Monthly Recommendations
Wednesday, July 02, 2008
Polls - Bull or Bear
Bull 46 (46%)
Bear 52 (53%)
Still few more bears left
Click on the label below to find out about previous Bull or Bear Polls
BSE Bulk Deals to Watch - July 2 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
2/7/2008 532981 ANU LABS VIPUL PANNALAL SHAH B 65000 271.93
2/7/2008 532981 ANU LABS VIPUL PANNALAL SHAH S 65000 271.40
2/7/2008 532981 ANU LABS VICKY RAJESHBHAI JHAVERI S 74000 274.00
2/7/2008 505506 AXON INFOTEC RAJESH K DROLIA S 10735 23.12
2/7/2008 532989 BAFNA PHARMA S. M. NISSAR B 105149 24.81
2/7/2008 532989 BAFNA PHARMA PRABHUDAS LILLADHER PVT. LTD. B 362566 25.62
2/7/2008 532989 BAFNA PHARMA N D NISSAR B 338899 25.18
2/7/2008 532989 BAFNA PHARMA S. M. NISSAR S 105149 24.98
2/7/2008 532989 BAFNA PHARMA PRABHUDAS LILLADHER PVT. LTD. S 362566 25.64
2/7/2008 532989 BAFNA PHARMA N D NISSAR S 338899 25.30
2/7/2008 500490 BAJ HOLD INV FID FDS MAURITIUS LIMITED S 1016689 430.13
2/7/2008 531530 BETALA GLO S H. R. JAVERI B 8788 13.72
2/7/2008 590061 BRUSHMAN IND PACIFIC CORPORATE SERVICES LTD B 96326 130.15
2/7/2008 500083 CENTURY EXT MANMOHINI DARSHANJIT KAUR S 89142 4.26
2/7/2008 532271 CYBERMAT INF PARSHURAM SHIVAJI CHAUDHARI B 631779 4.57
2/7/2008 532271 CYBERMAT INF BASMATI SECURITIES PVT LTD. B 520917 4.75
2/7/2008 532271 CYBERMAT INF PARSHURAM SHIVAJI CHAUDHARI S 631779 4.75
2/7/2008 517973 DMC INTER AMIT TIWARI B 20730 7.99
2/7/2008 530643 INFOTREK SYS PRATIBHA GOYAL B 25000 27.30
2/7/2008 530643 INFOTREK SYS ANURAG GUPTA HUF B 20000 27.50
2/7/2008 530643 INFOTREK SYS UPSURGE INVESTMENT AND FINANCE LTD. S 20000 27.50
2/7/2008 530643 INFOTREK SYS YASH MANAGEMENT AND SATELLITE LTD S 25000 27.30
2/7/2008 512185 IOL NET COM SHREE DHOOT TRADING AND AGENCIES LTD B 269361 74.69
2/7/2008 505840 JAIPAN INDUS ASTUTE COMMODITIES AND DERIVATIVES PVT LTD S 39081 43.85
2/7/2008 530885 JAISAL SECUR SRIPATHEE INVESTMENTS PRIVATE LIMITED B 27000 36.50
2/7/2008 530885 JAISAL SECUR CANOS TRADING PVT LTD. S 27000 36.50
2/7/2008 524330 JAYANT AGRO RELIGARE FINVEST LTD LIQUIDATI S 85979 50.01
2/7/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD B 65750 21.57
2/7/2008 532985 KOTAK SENSEX EDELWEISS SECURITIES LIMITED B 62889 130.64
2/7/2008 532606 PAREKH ALUM AJITSINH GOKALDAS KHIMJI B 500000 113.40
2/7/2008 532606 PAREKH ALUM MANISH J.MARU S 500000 113.22
2/7/2008 532933 PORWAL AUTO V J PATEL INVESTMENT S 96843 12.26
2/7/2008 532884 REFEX REFRIG BHARATKUMAR PARMAR B 145000 206.00
2/7/2008 532993 SEJAL GLASS ASHOK COMMERCIAL ENTERPRISES B 226643 65.25
2/7/2008 532993 SEJAL GLASS H.J.SECURITIES PVT.LTD. B 231372 72.37
2/7/2008 532993 SEJAL GLASS H.J.SECURITIES PVT.LTD. S 231372 72.57
2/7/2008 511607 SHLOKA INFO BIRLA LEASING AND INFRASTRUCTURE LTD B 196553 53.00
2/7/2008 511607 SHLOKA INFO BIRLA BOMBAY PVT LTD S 196553 53.00
2/7/2008 517214 SPICE MOBIL INFOTRADE RESOURCES I PVT LTD S 670000 23.50
2/7/2008 530585 SWASTIK INV JIGNESHBHAI HIRALAL SHAH S 68654 19.07
NSE Bulk Deals to Watch - July 2 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
02-JUL-2008,BRIGADE,Brigade Enterprises Limit,Reliance Capital Trustee Co Ltd A/c Reliance Vision Fund,BUY,1188000,99.00,-
02-JUL-2008,GWALCHEM,Gwalior Chemical Industri,FIN BRAINS SECURITIES (INDIA) LTD.,BUY,140508,92.97,-
02-JUL-2008,IFCI,IFCI Ltd.,AMBIT SECURITIES BROKING PVT. LTD.,BUY,3996885,33.17,-
02-JUL-2008,IFCI,IFCI Ltd.,CLEAN FINANCE & INVESTMENT LTD,BUY,5331493,32.44,-
02-JUL-2008,MAXWELL,Maxwell Industries Ltd.,SUNIL JAYKUMAR PATHARE,BUY,982400,13.05,-
02-JUL-2008,MVL,MVL Limited,DHIRAJ ANOPCHAND MEHTA PROPRIETORRINKI ENTERPRISE,BUY,367482,71.63,-
02-JUL-2008,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD,BUY,3358457,30.75,-
02-JUL-2008,PSTL,Pyramid Saimira Theatre L,B K SHAH CO KETAN BHAILAL SHAH,BUY,232235,168.81,-
02-JUL-2008,SASKEN,Sasken Commu Techno Ltd,MBL & COMPANY LTD.,BUY,318726,128.61,-
02-JUL-2008,SEJALGLASS,Sejal Architectural Glass,ASTUTE COMMODITIES & DERIVATIVES Pvt Ltd,BUY,282891,68.74,-
02-JUL-2008,SEJALGLASS,Sejal Architectural Glass,R.M. SHARE TRADING PVT LTD,BUY,142142,69.39,-
02-JUL-2008,SPICEMOBIL,Spice Mobiles Limited,SURENDRA NARAINDAS SAJNANI,BUY,925000,23.29,-
02-JUL-2008,BAJAJHLDNG,Bajaj Holdings & Invs Ltd,FID FDS MAURITIUS LTD,SELL,1071007,430.07,-
02-JUL-2008,BRIGADE,Brigade Enterprises Limit,Copthall Mauritius Investment Ltd,SELL,1188314,99.00,-
02-JUL-2008,GWALCHEM,Gwalior Chemical Industri,FIN BRAINS SECURITIES (INDIA) LTD.,SELL,140508,92.99,-
02-JUL-2008,IFCI,IFCI Ltd.,AMBIT SECURITIES BROKING PVT. LTD.,SELL,3959455,33.20,-
02-JUL-2008,IFCI,IFCI Ltd.,CLEAN FINANCE & INVESTMENT LTD,SELL,5331493,32.46,-
02-JUL-2008,MAXWELL,Maxwell Industries Ltd.,PRASHANT JAIPAL REDDY,SELL,982400,13.05,-
02-JUL-2008,MVL,MVL Limited,DHIRAJ ANOPCHAND MEHTA PROPRIETORRINKI ENTERPRISE,SELL,340857,72.66,-
02-JUL-2008,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD,SELL,3358457,30.80,-
02-JUL-2008,PSTL,Pyramid Saimira Theatre L,B K SHAH CO KETAN BHAILAL SHAH,SELL,231240,168.17,-
02-JUL-2008,SASKEN,Sasken Commu Techno Ltd,MBL & COMPANY LTD.,SELL,309814,128.48,-
02-JUL-2008,SEJALGLASS,Sejal Architectural Glass,ASTUTE COMMODITIES & DERIVATIVES Pvt Ltd,SELL,282882,68.88,-
02-JUL-2008,SEJALGLASS,Sejal Architectural Glass,R.M. SHARE TRADING PVT LTD,SELL,142142,70.51,-
02-JUL-2008,SHAHALLOYS,Shah Alloys Limited,DINAKUMAR M PATEL,SELL,204606,40.03,-
02-JUL-2008,SPICEMOBIL,Spice Mobiles Limited,AKASHDEEP SINGLA,SELL,697300,23.25,-
02-JUL-2008,SPICEMOBIL,Spice Mobiles Limited,SHIV MITTAL,SELL,400000,23.44,-
Post Session Commentary - July 2 2008
The domestic market today came out strongly by breaking its last three days losing trend to close with handsome gains. It recovered smartly since afternoon after showing lots of volatility at the initial stage. This was supported by the recovery in the European markets and positive closing of the US market, which gave a ray of hope to the investors to book their positions. The BSE Sensex bounced back by crossing the 13,650 level mark and NSE Nifty above 4,050, as both rallied more than 5% in a day. The BSE Midcap and Smallcap indices also followed the benchmark indices to close with addition of more than 3% and 1.9% respectively. Market opened on positive note on the back of mixed global cues and soon turned volatile during early trade. Bulls took the charge and kept the bears completely under control to provide a platform to the market to close with heavy gains. From the sectoral front, Metal, Capital Goods, Reality, Oil & Gas and Bank stocks posted decent gains while FMCG counter was out of favor due to the selling pressure. The sudden rush for key stocks from realty index had sustained up the BSE Realty index by an impressive advance of 12%. The market breadth was positive as 1586 stocks closed in green while 1094 stocks closed in red and 57 stocks remained unchanged.
