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Friday, July 11, 2008
Post Session Commentary - July 11 2008
The domestic market fell drastically to close in deep red by reacting badly to inflation data, which stood at 11.89% for the week ended June 28 as against 11.63% in earlier week. Also, the IIP number for the month of May, which declined to 3.8% as against 10.6% in same period of last year adds to the negative sentiment. Even the better than expected quarterly results of the IT bellwether “Infosys” fell to give support to the market. Indian market opened on upbeat note tracking mixed cues from the global markets but soon lost ground and slipped into negative territory. Though the market showed some sign of recovery in the mid session but fell to sustain and kept on drifting downwards due to heavy selling pressures. Market witnessed some volatility during the session. From the sectoral front, all indices closed in red and major selling witnessed among the frontline indices mainly the Capital Goods, IT, Metal, Power and Oil & Gas stocks. IT index closed with deep cut of more than 6% and Capital Goods and Power indices slipped by more than 4%. The market breadth was negative as 995 stocks closed in green while 1665 stocks closed in red and 61 stocks remained unchanged.
The BSE Sensex closed lower by 456.39 points at 13,469.85 and NSE Nifty ended down by 113.20 points at 4,049. The BSE Mid Caps and Small Cap closed negative with loss of 106.86 points and 95.58 points 5,365.64 and 6,713.66 respectively. The BSE Sensex touched intraday high 14,066.36 of and intraday low of 13,351.34.
Infosys has announced its first quarter results today. The Company has reported a consolidated net profit of Rs130200 lacs with a growth of 4.2% in the quarter ended June 2008 as against Rs124900 lacs in the previous quarter same year. The standalone Net Profit was at Rs. 126200 lacs for the quarter ended on June 2008 against Rs. 118200 lacs for the quarter ended on March 2008.
Losers from the BSE are JP Associates (8.48%), TCS Ltd (8.03%), Satyam Comp (7.19%), Infosys Tech (7.18%), L&T Ltd (6.89%), Reliance Infra (6.28%), HDFC (5.52%), Tata steel (4.69%), Wipro Ltd (4.34%) and ICICI Bank Ltd (4.09%).
The Capital Goods index closed down by 565.67 points at 10,774.38. Lossers are L&T Ltd (6.89%), Punj Lloyd (6.25%), Alstom Proje (6.13%), ABB Ltd (5.80%), BEML Ltd (4.86%) and Elecon Eng C (4.21%).
The IT Index closed lower by 281.77 points at 3,907.63. Lossers are I-Flex (9.10%) along with Satyam Computer (7.19%), Infosys Tech (7.18), Tech MAhindra (6.87%), Rolta India (6.80%), Moser Bayer (4.55%) and Wipro Ltd Ltd (4.34%).
The Metal index closed down by 247.46 points at 12,711.71. Lossers are Ispat Industries (6.47%), Tata Steel (4.69%), JSW SL (3.51%), Jindal Steel (2.67%), Steel Authority (2.36%) and Jindal Stain (2.35%).
The Oil & Gas index ended down by 193.31 points at 8,886.28. As BPCL (8.06%), Essar Oil Ltd (5.73%), IOC (4.59%), Reliance Natural Resources (3.76%), ONGC (3.65%) and HPCL (2.93%) closed in negative territory.
The Power index lost 104.72 points to close at 2,344.06. Major lossers are GMR Infrastructure (7.17%), Tata Power (6.29%), Reliance Infra (6.28%), ABB Ltd (5.80%), Reliance Power (5.16%) and GVK Power Inf (5.11%).
NSE Bulk Deals to Watch - July 11 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
11-JUL-2008,ASIANHOTEL,Asian Hotels Ltd.,SHIV KUMAR JATIA,BUY,161158,492.00,-
11-JUL-2008,FIRSTWIN,First Winner Industries L,TIRUPATI ONLINE,BUY,307108,101.33,-
11-JUL-2008,IFCI,IFCI Ltd.,CLEAN FINANCE & INVESTMENT LTD,BUY,4579277,40.63,-
11-JUL-2008,IOLN,IOL Netcom Limited,SHREE DHOOT TRADING & AGENCIES LIMITED,BUY,177781,67.14,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,ACCURATE FINSTOCK PVT LTD,BUY,170000,36.94,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,CHOKHANI SECURITIES LTD,BUY,277794,36.07,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,DEVANG MAHENDRA SHAH,BUY,168662,36.34,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,DINESH MUNJAL,BUY,439624,36.68,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,DIPAK RAMANBHAI RATHOD,BUY,156421,34.94,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,H K STOCK SERVICES PVT LTD,BUY,105766,34.57,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,LABH INVESTMENT,BUY,165000,36.41,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,LATIN MANHARLAL SECURITIES PVT. LTD.,BUY,111114,37.20,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,MIHIR AGENCIES PRIVATE LTD,BUY,350000,37.10,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,NIKUNJ K SHAH,BUY,219248,37.36,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,NISSAR BROTHERS,BUY,330618,36.47,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,PRABHUDAS LILLADHER PVT LTD.,BUY,114903,36.34,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,PRAKASH & CO,BUY,152563,35.92,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,PRASHANT JAYANTILAL PATEL,BUY,433294,36.70,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,R.M. SHARE TRADING PVT LTD,BUY,428414,36.13,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,RAHUL DOSHI,BUY,240817,37.15,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,SANGEETA KAKANI,BUY,569800,36.60,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,SANJAY BHANWARLAL JAIN,BUY,236451,36.70,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,SHREYASKUMAR MAHESHBHAI PATEL,BUY,113000,36.79,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,STANDARD SECURITIES & INVESTMENT INTERMEDIATES LIMITED,BUY,107275,36.04,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,TIRUPATI ONLINE,BUY,395245,37.13,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,TRANSGLOBAL SECURITIES LTD.,BUY,749021,36.09,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,VAIBHAV DOSHI,BUY,272739,36.84,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,VIPUL PANNALAL SHAH,BUY,198488,38.10,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,YES INVESTMENTS VISHAL KISHORE BHATIA,BUY,140000,36.50,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,YUVAK SHARE TRADING PVT LTD,BUY,176287,36.31,-
