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Thursday, June 05, 2008
NSE Bulk Deals to Watch - June 5 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
05-JUN-2008,ARCHIES,Archies Limited,MUDRA SECURITIES,BUY,36174,113.75,-
05-JUN-2008,BRABOURNE,Brabourne Enterprises Ltd,THE SURAT SAFE DEPOSIT VAULT PVT LTD,BUY,86123,24.63,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,ASTUTE COMMODITIES & DERIVATIVES Pvt Ltd,BUY,313959,184.68,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,B K SHAH CO KETAN BHAILAL SHAH,BUY,134596,186.01,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,CHHATISGARH INVESTMENTS LTD,BUY,204000,184.88,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,DINESH MUNJAL,BUY,330899,183.72,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,LATIN MANHARLAL SECURITIES PVT. LTD.,BUY,161725,189.66,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,NAMAN SECURITIES & FINANCE PVT LTD,BUY,144429,196.74,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,PACIFIC CORPORATE SERVICES LTD ,BUY,45518,206.33,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,PRASHANT JAYANTILAL PATEL,BUY,373853,192.72,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,R.M. SHARE TRADING PVT LTD,BUY,306549,187.87,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,SANJAY BHANWARLAL JAIN,BUY,262728,182.55,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,SMC GLOBAL SECURITIES LTD.,BUY,132488,187.54,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,TRANSGLOBAL SECURITIES LTD.,BUY,235404,186.17,-
05-JUN-2008,GRABALALK,Grabal Alok Impex Limited,MAHESH CHIMANLAL DALAL,BUY,125000,119.72,-
05-JUN-2008,PTL,PTL Enterprises Limited,APURVA COMMODITIES PRIVATE LIM,BUY,500000,27.10,-
05-JUN-2008,ARCHIES,Archies Limited,AATMAN INNOVATIONS PRIVATE LTD,SELL,48395,115.25,-
05-JUN-2008,BRABOURNE,Brabourne Enterprises Ltd,THE SURAT SAFE DEPOSIT VAULT PVT LTD,SELL,56905,24.20,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,ASTUTE COMMODITIES & DERIVATIVES Pvt Ltd,SELL,311959,184.81,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,B K SHAH CO KETAN BHAILAL SHAH,SELL,142043,182.36,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,DINESH MUNJAL,SELL,330899,184.71,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,LATIN MANHARLAL SECURITIES PVT. LTD.,SELL,159725,189.93,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,NAMAN SECURITIES & FINANCE PVT LTD,SELL,123929,196.40,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,PACIFIC CORPORATE SERVICES LTD ,SELL,168221,206.88,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,PRASHANT JAYANTILAL PATEL,SELL,373853,192.96,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,R.M. SHARE TRADING PVT LTD,SELL,306549,188.38,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,SANJAY BHANWARLAL JAIN,SELL,262728,182.74,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,SMC GLOBAL SECURITIES LTD.,SELL,132488,187.56,-
05-JUN-2008,GOKUL,Gokul Refoils and Solvent,TRANSGLOBAL SECURITIES LTD.,SELL,235404,186.76,-
05-JUN-2008,GRABALALK,Grabal Alok Impex Limited,INDEX EQUITIES PVT. LTD.,SELL,124151,119.74,-
05-JUN-2008,MASTEK,Mastek Ltd,ALLIANZ BAJAJ LIFE INSURANCE CO.LTD.,SELL,150000,400.00,-
05-JUN-2008,PTL,PTL Enterprises Limited,APURVA COMMODITIES PRIVATE LIM,SELL,534815,27.09,-
05-JUN-2008,RENUKA,Shree Renuka Sugars Limit,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,2416796,99.86,-
BSE Bulk Deals to Watch - June 5 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
5/6/2008 532981 ANU LABS VIDHYA TEXTURISERS PVT LTD B 100000 287.00
5/6/2008 532981 ANU LABS SHAILESH M. NISSAR B 163002 277.80
5/6/2008 532981 ANU LABS N D NISSAR B 99994 279.09
5/6/2008 532981 ANU LABS DIPAK R RATHOD B 65101 280.62
5/6/2008 532981 ANU LABS BUNIYAD CHEMICALS LIMITED B 166360 288.87
5/6/2008 532981 ANU LABS PINKY POPATLAL JAIN B 119311 282.54
5/6/2008 532981 ANU LABS SHAILESH M. NISSAR S 163002 278.00
5/6/2008 532981 ANU LABS N D NISSAR S 99994 279.28
5/6/2008 532981 ANU LABS DIPAK R RATHOD S 65101 286.49
5/6/2008 532981 ANU LABS SUMIT BAJLA S 100000 279.85
5/6/2008 532981 ANU LABS BUNIYAD CHEMICALS LIMITED S 166360 290.99
5/6/2008 532981 ANU LABS PINKY POPATLAL JAIN S 119311 279.69
5/6/2008 531733 BAFNA SPINNI DE RADHAMANI B 100000 4.48
5/6/2008 532946 BANG MARUTI SECURITIES LTD B 80000 244.75
5/6/2008 524663 BHARAT IMUNO NANDITA MIHIR MEHTA B 205320 23.10
5/6/2008 524663 BHARAT IMUNO B R INTERNATIONAL S 204970 23.10
5/6/2008 524388 CRAZY INFOTE MANOJ DAGA B 330669 4.39
5/6/2008 532876 EVERONN SYS NANDITA MIHIR MEHTA B 185850 611.91
5/6/2008 532876 EVERONN SYS B R INTERNATIONAL S 185850 611.91
5/6/2008 532980 GOKUL REFOIL N D NISSAR B 190558 185.61
5/6/2008 532980 GOKUL REFOIL SAM GLOBAL SECURITIES LTD B 198897 187.88
5/6/2008 532980 GOKUL REFOIL H.J.SECURITIES PVT.LTD. B 193180 190.94
5/6/2008 532980 GOKUL REFOIL N D NISSAR S 190558 185.60
5/6/2008 532980 GOKUL REFOIL SAM GLOBAL SECURITIES LTD S 198897 188.15
5/6/2008 532980 GOKUL REFOIL H.J.SECURITIES PVT.LTD. S 193180 191.35
5/6/2008 501209 MAST MEDI SY BAKLIWAL INVESTMENT B 30000 39.50
5/6/2008 531996 ODYSSEY CORP SMITA MANOJ TURKHIA S 35000 30.24
5/6/2008 531769 PFL INFOTECH BABULAL RANARAM GHANCHY S 45900 13.06
5/6/2008 532884 REFEX REFRIG HIMAT PARSHOTTAMBHAI JATANIA B 93000 229.35
5/6/2008 526407 RIT PRO IND SHREE ATAM VALLABH POLYPLSTI S 51102 135.20
5/6/2008 531324 ROSELABS FIN YASH MANAGEMENT AND SATELLITE LTD B 150100 13.95
5/6/2008 590048 TYCHE PERIPH RAAJRATNA STOCKHOLDING PVT LTD B 58657 79.94
Post Session Commentary - June 5 2008
The Indian market made a smart turnaround after the mid session to close on an optimistic note. The favoring cues from the European markets also gave a boost to the domestic market. The market breaks its last three days losing trend to close on an optimistic note. Though the market faced the volatility throughout the trading session due to concern of rising inflation backed by hike in domestic fuel prices. From the sectoral front, the IT stocks, Bankex and Metal stocks shine as most buying was witnessed from these baskets. The market breadth was weak as 1397 stocks closed in red while 1240 stocks closed in green.
