Eveninger - July 17 2008
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Thursday, July 17, 2008
Market zooms 536 points
Overcoming sustained selling pressure of the past five sessions, the Bombay Stock Exchange benchmark Sensex surged on Thursday by over 530 points to regain the 13k level with buying activity picking up on strong global cues and easing of crude oil prices.
The 30-share BSE barometer, which has lost nearly 1,350 points in past five trading sessions, gained 536.05 points at 13,111.85 points today.
It touched the day's high of 13,150.35 and a low of 12,843.79 points.
Market breadth was impressive with 28 stocks out of 30-scrip Sensex ending in green while two stocks -- Ranbaxy Labs and Tata Steel-- closing in red.
National Stock Exchange index Nifty also shot up by 130.50 points at 3,947.20, after hitting a high of 3,968.75 and a low of 3,823.15 points.
Marketmen said buying activity picked up following reports of crude oil falling from record high levels and global stock markets surging.
With crude oil prices easing, most of refinery stocks, led by Reliance Industries, recorded fresh gains.
Crude for August delivery fell three per cent in New York after the US Energy Department showed an unexpected gain in supplies as fuel demand slowed.
Asian markets rallied mirroring the gain in US stocks. Hong Kong, Tokyo, South Korea and Singapore exchanges closed with handsome gains.
Capital goods sector index gained the most by 601.48 points at 10,762.01, followed by banking index by 327.36 points at 5,727.60.
Oil and Gas index rose by 263.69 points at 8,852.08, realty index by 208.90 points at 4,428.02, auto index by 141.29 points at 3535.78, IT index by 108.22 points at 3675.20, power index by 92.89 points at 2302.77, PSU index by 113.97 points at 5866.67, FMCG index by 44.48 points at 1941.94, tech index by 80.30 points at 2864.80 and consumer durable index by 49.37 points at 3440.60.
Healthcare gained 4.87 points at 3976.28 as most of the gains in the sector were pulled down after the segment leader Ranbaxy Laboratories fell Rs 18.50, 3.93 per cent to Rs 452.20 on some negative reports.
Midcap index gained 67.06 points at 5155.34 and smallcap index by 62.67 points at 6387.12.
However, Metal index fell by 238.62 points at 11697.30 as the segment majors Jindal Steel, Sterlite and Tata Steel fell sharply on profit selling.
Not all hope lost - economy can still grow at 8%
Amid various disappointing indicators, India has received some solace with the International Monetary Fund marginally revising its projections for economic growth to 8 per cent in 2008 from its earlier estimates of 7.9 per cent.
IMF in its update of World economic Outlook released today, however, retained its earlier forecast of 8 per cent GDP growth for India during 2009.
Indian economy grew by 9.3 per cent in 2007.
Projections for Indian economy are not too dismal, if one takes IMF views on the world economy. The multi-lateral agency projected the global growth to moderate from five per cent in 2007 to 4.1 per cent in 2008 and 3.9 per cent in 2009.
"The slowdown in global growth is expected to continue through the second half of 2008, with only a gradual recovery during 2009," IMF said.
It said the global growth decelerated to 4.5 per cent in the first quarter of 2008, down from 5 per cent in the third quarter of 2007, with sluggish activities both in advanced and emerging economies.
In advanced economies, business and consumer sentiments have continued to retreat, while industrial production has weakened further. There has also been signs weakening in business activities in emerging economies.
The projections of the multilateral funding agency for India came a few days after Fitch downgraded the country's domestic credit outlook to negative from stable. Fitch also expected Indian economy to grow at 7.7 per cent in 2008-09 against nine per cent in the previous year.
Indian economy is widely expected to witness a moderation this year due to rise in borrowing costs as RBI continued to tighten monetary stance to tame inflation, which is inching towards 12 per cent mark.
The recent industrial production data have also shown that the industry continued to bear the brunt of rising costs as its growth plunged to 3.8 per cent in May compared to 10.6 per cent last year. Both manufacturing and electricity sectors showed a sharp decline in their growth. This may be pointer to the slow down in the Indian economy.
The Finance Ministry also expects moderation in India's growth this fiscal, though not much. It hopes that the economy would grow between 8-8.5 per cent in 2008-09.
Asian Markets Rallied As Crude Oil Continues Its Retreat
Also Follows The Positive Sentiments Generated By Wall Street
The Asian stock markets rallied on bargain hunting following positive sentiments generated by Wall Street's biggest one-day gains since 1 April overnight and a steep fall in oil prices for a second day. Financial stocks rebounded as credit worries eased, following surprisingly strong results from the U.S. bank Wells Fargo. But the resources sector was lower following weaker commodity prices. On the Wall Street, the Dow jumped 2.52% to 11,239.28, the broader S&P 500 gained 2.51% to 1,245.36 and the Nasdaq surged 3.12% to 2,284.85.
Crude oil prices fell $4.14 to settle at $134.60 a barrel on the New York Mercantile Exchange after data released by the U.S. Energy Department showed that domestic inventories of crude oil and gasoline rose last week, rather than declining as analysts had expected. Crude oil is currently down 41 cents at $134.19 a barrel in Asian trade Thursday.
On the currency front, the U.S. dollar recovered to lower 105-yen range in early Tokyo deals from lower 104-yen levels late Wednesday. In Asian currency trading, the U.S. dollar bought 104.82 yen recently, compared with 105.03 yen late in New York. In South Korea, the U.S. dollar opened lower at 1,007.5 won compared to previous day's close of 1,009.3 won. The Australian dollar has opened weaker at US$0.9746-0.9749 and the kiwi held on to its overnight gains and was buying US$0.7715 in early local trade.
The Japanese market closed higher after a mixed performance on yesterday. Wall Street's rally overnight following a sharp decline in oil prices boosted market sentiment. However, concerns over the dollar's weakness against the yen. The banking sector rallied after the U.S. bank Wells Fargo reported better-than-expected quarterly numbers, but oil-related stocks lost ground. The benchmark Nikkei 225 index gained 1.0% to finish at 12,887.95. The broader Topix index gained 1.15% at 1,263.65.
On the economic front, the Finance ministry said that foreign residents were net sellers of Japanese stocks last week. The dumped shares in favor of bonds. Foreigners were net sellers of 242.4 billion yen worth of Japanese stocks for the week ended July 12, the third week of net stock selling. Meanwhile, foreigners were net purchasers of 528.2 billion yen in Japan bonds and notes during the week, the second straight week of net acquisition.
Meanwhile, a final report from the Japanese Cabinet Office showed that the leading index stood at 92.9 in May, up from an initial estimate of 92.6 and 92.8 recorded in April. The coincident index also showed an improvement from its initial estimate. The index recorded a reading of 103.3, an increase from 103 reported earlier. It was also up from 101.7 registered in April. However, the lagging index decreased to 103.4 from 103.7 seen in April.
China's Shanghai Composite Index posted modest losses, lagging a sharp regional advance, after data showed wholesale inflation and factory investment remain elevated, likely leaving policy makers few options on a tightening bias.
