Monday, July 28, 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
28/7/2008 590059 BIHAR TUBES SECUROCROP SECURITIES INDIA P B 40000 153.24
28/7/2008 532271 CYBERMAT INF S V ENTERPRISES B 541562 4.54
28/7/2008 532271 CYBERMAT INF S V ENTERPRISES S 541562 4.52
28/7/2008 500720 FUTURA POLYS YUVAK SHARE TRADING PVT.LTD. B 286697 33.81
28/7/2008 530655 GOOD LUCK ST HANS SEC BROKING P LTD B 40000 224.91
28/7/2008 530655 GOOD LUCK ST MANOJ GUPTA S 39900 224.49
28/7/2008 530885 JAISAL SECUR VENUGOPAL REDDY S B 25000 36.50
28/7/2008 530885 JAISAL SECUR CANOS TRADING PVT LTD. S 25000 36.50
28/7/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD B 46400 19.67
28/7/2008 531602 KOFF BR PICT DEEPAL CORPORATION S 40276 19.21
28/7/2008 590077 RANKLIN SOLU CHARAK AYURMEDICA PVT LTD S 28000 149.29
28/7/2008 513583 SBT INTERN KBS TRADING PVT LTD S 90000 14.18
28/7/2008 526049 SHRILAKSHMI PRARTHNA TARUNKUMAR BRAHMBHATT S 98000 109.46
28/7/2008 526365 SHYAM STAR BALAJI INVESTMENT B 50000 177.00
28/7/2008 526365 SHYAM STAR PARASKUMAR NARENBHAI SHAH S 45000 177.00
28/7/2008 533001 SOMI CONVEY MEENAL NITISH THAKUR B 107201 23.87
28/7/2008 533001 SOMI CONVEY AJAY NATAVARLAL SH STOCK PL S 100000 23.52
28/7/2008 533001 SOMI CONVEY MEENAL NITISH THAKUR S 107201 23.38
28/7/2008 508976 SPANC TELESY TECK CONSULTANCY AND SERVICES PVT LTD B 200000 94.85
28/7/2008 508976 SPANC TELESY TECK CONSULTANCY AND SERVICES PVT LTD B 100000 94.10
28/7/2008 508976 SPANC TELESY SUBHKAM CAPITAL INVESTMENT PVT LTD S 200000 94.85
28/7/2008 508976 SPANC TELESY SUBHKAM CAPITAL INVESTMENT PVT LTD S 100000 94.10
28/7/2008 522085 STONE INDI L MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. S.V. B S 108636 52.07
28/7/2008 511110 V B DESAI FI BAHAL AND CO PVT LTD B 104820 33.50
28/7/2008 511110 V B DESAI FI PURVI R. SHROFF S 28549 33.50
28/7/2008 511110 V B DESAI FI RAJ SHROFF S 39841 33.50
28/7/2008 511110 V B DESAI FI SATYAM P. SHROFF S 36430 33.50
: Private sector lender HDFC Bank today reported a jump of 44.6 per cent in the net profit for the quarter ended June 30, 2008, at Rs 464.4 crore.
A substantial increase in net interest income combined with a healthy jump in fees and commission has enabled HDFC Bank to clock a total income of Rs 4,215.2 crore in Q1 FY 2009, up 59.6 per cent as compared to the year-ago period.
The bank which recently merged Centurion Bank reported a jump of 74.9 per cent in the Net interest income at Rs 1,723 crore driven by average asset growth of 68 per cent and a core net interest margin of just over 4.1 per cent.
Fees and commission, the main contributors to other income for the quarter, increased by 37.3 per cent to Rs 511.2 crore, the release said.
The two other major components of other income were foreign exchange and derivatives revenues of Rs 157.4 crore as compared to Rs 146.5 crore in the corresponding quarter of the last fiscal.
The bank reported a loss of Rs 77.6 crore on revaluation or sale of investments in the reporting quarter as against a profit of Rs 52.6 crore in the year-ago period.
There was an increase in provisions and contingencies for the quarter at Rs 344.5 crore as against Rs 307.1 crore in the year-ago period.
These comprised primarily of specific provisions for NPAs and general provisions for standard assets of Rs 324.4 crore as against Rs 299.7 crore in the year-ago period, the release said.
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
28-JUL-2008,POLARIS,Polaris Software Lab Ltd,P R B SECURITIES PRIVATE LTD,BUY,878683,94.38,-
28-JUL-2008,PRAENG,Prajay Engineers Syndicat,DYNAMIC STCOK BROKING (I) PVT LTD,BUY,207299,69.24,-
28-JUL-2008,PRAENG,Prajay Engineers Syndicat,NAMAN SECURITIES & FINANCE PVT LTD,BUY,318831,67.43,-
28-JUL-2008,KHAITANLTD,Khaitan (India) Ltd.,CD EQUI FINANCE PVT LTD,SELL,37141,32.35,-
28-JUL-2008,POLARIS,Polaris Software Lab Ltd,P R B SECURITIES PRIVATE LTD,SELL,878683,94.56,-
28-JUL-2008,PRAENG,Prajay Engineers Syndicat,DYNAMIC STCOK BROKING (I) PVT LTD,SELL,207798,69.36,-
28-JUL-2008,PRAENG,Prajay Engineers Syndicat,NAMAN SECURITIES & FINANCE PVT LTD,SELL,228760,69.04,-
The domestic market managed to conclude the day with marginal gains after showing a lot of volatility during the trading session ahead of the RBI''s quarterly review, which is scheduled tomorrow (29-July 2008).The Indian market opened flat and soon turned volatile on sense of uneasiness due to the serial blasts in Bangalore and Ahmedabad. Further it was not able to maintain stability and showed sea saw movement tracking negative cues from the European markets and mixed cues from the Asian Markets. Further, due to some buying from the key indices led the market to close in green. The BSE Sensex ended below 14,400 and NSE Nifty closed below 4,400. BSE Small Cap gained around 2%. From the sectoral front, the Capital Goods, Oil & Gas, Reality, Consumer Durables and Pharma were able go gain favor from market as most of the buying was seen from these baskets. While the Metal, Power, IT and Auto stocks remained out of favor. The market breadth was positive as 1767 stocks closed in green while 848 stocks closed in red and 77 stocks remained unchanged.
The BSE Sensex closed higher by 74.17 points at 14,349.11 and NSE Nifty ended up by 20.25 points at 4,332.10. The BSE Mid Caps and Small Cap closed with gains of 58.19 points and 134.20 points to 5,630.78 and 6,912.98 respectively. The BSE Sensex touched intraday high of 14,421.61 and intraday low of 14,219.38.
Gainers from the BSE are L&T Ltd (3.73), Tata Power (3.56%), ACC Ltd (3.34%), ONGC (3.00%), Ranbaxy Lab (2.60%), Reliance Com Ltd (1.82%), DLF Ltd (1.77%), Reliance (1.48%) and TCS Ltd (1.01%).