The BSE Sensex closed higher by 702.94 points at 13,664.62 and NSE Nifty ended up by 196.60 points at 4,093.35. The BSE Mid Caps and Small Cap closed positive with growth of 169.44 points and 121.69 points 5,311.30 and 6,506.80 respectively. The BSE Sensex touched intraday high 13,712.31 of and intraday low of 12,822.75
Gainers from the BSE are DLF Ltd (15.08%), Reliance Infra (12.60%), HDFC (11.10%), ONGC (8.12%), L&T Ltd (7.33%), Satyam Computer (7.18%), JP Associates (7.03), Mahindra & Mahindra Ltd (6.57%) and Infosys Technologies Ltd (6.45%).
The Metal index closed higher by 744.83 points at 13,239.02. Gainers are Sh Precoated (14.36%), Jindal Steel (12.67%), Ispat Industries (10.68%), Maharashtra Seamless (8.98%), Sterlite In (6.28%) and Tata Steel (6.21%).
The Capital Goods index advanced by 573.83 points to close at 10,318.14. Major gainers are Praj Industries Ltd (13.75%), Siemens Ltd (9.30%), Punj Lloyd (9.12%), Areva (8.44), L&T Ltd (7.33%) and Havells India (5.44%).
The Reality Index closed higher by 515.26 points at 4,731.19. Gainers are Ansal Infra (28.17%) along with Akruti City (19.98%), Housing Dev (19.22%), Penland Ltd (17.75%), DLF Ltd (15.08%) and Indiabulls Real (14.27%).
The Oil & Gas index closed up by 461.57 points at 9,195.29. As Reliance Natural Resources (13.12%), ONGC (8.12%), Essar Oil Ltd (7.92%), Aban Offshore (5.67%), Reliance Petroleum (5.09%) and Relaince (4.84%) closed in positive territory.
The Banking index closed up by 336.04 points at 5,919.63. Gainers are Bank of India (13.10%), Punjab National Bank (10.49%), Karnataka Bank (9.83%), Kotak Bank (8.54%), SBI (4.04%), Allahabad Bank (6.33%), Union Bank (5.69%) and ICICI Bank Ltd (5.68%).
The FMCG index closed down by 22.29 points at 1,999.15. As REI Agro Ltd (5.00%), United Sprit (3.49%), Britania In (2.83%), ITC Ltd (2.10%) and Godrej Cons (0.42%) closed in negative territory.
Sensex vaults 703 points on hopes government may retain power
The market staged a solid rebound today with the 30-share BSE Sensex clocking its biggest intra-day gain since 25 March 2008. Sensex gained 702 points, recouping nearly half of 1,460.14 points it had lost in previous three trading sessions. Volatility was high today. The Sensex and the S&P CNX Nfity had slumped to its lowest level in nearly 15 months in mid-morning trade after strong opening.
The recovery on the bourses came partly on hopes the Congress-led United Progressive Alliance (UPA) government may be able to retain power on reports Samajwadi Party (SP) is likely to provide support to the government at a time when Left parties are on the verge of withdrawing support to the government over Indo-US nuclear deal. SP has 39 seats in parliament, compared with 59 seats for the communist parties. The ruling coalition needs the support of 44 lawmakers to reach a majority and it hopes to also win support from a few smaller parties.
Consumer durable, banking, IT and capital goods stocks rose while FMCG stocks fell. FMCG index was the lone loser from sectoral indices on BSE. Realty stocks which were battered earlier in the day, bounced back sharply. DLF surged more than 15% on buyback plans. Reliance Infrastructure and HDFC rose more than 10%. The market breadth turned strong later in the day in contrast to a weak breadth earlier in the day.
Gains in European markets, which opened after Indian market, also aided today's rebound on the domestic bourses. Key benchmark indices in France, Germany and UK were up between 0.69% to 1.56%. European stocks rose after Deutsche Bank said it expects to make a profit in the second quarter of the year and therefore did not need to turn to shareholders for extra cash. Asian markets which opened before Indian market were in red.
Surging global crude oil prices, high inflation, higher interest rates and political uncertainity have rattled India bourses over the past few days. The barometer index BSE Sensex had plunged 1,460.14 points, a fall of more than 10% in the past three trading sessions to 12,961.68 on 1 July 2008 from 14,421.82 on 26 June 2008.
Oil, India's biggest import, rose more than $1 a barrel on Wednesday, 2 June 2008, within sight of Monday (30 June 2008)'s record high above $143. Oil has risen more than 40% in calendar 2008 so far and it is the key reason for the turmoil of Indian equities.
The 30-share BSE Sensex today surged 702.94 points or 5.42% at 13,664.62. At the day’s high of 13,711.01 hit in late trade, the Sensex rose 749.33 points, the biggest intra-day gain since 25 March 2008. Sensex hit a low of 12,822.75 in mid-morning trade, its lowest level in nearly 15 months. Sensex lost 138.93 points at the day's low.
The broader based S&P CNX Nifty was up 196.6 points or 5.05% at 4,093.35. Nifty had hit a low of 3,848.25 earlier in the day, its lowest level in nearly 15 months.
From a record high of 21,206.77 hit on 10 January 2008, Sensex has lost 7,542.15 points or 35.56%. It is down 6,622.37 points or 32.64% in calendar year 2008 so far.
The market breadth turned strong from earlier weak breadth on BSE with 1,586 shares advancing as compared to 1,094 that declined. 57 remained unchanged.
From the Sensex pack 28 stocks were trading in green.
The BSE Mid-Cap index rose 3.3% to 5,311.30 and BSE Small-Cap index climbed 1.91% to 6,506.80. Both these indices underperformed Sensex.
BSE Realty index (up 12.22% at 4,731.19), BSE Bankex (up 6.02% at 5,919.63), BSE Metal index (up 5.96% to 13,239.02), The BSE Capital Goods index (up 5.89% at 10,318.14), BSE IT index (up 5.77% to 4,177.75), BSE Power (up 5.72% to 2,280.21), BSE Consumer Durables index (up 5.52% to 3,512.52), outperformed Sensex.
BSE FMCG index (down 1.1 % to 1,999.15), BSE Health Care index (up 2.29% at 4,167.31), BSE Auto (up 2.6% at 3,498.05), BSE PSU index (up 3.78% to 5,668.68), The BSE Oil & Gas index (up 5.28% to 9,195.29), BSE TecK index (up 5.4% to 3,109.76), underperformed Sensex.
Realty stocks surged in late trade on bargain hunting at lower levels. BSE Realty index surged 12.22% to 4,731.19. From a recent high of 6,099.19 hit on 17 June 2008, BSE Realty index had slumped 30.87% to 4,215.93 on 1 July 2008. India’s largest real estate firm by market capitalisation DLF rose 15.08% to Rs 423.95 after the company said its board will meet on 10 July 2008 to consider proposal for buyback of equity shares of the company.
Unitech (up 7.21% to Rs 171.10), and Indiabulls Real Estate (up 14.27% to Rs 286.20) edged higher.
Consumer durables stocks rose. Videocon Industries (up 11.24% to Rs 282.15), Rajesh Exports (up 9.07% to Rs 54.70), Titan Industries (up 4.26% to Rs 1,043.20) edged higher.
Capital goods stocks rose. Bharat Heavy Electricals (up 5.24% to Rs 1,426.25), Larsen & Toubro (up 7.33% to Rs 2,297.15), Suzlon Energy (up 1.76% to Rs 199.45), Praj Industries (up 13.75% to Rs 170) edged higher.
Banking stocks rose after recent steep fall. HDFC Bank (up 5.66% to Rs 1,020.55), State Bank of India (up 5.33% to Rs 1,079.25) and ICICI Bank (up 5.68% to Rs 623) edged higher. Recently most of the banks had raised their lending rates after the Reserve Bank of India tightened monetary policy last week to tame inflation.
FMCG Stocks declined. BSE FMCG index was the lone loser from sectoral indices on BSE. ITC (down 2.1% to Rs 179.60), and United Spirits (down 3.49% to Rs 1,153.30) edged lower. However Hindustan Unilever rose 1.24% to Rs 200.15.
IT stocks rose as rupee hovered near 15-month low against the dollar. Satyam Computer Services (up 7.18% to Rs 463.30), Infosys (up 6.45% to Rs 1,820.60), Wipro (up 5.73% to Rs 439.90), Tata Consultancy Services (up 3.68% to Rs 877.95) edged higher. A weak rupee augurs well for IT pivotals as they derive majority of their revenue from exports to the US.