The benchmark Shanghai Composite Index closed down 0.8% at 2,684.78 extending yesterday’s fall of 2.7%.
According to the data released by the National Bureau of Statistics Bureau showed producer prices rose a faster-than-expected 8.8% in June, up from 8.2% in May. The pace of gains in consumer prices eased somewhat, with the CPI rising 7.1% in June on year, down from a 7.7% in May and 8.5% in April.
First-half gross domestic product climbed 10.4% from a year earlier, easing from an 11.9% expansion in 2007. The consumer price index rose 7.1% in June from a year earlier, easing from a 7.7% rise in May and 8.5% in April.
In Hong Kong, the Hang Seng Index increased 2.4% to 21,734.72, while the Hang Seng China Enterprises Index zoomed up 2.9% to 12,056.56.
The Australian stock market closed higher. The market started off on a firm note and extended its gains for the second straight session after Wall Street rallied overnight following a steep fall in crude oil prices for a second day. The resources stocks fell on weak commodity prices. The benchmark S&P/ASX 200 index closed up 0.6% at 4,901.0 and the broader All Ordinaries index also gained 0.6% to finish at 4,991.4.
On the economic front, Australia's international merchandise imports totaled A$17.527 billion in June, down from a revised A$18.191 billion in May, according to the Australian Bureau of Statistics. The bureau also said preliminary analysis showed that goods imports on a balance of payments basis fell by 2% in seasonally adjusted terms between May and June.
The data, included in the Reserve Bank of Australia monthly bulletin, showed that the central bank sold a net A$875 million in the spot foreign exchange market in June. The central bank also bought a net A$993 million from the government during the month. The Reserve Bank's spot foreign exchange market transactions in May amounted to net sales of A$336 million.
The South Korean market closed higher, ending a three-day losing streak. However, the market came of the day's highs amid caution ahead of the release of quarterly earnings by major U.S. investment banks later in the day. The benchmark Korea Composite Stock Price Index closed up 1.2% at 1,525.56, off a day's high of 1,546.84. The key index rebounded following a nearly 4% decline over the previous three days
On the economic front, Korea Automobile Importers and Dealers Association said that sales of imported cars in South Korea jumped 31.2% from a year earlier in the first half of this year, despite weaker consumer sentiment.
The New Zealand market closed higher extending yesterday's gains. The market started off on a firm note as Wall Street's rally overnight, following a sharp decline in oil prices for a second consecutive session, encouraged investors to look for bargain buys. The benchmark NZX 50 index closed up 1.04% at 3,091.38, after adding 0.6% on Wednesday.
The Indian market is trading firm after opening sharply higher in the morning. A sharp plunge in the price of oil for a second day and positive global cues triggered buying interest, but traders are expressing caution ahead of the release of inflation data today.
After opening sharply higher at 12,909, the BSE Sensex rose to an intra-day high of 13,099 within a few minutes. The Sensex pared its gains closing at 13,111.85, up 536 points or 4.26% over the previous day's close. Meanwhile, the S&P CNX Nifty is up 130 points or 3.42%.
Elsewhere, Taiwan's weighted index spiked 3.9% to 6,974.51, while Singapore's Straits Times Index added 1% to 2,864.10.
Turning toward European markets, jumped higher with investors taking heart from a continued retreat in oil prices and moving back into recently battered sectors such as the banks. In the opening trade, the U.K. FTSE 100 index climbed 1.7% to 5,238.90, the German DAX 30 index rose 1.5% to 6,245.20, and the French CAC-40 index advanced 1.6% to 4,178.23.
On the economic front the day is scheduled to release construction output for the Eurozone, which will be followed by ZEW economic survey for the Switzerland. From US we have building permits, which will be followed by the continuous and initial jobless claims. In the evening we have housing starts accompanied by Philadelphia Fed’s manufacturing survey. From Canada the Bank of Canada will release its monetary policy report, which will be preceded by the data on the foreign investment in Canadian securities.
BSE Bulk deals to Watch - July 17 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
17/7/2008 532981 ANU LABS DIPAK R RATHOD B 68824 330.28
17/7/2008 532981 ANU LABS DIPAK R RATHOD S 68824 333.24
17/7/2008 532996 FIRST WIN MBL AND COMPANY LIMITED B 93094 115.72
17/7/2008 532996 FIRST WIN OPG SECURITIES PVT LTD B 231418 115.93
17/7/2008 532996 FIRST WIN BUNIYAD CHEMICALS LIMITED B 100000 113.70
17/7/2008 532996 FIRST WIN MBL AND COMPANY LIMITED S 93094 115.46
17/7/2008 532996 FIRST WIN OPG SECURITIES PVT LTD S 231418 115.96
17/7/2008 532996 FIRST WIN BUNIYAD CHEMICALS LIMITED S 100000 119.63
17/7/2008 532909 GRABAL ALOK INDEX EQUITIES P .LTD S 149878 82.00
17/7/2008 524330 JAYANT AGRO HARISH TARSEM MITTAL B 100000 50.34
17/7/2008 523628 WEAROLOGY LT SOPHIA GROWTH A SHARE CLASS B 200000 73.00
NSE Bulk Deals to Watch - July 17 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
17-JUL-2008,BASF,BASF Ltd.,INDIA DIVERSIFIED (MAURITIUS) LIMITED,BUY,142000,291.21,-
17-JUL-2008,FIRSTWIN,First Winner Industries L,BUNIYAD CHEMICALS LIMITED,BUY,96230,114.15,-
17-JUL-2008,FIRSTWIN,First Winner Industries L,PRASHANT JAYANTILAL PATEL,BUY,156275,116.21,-
17-JUL-2008,FIRSTWIN,First Winner Industries L,SANJAY BHANWARLAL JAIN,BUY,127440,115.00,-
17-JUL-2008,FIRSTWIN,First Winner Industries L,TIRUPATI ONLINE,BUY,100000,121.00,-
17-JUL-2008,FIRSTWIN,First Winner Industries L,TRANSGLOBAL SECURITIES LTD.,BUY,89300,116.93,-
17-JUL-2008,IFCI,IFCI Ltd.,CLEAN FINANCE & INVESTMENT LTD,BUY,5744254,37.66,-
17-JUL-2008,PRIMESECU,Prime Securities Limited,OMEGA FINHOLD PRIVATE LTD.,BUY,247072,35.90,-
17-JUL-2008,WEBELSOLAR,Webel-SL Energy Systems L,SOHAN LAL AGARWAL,BUY,50337,214.89,-
17-JUL-2008,BASF,BASF Ltd.,DEUTSCHE SECURITIES MAURITIUS LIMITED,SELL,172975,286.05,-
17-JUL-2008,FIRSTWIN,First Winner Industries L,BUNIYAD CHEMICALS LIMITED,SELL,96230,121.22,-
17-JUL-2008,FIRSTWIN,First Winner Industries L,PRASHANT JAYANTILAL PATEL,SELL,156275,116.24,-
17-JUL-2008,FIRSTWIN,First Winner Industries L,SANJAY BHANWARLAL JAIN,SELL,127440,115.09,-
17-JUL-2008,FIRSTWIN,First Winner Industries L,TIRUPATI ONLINE,SELL,91849,120.25,-
17-JUL-2008,FIRSTWIN,First Winner Industries L,TRANSGLOBAL SECURITIES LTD.,SELL,89300,117.07,-
17-JUL-2008,IFCI,IFCI Ltd.,CLEAN FINANCE & INVESTMENT LTD,SELL,5744254,37.66,-
17-JUL-2008,PRIMESECU,Prime Securities Limited,CITIGROUP GLOBAL MARKETS MAURITIUS PRIVATE LIMITED ,SELL,250000,35.90,-
17-JUL-2008,PRIMESECU,Prime Securities Limited,OMEGA FINHOLD PRIVATE LTD.,SELL,158141,36.04,-
17-JUL-2008,WEBELSOLAR,Webel-SL Energy Systems L,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,73150,215.00,-
Sensex rebounds
After crashing over 1,000 points in the last five sessions, the market witnessed a strong relief rally on across-the-board buying through the day. The strong optimism in key indices triggered a steep rally and the Bankex index managed to register gains of over 4%. Sensex opened on a strong note with a positive gap of 334 points at 12,910, but quickly tumbled; anyway, it remained upbeat all through the session on sustained buying support. The rally gathered steam towards the close and Sensex touched an intra-day high of 13,150 before ending the session at 13,112, up 536 points. Nifty also bounced back sharply and advanced 130 points to close at 3,947.