The BSE Capital Goods index advanced 168.54 points to close at 11,906.81. Major gainers are Reliance Industrial Infra (5.00%), Walchand In (4.99%), Jyoti Struct (3.95%), L&T Ltd (3.73), Thermax Ltd (2.87%) and Praj Industries Ltd (2.28%).
The Oil & Gas index ended up by 148.48 points at 9,652.90. As ONGC (3.00%), Cairn India (2.23%), BPCL (1.86%), Cairn India (1.84%), Reliance Petroleum (1.72%) and Relaince (1.48%) closed in positive territory.
The BSE Reality index closed higher by 50.06 points at 5,079.12. Major gainers are Pheonix Mill (9.89%), Anant Raj Industries (7.52%), Orbit Co (4.99%), Penland Ltd (4.59%), MAhindra Life (2.42%), and Indian DLF Ltd (1.77%).
The BSE Consumer Durables index gained 36.93 points to close at 3,660.72. Major gainers are Blue star L (3.50%) along with Videocon India (1.80%) and Rajesh Exports (1.02%).
The BSE Pharma index ended up by 16.53 points at 3,202.67. As Ster Biotech (5.34%), Wockhardt Ltd (4.92%), Ranbaxy Lab (2.60%), Biocom Ltd (2.31%), Glaxo Smith (2.20%), Bil Care Ltd (1.92%) and Apollo Hos E (1.52%) closed in positive territory.
The Metal index closed down by 125.38 points at 12,366.72. Lossers are Sterlite In(3.47), Nalco (3.06%), Gujarat Nre C (3.05%), Tata Steel (2.26%), Hindalco (2.21%), and Steel Authority (1.40%).
The key benchmark indices snapped Friday (25 July 2008)’s heavy fall to score marginal gains. However, trade was cautious ahead of the Reserve Bank’s monetary policy review scheduled tomorrow, 29 July 2008.
Reliance Industries (RIL) recovered after weak start. Banking stocks were mixed ahead of the monetary policy review by the central bank. Capital goods and oil & gas stocks edged higher. Asian markets, which opened before Indian market, were mostly in green. European markets, which opened after Indian market, were trading in red.
The 30-share BSE Sensex gained 74.17 points or 0.52% higher at 14,349.11. Sensex gained 145.66 points at day’s high of 14,420.60 hit in early afternoon trade.
The market had opened lower dampened by serial blasts in Bangalore and Ahmedabad, which rocked the nation late last week. Sensex lost 55.56 points at the day’s low of 14,219.38, hit in early trade.
The broader based S&P CNX Nifty rose 20.25 points or 0.47% at 4,332.10.
The barometer index BSE Sensex is down 5,937.88 points or 29.26% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 6,857.66 points or 32.33% away from its all-time high of 21,206.77 struck on 10 January 2008.
Nifty July 2008 futures were at 4338.50, at a premium of 6.40 points as compared to spot closing of 4332.10.
The BSE clocked a turnover of Rs 4596 crore today, 28 July 2008 as compared to a turnover of Rs 5,866.95 on Friday, 25 July 2008.
NSE's futures & options (F&O) segment turnover was Rs 45,000.90 crore, which was lower than Rs 53,163.45 crore on Friday, 25 July 2008.
The BSE Mid-Cap index was up 1.04% to 5,630.78 and the BSE Small-Cap index was up 1.98% to 6,912.98.
The market breadth was positive on BSE with 1,767 shares advancing as compared to 848 that declined. 77 remained unchanged.
As per the provisional figures on BSE, the foreign institutional investors (FII)'s sold shares worth Rs 721.90 crore while domestic funds bought shares worth Rs 456.67 crore today,28 July 2008.
BSE Oil & Gas (up 1.56% to 9,652.90), BSE Capital Goods index (up 1.44% to 11,906.81), BSE Consumer Durables index (up 1.02% to 3,660.72), BSE Realty index (up 1% to 5,079.12), BSE PSU index (up 0.75% to 6,724.42) outperformed Sensex.
BSE Metal index (down 1% to 12,366.6.72), BSE Power index (down 0.29% to 2,579.81), BSE IT index (down 0.12% to 3,606.81), BSE Auto index (down 0.06% to 3,723.80), BSE Bankex (up 0.15% to 6,761.82), BSE Teck index (up 0.29% to 2,981.88), BSE HealthCare (up 0.39% to 4,202.67) and BSE FMCG (up 0.5% to 2,135.11) underperformed Sensex.
India’s largest private sector firm by market capitalization and oil refiner Reliance Industries rose 1.48% to Rs 2,179.10. The stock came off from the session's low of Rs 2,105.55. Earlier in the day, the stock had extended a sharp fall witnessed on Friday, 25 July 2008, after its Q1 June 2008 results disappointed investors.
Power stocks were mixed. Power Grid Corporation of India (down 1.06% to Rs 98.10), NTPC (down 1.44% to Rs 184.80) edged lower while Reliance Infrastructure (up 0.24% to Rs 987.05) and Reliance Power (up 0.21% to Rs 169.20) edged higher.
Metal stocks fell. Steel Authority of India (down 1.4% to Rs 137.30), National Aluminum Company (down 3.06% to Rs 428.75), Tata Steel (down 2.26% to Rs 603.95) edged lower.
Capital Goods stocks rose. India’s largest engineering and construction firm by sales Larsen & Toubro rose 3.73% to Rs 2,723.55. L&T reported 33.32% growth in net profit to Rs 502.44 crore on 50.63% rise in total income to Rs 7,103.26 crore in Q1 June 2008 over Q1 June 2007. It announced the result during the market hours today.
India’s largest wind turbine maker by sales Suzlon Energy rose 1.09% to Rs 213.75 while India’s largest electric equipment maker by sales Bharat Heavy Electricals declined 0.37% to Rs 1,665edged higher.
Oil & Gas stocks rose. BPCL (up 1.86% to Rs 325.70), HPCL (up 0.22% to Rs 230.20), Reliance Petroleum (up 1.72% to Rs 162.75) edged higher.
Banking stocks were mixed ahead of Reserve Bank of India (RBI’s) monetary policy review scheduled tomorrow 29 July 2008. India’s largest private sector bank in terms of net profit ICICI Bank rose 1% to Rs 663.45. The bank’s net profit declined 6% to Rs 728 crore on 1.6% growth in total income to Rs 9429.98 crore in Q1 June 2008 over Q1 June 2007. Treasury losses and slower growth in advances have taken a toll on ICICI Bank’s profits for the first quarter of the current financial year.