11-JUL-2008,MAXWELL,Maxwell Industries Ltd.,KAPIL JAYKUMAR PATHARE,BUY,700650,14.15,-
11-JUL-2008,MAXWELL,Maxwell Industries Ltd.,SUNIL JAYKUMAR PATHARE,BUY,500250,14.15,-
11-JUL-2008,PRAENG,Prajay Engineers Syndicat,CITIGROUP GLOBAL MARKET MAURITIUS PVT.LTD.,BUY,200000,74.20,-
11-JUL-2008,SASKEN,Sasken Commu Techno Ltd,MBL & COMPANY LTD.,BUY,223780,146.55,-
11-JUL-2008,SITASHREE,Sita Shree Food Products,BHAYANI SECURITIES,BUY,250000,21.00,-
11-JUL-2008,SITASHREE,Sita Shree Food Products,H K STOCK SERVICES PVT LTD,BUY,313936,20.78,-
11-JUL-2008,SITASHREE,Sita Shree Food Products,HARJEET SINGH DHILLON,BUY,111000,20.25,-
11-JUL-2008,SITASHREE,Sita Shree Food Products,LABH INVESTMENT,BUY,235979,20.52,-
11-JUL-2008,SITASHREE,Sita Shree Food Products,STANDARD SECURITIES & INVESTMENT INTERMEDIATES LIMITED,BUY,178948,20.46,-
11-JUL-2008,SKFINDIA,SKF India Limited,HQ FONDER SVERIGE AB HQ STRATEGIFOND,BUY,1655662,217.00,-
11-JUL-2008,ASIANHOTEL,Asian Hotels Ltd.,MOSAIC INTER TRADE LIMITED,SELL,161158,492.00,-
11-JUL-2008,FIRSTWIN,First Winner Industries L,SOPHIA GROWTH -A SHARE CLASS,SELL,150000,103.00,-
11-JUL-2008,FIRSTWIN,First Winner Industries L,TIRUPATI ONLINE,SELL,307108,102.16,-
11-JUL-2008,IFCI,IFCI Ltd.,CLEAN FINANCE & INVESTMENT LTD,SELL,4579277,40.64,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,CHOKHANI SECURITIES LTD,SELL,277794,36.33,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,DEVANG MAHENDRA SHAH,SELL,168662,36.53,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,DINESH MUNJAL,SELL,439624,36.58,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,DIPAK RAMANBHAI RATHOD,SELL,156421,37.20,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,H K STOCK SERVICES PVT LTD,SELL,83203,35.80,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,INDIA MAX INVESTMENT FUND LTD,SELL,801750,37.93,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,LABH INVESTMENT,SELL,1000,36.07,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,LATIN MANHARLAL SECURITIES PVT. LTD.,SELL,111114,37.09,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,NIKUNJ K SHAH,SELL,219248,37.21,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,NISSAR BROTHERS,SELL,330618,36.47,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,PRABHUDAS LILLADHER PVT LTD.,SELL,114903,36.69,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,PRAKASH & CO,SELL,152563,36.04,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,PRASHANT JAYANTILAL PATEL,SELL,433294,36.63,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,R.M. SHARE TRADING PVT LTD,SELL,428414,36.19,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,RAHN AND BODMER,SELL,564150,36.60,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,RAHUL DOSHI,SELL,240817,36.61,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,SANGEETA KAKANI,SELL,569800,35.92,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,SANJAY BHANWARLAL JAIN,SELL,236451,36.65,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,STANDARD SECURITIES & INVESTMENT INTERMEDIATES LIMITED,SELL,107275,36.23,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,TIRUPATI ONLINE,SELL,395245,37.31,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,TRANSGLOBAL SECURITIES LTD.,SELL,749021,36.29,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,VAIBHAV DOSHI,SELL,272739,35.38,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,VIPUL PANNALAL SHAH,SELL,198488,37.18,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,YES INVESTMENTS VISHAL KISHORE BHATIA,SELL,140000,36.17,-
11-JUL-2008,LOTUSEYE,Lotus Eye Care Hospital L,YUVAK SHARE TRADING PVT LTD,SELL,176287,36.48,-
11-JUL-2008,MAXWELL,Maxwell Industries Ltd.,PRASHANT JAIPAL REDDY,SELL,1200900,14.15,-
11-JUL-2008,SASKEN,Sasken Commu Techno Ltd,MBL & COMPANY LTD.,SELL,230356,146.33,-
11-JUL-2008,SITASHREE,Sita Shree Food Products,BHAYANI SECURITIES,SELL,250000,21.03,-
11-JUL-2008,SITASHREE,Sita Shree Food Products,H K STOCK SERVICES PVT LTD,SELL,287936,21.00,-
11-JUL-2008,SITASHREE,Sita Shree Food Products,HARJEET SINGH DHILLON,SELL,70000,18.04,-
11-JUL-2008,SITASHREE,Sita Shree Food Products,LABH INVESTMENT,SELL,296979,21.08,-
11-JUL-2008,SITASHREE,Sita Shree Food Products,STANDARD SECURITIES & INVESTMENT INTERMEDIATES LIMITED,SELL,178948,20.54,-
11-JUL-2008,SKFINDIA,SKF India Limited,CITIGROUP GLOBAL MKTS MAURITIUS PVT LTD- SELL CODE,SELL,1766995,217.00,-
BSE Bulk Deals to Watch - July 11 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
11/7/2008 531190 A V COTTEX I PEGASUS STOCKS AND SHARES PVT LTD B 191045 15.30
11/7/2008 531190 A V COTTEX I SUDISH KUMAR S 100000 15.30
11/7/2008 531190 A V COTTEX I URMILA ARORA S 92045 15.30
11/7/2008 524412 AAREY DRUGS HARDIK M MITHANI S 34230 60.05
11/7/2008 500008 AMARA RAJA FRANKLYN TEMP MF FRANKLIN INDIA HIGH GROWTH CO FUND B 1120833 132.00
11/7/2008 500008 AMARA RAJA TEMPLETON MUTUAL FUND AC FRANKLIN INDIA FLEXI CAP FUND B 1569167 132.00
11/7/2008 500008 AMARA RAJA TEMPELTON MUTUAL FUND S 2690000 132.00
11/7/2008 500058 BIHAR SPON I MODI RUBBER LTD S 522347 19.42