The breadth of the market was absolutely positive. Of the 2,689 stocks traded on the BSE, 1,529 stocks advanced, 1,088 stocks declined and 72 stocks ended unchanged. All the sectoral indices closed with significant gains except the BSE Metal index. The BSE Bankex index was the major gainer and soared 6.06% followed by the BSE CG index (up 5.92%), the BSE Realty index (up 4.95%), the BSE Power index (up 4.20%) and the BSE Auto index (up 4.16%). The BSE Metal index was however down by 2%.
Among the 30 Sensex stocks, 28 ended in the green. Attracting strong buying support HDFC surged 9.78% at Rs1,888.70, Maruti Suzuki India soared 9.52% at Rs600, JP Associates jumped 9.19% at Rs149.05, DLF advanced 8.44% at Rs427.20, State Bank of India (SBI) added 7.75% at Rs1,227.05, Larsen & Toubro zoomed 7.49% at Rs2440, Tata Consultancy Services gained 7.13% at Rs779.50, ICICI Bank vaulted 6.08% at Rs551.20 and HDFC Bank was up 6.03% at Rs958.10. Other frontline stocks also moved up by 2-5% each.
Banking stocks witnessed sustained buying support. Axis Bank surged 8.73% at Rs635.50, UBI jumped 7.94% at Rs108.05, SBI added 7.75% at Rs1,227.05, Bank Of India advanced 7.31% at Rs243.65 and ICICI Bank gained 6.08% at Rs551.20. Kotak Bank, Yes Bank and Punjab National Bank were up over 4% each.
Over 1.91 crore Reliance Petroleum shares changed hands on the BSE followed by Reliance Natural Resources (1.55 crore shares), IFCI (1.44 crore shares), Ispat Industries (1.05 crore shares) and Chambal Fertilisers (89 lakh shares).
Market rebounds after four-day steep slide; Sensex vaults 536 points
Frenzied buying in battered pivotals along with short covering after four straight days of catastrophic fall triggered a solid rally on the bourses today. Strong global markets and a savage cut in crude oil for the second straight day yesterday, 16 July 2008 triggered the rally. The market breadth was strong. Except metal stocks, shares from other sectors rose
As per provisional data, foreign funds today, 17 July 2008, bought shares worth a net Rs 310.45 crore. Domestic funds bought shares worth a net Rs 168.02 crore.
Asian and European stocks rallied today, propelled by the biggest surge in US bank shares in 16 years and a sharp drop in oil prices, easing the worst fears about the global credit crisis spiralling out of control.
Political uncertainty will continue to weight on the market in the near term. The government is holding a two-day special session of parliament on 21 July 2008 and 22 July 2008 to seek vote of confidence after it was reduced to minority following withdrawal of support by Left parties on 8 July 2008. The government hopes to retain power due to backing from Samajwadi Party, a regional party in Uttar Pradesh.
The 30-share BSE Sensex surged 536.05 points or 4.26% at 13,111.85. The Sensex opened with a sharp 333.77 point upward gap at 12,909.57 and advanced further to touch a high of 13,150.35 in late trade. At the day's high, the Sensex surged 574.55 points. At the day�s low of 12,843.79 touched in mid-morning trade, the Sensex gained 267.99 points.
The broader based S&P CNX Nifty advanced 130.50 points or 3.42% at 3,947.20. Nifty July 2008 futures were at 3930.25, at a discount of 16.95 points as compared to spot closing.
The BSE Sensex shed 1350.44 points or 9.67% in four trading sessions to 12575.80 on 16 July 2008 from 13964.26 on 9 July 2008.
The BSE Sensex is down 7175.14 points or 35.36% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 8094.92 points or 38.17% away from its all-time high of 21,206.77 struck on 10 January 2008.
The market breadth was strong on BSE with 1529 shares advancing as compared to 1092 that declined. 70 remained unchanged.
The BSE Mid-Cap index was up 1.32% to 5,155.34 and the BSE Small-Cap index rose 0.99% to 6,387.12. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 4847 crore as compared to Rs 4,611.44 crore on Wednesday, 16 July 2008. NSE's futures & options (F&O) segment turnover was Rs 46,300.96 crore, which was higher than Rs 45,738.28 crore on Wednesday, 16 July 2008.
Among the 30-member Sensex pack, 27 advanced while the rest declined
India�s largest real estate developer in terms of market capitalisation DLF galloped 10.93% to Rs 437 on 20.58 lakh shares. It was the top gainer from the Sensex pack.
Auto shares advanced on fresh buying. India�s top small car maker in terms of sales Maruti Suzki India surged 9.52% to Rs 600. Mahindra & Mahindra (up 4.31% to Rs 514.95), Hero Honda Motors (up 2.89% to Rs 657.20), and Tata Motors (up 3.44% to Rs 409), rose
India�s largest private sector firm by market capitalization and oil refiner Reliance Industries rose 4.15% at Rs 2026.15 on 11.07 lakh shares. The stock moved in a range of Rs 2030 and Rs 1965 so far during the day.
Capital goods heavyweights advanced. India�s largest engineering & construction company in terms of order book position Larsen & Toubro jumped 8.11% to Rs 2454.50. The stock is trading 1:1 cum bonus.
India�s largest power equipment maker in terms of sales Bharat Heavy Electricals advanced 5.75% to Rs 1460.50.
India's largest dedicated housing finance company in terms of operating income HDFC vaulted 9.38% to Rs 1881.8. The company reported 25.56% rise in net profit to Rs 468.11 crore on a 26.67% increase in total income to Rs 2318.62 crore in Q1 June 2008 over Q1 June 2007. The results were announced during trading hours yesterday, 16 July 2008.
