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Friday, June 27, 2008
NSE Bulk Deals to Watch - June 27 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
27-JUN-2008,CARBORUNIV,Carborundum Univ Ltd,MERILL LYNCH CAPITAL MARKET ESPANA S.A. SVB,BUY,612000,129.94,-
27-JUN-2008,GTCIND,GTC Industries Ltd,MONEY MATTERS ADVISORY SERVICES LTD ,BUY,197348,148.42,-
27-JUN-2008,GWALCHEM,Gwalior Chemical Industri,MORGAN STANLEY MAURITIUS COMPANY LTD,BUY,245000,107.09,-
27-JUN-2008,GWALCHEM,Gwalior Chemical Industri,TRANSGLOBAL SECURITIES LTD.,BUY,152779,115.13,-
27-JUN-2008,HINDUJAVEN,Hinduja Ventures Limited,HAMON ASSET MANAGEMENT LTD.A/C SELECTED ASIAN PORTFOLIO,BUY,194667,219.00,-
27-JUN-2008,SASKEN,Sasken Commu Techno Ltd,MBL & COMPANY LTD.,BUY,293749,144.08,-
27-JUN-2008,TRICOM,Tricom India Limited,KIRTIKUMAR KANTILAL SHAH,BUY,69000,124.00,-
27-JUN-2008,GTCIND,GTC Industries Ltd,CAPITAL GROWTH INVESTMENT LTD,SELL,125000,148.65,-
27-JUN-2008,GWALCHEM,Gwalior Chemical Industri,TRANSGLOBAL SECURITIES LTD.,SELL,152779,115.27,-
27-JUN-2008,HINDUJAVEN,Hinduja Ventures Limited,ICICI BANK LTD.,SELL,194667,219.00,-
27-JUN-2008,SASKEN,Sasken Commu Techno Ltd,MBL & COMPANY LTD.,SELL,291551,144.10,-
27-JUN-2008,TRICOM,Tricom India Limited,HETAL ASHOK SHAH,SELL,69000,124.00,-
BSE Bulk Deals to Watch - June 27 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
27/6/2008 531223 ANJANI SYNTH NARENDRA V BAHUVA B 80000 39.30
27/6/2008 531223 ANJANI SYNTH NARENDRA V BAHUVA S 70000 39.76
27/6/2008 532981 ANU LABS SUMMIT COMMUNICATIONS PVT LTD B 76112 369.61
27/6/2008 532981 ANU LABS SUMMIT COMMUNICATIONS PVT LTD S 121112 370.59
27/6/2008 500820 ASIAN PAINTS GEETANJALI TRADING AND INVESTMENT CO LTD B 617400 1173.98
27/6/2008 532989 BAFNA PHARMA N D NISSAR B 1446160 41.27
27/6/2008 532989 BAFNA PHARMA KULKARNI MEGHA PRAKASH B 125550 41.90
27/6/2008 532989 BAFNA PHARMA LATIN MANHARLAL SEC PVT LTD B 130687 44.18
27/6/2008 532989 BAFNA PHARMA PRAKASH K MAKHIJA B 319685 41.63
27/6/2008 532989 BAFNA PHARMA KETAN MAMANIYA B 205806 42.44
27/6/2008 532989 BAFNA PHARMA CHIRAG D. MEHTA B 113858 39.37
27/6/2008 532989 BAFNA PHARMA AKHIL J. PATVA B 187983 42.92
27/6/2008 532989 BAFNA PHARMA S.M.NISSAR B 300815 41.07
27/6/2008 532989 BAFNA PHARMA PRABHUDAS LILLADHER PVT. LTD. B 532939 42.16
27/6/2008 532989 BAFNA PHARMA CHIRAG D. MEHTA S 113858 39.35
27/6/2008 532989 BAFNA PHARMA AKHIL J. PATVA S 181874 43.22
27/6/2008 532989 BAFNA PHARMA S.M.NISSAR S 300815 41.18
27/6/2008 532989 BAFNA PHARMA PRABHUDAS LILLADHER PVT. LTD. S 532939 42.24
27/6/2008 532989 BAFNA PHARMA N D NISSAR S 1446160 41.31
27/6/2008 532989 BAFNA PHARMA KULKARNI MEGHA PRAKASH S 123700 41.89
27/6/2008 532989 BAFNA PHARMA LATIN MANHARLAL SEC PVT LTD S 130687 44.22
27/6/2008 532989 BAFNA PHARMA TAIB SEC MAURITIUS LTD S 191634 45.20
27/6/2008 532989 BAFNA PHARMA PRAKASH K MAKHIJA S 319685 42.62
27/6/2008 532989 BAFNA PHARMA KETAN MAMANIYA S 205806 42.46
27/6/2008 511664 BGIL FL TEC CHETAN DOGRA S 60289 13.64
27/6/2008 512332 BIRLA CAP SHEARSON INV AND TRADING PVT LTD B 3000000 5.98
27/6/2008 512332 BIRLA CAP BIRLA BOMBAY PVT LTD S 3039500 5.98
27/6/2008 513375 CARBO UNIVER MERRILL LYNCH CAPITAL MARKET ESPANA S A SVB B 3835000 129.99
27/6/2008 513375 CARBO UNIVER RELIANCE CAPITAL TRUSTEE CO LTD AC RELIANCE LONG TERM EQ FUND S 3425000 130.00
27/6/2008 522059 CHAMPAGN IND AMERICAN FUNDS INSURANCE SERIES GLOBAL SMALL CAPITALIZATION FUND B 180510 426.99
27/6/2008 522059 CHAMPAGN IND CAPITAL GROUP AC SMALL CAP WORLD FND INC B 165136 426.99
27/6/2008 522059 CHAMPAGN IND VONTOBEL FUND FAR EAST EQUITY S 343025 427.00
27/6/2008 532312 GEOMETRIC L MATTERHORN VENTURES LIMITED B 5775001 43.50
27/6/2008 532312 GEOMETRIC L FIDELITY INVESTMENT AC FID FUNDS MAURITIUS LTD S 5775001 43.50
27/6/2008 532909 GRABAL ALOK INDEX EQUITIES P LTD S 119300 100.06
27/6/2008 526797 GREENPL INDU CREDIT SUISSE SINGAPORE LIMITED B 648868 158.00
27/6/2008 526797 GREENPL INDU AENEAS PORTFOLIO COMPANY LP FDI S 648868 158.00
27/6/2008 532764 GWALIOR CHEM MORGAN STANLEY MAURITIUS COMPANY LTD B 143000 107.14
27/6/2008 532764 GWALIOR CHEM H.J.SECURITIES PVT.LTD. B 177407 115.04
27/6/2008 532764 GWALIOR CHEM H.J.SECURITIES PVT.LTD. S 177407 115.23
27/6/2008 530005 INDIA CEMENT HSBC GLOBAL INVESMENT FUND MAURITIUS LTD B 3982400 149.75
27/6/2008 530005 INDIA CEMENT MORGAN STANLEY INVESMENT MAURITIUS LTD S 3982400 149.75
27/6/2008 530885 JAISAL SECUR SRIPATHEE INVESTMENTS PRIVATE LIMITED B 25000 36.99
27/6/2008 532986 NIRAJ CEMENT ANIL AMRUTLAL GANDHI B 200000 231.55
27/6/2008 532986 NIRAJ CEMENT AYODHYAPATI INVESTMENT PVT LTD B 276932 223.20
27/6/2008 532986 NIRAJ CEMENT AMRUT SECURITIES LTD B 61445 221.20
27/6/2008 532986 NIRAJ CEMENT S.M.NISSAR B 200143 223.00
27/6/2008 532986 NIRAJ CEMENT ANGEL INFIN PRIVATE LIMITED B 113296 227.93
27/6/2008 532986 NIRAJ CEMENT PRABHUDAS LILLADHER PVT. LTD. B 180934 223.02
27/6/2008 532986 NIRAJ CEMENT N D NISSAR B 160107 226.32
27/6/2008 532986 NIRAJ CEMENT N.C.JAIN B 140004 228.48
27/6/2008 532986 NIRAJ CEMENT KAUSHIK SHAH SHARES SEC PL B 158583 225.86
27/6/2008 532986 NIRAJ CEMENT IMTIYAZ I.DESAI S 82000 237.05
27/6/2008 532986 NIRAJ CEMENT ANIL AMRUTLAL GANDHI S 166493 231.43
27/6/2008 532986 NIRAJ CEMENT AYODHYAPATI INVESTMENT PVT LTD S 276932 227.10
27/6/2008 532986 NIRAJ CEMENT S.M.NISSAR S 200143 223.50
27/6/2008 532986 NIRAJ CEMENT ANGEL INFIN PRIVATE LIMITED S 85295 232.93
27/6/2008 532986 NIRAJ CEMENT PRABHUDAS LILLADHER PVT. LTD. S 180896 223.90
27/6/2008 532986 NIRAJ CEMENT N D NISSAR S 160107 226.88
27/6/2008 532986 NIRAJ CEMENT N.C.JAIN S 130503 230.27
27/6/2008 532986 NIRAJ CEMENT KAUSHIK SHAH SHARES SEC PL S 158210 226.29
27/6/2008 532884 REFEX REFRIG HIMMAT PARSHOTTAMBHAI JATANIA B 330000 223.14
27/6/2008 532884 REFEX REFRIG TUSHAR RAMESHBHAI PATEL S 394000 221.21
27/6/2008 526586 WIM PLAST LT M M S HOLDINGS PVT LTD S 42000 50.87
27/6/2008 531404 ZICOM ELE SE GKK CAPITAL MARKETS PVT L S 100000 147.99
Weekly News - June 27 2008
India, Pak, Iran to discuss pipeline in July
Officials from India, Pakistan and Iran will meet next month to discuss construction of the much-delayed US$7.6bn pipeline to transport natural gas from Iran to the sub-continent, Petroleum Secretary M.S. Srinivasan said. Iran and India are yet to agree on the delivery point of the natural gas, Srinivasan told reporters in New Delhi. India wants Iran to deliver gas at the border it shares with Pakistan, he said, adding that Pakistan has said it has no problem with India's stand. The three countries want to build 2,100-kilometer long natural gas pipeline by December 2012 after a decade of delays.
