover from the January crash and the ensuing volatility. A lot of post budget analysis will surely take place this week as to which sector will gain the most and which ones will not. Investors, traders and experts alike will try and ascertain the near-term impact of the budget on the markets. We expect a lot of sector-centric action based on the budget proposals in the near term.
Market players will once again start looking at emerging micro as well as macro factors. The hike in short-term capital gains and the withdrawal of the tax rebate on STT could hurt the sentiment in the near term, especially for traders and brokers (on proprietary trading). It will be interesting to see what stance will the foreign funds take post the budget. A lot will hinge on their actions, as well as that of the retail investors and HNIs. All these investors still lack conviction to resume aggressive purchases given the anxiety over the US economy.
Most market observers see a rangebound and sideways movement this year given the lack of clarity on how serious is the crisis in the US housing and credit markets. On the local front too, the economy has slowed down over the past few months. Hopefully, the tax cuts and other positive measures announced in the budget will boost consumption and overall economic activity. Inflation will be a critical factor as will be the movement in interest rates. Don't expect an immediate rub-off of the budget on the Indian economy too soon. These things take time to work their way through the systems. Till that time, the market will continue to show yo-yo sort of movement with intermittent bouts of buying and selling.
FIIs were net sellers of Rs3.35bn in the cash segment (provisional) on Friday. Local institutions were net buyers of Rs7.42bn on the same day. In the F&O segment, FIIs were net sellers of Rs5.23bn on Friday. On Thursday, FIIs were net sellers of Rs5.29bn.
Most Asian markets were trading sharply down this morning, in step with the steep fall in US stocks on Friday. The Nikkei in Tokyo was down 4% at 13,057 while the Hang Seng in Hong Kong slid 2.9% to 23,632. The Kospi in Seoul was down 2.9% at 1662 while the Straits Times in Singapore shed 3% to 2934.
The Taiex in Taiwan slumped 2.8% to 8177 while the Shanghai Composite in China rose 0.7% to 4377.
Banks and automakers led the decline across Asia on deepening concerns that credit market losses will shoot up for global financial companies and that an impending recession in the US will weigh on the global economy.
Commonwealth Bank of Australia retreated to the lowest in more than two years in Sydney, while Mitsubishi UFJ Financial Group fell in Tokyo after UBS said losses in credit markets may reach $600bn.
Toyota dropped after an index of US business activity fell to the lowest level since 2001 and the yen strengthened against the dollar.
The MSCI Asia Pacific Index lost 2.9% to 143.21 as of 11:01 a.m. in Tokyo, set for its biggest decline since Feb. 20. Financial stocks were the biggest drag. The benchmark erased its 2.8% gain in February, which came amid speculation that a bailout of US bond insurers will prevent credit losses from spreading.
Meanwhile, the dollar declined to a three-year low against the yen on speculation that the US Federal Reserve will reiterate its plan to keep cutting interest rates to avoid a recession. The currency approached a record low against the euro.
The dollar fell last week against the euro by the most since December after Fed Chairman Ben Bernanke said some small banks may fail and unemployment will increase.
US stocks plunged on Friday, ending the month of February on a weak note after insurance giant AIG reported its biggest loss ever and UBS said losses from credit markets may top US$600bn. Also, a fresh batch of weak economic reports heightened worries over an impending recession in the world's biggest economy.
The Dow Jones Industrial Average tumbled 316 points, or 2.5%, to 12,266.39. The S&P 500 slumped 37 points, or 2.7%, to 1,330.63, its biggest drop since Feb. 5. The Nasdaq Composite slid 60 points, or 2.6%, to 2,271.48.
Market breadth was negative. Eleven stocks fell for every one that rose on the New York Stock Exchange (NYSE). On the Nasdaq, decliners topped advancers three to one on volume of 2.04bn shares.
The Dow was down 0.9% on the week, 3% for February, and has now lost 7.5% year-to-date. The S&P 500 lost 1.7% for the week, 3.5% for the month and is down 9.4% year-to-date. The Nasdaq fell 1.4% over the week, is down 5% for February and off a whopping 14% for the year so far.