India’s second largest private sector bank by sales HDFC Bank was flat at Rs 1127.05 after the bank reported 44.55% jump in net profit to Rs 464.35 crore on 59.56% spurt in total income to Rs 4215.15 crore in Q1 June 2008 over Q1 June 2007. HDFC Bank said the results were not comparable due to merger of Centurion Bank of Punjab with the bank. HDFC Bank announced the result today during the market hours.
Axis Bank (down 2.15% to Rs 697.20) and Allahabad Bank (down 0.32% to Rs 61.70) edged lower.
India’s largest commercial bank State Bank of India (SBI) declined 2.12% to Rs 1,418.05. The bank’s net profit rose 15% to Rs 1640.79 crore on 32.4% growth in total income to Rs 16203.07 crore in Q1 June 2008 over Q1 June 2007.
India’s largest FMCG major by sales Hindustan Unilever declined 0.56% to Rs 230.90. Net profit of Hindustan Unilever fell 0.06% to Rs 558.18 crore on 21.09% growth in sales to Rs 4215.67 crore in Q2 June 2008 over Q2 June 2007. The company announced the results at the fag end of the trading session on Friday, 25 July 2008.
Sterlite Industries declined 3.47% to Rs 582.25 and Tata Power Company rose 3.5 6% to Rs 1,051.60. Sterlite Industries and Tata Power Company will replace Ambuja Cement and Cipla in Sensex from today, 28 July 2008. Cipla declined 1.17% to Rs 222.95.
Sterlite Industries' net profit rose 77.67% to Rs 357.93 crore on 0.73% fall in total income to Rs 3,142.6 crore in Q1 June 2008 over Q1 June 2007. It announced the result during trading hours today.
Ambuja Cement fell 0.37% to Rs 81.80. Net profit of Ambuja Cements declined 32.51% to Rs 577.02 crore on 8.20% growth in sales to Rs 1569.77 crore in the quarter ended June 2008 over the quarter ended June 2007.
Ranbaxy Laboratories (up 2.6% to Rs 493.75), ACC (up 3.34% to Rs 593.45), ONGC (up 3% to Rs 1,012.50), Reliance Communications (up 1.82% to Rs 512.25), and edged higher from Sensex pack.
Reliance Natural Resources clocked the highest volume of 1.68 crore shares on BSE. Ispat Industries (1.58 crore shares), Himachal Futuristic Communications (93.93 lakh shares), IFCI (88.73 lakh shares) and Mangalore Refinery and Petrochemicals (79.93 lakh shares) were the volume toppers in that order.
Larsen & Toubro clocked the highest turnover of Rs 294.76 crore on BSE. Reliance Industries (Rs 262.66 crore), Reliance Capital (Rs 197.62 crore), Housing Development and Infrastructure (Rs 189.08 crore) and Reliance Natural Resources (Rs 161.34 crore) were other turnover toppers in that order.
Expiry of futures & options contracts for July 2008 series is on Thursday, 31 July 2008. As per reports, marketwide rollover of positions from July 2008 series to August 2008 series stood at 19%, while that of Nifty was 24%, as of Friday 25 July 2008.
In Europe, France’s CAC, UK’s FTSE 100 and Germany’s DAX were down by between 0.33% to 1.26%.
Asian markets were trading higher today, 28 July 2008. China's Shanghai Composite, Japan's Nikkei, South Korea's Seoul Composite, rose between 0.02% to 1.32%. Singapore's Strait Times and Hong Kong's Hang Seng fell between 0.29% to 0.44%.
US markets advanced on Friday, 25 July 2008 on better than expected economic of durables, new home sales and consumer sentiment eased concerns of economic slowdown. The Dow Jones rose 21 points at 11,370 while the Nasdaq Composite gained 30 points to 2,310. The S&P 500 index climbed 5.22 points at 1257.76.
Back home, the markets had cracked on Friday, 25 July 2008 on weak global cues and profit booking by investors after a recent sharp surge in a short span. The 30-share BSE Sensex fell 502.07 points or 3.40% at 14,274.94 and the broader based S&P CNX Nifty slipped 121.7 points or 2.74% at 4311.85, on that day.
With inflation rising and global oil prices falling, home and consumer loanees may heave a sigh of relief as Reserve Bank is likely to announce a 'benign' monetary policy on Tuesday so as not to impede growth.
Several Bankers and industrialists felt there could be no more hike in short-term key rates and cash reserve ratio (CRR) but some said if there was any hike it could be a mere 0.25 percent to tame inflation now at 11.89 percent against RBI's forecast of 5-5.5 percent by end-fiscal.
CRR is the percentage of amount that banks are required to park with the Reserve Bank. Repo is the rate at which RBI lends to banks.
"Inflation seems to have plateaued...with oil prices coming down, the RBI could be expected to come up with a benign monetary policy regime," Godrej Group Chairman, Adi Godrej, told reporters here.
Corroborating Godrej's view, HDFC Bank's Managing Director Keki Mistry and IDBI Chairman, Yogesh Agarawal said it is unlikely that the apex bank would hike rates as it would be detrimental to the industry, already affected by high interest rates.
"I do not think that RBI will further hike rates at the quartrely review of monetary policy. There are no indications of a further hike in RBI key-rates. They may wait for 1-2 weeks to see how the inflation is moving," Mistry said
The Indian Market is expected to have negative opening due to negative bias among the investors. Though the global cues are little supportive as US markets closed with gains and Asian markets are trading mixed along with further drop in crude oil prices. On Friday, the Indian market closed in deep red mainly due to heavy selling over the counters. The domestic market opened sharply lower tracking negative cues from the global markets. Further, it lost more ground after reports of serial bomb blasts that hit the IT city Bangalore and continued to trade on back foot till the end of session. The BSE Sensex slipped below 14,300 and NSE Nifty closed below 4,400. From the sectoral front, heavy selling pressure was seen in the Oil & Gas, Bank, Capital Goods, Reality, Metal and Power stocks. While, FMCG and Pharma stocks were in limelight as most of the buying was witnessed from these baskets. The BSE Sensex closed lower by 502.07 points at 14,274.94 and NSE Nifty ended down by 121.70 points at 4,311.85.
We expect that market may trade lower with negative bias during the trading session ahead of RBIs review and on sense of uneasiness due to the serial blasts in Bangalore and Ahmedabad.
On Friday, the US market was closed with gains on better than expected economic reports and further drop in crude oil to $123 a barrel on the New York Mercantile Exchange. The NASDAQ closed higher by 30.40 points at 2,310.53 along with Dow Jones Industrial Average (DJIA) ended up by 21.41 points at 11,370.69 and S&P 500 index closed higher by 5.22 points at 1,257.76.