The BSE Sensex closed higher by 254.93 points at 15,769.72 and NSE Nifty closed up by 91.35 points at 4,676.95. The BSE Mid Cap and Small Cap grew by 2.92 points and 15.33 points to close 6,400.29 and 7,735.59 respectively.
The IT index closed up by 220.09 points at 4,617.44. Gainers are Niit Techno 9.13%, Tech Mahindra 7.52%, Wipro 6.25%, Infosys 5.86%, HCL Tech 5.80%, Satyam Comp 5.47%, NIIt 4.90% and I-Flex 2.19%.
The Metal index closed higher by 291.44 points at 15,714.59. Major gainers are Jindal Steel 5.09%, Nalco 4.90%, Tata Steel 3.10%, Ispat Inds 2.43%, SAIL 2.21%, JSW Steel 1.92% and Welspun Guj 1.49%.
The Bankex index grew by 138.21 points at 7,348.58. Scrips that gained are Yes bank 4.27%, Axis bank 4.19%, ICICI bank 3.09%, HDFC bank 2.22%, SBI 1.70%, Kotak bank 1.29%, IOB 0.80%.
The Power index advanced by 76.12 points at 2,708.49 as Suzlon Energy 8.66%, Tata Power 7.79%, Reliance Infra 5.68%, NTPC 5.57%, Crompton Greaves 4.63%, GMR Infra 2.63% and ABB 0.76% closed in green.
From the Oil and Gas basket, ONGC 7.46%, Gail India 7.39%, Essar Oil 4.15%, RNRL 2.92%, Aban Offshore 2.41%, Cairn India 0.71% and RPL .75% closed higher.
Market pulls back after three-session slump
The market put a halt to its three straight session losses and bounced back sharply on the second last day of the current trading week, as battered heavyweights and sectoral stocks found substantial buying support today. The sharp upmove in the Sensex and Nifty was in line with strong global indices. The Sensex, after dropping over 900 points in the last three sessions, witnessed sharp volatility till mid-morning trades. After a week opening at 15,480, the index tumbled to the day's low of 15,314 and gyrated between zones till mid-morning trades. The market soon recouped its lost ground and rallied sharply in the noon trades as gains in IT, Teck, power, FMCG and metal stocks propelled the index to an intra-day high of 15,815. The Sensex finally wrapped the session with gains of 1.62% or 255 points at 15,770, while Nifty advanced 91 points at 4,677.
Surprisingly the market breadth was weak. Of the 2,711 stocks traded on the BSE 1,392 stocks declined, 1,243 stocks advanced and 76 stocks ended unchanged. All the sectoral indices ended positive, except the BSE CD, BSE Realty, BSE Auto and BSE CG. The BSE IT index led the pack and rose 5.01% followed by the BSE Teck index (up 3.45%), the BSE Power index (up 2.89%), the BSE FMCG index (up 2.48%) and the BSE Bankex (up 1.92%).
Reversing the recent downward trend, 23 Sensex stocks advanced with DLF. Reliance Industries, Ambuja Cement, Tata Motors, BHEL, Larsen & Toubro and Mahindra & Mahindra failed to end in the green. Among the other major Sensex gainers, ONGC scaled up 7.46% at Rs953.20, Reliance Infra shot up by 5.68% at Rs1,130.85, NTPC vaulted 5.57% at Rs166.65, JP Associates jumped 3.68% at Rs205.60, Hindustan Unilever flared up 3.23% at Rs230.40, Grasim Industries rose 3.19% at Rs2,246.30, Tata Steel moved up by 3.10% at Rs840.90 and ICICI Bank spurted 3.09% at Rs781.25. ITC, TCS, HDFC Bank, Maruti, Hindalco, SBI, Bharti Airtel, Reliance Communications and Cipla gained around 1-2% each.
IT stocks hogged the limelight. NIIT Technology scaled up 9.13% at Rs141, Tech Mahindra surged 7.52% at Rs788.55 and Wipro edged higher by 6.25% at Rs528.40. Infosys, HCL Technologies, Satyam Computer Services and NIIT gained 5% each. Among the Teck stocks, Patni Computer zoomed by 3.71% at Rs276.40, Tanla flared up 3.34% at Rs267.40, Tata Communications added 2.78% at Rs489.95 and Moser Baer firmed up 2.72% at Rs169.90.
Over 1.90 crore IFCI share changed hands on the BSE followed by Anu Lab (1.25 crore shares), Ispat Industries (1.21 crore shares), Chambal Fertiliser (1.14 crore shares), Reliance Natural Resources (1.12 crores shares), Gokul Refoil (1.11 crore shares) and Reliance Petroleum (1.11 crore shares).
Bulls emerge victorious after three days of setback
Frenzied buying coupled with short covering after three straight day's of fall triggered a solid rally in late trade. Reports of Prime Minister's resignation had spooked a sell-off in mid-morning trade. Despite the rally, the market breadth remained negative. The market witnessed choppy swings throughtout the day. Global cues were mixed.
Earlier today, the market saw firm start despite weak global cues, but slipped in red shortly on fresh selling. The market breadth was weak. Shares from oil, realty, declined while those from IT, FMCG and power rallied.
The 30-share BSE Sensex ended up 254.93 points or 1.64% at 15,769.72. Sensex gained 300.01 points at its high of 15814.80 touched during late trade. It lost 200.72 points at day's low of 15,314.02, touched in mid-morning trade.
The BSE Sensex had eroded 900.78 points or 5.48% from 16,415.57 in past three trading days to 15,514.79 on 4 June 2008. Fears of early election, uncertainity over fuel price hike and weak global markets played the spoilsport.
The broader based S&P CNX Nifty was up 91.35 points or 1.99% to 4,676.95. Nifty June 2008 futures were at 4671, at a discount of 5.95 points as compared to spot closing.
The market breadth was negative on BSE with 1240 shares advancing as compared to 1397 that declined. 77 remained unchanged.
The BSE Mid-Cap index rose 0.05% to 6400.29 and BSE Small-Cap index rose 0.2% to 7,735.5961. Both these indices underperformed the Sensex.
BSE clocked a turnover of Rs 5578 crore today as compared to a turnover of Rs 6461.80 crore on 4 June 2008.
The NSE futures & options (F&O) segment turnover was Rs 51017.9 crore, which was higher than Rs 48,378.31 crore on Wednesday, 4 June 2008.