Apr-June direct tax collections up 43% yoy
The collection from corporate income tax and personal income tax as on June 21, stood at Rs494.11bn, exhibiting a growth rate of 43.45% over the same period of the previous year. Collection from corporate income tax stood at Rs306.55bn, reflecting a growth rate of 39.8% over the year-ago period, while personal income tax receipts were up nearly 50% at Rs187.56bn. The buoyancy in the tax collection is significant considering the fact that refunds to the tune of Rs108.1bn have been issued till date at a growth rate of 33.7% over previous year. The advance tax payments by top companies have shown a healthy growth. The highest contribution has come from ONGC followed by SBI and SAIL indicating that the growth is visible in almost all sectors of economy.
SBI raises PLR by 50 bps
State Bank of India (SBI) hiked its Prime Lending Rate (PLR), the rate it receives from its best borrowers, for the first time in 15 months after the RBI increased the repo rate and CRR by 50 basis points to tame inflation. SBI will hike its PLR by 50 basis points to 12.75% from June 27, the country's biggest bank said in a statement. Axis Bank raised its PLR by 50 bps to 15.25%. The private sector bank also announced a 50- basis- point hike in floating home loan rates to 11% with effect from July 1. According to reports, HSBC has hiked its deposit rates by up to 75 bps with immediate effect.
IndusInd Bank has increased its PLR by 0.5% to 16.25% with effect from June 19. The bank also increased its deposit rates by 25-50 bps across tenures. Punjab National Bank (PNB) is likely to raise its deposits and lending rates from July 1 by 50 bps. At present, the bank's PLR is 12.5%. Union Bank has hiked term deposit rates by up to 100 bps. Earlier, HDFC Bank, J&K Bank and Yes Bank had increased their PLRs following the RBI's decision to raise the repo rate by 25 bps on June 11.
Govt unveils new potash, phosphate policy
The Cabinet Committee on Economic Affairs (CCEA) considered and approved the proposal of the Department of Fertilizers (DOF) relating to the Concession Scheme on de-controlled P&K fertilizers. The new policy is effective April 1. The scheme is substantially based on the recommendations of the Tariff Commission and provides a realistic framework for computing input cost, conversion and handling. It will encourage the P&K fertilizer industry to meet the long term needs of the agriculture sector. Indigenous DAP has been brought at par with imported DAP for the purposes of calculation of concession. Providing concession to indigenous DAP on the basis of Import Parity Price (IPP) will ensure competitiveness and provide a rational basis for payment of concession.
Govt asks RIL to prioritize gas supply
The Government chalked out an order of priority which Reliance Industries Ltd. (RIL) should adhere to while pumping natural gas from KG D6 block in the Krishna Godavari basin, off the east coast. RIL is expected to commence production from September. It will initially be about 25 mmscmd, and is expected to gradually increase to 40 mmscmd by March 2009. The EGoM has decided that the existing gas based urea plants, which are now getting gas below their full requirement, should be supplied gas so as to enable full capacity utilization. A maximum quantity of 3 mmscmd should be supplied to existing gas based LPG plants. Up to 18 mmscmd natural gas should be supplied to power plants.
Idea Cellular will acquire the promoters' 40.8% stake (281,489,350 shares of Rs10 each) in Spice Communications at Rs77.30 per share. Spice also approved a merger with Idea. As per the merger terms, Spice shareholders will receive 49 shares of Idea for every 100 shares held. In addition, the Idea-TM International Berhad combine will make an open offer for acquiring an additional 20% stake in Spice at Rs77.30 per share. TM International Berhad currently holds 39.2% in Spice. Idea will also sell a 14.99% stake to TM International Berhad on a preferential basis at Rs156.96 per share. It will also pay Rs5.44bn to Spice promoters as a non-compete fee. Post the Spice acquisition, Idea will become a debt free company, and will be the fifth-biggest wireless operator just behind BSNL.
Essar Steel withdraws bid for Esmark
Essar Steel withdrew its bid to acquire US-based Esmark. Severstal would now acquire Esmark for US$19.25 per share for a total value of US$1.25bn including debt. Esmark gave its union a time period of three days till June 26 to submit the bid. The United Steelworkers union would have to come up with a competing offer for Esmark, failing which Essar could revive its earlier bid, which was already approved by the Esmark Board, the report added.
Sun Pharma exercises options to acquire Taro Pharma
Sun Pharmaceutical Industries announced that a subsidiary of Sun Pharma has exercised the option to acquire all the shares held by the controlling shareholders of Taro Pharmaceuticals Industries Ltd. Sun Pharma will in the next few days commence a Tender Offer for all ordinary shares as required by the option agreement. The agreement also requires that Sun Pharma specifically commence its Tender Offer at US$7.75 per share. Sun Pharma filed an action in the Supreme Court of New York against Taro and its full Board of Directors. The action asserting fraud claims against Taro and its directors asks the court to order the controlling shareholders to honor their promises under the option agreement.
GMR announced the signing of definitive documentation for the acquisition of 50% stake in InterGen NV, a leading global power generation company, for US$1.1bn. GMR Infrastructure (Malta) Ltd. signed the share purchase agreement with AIG Highstar to acquire the stake in InterGen. The acquired firm has power plants located across the UK, the Netherlands, Mexico, Australia and the Philippines, with total net capacity (net of auxiliary) of 12,756 MW. The deal is subject to regulatory approvals and is expected to close in the third quarter of 2008. This is the largest ever acquisition of a global energy utility by an Indian company. It is the most competitive acquisition at US$360,000 per MW which is half the current cost of similar facility. InterGen had total proportional turnover of about US$1.65bn and total proportional EBITDA of US$613mn for the year ended December 2007.
Reid & Taylor to get funds from GIC arm
S. Kumars Nationwide Ltd. (SKNL) said that it's wholly owned unlisted subsidiary, Reid & Taylor (India) Ltd. has received an investment of Rs9bn from Indivest Pte Ltd, an affiliate of GIC Special Investments. GIC SI will invest in Reid & Taylor through a fresh issue of shares and warrants. Post-conversion of warrants, GIC SI would own 25.4% of Reid & Taylor, valuing it at Rs35.4bn. S.Kumars will own 74.6% of Reid & Taylor post investment from GIC SI. The investment will help to substantially strengthen Reid & Taylor and S. Kumars businesses. It will also help boost their ability to grow in the luxury fabric & apparel and other textile segments, S.Kumars said.
Citi selling Indian BPO biz: report
Citigroup is reportedly planning to sell off its Indian BPO subsidiary, Citigroup Global Services, and its technology and infrastructure outsourcing arm Citos. The top US bank, which has been one of the worst hit by the sub-prime cum credit crisis, could be close to finalizing a deal with IBM, a financial daily said. French IT company Capgemini, and India's leading IT services firm Tata Consultancy Services (TCS) are the other two contenders, the newspaper said. The deal, if concluded, is expected to be worth around US $800mn, the paper said. Citigroup Global Services had been put on sale last year, but the transaction did not materialize, the business daily added.
Cairn to invest US$2bn on Rajasthan fields, pipeline
Cairn India plans to spend US$2bn to develop oil fields in Rajasthan and build a crude pipeline over the next 18 months, Chairman Bill Gammell said. A project to develop fields in Rajasthan will cost US$850mn, Gammell said in Mumbai. Cairn India started construction on a 600-kilometer pipeline to transport crude oil from its Rajasthan fields to the country's west coast. Oil production from the Mangala field is expected to start in the second half of 2009, Gammell said. The output from the Bhagyam and Aishwariya fields will start in 2010.
Caterpillar to expand manufacturing capacity in India
As part of its strategic plan to increase its manufacturing footprint in the rapidly growing Asia-Pacific region, Caterpillar announced a four-year, US$200mn investment to increase manufacturing capacity in India. The announcement to increase engine and machinery production in India was made during a visit to Caterpillar’s India facilities by Caterpillar Chairman and CEO Jim Owens. Due to the investment in operations and anticipated increases in its business to support a growing base of customers, Caterpillar plans to significantly increase employment in India over the next several years.
Sinclair signs first agreement with Wockhardt
Sinclair Pharma Plc announced that it has concluded its first marketing distribution agreement in India. The agreement was signed with Wockhardt, an Indian pharmaceutical and biotech company employing 7,500 people and sales last year of around US$670mn. The 10 year agreement with Wockhardt initially covers Atopiclair (non steroidal cream for atopic dermatitis), Aloclair (presentations for the treatment of mouth ulcers), Papulex (presentations for the treatment of acne) and Decapinol (product range for the treatment and prevention of gingivitis and plaque). Sinclair will provide finished product to Wockhardt but switch to local manufacturing as soon as possible, which will enhance the margins for Sinclair.