HDFC chairman Deepak Parekh yesterday denied rumors that Citigroup may sell its 11.74% stake in HDFC to Oman Investment Corporation.
Banking shares witnessed across-the-board rally ahead of the inflation data to be released after market hours today. HDFC Bank (up 5.57% to Rs 955.50), State Bank of India (up 9.33% to Rs 1245), and ICICI Bank (up 6.92% to Rs 555.55), also gained.
Mid-cap banks, Kotak Mahindra Bank (up 4.26% to Rs 465), Axis Bank (up 10.02% to Rs 643), Union Bank of India (up 7.89% to Rs 108), Bank of India (up 7.31% to Rs 243.65), also joined the rally.
Starting this week the government will inflation data every Thursday at 17:00 IST instead of mid-day every Friday.
India�s largest cellular services provider in terms of market capitalisation Bharati Airtel advanced 1.87% to Rs 744, Reliance Communications, the country�s second largest cellular services provider in terms of market capitalisation rose 4.66% to Rs 417.90.
Two oil exploration heavyweights saw divergent trend. Oil & Natural Gas Corporation (ONGC) soared 4.22% to Rs 902.90 while Cairn India lost 3.77% to Rs 215.90
India�s largest cigarette manufacturer in terms of sales ITC gained 3.51% to Rs 168. As per recent reports Amar Singh, whose Samajwadi Party is the key to the survival of the ruling Congress-led UPA Government wants the Unit Trust of India (UTI) and other public financial institutions to divest their stake in ITC in favour of British American Tobacco (BAT). Public financial institutions have a combined 37.62% (as at end March 2008) holding in ITC, which includes 11.90% of UTI and 13.65% of Life Insurance Corporation of India.
IT pivotals rallied. TCS surged 6.83% to Rs 773 after the company reported 8.58% rise in net profit to Rs 1204.01 crore on a 5.99% increase in total income to Rs 5321.88 crore in Q1 June 2008 over Q4 March 2007. The results were declared after market hours yesterday, 16 July 2008.
Infosys Technologies (up 2.25% to Rs 1581), Satyam Computer Services (up 5.26% to Rs 415.25), and Wipro (up 2.36% to Rs 380), edged higher from IT pack.
Reliance Infrastructure (up 4.67% to Rs 801.25), Jaiprakash Associates (up 9.34% to Rs 149.25), were the other gainers from Sensex pack.
India�s largest pharma company in terms of sales Ranbaxy Laboratories was the top loser from the Sensex pack. The stock slumped 3.89% to Rs 452.40 on profit booking after surging 15.03% to Rs 470.70 yesterday, 16 July 2008. The counter saw high volumes of 69.68 lakh shares. The stock surged wildly in a range of Rs 494.40 and Rs 431 today.
The stock galloped after the company's chief executive Malvinder Singh yesterday, 16 July 2008 said in a televised conference that the deal with Japan's Daiichi Sankyo remains on track. He also said that the firm would provide all information required for a probe by the US authorities within the next month.
Steel stocks extended early losses on reports the government may consider setting up a price band for steel products to control inflation. Tata Steel (down 2.91% to Rs 607.50), Sail (down 6.29% to Rs 119.20), and Kalyani Steel (down 1.05% to Rs 146), declined from steel sector.
Besides metal stocks like Sterlite Industries (down 5.69% to Rs 608), National Aluminium Company (down 4.78% to Rs 336.50), and Hinstan Zinc (down 0.02% to Rs 527.80) were not spared either.
Ranbaxy Laboratories was the top traded counter on BSE with turnover of Rs 316.39 crore followed by Reliance Petroleum (Rs 288.68 crore), Reliance Capital (Rs 243.26 crore), Reliance Industries (Rs 221.65 crore), and Larsen & Toubro (Rs 176.10 crore), in that order.
Reliance Petroleum led the volumes chart notching volumes of 1.92 crore shares followed by Reliance Natural Resources (1.56 crore shares), IFCI (1.45 crore shares), Ispat Industries (1.05 crore shares) and Chambal Fertilisers (89.55 lakh shares), in that order.
State run oil-marketing companies extended yesterday gains after sharp fall in crude oil prices for the second straight day yesterday, 16 July 2008. Hindustan Petroleum Corporation (up 5.10% to Rs 207.95), Bharat Petroleum Corporation (up 7.74% to Rs 272.10), and Indian Oil Corporation (up 6.16% to Rs 363.90), surged.
HCL Technologies was down 1.21% to Rs 212.75 after the company said on Wednesday, 16 July 2008, it has acquired UK based business process outsourcing provider Liberata Financial Services. The company made this announcement after trading hours on Wednesday, 16 July 2008.
Biocon fell 6.96% to Rs 350 after posting 71.66% fall in consolidated net profit to Rs 15.02 crore in Q1 June 2008 over Q1 June 2007. The company announced the results during trading hours today, 17 July 2008.
BGR Energy Systems spurted 20% to Rs 297.35 after the company said during trading hours on Wednesday, 16 July 2008, it has secured a contract worth Rs 4900 crore for engineering, procurement and construction of a thermal power project in Rajasthan. The stock surged 13.41% to Rs 247.80 on Wednesday, 16 July 2008
Chambal Fertilisers & Chemicals declined 0.20% to Rs 57.10 on reporting 61.44% fall in net profit to Rs 23.80 crore on 31.90% rise in total income to Rs 843.78 crore in Q1 June 2008 over Q1 June 2007. The company announced the results after trading hours yesterday, 16 July 2008.
Polaris Software Lab spurted 17.30% to Rs 80 after posting 40.27% surge in net profit to Rs 19 crore on 11.59% growth in net sales to Rs 267.12 crore in Q1 June 2008 over Q4 March 2008. The company announced the results during trading hours today, 17 July 2008.
Unichem Laboratories gained 7.89% to Rs 176 on reporting 48.34% surge in net profit to Rs 33.38 crore on 18.27% increase in net sales to Rs 181.54 crore in Q1 June 2008 over Q1 June 2007. The company made this announcement during trading hours today, 17 July 2008.
Among the side counters, ORG Information (up 20% to Rs 22.80), First Winner Industries (up 15.75% to Rs 119.50), IVRCL Infrastructures (up 14.55% to Rs 296), Eimco Elecon (up 12.40% to Rs 285), Hitachi Home & Life Solutions (up 13.77% to Rs 128.50), Astral Polytecnik (up 12.68% to Rs 160), Siemens (up 9.68% to Rs 473.20), Essar Shipping (up 10% to Rs 96.05), Balaji Telefilms (up 9.27% to Rs 162), Gokul Refoils (up 8.32% to Rs 191.40), surged.
Ace Software (down 13.23% to Rs 11.15), Nahar Industrial (down 9.55% to Rs 38.35), and Deltron Cables (down 9.41% to Rs 90), slipped.
Crude oil was up 26 cents at $134.86 today, 17 July 2008. On the New York Mercantile Exchange, August crude plunged $4.14 to $134.60 a barrel yesterday, 16 July 2008.