Among the sectoral indices on BSE, the BSE Consumer Durables index (down 1.42% to 4,031.72), BSE Realty index (down 0.99% at 6,326.05), BSE Auto (down 0.08% at 4,222.01), The BSE Oil & Gas index (up 0.02% to 10,061.83), BSE Capital Goods index (down 0.03% at 12,111.63), underperformed Sensex.
However the BSE IT index (up 5.01% to 4,617.44), BSE TecK index (up 3.45% to 3,525.65), BSE Power (up 2.89% to 2,708.49), BSE FMCG index (up 2.48% to 2,426.16), BSE Bankex (up 1.92% at 7,348.58), BSE Health Care index (up 1.9% at 4,345.89), BSE Metal index (up 1.89% to 15,714.59), BSE PSU index (up 1.84% to 6,719.54), outperformed the Sensex.
Among the 30-member Sensex pack, 22 advanced while the rest slipped.
IT stocks were the stars of the day's trading session, boosted by firm US dollar against Indian rupee. Wipro (up 6.25% to Rs 528.40), Satyam Computer Services (up 5.47% to Rs 512.20) and TCS (up 2.57% to Rs 982.75) edged higher.
India's second largest software services exporter Infosys jumped 5.86% to Rs 1979.70 on reports the firm is eyeing acquisitions in Europe to reaccelerate its growth. However the target company's name and size was not disclosed in the report.
Sahara Housing Finance Corporation was locked at 5% lower circuit filter at Rs 178 after the Reserve Bank of India banned a group financial firm Sahara India Financial Corporation from accepting public deposits after it was found guilty in violating various regulatory norms.
Mercator Lines soared 12.70% to Rs 118.50 after its Singapore-based unit bagged a renewed 4-year contract from Tata Power worth $320 million.
National Aluminium Company advanced 4.90% at Rs 501.75 on BSE on reports the firms plans massive investment of around Rs 40,000 crore in next five years in its various expansion projects.
Shares of upstream companies rallied after the subsidy burden that they have to bear became clear post fuel price hike announced yesterday, 4 June 2008, which had remained uncertain until now.
Oil and Natural Gas Corporation soared 7.46% to Rs 953.20 and Gail India jumped 7.39% to Rs 398.30.
Upstream oil companies ONGC and GAIL India absorb most of subsidy burden arising in the form of under-recoveries of oil marketing companies. The duo will now have to bear Rs 45,000 crore in subsidy burden, which is at historically high levels.
However the public sector oil-marketing companies extended losses today after yesterday’s fuel price hike. HPCL (down 6.26% to Rs 226.30), Indian Oil Corporation (down 6.29% to Rs 391.90) and BPCL (down 7.01% to Rs 301.35) edged lower.
Power stocks advanced on fresh buying. Tata Power Company (up 7.79% to Rs 1256.65), NTPC (up 5.57% to Rs 166.65), Reliance Infrastructure (up 5.68% to Rs 1130.85) edged higher.
FMCG stocks rose. Tata Tea (up 5.02% to Rs 816.30), Hindustan Unilever (up 3.23% to Rs 237.85), ITC (up 2.89% to Rs 222.35) edged higher.
Jaiprakash Associates (up 3.68% to Rs 205.60), Grasim Industries (up 3.19% to Rs 2,246.30), Tata Steel (up 3.1% to Rs 840.90), ICICI Bank (up 3.09% to Rs 781.25), HDFC Bank (up 2.22% to Rs 1,243), were the top gainers from Sensex pack.
Tata Motors (down 1.82% to Rs 532.60), Larsen & Toubro (down 1.6% to Rs 2,721.20), Ambuja Cements (down 1.89% to Rs 85.85), Reliance Industries (down 2.58% to Rs 2247.65), were the top losers from Sensex pack.
Interest rate sensitive realty sector declined on fears of hike in interest rates or CRR after inflation may rally to double-digit post fuel price hike announced yesterday, 4 June 2008.
Indiabulls Real Estate (down 1.6% to Rs 405.45), Phoenix Mills (down 3.99% to Rs 319) and DLF (down 3 % to Rs 538.45) edged lower from realty pack.
India’s largest maker of utility vehicles, Mahindra and Mahindra (M&M) declined 0.92% to Rs 562.75. It announced signing an agreement to acquire 100% stake in Italy based Engines Engineering. Engines Engineering is in the business of two wheels design and developing of motorcycle prototype.
India’s second largest telecom services provider Reliance Communications rose 1.3% to Rs 547.15. As per reports Reliance Communications and South Africa's MTN have begun due diligence as they inch closer to creating a global top-10 telecoms firm. Reliance Communications has also engaged Deutsche Bank for the possibility of roping in private equity firms for part of the deal, the source said. Blackstone Group Carlyle Group and Apax were interested to put in $4 billion to $5 billion, reports added.
India’s largest cement maker by sales ACC rose 1.09% to Rs 639.70. Its cement shipments in May 2008 fell to 1.8 million tonnes from 1.82 million tonnes a year earlier. Production fell to 1.79 million tonnes from 1.82 million tonnes during the similar period.
IFCI clocked the highest volume of 1.9 crore shares on BSE. Anu’s Laboratories (1.25 crore shares), Ispat Industries (1.21 crore shares), Chambal Fertilisers and Chemicals (1.14 crore shares) and Reliance Natural Resources (1.14 crore shares) are among other gainers in that order.
Reliance Industries clocked the highest turnover of Rs 418.91 crore on BSE. Anu’s Laboratories (Rs 353.59 crore), Reliance Capital (Rs 266.36 crore), Gokul Refoils and Solvent (Rs 210.66 crore) and ONGC(Rs 204.36 crore) are among other turnover toppers in that order.
India's largest wind turbine maker Suzlon Energy soared 8.66% to Rs 268.60. The stock moved up on reports that REpower Systems, in which Suzlon holds 33.6% stake, has bagged an order to supply 100 wind turbines to US-based enXco.
Tech Mahindra rose 7.52% to 847.85. The stock galloped after the firm said it signed a multi-million dollar deal with Botswana Telecommunications. The company sees revenues of upto $10 million over the next 3-5 years from the deal.
In a crucial development, government yesterday, 4 June 2008 agreed to raise its petrol and diesel prices by about 10% in an attempt to curb mounting losses of state-owned refiners thereby stoking inflation and risking a political backlash. After 10 days of debate over the price increase, the Cabinet also agreed to cut the import duty on crude oil to support state run refining and retailing firms. Customs duty on crude was also reduced to nil from 5%. The duty cuts would amount to Rs 22,660 crore in revenue loss, the Revenue Secretary said.
Meanwhile, the ruling Left Front in West Bengal has called a 12-hour general strike today, 5 June 2008 in protest against the 'anti-people' decision of the Centre to raise the prices of petrol, diesel and cooking gas.