Indian ADRs ended mixed. In technology sector, Satyam ended higher by (1.39%) along with Wipro by (1.30%) and Infosys by (1.16%) while Patni Computers dropped by (0.46%). In banking sector, ICICI bank and HDFC bank lost (2.52%) and (1.61%) respectively. In telecommunication sector, MTNL and Tata Communication ended up by (6.94%) and (0.13%). Sterlite industries decreased by (5.80%).
Today the major stock markets in Asia are trading mixed. Japan’s Nikkei is trading higher by 71.07 points at 13,405.83 along with Hang Seng index trading up by 9.73 points at 22,750.44. However, Singapore''s Straits Times is down 9.73 points at 2,913.18.
The FIIs on Friday stood as net buyer in equity and debt. The gross equity purchased was Rs3,927.10 Crore and the gross debt purchased was Rs90.50 Crore while the gross equity sold stood at Rs3,370.80 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was Rs556.30 Crore and net debt was Rs90.50 Crore.
Today, Nifty has support at 4,182 and resistance at 4,378 and BSE Sensex has support at 13,825 and resistance at 14,555.
Local benchmark indices are likely to open lower dampened by serial blasts in Bangalore and Ahmedabad, which rocked the nation last week. Global cues were mixed. Crude oil also edged higher after a sharp correction from record high last week. US light crude for September delivery rose 46 cents to $123.72 a barrel.
In the near term, the market trend is likely to dictated by slew of events like Reserve Bank of India (RBI’s) monetary policy review on 29 July 2008 and expiry of futures & options contracts on Thursday, 31 July 2008. Besides, the progress of the monsoon and corporates quarterly numbers will also be keenly watched.
Volatility may remain high ahead of the expiry of futures & options contracts for July 2008 series on Thursday, 31 July 2008. As per reports, marketwide rollover of positions from July 2008 series to August 2008 series stood at 19%, while that of Nifty was 24%, as of Friday 25 July 2008.
Asian markets were trading mixed today, 28 July 2008. China's Shanghai Composite rose 1.95% or 55.93 points at 2,921.03, Japan's Nikkei added 0.53% or 71.07 points at 13,405.83, Hong Kong's Hang Seng advanced 0.04% or 9.73 points at 22,750.44. However, Singapore's Straits Times was down 0.33% or 9.73 points at 2,913.18 and South Korea's Seoul Composite slipped 0.32% or 5.15 points at 1,592.78
US markets advanced on Friday, 25 July 2008 on better than expected economic of durables, new home sales and consumer sentiment eased concerns of economic slowdown. The Dow Jones rose 21 points at 11,370 while the Nasdaq Composite gained 30 points to 2,310. The S&P 500 index climbed 5.22 points at 1257.76
Back home, markets cracked on Friday, 25 July 2008 on weak global cues and profit booking by investors after a recent sharp surge in a short span. The 30-share BSE Sensex fell 502.07 points or 3.40% at 14,274.94 and the broader based S&P CNX Nifty slipped 121.7 points or 2.74% at 4311.85, on that day.
The key benchmark indices extended gains for the third straight week in the week ended Friday, 25 July 2008, buoyed the Congress-led coalition government winning confidence vote in parliament, sharp correction in crude oil and short covering of derivatives positions. The barometer index BSE Sensex gained 639.54 points or 4.69% to 14,274.94 in the week ended Friday, 25 July 2008. The S&P CNX Nifty edged up 219.60 points or 5.36% to 4,311.85 in the week.
As per provisional data, foreign funds sold shares worth a net Rs 565.73 crore and domestic institutional investors sold shares worth a net Rs 302.41 crore on Friday, 25 July 2008
Nasdaq manages to eke out some gains for the week while Dow and S&P 500 end in the red
US Market ended the week on Friday, 25 July on a mixed note. Nasdaq was the only index that managed to carve out some gains for the week. But the other two major indices, S&P 500 and the Dow registered modest losses. Drop in oil prices, ups and downs in the financial stocks and better-than-feared earnings news once again dominated the week.
The Dow Jones Industrial Average lost 126 points for the week to end at 11,370.69. Tech - heavy Nasdaq gained 30.4 points at 2,310.5. S&P 500 lost 2.9 points to end at 1,257.76. In percentage terms, Nasdaq gained 1.2%. Dow and S&P 500 lost 1.1% and 0.2% respectively.
Bank of America kicked off the reporting for the financial sector this week. The company announced a substantial drop in its profits. Bank of America reported a 43% drop in earnings per share to $0.72. However, the result easily topped Wall Street's forecast due to a lower-than-expected write-down of $1.2 billion. In contrast, Wachovia declared a larger-than-expected loss of $8.9 billion.
After rallying in the first two days of the week, the pullback in the financials was a major drag on the broader market during the rest of the period. A pickup in concerns about a global economic slowdown, which were fed by weak data out of Europe, the hangover of major earnings disappointments from American Express and Texas Instruments, cautious guidance from Apple, and a horrendous earnings report from Ford kept buying efforts in check.
Also in the earnings arena, strong emerging market demand helped Caterpillar increase earnings per share 40% year-over-year, topping estimates. UPS reported in-line earnings, relieving investors. The company called the economy "bleak," but kept its full year earnings forecast in-line with expectations.
In the healthcare sector, Merck reported better-than-expected results for its latest quarter, but continued concerns over its cholesterol drug Vytorin sent shares tumbling. United Health reported a 23% drop in earnings per share, but the results topped expectations.
AT&T shares rallied after reporting an 8.6% rise in earnings per share, which met Wall Street's forecast. There were some earnings misses as well. Boeing, E*Trade, Washington Mutual and Yahoo! fell short of estimates. Washington Mutual reported a larger-than-expected loss of $3.3 billion. 3M announced earnings that exceeded analysts' expectations. Amazon.com announced that its second quarter revenue surged 40% year-over-year to $4.1 billion which was better than analysts forecast.
Weak housing data added further salt to injury that the market had been bleeding with since the middle. On Thursday, 24 July, the National Association of Realtors reported existing home sales in June slipped to a 10-year low. A day later, Commerce Department reported that new home sales, were reported to be down 0.6% in June from an upwardly revised May number. Strikingly, June new home sales at an annual rate of 530,000 units were right in line with the 3-month average for the March to May period. Market was expecting new home sales of 503,000 for June. Importantly, the data suggested some signs of stabilization, though at depressed levels.
During the last day of the week, Friday, 25 July, traders lifted stocks in early action after it was reported durable goods orders made a surprising increase for June. The increase totaled 0.8%, which is better than the prior increase of 0.1% and the 0.3% downturn that economists forecast. Excluding transportation, orders increased 2.0%, up from the 0.5% downturn in the prior month and above the 0.2% downturn that was expected.
In other economic news, initial jobless claims for the week ending 19 July was reported to have totaled 406,000, which is an increase of 34,000 from the prior week and 26,000 more than market expectations. That was the second time in four weeks the claims number were reported above 400,000. This report also made sentiment negative in the market.