The Reserve Bank of India (RBI) may reportedly opt for further tightening of money supply as there is no likelihood of inflation coming down to single digit figure in the next six months based on indications given by the central bank Governor to a parliamentary panel.
European markets, which opened after Indian markets edged higher trade. Key benchmark indices in UK, Germany and France were up by between 1.78% and 2.21%.
Most Asian markets, which opened before Indian markets, were trading higher today, 17 July 2008. Key benchmark indices in Japan, Hong Kong, Taiwan, Singapore and South Korea were up by between 1% and 3.93%. However China's Shanghai Composite fell 0.78%.
US markets surged yesterday, 16 July 2008 led by financial stocks, after unexpectedly strong results from Wells Fargo & Co, the fifth-largest US bank and mortgage lender, eased worries about the on-going credit crisis. A drop in oil prices also aided the upmove.
The Dow Jones industrial average soared 276.74 points, or 2.52%, to 11,239.28. The S&P 500 index rose 30.45 points, or 2.51%, to 1,245.36, and the Nasdaq Composite index advanced 69.14 points, or 3.12%, to 2,284.85.
Market may witness pull-back
Overnight gains in the US markets and a sharp rise in several Asian indices in the ongoing trading session may help the domestic indices rebound from yesterday's losses. However, the market may exhibit caution owing to lack of clarity, higher volatility and the Sensex breaking the psychological level of 12600 towards the close yesterday. Among the indices, the Nifty could test higher levels at 3875 and 3920, and has a supports at 3750. The Sensex has a likely support at 12350 and may face resistance at 12675.
US indices bounced back sharply after yesterdays flat close with Dow Jones flared up by 277 points at 11,239, the Nasdaq moved up by 69 points at 2,285.
Barring Dr Reddy rest of the Indian floats had a field day on the US bourses. Rediff jumped 8.74%, ICICI Bank gained 8.56% and MTNL moved up 7.60%, while Satyam, HDFC Bank, VSNL, Infosys, Wipro, Tata Motors, and Patni Computer gained around 0.18-6% each.
Crude oil prices sheds sharply, the US light crude oil for August delivery moved down by $4.14 at $134.60 a barrel. In the commodity segment, the Comex gold for August delivery slipped by $16 to settle at $962.70 an ounce.
Local indices geared for rally in opening trade
Key benchmark indices are likely to snap their four-day loosing streak mirroring strong global markets. Sentiment may also get a boost from sharp plunge in crude oil for the second straight day yesterday, 16 July 2008.
On the New York Mercantile Exchange, August crude was down $4.14 at $134.60 a barrel yesterday, 16 July 2008.
However caution may prevail ahead of the release of inflation figures after market hours today, 17 July 2008. From this week inflation data will be released every Thursday at 17:00 IST instead of mid-day on Friday.
The Reserve Bank of India (RBI) may reportedly opt for further tightening of money supply as there is no likelihood of inflation coming down to single digit figure in the next six months based on indications given by the central bank Governor to a parliamentary panel. Some more monetary measures may be taken to contain the aggregate demand to counter inflation, RBI Governor Dr YV Reddy told members of the Parliamentary Standing Committee attached to the finance ministry earlier this week.
Asian markets were trading higher today, 17 July 2008. China's Shanghai Composite rose 2.24% or 60.60 points at 2,766.46, Nikkei gained 1.11% or 141.59 points at 12,902.39, Hang Seng surged 2.65% or 562.15 points at 21,785.65, Taiwan's Taiwan Weighted added 3.24% or 217.16 points at 6,927.80, Straits Times advanced 1.88% or 53.41 points at 2,888.73 and South Korea's Seoul Composite was up 1.90% or 28.63 points at 1,536.03
US markets surged yesterday, 16 July 2008 led by financial stocks, after unexpectedly strong results from Wells Fargo & Co, the fifth-largest US bank and mortgage lender, eased worries about the on-going credit crisis. A drop in oil prices also aided the upmove.
The Dow Jones industrial average soared 276.74 points, or 2.52%, to 11,239.28. The S&P 500 index rose 30.45 points, or 2.51%, to 1,245.36, and the Nasdaq Composite index advanced 69.14 points, or 3.12%, to 2,284.85.
Back home, the key benchmark indices suffered losses for the fourth straight day yesterday, 16 July 2008, on unabated selling pressure in blue-chip stocks. Both the indices hit 15-month low in intra-day trade yesterday. The 30-share BSE Sensex was down 100.39 points or 0.79% to 12,575.80 and the broader based S&P CNX Nifty was down 44.4 points or 1.15% at 3816.70 yesterday.
The BSE Sensex is down sharply 7711.19 points or 38.01% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 8630.97 points or 40.69% away from its all-time high of 21,206.77 struck on 10 January 2008.
As per provisional data, foreign funds sold shares worth a net Rs 229 crore while domestic funds bought shares worth a net Rs 14.12 crore yesterday, 16 July 2008.
Foreign institutional investors (FIIs) were net sellers of Rs 712.30 crore in the futures & options segment on 16 July 2008. They were net sellers of index futures to the tune of Rs 69.76 crore and sold index options worth Rs 432.98 crore. They were net sellers of stock futures to the tune of Rs 213.45 crore and purchased stock options worth Rs 3.90 crore.
Political uncertainty will also continue to take its toll on the market. The government is holding a two-day special session of parliament on 21 July 2008 and 22 July 2008 to seek vote of confidence after it was reduced to minority following withdrawal of support by Left parties on 8 July 2008. The government hopes to retain power due to backing from Samajwadi Party, a regional party in Uttar Pradesh.
Morning Call - July 17 2008
Market Grape Wine :
In House :
Nifty at a support of 3785 and 3725 levels with resistance at 3862 and 3925 levels .
Gap up Opening .
Buy : APIl above 363.5 target 382 s/l of 355
Buy : in F&O RElCap above 986 target 1022 s/l of 960
Buy : LITL above 271 target 284 s/l of 260
Out House:
Markets at a support of 12491 & 12435 resistance at 12786 & 13131 levels .
Markets to be choppy and volatile maintain strict stop loss .
Buy : Sail & Tisco
Buy : RIL & RPL
Buy : Coreproject & Aftek
Buy : LT & Bhel
Buy : Ranbaxy & Glenmark
Buy : SBIN & IciciBank
Buy : Infy & Satyam
Dark Horse : LNT , RPL , Tisco , Wipro , ITC , Infy , RIL & Core
Pre Session Commentary - July 17 2008
The Indian Market is expected to have positive opening on the back of strong global cues and drop in crude oil prices. On Wednesday, the Indian market extended its losses to touch a new low on concerns over inflation and political uncertainty. The domestic market opened in positive territory, on crude oil’s support and maintained the strength till afternoon. Further market lost ground tracking negative cues from European market and slipped to close on back foot. The BSE Sensex skidded below 12,600 level and NSE Nifty below 3,900. From the sectoral front, Reality index were completely crushed to close with deep cut of more than 7% as most selling was reported from this basket. Along with this, Metal, Oil & Gas, Bank, Capital Goods and Consumer Durables stocks witnessed the selling pressure. The BSE Sensex closed lower by 100.39 points at 12,575.80 and NSE Nifty ended down by 44.40 points at 3,816.70. We expect that market may go up during the trading session.