This was the fourth consecutive month of declines for Wall Street that remains plagued by the credit crisis and an uncertain economic outlook. The four-month losing streaks for the S&P 500 and Dow are the longest since 2002.
European shares ended February on a sour note on Friday with banking shares yet again accounting for some of the biggest losses as worries about problems related to the US subprime mortgages.
The Dow Jones Stoxx 600 index slipped 1.4% to 318.95, leading the pan-European stock market index to close February with a small monthly loss. The German DAX 30 dropped 1.7% to 6,748.13, the French CAC-40 lost 1.5% to 4,790.66 and the UK's FTSE 100 closed down 1.4% at 5,884.30.
HSBC Holdings fell 1.8% ahead of its financial results on Monday.
Major Latin American markets dropped on Friday on the back of weak US economic data. Mexico's IPC index of 35 most-traded issues fell 4% to close at 28,918.52. In Brazil, the benchmark Bovespa stock index sank 3.1% to 63,489.30 on the Sao Paulo Stock Exchange.
Argentina's Merval fell 1.7% lower to 2,162.20, while Chile's IPSA fell 2.35 to 2,836.83.
Global cues to dictate terms
An eventful day ended in negative territory after market players sharply reacted to government plans of increasing short-term capital gains tax to 15% from 10%. Sentiments were also dampened after the Finance Minister said that government would waive all loans for small, marginal farmers. From there on key indices gradually slipped lower.
However, towards the end sentiments were lifted after media reports stated that Banks would be re-imbursed Rs600bn in lieu of waivers.
Finally, the 30-share Sensex closed at 17,578 losing 245 points after hitting an intra-day high of 17,779.54 and a low of 17,258. The NSE Nifty closed at 5,223 slipping 61 points touching an intra-day high of 5290 and a low of 5098.
Overall about 1,082 stocks advanced, 1,615 stocks declined while 45 stocks remained unchanged. Among the BSE 30 index 9 stocks advanced while 21 stocks declined.
Among the 30-scrips of Sensex, SBI, L&T, Infosys, ICICI Bank and Bharti Airtel were among the major laggards. However, SBI, Hindustan Unilever and HDFC were among the major gainers.
Cement stocks lost grip after government announced its plans to levy additional excise duties on the cement makers. Finance Minister P. Chidambaram proposed imposing an additional tax of Rs400 on every ton of cement and Rs450 on every ton of cement clinker. ACC lost 1.6% to Rs795, Grasim was down 2.1%, Dalmia Cement slipped 2% and India Cement declined 2.5%.
Banking stocks initially felt the heat after the government proposed to scrap Rs500bn of loans for farmers with holdings of up to 2 hectares and the remainder for growers owning more than 2 hectares of land. However, later in the day media reports stated that Banks would be re-imbursed Rs600bn in lieu of waivers which lifted the sentiments. The major losers were index heavyweights ICICI Bank down 1.5%, HDFC Bank down 1.1% and Corp Bank slipped 1.2%. However, stocks like SBI, PNB and Canara Bank staged a smart bounce back each gaining over 3%.
The Oil & Gas stocks reacted sharply as many incentives which were expected from the budget were not delivered. Further oil refinery companies like IOC and its other state-run counterparts are barred from raising fuel prices to cover higher crude oil costs. ONGC dropped 2.3% and BPCL was down 1%.
Hospitality stocks recorded healthy gains after government announced its proposal of granting a five-year tax exemption for setting up hospitals, especially in smaller Indian cities, to encourage availability of health care in rural areas. Hospitality stocks like Fortis Healthcare surged by over 7.5% and Apollo Hospital gained 1.5%.
Steel stocks suffered as most of the expectation were not fulfilled. Excise duty cur from 16% to 8%. Import duty on thermal coal was expected to come down to zero from 5%. However, government proposed to scrap the 5% import duty on steel-smelting and aluminum scrap to help companies pare costs amid an increase in prices of materials and freight rates. Stocks like, Bhushan Steel fell over 5.5%, JSW Steel was down 1.8%, Jindal Steel slipped 2%, Tata Steel dropped 2.7% and
FMCG stocks also recorded smart gains as reduction in excise duty from 16% to 14% and higher funds in the hands of farmers would result in increased consumption and hence is marginally positive for the FMCG sector. Hindustan Unilever was up 3%, Dabur gained 2.5%, Nirma was up 1.6% and Tata Tea was up 0.5%.