11/7/2008 590059 BIHAR TUBES ELARA INDIA OPPORTUNITIES FUND LIMITED B 1500000 159.35
11/7/2008 590059 BIHAR TUBES APL INFRASTRUCTURE PRIVATE LIM S 145000 159.35
11/7/2008 590059 BIHAR TUBES VINAY GUPTA S 190560 159.35
11/7/2008 590059 BIHAR TUBES VANDANA GUPTA S 245400 159.35
11/7/2008 590059 BIHAR TUBES SAMEER GUPTA S 183417 159.35
11/7/2008 590059 BIHAR TUBES SANJAY GUPTA S 509610 159.35
11/7/2008 590059 BIHAR TUBES MEENAKSHI GUPTA S 226080 159.35
11/7/2008 590081 BRAHMANAND PRAGYA MERCANTILE PVT LTD S 99796 32.26
11/7/2008 532271 CYBERMAT INF S V ENTERPRISES B 1069618 5.03
11/7/2008 532271 CYBERMAT INF S V ENTERPRISES S 1066378 5.02
11/7/2008 532996 FIRST WIN SOPHIA GROWTH A SHARE CLASS S 150000 103.00
11/7/2008 509550 GAMMON INDI WARHOL LTD B 3884000 220.00
11/7/2008 509550 GAMMON INDI JPMORGAN INDIAN INVESTMENT COMPANY M LIMITED S 500000 220.00
11/7/2008 509550 GAMMON INDI JP MORGAN FLEMING ASSET MGMT EUROPE FLAGSHIP INDIAN INV M LTD S 3000000 220.00
11/7/2008 507759 LIME CHEM DUKE SPECIAL OPPORTUNITY FUND LLC S 20000 5.61
11/7/2008 532998 LOTUS EYE H.K.STOCK SERVICES PVT LTD B 244848 34.96
11/7/2008 532998 LOTUS EYE KHATRI ENTERPRISES B 201454 35.34
11/7/2008 532998 LOTUS EYE PRABHUDAS LILLADHER PVT. LTD. B 335104 36.98
11/7/2008 532998 LOTUS EYE N D NISSAR B 340615 36.49
11/7/2008 532998 LOTUS EYE H.J.SECURITIES PVT.LTD. B 182609 37.46
11/7/2008 532998 LOTUS EYE SHAH SAMIR D B 150000 37.00
11/7/2008 532998 LOTUS EYE MIHIR AGENCIES PVT LTD B 200000 37.13
11/7/2008 532998 LOTUS EYE SHEFALI V SAMDARIA B 298511 36.71
11/7/2008 532998 LOTUS EYE YUVAK SHARE TRADING PVT.LTD. B 239460 37.22
11/7/2008 532998 LOTUS EYE AMU SHARES AND SEC LTD B 236158 36.83
11/7/2008 532998 LOTUS EYE PRABHUDAS LILLADHER PVT. LTD. S 335104 36.86
11/7/2008 532998 LOTUS EYE N D NISSAR S 340615 36.42
11/7/2008 532998 LOTUS EYE H.J.SECURITIES PVT.LTD. S 182609 37.12
11/7/2008 532998 LOTUS EYE SHEFALI V SAMDARIA S 298511 36.71
11/7/2008 532998 LOTUS EYE RAHN AND BODMER S 900000 37.31
11/7/2008 532998 LOTUS EYE YUVAK SHARE TRADING PVT.LTD. S 235464 36.55
11/7/2008 532998 LOTUS EYE AMU SHARES AND SEC LTD S 236158 36.87
11/7/2008 526365 SHYAM STAR PRABHUBHAI DOBARIA S 38611 185.75
11/7/2008 532961 SITA SHREE H.K.STOCK SERVICES PVT LTD B 199452 21.28
11/7/2008 532961 SITA SHREE H.K.STOCK SERVICES PVT LTD S 199452 20.89
11/7/2008 532961 SITA SHREE LABH INVESTMENT S 195766 20.93
Market may remain weak
The market might extend Friday (11 July 2008)'s sharp fall on gloomy domestic and global scene. Higher crude oil prices, rising inflation, weak industrial production numbers, fears of further rise in interest rates, fluid domestic political situation and tension in Middle East will weight on the investor sentiment.
Infosys kickstarted the Q1 June result season on 11 July 2008 on a positive note. Infosys has revised upwards earnings and revenue guidance for the year ending March 2009 (FY 2009). Infosys has forecast 24.4% to 26.6% growth in earnings per share as per Indian GAAP at between Rs 98.79 to Rs 100.51 in FY 2009 over the year ended March 2008 (FY 2008). It has forecast a between 27.5% to 29.5% growth in revenue at between Rs 21278 crore and Rs. 21622 crore in FY 2009 over FY 2008.
The overall earnings of the corporate sector are seen rising about 15% in Q1 June 2008 over Q1 June 2007. That would be well below the 20-25% growth seen over the past few years.
Political uncertainty will continue to haunt the bourses. Prime Minister Manmohan Singh is likely to seek a vote of confidence in parliament shortly following Left’s withdrawal of support to the government over the India-US civil nuclear agreement. There was speculation that the government may choose a date around 22 July 2008 to call a special Lok Sabha session for the vote.
With Left parties withdrawing support to the United Progressive Alliance (UPA) government, India Inc. hopes the slow-moving economic reforms program will now be put on the fast track. Over the last four years, Left parities had stalled privatisation of state-run firms, pension reforms, higher foreign limits in insurance and more liberal norms for foreign bank.
Capping inflation has been a major priority for India’s central bank. Inflation based on the wholesale price index rose 11.89% in 12 months to 28 June 2008, above the previous week's annual rise of 11.63%, government data released on 11 July 2008, afternoon showed. It was at highest level in more than 13 years.
Reserve Bank of India on 24 June had hiked both repo rates and cash reserve ratio by 50 basis points each to tame rising inflation. There are expectations of further monetary tightening in quarterly monetary policy review of RBI scheduled on 29 July 2008 as inflation is showing no signs of abatement.
Industrial production rose 3.8% in May 2008, much lower than revised 6.2% growth in April 2008, the government data released on Friday, 11 July 2008, showed. Industrial production growth for April 2008 revised downwards to 6.2% from earlier 7%.
Crude oil has created a major havoc on global bourses. Crude oil for August delivery rose as much as $1.54, or 1.5%, to $143.19 a barrel on Friday 11 July 2008 on the New York Mercantile Exchange as Brazilian oil workers threatened a strike and on concern that Middle East and Nigerian supplies may be disrupted.
In the light of above worries, foreign institutional investors (FIIs) sold shares worth Rs 1,012.20 crore in the month of July 2008 so far, till 9 July 2008. FIIs sold shares worth Rs 26,477.50 crore in the calendar year 2008. Mutual funds have bought shares worth Rs 712.30 crore in the month of July so far.