Analysts opine that higher inflationary expectations immediately gave rise to fears of a cash reserve ratio (CRR) or interest rate hike, which is a negative for markets.
European markets were trading mixed. Key benchmark indices from France, and Germany were up between 0.08% to 0.11%. While UK's FTSE 100down 0.26%.
Asian markets were mixed today, 5 June 2008. Japan's Nikkei Singapore's Straits Times, South Korea's Seoul Composite, and China's Shanghai Composite, were down by between 0.08% to 0.65%. Hong Kong's Hang Seng and Taiwan's Taiwan Weighted were up between 0.55% to 1.28%.
US markets ended mixed in volatile session yesterday, 4 June 2008. Banks fell to their lowest level in eight years on Fed Chairman Ben Bernanke's warning that inflation is still a concern. Financials tumbled on rumors that Moody's May Put bond insurers AMBAC and MBIA on review for a possible credit rating downgrade.
The Dow Jones industrial average slipped 12.37 points, or 0.10%, to 12,390.48. The Standard & Poor's 500 index was down 0.45 points, or 0.03%, to 1,377.20, while the Nasdaq advanced 22.66 points, or 0.91%, to 2,503.14.
It's gonna be 9 in the near term
Inflation may go beyond a 13-year high of 9 per cent as a result of the steepest-ever hike in petroleum prices, analysts said on Wednesday.
"It (inflation) could cross 9 per cent in the near term owing to the hike in petrol and diesel prices," HDFC bank chief economist Abheek Barua told a news agency.
Government today hiked petrol price by Rs 5 per litre, diesel by Rs 3 a litre and cooking gas by Rs 50 a cylinder.
ICICI bank CEO and MD K V Kamath said, "a 10 per cent sustained rise, if passed through, can add as much as 1.3 per cent to inflation."
Inflation was over 9 per cent nearly 13 years back in September 1995.
Petroleum Secretary M S Srinivasan said the hike could lead to an about 0.5-0.6 per cent rise in inflation rate.
Petrol and diesel prices, which have gone up by 11 per cent and 8.5 per cent respectively, will increase the inflation rate by about 0.3 per cent, while LPG cylinder would add 0.2-0.3 per cent to the rate.
Besides, there would be cascading effect of diesel price rise on commodities in due course of time by way of higher transportation cost, adding to the inflation.
A study by CRISIL said the petroleum price hike would push up inflation by 95 basis points through both direct and indirect impacts.
Last week, Finance Minister P Chidambaram had said any increase in administered prices of petrol would have moderate inflationary impact in the short term, but its effect on prices in the long term could not be predicted as there would be a cut in expenditure under some heads as well.
The hike in prices would be reflected in official inflation data slated to be released on June 20.
Market may extend losses
Local equities are seen extending losses for the fourth straight day today, 5 June 2008 on worries of double digit inflation post fuel price hike announced yesterday, 4 June 2008. Sentiment may also nervous stay nervous following weak global cues.
Local markets have been reeling under pressure since the past three sessions marred by fears of spike in inflation to a 13-year high post fuel price hike announced yesterday, 4 June 2008. Weak global markets also played the spoilsport during this period. The 30-share BSE Sensex tumbled 447.77 points or 2.81% at 15,514.79 and the broader based S&P CNX Nifty was down 130.3 points or 2.76% at 4,585.60, yesterday 4 June 2008.
The BSE Sensex has now eroded 900.78 points or 5.48% from 16,415.57 in just three trading days. The Sensex has now slumped 5691.98 points or 26.84% from its all time high of 21,206.77, struck on 10 January 2008. However it is still up 705.3 points or 4.76% from its recent low of 14,809.49 touched on 17 March 2008.
In a crucial development, government yesterday, 4 June 2008 agreed to raise its petrol and diesel prices by about 10% in an attempt to curb mounting losses of state-owned refiners thereby stoking inflation and risking a political backlash. After 10 days of debate over the price increase, the Cabinet also agreed to cut the import duty on crude oil to support state run refining and retailing firms. Customs duty on crude was also reduced to nil from 5%. The duty cuts would amount to Rs 22,660 crore in revenue loss, the Revenue Secretary said.
Meanwhile, the ruling Left Front in West Bengal has called a 12-hour general strike today, 5 June 2008 in protest against the 'anti-people' decision of the Centre to raise the prices of petrol, diesel and cooking gas.
Analysts opine that higher inflationary expectations immediately gave rise to fears of a cash reserve ratio (CRR) or interest rate hike, which is a negative for markets.
In coming weeks, markemen would be eyeing two things. One would be progress of monsoon and second would be the advance tax figures.
Asian markets were trading lower today, 5 June 2008. Japan's Nikkei (down 0.69% at 14,335.79), Taiwan's Taiwan Weighted (down 1.13% at 8,530.12), Singapore's Straits Times (down 0.57% at 3,117), South Korea's Seoul Composite (down 0.72% at 1,820.59), Hong Kong's Hang Seng (down 0.03% to 24,110.27) and China's Shanghai Composite (down 0.06% at 3,368.48), edged lower.
US markets ended mixed in volatile session yesterday, 4 June 2008. Banks fell to their lowest level in eight years on Fed Chairman Ben Bernanke's warning that inflation is still a concern. Financials tumbled on rumors that Moody's May Put bond insurers AMBAC and MBIA on review for a possible credit rating downgrade.
The Dow Jones industrial average slipped 12.37 points, or 0.10%, to 12,390.48. The Standard & Poor's 500 index was down 0.45 points, or 0.03%, to 1,377.20, while the Nasdaq advanced 22.66 points, or 0.91%, to 2,503.14.
As per provisional data, foreign funds sold shares worth a net Rs 1198.80 crore yesterday, 4 June 2008. Domestic funds bought shares worth a net Rs 419.81 crore on that day.
Foreign institutional investors (FIIs) were net buyers of Rs 334.96 crore in the futures & options segment yesterday, 3 June 2008. They were net buyers of index futures to the tune of Rs 82.12 crore and bought index options worth Rs 26.18 crore. They were net buyers of stock futures to the tune of Rs 225.94 crore and bought stock options worth Rs 0.72 crore.
Pre Session Commentary - June 5 2008
The Indian Market is likely to have negative opening, as the cues from the global markets are not in favor. On Wednesday, the market declined drastically during the trading session on the concern of rally of inflation above 10% mark due to the hike in fuel prices by the Union government. The Union Cabinet on Wednesday raised the prices of petrol by Rs5 and diesel by Rs3 due to rising crude oil prices. The price of the domestic cooking gas was also hiked by Rs50 a cylinder. The excise duty on petrol was cut Re1 a litre. Kerosene was exempted. The customs duty on crude was also reduced to nil from 5%. Though the market gained some grounds to pare its losses in the mid session but all of a sudden lost the grip due to fear of inflationary pressures as well as negative cues from the global markets. The market showed no sign of recovery till the close due to heavy selling pressures across the sectoral indices.