TCS Ltd has announced its first quarter ended June 2008, results. Its consolidated net profit under the US GAAP fell marginally to Rs1,243.6 Crore, compared to Rs1,255.8 Crore in the previous quarter with a marginal drop of 0.98%. Revenue in the same period grew 5.2% to Rs6,410.7 Crore.
On Wednesday, the US market was closed in green as oil prices continued to fall for the second day and the financial sector moved up the most in its 19-year history. Oil prices tumbled $4.14 to $134.60 per barrel, after the government reported a surprising spike in U.S. crude and gasoline supplies. The fifth-largest U.S. bank and the second largest mortgage lender Wells Fargo''s better-than-expected earnings sparked the rally that was compounded by short-covering.
The Dow Jones Industrial Average (DJIA) closed higher by 276.74 points at 11,239.28 along with NASDAQ trading up by 69.14 points at 2,284.85 and S&P 500 index closed higher by 30.45 points at 1,245.36.
Indian ADRs ended up. In technology sector, Satyam ended higher by (6.09%) along with Infosys by (5.78%), Wipro by (4.17%) and Patni Computers advanced by (0.18%). In banking sector, ICICI bank and HDFC bank gained (8.56%) and (6.51%) respectively. In telecommunication sector, MTNL and Tata Communication ended up by (7.60%) and (6.32%)). However, Sterlite industries decreased by (0.34%).
Today the major stock markets in Asia are trading in green surge in US bank shares and a sharp drop in oil prices. Hang Seng index is trading higher by 562.15 points at 21,785.65 along with Taiwan Weighted trading up by 59.49 points at 6,927.80 and Japan’s Nikkei trading at 12,902.69 advanced by 217.16 points.
The FIIs on Wednesday stood as net seller in equity and net buyer in debt. The gross equity purchased was Rs2,370.50 Crore and the gross debt purchased was Rs46.60 Crore while the gross equity sold stood at Rs3,050.90 Crore and gross debt sold stood at Rs45.00 Crore. Therefore, the net investment of equity reported was (Rs680.40) Crore and net debt was Rs1.70 Crore.
Today, Nifty has support at 3,755 and resistance at 4,013 and BSE Sensex has support at 12,330 and resistance at 13,169.
Trading Calls - July 17 2008
Nifty (3817) Sup 3770 Res 3950
Buy HPCL (197) SL 193
Target 207, 210
Buy Gail (333) SL 328 Target 343, 346
Buy Sterlite (644) SL 637 Target 658, 662
Buy Divi’s Lab (1304) SL 1290 Target 1335, 1345
Sell Amtek Auto (220) SL 224 Target 210, 208
Standards keep changing!
The nice thing about standards is that there are so many of them to choose from.
The government has expressed displeasure at Fitch’s recent ratings. But they better be prepared for further downgrades in the coming weeks. Don’t want to sound extra cautious on a day markets may remain positive. But one hears of headwinds now more often than anything else. For a change we are set to see some greenery in the market. The tailwinds this time are crashing oil prices and rising global equities. Nothing has really changed overnight except for some reports and assurances here and there.
Like we saw Ranbaxy recovering after a clarification so are the Fannies and Freddies of the world having fun as they were helped by Fed comments. They moved up around 30% as Bernanke said they are in no danger of failing. Of course the Fed may have said many things in the past which we would not like to revisit. But like they say, no harm in enjoying a fine day. Wells Fargo jumped the most since at least 1980 after reporting profit of 53 cents a share and record revenue of $11.5 billion, leading the S&P 500 Financials Index to a record 12% jump.
Back to our market, no more inflation Friday noon’s to worry about. Given the accuracy of the leaks, the information now will be available to everyone at 5pm on Thursdays. But don’t be surprised if the expectations start floating around during the last half an hour today.
After shedding over 1,400 points in the last five trading sessions a green opening with a gap is a welcome sign. FIIs remain on the sidelines. The overseas investors have to resume their shopping spree. That may take a while to happen as macroeconomic fundamentals continue to remain weak. Inflation numbers will be declared at 5pm on Thursdays starting today. This will avoid the Friday noon volatility. Oil marketing companies could be in the limelight following the fall in crude prices.
Courage or conviction is nowhere around. Profit booking at higher levels may come in sooner than one expects. This time there is a carrot called confidence vote which may allow people to extend their long positions hoping to strike oil. That reminds us oil came crashing again. In fact it has fallen around $10 in two days and don’t be surprised if you hear the I’d told you so about this till it spurts again.
The US government's weekly inventory report indicates record high gasoline prices may be reducing US energy consumption. OPEC on Tuesday released a report which more or less shows that global demand for 2009 would be less than it was in 2008. Doesn’t take really long to write another report though!
Light sweet crude oil for August delivery closed at $134.60 a barrel, down $4.14 on the New York Mercantile Exchange.
After all the battering in recent times, US stocks improved their standards. The Dow Jones gained 277 points to close 2.5% higher. This was one of the largest one-day increases in the Dow since April 1 (this year). Of course this rally is after closing at its lowest level since July 21, 2006 on Tuesday. So nothing to get overexcited about.
The Standard & Poor's 500 added 2.5% as it bounced back from its lowest close since Nov. 2, 2005. The Nasdaq was up 3.1%. The US indices were choppy at start following a CPI (Consumer Price Index) report, which zoomed beyond 5% in the past year. This was the biggest annual jump in over 17 years.
Asian stocks are in the green for the first time this week. Japan's Nikkei is up over a percent around the 12,900 levels.
In currency trading, the dollar bounced back after setting an all-time low versus the euro Tuesday and slipping to a $2 level against the British pound.
The government’s plans to put a price band to check steel prices could see pressure on the steel companies. Meanwhile a report states that steel companies may hike prices after the three-month freeze ending August 7.
While markets speculate Citi’s stake in HDFC is up for sale, Deepak Parekh, Chairman, HDFC, has clarified that he is not aware of any plan that Citi may sell its stake.
It was another bad day for Indian bourses on Wednesday. Market extended loses to fifth straight trading session as bulls were unable to hold on to early gains.
Markets started off the day on a positive note, shrugging off weak cues from the US and the Asian markets. However, as the day progressed markets erased early gains as bears took over after benchmark index hit an intra-day high of 12,935. From there on markets showed no signs of recovery till the last hour of the trading session to close below previous day’s close.
Finally the Sensex lost 100 points to close at 12,575 and the Nifty was down 44 points to close at 3,816.
Ranbaxy Labs was the talk of the day as the stock staged a sharp rally on Wednesday after the company announced the agreement with Daiichi Sankyo Co. is binding and it’s on track. Ranbaxy is continuing to seek approvals to take the transaction forward.
Daiichi Sankyo Co earlier had agreed to buy 34.8% stake of Ranbaxy Laboratories, and a portion of about US$1bn of preferential stock. The Japanese drugmaker also have to offer to buy a further 20% from shareholders, under the Indian takeover rules.