India’s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) rose 4.84% to Rs 2,143.10.
Reliance Infrastructure (up 12.6% to Rs 790.50), HDFC (up 11.10% to Rs 2,039.20), Jaiprakash Associates (up 7.03% to Rs 144.70), Mahindra & Mahindra (up 6.57% to Rs 469), edged higher from Sensex pack.
India’s largest state run oil exploration firm by sales ONGC rose 8.12% to Rs 854.45. ONGC Videsh (OVL), the wholly-owned subsidiary of ONGC, is reportedly one of the 41 global oil firms to be shortlisted by the Iraqi government to develop its oil fields. OVL is also re-negotiating earlier exploration commitments given under the Saddam Hussein regime and later cancelled by the US.
India’s largest drugmaker by sales Ranbaxy Laboratories rose 2.9% to Rs 521.40. Two manufacturing facilities of Ranbaxy Laboratories are reportedly learnt to have come under the scanner of the US Food and Drug Administration (US FDA), the drug regulatory body in the US. According to reports, US FDA carried out inspections at Ranbaxy’s manufacturing plant at Dewas (Madhya Pradesh) and Batamandi (Himachal Pradesh) earlier this year. US FDA is learnt to have raised concerns over cross contamination at the Dewas plant.
India’s largest commercial vehicle maker by sales Tata Motors rose 1.21% to Rs 413.40 after the company said high input costs, rising interest rates and slowing demand would dent sales of commercial and passenger vehicles in the year to March 2009.
Reliance Natural Resources clocked the highest volume of 3.32 crore shares on BSE. IFCI (2.58 crore shares), Reliance Petroleum (2.08 crore shares), Ispat Industries (1.82 crore shares) and Chambal Fertilisers and Chemicals (1.58 crore shares) were the other volume toppers in that order.
Reliance Industries clocked the highest turnover of 470.28 crore on BSE. Reliance Capital (Rs 456.94 crore), Reliance Petroleum (Rs 350.06 crore), Reliance Infrastructure (Rs 229.89 crore) and Reliance Natural Resources (Rs 198.38 crore) were the other turnover toppers in that order.
Asian stocks were trading lower today. Key benchmark indices in Hong Kong, Japan, Taiwan and South Korea, Singapore were down by between 0.37% to 2.57%. China’s Shanghai Composite was flat.
US stocks rose on Tuesday, 1 July 2008, after embattled automaker GM surprised Wall Street with stronger-than-expected June sales and financial shares reversed earlier losses as investors scoured for bargains, overshadowing concerns about record oil prices. The Dow Jones Industrial Average gained 32.25 points or 0.28% to 11,382.26. The tech-laden Nasdaq Composite index rose 11.99 points or 0.52% to 2,304.97.
Record high oil prices, surging inflation, higher interest rates, a likely increase in fiscal deficit and political uncertainty have all caused a gloom on the macro economic front in India at this juncture. The stock market’s concerns are that the rise in input costs and tough macro economic environment comprising high inflation, record high global crude oil prices and rising interest rates, will result in slowdown in earnings growth of the corporate sector.
The advance tax payment by the Indian corporate sector this year so far has been strong. Government’s direct tax collection from the corporate sector rose 39.81% to Rs 30655 crore until 21 June 2008 compared to the corresponding period last year. More clarity on the impact of poor macroeconomic environment on earnings of India Inc. will emerge when company managements give outlook for the current fiscal years at the time of announcement of Q1 June 2008 results this month.
Sustained selling of Indian stocks by foreign institutional investors (FIIs) has also dented market sentiment. FII outflow in June 2008 totaled Rs 10095.80 crore. FII outflow in calendar year 2008 totaled Rs 25692.40 crore, till 30 June 2008.
Political uncertainty continues to haunt Indian bourses. Doubts have been raised as to whether the Congress led United Progressive Alliance government will be able to push through a much-debated Indo-US nuclear deal and still retain its power, in the face of heavy opposition from its key communist allies. The Left parties on Sunday, 29 June 2008, renewed their threat to withdraw support from the ruling coalition if Prime Minister Manmohan Singh forged ahead with the nuclear deal. Singh on Monday, 30 June 2008, promised to bring the nuclear pact with the US before parliament before going ahead with the deal that is fiercely opposed by his communist allies, a report said.
The Prime Minister played down the communists' threats to withdraw support to his government saying all that he wanted was that the government should be allowed to complete the negotiation process with the International Atomic Energy Agency-IAEA and Nuclear Suppliers' Group-NSG. Singh expressed confidence that the government would be able to address concerns of all including the Left parties on the civil nuclear cooperation agreement with the US.
The economic reforms process in India has virtually come to a halt in the last two years or so. A good news in the current gloom on the macroeconomic front is that the Indian Meteorological Department (IND), in its long-range forecast update for the 2008 southwest monsoon, has maintained that rainfall for the country as a whole is likely to be ‘near normal’. The department classifies rainfall as near normal when it's between 96% and 104% of the 50-year average. Good rains will bolster farm production which in turn may help rein in inflation.
Post Session Commentary - July 2 2008
The domestic market today came out strongly by breaking its last three days losing trend to close with handsome gains. It recovered smartly since afternoon after showing lots of volatility at the initial stage. This was supported by the recovery in the European markets and positive closing of the US market, which gave a ray of hope to the investors to book their positions. The BSE Sensex bounced back by crossing the 13,650 level mark and NSE Nifty above 4,050, as both rallied more than 5% in a day. The BSE Midcap and Smallcap indices also followed the benchmark indices to close with addition of more than 3% and 1.9% respectively. Market opened on positive note on the back of mixed global cues and soon turned volatile during early trade. Bulls took the charge and kept the bears completely under control to provide a platform to the market to close with heavy gains. From the sectoral front, Metal, Capital Goods, Reality, Oil & Gas and Bank stocks posted decent gains while FMCG counter was out of favor due to the selling pressure. The sudden rush for key stocks from realty index had sustained up the BSE Realty index by an impressive advance of 12%. The market breadth was positive as 1586 stocks closed in green while 1094 stocks closed in red and 57 stocks remained unchanged.
The BSE Sensex closed higher by 702.94 points at 13,664.62 and NSE Nifty ended up by 196.60 points at 4,093.35. The BSE Mid Caps and Small Cap closed positive with growth of 169.44 points and 121.69 points 5,311.30 and 6,506.80 respectively. The BSE Sensex touched intraday high 13,712.31 of and intraday low of 12,822.75
Gainers from the BSE are DLF Ltd (15.08%), Reliance Infra (12.60%), HDFC (11.10%), ONGC (8.12%), L&T Ltd (7.33%), Satyam Computer (7.18%), JP Associates (7.03), Mahindra & Mahindra Ltd (6.57%) and Infosys Technologies Ltd (6.45%).
The Metal index closed higher by 744.83 points at 13,239.02. Gainers are Sh Precoated (14.36%), Jindal Steel (12.67%), Ispat Industries (10.68%), Maharashtra Seamless (8.98%), Sterlite In (6.28%) and Tata Steel (6.21%).
The Capital Goods index advanced by 573.83 points to close at 10,318.14. Major gainers are Praj Industries Ltd (13.75%), Siemens Ltd (9.30%), Punj Lloyd (9.12%), Areva (8.44), L&T Ltd (7.33%) and Havells India (5.44%).
The Reality Index closed higher by 515.26 points at 4,731.19. Gainers are Ansal Infra (28.17%) along with Akruti City (19.98%), Housing Dev (19.22%), Penland Ltd (17.75%), DLF Ltd (15.08%) and Indiabulls Real (14.27%).
The Oil & Gas index closed up by 461.57 points at 9,195.29. As Reliance Natural Resources (13.12%), ONGC (8.12%), Essar Oil Ltd (7.92%), Aban Offshore (5.67%), Reliance Petroleum (5.09%) and Relaince (4.84%) closed in positive territory.
The Banking index closed up by 336.04 points at 5,919.63. Gainers are Bank of India (13.10%), Punjab National Bank (10.49%), Karnataka Bank (9.83%), Kotak Bank (8.54%), SBI (4.04%), Allahabad Bank (6.33%), Union Bank (5.69%) and ICICI Bank Ltd (5.68%).
The FMCG index closed down by 22.29 points at 1,999.15. As REI Agro Ltd (5.00%), United Sprit (3.49%), Britania In (2.83%), ITC Ltd (2.10%) and Godrej Cons (0.42%) closed in negative territory.
Asian Markets Extends Losses
IMF Rings Warning Bell For Accelerating Inflation
Asian markets continued with another day of declines on worries about the health of the U.S. economy and a threat to the regional economies from rising inflation. IMF warned that inflation was pushing some developing economies toward the tipping point of widespread hunger.
Japanese stocks stood out as the benchmark indexes in Tokyo plunged further into losses, as automotive exporters dropped after a steep decline in U.S. sales last month. The Nikkei 225 Average shed 1.3% to 13,286.37, taking its decline into a 10th straight session. The benchmark average had lost nearly 7% in the previous nine sessions. The broader Topix index, meanwhile, fell 1.4% to 1,301.15, after dropping in eight of the previous nine sessions.