The BSE Sensex closed lower by 447.77 points at 15,514.79 and NSE Nifty fell by 130.3 points to close at 4,585.60. We expect that the market may remain volatile during the trading session due to the concern of rising inflation as well as the global market are not supportive.
On Wednesday, the US market was closed mixed. The Dow Jones Industrial Average (DJIA) closed lower by 12.37 points at 12,390.48 while NASDAQ closed up by 22.66 points at 2,503.41 and S&P 500 index closed flat at 1,377.20.
Major Indian ADRS closed mixed. In technology sector, Wipro fell by (1.79%) along with Satyam by (1.06%) and Infosys by (0.17%) while Patni Computers grew by (1.18%). In banking sector, HDFC bank dropped by (1.75%) while ICICI bank advanced by (0.17%). In telecommunication sector, Tata Communication and MTNL slipped by (3.71%) and (1.94%). Sterlite industries decreased by (3.55%).
Today the major stock markets in Asia are trading weak. Japan Nikkei is trading lower by 99.78 points at 14,335.79 along with Taiwan Weighted trading down by 97.68 points at 8,530.12 and Singapore Strait Times trading at 3,117 down by 17.80 points.
The FIIs on Wednesday stood as net seller both in equity as well as debt. The gross equity purchased was Rs2,966.80 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs3,919.20 Crore and gross debt sold stood at Rs25.00 Crore. Therefore, the net investment of equity reported was (Rs952.30 Crore) and net debt was (Rs25.00 Crore).
Today, Nifty has support at 4,483 and resistance at 4,673 and BSE Sensex has support at 15,196 and resistance at 15,793.
US markets end mixed
Technology sector tries to offset the weakness in the energy and financial sectors
US Market practically ended unchanged today, Wednesday, 04 June 2008 after technology sector tried utmost to offset the weakness in the financial and the energy sectors. Ben Bernanke’s speech before Harvard also stocks tumbling in the mid session hours. Telecom was also a noted laggard today following reports of a large buyout in the sector. Five of ten sectors posted gains today. Technology sector was the largest gainer while energy was the largest loser.
The major indices open with slight losses, as a better-than-expected private employment reading and an upward revision to first quarter productivity was not enough to lift investor sentiment in the early going. In the middle hours, market tried recovering after Moody’s decided to review the two bond insurers’ - Ambac and MBIA’s credit ratings. At the end, the Dow Jones industrial Average ended the day with a loss of 12.3 points at 12,390. The Nasdaq Composite Index, finished higher by 22.6 points at 2,503. S&P 500 finished lower by 0.45 points at 1,377.2.
Fifty percent of the thirty Dow stocks ended in the green today. General Motors together with other financial stocks like JP Morgan, Citigroup and Banc of America were the largest losers. Walt Disney, Intel and American Express were the main Dow laggards.
There were quite a few economic reports on the dock today. All were better than expected but were not very dictating. Employment services firm, ADP reported that private nonfarm employment rose by 40,000 in May. This came out ahead of the expected drop of 30,000.
First quarter nonfarm productivity was revised to a gain of 2.6% from 2.2% as against a consensus figure of 2.5%.
Also, May (Institute of Supply Management) ISM services - a survey of nonmanufacturing purchasing managers - was nearly unchanged at 51.7 compared to 52 in April. Market had forecast a reading of 51. Because the reading is above 50, it indicates the services sector is expanding.
Financials got badly hammered today after headlines crossed the wires that Moody's has placed Ambac's Aaa insurance financial strength rating on review for a possible downgrade.
The stock market fell to session lows on the release of Fed Chairman Bernanke's prepared text for his Harvard speech. Bernanke said inflation is "significantly higher" than the Fed wants, and that price stability is "a top priority" of the Fed. He noted that there is no sign of the 1970s-type price wage spiral.
Bernanke also added, "If people expect an increase in inflation to be temporary and do not build it into their longer-term plans for setting wages and prices, then the inflation created by a shock to oil prices will tend to fade relatively quickly."
Crude oil prices registered another drastic drop. The weekly inventory report from the Energy Department was the main reason behind this. The dollar also remained modestly strong today after Federal Reserve Chairman Ben Bernanke yesterday signaled he's finished cutting U.S. borrowing costs for now thereby boosting the dollar. Crude prices dropped more than 2% today after dropping almost 4% yesterday. Crude-oil futures for light sweet crude for July delivery today closed at $122.31/barrel (lower by $2.01/barrel or 1.6%) on the New York Mercantile Exchange.
As per the weekly inventory report by the Energy Department, crude supplies dropped by 4.8 million barrels to 306.8 million for the week ended 30 May. As per the data, supplies have fallen a total of 19 million barrels in three weeks.
Volume on the New York Stock Exchange topped 1.3 billion, while more than 946 million shares changed hands on the Nasdaq. Declining stocks outran those advancing nearly 8 to 7 on the NYSE, and by about 4 to 3 on the Nasdaq.
For tomorrow, the economic calendar focuses on the weekly initial jobless claims report. Also on the agenda will be May same-store sales from chain retailers.
Grey Market - First Winners, Sejal, Avon Weighing
Niraj Cement 175 to 190 Discount
Bafna Pharmaceutical 4010 to 12
Avon Weighing 10 2 to 3
Sejal Architectural Glass Ltd. 105 to 115 25 to 27
First Winners Ind. Ltd. 120 to 130 13 to 15
Market may remain nervous
After correcting sharply in yesterday's trades, the market is likely to witness sideways movement. However, on the other hand, the undertone still looks bearish on the back of strong selling by the FIIs. For the Nifty, the key resistance level is at 4635 and has a likely support at 4540 on the downside. The Sensex has a likely support at 15300 and resistance at 15700.
US indices finished on a flat note on Wednesday. As a result, the Dow Jones slipped by 12 points at 12390 while the Nasdaq was up 23 points at 2503 respectively.
Indian ADRs were largely weak on the US bourses. VSNL led the downfall by 3.71% followed by Wipro, Satyam, HDFC Bank, Tata Motors and MTNL were down above 1% each while Infosys and Dr Reddy, were marginally declined. However, Rediff, Patni Computers and ICICI Bank was only closed in positive territory.
In the crude oil front, the Nymex light crude oil for July series moved down by $2.01 at $122.30 a barrel. In the commodity segment, the Comex gold for August delivery declined $1.70 to settle at $883.80 an ounce.
Trading Calls - June 5 2008
Nifty (4586) Sup 4500 Res 4650
Sell HDIL (637) SL 644
Target 623, 620
Sell Maruti (746) SL 753
Target 731, 727
Sell HDFC (2402) SL 2425
Target 2357, 2347
Buy ONGC (886) SL 879
Target 900, 905
Buy Welspun Gujarat (380) SL 375 Target 390, 392
Helplessness brings courage!
Courage is the discovery that you may not win, and trying when you know you can lose.