Fed keeps rates unchanged
No surprises here. For the first time in the last nine months, the Federal Reserve did not cut interest rates, as its focus shifts to managing inflation expectations from boosting economic growth. At the end of its two-day policy meeting on June 26, the Fed left its benchmark fed funds rate unchanged. Mounting inflation worries prompted the US central bank to halt its aggressive rate-cutting campaign that began in September 2007.
Between last September and April this year, the Fed cut short-term interest rates by 3.25% to just 2% in an effort to prevent the world's biggest economy from sliding into a recession. But, with chances of a recession receding somewhat, and commodity prices (especially that of crude oil) shooting through the roof, the Fed has had to change its stance, like most central banks around the world. In fact, Dallas Fed chief Richard Fisher voted for a rate hike.
The Fed sharpened its focus on inflation, saying that the risks to the US economy from upward pressure on prices have increased. "The upside risks to inflation and inflation expectations have increased," the FOMC said. At the same time, downside risks to growth appear to have diminished somewhat," it added. However, the Fed did not drop any hints as to when rates will start rising again if inflationary pressures continue to mount. Some economists believe there will be a monetary tightening before the end of the year, while others see no move until next spring, after this November's presidential elections.
European economy slows in May-June
Economic conditions in Europe slowed further in the last two months, according to three closely watched reports. German business confidence fell to the lowest level in more than two years in June on the back of rising crude oil prices and the prospect of higher interest rates. Rising prices are eroding consumer spending while a stronger euro is hurting exports. Separately, a preliminary purchasing managers index (PMI) for the manufacturing and service sectors across the 15-nation eurozone pointed to a contraction in activity in June, according to media reports. Also, business and consumer confidence in the 15 countries that use the euro weakened significantly in June as the European Central Bank prepared to raise its key interest rate.
Japanese economy weakens further
Japan's household spending slumped in May, the ratio of jobs available fell to a three-year low and the inflation rate almost doubled, with a measure of core prices suffering its biggest jump since 1998. Household spending declined 3.2%, the most since September 2006, the statistics bureau said. Core consumer prices, which exclude fruit, fish and vegetables, rose 1.5% from a year earlier after climbing 0.9% in April. Stocks slid to a two-month low on concern that soaring energy costs are sapping global demand for Japanese products. Bonds gained because the risk of a recession may prevent the Bank of Japan (BOJ) from raising its key interest rate from 0.5% even as inflation accelerates. The government downgraded its assessment of industrial production despite output growing for the first time in three months.
Barclays to raise US$8.8bn via share sale
Barclays said it plans to raise around £4.5bn (US$8.85bn) through a private placement of shares to three investors, as it attempts to shore up its capital base in the wake of losses linked to the sub-prime meltdown in the US. Qatar Investment Authority (£1.76bn), Challenger (£533mn), and Sumitomo Mitsui Banking Corp (£500mn) will become new shareholders of Barclays. Existing shareholders China Development Bank and Temasek will also participate in the share sale, as will other institutional shareholders and investors. The share issue will enable Barclays to run capital ratios ahead of its long-standing targets. The Board estimates that, taking into account the proceeds of the share sale, Barclays would have reported a tier one ratio of 8.8% and an equity tier one ratio of 6.3% as at Dec. 2007.
Global HNI wealth up 9.4% yoy
The combined wealth of the world’s high net worth individuals (HNIs ) increased 9.4% to US$40.7 trillion in 2007, according to the 12th annual World Wealth report, released by Merrill Lynch and Capgemini. The increase was largely driven by market capitalization growth in emerging economies. India was the world’s fastest-growing HNI market with a 22.7 % gain to 123,000, followed by China which saw a 20.3 % increase to 415,000.
The number of HNWIs in the world rose 6% in 2007 to 10.1mn, while the number of ultra high net worth individuals (Ultra-HNWIs ) increased by 8.8 %. For the first time in the history of the Report, the average assets held by HNWIs exceeded US$4 million.
In Asia Pacific, the HNWI population rose 8.7% from a year earlier to 2.8mn. The region’s HNWIs had combined wealth of US$9.5 trillion, an increase of 12.5 %.
Asia was home to some of the world’s fastest-growing markets by HNWI population, taking five spots out of the global top 10 for the third consecutive year. China also surpassed France as the fifth-largest HNWI population in the world. Also included in the world’s fastest-growing markets were South Korea, where the HNWI population increased 18.9 %, Indonesia at 16.8 % and Singapore at 15.3 %.
In India, the number of HNWIs rose 22.7 % during the year to 123,000. The growth was primarily led by market capitalization and real GDP growth.
"In India, wealth is being created at an unprecedented rate. We are in the midst of a multi-year growth trajectory in terms of the number of HNWIs as also their combined wealth," said Pradeep Dokania, head of Global Private Client at DSP Merrill Lynch Limited. "Notwithstanding the recent dislocation in global markets, the robust economies in Asia, as well as in India, are increasingly being driven by the domestic consumption story and continue to spur wealth creation in the region."
Crude on boil again...nears U$142/bbl
Crude oil prices accelerated in the last two days of the week, touching a new all-time high of nearly US$142 per barrel in electronic trading. The August light crude contract traded as high as US$141.71 per barrel on Friday. It closed at a record US$139.64 in New York on Thursday. Prices jumped after OPEC president warned of higher oil prices, the dollar declined and Libya threatened reduction in crude output.
OPEC president Chakib Khelil, who is also Algeria's Energy Minister, said oil prices could jump as high as US $150 to US $170 dollars a barrel this summer. However, he thinks crude will fall short of US $200 a barrel. At a meeting in Paris, Khelil said a further fall of 1-2% in the dollar versus the euro could add another US $8 to oil prices. He cited the weakness of the greenback as a major cause of spiking oil prices.
Also, Libya threatened to cut oil output because of a US threat to its assets and an assumption that the oil market is oversupplied, according to Bloomberg. A US law allows terror victims to seize assets of foreign governments as compensation, the report said.
US dollar fell against most of its major rivals after the Federal Reserve held its benchmark short-term rate steady at 2%. The central bank sharpened its focus on inflation, saying that the risks posed to the economy by rising prices have increased. Oil may rise further if the ECB boosts rates on July 3, further weakening the US dollar. ECB President Jean-Claude Trichet said on June 25 that policy makers may increase rates by 25 bps next month to contain inflation.
Weekly Newsletter - June 27 2008
Crude continues to play spoilsport. The coming week may see it flirt with the US$150 levels after which it could cool for some time. Over the weekend, more noises will be made regarding the ruling government’s plan of action regarding the nuclear deal. The global cues will direct the turn of events.
With most sectors and stocks at the receiving end, select buying will set in depending more on the news flow. While FMCG and pharma remain the defensive bets, some beaten down large caps may be quick to rebound. Except for wild swings due to sector shifts by institutions, the week is likely to see the indices moving in a range.
The advance tax numbers are getting deceptive. The actual results will start flowing in only the following week. Till then selectively pick the large caps. There is no need to buy in a hurry as yet
Repo rate, CRR hiked to check inflation
In a somewhat surprise move, the Reserve Bank of India (RBI) dealt a double blow to the markets in the continued fight against inflation. The central bank increased the repurchase rate (repo rate) and the CRR by 50 basis points each. While the repo rate was hiked to 8.5% with immediate affect, the CRR will go up in two stages - on July 5 (to 8.5%) and on July 19 (to 8.75%).
Expect lending rates on everything from home loans to auto, consumer and corporate loans to increase. Quite a few banks, including SBI, raised their Prime Lending Rates (PLR) by 50 bps. Some banks also increased their deposit rates, which will still be in the negative zone with inflation soaring to a fresh 13-year high of 11.42%. Other banks and housing finance companies are likely to take a call on rates over the next few days.
As far as markets are concerned, the move was a bit unexpected, as only on Monday the RBI Governor Y.V. Reddy had sought to allay fears of a swift reaction from the central bank in the wake of the steep increase in inflation. He even hinted that economic growth may not be hit afterall due to the series of monetary tightening measures. So, a sudden turnaround in the RBI's stand did smack of some kind of political pressure from North Block.
The stock market continued its downward spiral while bond prices tumbled, with their corresponding yields rising sharply. Shares in the rate-sensitive sectors like banking, real estate and auto were the hardest hit. Stocks in capital goods, construction, cement, retail and consumer-oriented sectors also came under pressure amid concerns over further slowdown in the economy. The rupee touched a three-week high, but retreated after crude oil nearly breached US$142 a barrel.
Post Session Commentary - June 27 2008
The market went through the bloodbath during the trading session on the concern of surge in crude oil prices and inflation worries. Crude oil prices reached to a new high of $141.71 a barrel for the first time after the head of OPEC predicted that the price of crude could rise over $150 a barrel this year. Inflation for the week jumped to 11.42% for the week ended June 14, against 11.05% for the previous week. Market opened on extremely negative note on the back of weak global cues continued to trade weak. It was a bad day for the market as it remained in the terrible situation for through out trading session led all sectoral indices to witness heavy selling pressure. From the sectoral front, metal, capital goods, bank, oil & gas and realty stocks faced heavy selling across the counters. The market breadth was weak as 2051 stocks closed in red while 601 stocks closed in green.