In Hong Kong, the Hang Seng Index declined 1.8% to 21,704.45 and the Hang Seng China Enterprises Index shed 2.5% to 11,608.92.
China's Shanghai Composite squares off to 2,651.72 reversing a decline earlier in the day. The Shenzhen Composite increased by 1.1% to 784.89.
Meanwhile the International Monetary Fund warned that inflation was pushing some developing economies toward the tipping point of widespread hunger, and the international finance organization urged cooperation among wealthier countries to boost supplies.
In a study of 162 countries, the Washington, D.C.-based IMF said surging global oil and food prices are causing the most pain in poor countries that rely on imports.
With food taking up more than half of household spending in emerging and developing economies, the IMF warned that the share of undernourished could rise rapidly to above 40% of the total of their populations.
The statement from IMF gain importance on the back of data released for the Thailand, Indonesia and South Korea showing further accelerate, putting further pressure on central bankers to tighten monetary policy.
Thailand's consumer price inflation soared to a 10-year high of 8.9% in June, as compared with the year-earlier month, official data showed Tuesday. That was up from a 7.6% figure for May. The Thai Set declined by 1.3% to 541.76.
South Korea also reported that June consumer prices were up 5.5% from June 2007; May prices were up 4.9% from the year-earlier month. The June price surge was the highest in 10 years. South Korea's Kospi shrank 2.6% to 1,623.60.
Separately, Indonesia said that consumer prices were up 11.03% between June 2007 and June 2008, having been up 10.38% in May versus the year-earlier month. Indonesia’s Jakarta Composite closed at par with 2,378.47 on the screen.
Australia's S&P/ASX 200 gave up 0.9% to 5,094.80, marking its fourth decline in a row. However on the economic front it was a good day for the Australians as the retail sales climbed at a faster-than-expected pace in May, defying expectations that consumers would curtail spending in view of higher interest rates and surging prices for daily necessities.
Sales rose 0.7% from April on a seasonally adjusted basis, rebounding from a 0.1% contraction that month, according data released by the Bureau of Statistics Wednesday. The result beat consensus estimates for a 0.2% rise.
Spending on recreational goods rose 2.2%, marking the largest increase among sectors tracked. Spending on food rose 1%, while hospitality and services climbed 2.4%.
Spending on household goods fell 1% and department store sales were down 0.8%.
Also extending losses, South Korea's Kospi slipped 2.6% to 1,623.60 for its fifth straight session of losses while New Zealand's NZX 50 index slipped 0.4% to 3,163.39. Taiwan's weighted index declined 0.7% to 7,353.86 and Singapore's Straits Times index ended on par with 2,906.23. Philippines' Composite index shed 0.9% to 2,393.90.
India's 30-constituent Sensitive Index, or Sensex, gained 5.4% to 13,664.62 and the 50-stock S&P/CNX Nifty also zoomed up by 5.1% to 4,0.98.35.
In currency trading, the U.S. dollar bought 105.99 yen in Asia, compared with 105.39 yen in midday European trading.
Crude-oil futures extended their winning streak to four sessions Tuesday as weakness in the U.S. dollar underpinned demand for energy and global production concerns continued.
But uncertainty ahead of this week's update on U.S. petroleum supplies and some assumptions that high prices hurt energy demand kept prices in check, prompting a pullback from the day's high of more than $143 a barrel.
August crude-oil futures rose as much as $1.20 to $143.33 a barrel in electronic trading, after finishing 97 cents higher at $140.97 a barrel on the New York Mercantile Exchange.
On Wall Street, the Dow Jones Industrial Average gained 32.25 points to end at 11,382.26, rebounding from steep losses earlier in the session, after data showed that General Motors Corp.'s June sales didn't drop as much as expected. The S&P 500 index rose 4.91 points to 1,284.91, while the Nasdaq Composite gained 11.99 points to 2,304
Moving towards European markets, which extended gains backed by gains from banks and miners. The U.K. FTSE 100 index rose 1.4% to 5,558.00, the German DAX 30 index climbed 1.2% to 6,393.55 and the French CAC-40 index advanced 0.8% to 4,376.32
For the region the day started with a bang as high energy costs pushed producer prices in the euro zone to an 18-year high in May, providing more justification for the European Central Bank's view that a rate hike may be needed to stem inflationary pressures in the currency bloc.
Prices of goods leaving euro-zone factory gates rose 1.2% on the month and 7.1% on the year in May, well ahead of market expectations for a 0.8% rise on the month and a 6.6% annual gain. Euro stat revised April's producer price data upward to show rises of 0.9% on the month and 6.2% on the year.
Much of the gain was driven by soaring energy costs, which surged 4.1% over the month and 18.2% over the year in May.
Excluding construction and energy, prices rose 0.3% on the month and 3.8% on the year in May. That follows gains of 0.4% on the month and 3.7% on the year in April.
The May annual PPI gain was the highest since records began in January 1990, while the monthly gain matches a previous record high of 1.2% recorded in January 2006.
In UK construction sector saw activity fall at a record pace in June, a key survey has found. The Chartered Institute of Purchasing and Supply (CIPS) said the purchasing managers index (PMI) for the construction sector slumped to 38.8 in June, its lowest ever, from 43.9 in May. CIPS said the June PMI points to the sharpest decline in output since the survey began in April 1997.
Meanwhile, the Organisation for Economic Cooperation and Development said unemployment is expected to start increasing this year after declining steadily in recent years. The declining trend in unemployment in recent years is projected to reverse in 2008, with the number of unemployed persons in the OECD area increasing by 1 million persons in 2008 and by nearly a further 2 million in 2009.
The organization said in its annual employment outlook that the unemployment will rise to 32.9 million this year and to 34.8 million next year from 31.9 million in 2007.
The unemployment rate is projected to edge up to 5.7 percent this year from 5.6 percent last year and then to rise to 6.0 percent in 2009, returning to its 2006 level.
Market bounces back from 15-month low
The market staged a solid rebound today with the 30-share BSE Sensex clocking its biggest intra-day gain since 25 March 2008. Sensex had slumped to its lowest level in nearly 15 months in mid-morning trade after strong opening.
Consumer durable, banking and capital goods stocks rose while FMCG stocks fell. Realty stocks which were battered earlier in the day, bounced back sharply. DLF surged more than 15% on buyback plans. Reliance Infrastructure and HDFC also rose more than 10%. The market breadth turned strong later in the day in contrast to a weak breadth earlier in the day.
In Europe, key benchmark indices in France, Germany and UK were up between 0.57% to 1.41%. Asian markets which opened before Indian market were in red.
Surging global crude oil prices, high inflation, higher interest rates and political uncertainity have rattled India bourses over the past few days. The barometer index BSE Sensex had plunged 1,460.14 points, a fall of more than 10% in the past three trading sessions to 12,961.68 on 1 July 2008 from 14,421.82 on 26 June 2008.
Oil, India's biggest import, rose more than $1 a barrel on Wednesday, 2 June 2008, within sight of Monday (30 June 2008)'s record high above $143. Oil has risen more than 40% in calendar 2008 so far and it is the key reason for the turmoil of Indian equities. A section of the market reckons that only a sharp fall in oil prices can bring out a meaningful recovery in battered Indian stocks.
The 30-share BSE Sensex provisionally ended up 714.62 points or 5.51% at 13,676.30. At the day’s high of 13,711.01 hit in late trade, the Sensex rose 749.33 points, the biggest intra-day gain since 25 March 2008. Sensex hit a low of 12,822.75 in mid-morning trade, its lowest level in nearly 15 months. Sensex lost 138.93 points at the day's low.
The broader based S&P CNX Nifty was up 208.8 points or 5.36% at 4,105.55 as per the provisional figures. Nifty had hit a low of 3,848.25 earlier in the day, its lowest level in nearly 15 months.
The market breadth turned strong from earlier weak breadth on BSE with 1,579 shares advancing as compared to 1,094 that declined. 62 remained unchanged.
From the Sensex pack 29 stocks were trading in green.
Realty stocks surged in late trade on bargain hunting at lower levels. BSE Realty index surged 12.31% to 4,735.11. From a recent high of 6,099.19 hit on 17 June 2008, BSE Realty index had slumped 30.87% to 4,215.93 on 1 July 2008. India’s largest real estate firm by market capitalisation DLF rose 15.08% to Rs 423.95 after the company said its board will meet on 10 July 2008 to consider proposal for buyback of equity shares of the company.
Unitech (up 7.21% to Rs 171.10), and Indiabulls Real Estate (up 14.27% to Rs 286.20) edged higher
Consumer durables stocks rose. Videocon Industries (up 11.24% to Rs 282.15), Rajesh Exports (up 9.07% to Rs 54.70), Titan Industries (up 4.26% to Rs 1,043.20) edged higher.
Capital goods stocks rose. Bharat Heavy Electricals (up 5.24% to Rs 1,426.25), Larsen & Toubro (up 7.33% to Rs 2,297.15), Suzlon Energy (up 1.76% to Rs 199.45), Praj Industries (up 13.75% to Rs 170) edged higher.