The Government finally managed to muster up enough courage to hike retail prices of petrol, diesel and cooking gas. (Kerosene of course was exempt and will add to the joy of adulterators). To limit the burden on consumers, the Centre has also slashed customs duty on crude and petro products besides trimming the excise duty on petrol and diesel. But, all this may be a case of too little, too late. At best, it will provide a lifeline to the PSU oil marketing companies for some time. A long-term solution to the perennial problems of India's highly politicised oil sector continues to elude us.
In an unprecedented (perhaps a desperate) move to pacify the people, the Prime Minister went on air to explain the rationale behind the move. He is also seeking a long-term solution rather than saddle the Government and oil companies with the majority of the burden. As usual, the Left parties, and the BJP slammed the Government's decision. Even the RJD, very much part of the Congress coalition, has called for a rollback. If the political temperature continues to mount, there could be a small reversal in the fuel price hike.
Coming to the markets, the much-awaited announcements didn't cut much ice with the investors. Even the shares of OMCs gave up most of their gains by the end of the day. Though the price hike and other measures will provide some relief to OMCs, they will still be in considerable pain. What's more, the fiscal situation is also likely to worsen. Inflation is soon expected to hit double-digits. Companies in sectors like Auto, Aviation, Cement and Steel will be hit the most. Banks will also be affected as higher inflation will lead to more monetary tightening.
To add to the macro-economic woes, we have the fresh concerns over the global front. There are talks that Lehman Brothers could report losses and will have to raise fresh capital to stay afloat. Two of the biggest US bond insurers may have their ratings cut by Moody's. Though oil prices have cooled off substantially from US$135 per barrel, they are still quite high. The US economy may have avoided a recession (only technically though), but it's not going to gallop either. Also, Federal Reserve chief Ben Bernanke has hinted that the central bank may not increase rates any further.
Given the slew of negative factors, we expect the market to remain under pressure in the near-term. There are more chances of it falling than rallying from here. Technical and F&O indicators too are negative. FII selling has accelerated in the past few days. So, the bulls appear to be cornered from all fronts. Amidst extreme pessimism, a minor pull-back is not ruled out. But, any rally should be looked at a chance to lighten positions.
FIIs were net sellers to the tune of Rs11.99bn (provisional) in the cash segment yesterday while the local institutions poured in Rs4.2bn. In the F&O segment, foreign funds were net buyers at Rs3.35bn. On Tuesday, FIIs were net sellers of Rs9.52bn in the cash segment. Mutual Funds were net buyers of Rs1.24bn.
Fortis Healthcare and HOV Services will announce their results today.
Asian stocks are mostly down this morning, led by raw- material suppliers and financial companies, after commodity prices dropped and Lehman Brothers cut its rating on Japanese banks to negative on rising credit costs.
BHP Billiton dropped after copper fell to the lowest in more than three months and crude oil prices retreated for a second day. Mitsubishi UFJ Financial and Mizuho Financial both declined in Tokyo.
The MSCI Asia Pacific Index lost 0.9% to 148.98 as of 10:46 a.m. in Tokyo, with more than two stocks down for each that advanced. An index tracking financial companies was the biggest drag on the benchmark index.
Japan's Nikkei 225 Stock Average retreated 1% to 14,288.47. Malaysia's Kuala Lumpur Composite Index dropped 2.2%, the region's largest decline, after the government raised energy prices and imposed a windfall tax on power producers and oil palm companies.
Fresh jitters over the ongoing credit crunch coupled with Federal Reserve chairman Ben S. Bernanke's hawkish remarks on inflation sent US blue chip stock indices lower. However, technology shares managed to buck the negative trend as investors chose to avoid exposure to the volatile financial sector.
The S&P 500 ended nearly flat at 1,377.2. The Dow Jones Industrial Average declined 12.37 points, or 0.1%, to 12,390.48. The Nasdaq added 22.66 points, or 0.9%, to 2,503.14. About the same number of stocks rose as fell on the New York Stock Exchange.
US stocks opened lower but rallied after a report showed moderate expansion in the services sector. The major indexes remained in positive territory for most of the day as oil prices declined and shares of Lehman Brothers, which have been battered by credit concerns, rose following an upgrade by Merrill Lynch.
But stocks came under renewed selling pressure later in the session after credit ratings agency Moody's placed bond insurers MBIA and Ambac on review for a possible downgrade of their credit ratings.
Rumors surrounding Lehman Brothers and worries about bond insurers prevented the market from rallying on lower oil prices. On Friday, Wall Street will get a better sense of the economy's direction when the Department of Labor releases its May unemployment report.
Wachovia led 20 of 23 companies in the S&P 500 Banks Index lower after Bernanke said price stability is the Fed's top priority. Intel and Cisco gained, sending the Nasdaq to its biggest advance in a week, as an industry report showed stronger-than-forecast growth at service companies.
US light crude oil for July delivery fell US$2.01 to US$122.30 a barrel on the New York Mercantile Exchange, following the release of the government's weekly oil inventories report. The report showed a bigger-than-expected rise in gas stockpiles and a surprise drop in crude supplies.
The national average price for a gallon of regular unleaded gas rose to US$3.983 from US$3.978 the previous day, AAA reported. It was the 27th record high in 28 days.
The dollar slipped versus the euro and the yen, after rising for the past few sessions. Treasury prices fell, lifting the yield on the 10-year note to 3.97% from 3.89%. COMEX gold for August delivery fell US$1.70 cents to US$883.80 an ounce.
The Institute for Supply Management said its services sector index reading for May dipped to 51.7 from 52 in April, versus forecasts for a drop to 51. A reading above 50 indicates growth in the sector, and a reading below 50 represents a sector-wide decline.
Payroll services firm ADP reported non-farm private employment rose 40,000 last month, countering forecasts for a decline of 30,000. The report is a lead-in to Friday's more closely watched government employment report.
The US government said that first-quarter productivity was revised to a gain of 2.6% from an initial read of 2.2%, topping forecasts for a rise to 2.5%.
United Airlines, unit of UAL Corp., said it will reduce its fleet by 100 planes and cut as much as 1,600 jobs amid losses related to higher fuel costs. UAL shares gained nearly 9%.
Smuckers, the jam and jelly maker, has agreed to purchase Folgers, the coffee company from Procter & Gamble, in an all-stock deal worth US$3bn.
European shares dropped sharply, as fresh credit worries hammered the banking sector, while the energy sector sank along with oil prices. The pan-European Dow Jones Stoxx 600 index fell 1.2% to 317.06, its worst one-day drop since May 23. UK's FTSE 100 closed down 1.5% at 5,970.10, while Germany's DAX 30 dropped 0.8% to 6,965.43 and the French CAC-40 lost 1.4% to 4,915.07.
Most emerging markets closed in the red. The Bovespa in Brazil was down 1.9% at 68,673 while the IPC index in Mexico fell 0.14% at 31,448. The RTS index in Russia dropped by 3.1% to 2353 while the ISE National 30 index in Turkey dived 1.9% to 48,285.