The BSE Sensex closed lower by 619.70 points at 13,802.22 and NSE Nifty ended down by 179.20 points at 4,136.65. The BSE Mid Caps and Small Cap closed negative with fall of 183.29 points and 191.01 points 5,558.75 and 6,938.07 respectively. The BSE Sensex touched intraday high 14,127.76 and intraday low of 13,760.24. Among the Sensex pack, all 30 scrips closed in negative.
Lossers from the BSE are Tata Motors (8.24%), HDFC (8.15%), Wipro Ltd (7.78%), Reliance Infra (7.72%), M&M Ltd (7.61%), Ambuja Cement (7.14%), JP Associates (7.01), ICICI Bank Ltd (6.40%) and DLF Ltd (5.70%).
The Metal index closed lower by 630.96 points at 13,292.45. Lossers are NALCO (9.98%), Sterlite In (6.88%), Steel Authority (6.67%), Welspan Gujarat Sr (5.65%), Sh Precoated (5.52%), LSW SL (4.96%) and HINDALCO (4.16%).
The Capital Goods index dropped by 445.09 points to close at 10,442.14. Major lossers are Siemens Ltd (5.79%), Havells India (5.75%), Jyoti Struct (5.73%), ABB Ltd (5.27), Suzlon Energy (5.05%) and Punj Lloyd (4.98%).
The Banking index closed down by 345.64 points at 6,125.95. Lossers are Bank of India (8.42%), Axis bank (6.99%), ICICI Bank Ltd (6.40%), Kotak Bank (5.77%), Indian Overseas Bank (5.33%), Yes Bank (25.06%) and OBC (4.77%).
The Oil & Gas index closed down by 289.75 points at 9,387.63. As BPCL (8.35%), Gail India (6.11%), HPCL (5.79%), Essar Oil Ltd (4.88%), ONGC (4.62%) and Reliance Natural Resources (4.30%) closed in negative territory.
The Reality Index closed higher by 227.18 points at 4,875.25. Lossers are Phoenix Mill (13.11%) along with Indiabull Real (7.76%), MAhindra Life (6.28%), DLF Ltd (5.70%), Ansal Infra (5.52%) and Sobha Dev (4.15%).
Market may remain weak
The outlook for the market remains grim for the near term as steaming inflation, record high global crude oil prices and high interest rates threaten the pace of growth in the world's second fastest expanding major economy, driving investors to the sideline or to exit.
The wholesale price index rose 11.42% in 12 months to 14 June 2008, above the previous week's annual rise of 11.05%, government data released on Friday, 27 June 2008, showed. Inflation for the year through 19 April 2008 was revised upwards to 8.23% from 7.57%.
To tame inflationary pressures, the Reserve Bank of India (RBI) on 24 June 2008, raised its key lending rate viz. the repo rate by 50 basis points to 8.5% with immediate effect, its highest since March 2002 and the second hike this month. The RBI had earlier on 11 June 2008, raised the repo rate, by 25 basis points to 8%.
The RBI also increased the cash reserve ratio, the ratio of deposits banks must keep with it, to 8.75% from 8.25% in two 25-basis-point stages on 5 July 2008 and 19 July 2008.
Foreign investors, who usually set the trend for the market, have been withdrawing relentlessly this year. FIIs dumped shares worth Rs 9349.60 crore in the month of June 2008 (till 26 June 2008). FII outflow in calendar year 2008 totaled Rs 24,719.10 crore (till 26 June 2008).
Political factors will also weigh on the market due to the ongoing confrontation between the government and Left parties over the Indo-US nuclear deal. The UPA-Left coordination committee on Indo-US nuclear deal on 25 June 2008 decided to meet again later. Foreign Minister Pranab Mukherjee said the committee completed its discussions on all aspects of the nuclear deal. The next meeting of the committee will finalise its findings.
The Left parties have already made it clear that they will withdraw their support to the government if it moves ahead with the nuclear deal. Left parties are opposing the deal saying it undermines India's independent foreign policy and nuclear weapons program.
With inflation expected to remain in double-digits in the coming months, it would be suicidal for the ruling coalition to precipitate a political crisis and go for early elections, which are due by May next year.
Crude hit a record of $141.71 on Friday, 27 June 2008 after Opec President, Chakib Khelil predicted that the oil prices could rise to $150-170 a barrel in the next 3-4 months. Rising crude oil remains a major worry as India imports close to 70% of its crude requirements.
Sensex sheds 769 points
The key benchmark indices slumped as a political rift over nuclear deal, soaring crude oil prices and high inflation weighed heavily on the market sentiment. The BSE Sensex fell to the lowest level in 13-months while the S&P CNX Nifty touched a 10-month low.
Sensex declined 769.07 points or 5.28% to 13,802.22 in the week ended Friday, 27 June 2008. The S&P CNX Nifty lost 210.90 points or 4.85% to 4136.65 in the week.
The BSE Mid-Cap index declined 473.68 points or 7.85% to 5,558.75. The BSE Small-Cap index slumped 459.59 points or 6.21% to 6,938.07.
The market suffered major losses on 23 June 2008 to settle at 10-month low on sustained selling pressure throughout the day. The 30-share BSE Sensex lost 277.97 points or 1.91% at 14,293.32. The broader based S&P CNX Nifty was down 81.15 points or 1.87% to 4266.40.
Equities extended losses for the fifth straight day on 24 June 2008 with the barometer index BSE Sensex falling below the psychologically important 14,000 mark for the first time in 10 months since late August 2007. The 30-share BSE Sensex was down 186.74 points or 1.31% at 14,106.58. The broader based S&P CNX Nifty slumped 75.30 points or 1.76% at 4,191.10.
On 25 June 2008, equities staged a solid rebound after touching fresh calendar 2008 lows in early trade. The initial jolt was caused by the Reserve Bank of India's move to hike the key lending rate. However, short covering ahead of the expiry of June 2008 derivatives contracts tomorrow, 26 June 2008, provided a foundation for the recovery. The 30-share BSE Sensex gained 113.49 points or 0.80% at 14,220.07. The broader based S&P CNX Nifty surged 61.55 points or 1.47% at 4,252.65.
On 26 June 2008, short covering ahead of expiry of June 2008 derivatives contracts helped market move higher for the second straight session. However, the market underwent choppy swings throughout the day. The 30-share BSE Sensex gained 201.75 points or 1.42% at 14,421.82. The broader based S&P CNX Nifty was up 63.20 points or 1.49% at 4,315.85.
A setback to stocks in Asia and US, sharp spurt in crude oil prices and political uncertainty due to Indo-US nuclear deal rattled bourses on 27 June 2008. The 30-share BSE Sensex slumped 619.60 points or 4.30% to 13,802.22. Intense selling pulled it lower to day’s low of 13,760.78, which is its lowest level in more than 13 months. The broader based S&P CNX Nifty tanked 179.20 points or 4.15% at 4,136.65.
India’s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) rose 4.07% to Rs 2181.90 in the week. RIL will start pumping 25 million standard cubic metres a day (mmscmd) of natural gas by September from its D-6 field in the Krishna Godavari basin, the oil ministry said on 25 June 2008. It said in a statement that the output would be raised to 40 mmscmd by March 2009.
India’s second largest private sector bank in terms of net profit HDFC Bank declined 7.31% to Rs 1018.65. The bank announced a hike in its benchmark prime lending rate by 25 basis points to 15.25%. The bank made this announcement after trading hours on Friday, 20 June 2007.
Wipro, the country’s third largest software services exporter fell 6.65% to Rs 442.60. Wipro has reportedly raised close to Rs 1,400 crore (35 billion Yen) through external commercial borrowings (ECBs). The company has been pursuing an aggressive acquisition strategy over the last few years and it concluded two major acquisitions in the year ended March 2008 including Unza and Infocrossing for a cumulative value of close to $900 million. As of 31 March 2008, Wipro had cash and bank balance Rs 3,927 crore.
Reliance Communications (RCom), the country’s second largest telecom services provider in terms of market capitalisation lost 3.61% to Rs 473.55. RCom’s proposed merger deal with South Africa based global operator, MTN is reportedly expected to close by first week of July 2008.
India’s leading pharma company in terms of sales Ranbaxy Laboratories fell 3.61% to Rs 523.05 after receiving tentative approval from US Food and Drug Administration for manufacturing and marketing valganciclovir hydrochloride tablets in 450 miligram strength.
India’s largest bank in terms of net profit State Bank of India fell 7.15% to Rs 1158.30 after the state-run bank raised its benchmark prime lending rate by 50 basis points to 12.75% with effect from 27 June 2008. The bank made this announcement during trading hours on 26 June 2007.
India’s largest private sector steel manufacturer in terms of sales Tata Steel fell 6.54% to Rs 726.75. The company reported 195.64% jump in consolidated net profit to Rs 12349.98 crore on 415.04% spurt in total income to Rs 132110.09 crore in the year ended March 2008 over the year ended March 2007. The results are non comparable due to merger Corus Group with Tata Steel.
India’s largest private sector bank by assets ICICI Bank plunged 11.10% at Rs 653.10. It hit a 52-week low of Rs 643 on 27 June 2008.
India’s largest engineering and construction firm by revenue Larsen & Toubro fell 11.57% at Rs 2267.15.
India’s second largest software exporter by sales Infosys Technologies fell 6.57% at Rs 1707.60.