Market posts marginal gains
The market shrugged off decision of Left parties to withdraw their support to the Congress-led United Progressive Alliance government on the hopes this would give government an opportunity to kickstart stalled economic reforms which Left had opposed for four years. However, a surge in crude oil prices, disappointing industrial production data and inflation climbing to more than 13-year high at the end of week played the spoilsport paring earlier gains of the week with the market ending with marginal gains in the week. BSE Sensex fell in 3 out of 5 trading sessions.
The barometer index rose 15.85 points or 0.12% to 13,469.86 in the week ended Friday, 11 July 2008. The S&P CNX Nifty edged up 33 points or 0.82% to 4,049 in the week.
The BSE Mid-Cap index added 87.10 points or 1.65% to 5,365.34. The BSE Small-Cap index rose 263.99 points or 4.09% to 6,713.66.
Foreign institutional investors (FIIs) sold shares worth Rs 1,012.20 crore in the month of July 2008, till 9 July 2008. FIIs sold shares worth Rs 26,477.50 crore in the calendar year 2008. Mutual funds have bought shares worth Rs 712.30 crore in the month of July 2008 so far.
The 30-share BSE Sensex rose 71.99 points or 0.54% at 13,525.99 on Monday 7 July 2008. The market lost most of its gains in late trade ending marginally higher after reports filtered in that India's Defence Attache Brigadier R D Mehta and three other Indians among forty-one people were killed in a suicide attack on the Indian Embassy in Kabul. The market had remained firm in most part of the day on firm global cues.
Sensex lost 176.34 points or 1.3% at 13,349.65 on Tuesday, 8 July 2008. The market failed to sustain previous day's small gains as global markets played a spoilsport. Nevertheless, the market came off lower level after an initial sharp fall, shrugging off decision of Left parties to withdraw their support to the Congress-led United Progressive Alliance (UPA) government.
Sensex surged 614.61 points or 4.6% at 13,964.26 on Wednesday, 9 July 2008. A mix of positive domestic and global news helped bulls conquer the bourses. The market was also boosted on hopes the government may push through some of the economic reforms which Left parties had stalled over the past four years.
The 30-share BSE Sensex lost 38.02 points or 0.27% at 13,926.24 on Thursday, 10 July 2008. The market ended little changed after witnessing a bout of volatility in the day. Investors refrained building large positions ahead of the weekly inflation data and Index of Industrial Production (IIP) data for May 2008 to be released by the government on, 11 July 2008.
The 30 share BSE Sensex slumped 456.39 points or 3.28% to 13,469.85 on Friday, 11 July 2008. Dismal economic data and strengthening crude oil prices forced investors to dump shares across the board. IT stocks tumbled after IT bellwether Infosys said at the time of announcing Q1 June 2008 results that the business environment was tough. All the sectoral indices on BSE were in red.
India’s second largest IT exporter by sales Infosys slumped 4.5% to Rs 1676.45 in the week. Infosys’ consolidated net profit as per Indian GAAP rose 4.2% to Rs 1302 crore on 6.8% growth in revenue to Rs 4854 crore in Q1 June 2008 over Q4 March 2008. Infosys has forecast 24.4% to 26.6% growth in earnings per share as per Indian GAAP at between Rs 98.79 to Rs 100.51 in FY 2009 over the year ended March 2008 (FY 2008). It has forecast a between 27.5% to 29.5% growth in revenue at between Rs 21278 crore and Rs. 21622 crore in FY 2009 over FY 2008.
India’s largest electric equipment maker by sales Bharat Heavy Electricals rose 1.4% to Rs 1,521.25 in the week. The company said on 11 July 2008 it has bagged a contract worth Rs 2175 crore for setting up a 600 megawatt thermal power plant in Tamil Nadu.
India’s largest telecom services provider by sales Bharti Airtel rose 4.01% to Rs 745 on 11 July 2008. As per reports the company added 2.5 million new subscribers in June 2008, the highest ever monthly customer addition by any operator in India.
India’s largest realty major by sales DLF surged 9.23% to Rs 452.80. The company’s board of directors on 10 July 2008 approved a proposal of buyback of equity shares at a price not exceeding Rs 600 per share.
The world’s sixth largest steel producer Tata Steel rose 4.07% to Rs 666.15 in the week. As per reports on 10 July 2008 the company plans to list a holding firm for steel and raw material assets outside India, on the London Stock Exchange to raise funds for acquiring iron ore and coal mines.
India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries fell 3.94% to Rs 2,016.40. It has reportedly signed an agreement with Peru's Perupetro to jointly explore for oil and gas in the Andean country.
India’s second largest telecom services provider by sales Reliance Communications fell 0.07% to Rs 437.90. South African mobile phone operator MTN Group has agreed to extend its exclusive talks with the Indian cellular services provider for a possible combination of their businesses, until 21 July 2008.
India’s largest engineering and construction firm by sales Larsen & Toubro fell 0.95% to Rs 2,357.20. The company said on Tuesday, 8 July 2008, it has bagged an order worth Rs 1047 crore from Indian Railways for setting up a cast steel wheel manufacturing plant at Saran in Bihar.
India’s third largest IT exporter by sales Satyam Computer Services fell 3.83% to Rs 444.45. It formed an alliance with Taiwan based Tyfone to provide mobile financial services to its customers.
Tata Consultancy Services (down 5.28% to Rs 799.20) and ONGC (down 3.09% to Rs 849.25) edged lower in the week.
Prime Minister Manmohan Singh is likely to seek a vote of confidence in parliament shortly following Left’s withdrawal of support to the government over the India-US civil nuclear agreement. There was speculation that the government may choose a date around 22 July 2008 to call a special Lok Sabha session for the vote.
With Left parties withdrawing support to the United Progressive Alliance (UPA) government, India Inc. hopes the slow-moving economic reforms program will now be put on the fast track. Over the last four years, Left parities had stalled privatisation of state-run firms, pension reforms, higher foreign limits in insurance and more liberal norms for foreign bank.
Inflation based on the wholesale price index rose 11.89% in 12 months to 28 June 2008, above the previous week's annual rise of 11.63%, government data released on 11 July 2008, afternoon showed. It was at highest level in more than 13 years.
Industrial production rose 3.8% in May 2008, much lower than revised 6.2% growth in April 2008, the government data released on Friday, 11 July 2008, showed. Industrial production growth for April 2008 revised downwards to 6.2% from earlier 7%.