No relief in sight for bulls
Markets slipped for fourth consecutive trading session. Indian bourses witnessed a deeper crack on Wednesday as almost all the BSE Sectoral indices i.e. the Auto, Banking, Realty, Capital Goods and PSU indices all touched their January lows.
Markets took a nose dive in the afternoon trades post fuel price hike on back of rising inflation worries; the Nifty index slipped below the crucial support level i.e. the 4,630 mark after which the index further lost ground closing below the 4,600mark for the first time since March 17 2008. The market breath was also very weak. Overall 1,944 stocks declined while only 700 stocks advanced and 75 stocks stayed unchanged.
Finally, the BSE benchmark Sensex ended 447 points lower to close at 15,514 and the Nifty index lost 130 points to close at 4,585.
Deepak Fertilizers edged lower by 0.5% to Rs102. The company announced that it is planning to enter contract-mining operation. The company is looking at third-party mining contracts in India, which will involve drilling and blasting rock on ground, mining chemicals, and related products, according to reports. The scrip touched an intra-day high of Rs107 and a low of Rs102 and recorded volumes of over 2,00,000 shares on BSE.
NTPC slipped by 1.2% to Rs157. According to reports, the company has started preparations to add nearly 7,000 mw in the hydro sector by the end of the 12th Plan (2016-17). The investment in the eight upcoming hydro projects would be around Rs350bn. The company is in the process of developing three hydel projects —Koldam (800 mw) in Himachal Pradesh, Loharigang Pala (600 mw) and Tapovan Vishnugad (500 mw) in Uttarakhand. These projects are likely to be developed within the 11th Plan period.
The scrip touched an intra-day high of Rs163 and a low of Rs156 and recorded volumes of over 35,00,000 shares on BSE.
GAIL declined by 3.7% to Rs370. GAIL Gas Ltd, the city gas distribution company of state-run GAIL India, applied for a liceBSE to set up CNG stations and piped gas network in six cities, including Gwalior, Mathura and Ghaziabad, according to the reports. The scrip touched an intra-day high of Rs390 and a low of Rs368 and recorded volumes of over 4,00,000 shares on BSE.
Shoba Developers lost over 4 percent to Rs448. According to reports the company plans to diversify its portfolio through slum redevelopment schemes and SEZ, retail and commercial projects. The scrip touched an intra-day high of Rs477 and a low of Rs445 and recorded volumes of over 12,000 shares on BSE.
L&T declined by 3% to Rs2765. There were reports stating that the company secured order to supply main power equipments for a proposed 1,600mw power project in Andhra Pradesh. The scrip touched an intra-day high of Rs2868 and a low of Rs2750 and recorded volumes of over 3,00,000 shares on BSE.
Suzlon Energy ended lower by 4% at Rs247. The company along with six others leading wind turbine manufacturers in the world has signed an agreement with the US government for improving quality and manufacturing standards, with a view to make the US generate 20% of its electricity from wind energy sources by 2030, according to reports. This pact may aid Suzlon Energy win more orders for power equipment and improve manufacturing technology. The wind energy equipment company has already captured over 8% of the US wind energy market in the recent two to three years. The scrip touched an intra-day high of Rs264 and a low of Rs240 and recorded volumes of over 19,00,000 shares on BSE.
Corporate News
Private equity firms Blackstone, Apax Partners and Carlyle are raising US$5bn for Reliance Communication Ltd’s deal with MTN. (FE)
Reliance Communications hires Deutsche Bank to fund MTN takeover. (BS)
Tech Mahindra bagged US$2.5mn deal to provide end to end systems integration services to the Botswana Tele-Communications. (BL)
Bharti Airtel to opt for the mobile virtual network operator (MVNO) model to increase its footprint overseas than acquisitions abroad. (FE)
SAP plans to invest around US$4-5mn which could go up to US$8-10mn in start-up companies in India through its investment arm, SAP Ventures. (ET)
National Aluminium Company (NALCO) to invest Rs400bn in Greenfield and brownfield projects. (BS)
RBI bars Sahara India Financial Corporation from accepting public deposits due to violation of regulations. (BS)
IVRCL Infrastructure bags RS8.36bn project from ONGC Petro Addittions. (BS)
Phoenix Mills to raise US$450mn from private equity investors to fund its mall and hospitality business. (BS)
Reliance Retail in talks with Liz Claiborne for a JV to open its stores in India. (Mint)
Novartis has bought US-based Protez Pharmaceuticals in a deal worth up to US$400mn, giving it rights to an antibiotic which could be used to fight superbugs such as methicillin-resistant Staphylococcus aureus (MRSA). (ET)
Biocon launches pre filled syringes for two drugs for kidney and for cancer patients. (BS)
Essar plans to partner or buy controlling stake in Kalindee Rail Nirman to benefit from the high spending by the railways. (Mint)
Tata Sky not granted relief by Delhi High Court on petition filed for ‘misleading’ advertisement by Dish TV. (BS)
FITCH Ratings placed Reliance Infrastructure on negative rating watch, indicating that the ratings may be downgraded or remain at the current level. (ET)
Air India to induct seven Boeing 737-800’s to its fleet of 18, making its total fleet to 25. (BS)
Orissa based Ruserger Mines and Minerals has applied for license for three mines in Sindhudurg in Maharashtra. (BS)
TVS Motor has entered into a contract manufacturing arrangement with Mahabharat Motors Manufacturing Pvt Ltd. (BL)
TATA BP Solar plans to launch its solar-powered hoardings product called I-Sign by September. (ET)
Raymond launched its new readymade garments range, Raymond Finely Crafted Garments and is close to forming a joint venture with an overseas company. (ET)
Himalaya Drug Company is going to launch a new strategic business unit (SBU) for expanding into smaller towns and hinterland districts. (ET)
Economic News
The Centre to sanction Rs45bn for Mumbai Metro Rail project.
National Bank for Agriculture and Rural Development (NABARD) to open a special liquidity assistance window for cooperative credit institutions to assist during tight resource conditions. (BS)
State governments have decided to reduce the sales tax on petrol and diesel, to reduce the impact of increase in prices. (BL)
The Board of Approval (BoA) for Special Economic Zone (SEZ) cleared 21 SEZs proposal, but there was no decision on Goa SEZ. (FE)
Infrastructure development in and around Mumbai could come to a halt as a result of the proposed coastal management zone (CMZ) regulations. (ET)
The print media industry recorded a growth of 16% last year and stood at Rs149bn according to the ministry of information and broadcasting (I&B). (ET)
In its recommendations on satellite radio Trai has recommended an FDI cap of 74% and a 4% revenue share for all players who want to offer services on this platform. (ET)
The general insurance industry grew by 14% in April led by strong growth in premiums collected by private sector insurers. (ET)
FMC will frame new rules on appointment of directors and tenure of board members in commodity exchanges in a move to improve corporate governance in these entities. (ET)
The Centre has decided to keep the base prices of edible oils unchanged for this fortnight. (ET)
Today's Pick - Deccan Aviation
We recommend a sell in Deccan Aviation from a short-term perspective. It is evident from the charts of the stock that it has been on a long-term downtrend from its December 2007 peak of Rs 335.