The stock finally surged 15% to close at Rs470 hitting an intra-day high of Rs476 and a low of Rs417 recording volumes of over 1,00,00,000 shares on NSE.
PFC surged by 6.5% to Rs114 after the company announced its Q1 results. The company posted an increase in total income increased from Rs11.458bn for the quarter ended June 30, 2007 to Rs14.416bn (up 25%) for the quarter ended June 30, 2008. However, net profit was at Rs2.97bn for the quarter ended June 30, 2008 (down 4%) as compared to Rs3.09bn for the quarter ended June 30, 2007.
The scrip touched an intra-day high of Rs114 and a low of Rs105 and recorded volumes of over 7,00,000 shares on NSE.
TTML declined by over 5.5% to Rs22 after the company announced its Q1 results with a net loss of Rs347.154mn for the quarter ended June 30, 2008 as compared to net loss of Rs284.288mn for the quarter ended June 30, 2007.The total income increased from Rs4096.012mn for the quarter ended June 30, 2007 to Rs5048.928mn for the quarter ended June 30, 2008.
The scrip touched an intra-day high of Rs24 and a low of Rs21 and recorded volumes of over 37,00,000 shares on NSE.
Shares of ZF Steering Gear dropped from its high and finally ended at Rs136 down 4.7%. The stock had surged by over 8% to Rs165 the most in almost 14 months after ~10% of its equity shares changed hands in a single transaction. The stock had hit an 52-week high of Rs252.95 on July 17, 2007 and 52-week low of Rs125 on July 16, 2008.
Shares of EPIC Energy slipped 1.4 percent to Rs141. The company announced the acquisition of Sathian Sun Power Systems, (Sathian), a Salem, Tamil Nadu based solar energy products company.
This acquisition would help Epic to execute similar projects in other States, where it has a substantial presence. Epic operates in Maharashtra, Gujarat, Andhra Pradesh, Kerala, Karnataka, Tamil Nadu, Uttar Pradesh, Chhattisgarh and Rajasthan. The scrip touched an intra-day high of Rs150 and a low of Rs140 and recorded volumes of over 1,00,000 shares on NSE.
Parsvnath declined by 4.5% to Rs103 after the company announced that it acquired 38% stake in Nano City project in Haryana. The company also said that it would invest RsUS$100mn through equity, debt. The scrip touched an intra-day high of Rs111 and a low of Rs99 and recorded volumes of over 9,00,000 shares on NSE.
Shares of BGR Energy rallied by over 13% to close at Rs247 after the company announced that the power projects division of the company has secured a contract from Rajasthan Rajya Vidyut Utpadan Nigam Ltd ("RRVUNL"), Rajasthan for the 2 x 600MW Kalisindh Thermal Power Project. The contract value is Rs49bn and will be executed over 39 months for Unit - I and 42 months for Unit - II.
The scrip touched an intra-day high of Rs258 and a low of Rs216 and recorded volumes of over 12,00,000 shares on NSE.Sterlite plans to raise up to US$1.6bn loan. (Mint)
M&M to buy a major portion of two-wheeler maker Kinetic Motor Company's assets in a deal valued at Rs1.1-1.2bn. (BS)
Deccan aviation to convert from a low-cost airline into a value carrier. (ET)
Thermax bags Rs8.2bn boiler order to supply boilers for the captive co-generation plant. (FE)
Renault-Nissan JV may form an alliance with Bajaj Auto for production of e-vehicles. (ET)
ONGC plans to relinquish the Barmer-Sanchor CBM (coal bed methane) block it now jointly holds with Gujarat State Petroleum Corporation. (BL)
HCL Tech buys UK BPO firm Liberata Financial Services (LFS) for US$2mn. (ET)
Citigroup and Warburg may pick up 15% stake in Ansal API dadri project. (ET)
Parsvnath picked up 38% stake in Nano City project. (BL)
Unitech raises US$300mn abroad for its global property fund. (BS)
Ginger hotels to invest Rs1bn to add six new hotels in CY08. (ET)
Titan to venture into eyewear segment with launch of Titan Eye Plus. (ET)
MP government and IL&FS to sign Rs200bn deal on making the state a heavy power equipment manufacturing hub. (BS)
Ranbaxy Laboratories said that the probe by the US Department of Justice will not jeopardise its deal with Japanese pharmaceutical company Daiichi Sankyo. (BL)
Reliance Retail to open 50-60 i-stores across the country in the current fiscal. (ET)
Jet Airways to pull out from BKC deal. (ET)
GSPC discovers gas reserves in KG Basin. (ET)
NMDC seeks higher prices for iron ore export on account of soaring input cost. (ET)
SCI to receive navratna status.
BGR Energy Ltd received Rs50.2bn contract from Rajasthan Vidyut Utpadan Nigam Ltd, the electricity generation company of Rajasthan’s electricity Board. (BL)
BHEL has bagged Rs1.6bn order from a UAE firm for supply of two gas turbine generating units. (BL)
Nagarjuna Construction to invest up to Rs5bn in airports and ports. (BL)
IOB to raise Rs4bn Tier II capital. (BL)
TRF Ltd won Rs4.1bn turnkey order from Damodar Valley Corporation. (BL)
Bank of Baroda plans to add 91 new branches by September. (FE)
Gitanjali to invest US$16mn for setting up watch manufacturing unit and retail outlets. (FE)
Economic Front Page
India`s outward FDI was up 29.6% at US$17.4bn in FY08. (BS)
DOT may put a lock-in period to restrict start-up telecom companies to sell a majority stake. (ET)
India plans to build eight 700MW nuclear plants. (Mint)
The Kerala government completed the land acquisition process for the International Container Transshipment Terminal (ICTT) project at Vallarpadam. (BS)
Government to raise cap on professional tax to Rs75bn from current Rs25bn. (ET)
Mr Kamal Nath clarified that the EoU status will not be withdrawn. (BL)
The Centre plans to make additional free sale quota (FSQ) releases in order to calm down prices. (BL)
Delhi-Mumbai dedicated rail freight corridor to be ready by 2013. (ET)
DOT has deferred to finalise the one-time spectrum charges for GSM operator holding spectrum beyond 6.2MHz limits. (ET)
TRAI has given its nod to DOT on a proposal to increase spectrum usage charges by 1% of adjusted gross revenue. (FE)
Saudi Arabian King slams oil speculators
Saudi Arabian King Abdullah on Wednesday denounced speculation on oil prices and called for more dialogue between producing and consuming nations in an interview with the Italian daily La Repubblica.
"Oil has become a commodity, pratically like a currency (that) has attracted speculative interest among some companies and people," said Abdullah, whose nation is the world's top oil exporter.
"We don't want the price to be so high. It is not in our interest because it is not in the interest of the rest of the world," he said.
Saudi Arabia has warned repeatedly that speculation is a leading cause of soaring oil prices along with rising demand and the taxation of oil products in consumer countries.
The International Energy Agency said early this month that speculators should not be a "scapegoat" for the record prices.
Abudullah has said importing countries should "adapt" to the rising prices while calling for more dialogue between producers and consumers.