India’s largest state-run oil exploration company Oil & Natural Gas Corporation (ONGC) fell 4.23% to Rs 830.15. Net profit of ONGC fell 2% to Rs 2627.10 on a 26% increase in sales to Rs 15626.07 crore in Q4 March 2008 over Q4 march 2007. The company announced the results during trading hours on 25 June 2007.
The wholesale price index rose 11.42% in 12 months to 14 June 2008, above the previous week's annual rise of 11.05%, government data released on Friday, 27 June 2008, showed. Inflation for the year through 19 April 2008 was revised upwards to 8.23% from 7.57%.
RBI, after market hours on 24 June 2008, raised its key lending rate viz. the repo rate by 50 basis points to 8.5% with immediate effect, its highest since March 2002 and the second hike this month. The RBI had earlier on 11 June 2008, raised the repo rate, by 25 basis points to 8%.
The RBI also increased the cash reserve ratio, the ratio of deposits banks must keep with it, to 8.75% from 8.25% in two 25-basis-point stages on 5 July 2008 and 19 July 2008.
Political uncertainty weighed heavily on the market due to confrontation between the government and Left parties over the Indo-US nuclear deal. The UPA-Left coordination committee on Indo-US nuclear deal on 25 June 2008 cided to meet again later. Foreign Minister Pranab Mukherjee said the committee completed its discussions on all aspects of the nuclear deal. The next meeting of the committee will finalise its findings.
The Left parties have already made it clear that they will withdraw their support to the government if it moves ahead with the nuclear deal. Left parties are opposing the deal saying it undermines India's independent foreign policy and nuclear weapons program.
The finance ministry on 25 June 2008, said the direct tax receipts were up 43.45% to Rs 49411 crore until 21 June 2008, on the back of a higher advance tax payments by corporates. Collection from corporate tax were Rs 30655 crore, up 39.81% from a year-ago, while income tax receipts were up 49.8% to Rs 18756 crore, it said in a statement.
Another brutal day on Dalal Street
The market crashed by 4.30%, in tune with other major global indices, as concerns of hike in crude oil and inflation played on investor sentiment. After gaining over 200 points in yesterday's trades, the Sensex resumed 294 points lower at 14,1428 and tanked another 368 points to touch the day's low of 13,760 on relentless selling in Bankex, Auto, Power, and overall stocks. The Sensex managed to recover 42 points in late trades, but still ended with losses of 620 points at 13,802. The Nifty shed 4.12% or 179 points to close at 4,137.
The market breadth was extremely negative. Of the 2,706 stocks traded on the BSE, 2,051 stocks declined, 601 stocks advanced and 54 stocks ended unchanged. All the sectoral indices were battered. Among the major losers, the BSE Bankex index lost 5.34%, the BSE Auto index dropped 5.26%, the BSE Power shed 4.87%, the BSE Metal index declined by 4.53% and the BSE Realty index fell 4.45%.
All the Sensex stocks ended in the red. Among the major losers Tata Motors plummeted 8.24% at Rs445.05, HDFC tanked 8.15% at Rs2,028.15, Wipro dropped 7.78% at Rs436.60, Reliance Infrastructure slumped 7.72% at Rs876, Mahindra& Mahindra crumbled by 7.61% at Rs503, Ambuja Cement dropped 7.14% at Rs80 and Jaiprakash Associates shed 7.01% at Rs141.55. ICICI Bank, DLF, SBI, Maruti Suzuki India, ONGC, Grasim Industries, Reliance Communications, Satyam Computer Services, Infosys, Hindalco and Tata Steel shed over 6-4% each.
Over 2.28 crore Bafna Pharma shares changed hands on the BSE followed by Reliance Petroleum (1.63 crore shares), Chambal Fertilisers (1.16 crore shares), Niraj Cement (1.09 crore shares) and Reliance Natural Resources (1.07 crore shares).
Inflation worries, oil price surge rattle bourses
A setback to stocks in Asia and US, sharp spurt in crude oil prices and political uncertainty due to Indo-US nuclear deal rattled bourses. Sustained selling pressure in index pivotals throughout the day kept market depressed. Fears of a further monetary tightening by the Reserve Bank of India (RBI) following surge in inflation to more than a 13-year high weighed on the sentiment. The BSE Mid-Cap index, ICICI Bank and Tata Motors touched 52-week lows today.
After an initial sharp fall, the market had staged a mild recovery from lower level in early afternoon trade which proved short lived as news that crude oil has hit a fresh record high of $141.71 a barrel, once again spooked the market and Sensex ended at the lowest level of the day.
Inflation based on the wholesale price index stood at 11.42% for the week ended 14 June 2008, the highest reading in more than 13 years. The rise has been primarily on account of higher prices of food items like tea, milk and cereals. The other commodities, whose prices went up during the week were lubricants and manufactured items.
The market breadth was weak. Realty, auto and banking stocks declined sharply. Shares of oil marketing and air carriers were hit hard following surge in crude oil prices.
Political uncertainty continued to dog bourses. As per reports in a section of the media, Congress president Sonia Gandhi has given the green signal to Prime Minister Manmohan Singh to go ahead with the Indo-US nuclear deal even if it leads to the collapse of the government at the Centre. Left parties are opposing the deal and they have threatened to withdraw their support to the government if it went ahead with operationalisation of the deal.
US stocks plunged on Thursday, 26 June 2008, with the Dow Jones Industrial Average sliding about 360 points to a 21-month low as oil hit a record and Goldman Sachs urged investors to sell bank and automaker shares, escalating concern about the outlook for profits.
The 30-share BSE Sensex slumped 619.60 points or 4.30% to 13,802.22. The barometer index opened with a sharp downward gap of 294.06 points at 14,127.76. Intense selling pulled it lower to day’s low of 13,760.78, which is its lowest level in more than 13 months. The Sensex lost 661.04 points at day’s low hit in fag trade.
The broader based S&P CNX Nifty tanked 179.20 points or 4.15% at 4,136.65. The Nifty slipped to a low of 4,119.20 which is its 10-month low. Nifty July 2008 futures were at 4,075 a sharp discount of 61.65 points as compared to spot closing.
Nifty June 2008 expired yesterday, 26 June 2008. As per reports, the marketwide rollover of positions from June 2008 contracts to July 2008 contracts in the derivatives segment stood at 82% while that of Nifty was 70%. June 2008 derivaties contracts expired yesterday, 26 June 2008.
The BSE Sensex is down 6484.77 points or 31.96% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2008. It is 7404.55 points or 34.91% away from its all-time high of 21,206.77 struck on 10 January 2008.
All sectoral indices on BSE settled with losses today. The BSE Power (down 4.87% to 2,335.26), BSE Realty index (down 4.45% at 4,875.25), BSE Metal index (down 4.53% to 13,292.45), BSE Auto (down 5.26% at 3,689.92), BSE Bankex (down 5.34% at 6,125.95), underperformed the Sensex.
The BSE Oil & Gas index (down 2.99% to 9,387.63), BSE PSU index (down 4.29% to 5,821.62), BSE Capital Goods index (down 4.09% at 10,442.14), BSE TecK index (down 3.86% to 3,093.63), BSE Consumer Durables index (down 3.13% to 3,649.33), BSE FMCG index (down 3.24% to 2,073.15), BSE Health Care index (down 1.40% at 4,150.05), BSE IT index (down 4.24% to 4,004.75), outperformed the Sensex.
Standard and Poor’s (S&P) and its Indian subsidiary Crisil have lowered their India growth forecast for the current year to 7.8% from 8.1-8.6% earlier. The agencies said that the Indian economy would be hit by the surge in inflation fuelled by energy and commodity prices.
The market breadth was weak on BSE with 2038 shares declining as compared to 617 that advanced. 54 remained unchanged.
The BSE Mid-Cap index was down 3.19% to 5,559.07 after touching a 52-week low of 5,542.35. The BSE Small-Cap index shed 2.68% to 6,938.07. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 5,890 crore as compared to Rs 5,205.78 crore yesterday, 26 June 2008. The turnover was boosted by 3 large block deals of 20.12 lakh shares each on ACC counter on BSE struck at an average price of Rs 596 per share in opening trade. It was the top traded counter on BSE with turnover of Rs 730.18 crore. The stock slipped 3.61% to Rs 578.
Reliance Industries (Rs 540.09 crore), Reliance Capital (Rs 308.13 crore), Reliance Petroleum (Rs 284.19 crore), and Tata Steel (Rs 258.03 crore), were the other turnover toppers on BSE.
All the 30-members from the Sensex pack suffered losses.
Auto stocks dropped on fears a surge in oil may impact their sales. India’s top tractor maker in terms of sales, Mahindra & Mahindra (M&M) slumped 8.98% to Rs 503, also its 52-week low. 61,161 shares were traded on the counter. It was the top loser from Sensex pack.
Ashok Leyland (down 4.75% to Rs 30.10), Hero Honda Motors (down 4.80% to Rs 679), and Maruti Suzuki India (down 3.97% to Rs 650), were the other losers from auto pack.
India’s top truck manufacturer in terms of sales, Tata Motors slumped 8.06% to Rs 450. The stock touched a 52-week low of Rs 445.05 on BSE.
India’s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) shed 3.20% to Rs 2167.70 on 24.72 lakh shares. The stock moved in a range of Rs 2137 and Rs 2247. RIL will start pumping 25 million standard cubic metres a day (mmscmd) of natural gas by September from its D-6 field in the Krishna Godavari basin, the oil ministry said on Wednesday, 25 June 2008. It said the output would be raised to 40 mmscmd by March 2009.