Sales of passenger cars rose 6.1% to 99,738 units in June 2008 over June 2007, the Society of Indian Automobile Manufacturers said. Sales of commercial vehicles rose 13.5% to 40,324 units in June 2008 over June 2007.
Infrastructure sector output rose 3.5% in May 2008 from a year earlier, holding steady near April's 3.6% annual growth, government data released today, 9 July 2008, showed. The infrastructure sector accounts for 26.68% of industrial output.
Sensex sheds 456 points as Infosys tumbles after Q1 results
The market slumped once again after a minor recovery earlier this week. Spiraling crude oil prices and weak economic data dampened investor sentiments. IT stocks tumbled after IT bellwether Infosys said at the time of announcing Q1 June 2008 results today that the business environment was tough. All the sectoral indices on BSE were in the red. Capital goods stocks slumped.
As per provisional data, foreign funds today, 11 July 2008, sold shares worth a net Rs 467.67 crore. Domestic funds bought shares worth a net Rs 214.74 crore.
Industrial production rose 3.8% in May 2008, much lower than revised 6.2% growth in April 2008, the government data released today, 11 July 2008, afternoon showed. Industrial production growth for April 2008 revised downwards to 6.2% from earlier 7%.
Inflation based on the wholesale price index rose 11.89% in 12 months to 28 June 2008, above the previous week's annual rise of 11.63%, government data released today, 11 July 2008, afternoon showed. It was the reading since annual numbers in the current series became available in April 1995.
Crude oil flared up 3.57% to $145.70 a barrel today amid growing worries of threats to supplies from Nigeria and Iran, as well as concern over a Brazilian oil workers strike next week.
The 30-share BSE Sensex lost 456.39 points or 3.28% at 13,469.85. Sensex plunged 574.90 points at the day’s low of 13,351.34 hit in mid-afternoon trade. At the day’s high of 14,066.36, the Sensex gained 140.12 points at the onset of trading session.
The broader based S&P CNX Nifty was down 113.20 points or 2.72% at 4049. Nifty July 2008 futures were at 4040, at a discount of 9 points as compared to spot closing.
The BSE Mid-Cap index was down 2.01% at 5,365.34, while the BSE Small-Cap index was down 1.40% at 6,713.66. Both the indices outperformed the Sensex.
The market breadth was weak on BSE, with 1655 losers outpacing 995 gainers. 61 stocks remained unchanged.
BSE clocked a turnover of Rs 5299 crore as against Rs 4,825.81 crore on Thursday, 10 July 2008.
India’s largest private sector firm by market capitalization and oil refiner Reliance Industries declined 1.36% at Rs 2016.40.
IT shares declined sharply. TCS (down 8.03% at Rs 799.20), Satyam Computer (down 7.19% at Rs 444.45), and Wipro (down 4.34% at Rs 412.30), slipped. The BSE IT index underperformed the Sensex, falling 6.73% to 3,907.63.
India's second largest software exporter by sales Infosys Technologies slipped 7.18% at Rs 1,676.45. Infosys’ chief operating officer S.D. Shibulal said he expected pricing to remain stable in the current year ending March 2009 (FY 2009), with no opportunity for uptick.
Infosys today reported 4.2% growth in consolidated net profit to Rs 1302 crore in Q1 June 2008 over Q4 March 2008. Revenue rose 6.8% to Rs 4854 crore in Q1 June 2008 over Q4 March 2008.
Infosys has revised upwards earnings and revenue guidance for the year ending March 2009 (FY 2009). Infosys has forecast 24.4% to 26.6% growth in earnings per share as per Indian GAAP at between Rs 98.79 to Rs 100.51 in FY 2009 over the year ended March 2008 (FY 2008). It has forecast a between 27.5% to 29.5% growth in revenue at between Rs 21278 crore and Rs. 21622 crore in FY 2009 over FY 2008.
However, Infosys has not revised its earnings as well as revenue guidance in dollar terms i.e. as per US GAAP, which means that the upward revision in earnings and revenue guidance as per Indian GAAP is just due to a sharp fall in rupee against the dollar.
Capital goods declined after the data showed growth in capital goods sector declined sharply in May 2008 over May 2007. The BSE Capital Goods index underperformed the Sensex, falling 4.99% to 10,774.38.
Larsen & Toubro (down 6.89% at Rs 2,357.20), Punj Lloyd (down 6.25% at Rs 211.55), ABB (down 5.80% at Rs 851.75), and Bharat Heavy Electricals (down 2.68% at Rs 1,521.25), tumbled.
Banking stocks also witnessed selling pressure on fears of further monetary tightening by the Reserve Bank of India to control the surging inflation. Yet, the BSE Bankex outperformed the Sensex, sliding 1.95% to 6,044.76.
India's largest private sector bank by market capitalization ICICI Bank declined 4.09% at Rs 591.55. Oriental Bank of Commerce (down 4.23% at Rs 134.75) and Axis Bank (down 1.38% at Rs 669.60) declined.
India’s largest commercial bank State Bank of India fell 0.97% to Rs 1222.25. The bank is likely to report double-digit net profit growth in the Q1 June 2008, Chairman O.P. Bhatt told media reporters today.
Top Sensex losers were, Jaiprakash Associates (down 8.48% at Rs 156.50), Reliance Infrastructure (down 6.28% at Rs 801.40), Housing Development and Finance Corporation (5.52% at Rs 2000.55), and Tata Steel (down 4.69% at Rs 666.15).
India’s top cellular service provider by sales Bharti Airtel rose 0.44% at Rs 745. It came off from early high of Rs 798.65. As per reports, the company added 2.56 million users in June 2008, taking its total user base to 69.4 million.
Stock broking firm Edelweiss Capital plunged 5.57% to Rs 524.35 after the company posted 10.08% fall in net profit to Rs 6.78 crore on a 84.52% rise in total income to Rs 56.63 crore in Q1 June 2008 over Q1 June 2007.
Reliance Capital clocked the highest turnover of Rs 390.20 crore on BSE. Infosys Technologies (Rs 358.48 crore), Reliance Industries (Rs 279.34 crore), Reliance Infrastructure (Rs 176.79 crore) and Larsen & Toubro (Rs 147.61 crore), were the other turnover toppers on BSE in that order.