Overall impact for ITC is positive as there was no excise hike on filter cigarettes, which accounts for ~95% of cigarette profits for the company. The stock gained by 0.5%.
Auto stocks were in top gear today as the BSE auto index ended 1.2% higher on back of deduction in the excise duty from 16% to 12%. Stocks like Maruti, M&M, Bajaj Auto and Ashok Leyland were among the major gainers.
News Snippets:
NTPC plans to spend Rs73bn for setting up of second phase of Barh thermal power project in Bihar. (BL)
Nokia Siemens signs multi million euro deal with TCS to transfer its product engineering and R&D services. (BL)
Gitanjali Gems acquires the retail business of Mumbai based jewellery company Renaissance Jewellery. (BS)
Temasek is in talks with Tata Communications to pick up a stake in its new retail business. (Mint)
SCI is in talks with South Korean shipbuilder STX Shipbuilding Co. for a shipbuilding JV. (Mint)
BSNL and MTNL would together invest Rs210bn in 2008-09 through internal and extra budget resources. (BL)
Luxury hotel chain Orient Express, in which Indian Hotels is the second largest shareholder, says talks about its possible acquisition could affect its price. (FE)
Essar Group plans to invest Rs500bn in Gujarat over the next three years on SEZs, steel, oil and gas, amongst others. (BS)
Global asset management firm AIG picks up 14.5% stake in Kinetic Engineering; company raises Rs1bn. (FE)
Virgin Group has launched its Virgin Mobile brand in India in association with Tata Teleservices. (TOI)
Manipal group is close to acquiring a substantial stake in Kochi based Lakeshore Hospital for Rs1bn. (ET)
Petrobas to pick up 40% stake in ONGC’s Mahanadi block. (ET)
Tata Motors Jaguar-Land Rover deal may be delayed as issues relating to supply of engines, platforms and technologies are still to be sorted out. (ET)
Reliance Retail forms a 50:50 JV with Europe’s HAL Holdings to open stand alone optical stores across India. (Mint)
BSNL completes feasibility study for locating the country’s fourth cable landing station at Haldia in West Bengal. (ET)
GTC Industries board has granted an in-principle approval to demerge the tobacco and the real estate business into separate entities. (ET)
BEML to position itself as a leading manufacturer of metro coaches; on look out for a JV partner. (Mint)
Economic Front Page
Inflation rises to 4.89% for the week ended February 16th. (BL)
Six cement factories to be set up in Himachal Pradesh for Rs48bn to produce 2mn tons of cement annually. (FE)
Government defers by one year the target of eliminating revenue deficit set by FRBM Act; targets fiscal deficit of 2.5% for FY09. (BS)
Farm debt waiver and relief package announced in the Budget may involve a combination of special securities and cash. (BS)
Airports Authority of India proposes Rs124bn for infrastructure development at various airports in 11th plan. (BL)
Excise cut on pharmaceuticals unlikely to have an effect on drug prices as government decides to cut abatement rate for calculation of MRP based excise duty on pharmaceuticals. (BS)
Lower allocation for defence cable system may delay spectrum release. (BL)
Sixth Pay Commission impact is expected to be within 0.4% of GDP, similar to that of previous one in 1996. (BS)
Gold gains 6% in Feb
Gold and silver prices continue to take giant jumps on interest rate outlook
Bullion metal prices rose sharply higher for the fourth straight day on Friday, 29 February, 2008 after the dollar slumped sharply against its rival currencies, mainly the euro. The dollar have been dampened since last week after the Federal Reserve Chairman, Ben Bernanke hinted that Fed in all possibility will go for another soft landing in its next meeting thereby reducing interest rates by another 50 bps.
This has been weakening dollar further. Gold, as a dollar-denominated commodity, suffers from dollar strength. On the contrary, gold prices rise with falling dollar as inflationary concerns boosts the metal's appeal as an inflation hedge. Silver prices also gained substantially today, reaching the highest level in twenty eight years.