Jaiprakash Associates (down 7.37% to Rs 142.10), Ambuja Cements (down 7.66% to Rs 80.80), and HDFC (down 8.05% to Rs 2055) edged lower from Sensex pack.
Frontline telecom stocks Bharti Airtel (down 3.04% to Rs 744), Reliance Communications (down 4.79% to Rs 472), and Idea Cellular (down 4.44% to Rs 95.80), also tumbled in the market meltdown.
Software stocks dropped on concerns about the impact of a slowing US economy, their key market. Wipro (down 6.25% to Rs 450), Infosys Technologies (down 4.48% to Rs 1702), and TCS (down 2.15% to Rs 858), slumped.
Satyam Computer Services, the country’s fourth largest software services exporter fell 4.49% to Rs 439.15 even as the company said it has formed an alliance with US based Sciformix Corporation to provide end to end management services in 'Pharmacovigilance'. The company made this announcement after trading hours yesterday, 26 June 2007.
Banking shares were weak after inflation data was released, with India’s largest private sector bank in terms of net profit ICICI Bank striking 52-week low of Rs 643 on BSE. The stock crashed 6.71% to Rs 650.90.
State Bank of India (down 5.36% to Rs 1151), Kotak Mahindra Bank (down 5.89% to Rs 487.95), Axis Bank (down 7.39% to Rs 626.25), Bank of India (down 8.50% to Rs 224.90), and HDFC Bank (down 3.91% to Rs 1017), were the other losers from banking sector.
Power and power sector related stocks declined on selling pressure. Tata Power Company (down 6.46% to Rs 1054), Suzlon Energy (down 4.88% to Rs 230.80), Reliance Infrastructures (down 7.98% to Rs 884), Bharat Heavy Electricals (down 3.98% to Rs 1380), edged lower.
Real estate stocks slipped on selling pressure, with the BSE Realty index touching 52-week low of 4,841.49. Akruti City (down 0.85% to Rs 714.20), DLF (down 5.70% to Rs 424.20), Ansal Infrastructure (down 5.52% to Rs 74.50), Phoenix Mills (down 13.11% to Rs 163.70), were not spared either.
Unitech slipped 1.51% to Rs 183 after posting 50.76% fall in net profit to Rs 175.84 crore on 14.08% decline in total income to Rs 759.65 crore in Q4 March 2008 over Q4 March 2007. The company announced the results during trading hours today, 27 June 2008.
Tata Steel, the world's sixth-largest steelmaker in terms of sales, saw high volatility in the day. The stock settled 4.49% lower at Rs 723.10 after striking day’s high of Rs 783.90 and day’s low of Rs 721.15. The counter saw high volumes of 34.37 lakh shares. On Thursday 26 June 2008, the company reported 195.64% jump in consolidated net profit to Rs 12349.98 crore on 415.04% growth in total income to Rs 132110.09 crore in the year ended March 2008 (FY 2008) over the year ended March 2007. The results are non-comparable due to merger Corus Group with Tata Steel in FY 2008.
At the time of announcing the results, Tata Steel managing director B. Muthuraman said it had raised prices for one-year steel sale contracts. 25% of Tata Steel's total sales were through annual contracts, he said.
Ranbaxy Laboratories (down 2.01% to Rs 523.60), NTPC (down 2.25% to Rs 152.20), and Cipla (down 2.75% to Rs 210.70), outperformed the Sense.
Oil marketing companies declined as surge in crude oil prices to record high will increase their under recoveries. Hindustan Petroleum Corporation (down 6.29% to Rs 184.60), Bharat Petroleum Corporation (down 9.43% to Rs 244), and Indian Oil Corporation (down 3.46% to Rs 342), declined.
Shares of air carriers also declined on selling pressure in the wake of surging oil prices. Jet Airways (down 5.56% to Rs 489.10), SpiceJet (down 5.10% to Rs 26.10), and Deccan Aviation (down 7.71% to Rs 70), slipped.
However upstream oil company, Cairn India rose 1.59% to Rs 275.50 as rising crude oil augurs well for the oil exploration firm.
Debutante Bafna Pharmaceuticals topped volumes charts clocking volumes of 2.28 crore shares followed by Reliance Petroleum (1.63 crore shares), Chambal Fertilisers & Chemicals (1.16 crore shares), Niraj Cement & Structurals (1.09 crore shares) and Reliance Natural Resources (1.07 crore shares), in that order.
Among the side counters, Hindustan Construction Company (down 13.71% to Rs 83.70), S Kumars Nationwide (down 18.28% to Rs 80), Kaveri Telecom (down 20% to Rs 117.65), Atlas Copco (down 10% to Rs 960.65), and Bartronics (down 9.75% to Rs 170.30), slumped.
Bafna Pharmaceuticals, a multi-product pharmaceutical formulations company, settled at Rs 38.50, a 3.75% discount of over its price of Rs 40 per share. The stock listed on BSE at Rs 43.80, a premium of 9.5%. The stock hit a low and high of Rs 37.30 and Rs 47.20 during the day. The company’s IPO was subscribed 4.96 times.
Allcargo Global Logistics gained 2.49% to Rs 825 after the company said its board has deferred a decision on sub-division of the equity shares. The company made this announcement before trading hours today, 27 June 2007.
Sun Pharmaceutical Industries slipped 0.77% to Rs 1332 after the company said it has exercised the option under its option agreement to acquire all the shares held by the controlling shareholders of Israel’s Taro Pharma. The company announced this before trading hours today, 27 June 2007.
ABG Shipyard plunged 5.93% to Rs 352.10 despite securing an order worth Rs 585 crore from Sealion Shipping for construction of three sub-sea multi purpose vessels. The company made this announcement before trading hours today, 27 June 2007.
Religare Enterprises declined 2.45% to Rs 388 even as it reported 109.4% surge in net profit to Rs 23.45 crore on 107.3% growth in operating income to Rs 31.89 crore in the year ended March 2008 over the year ended March 2007.
National Aluminium Company plunged 10.75% to Rs 330 following reports the company formed a joint venture with Tata Africa to set up a $3 billion aluminium smelter and power plants in South Africa.
Parsvnath Developers declined 3.73% to Rs 131.50 despite bagging an order worth Rs 125 crore from the state government of Bihar for building a park in an area of 2.9 million square feet.
Anant Raj Industries jumped 5.19% to Rs 142.85 after the company said a Bahrain realty fund acquired a minority stake in its subsidiary Anant Raj Projects for Rs 216.38 crore. The company made this announcement during trading hours today, 27 June 2007.
European markets, which opened after Indian markets, were trading lower. Key benchmark indices in United Kingdom, Germany and France were down by between 0.28% and 1.33%.
Morning Call - June 27 2008
Market Grape Wine :
In House :
Nifty at a support of 4254 and 4185 with resistance at 4310 and 4350 levels.
Cash: sell RPL below 174 TGT 168 with S/L 176.70
Cash: Sell TISCO below 756.50 TGT 740 with S/L 761.
Future: Sell WELGUJ below 319 TGT 309 with S/L 326 .
Future: Sell RNRL below 77 TGT 71 with S/L 80.
Out House:
Markets at a support of 13926 & 13786 resistance at 14235 & 14114 levels .
Maintain strict stop loss as markets to open weak and selling to persist at every rise .
Inflation expected 11.55 to 11.77 % today .
Sell : JetAir & AirDeccan
Buy : HP & IOC at dips
Buy : ONGC at dips
Sell : DLF , HDIL & Unitech
Buy : Tisco at dips
Dark Horse : Horses have run out of Fuel , they are resting : TGIF : Thank God Its Friday : a tormenting week coming to a end .
Grey Market - KSK Energy Venture and more...
Bafna Pharmaceutical 40 7 to 10
Avon Weighing 10 5 to 7
Sejal Architectural Glass Ltd. 115 15 to 17
First Winners Ind. Ltd. 125 Discount
Archid Ply Ind. 74 4 to 7
Lotus Eye Care Hospital 36 to 38 3 to 5
KSK Energy Venture 240 to 255 Discount
Somi Conveyor Beltings 35 4 to 6
Birla Cotsyn 15 to 18 3 to 5
Market may open weak on negative global cues
The market is likely to open on a weak note tracking negative global cues. The sharp spurt in crude oil prices above the $140 per barrel mark may dampen the sentiment further. However trading might be cautious ahead of the government’s release of inflation data for the year through 14 June 2008.
As per reports, the marketwide rollover of positions from June 2008 contracts to July 2008 contracts in the derivatives segment stood at 82% while that of Nifty was 70%. June 2008 derivaties contracts expired yesterday, 26 June 2008.
Asian markets were trading weak today, 27 June 2008. Shanghai Composite plunged 3.67% or 106.41 points at 2,795.44, Japan's Nikkei fell 2.22% or 307.20 points at 13,515.12, Hang Seng tumbled 2.64% or 592.71 points at 21,862.96, Taiwan's Taiwan Weighted declined 3.99% or 311.64 points at 7,500.16, Singapore's Straits Times lost 1.41% or 42.02 points at 2,938.93. and South Korea's Seoul Composite was down 2.10% or 36.01 points at 1,681.65
US markets plunged after a downgrade on brokerage stocks, disappointing earnings from two tech giants and oil's rally above $140 a barrel. The Dow Jones closed at its lowest level since September 2006. The Dow Jones industrial average plunged 358.41 points, more than 3%, to close at 11,453.42. The Standard & Poor's 500 fell 38.82 points, about 3 percent, to 1,283.15, and the Nasdaq composite lost 79.89 points, or 3.3%, to 2,321.37.