IFCI reported highest volume of 2.10 crore shares on BSE. Reliance Natural Resources (2.01 crore shares), Lotus Eye Care Hospital (1.94 crore shares), Ispat Industries (1.58 crore shares) and Chambal Fertilisers & Chemicals (1.04 crore shares), were the other volume toppers on BSE in that order.
European markets, which were mostly higher earlier, declined as the session proceeded. Key indices in UK and France were down 0.08% to 1.09%. However, Germany's DAX index was down 0.10%.
Asian market which opened before Indian market rose, boosted by a report that the US government is weighing the takeover of top US mortgage lenders Fannie Mae and Freddie Mac which have been under fire on fears they may not be able to get the capital they need to survive. Key benchmark indices in Hong Kong, Japan, Singapore, South Korea and Taiwan were up by 0.87% to 2.39%. China's Shanghai Composite index was down 0.65%.
US stocks rose on Thursday, 10 July 2008, helped by optimism about a major deal in the chemicals sector and after the Federal Reserve chairman said the central bank and the government are focused on stabilizing the financial system. The Dow Jones Industrial Average rose 81.58 points or 0.73% at 11,229.02. The tech-laden Nasdaq Composite index rose 22.96 points or 1.03% to 2,257.85.
From a record high of 21,206.77 hit on 10 January 2008, Sensex has lost 7736.92 points or 36.48%. It is down 6817.14 points or 33.60% in calendar year 2008 so far.
Caution may prevail on the bourses in the near term due to political uncertainty as to whether the government will be able to win confidence vote in the parliament. Reports suggest that government may hold a special session of parliament shortly to seek vote of confidence following withdrawal of support to the government by Left front this week.
The government is confident of retaining power due to backing from Samajwadi Party, a regional party in Uttar Pradesh. Left has withdrawn support to protest Indo-US nuclear deal.
Markets seek confidence!
Confidence is contagious, so is lack of confidence!
It’s not just the ruling government which needs to pass a vote of confidence soon. The market would look at Infosys to give some words of confidence. Most factors will be pushed into the background (though only temporarily) as software major Infosys announces its results today. Traditionally, the company sets the tone for the quarterly results season, especially for the IT sector. A few top companies (like Bajaj Auto) have already announced their results though.
The market is eager to hear what the Infosys management has to say on the emerging challenges for the company, as well as for the sector. There could be a positive surprise on the cards from Infy, as it has lower hedging exposure this time around. This may lift the stock and other IT shares. The company could also up its fully-year guidance. But, the euphoria may not last longer as major headwinds facing the sector are still in place. No harm in enjoying the day.
Coming to the broader market, the trend will remain choppy and will hinge on the news flow from various quarters. It's a mixed bag across global markets. Crude oil remains a big worry amid growing geo-political concerns with Iran testing more missiles.
The local political situation is also tense, though it may not impact the sentiment unless the Government fails the 'Trust Vote'. The prime minister appears confident of winning the vote of confidence. Later in the day we will know the exact date on which the special parliament session will be called.
Being Friday, there is of course the Inflation numbers which will continue to give an excuse for swinging the mood either way. We will also get the IIP data today.
Shares of Lotus Eye Care Hospital Ltd. will get listed on the bourses.
Results Today: Edelweiss Capital, Infosys and Orbit Corp.
FIIs were net sellers of Rs5.52bn (provisional) in the cash segment yesterday while the local institutions too withdrew Rs1.12bn. In the F&O segment, the foreign funds were net buyers of Rs9.14bn. On Wednesday, they pulled out Rs2.88bn from the cash segment.
US stocks ended higher the end of a volatile session. A steep increase in oil prices, coupled with the nagging worries about the health of the financial sector continued to cloud the sentiment.
Concerns about the viability of government-sponsored mortgage buyers Fannie Mae and Freddie Mac were offset by Dow Chemical's big-ticket acquisition of Rohm & Haas and a 10% rise in shares of Alcoa.
In a testimony to the US Congress, Treasury Secretary Henry Paulson assured that Fannie Mae and Freddie Mac remain well capitalized. Paulson and Federal Reserve chief Ben Bernanke also told the Congress that legislation is needed to modernize the nation's financial system.
After swinging up and down throughout the session, the major indexes found some footing late in the day, with the S&P 500 Index rebounding from a two-year low. The S&P 500 added 8.7 points, or 0.7%, to 1,253.39. The benchmark marked its first bear market since 2002 on Wednesday.
The Dow Jones Industrial Average advanced 81.58 points, or 0.7%, to 11,229.02. The Nasdaq Composite Index rose 22.96 points, or 1%, to 2,257.85.
Investors snapped up technology and other shares hit hard in Wednesday's selloff. However, some of those gains dissipated after crude oil spiked more than $5 per barrel, surging over $141 a barrel, on reports that Iran had again tested some missiles and that the cease-fire in Nigeria has ended.
Stocks turned higher again towards the close, as reports quoted Intel CEO as saying that the chip giant has not been hurt by the US slowdown and continues to enjoy strong global sales.
Market breadth was positive. About three stocks rose for every two that dropped on the New York Stock Exchange.
Shares of Fannie Mae and Freddie Ma continued to plunge on worries about a potential collapse. A former Fed president said that the companies were insolvent and may need a government bailout. Fannie Mae lost 13.8% and Freddie Mac was down 22%.
Lehman Brothers lost another 12.4% on ongoing concerns about its solvency after it posted a $3bn quarterly loss last month. Automakers continued to plummet, with GM hitting a 54-year low, despite CEO Rick Wagoner dismissing bankruptcy rumors.
Wachovia said it would report a quarterly loss of between $2.6-2.8bn, prompting Moody's to put the bank's long-term debt rating on review for a downgrade. Shares fell over 8%.
Wal-Mart reported stronger-than-expected June sales, thanks in part to the economic stimulus package. Discounters benefited most from the tax rebates. Alcoa gained 9.7% on reports that Chinese aluminum companies will cut back production to save energy.
US light crude oil for August delivery gained $5.60 to settle at $141.65 a barrel on the New York Mercantile Exchange. The national average price for a gallon of regular unleaded gas fell to $4.104 after holding stead at a record $4.108 for three days straight.
In currency trading, the dollar fell versus the euro and rose against the yen. In the bond market, Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.80% from 3.81% late on Wednesday. COMEX gold for September delivery rose $13.40 to settle at $944.50 an ounce.
Friday brings quarterly earnings from GE, with the Dow company expected to have earned 54 cents versus 53 cents a year ago. Also on the docket Friday: the May trade balance and the July consumer sentiment index from the University of Michigan.