"Cooperation between the two sides should be strengthened to address the overall market situation: that's what is needed to stabilise oil prices, and it is a shared goal," Abdullah told the Italian daily.
Today's Pick - GMDC
We recommend a sell in Gujarat Mineral Development Corporation from a short-term perspective. From the charts of Gujarat Mineral Development Corporation, we observe that it has been on a long-term downtrend since its November 2007 peak.
The down move accelerated in March 2008 and the stock penetrated its 200-day moving average during this decline. The stock has been testing the key support level at Rs 240 over the last two weeks. On July 16, the stock conclusively broke through this support level and closed 6 per cent lower.
The daily and weekly relative strength indices have entered into the bearish zone from the neutral region. The stock is trading well-below it 21- and 50-day moving averages. The long-term down trendline of the stock is still in place.
Considering the above negative factors, we are bearish on the stock in the short-term horizon. We expect the stock’s decline to prolong until it hits our price target of Rs 198 in the approaching trading sessions. Traders with short-term perspective can sell the stock, while maintaining stop-loss at Rs 234.
via BL
Crude drops again - can it fall more ?
Prices give up almost $11 in two sessions
Crude oil prices once again witnessed a drop in prices for the second consecutive day today, Wednesday, 16 July, 2008. Prices plunged once again after government data showed a surprise increase in U.S. petroleum inventories last week. Yesterday, the Organization of the Petroleum Exporting Countries lowered its forecast for world oil-demand growth for 2008 and 2009. Prices witnessed considerable volatility throughout the day.
Crude-oil futures for light sweet crude for August delivery today closed at $134.6/barrel (lower by $4.14/barrel or 3%) on the New York Mercantile Exchange. Earlier in the day it fell to $132. Last week, prices gained $0.21 (0.2%). Crude has lost $10.58 over the last two sessions, the biggest two-day price drop since January, 1991. It's now 8.6% lower than the $147.27 record high hit last Thursday.
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 82% higher than a year ago. For the year, crude is up by 42% till date.
EIA reported today that U.S. crude inventories rose 3 million barrels to stand at 296.9 million barrels in the week ended 11 July. Gains in U.S. crude inventories got a helping hand from increased imports. Daily crude imports averaged nearly 10.8 million barrels last week, up 1.2 million barrels from a week earlier. With the weekly gain of 3 million barrels, U.S. crude inventories were still near the lower boundary of the average range for this time of year.
EIA also reported that gasoline supplies rose by 2.4 million barrels, and distillate stocks gained by 3.2 million barrels. Over the last four weeks, U.S. motor gasoline demand averaged 9.3 million barrels per day, down by 2.1% from the same period last year. U.S. refineries operated at 89.5% of their operable capacity last week, up from the previous week's 89.2%.
In its monthly report issues yesterday, OPEC lowered its forecast for world oil-demand growth for 2008 to 1.03 million barrels a day, which represents a decline of 70,000 barrels from its previous estimate. Global oil demand this year is expected to average 86.81 million barrels a day. Earlier this month, the Energy Information Administration projected that U.S. petroleum consumption will shrink by 400,000 barrels a day in 2008, 38% more than EIA's June projection of a decline of 290,000 barrels.
Crude oil also fell because of the dollar's rise against the euro today. At the currency markets on Wednesday, the dollar reversed sharp losses taking support from better-than-expected U.S. output data, strength on Wall Street and sagging crude-oil futures. The dollar index which tracks the performance of the greenback against a basket of other currencies, rose 0.3% to 71.98.
Against this backdrop, August reformulated gasoline fell 3.1% to $3.279 a gallon and August heating oil lost 2% to $3.841 a gallon.
Natural gas futures fell to the lowest in eight weeks amid concern demand will decline as the U.S. economy slows. August natural-gas futures fell 0.7% to $11.398 per million British thermal units, a day ahead of the government's update on gas in storage.
At the MCX, crude oil for July delivery closed at Rs 5,989/barrel, higher by Rs 25 (0.41%) against previous day's close. Natural gas for July delivery closed at Rs 488.6/mmbtu, lower by Rs 5.1/mmbtu (1%).
Crude continues to tarnish bullion metal prices
Bullion metals prices drop the maximum in three weeks
Lower crude price once again pressured bullion metals today, Wednesday, 16 July, 2008 as the energy prices continued to drop for the second straight day. A rebound in the US dollar also added further impact. The increase in energy costs generally increases demand for the precious metal as a hedge against inflation and vice versa. Silver prices fell for the day.
Comex Gold for August delivery fell $16 (1.65%) to close at $962.7 ounce on the New York Mercantile Exchange. Prices fell to a low of $959 during intra day trading. Last week, it ended higher by $27 (2.8%). On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped since then.
Today, Comex silver futures for September delivery fell 20.8 cents (1.1%) to $18.805 an ounce. Silver has gained 27% in 2008 till date. For the second quarter, it gained a paltry 1.4%.
At the currency markets on Wednesday, the dollar reversed sharp losses taking support from better-than-expected U.S. output data, strength on Wall Street and sagging crude-oil futures. The dollar index which tracks the performance of the greenback against a basket of other currencies, rose 0.3% to 71.98.
The Labor Department reported today that prices paid by U.S. consumers jumped 1.1% in June after a 0.6% gain the prior month.
In the crude market on Wednesday, crude-oil futures dropped as much as 4.9% to $132 a barrel in New York after a U.S. government report showed an unexpected increase in inventories. Crude is down more than $12 from the July 11 record of $147.27. It shed almost $11 in the past two sessions.
In the Wall Street yesterday, Federal Reserve Chairman Ben Bernanke said that the U.S. economy is facing "significant" risks to growth. On the other hand, Oganization of the Petroleum Exporting Countries also lowered its forecast for world oil-demand growth for 2008 and 2009.
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 and oil has climbed 47% and 87% since the past one year.
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.
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 15% 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%.
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.
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 month.
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 lower by Rs 195 (1.4%) at Rs 13,365 per 10 grams. Prices rose to a high of Rs 13,640 per 10 grams and fell to a low of Rs 13,330 per 10 grams during the day's trading.
At the MCX, silver prices for September delivery closed Rs 264 (0.99%) lower at Rs 26,217/Kg. Prices opened at Rs 26,401/kg and fell to a low of Rs 26,104/Kg during the day's trading.
Nifty July 2008 futures at premium
DLF, Tata Steel July 2008 futures at discount
Nifty July 2008 futures were at 3821.20, at a premium of 4.50 points as compared to spot closing of 3816.70. NSE's futures & options (F&O) segment turnover was Rs 45,738.28 crore, which was higher than Rs 44,122.92 crore on Tuesday, 15 July 2008.
State Bank of India (SBI) July 2008 futures were at premium at 1138 compared to the spot closing of 1135.85.
DLF July 2008 futures were at discount at 384 compared to the spot closing of 393.40.
Tata Steel July 2008 futures were at discount at 620.25 compared to the spot closing of 625.25.
In the cash market, the S&P CNX Nifty lost 44.40 points or 1.15% at 3816.70.
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