Back home, short covering ahead of expiry of June 2008 derivatives contracts helped market move higher for the second straight session yesterday, 26 June 2008. The 30-share BSE Sensex gained 201.75 points or 1.42% at 14,421.82 and the broader based S&P CNX Nifty was up 63.20 points or 1.49% at 4,315.85, on that day.
Nifty July 2008 futures were at 4252.95, a huge discount of 62.90 points as compared to spot closing.
The BSE Sensex is down 5,865.17 points or 28.91% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2008. It is 6,784.95 points or 31.99% away from its all-time high of 21,206.77 struck on 10 January 2008.
As per provisional data, foreign funds today, 26 June 2008, sold shares worth a net Rs 667.19 crore. Domestic funds bought shares worth a net Rs 395.64 crore.
Foreign institutional investors (FIIs) were net buyers of Rs 110.71 crore in the futures & options segment yesterday, 25 June 2008. They were net buyers of index futures to the tune of Rs 1099.50 crore and sold index options worth Rs 720.12 crore. They were net sold of stock futures to the tune of Rs 282.69 crore and bought stock options worth Rs 14.02 crore.
U.S. light crude for August delivery was down 32 cents at $139.32 a barrel today, 27 June 2008 in Globex electronic trading. U.S. oil hit a record of $140.39 on Thursday after Libya said it was studying possible options to cut output in response to potential U.S. actions against OPEC countries.
Meanwhile, Standard and Poor’s (S&P) and its Indian subsidiary Crisil have lowered their India growth forecast for the current year to 7.8% from 8.1-8.6% earlier. The agencies said that the Indian economy would be hit by the surge in inflation fuelled by energy and commodity prices. The Reserve Bank of India (RBI) has already hiked interest rates twice in June 2008 to curb inflationary pressures and may well do so again.
Nightmare at US Markets
The Dow falls to a new 52 week low as crude soars to a new high and Goldman Sachs adds companies to sell list
US Market registered steep losses today, Thursday, 26 June, 2008 and headed for the worst June performance in almost seventy eight years. Crude prices soaring by more than $5 at one go and analyst downgrade on General Motors was the main reasons behind today’s steep losses. Goldman Sachs cut its overall rating on U.S. brokerages to Neutral from Attractive thereby taking a big toll on the overall financial sector. All ten economic sectors posted a loss.
The Dow Jones industrial Average ended the day with a huge loss of 358.4 points at 11,453.42. The Nasdaq Composite Index, finished lower by 79.89 points at 2,321.37. S&P 500 finished lower by 38.82 points at 1,283.15. Dow fell to a new 52 week low. All the thirty Dow stocks ended in the red headed by GM which skidded by more than 10%.
Goldman Sachs added a couple of companies to its conviction sell list. This spurred a major sell-off in Wall Street today. The firm lowered its rating on the broker sector and indicated Citigroup might incur additional write-downs and may also raise more capital. It also hinted that Merrill Lynch might raise additional capital. Goldman also cut estimates for Dow Jones Industrials component General Motors.
Dow component GE also came under severe pressure today on reports that the company is reportedly having difficulty finding a buyer for its credit card business.
In terms of economic data, the final GDP reading for the first quarter indicated the economy grew at 1%, on par with expectations and up slightly from the previous reading. Personal consumption expenditures were revised upward to 1.1%, while the GDP price index came in at 2.7%.
Also, jobless claims for the week ending 21 June exceeded expectations, totaling 384,000, though they were unchanged from the prior week. In the housing arena, existing home sales rose 2% m-o-m to a seasonally adjusted annual rate of 4.99 million, which was better than the expected increase of 1.2%.
Technology sector was hammered today after Research In Motion fell more than 13% after the company disappointed investors by reporting earnings per share results that were a penny shy of the quarterly consensus estimate. Oracle, too, disappointed its investors with an underwhelming forecast.
Crude futures rose by more than $5 at one shot today. A host of factors contributed to this sudden rise. First and foremost, the dollar weakened today. Then, Libya threatened to cut output and also OPEC's president said prices may reach $170 by the summer. Crude-oil futures for light sweet crude for August delivery today closed at $139.64/barrel (higher by $5.09/barrel or 3.8%) on the New York Mercantile Exchange. It traded as high as $140.06 during intra day trading. This was an all time new closing price for crude.
It was reported today that Libya may curb output because of a U.S. law that allows terror victims to seize assets of foreign governments as compensation. OPEC President Chakib Khelil was also reported to have said that oil may surge as high as $170 in near months on a European interest rate rise.
Volume on the New York Stock Exchange topped 1.5 billion, and declining stocks outdid those advancing more than 5 to 1. On the Nasdaq, nearly 998 million shares traded, and decliners raced beyond advancers 11 to 3.
Economic data will be the area of focus tomorrow, with the release of the May personal income and spending report.
Pre Session Commentary - June 27 2008
The Indian Market is expected to have negative opening on the back of weak global cues as US markets ended on back foot and Asian markets are trading in deep red. On Thursday, the Indian market closed in green due to short covering of the ahead of the expiry of the June derivatives contract that led the buying support in key indices. The market opened on upbeat note tracking the favoring cues from the global markets as the US Federal Reserve’s decision on Wednesday to keep the interest rates unchanged at 2%, which was according to the expectation. Further, the market was not able to sustain the same momentum and lost its gains. But selective buying at the final hours led the market close in positive territory. From the sectoral front, the oil and gas and metal stocks were in limelight as most buying was witnessed from these baskets. The BSE Sensex closed higher by 201.75 points at 14,421.82 and NSE Nifty ended up by 63.2 points at 4,315.85. We expect that market may decline during the trading session and inflation number which is due out to be today will give further direction to the market.
US markets closed lower on Thursday as Oil prices touched above $ 140 a barrel also contributed to the negative sentiment. Also the credit-market write downs and a slowing economy threatened to extend the longest slump in quarterly profits since 2002 adds to the sentiments.
The Dow Jones Industrial Average (DJIA) closed lower by 358.41 points at 11,453.42 along with NASDAQ down by 79.86 points to close at 2,321.37 and S&P 500 dropped by 38.82 points to close at 1,283.15.
Indian ADRs ended down. In technology sector, Satyam dropped by (6.05%) along with Wipro by (5.22%), Infosys by (3.86%) and Patni Computers by (2.93%). In banking sector, HDFC bank and ICICI bank decreased by (5.51%) and (5.14%) respectively. In telecommunication sector, Tata Communication advanced by (0.06%) while MTNL reduced by (1.11%). Sterlite industries declined (1.48%).
Today the major stock markets in Asia are trading in red shares plunged on Wall Street and high inflation worries. Hang Seng index is trading lower by 592.71 points at 21,862.96 along with Taiwan Weighted trading down by 311.64 points at 7,500.16 and Japan’s Nikkei trading at 13,515.12 dropped by 307.20 points.
The FIIs on Thursday stood as net seller in equity. The gross equity purchased was Rs2,901.60 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs3,005.20 Crore and gross debt sold stood at Rs187.40 Crore. Therefore, the net investment of equity reported was (Rs103.60) Crore and net debt was 0.00 Crore.
Today, Nifty has support at 4,170 and resistance at 4,384 and BSE Sensex has support at 13,979 and resistance at 14,632.
Trading Calls - June 27 2008
Nifty (4316) Sup 4160 Res 4400
Sell Omaxe (142) SL 146 Target 136, 133
Sell Hero Honda (720) SL 727 Target 706, 704
Sell Tata Motors (488) SL 494 Target 478, 474
Sell RIL (2239) SL 2255 Target 2200, 2190
Sell HDIL (450) SL 456 Target 440, 436
Of depressions and Inflation!
Concern should drive us into action and not into depression.
The sea of red across most global markets would sure drive Indian investors into depression. The Dow fell to its worst June since the Great Depression. Most market participants would just be watching the screen for the initial minutes till some stability returns. The daredevils may hope to make some quick bucks in the melee. (We can’t advise you to take such risks). Yet, there are those who would like to invest and these are times you can pick up small quantities of once upon a time very large cap stocks. Those who have the money, it would be time for action rather than depression.
But things are definitely not getting any better on the global or domestic front. Sonia Gandhi may have given her go ahead to the PM for pushing ahead with the nuke deal. But nobody could care about it today. After the initial choppiness, market will spare a thought for the inflation numbers which will officially be announced around noon. No great expectations of a cool down here. In fact it could only get worse for the coming weeks.
Crude oil prices hit a record high of US$140.39 in a rally after OPEC president in a comment said that prices could rise as high as $170/bbl in the coming months. A weaker dollar also helped fuel the rally.
Asian markets have slipped sharply this morning, following US markets overnight tumble that reflected rising worries over spiraling inflation. This would be Asian markets’ worst first half of the year since 1992. Japan's Nikkei 225 Stock Average slipped 2.22% to 13,515.12, while Hang Seng index dropped 2.2%.
The US Dow Jones industrial average fell to a 21-month low on back of record rise in crude oil prices. Sentiments were further dampened after Goldman Sachs' reports painted a gloomy picture for the financial sector.