However, after a corrective up move from Rs 100 level to Rs 155 level (between late March 2008 and early May 2008), the stock met with a resistance at around Rs 155 and resumed the long-term downtrend. Subsequently, the stock breached the 50 and 21-day moving average and continued to decline.
Currently, the stock is hovering around Rs 100 level, likely to penetrate this level and decline. The daily and weekly momentum indicators are featuring in the bearish zone, supporting the downtrend. The moving average convergence and divergence is also featuring in the negative territory, in line with the downtrend.
Our short-term forecast for the stock is bearish. We expect the stock to decline further until it hits our price target of Rs 90 in the approaching trading sessions. Traders with short-term perspective can sell the stock while keeping the stop-loss at Rs 106 level.
via BL
Bullion metals end mixed
Gold prices end little lower while silver climbs up little higher with modest strength from dollar
Precious metals registered little drop on Wednesday, 04 June, 2008 as crude prices once again marked big drop and dollar showed modest strength. The dollar was strong for second straight day today after Federal Reserve Chairman Ben Bernanke yesterday signaled he's finished cutting U.S. borrowing costs for now thereby boosting the dollar and thus eroding the appeal of precious metals as alternative investments. A drop in energy costs also eroded demand for the precious metals as a hedge against inflation. But silver prices finished higher for the day.
Comex Gold for August delivery fell $1.7 (0.2%) to close at $883.8 ounce on the New York Mercantile Exchange. It fell to an intra day low of $879.2. Earlier, gold gained as the dollar dropped. Last week, gold prices ended lower by 4.2%. But for the month of May, it ended with a gain of higher by $22.5 (2.5%). On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped since then.
This year, gold prices have gained 5.5% for the till date against a 6.5% drop for the dollar against the euro. Before May, for April, prices closed lower by 6.3%. For first quarter prices gained 10.7%. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. But in March, prices succumbed and fell by 5.5%.
On Monday, Comex silver futures for July delivery rose 10.5 cents (0.6%) to $16.94 an ounce. Silver has gained 14.2% in 2008 till date. It finished 7.5% lower last week.
Silver prices ended the month of May 2008 with a gain of 2.7%. For April, it closed lower by 5.5%. Silver had gained 16% in Q1. In January this year itself, prices climbed 14%. In February, it gained another 15%. For March, it ended lower by 13%. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years.
At the currency markets on Wednesday, the U.S. Dollar Index, a weighted measure against the euro, yen and four other major currencies, gained as much as 0.3%. Yesterday, the U.S. currency rallied after Federal Reserve Chairman Ben S. Bernanke signaled he was done cutting U.S. borrowing costs for now. That sent gold down 1.3%.
Dollar weakness typically benefits dollar-denominated commodities, such as gold and crude oil, because it makes them cheaper for holders of other currencies. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.
In the energy market today, crude price fell more than 2% at $122.3/barrel after Energy Department reported that jump in refinery activities help supply of more petroleum products in the crude market.
The weakening dollar and higher global demand for raw materials have led to records this year for commodities including gold. 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. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies.
Since last September, Fed has axed interest rates seven times and brought it down to 2%. The ECB has kept rates unchanged at 4% since June, 2007.
Gold witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. In 2006, silver had jumped 46% while gold gained 23%.
At the MCX, gold prices for August delivery closed higher by Rs 39 (0.3%) at Rs 12,201 per 10 grams. Prices rose to a high of Rs 12,249 per 10 grams and fell to a low of Rs 12,078 per 10 grams during the day’s trading.
At the MCX, silver prices for July delivery closed Rs 164 (0.7%) higher at Rs 23,577/Kg. Prices opened at Rs 23,357/kg and rose to a high of Rs 23,630/Kg during the day’s trading.
Crude softens
Increase in refinery utilization lead to more availability of petroleum products
Crude oil prices registered another drastic drop on Wednesday, 04 June, 2008. The weekly inventory report from the Energy Department was the main reason behind this. The dollar also remained modestly strong today after Federal Reserve Chairman Ben Bernanke yesterday signaled he's finished cutting U.S. borrowing costs for now thereby boosting the dollar. Crude prices dropped more than 2% today after dropping almost 4% yesterday.
Crude-oil futures for light sweet crude for July delivery today closed at $122.31/barrel (lower by $2.01/barrel or 1.6%) on the New York Mercantile Exchange.
As per the weekly inventory report by the Energy Department, crude supplies dropped by 4.8 million barrels to 306.8 million for the week ended 30 May. As per the data, supplies have fallen a total of 19 million barrels in three weeks.
But refinery utilization was up 1.8% at 89.7% of capacity compared with 87.9 % a week earlier. The increase prompted a rise in petroleum products. As per EIA, motor gasoline supplies rose 2.9 million barrels to 209.1 million barrels and distillate stocks were up 2.3 million barrels at 111.7 million barrels.
Last week, crude prices closed lower by 3.7%. Previously during the month of May, 2008 prices had touched an all time high of $135.09. For the year, crude is up by 28% till date. Prices are 91% higher on a yearly basis. .
At the currency markets on Wednesday, the U.S. Dollar Index, a weighted measure against the euro, yen and four other major currencies, gained as much as 0.3%. Energy and metals dropped yesterday after Bernanke said the Fed is working with the Treasury to carefully monitor developments in foreign-exchange markets and is aware of the effect of the dollar's decline on inflation.
Dollar weakness typically benefits dollar-denominated commodities, such as gold and crude oil, because it makes them cheaper for holders of other currencies. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.
Natural gas higher by 65% on a yearly basis
Natural gas in New York advanced as traders ignored the return of the Independence Hub in the Gulf of Mexico and bought contracts amid speculation summer storms and higher temperatures will spur prices. Natural gas for July delivery rose 15.8 cents (1.3%) to settle at $12.379 per million British thermal units. Futures earlier fell as low as $12.076. Futures are 65% higher this year.
Against this backdrop, prices for July reformulated gasoline fell by 15 cents, or 4.5%, to finish at $3.20 a gallon, while July heating oil closed at $3.5458 a gallon, down 9.42 cents, or 2.6%.
Crude had ended FY 2007 substantially higher by $35 or 57%. It was crude’s biggest yearly gain in five years.
At the MCX, crude oil for June delivery closed at Rs 5,249/barrel, lower by Rs 75 (1.4%) against previous day’s close. Natural gas for June delivery closed at Rs 529.8/mmbtu, higher by Rs 10.9/mmbtu (1.9%).
The Energy Department will release its weekly update natural gas tomorrow
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