Banking stocks rose after recent steep fall. HDFC Bank (up 5.66% to Rs 1,020.55), State Bank of India (up 5.33% to Rs 1,079.25) and ICICI Bank (up 5.68% to Rs 623) edged higher. Recently most of the banks had raised their lending rates after the Reserve Bank of India tightened monetary policy last week to tame inflation.
FMCG Stocks declined. BSE FMCG index was the lone loser from sectoral indices on BSE. ITC (down 2.1% to Rs 179.60), and United Spirits (down 3.49% to Rs 1,153.30) edged lower. However Hindustan Unilever rose 1.24% to Rs 200.15.
India’s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) rose 4.84% to Rs 2,143.10.
Reliance Infrastructure (up 12.6% to Rs 790.50), HDFC (up 11.10% to Rs 2,039.20), Satyam Computer Services (up 7.13% to Rs 463.30), Jaiprakash Associates (up 7.03% to Rs 144.70), Mahindra & Mahindra (up 6.57% to Rs 469), Infosys (up 6.45% to Rs 1,820.60) edged higher from Sensex pack.
India’s largest state run oil exploration firm by sales ONGC rose 8.12% to Rs 854.45. ONGC Videsh (OVL), the wholly-owned subsidiary of ONGC, is reportedly one of the 41 global oil firms to be shortlisted by the Iraqi government to develop its oil fields. OVL is also re-negotiating earlier exploration commitments given under the Saddam Hussein regime and later cancelled by the US.
India’s largest drugmaker by sales Ranbaxy Laboratories rose 2.9% to Rs 521.40. Two manufacturing facilities of Ranbaxy Laboratories are reportedly learnt to have come under the scanner of the US Food and Drug Administration (US FDA), the drug regulatory body in the US. According to reports, US FDA carried out inspections at Ranbaxy’s manufacturing plant at Dewas (Madhya Pradesh) and Batamandi (Himachal Pradesh) earlier this year. US FDA is learnt to have raised concerns over cross contamination at the Dewas plant.
India’s largest commercial vehicle maker by sales Tata Motors rose 1.21% to Rs 413.40 after the company said high input costs, rising interest rates and slowing demand would dent sales of commercial and passenger vehicles in the year to March 2009.
Akruti Cityhit 20% upper circuit at Rs 799.90 after company reported 288.46% rise in net profit to Rs 294.7 crore on 152.1% rise in total income to Rs 473.66 crore in the year ended March 2008 over the year ended March 2007.
Godawari Power & Ispat declined 1.18% to Rs 196.50 after company signed a memorandum of understanding (MoU) with the Government of Chhattisgarh for setting-up of cement plant comprising of 2 million tons per annum capacity of cement and 1 million ton per annum capacity of clinker along with power plant of 50 megawatt (MW) capacity. The total cost of the project is envisaged at Rs 628 crores.
Asian stocks were trading lower today. Key benchmark indices in Hong Kong, Japan, Taiwan and South Korea, Singapore were down by between 0.37% to 2.57%. China’s Shanghai Composite was flat.
US stocks rose on Tuesday, 1 July 2008, after embattled automaker GM surprised Wall Street with stronger-than-expected June sales and financial shares reversed earlier losses as investors scoured for bargains, overshadowing concerns about record oil prices. The Dow Jones Industrial Average gained 32.25 points or 0.28% to 11,382.26. The tech-laden Nasdaq Composite index rose 11.99 points or 0.52% to 2,304.97.
Record high oil prices, surging inflation, higher interest rates, a likely increase in fiscal deficit and political uncertainty have all caused a gloom on the macro economic front in India at this juncture. The stock market’s concerns are that the rise in input costs and tough macro economic environment comprising high inflation, record high global crude oil prices and rising interest rates, will result in slowdown in earnings growth of the corporate sector.
The advance tax payment by the Indian corporate sector this year so far has been strong. Government’s direct tax collection from the corporate sector rose 39.81% to Rs 30655 crore until 21 June 2008 compared to the corresponding period last year. More clarity on the impact of poor macroeconomic environment on earnings of India Inc. will emerge when company managements give outlook for the current fiscal years at the time of announcement of Q1 June 2008 results this month.
Sustained selling of Indian stocks by foreign institutional investors (FIIs) has also dented market sentiment. FII outflow in June 2008 totaled Rs 10095.80 crore. FII outflow in calendar year 2008 totaled Rs 25692.40 crore, till 30 June 2008.
Political uncertainty continues to haunt Indian bourses. Doubts have been raised as to whether the Congress led United Progressive Alliance government will be able to push through a much-debated Indo-US nuclear deal and still retain its power, in the face of heavy opposition from its key communist allies. The Left parties on Sunday, 29 June 2008, renewed their threat to withdraw support from the ruling coalition if Prime Minister Manmohan Singh forged ahead with the nuclear deal. Singh on Monday, 30 June 2008, promised to bring the nuclear pact with the US before parliament before going ahead with the deal that is fiercely opposed by his communist allies, a report said.
The Prime Minister played down the communists' threats to withdraw support to his government saying all that he wanted was that the government should be allowed to complete the negotiation process with the International Atomic Energy Agency-IAEA and Nuclear Suppliers' Group-NSG. Singh expressed confidence that the government would be able to address concerns of all including the Left parties on the civil nuclear cooperation agreement with the US.
The economic reforms process in India has virtually come to a halt in the last two years or so.
A good news in the current gloom on the macroeconomic front is that the Indian Meteorological Department (IND), in its long-range forecast update for the 2008 southwest monsoon, has maintained that rainfall for the country as a whole is likely to be ‘near normal’. The department classifies rainfall as near normal when it's between 96% and 104% of the 50-year average. Good rains will bolster farm production which in turn may help rein in inflation.
Morning Call - July 2 2008
Market Grape Wine :
In House :
Nifty at a support of 3600 & 3650 levels .
Sell : in F&O Tisco below 698 target 678 s/l of 710
Sell : in F&O : Neyvelli below 102 target 98 s/l of 106
Out House:
Markets at a support of 12786 & 12662 resistance at 13234 & 13345 levels .
Maintain strict stop loss as markets to be very choppy and volatile with short covering not ruled out at lower levels .
Buy : Infy & Satyam
Buy : Cairn & Srei
Buy : Tisco
Buy : RIL & RPL
Buy : ZeeLtd
Buy : Lupin & glenmark
Buy : Kohinoor
Dark Horse : Satyam , RIL , Infy , Tisco , Cairn , Lupin & RPL
Market may extend losses as oil hovers near record high
The market is likely to extend the sharp fall witnessed in the last three days with oil prices hovering near record high and amid concerns about political stability. Oil, India's biggest import, rose more than $1 a barrel on Wednesday, 2 June 2008, within sight of Monday (30 June 2008)'s record high above $143. Oil has risen more than 40% in calendar 2008 so far and it is the key reason for the turmoil of Indian equities. A section of the market reckons that only a sharp fall in oil prices can bring out a meaningful recovery in battered Indian stocks.
The barometer index BSE Sensex plunged 1,460.14 points, a fall of more than 10% in the past three trading sessions. Sensex has shed 4638.44 points or 26.35% from a recent high of 17600.12 hit on 2 May 2008. It is own 7,325.31 points or 36.10% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2008. It is 8,245.09 points or 38.87% off its all-time high of 21,206.77 struck on 10 January 2008.
Asian stocks were mostly in the red today. Key benchmark indices in Hong Kong, Japan, Taiwan and South Korea were down by between 0.2% to 2%. Key benchmark indices in China and Singapore were up by between 0.39% to 1.58%.
US stocks rose on Tuesday, 1 July 2008, after embattled automaker GM surprised Wall Street with stronger-than-expected June sales and financial shares reversed earlier losses as investors scoured for bargains, overshadowing concerns about record oil prices. The Dow Jones Industrial Average gained 32.25 points or 0.28% to 11,382.26. The tech-laden Nasdaq Composite index rose 11.99 points or 0.52% to 2,304.97.
Record high oil prices, surging inflation, higher interest rates, a likely increase in fiscal deficit and political uncertainty have all caused a gloom on the macro economic front in India at this juncture. The stock market’s concerns are that the rise in input costs and tough macro economic environment comprising high inflation, record high global crude oil prices and rising interest rates, will result in slowdown in earnings growth of the corporate sector.
The advance tax payment by the Indian corporate sector this year so far has been strong. Government’s direct tax collection from the corporate sector rose 39.81% to Rs 30655 crore until 21 June 2008 compared to the corresponding period last year. More clarity on the impact of poor macroeconomic environment on earnings of India Inc. will emerge when company managements give outlook for the current fiscal years at the time of announcement of Q1 June 2008 results this month.
Sustained selling of Indian stocks by foreign institutional investors (FIIs) has also dented market sentiment. FII outflow in June 2008 totaled Rs 10095.80 crore. FII outflow in calendar year 2008 totaled Rs 25692.40 crore, till 30 June 2008.
Political uncertainty continues to haunt Indian bourses. Doubts have been raised as to whether the Congress led United Progressive Alliance government will be able to push through a much-debated Indo-US nuclear deal and still retain its power, in the face of heavy opposition from its key communist allies. The Left parties on Sunday, 29 June 2008, renewed their threat to withdraw support from the ruling coalition if Prime Minister Manmohan Singh forged ahead with the nuclear deal. Singh on Monday, 30 June 2008, promised to bring the nuclear pact with the US before parliament before going ahead with the deal that is fiercely opposed by his communist allies, a report said.