Crude prices once again fell on Friday, as investors continued to be worried about oil demand from US in the long run. The rebounding dollar also added further impact to the fall. With this, crude ended lower in the seven out of last nine sessions. Crude-oil futures for light sweet crude for September delivery closed at $123.26/barrel (lower by 2.23/barrel or 1.8%) on the New York Mercantile Exchange. For the week, prices coughed up $6.5 (4.8%). It's now 16.3% lower than the $147.27 record high hit last on Thursday, 10 July, 2008.
The coming week will bring another heavy slate of earnings reports and a key batch of economic data, including the advanced Q2 GDP report and the July employment report.
Prices end mixed on the last day of the week
Crude prices slipping further and the relatively strong US dollar led bullion metals close little higher, 25 July, 2008. But bullion metals registered modest losses for the week that ended on that day. Lower crude price and rebound in US dollar reduce precious metals’ appeal against a hedge against inflation. Before that, going economic concerns about the current health of the US economy had been increasing the metal’s demand as a safe asset against the rising inflation in recent times. But silver prices rose 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 $4.5 (0.5%) to close at $926.7 ounce on the New York Mercantile Exchange. For the week, it ended lower by $30 (3.2%). On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped since then.
This year, gold prices have gained 9.8% till date against a 8% drop for the dollar against the euro. 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%.
For first quarter prices gained 10.7%. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. But in March, prices succumbed and fell by 5.5%.
On Friday, Comex silver futures for September delivery rose 8 cents (0.46%) to $17.38 an ounce. Silver has gained 17.7% in 2008 till date. For the second quarter, it had 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 Friday, the dollar got a lift from better-than-expected U.S. durable-goods data and lower crude-oil-futures prices. A Commerce Department report showed new orders for U.S.-made capital goods rose 0.8% in June, pushed higher by orders for primary metals, machinery and electrical equipment. The dollar index a measure of the greenback against a trade-weighted basket of currencies, was at 72.86, up from 72.860.
In the crude market on Friday, crude oil for September delivery lost $2.23, or 1.8%, to $123.26 a barrel on the New York Mercantile Exchange. Investors continued to be worried that an economic slowdown will dampen oil demand.
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 36% and 66% since the past one year.
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%.
Prices drop by almost 5% for the week
Crude prices once again fell on Friday, 25 July, 2008 as investors continued to be worried about oil demand from US in the long run. The rebounding dollar also added further impact to the fall. With this, crude ended lower in the seven out of last nine sessions.
Crude-oil futures for light sweet crude for September delivery closed at $123.26/barrel (lower by 2.23/barrel or 1.8%) on the New York Mercantile Exchange. For the week, prices coughed up $6.5 (4.8%). It's now 16.3% lower than the $147.27 record high hit last on Thursday, 10 July, 2008.
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 63% higher than a year ago. For the year, crude is up by 32% till date.
At the currency markets on Friday, the dollar got a lift from better-than-expected U.S. durable-goods data and lower crude-oil-futures prices. A Commerce Department report showed new orders for U.S.-made capital goods rose 0.8% in June, pushed higher by orders for primary metals, machinery and electrical equipment. The dollar index a measure of the greenback against a trade-weighted basket of currencies, was at 72.86, up from 72.860.
EIA’s weekly inventory report on Wednesday showed that an economic slowdown is taking toll on energy demand. Over the past four weeks, U.S. motor gasoline demand has averaged 9.3 million barrels per day, down by 2.4% from the same period last year.
Against this background, September reformulated gasoline fell 1.2% to $3.04 a gallon, and September heating oil dropped 1.3% to $3.55 a gallon. August natural-gas futures fell 2.6% to $9.08 per million British thermal units.
Market Grape Wine :
In House :
Nifty at a support at 4265 and 4210 with resistance at 4370 and 4430 levels.
Cash: Buy BHEL above 1610 target 1735 with S/L 1560.
Cash: Buy ITC above 183 target 195 with S/L 177
Future: Buy RIL above 2159 target 2220 with S/L 2110
Future: Buy NEYVELILIG above 122 target 135 with S/L 116.
Markets at a support of 14114 & 14011 levls with resistance at 14491 & 14532 levels .
Buy : Adalbs
Buy : RPL & RIL at dips
Buy : RNRL & Relcap
Buy : Hdfc & Lichsng
Buy : ITC
Buy : SBIN
Buy : HDFCBank
Buy : Core project
Dark Horse : ITC , Adalbs , Relcap , SBIN , LNT , Skumar & RIL
We recommend a buy in Aventis Pharma from a short-term perspective. We note that this stock has been on a very long-term downtrend from its May 2006 high of Rs 2,125.
However, the stock found support at around Rs 700 in early July 2008 which is a significant long-term support level and began to move upward. On July 23, the stock jumped up by 7 per cent penetrating the medium-term down trend line (which was in plac e from March 2008) as well as its 50-day moving average. We notice a prolonged positive divergence in the weekly relative strength supporting the stock’s recent reversal.
The daily relative strength index has entered in to the bullish zone from the neutral region. The daily moving average divergence (MACD) also displays positive divergence and is on the brink of entering the positive territory. The stock is trading well above 21- and 50-day moving averages. We are bullish on the stock in the short-term.
We expect the stock’s current up move to continue until it hits our price target of Rs 850 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining stop-loss at Rs 738.
Nifty (4312) Sup 4250 Res 4380
Buy HUL (233) SL 228
Target 241, 423
Buy JP Hydro (54) SL 51
Target 59, 61
Buy Crompton Greaves (242) SL 238 Target 252, 255
Sell HCL Tech (203) SL 208
Target 193, 190
Sell Sun TV (267) SL 272
Target 252, 249
Let us not look back in anger or forward in fear, but around in awareness.
After a five-day, 2300-point rally in the Sensex, the bulls decided to take stock of the situation. Hence, the correction in the last two days. Friday's serial blasts in IT hub Bangalore made matters worse. Sentiment may get hit further (albeit temporarily) by weekend blasts in Ahmedabad. History shows that stock markets have bounced back in the aftermath of terrorist strikes. We expect history to get repeated today. After a cautious to lower opening, things should start looking up again, especially if oil prices remain stable or fall further, and global markets hold up. Another positive could be the strong revival in monsoon, which should ease inflationary expectations.
Talking of macroeconomics, the market will also be nervous ahead of tomorrow's RBI policy meeting. Given that inflation is still ruling near 12%, the central bank is expected to go for a minor tightening. The recent cooling in crude oil could prompt the RBI to soften its hawkish stance though. In any case, the market has discounted the fact that interest rates will stay high unless inflation falls sharply. Overall, we expect the market to remain choppy and rangebound after the rebound from the 52-week lows. A major downside may not happen unless we get fresh bad news from local or global markets.