In Europe, heavyweights fell to their lowest close since late March, driven by a sharp turn down in global financial shares. Banking stocks were badly battered turning out to be the worst performers on the FTSE 100 index. HSBC, Standard Chartered and Royal Bank of Scotland all fell between 4 to 7%.
The FTSE 100 closed at 5,518.2 losing 147.90 points or 2.61%, making this its lowest close since March 20, 2008, and its biggest one-day fall in over a month.
Even the Australian stocks slumped in early trading Friday following a sharp cut on Wall Street. Banking stocks were hit the hardest. Mining giants BHP Billiton and Rio Tinto fell about 3% each. The S&P/ASX 200 index fell 82 points or 1.55% to close at 5,225.
China's Shanghai Composite plunged 3.2% to 2,809.31 in the early minutes, and Singapore's Straits Times Index gave up 1.8% to 2,927.51. Taiwan's Weighted Index slumped 3.5% to 7,539.28.
In Asian currency trading, the U.S. dollar strengthened to 106.94 yen from 107.87 yen late on Thursday.
Back to the Indian corporate events, Jet Airways could be under further pressure following reports that it may post Rs20bn loss in two years.
Most leading banks have hiked PLR. Except for bargain hunting at lower levels, pressure would remain on bank stocks. SBI hiked its PLR to 12.75% effective from June 27, 2008. Union Bank raised its PLR to 13.25% effective from July 1, 2008.
Meanwhile, Axis Bank has acquired 2.5% stake in HCC arm Lavasa for Rs2.5bn.
Other media headlines of the day include:
Sun Pharma launches hostile Taro bid. (BS)
Essar Steel loses Esmark race to Severstal.(BS)
ONGC Videsh, along with Lakshmi Mittal will invest $155mn in a gas block in Trinidad and Tobago and another $282mn in two exploration blocks in Brazil. (Mint)
Aban Offshore wins $55mn deal to drill wells. (Mint)
Icra arm ties up with US firm to offer services. (Mint)
Vedanta to raise $1.25bn via bonds. (BS)
Essar plans Rs48bn power plant in Vadinar. (BS)
Lanco Group plans wind energy foray. (BL)
HT Media acquires stake in realty major Sunil Mantri. (BL)
Satyam, Saciformix to help drug companies with data management. (BL)
ITC exits greeting cards business. (BL)
RCom unveils Motorola’s new CDMA handset. (BL)
RBI allows Ranbaxy promoted Fortis to exit NBFC business. (BL)
GMR’s Turkey project achieves financial closure. (BL)
Stone India develops pantograph for double stack container trains. (BL)
Mastek chooses Chennai for its delivery centre. (BL)
Holcim increased its stake in ACC by 3% to 46%. (ET)
Court fines Ansal Properties & Infrastructure Rs2.73mn for not handing over an apartment on time. (ET)
Reliance Retail launches its sixth retail super store in Ahmedabad. (ET)
Markets extended its winning streak to third straight trading session as bulls were in control for major part of the day. The index heavyweight Reliance Industries was the leading stock which drove Nifty to close above the 4,300 mark and the Sensex above the 14,400 level.
Finally, the BSE benchmark Sensex gained 201 points to close at 14,421 and the Nifty index gained 63 points to close at 4,315.
However, the whole of June series was a disappointing one for the bulls as the benchmark Sensex lost 12% and the Nifty fell 11% during the June series.
The Mid-Cap and the Small-Cap index were down 15% and 13% respectively. Among the BSE Sectoral indices, The Realty index was down 28%, Metal and Capital Goods index was down 16%.
Among the major draggers were, National Aluminum (down 30%), DLF (down 28%), Unitech (down 28%), Hindalco (down 24%), SBI (down 17%), Tata Steel (down 16%) and ICICI Bank (down 13%).
BHEL lost gained ground and slipped by half a percent to Rs1437. The company announced that it secured order worth Rs5.06bn from ONGC to upgrade and supply new equipment for onshore drilling rigs. The scrip touched an intra-day high of Rs1470 and a low of Rs1408 and recorded volumes of over 3,00,000 shares on NSE.
Fertilizer stocks got a boost after India’s cabinet approved a new pricing policy for potash and Phosphate fertilizers. The new policy will set rates for 17 items. Chambal Fertilizer rallied by over 6.5% to Rs81, Nagarjuna Fert surged by over 6% to Rs40, RCF was up by over 3.5% to Rs55 and GSFC was up 5% to Rs162.
SBI gained by 1% to Rs1216. The Bank has restored its Benchmark Prime Lending Rate (referred as SBAR) to 12.75% p.a. with effect from June 27, 2008. The scrip touched an intra-day high of Rs1227 and a low of Rs1191 and recorded volumes of over 4,00,000 shares on NSE.
Apollo Hospitals edged lower by half a percent to Rs489. Reports that the company intends to spin off its pharma retailing business into a separate company. The scrip touched an intra-day high of Rs503 and a low of Rs492 and recorded volumes of over 2,000 shares on NSE.
Amtek Auto ended flat at Rs249. Reports stated that the company through its subsidiary Amtek Transportation Systems Ltd has signed a JV agreement with American Railcar Industries Inc based in St Charles, Missouri. The scrip touched an intra-day high of Rs264 and a low of Rs247 and recorded volumes of over 67,000 shares on NSE.
Aban Offshore slipped by 1% to Rs3121. The company announced that it received a letter of intent from a leading operator for the deployment of the jack-up rig Deep Driller 2 offshore Malaysia for a 3 well programme.
Further, a LoI has been received from another leading operator for the deployment of the jack-up rig Deep Driller 2 offshore Malaysia for a 6 firm well plus one optional well programme. The scrip touched an intra-day high of Rs3239 and a low of Rs3081 and recorded volumes of over 76,000 shares on NSE.
Reliance Infrastructure gained by 1.2% to Rs960 after reports stated tha the company has entered into an agreement with US consultant Black & Veatch (B&V) to maximise efficiency in implementation, maintenance and operation of the twin 4000 mw Sasan and Krishnapatnam ultra mega thermal ventures being executed by ADAG company, Reliance Power.
The scrip touched an intra-day high of Rs971 and a low of Rs931 and recorded volumes of over 6,00,000 shares on NSE.
Idea Cellular slipped by a percent to Rs100. The company on Wednesday announced that it would buy 40.8% stake in Spice Telecommunications in an all cash deal worth Rs27bn at Rs77.3 per share. Idea would pay an additional Rs5.4bn to the promoters of Spice group as non-compete fee. The scrip touched an intra-day high of Rs104 and a low of Rs98 and recorded volumes of over 33,00,000 shares on NSE.
- Holcim increased its stake in ACC by 3% to 46%. (ET)
- SBI hiked its PLR to 12.75% effective from June 27, 2008. (ET)
- Union Bank raised its PLR to 13.25% effective from July 1, 2008. (ET)
- Court fines Ansal Properties & Infrastructure Rs2.73mn for not handing over an apartment on time. (ET)
- Reliance Retail launches its sixth retail super store in Ahmedabad. (ET)
- Shringar Cinemas, rebranded as Fame India to foray into film production. (ET)
- Tata BP Solar, a JV between Tata Power and BP Solar, invests Rs4bn to manufacture 180MW of solar cells and 125MW of solar modules. (ET)
- ICICI Venture-owned RFCL set to acquire Italian Company Carlo Erba SPA. (ET)
- Bharti Airtel, Vodafone Essar and BSNL will have to delay its launch of 3G services unless 3G spectrum get vacated. (ET)
- Tata Steel plans to form an international company for consolidating its raw material assets spread across the world. (ET)
- Tata Steel’s standalone net profit rose 11% to Rs46.87bn while, revenues grew 11% to Rs179.85bn. (ET)
- Tata Steel to supply critical parts to Tata Motors for Nano. (ET)
- BHEL secures Rs5.06bn oil rigs contract from ONGC. (ET)
- Axis Bank acquires 2.5% stake in HCC arm Lavasa for Rs2.5bn. (ET)
- Canara Bank opens first biometric ATM in Maharashtra in Dharavi and ninth Biometric ATM in India. (ET)
- Union Bank of India signs MoU with Myanmar Foreign Trade Bank for routing border-rade transactions. (ET)
- Maharashtra Seamless in race to acquire Indonesian iron ore mining firm for ~Rs3bn. (ET)
- J&K Bank enters in to strategic alliance with Sundaram BNP Paribas Mutual Fund. (FE)
- Hotel Leela plans to enter the mid-market segment by 2013. (FE)
- Tatas, Nalco to ink JV agreement to set up a US$3bn aluminum smelter and power plants in South Africa. (FE)
- Government approves cruise shipping policy; targets tourism sector. (Mint)
- Inflation seen rising at 11.42% (BS)
- S&P cuts India’s growth forecast to 7.8% (Mint)
- 8.62mn wireless subscribers have been added during May 2008 as against 8.21mn last year. (ET)
- Total wireless subscriber base stood at 277.92mn at the end of May 2008. (ET)
- FDI inflow in April rose by 127% to US$3.7bn over the same month of the previous year. (ET)
- Manufacturing sector received 53% of total FDI. (ET)
- Government may fix green power quota for power distribution companies. (ET)
- State finance ministers sets up an expert committee to examine VAT structure and deviations. (ET)
- Government announces concession scheme for decontrolled phosphatic and potasic fertilizers. (ET)
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