The Prime Minister played down the communists' threats to withdraw support to his government saying all that he wanted was that the government should be allowed to complete the negotiation process with the International Atomic Energy Agency-IAEA and Nuclear Suppliers' Group-NSG. Singh expressed confidence that the government would be able to address concerns of all including the Left parties on the civil nuclear cooperation agreement with the US.
For the stock market, the political uncertainty pertains to whether there will be stability at the centre if mid-term polls are held i.e. whether the new government will complete five years and whether the new government restarts economic reforms process which has virtually come to a halt in the last two years or so.
A good news in the current gloom on the macroeconomic front is that the Indian Meteorological Department (IND), in its long-range forecast update for the 2008 southwest monsoon, has maintained that rainfall for the country as a whole is likely to be ‘near normal’. The department classifies rainfall as near normal when it's between 96% and 104% of the 50-year average. Good rains will bolster farm production which in turn may help rein in inflation
US Markets recover after zig zag movement
Stocks take a reverse course after GM announces much less than expected drop in June sales
US Market struggled today, Tuesday, 01 July, 2008 until General Motors reported its June sales results in the mid-afternoon. The sales data gave a much wanted lift to the major indices, which closed near their best levels of the session. Earlier in the day, encouraging economic data provided stocks with a boost but the gains, were limited as investors returned their focus to an uncertain financial sector and high oil prices
After being down by more than 135 points earlier during the day, The Dow Jones industrial Average ended the day with a gain of 32.25 points at 11,382.26. The Nasdaq Composite Index, finished higher by 11.99 points at 2,304.97. S&P 500 finished higher by 4.91 points at 1,284.91.
The GM stock was one of the main winners of Dow for the day. The stock soared as high as 15% today and ultimately closed higher by 2%.
General Motors reported that its sales in North America declined 8.3% in June versus a market expectation that they would decline 21%. Its competitors Toyota and Ford reported more drop in sales as against GM’s. Market took this piece of report with utter joy.
Ford Motor Company reported its North American auto sales during June fell 28.1% year-over-year. Ford has been hit hard by the slowing economy and rising fuel costs.
In economic news, the latest Institute of Supply Management (ISM) Index indicated that manufacturing activity expanded during June, coming in at 50.2 and topping the 48.5 figure that was widely expected. The report showed that there was expansion in activity.
Additionally, May construction spending fell 0.4% month-over-month. Market had forecast a 0.6% downturn. More importantly, nonresidential construction spending was up 0.2% in May, which follows a 1.6% increase for April.
Crude futures rose today as the dollar fell. Prices rose on concern that Israel may attack Iran over its nuclear program and disrupt supply from OPEC's second-largest producer. Crude-oil futures for light sweet crude for August delivery today closed at $140.97/barrel (higher by $0.97/barrel or 0.7%) on the New York Mercantile Exchange. Prices rose to a high of $143.33 earlier during the day. Crude prices gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years.
Today, the IEA (International Energy Agency) said in a report that spare OPEC capacity will shrink by 2013, keeping the market tight. In its Medium-Term Oil Market Report today, IEA reported that OPEC spare capacity will rise from 2.5 million barrels a day in 2008 to more than 4 million a day in 2010 before fading to negligible levels of around 1 million barrels a day by 2013.
International Energy Agency also said that supplies might not keep up with demand through 2013. The IEA, the Paris-based adviser to 27 oil-consuming nations, cut more than 3 million barrels a day from its 2012 global demand forecast. The IEA lowered demand forecasts for the years 2009 to 2012, citing weaker economic growth and the sharp rise in oil prices as factors curbing oil consumers' appetites.
Economic data will be the area of focus tomorrow. Latest inventory report from the Department of Energy and the ADP employment report are the first things in the morning.
Pre Session Commentary - July 2 2008
The Indian Market is expected to have negative opening on the back of weak cues from the Asian markets. On Tuesday, the Indian market closed in deep red after going through a blood bath due to rise in crude oil prices along with political uncertainty and inflation worries. Crude oil prices reached to a new high of $141 a barrel as the IAEA director informed that oil supplies will remain tight. Market opened on positive note on the back of mixed global cues but slipped soon sharply and continued to trade weak till end. It was a very bad day for the market as BSE Sensex closed below 13,000 mark for the first time since April 2007 and NSE Nifty below 3,900. From the sectoral front, all indices closed in red with reality stocks ended with a huge cut of 7% and bank and metal indices with more than 5%. Metal, Bank, Reality, Oil & Gas and Capital Goods stocks were worst performers as witnessed most of the selling. The BSE Sensex closed lower by 499.92 points at 12,961.68 and NSE Nifty ended down by 143.80 points at 3,896.85. We expect that market may remain volatile during the trading session.
India on Tuesday moved out of the coveted trillion-dollar stock market league as the cumulative worth of all the listed companies in the country fell to $966 due to the 500 point fall in the benchmark Sensex.
US markets closed up after a volatile session on Tuesday on late-session interest in the financial sector among bargain-hunters. A speculation that General Motors may post better sales for the month, helped the US market to close in positive territory.
The Dow Jones Industrial Average (DJIA) closed higher by 32.25 points at 11,382.26 along with NASDAQ up by 11.99 points to close at 2,304.97 and S&P 500 advanced by 4.91 points to close at 1,284.91.
Indian ADRs ended mixed. In technology sector, Satyam ended up by 0.24%) along with Infosys by (0.02%) while Patni Computers ended down by (3.98%) and Wipro dropped by (3.20%). In banking sector, ICICI bank and HDFC bank decreased by (4.62%) and (3.47%) respectively. In telecommunication sector, MTNL and Tata Communication reduced by (3.52%) and (0.11%). Sterlite industries declined (2.26%).
Today the major stock markets in Asia are trading mixed. Singapore''s Straits Times rose 10.18 points at 2,916.97 while Hang Seng index is trading lower by 303.23 points at 21,798.78 along with Japan’s Nikkei trading down by 131.22 points at 13,331.98 and Taiwan Weighted trading at 7,406.64 advanced by 1.34 points.
The FIIs on Tuesday stood as net seller in equity and net buyer in debt. The gross equity purchased was Rs2,865.00 Crore and the gross debt purchased was Rs171.70 Crore while the gross equity sold stood at Rs3,092.20 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was (Rs227.10) Crore and net debt was 171.70 Crore.
Today, Nifty has support at 3,787 and resistance at 3,965 and BSE Sensex has support at 12,513 and resistance at 13,212.
Grey Market - Avon, First Winner, Archid Ply
Avon Weighing 10 5 to 7
First Winners Ind. Ltd. 125 1.5 to 2
Archid Ply Ind. 74 2 to 3
Lotus Eye Care Hospital 38 1.5 to 2
KSK Energy Venture 240 to 255 Discount
Somi Conveyor Belting 35 3 to 4
Birla Cotsyn (India) 15 to 18 1.50 to 2
Trading Calls - July 2 2008
Nifty (3897) Sup 3790 Res 4020
Sell BHEL (1356) SL 1378
Target 1310, 1300
Sell Bombay Dyeing (519) SL 525 Target 509, 505
Sell Hindustan Oil (127) SL 131 Target 119, 117
Sell Educomp (2373) SL 2390 Target 2330, 2320
Buy Tata Elxsi (210) SL 206 Target 218, 221
Stocks may shine, avoid the trap!
When the moon is not full, the stars shine more brightly.
The market may well rebound after Tuesday's pounding. At such times, beaten down stocks will suddenly have the wow factor, especially when the indices are in the green. Resist the temptation. We reiterate our warning that the pullback may not last long. Remain extremely cautious in this market whether one is trading or investing.
Reports state a few operators and even some promoters may be in trouble due to margin calls. As any rebound sets in you will hear news trickling in from all over regarding political adjustments, corporate developments and planetary movements. The sun has been refusing to shine on the bulls who now hope the new moon gives them a new lease of life.
While the Indian bulls suffered a neck squeeze on Tuesday, the Dow for the third consecutive session flirted with what is considered bear market territory. Thankfully, it managed to close in the green.
On the whole, global markets are mixed. US stocks logged modest gains, while markets in Europe took a beating. Key Asian markets are in the red this morning. Crude remains above $142 per dollar.
Barring the occasional short-covering led bump-ups, the bulls may not get anything to cheer about in the near term. The political uncertainty and worsening macro-economic outlook will continue to cloud the sentiment. Quarterly results are the next big event. But, even that may not lead to any significant rebound.
FIIs were net buyers of Rs2.09bn (provisional) in the cash segment on Tuesday while the local institutions poured in Rs1.62bn. In the F&O segment, foreign funds were net buyers of Rs683.2mn.
On Monday, FIIs were net sellers of Rs2.27bn in the cash segment. With this, they have pulled out $6.36bn from the Indian market this year.
Mumbai-based real estate firm Akruti City declare its results today.
Asian stocks are mixed this morning. While the Nikkei in Tokyo, the Hang Seng in Hong Kong and the Kospi in Seoul are all down, markets in China, Taiwan and Singapore are marginally up.