Companies that announced their results after the close on Friday or over the weekend will be in action. Among the prominent ones included SBI, ICICI Bank, Reliance Infrastructure, SCI, Gujarat State Petronet, Jindal Steel & Power, Mphasis, Vijaya Bank, Uco Bank, Eicher Motors, Divi's Lab and PTC India.
Key Results Today: Adani Enterprises, Anant Raj, Andhra Cement, Bank of India, BPCL, Bhushan Steel, Blue Star, Bosch, Britannia, Cinemax, Dabur India, Dena Bank, Dewan Housing, Diamond Cables, Dish TV, EID Parry, EIH, Era Infra, Escorts, Genus Power, GSK, Glenmark, HDFC Bank, Hindalco, ICSA India, IOB, Jain Irrigation, Jyoti Structures, KS Oils, Kansai Nerolac, KLG Systel, Kotak India, L&T, Man Industries, Mic Electronics, Monnet Ispat, Mundra Port, Neyveli Lignite, Nirma, Nitin Fire, ONGC, Panacea Biotec, REC, Shiv-Vani Oil, Sterlite Industries, Sun Pharma, Sun TV, Tata Communication, Tata Tea, TVS Motor, Viceroy Hotels, Welspun India, Wockhardt and Wyeth.
FIIs were net sellers of Rs5.66bn in the F&O segment on Friday and the local funds pulled out Rs3.02bn. In the F&O segment, they were net sellers of Rs19.39bn. On Thursday, FIIs were net buyers of Rs5.56bn in the cash segment. Mutual funds were net sellers of Rs4.85bn on the same day.
Asian markets are pretty mixed this morning. The Nikkei in Tokyo and the Hang Seng in Hong Kong were up 0.5% each at 13,405 and 22,779, respectively. The Kospi was down 0.3% at 1592 and the Straits Times in Singapore shed 0.2% at 2916.
The Shanghai Composite index in China jumped 1.7% at 2912 while markets in Taiwan were shut after Typhoon Fung-Wong struck the island. Australia's S&P/ASX 200 index slid 1.5% to 4896.
The MSCI Asia Pacific Index was little changed at 132.93 as of 10:57 a.m. in Tokyo. More than three stocks rose for every two that declined.
US stocks finished largely higher on Friday after a choppy session, as encouraging economic indicators outweighed investors' fears about financials. The bluechip indices managed modest gains on crude oil's decline and upbeat economic data, including a surprising rise in orders for durable goods.
The Dow Jones Industrial Average gained 21 points to end at 11,370, leaving it with a 1.1% loss for the week. The S&P 500 rose 5 points to 1,257, down 0.2% from a week ago. The Nasdaq Composite climbed 30 points to 2,310, leaving the technology-laden index with a weekly gain of 1.1%.
US blue chips fell from their highs - briefly into negative territory - after Standard & Poor's (S&P) said the mortgage meltdown has led to investor fears about the credit positions of government-backed mortgage finance giants Freddie Mac and Fannie Mae.
Though S&P affirmed Fannie and Freddie's AAA credit ratings, the credit ratings firm put the mortgage financers on a negative credit watch list and said it may lower its ratings after a further review.
Market breadth was positive. On the New York Stock Exchange, advancers topped by a 3-to-2 ratio on a volume of 1.3 billion shares. On the Nasdaq, winners edged out losers on a 3-to-2 ratio on a volume of 2 billion shares.
Wall Street investors will see if the market can sustain a rally on Monday, a day devoid of any scheduled economic reports. Kraft Foods and Verizon Communications will report on quarterly earnings before the bell.
Oil prices fell $2.23 to settle at $123.26 per barrel on renewed concerns about demand destruction. Crude oil has plummeted $24 from its high of $147.27 per barrel set on July 11.
The average price of gasoline fell 2 cents to $4.006 per gallon in the United States, declining for the eighth straight day, according to a daily survey from motorist advocacy group AAA. It was gasoline's lowest level since June 7, when the average crossed $4 for the first time.
In currency trading, the US dollar was mixed against global currencies. The greenback rose against the Japanese yen, but fell a bit against the euro and British pound. COMEX gold for August delivery rose $4.50 to settle at $926.80 an ounce.
Treasury prices fell, bringing the yield on the benchmark 10-year note up to 4.11% from 4.01% late on Thursday.
European stock benchmarks ended mixed on Friday. Financials retreated after a profit warning from Munich Re and a prediction from Citigroup that the British economy was about to enter a recession.
The pan-European Dow Jones Stoxx 600 fell 0.2% to 281.76. The UK's FTSE 100 closed down 0.2% at 5,352.60, while Germany's DAX 30 dipped 0.1% to 6,436.71. The French CAC 40 rose 0.7% to 4,377.18.
In the emerging markets, the Bovespa in Brazil dropped 0.4% to 57,199 while the IPC index in Mexico was up 0.8% at 27,084. The RTS index in Russia plunged 5.6% to 1951 and the ISE National-30 index in Turkey slumped 4% 46,110.
Markets witnessed a see-saw session on Friday with key indices sliding sharply at open, bouncing back in the mid-afternoon and once again erasing gains towards the end. The fall could be attributed to weak global cues and heavy selling witnessed in the several index heavyweight stocks.
Barring the FMCG and the Pharma index all the other major BSE Sectoral indices ended with a negative bias. The BSE Realty index was the top loser, slipping 5.7%, followed by Oil & Gas, Realty and Capital Goods index slipping over 3% each.
Finally, the benchmark Sensex sharply fell 502 points to close at 14,272 and Nifty slipped 121 points to close at 4,311.
Shares of Reliance Industries sharply dropped by 7% to Rs2147 on concern increasing competition in its core refining business may curb profit growth. In additions, the company reported that it earned US$15.7 from every barrel of crude processed, which was lower than market expectations.
The company posted a net profit of US$955mn an increase of 13%. Petrochemicals production increased by 4%; Crude processed 8.13mn tons, Increase of 1.5%. The scrip touched an intra-day high of Rs2289 and a low of Rs2132 and recorded volumes of over 20,00,000 shares on BSE.
APIL fell by 2 percent to Rs428. The company announced its Q1 results with net profit at Rs183mn (up 4.5%) and net sales at Rs3.76bn (up 50.4%). The scrip touched an intra-day high of Rs437 and a low of Rs422 and recorded volumes of over 86,000 shares on BSE.
Pratibha Industries gained by 1.6% to Rs212 after the company announced Q1 with net profit at Rs116.1mn and net sales at Rs1.95bn. The scrip touched an intra-day high of Rs222 and a low of Rs210 and recorded volumes of over 33,000 shares on BSE.