European shares fell. The pan-European Dow Jones Stoxx 600 index dropped 2.1% to 277.95 reversing Wednesday's 1.8% rise. For the year, the index is down 24%, led by a 35% decline from the banking sector.
Germany's DAX 30 fell 1.3% to 6,305.00, while the French CAC-40 dropped 2.5% to 4,231.56 and the UK's FTSE 100 shed 2.2% to 5,406.80.
Markets recovered sharply from their day’s low to end on a flat note. Volatile trading session started off with slight positive bias, however from thereon selling pressure in the index heavyweights like Reliance Industries, ITC, Infosys and ICICI Bank dragged the benchmark Sensex to hit an intra-day low of 13,763.94.
However, bulls made a comeback in late trades managing to recover almost all the losses. The recovery was led by the Metal stocks after China’s 20 biggest Aluminium smelters agreed to cut production by as much as 10%. Stocks like Hindalco, Nalco, Hindusthan Zinc and Tata Steel were among the major gainers.
Finally the Sensex recovered almost 150 points from days low to close at 13,926 losing marginally by 38 points and the Nifty recouped nearly 50 points from days low to close flat at 4,162.
Shares of DLF advanced over 2% to close at Rs458 after the company announced that its board of directors approved the buyback of its equity shares from open market. In a resolution approved by the board, DLF will buy a maximum of 22mn equity shares at a price not exceeding Rs600/share. The company plans to spend Rs11bn on the buyback.
The maximum price fixed for the buyback is at a premium of 33.24% over the last average closing price of the company's equity shares on the BSE and NSE as of July 09, 2008.
Commenting on the buyback decision, Mr. Rajiv Singh, Vice Chairman, DLF said, "The company's aim has always been to maximize shareholder value and we see the share-buyback decision as a highly attractive opportunity for our shareholders. This decision would be value accretive for the shareholders. While we respect the market, we believe that our current share prices do not reflect the intrinsic strength and future growth potential of DLF."
DLF has appointed JM Financial Consultants Pvt Ltd and DSP Merrill Lynch Ltd as the merchant bankers for the buyback.
DLF had hit a 52-week high of Rs1,225 on January 14, 2008 and a 52-wek low of Rs350 on July 2, 2008.
Kale Consultants surged by over 4.5% to Rs41.7 after the company announced a co-creation initiative with bmi, the leading airline operating out of UK to jointly develop a financial decision support system for airlines taking the 2 year bmi-Kale association to the next strategic level. The scrip touched an intra-day high of Rs42 and a low of Rs39 and recorded volumes of over 18,000 shares on NSE.
Sintex Industries was down by 7% to Rs295. The company announced its Q1 results with net profit at Rs565mn (up 71.2%) and net sales at Rs7.15bn (up 107.8%). The scrip touched an intra-day high of Rs326 and a low of Rs292 and recorded volumes of over 2,00,000 shares on NSE.
Era Infra edged lower by half a percent to Rs574. The company announced that it is expanding its horizon in Power Sector. In pursuance of this objective, the company would establish a thermal Power Plant of 1200 MW in the State of Madhya Pradesh.
The company has also initiated relevant steps and procedures for obtaining various clearances and permissions from concerned departments.
The scrip touched an intra-day high of Rs580 and a low of Rs567 and recorded volumes of over shares 11,000 on NSE.
Vakrangee Softwares surged by over 8.5% to Rs188 after the company announced that it secured a project from the Chief Election Commission, Maharashtra Unit for the Delimitation exercise of the said state. Delimitation is the exercise of redrawing boundries of Lok Sabha and Assembly Constituencies to maintain equitable distribution of population across constituencies. The scrip touched an intra-day high of Rs191 and a low of Rs170 and recorded volumes of over 1,00,000 shares on NSE.
Kilburn Engineering was down by 1.2% at Rs28. The company announced that it secured order worth Rs161mn. The scrip touched an intra-day high of Rs29 and a low of Rs26 and recorded volumes of over 7,000 shares on NSE.
DLF says would spend up to Rs11bn to buy back shares at a maximum of Rs600 per share over next 12 months.(TOI)
Suzlon Energy plans to set aside Rs5.9bn to pay client as damages for output losses owing to defective blades.(BS)
Great Offshore lines up US$230mn outlay for acquisition of multi support vessel and jack-up rig.(BL)
SP targets gas policy as Reliance Industries’ KG output nears (ET)
Allied Digital Services acquires 80.5% stake in US based EnPointe Global Services for US$30mn.(FE)
Special Undertaking of UTI set to sell around 17% stake in Axis Bank through block deal.(BS)
Ruias, owners of Dunlop India, buy UK-based Schlegel Automotive. (Mint)
Bharti Airtel adds 2.56mn subscribers in June according to industry data.(BS)
Taro Pharmaceuticals disapproves Sun Pharmaceutical’s open offer as financially inadequate.(BL)
Sterlite Industries and unions representing the workers of US based Asarco agree to acquire all the assets of the bankrupt copper producer.(DNA)
ICICI Bank is considering acquisitions to expand outside India.(TOI)
Bajaj Auto plans two JVs with Renault. (ET)
Ashtavinayak invests Rs9bn in forthcoming movies. (ET)
Jet Airways gets rights to fly to Dubai. (Mint)
Sony Ericsson may buy Spice Mobile. (ET)
WNS (Holdings) buys BPO arm of Aviva for US$228mn.(BS)
ChrysCapital invests $440mn in HCL Technologies and Infosys. (ET)
Apollo Tyres, JK Tyres hike prices by 5%. (ET)
Economic Front Page
Air passenger traffic declines by 4% in the first week of July, for the first time in three years.(BS)
Cement shipments rose 8.7% in June from a year ago, according to industry data.(BL)
Passenger car sales witness 6.1% growth in June.(TOI)
DoT can go ahead with global auction for 3G spectrum says TRAI.(BL)
Boeing to deliver more jets as carriers seek to upgrade fleets. (Mint)
Mall space estimate falls by 1/6th on sagging demand as per Cushman and Wakefield. (Mint)
MNCs may need FIPB stamp to swap shares in local arms. (ET)
Telecom operators tell TRAI not to regulate VAS. (FE)
Grey Market Premiums - Discounts - July
Lotus Eye Care Hospital 38 3 to 4
KSK Energy Venture 240 Discount
Somi Conveyor Belting 35 3 to 5
Birla Cotsyn (India) 15 to 18 Discount
Bullion metals end higher
Reports of missile tests by Iran help gold and silver prices end up
The weak US dollar and the rising oil price once again sent some relief to the bullion metals today, Thursday, 10 July, 2008. Prices also rose on reports of more missile tests by Iran. Gold is typically seen as a safe-haven investment and its appeal increases during times of heightened geopolitical tensions. The increase in energy costs also generally increase demand for the precious metal as a hedge against inflation. Silver prices gained for the day.