The MSCI Asia Pacific Index lost 0.5% to 135.27 at 10:35 a.m. in Tokyo, adding to a 5.9% drop in the past nine days. More than two stocks fell for each that gained, while seven of the index's 10 industry groups declined. The measure is trading at its lowest since March 20.
Japan's Nikkei 225 Stock Average sank 1.3% to 13,228.93. The index is set for a 10th straight day of declines, its longest losing streak in 43 years. South Korea's Kospi index lost 1.7%.
US stocks managed to notch up moderate gains after a weak opening. General Motors' June sales were a tad better than expected, while oil prices came off earlier highs. Financial shares also regained some ground, with Lehman Brothers bouncing back after tumbling on Monday.
All the main indices were volatile throughout the session, turning positive in the late morning after a report showed a surprise pick up in manufacturing activity. The market then slid again in the early afternoon as the banking sector slumped.
The Dow and the Nasdaq both briefly fell to levels that meet the technical definition of a bear market before bouncing back a little. A bear market is defined as a drop of at least 20% off the recent highs.
The Dow climbed 32.25 points, or 0.3%, to 11,382.26, erasing earlier declines that sent the 30-stock gauge into a bear market for a third day. The S &P 500 Index added 4.91 points, or 0.4%, to 1,284.91. The Nasdaq Composite advanced 11.99 points, or 0.5%, to 2,304.97.
GM reported an 18% drop in its US sales in June versus a year ago. The figure was well short of the 25% decline analysts had been looking for. Ford reported 28% fall in its June sales.
Market breadth was negative. On the New York Stock Exchange, losers topped winners nine to seven on volume of 1.64bn shares. On the Nasdaq, decliners beat advancers four to three on volume of 2.67bn shares.
US light crude for August delivery rose 97 cents to settle at $140.97 a barrel on the New York Mercantile Exchange, an all-time closing high. The front-month contract moved close to the all-time trading record of $143.67 hit Monday before trimming gains.
The national average price for a gallon of regular unleaded gas rose to a record $4.087 from a record $4.086 the previous day, according to AAA.
In currency trading, the dollar fell versus the euro and the yen. In the bond market, Treasury prices fell, raising the yield on the benchmark 10-year note to 4% from 3.97% late on Monday. COMEX gold for August delivery rose $16.20 to settle at $944.50 an ounce.
Lehman Brothers shares rose as investors considered rumours that the investment bank may need to put itself up for sale and that too at a discount. Such concerns sent the stock plunging Monday, but Lehman Brothers bounced back after Morgan Stanley started coverage of the stock with an "outperform" rating.
American Express gained after UBS upgraded it to "neutral" from "sell".
CIT Group rallied on news it is selling its home lending business the mobile home mortgage business. UBS shares slipped after the company said it will reshuffle its board following big subprime mortgage losses.
The Institute for Supply Management said its manufacturing index rose to 50.2 in June beating forecasts for a slide to 48.6, according to a consensus of economists. A reading above 50 implies expansion, while one below implies a contraction in the sector.
However, the report also showed a big jump in the prices manufacturers pay for raw materials, reflecting the run up in oil prices and other inflationary pressures
Thursday's two key events are the latest interest rate decision from the European Central Bank (ECB) and the June employment report. Current expectations are for the ECB to raise rates and for employers to have cut 60,000 jobs from their payrolls. A positive surprise could lift the sagging mood, though.
Wednesday brings the June reading private sector employment report from payroll services firm ADP. The May factory orders report and the weekly crude oil inventories report will also be out today.
European shares started the new month and quarter on a weak note. The pan-European Dow Jones Stoxx 600 index dropped 2.2% to 283.01 in its biggest one-day fall since March 17. The index is now back at levels last seen at the end of 2005.
The UK's FTSE 100 closed down 2.6% at 5,479.90, while Germany's DAX 30 slid 1.6% to 6,315.94 and the French CAC-40 dropped 2.1% to 4,341.21.
In the emerging markets, the Bovespa in Brazil slid 2.5% to 63,396 while the IPC index in Mexico was down 0.6% at 29,221. The RTS index in Russia dropped 2.6% to 2242 while the ISE National-30 index in Turkey plunged 5.9% to 39,772.
Bulls pray for some respite
It was the third straight day of losses for the Indian bourses with the benchmark Index slipping to its lowest since April 5, 2007 led by spiraling crude oil prices and rising interest rates. Crude Oil rose, extending this year's 48% gain, after reports stated that Israel was increasingly likely to attack Iran this year, which could threaten supplies from the Middle East.
The interest rate sensitive stocks were among the major laggards. ICICI Bank, DLF, SBI, Reliance Industries and HDFC were among the major losers. Even the Mid-Cap and the Small-Cap stocks were badly battered, with both the indices slipping over 4% each.
Finally, the BSE benchmark Sensex lost 557 points to close at 12,904 and the Nifty index lost 143 points to close at 4,896.
ABB plunged by over 5% to Rs769. The company announced that it won Rs3.12bn power order for Delhi Airport. The scrip touched an intra-day high of Rs813 and a low of Rs755 and recorded volumes of over 77,000 shares on BSE.
Ambuja Cement dropped by 3% to Rs72. The company announced its sales rose 5% at 1.46mn tons a year ago. The scrip touched an intra-day high of Rs76 and a low of Rs70 and recorded volumes of over 3,00,000 shares on BSE.
HCC dropped by over 9.5% to Rs72. The company announced that it secured an order worth Rs3.4bn from National Highway Authority of India (NHAI), New Delhi, to construct the 4.4 km elevated six lane highway at Badrapur on National Highway 2 (Mathura Road) near Delhi on BOT basis. The scrip touched an intra-day high of Rs80 and a low of Rs71 and recorded volumes of over 8,00,000 shares on BSE.
BGR Energy declined by over 4% to close at Rs221. The Company announced that it secured EPC contract worth rs31bn for the 1x 600 MW from Tamil Nadu Electricity Board. This project is an expansion of the existing 4x 210 MW thermal power project of TNEB at Mettur.
The scope of work consists of Design, Engineering, Supply of Boiler. StreamTurbine, Generator and complete Balance of plant equipments inclusive of all mechanical, electrical instrumentation & control sytems and civil, structural and architectural works, necessary for putting into commercial operation on Engineering, Procurement and Construction (EPC) basis.
The scrip touched an intra-day high of Rs238 and a low of Rs210 and recorded volumes of over 1,00,000 shares on BSE.
Tata Motors slipped by over 4% to Rs408. The company announced that it sold 46,339 vehicles in May as compared to 42,558 vehicles in May 2007 translating into a growth of 8.9% over the same period last year.
The company sold 42,916 vehicles in the domestic market compared to 38,255 vehicles sold in the corresponding month a year earlier. Exports fell by 20% to 3,423 vehicles in May compared to 4,303 vehicles in the same month last year. The scrip has touched an intra-day high of Rs428 and a low of Rs405 and has recorded volumes of over 1,00,000 shares on BSE.
Bajaj Auto was down by a percent to end at Rs446. The company said that its motorcycle sales grew by 8% in June at 175,903 units, while total two-wheeler sales rose by 7% to 177,112. Three-wheeler sales for the month were down 14% at 19,629 units.
Total two and three-wheeler sales were up 5% at 196,741 units last month. Exports surged 33% in June to 64,878 units.
TVS Motor dropped by over 7% to Rs24. The company posted a 2% growth in total two wheeler sales at 109,082 units for June as against 107,177 units sold in the corresponding period of the previous year.
During the month, the company's motorcycle sales grew by 9% to 51,409 units versus 47,380 units sold in June 2007.
Maruti Suzuki fell by over 8% to Rs568. The company announced that it sold a total of 61,247 vehicles in June as against 59,917 units sold in the same month last year, representing an increase of 2.2%. While, domestic sales rose by a mere 0.7% to 56,411 exports jumped 23.5% to 4,836.