Godrej Consumer slipped by 2 percent to Rs120. The company announced its Q1 results with net profit at Rs391mn (up 1.1%) and net sales at Rs3.62bn (up 26.57%). The scrip touched an intra-day high of Rs125 and a low of Rs120 and recorded volumes of over 10,000 shares on BSE.
Shares of MRPL rallied by over 16% to Rs67.45 after the company announced that its Q1 net profit rose by 129% to Rs8,454mn for the quarter ended June 30, 2008 as compared to Rs3,685.5mn for the quarter ended June 30, 2007.
The company’s total Income increased by 44% to Rs10,8113mn for the quarter ended June 30, 2008 compared to Rs75,093.8mn for the quarter ended June 30, 2007. The company also announced its Q1 gross refining margin at US$18.03/bbl which was US$2.33 higher than the market leader Reliance Industries. The scrip touched an intra-day high of Rs69 and a low of Rs55 and recorded volumes of over 1,00,00,000 shares on BSE.
Educomp declined by over 11% to Rs2992. The company posted a net profit of Rs167.7mn for the quarter ended June 30, 2008 as compared to Rs59.6mn for the quarter ended June 30, 2007.
Total Revenue increased from Rs313.6mn for the quarter ended June 30, 2007 to Rs720.9mn for the quarter ended June 30, 2008. The scrip touched an intra-day high of Rs3300 and a low of Rs2950 and recorded volumes of over 1,00,000 shares on BSE.
Shares of HCC declined by over 5% to Rs95 after the company announced its Q1 results with net profit dropping by 11.8% to Rs308.4mn as compared to Rs349.8mn for the quarter ended June 30, 2007. It also incurred losses worth Rs506mn in forex.
However, the company’s total Income increased from Rs7608mn for the quarter ended June 30, 2007 to Rs8783.3mn for the quarter ended June 30, 2008 and also gained Rs618mn from land sale. The scrip touched an intra-day high of Rs100 and a low of Rs94 and recorded volumes of over 18,00,000 shares on BSE.
In the coming week, a lot would depend on the decision of central bank. Further, if the rain gods won’t shower then drought like situations could prove to be another dampener. However, one cannot rule out a bounce back after two consecutive days of downfall. Volatility would be the order in the next week.
Exide Industries to invest Rs1.8bn towards capacity expansion of both automotive and industrial batteries in this fiscal.(BL)
Jindal Infrastructure, part of the JSW group, is setting up a Rs20bn deep-sea port in the Bhadrak district of Orissa.(DNA)
ONGC says it is receptive to the idea of windfall profit tax on oil companies.(BS)
CCEA gives its consent to AB Volvo to own 45.6% stake in the JV with Eicher Motors to produce commercial vehicles and components.(BL)
GE, Westinghouse and Areva are in negotiations with Larsen &Toubro for a possible JV in nuclear power equipment and nuclear power generation.(ET)
BHEL plans to diversify into the manufacture of diesel locomotives, making and refurbishing of oil rigs, defence equipment and casting and forging, according to its CMD.(DNA)
GSPC rejects HPCL’s proposal for stake in the proposed 5-7.5mn tonne LNG terminal at Mundra.(BL)
Reliance Power to borrow US$4bn in ECBs to fund two mega power projects.(BL)
HSBC and ICICI Prudential along with SBI have been short listed to manage about Rs 250bn in provident fund.(TOI)
Reliance Industries, Tata Group and Reliance Power among the nearly two dozen firms that have bid for setting up projects to convert coal into oil.(FE)
Pantaloon Retail plans bonus issue with differential voting rights.(TOI)
Bharat Electronics plans an investment of around Rs15bn in the solar energy space, in a tie-up with Bharat Heavy Electricals.(BS)
Godrej Consumer Products eyeing acquisitions in its home market and abroad.(Mint)
Suzuki Motorcycles India plans to double capacity.(BL)
HCC will spin off four businesses construction, infrastructure development, real estate and the Lavasa project and list them separately.(DNA)
The open offer by Emami for Zandu Pharmaceutical Works has been delayed following queries by SEBI.(ET)
Tata group through Indian Hotels to foray in to Chinese hospitality sector.(TOI)
Federal Bank has bought 5% shares of Catholic Syrian Bank and is in the process of going for a full-fledged takeover.(ET)
Zee Entertainment Enterprises plans to float a film subsidiary, Zee Entertainment Studios; to raise US$210mn for the proposed venture.(DNA)
Suzuki Motors rejects proposal by Tata Motors and Fiat JV to set up a plant to manufacture the 1.3 multijet small diesel engine.(BS)
Maruti Suzuki to roll out new M800 Uniq.(ET)
Kolkata based South Asian Petrochem may scrap its proposed PET resin JV project with Egyptian Petrochemicals Holding Company if the necessary approvals are not received by year end.(BS)
Government is looking at selling half of its holding in NTPC BHEL Power Projects, the newly formed JV.(DNA)
Kingfisher Airlines may sell-off 2 out of 5 A340-500 aircrafts it had committed to buy from Airbus last year.(BS)
ONGC keen to restart exploration on Kochi-Konkan coast.(BL)
IDBI Bank to expand its network both in domestic and overseas markets, besides entering into new businesses like mutual fund, private equity and credit information bureau.(ET)
ADAG in talks with Gujarat government to set up 200MW power project worth an investment of Rs12bn.(BS)
Maharashtra government to recheck godowns of Subhiksha store chain following complaints of violation of hygiene norms.(BS)
Tata Sky has come under the scanner of MRTPC for monopolization of price. (ET)
Omnitech Infosolutions is close to acquiring two companies for a collective valuation of US$20mn.(DNA)
Zoom Developers receives a contract worth Rs4.3bn for construction of four lane Bhopal by-pass road project on BOT basis.(ET)
Reliance Infra to build Rs120bn power equipment plant in JV with Chinese company Shanghai Electric Corporation.(BS)
Essar Power is planning to set up a 500 MW hydel power plant in Bhutan.(ET)
Amtek Group is going in for a major restructuring exercise, to consolidate all its Indian companies under group flagship Amtek Auto. (ET)
Economic Front Page
DoT waives the license fee from revenues earned from fixed line phones in rural areas.(BL)
Tea production in India declines in 2007 due to erratic weather conditions in North and South India.(BS)
Mobile operators cumulatively added 8.94mn wireless subscribers in June.(BL)
The National Pharma Pricing Authority may allow the price increase of 70 drugs including a few antibiotics and life savers.(BS)
Finance ministry rejects aviation ministry’s proposal to levy a specific excise duty on ATF. (ET)
Retail steel prices drop by 6% in the last two weeks; Government says would continue to discourage high steel prices.(FE)
DoT has identified between 51 and 60MHz of spectrum in several service areas that will allow it to offer between 10 and 12 licenses to operators to introduce 3G services.(BS)
New 3G policy would allow global players to 2G services also if they acquire spectrum through auction process.(FE)
Government to fund 80% of R&D projects undertaken by private enterprises in defence sector.(BS)
External borrowings decline to US$4bn in Q1 FY09 as compared to US$8.5bn same period last year.(BL)
Government imposes anti-dumping duty on picture colour-tubes for televisions imported from China, Malaysia, Thailand and Korea. (BS)
RBI asks banks not to charge excessive interest rates on personal loans.(FE)
Cumulative seasonal rainfall for the entire country between 1st June and 23rd July is 2% below the long-period average.(BS)
The country’s first mega power project in the private sector will become fully commercial by August 15th.(BS)
UK economy...the slowdown continues
The British economy continued to slow in the second quarter of the year, recording a rate of growth that has not been seen in seven years. Weaker construction and production brought down the UK's Gross Domestic Product (GDP) growth down to 0.2% from 0.3% in the first quarter of 2008. The annual rate of GDP growth in the April-June quarter fell to 1.6% from 2.3% in the same period last year. The last time the UK economy grew at a lower rate on a 12-month basis was in 1993. Output from the construction industry fell 0.7% over the last three months compared to a rise of 0.4% in the first quarter of 2008, with large falls recorded in housing construction. However, high levels of growth were recorded in the transport and communication sectors - up 2.2% on the previous quarter. The slowdown was expected by economists, who think that growth rates will fall further in the rest of the year.