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 $13.4 (0.9%) to close at $942 ounce on the New York Mercantile Exchange. Prices climbed to a high of $945.5 during intra day trading. Last week, it ended higher by $2.3 (0.3%). On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped since then.
It was reported today that Iran test fired more missiles on Thursday, after testing missiles the day before that could reach Israel. Iran is the world's fourth-largest exporter of crude oil.
The weakening dollar and higher global demand for raw materials have led to records this year for commodities including gold. Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices.
Gold prices ended June, 2008 with a gain of 4.1%. The yellow metal ended second quarter with a marginal gain of 0.7%. 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 11.5% till date against a 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%.
Today, Comex silver futures for September delivery gained 14 cents (0.8%) to $18.32 an ounce. Silver has gained 22.3% in 2008 till date. It ended last week higher by 3.8%. 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 Thursday, the dollar lost previous gains as shares on Wall Street came under more pressure from concerns over the financial sector, with investors concerned over the fate of government-sponsored mortgage buyers Fannie Mae and Freddie Mac. The dollar index which measures the greenback against a trade-weighted basked of currencies, fetched 72.51, compared with 72.76 in early Thursday trade.
During last week of June, 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, after keeping interest rates unchanged at 4% since June, 2007, ECB hiked the same to 4.25% last week.
In the crude market on Thursday, crude for August delivery closed up $5.6, or 4.1%, at $141.65 a barrel on the New York Mercantile Exchange. Crude was mostly trading up less than $2 during the session, but jumped as much as $6 a few minutes before the market closed.
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 135 (1.04%) at Rs 13,076 per 10 grams. Prices rose to a high of Rs 13,137 per 10 grams and fell to a low of Rs 12,911 per 10 grams during the day’s trading.
At the MCX, silver prices for September delivery closed Rs 125 (0.5%) higher at Rs 25,624/Kg. Prices opened at Rs 25,564/kg and rose to a high of Rs 25,775/Kg during the day’s trading.
Crude shoots up in final minutes of trading
Prices end higher just by almost $6
Geo political tensions in Iran and Nigeria pushed up crude prices today, Thursday, 10 July, 2008. Traders also continued to worry about slowing demand, continued selling despite a sharp drop in U.S. inventories and rising tensions in the Middle East. Crude rose by almost $6 at one shot today in the final hour of trading after trading around $2 higher in the previous hours.
Crude-oil futures for light sweet crude for August delivery today closed at $141.65/barrel (higher by $5.6/barrel or 4.1%) on the New York Mercantile Exchange. Last week, prices gained $5.08 (3.6%).
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%. Prices are 105% higher than a year ago. For the year, crude is up by 44% till date.
At the currency markets on Thursday, the dollar lost previous gains as shares on Wall Street came under more pressure from concerns over the financial sector, with investors concerned over the fate of government-sponsored mortgage buyers Fannie Mae and Freddie Mac. The dollar index which measures the greenback against a trade-weighted basked of currencies, fetched 72.51, compared with 72.76 in early Thursday trade.
EIA reported yesterday that crude inventories fell 5.9 million barrels in the week ended 4 July to stand at 293.9 million barrels. Daily crude imports averaged 9.5 million barrels last week, down 621,000 barrels from the previous week. U.S. refineries operated at 89.2% of their operable capacity last week, unchanged from the previous week.
EIA also reported that U.S. gasoline supplies rose by 900,000 barrels in the latest week, while distillates rose by 1.8 million barrels.
The Paris based International Energy Agency (IEA) said today that it expects 2009 global energy demand to rise 1% from 2008 levels. Robust growth in developing economies will more than offset demand contractions in developed countries. The IEA also said that the bunching of new projects and Saudi Arabia's pledge for 250,000 barrels a day in additional production should lead to an increase in spare capacity for crude oil next year. But it said current high prices are not just about tight crude supplies, pointing to refinery capacity as another major contributor.
Against this backdrop, August natural gas futures rose 20.9 cents, or 1.7%, to $12.22 per million British thermal units. August reformulated gasoline gained 5.52 cents to $3.44 a gallon and August heating oil futures gained 19 cents to $4.04 a gallon.
At the MCX, crude oil for July delivery closed at Rs 5,911/barrel, higher by Rs 26 (0.44%) against previous day’s close. Natural gas for July delivery closed at Rs 523.2/mmbtu, higher by Rs 2.5/mmbtu (0.5%).
GMR Infrastructure
We recommend a buy in GMR Infrastructure from a short-term perspective. From the charts of GMR Infrastructure, we note that it was on a medium-term downtrend from its early May 2008 high of Rs 169 till it recorded a 52-week low of Rs 76 during early July.
However, the stock’s medium-term downtrend got arrested at around Rs 80 recently, a significant long-term support level. The stock has been on a short-term uptrend since early July. On July 9, the stock penetrated the medium-term down trendline by surging almost 6 per cent.
The short-term up-trend of the stock has been backed by good volume. The daily momentum indicator has recovered from the oversold territory and has entered into the neutral region. The daily moving average convergence and divergence is moving in line with the stock and is signalling a buy. We are bullish on the stock in the short-term. We anticipate the stock to rally until it hits our price target of Rs 106 in the upcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining stop-loss at Rs 88.
DLF, ICICI Bank, Suzlon July 2008 futures at discount
Turnover drops
Nifty July 2008 futures were at 4149, at a discount of 13.20 points as compared to spot closing of 4162.20. NSE's futures & options (F&O) segment turnover was Rs 35,645.89 crore, which was lower than Rs 47,907.81 crore on Wednesday, 9 July 2008.
DLF July 2008 futures were at discount at 446.50 compared to the spot closing of 459.95.
ICICI Bank July 2008 futures were at discount at 613.50 compared to the spot closing of 616.90.
Suzlon Energy July 2008 futures were at discount at 205.95 compared to the spot closing of 208.
In the cash market, the S&P CNX Nifty rose 5.10 points or 0.12% at 4162.20.
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