CERC may give transmission license to Reliance Infrastructure’s subsidiary (FE)
ONGC arm shortlisted by the Iraq Government to develop its oil fields (BS)
Tata Motors hikes CV prices by 3% (BL)
RNRL, Rio Tinto and Essar amongst 17 companies to submit EOI to develop Coal India mines (BL)
HDFC Bank increases PLR by 75bps to 16% (BS)
TCS announces capex of Rs44.7bn for this fiscal (FE)
SBI likely to increase home loan rate (FE)
Amtek Auto is in race to acquire Frankfurt-based KSM Castings in a deal worth Rs17bn (ET)
Tata Motors expects to start manufacturing Nano at its Singur facility in the fourth quarter (ET)
DLF to develop 8 shopping malls under leasing format in the metros this fiscal (BL)
BHEL wins contract in Syria worth Rs20.8bn (BL)
Tata arm to develop, lease out centres to TCS (BL)
Two manufacturing units of Ranbaxy under US FDA scanner for selling medicines in the US (ET)
Supreme Court stays reclamation of sea by Adanis for SEZ (DNA)
Taro Pharma to consider Sun Pharma’s offer by July 14th (FE)
BGR Energy get Rs31bn contract from Tamil Nadu Electricity Board (BL)
GTL Infra is in talks with Essar Telecom Infra for a possible merger (DNA)
ABB bags order worth Rs3.1bn from IGIA, Delhi (DNA)
HCC wins order of Rs3.4bn from NHAI (FE)
Bank of Baroda plans to expand overseas operations by opening ten new branches and offices abroad (FE)
Onmobile buys French firm, Telisma, for Euro11mn (ET)
DHL is eyeing a bigger share of the logistics business in the Saarc region (ET)
Subhash Projects is entering urban infrastructure space through airports, metro rail and freight corridor projects (DNA)
Deewan Housing hikes retail PLR by 50 bps (FE)
Karuturi Global may sell part of its stake in its Ethiopian subsidiary (ET)
Prithvi Information plans to acquire three US-based companies in next six months (DNA)
Economic Front Page
FM says fiscal deficit to not cross 2.5% of GDP in FY09 (ET)
Export growth falls to 13% yoy in May as compared to 31.5% yoy in April (ET)
Steel companies to hold prices in July (BL)
Cement prices likely to increase by 3/bag in Mumbai, Gujarat and southern markets from next week (ET)
Communications and IT Ministry has fixed a reserve price for Rs22.6bn for the upcoming auction of 3G spectrum (ET)
Nifty July 2008 futures at steep discount
Turnover surges
Nifty July 2008 futures were at 3815, at a discount of 81.75 points as compared to spot closing of 3896.75. NSE's futures & options (F&O) segment turnover was Rs 47,969.80 crore, which was higher than Rs 40,590.90 crore on Monday, 30 June 2008.
Reliance Industries July 2008 futures were at discount at 2027 compared to the spot closing of 2044.15.
Tata Steel July 2008 futures were at discount at 677 compared to the spot closing of 697.70.
Cairn India July 2008 futures were at discount at 257.40 compared to the spot closing of 258.90.
In the cash market, the S&P CNX Nifty lost 143.80 points or 3.56% at 3896.75.
Bullion metals at ten week high
Gold and silver prices rise sharply with the strong crude and weak dollar
Bullion metals ended at the highest level in ten week’s time today, Tuesday, 01 July, 2008. Prices rose due to the declining dollar and the rising crude prices. The increase in energy costs generally increase demand for the precious metal as a hedge against inflation. Silver prices also rose.
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.
Comex Gold for August delivery rose $16.2 (1.7%) to close at $944.5 ounce on the New York Mercantile Exchange. It was the highest closing price for the yellow metal since mid April. Last week, on Thursday, 26 June, prices surged by more than 3.5%. That was the biggest one day percentage gain for a most-active contract since June, 2006. Last week gold prices ended higher by $27.6 (3.1%). On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped since then.
Gold prices ended June, 2008 with a gain of 4.1%. The yellow metal ended second quarter with a marginal gain of 0.7% yesterday. Last month, in May, it ended with a gain of higher by $22.5 (2.5%). Before May, for April, prices closed lower by 6.3%.
This year, gold prices have gained 12.5% till date against a 8.5% drop for the dollar against the euro. 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 Tuesday, Comex silver futures for July delivery rose 78 cents (4.5%) to $18.29 an ounce. Silver has gained 21.9% in 2008 till date. For the second quarter, it gained a paltry 1.4%.
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 Tuesday, the dollar gave up earlier gains as currency traders turned their attention back to Thursday's job data release and a key European Central Bank meeting, losing their initial enthusiasm over better-than-expected factory data. The dollar index which measures the greenback against a basket of six major currencies, dipped to 72.374 from 72.529.
Last week, Federal Reserve yesterday sharpened its focus on inflation, saying that the upside risks to inflation have increased. Fed held its target for short-term interest rates steady at 2%.
Since last September, Fed has axed interest rates seven times and brought it down to 2%. On the other hand, the ECB has kept rates unchanged at 4% since June, 2007. Gold gained 38% from 17 Sept as the Fed slashed rates from 5.25%. All eyes will be on the ECB on Thursday, 3 July, 2008 looking to see what the board will do with interest rates
In the crude market on Tuesday, oil rose, extending this year's 48% gain, as the International Energy Agency said supplies may not keep up with demand through 2013 and on reports that Israel is increasingly likely to attack Iran this year. Crude oil for August delivery rose 97 cents (0.7%) to settle at $140.97 a barrel.
Gold had 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 328 (2.5%) at Rs 13,207 per 10 grams. Prices rose to a high of Rs 13,236 per 10 grams and fell to a low of Rs 12,835 per 10 grams during the day’s trading.
At the MCX, silver prices for July delivery closed Rs 1,015 (4.2%) higher at Rs 25,275/Kg. Prices opened at Rs 24,290/kg and rose to a high of Rs 25,640/Kg during the day’s trading.
Crude prices end modestly higher
Prices end higher though IEA cuts its demand outlook for next four years
Crude futures rose today, Tuesday, 01 July, 2008 as the dollar fell. Prices rose on concern that Israel may attack Iran over its nuclear program and disrupt supply from OPEC's second-largest producer.
Crude-oil futures for light sweet crude for August delivery today closed at $140.97/barrel (higher by $0.97/barrel or 0.7%) on the New York Mercantile Exchange. Prices rose to a high of $143.33 earlier during the day. Crude prices gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years. It ended June 2008 higher by 9.9%. Last week, crude prices closed higher by 3.6%. Prices are 105% higher than a year ago. For the year, crude is up by 43.7% till date.
But uncertainty ahead of this week's update on U.S. petroleum supplies and some assumptions that high prices hurt energy demand kept prices in check, prompting a pullback from the day's high of more than $143 a barrel.
Today, the IEA (International Energy Agency) said in a report that spare OPEC capacity will shrink by 2013, keeping the market tight. In its Medium-Term Oil Market Report today, IEA reported that OPEC spare capacity will rise from 2.5 million barrels a day in 2008 to more than 4 million a day in 2010 before fading to negligible levels of around 1 million barrels a day by 2013.
International Energy Agency also said that supplies might not keep up with demand through 2013. The IEA, the Paris-based adviser to 27 oil-consuming nations, cut more than 3 million barrels a day from its 2012 global demand forecast. The IEA lowered demand forecasts for the years 2009 to 2012, citing weaker economic growth and the sharp rise in oil prices as factors curbing oil consumers' appetites.
In its latest medium-term report on the oil markets, the IEA forecast global demand will rise to 86.87 million barrels a day in 2008, down 1.4 million from the 88.27 million barrels projected in last year's report.
Supported by tensions in the Middle East, concerns about Nigerian production and ongoing talk about U.S. government control over speculative trading in the commodities markets, crude prices rose more earlier in the day.
At the currency markets on Tuesday, the dollar gave up earlier gains as currency traders turned their attention back to Thursday's job data release and a key European Central Bank meeting, losing their initial enthusiasm over better-than-expected factory data. The dollar index which measures the greenback against a basket of six major currencies, dipped to 72.374 from 72.529.
Natural gas in New York rose to a 30- month high as crude oil advanced. Natural gas for August delivery rose 15.2 cents (1.1%) to settle at $13.505 per million British thermal units.
Against this backdrop, gasoline for August delivery rose 1.43 cents (0.4%) to $3.5134 a gallon. Prices are up 53% in the past year.
Brent crude oil for August settlement today rose $0.84 (0.6%) to $140.67 on the London-based ICE Futures Europe exchange. The London benchmark rose 54% in FY 2007, the most since 1999 when prices more than doubled.
At the MCX, crude oil for July delivery closed at Rs 6,148/barrel, higher by Rs 70 (1.15%) against previous day’s close. Natural gas for July delivery closed at Rs 587.3/mmbtu, higher by Rs 13.5/mmbtu (2.3%).
Inflation because of few commodities
Under attack for unabated rise in inflation, the government on Tuesday said extreme price rise was limited to a few commodities like milk, cotton and iron and steel, besides petroleum, and not across-the-board.
"Government is taking measures to moderate inflationary pressures," an official statement said, adding that prices of 206 commodities have either remained stable or declined between January 5, 2008 to July 14, when inflation touched a 13-year high of 11.42 per cent.
Pointing out that inflation is largely commodity centric, the statement said 60 per cent of increase in inflation in the primary articles category was contributed by five commodities -- iron ore, cotton, milk, sea fish and oranges.
Among the manufactured goods, 60 per cent of the increase has been on account of eight products, six of which belong to iron and steel category, the Government said.
As regards the fuel group, the rise has been due to increase in prices of petrol, diesel and cooking gas and also those items whose prices are not fixed by the government like ATF, light diesel oil and naphtha.
Among the 30 essential commodities, the statement said, bajra, moong, urad, potatoes, onions and fish inland witnessed a decline in inflation.
The Government also pointed out that consumer price- based inflation for goods used by industrial workers have declined from 7.81 per cent in April to 7.75 per cent in May.
Government and RBI have already taken a host of fiscal and monetary measures to contain price rise over for the past three months. It has banned export of non-basmati rice, extended ban on pulses by a year, and imposed restrictions on export of steel iron and steel.
RBI, meanwhile, has increased the short-term lending rates and mandatory deposits of banks with the central bank to absorb liquidity.
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