Comex Gold for April delivery rose $7.5 (0.9%) to close at $975 an ounce on the New York Mercantile Exchange. Prices touched a record $978/ounce during after hours trading. This year, gold prices have gained 17% till date. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%.
For the week, gold gained $27 (2.8%). Prices increased due to the slumping dollar and overall rise in other commodity prices.
Comex Silver futures for May delivery rose by 18 cents (0.8%) to $19.81 an ounce. Silver has gained 28% 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%.
The Fed has cut the federal funds rate to 3% from 5.25% in mid-September. January 2008 itself saw two rate cuts in a gap of ten days.
In the currency market on Friday, the dollar extended its decline against most of its major counterparts. The dollar index, which tracks the performance of the greenback against a basket of six major currencies, fell 0.8% to 73.70. The dollar earlier dropped to a three-year low against the yen.
Crude gains 11% in Feb
Prices gain 11% in February
Crude prices ended higher for the week that ended on Friday, 29 February, 2008. Prices ended higher by $2.84(3%) at $101.84/barrel. Price ended twice more than $100/barrel during the week. Cold weather continued to grip parts of North East and Mid West USA. Dropping dollar against euro also pushed crude prices also higher prompting traders to invest in commodities against a hedge against inflation.
Initially during the week, prices rose after fresh tensions cropped up in the Middle East. But then, during middle of the week, prices fell below $100 after EIA reported that crude inventories rose more than expected. But then, on Friday, 29 February, prices crossed $103 during day trading. But ultimately, price fell back and closed at $101.84/barrel.
The new high on Friday was also triggered by reports that a state-run oil company in Ecuador, the smallest producer in the 13-member Organization of Petroleum Exports Countries, suspended operations at a key export pipeline overnight.
Crude prices have gained more than $10 (11%) in February. On a yearly basis, prices have gained 6% in FY 2008.
Also, on the currency markets on Friday, the dollar extended its decline against most of its major counterparts. The dollar index, which tracks the performance of the greenback against a basket of six major currencies, fell 0.8% to 73.70. The dollar earlier dropped to a three-year low against the yen.
EIA reported on Wednesday, 27 February, 2008 in the weekly inventory report that crude inventories grew more than expected, rising 3.2 million barrels to stand at 308.5 million barrels in the week ended 22 February. Market was expecting an increase of 2.6 million barrels.
EIA also reported that U.S. gasoline supplies rose by 2.3 million barrels in the latest week, while distillate supplies, which include heating oil and diesel, fell by 2.5 million barrels.
OPEC is expected to go for a production cut in its coming meet. A fortnight back, Iranian oil minister said that reducing production is very normal for OPEC in March. Iran is OPEC’s second largest oil producer. Prior to that, two ministers of OPEC hinted that the cartel might go for a production cut in its next meeting at March, 2008. At its 1 February meeting at Vienna, OPEC members decided to keep current output levels unchanged.
In a monthly report released earlier this month, EIA said the world oil market is poised to ease over the next two years with production increases offsetting moderate growth in oil demand.
Today's Pick - Aurobindo Pharma
We recommend a buy in Aurobindo Pharma from a short-term perspective. Form the stock’s life high of Rs 820 (touched in July 2007) Aurobindo Pharma has been on a long-term downtrend as is evident form the charts. However, the stock halted at the long-term support level of Rs 300 a month ago and has been moving sideways above this level since then.
On February 29, the stock surged higher gaining more than Rs 19 or 6 per cent with more than average volumes . Prolonged positive divergence in the daily momentum indicator had supported the recent up move. The daily momentum indicator is rising in the neutral region towards the bullish zone while the weekly momentum indicator is featuring in the oversold region. The moving average convergence divergence is steadily rising towards the positive territory. The stock is trading well above the 21-day moving average.
Our short-term outlook for the stock is bullish and we expect the stock to make a dash to our target price level of Rs 375 in the forthcoming days. Investors with a short-term perspective can buy the stock while keeping the stop loss at Rs 298.
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