Japan cuts growth forecast; inflation jumps
Japan revised down its economic growth forecast for the current fiscal year to 1.3% from the previous outlook of 2%, saying that high oil prices, a stronger yen and sagging US demand would continue to hurt the world's second-biggest economy. The Cabinet Office - which also serves as a government advisory body - also said slowing growth would make it harder for Japan to achieve its self-imposed target of a balanced its core budget by 2011-12. "Very tough economic conditions have been continuing since the start of the year," Economy Minister Hiroko Ota was quoted as saying by The Wall Street Journal. Separately, Japan's consumer prices rose at the fastest pace in a decade as food and gasoline costs climbed, squeezing household budgets and slowing economic growth. Core prices, which exclude fruit, fish and vegetables, increased 1.9% from a year earlier after gaining 1.5% in May, the statistics bureau said in Tokyo.
German Ifo, euro-zone PMI drop sharply
German business confidence fell the most since the Sept. 11 terrorist attacks in 2001, signaling growth is faltering in Europe's biggest economy. The Ifo Institute's German business climate index reportedly fell to 97.5 in July, down from 101.3 in June and well below market expectations for a decline to 100.2. That's the weakest reading since September 2005. Separately, a key measure of euro-zone economic activity fell further in July, suggesting that the currency bloc is set for weak Q3 growth. The preliminary composite purchasing managers index (PMI) for the euro zone fell to 47.8 from 49.3 in June, below expectations for a decline to 48.7. A reading of less than 50 signals a decline in activity, while a reading of more than 50 signals expansion.
US approves housing aid, Fannie-Freddie plan
The US House of Representatives approved far-reaching government assistance for the nation’s housing market, including broad authority for the Treasury Department to protect Fannie Mae and Freddie Mac, the nation’s two largest mortgage finance companies from collapse. The measure also included an aggressive plan to help hundreds of thousands of troubled borrowers avoid foreclosure by refinancing their mortgages with more affordable government-insured loans. President Bush would sign the measure despite his opposition to the inclusion of nearly US$4bn in grants for local governments to buy and refurbish foreclosed properties. Bush’s support assures that the bill will become law after final passage by the Senate. The House approved the bill 272 to 152. The legislation leaves numerous questions unanswered. The biggest one is whether the move will be adequate to slow the meltdown in housing sector and help the economy recover from a prolong slump.
Ford posts US$8.7bn quarterly net loss
Ford Motor reported a second-quarter loss of US$8.7bn, or US$3.88 a share - the company’s worst quarterly results ever. The performance is a consequence of slumping sales, especially of trucks, in a sour US economy with US$4-a-gallon gasoline, as well as rising material costs. Last year during the same period, Ford reported a net profit of US$750mn, or 31 cents a share. Revenues during the April-June period declined to US$38.6bn, down from US$44.2bn a year ago. The second-quarter loss included US$8bn, or US$3.26 a share, in special charges, mostly in North America, which has been hit hard by an economic slowdown, a consequence of crises in the housing, credit and energy sectors. Ford said it will double production of hybrid vehicles, sell more European autos such as the Fiesta in the U.S. and convert three North American truck factories to make a redesigned Focus and other small cars.
Toyota takes global sales lead
Toyota sold more than 4.8mn vehicles worldwide in the first half, up 2% from the same period a year earlier, the Japanese automaker said. That exceeded General Motors' (GM) sales of 4.5mn vehicles in the same period, raising speculation that Toyota could potentially upstage GM's 77-year reign as the world's top automaker by sales. Toyota spokesman Hideaki Homma said the company sold 4,817,941 vehicles globally during the first six months of the year. GM said it sold 4,540,409 vehicles, a decline of 3% from the first half of 2007. The Detroit automaker blamed the decline on economic pressures and labor disruptions in the US. But GM said it posted record-breaking sales in other regions, including Latin America, Asia and Europe. Toyota has also been hit by softening demand in the US, western Europe and Japan. The company said last week it was reviewing its global sales target for 2008. It is expected to lower its projection from 9.85m units to about 9.5mn.
UBS hit with multibillion-dollar suit
New York State Attorney General Andrew Cuomo brought a multi-billion dollar civil lawsuit against the Swiss banking giant UBS for allegedly pushing everyday investors into buying troubled auction-rate securities. The lawsuit charges UBS with falsely marketing and selling auction-rate securities as safe, cash-equivalent investments at a time when the market for these securities was under severe strain. The state's investigation also revealed that top UBS executives sold off about US$21mn of their personal holdings of auction-rate securities, after they learned of troubles in this segment of the market. UBS said it would vigorously defend itself against civil fraud charges. "It is frustrating that the New York Attorney General has filed this complaint while we have been fully engaged in good faith negotiations with his office to bring liquidity to our clients holding auction rate securities," the Swiss bank said.
Yahoo and Icahn strike a deal
After several weeks of acrimony and intense war of words, Internet giant Yahoo! agreed to give billionaire investor Carl Icahn a seat on its Board to settle the long-running dispute. The company said its board is being expanded to 11 members, one of whom will be Icahn. Eight members of the Yahoo board will be eligible for re-election at the annual meeting, on August 1. The line-up includes CEO and co-founder Jerry Yang and chairman Roy Bostock. Current director and Activision Robert Kotick will step down. After the annual meeting, the Yahoo board will be expanded by one seat to 11 members. One seat will be given to Icahn and the two remaining seats would chosen from a list of nine candidates recommended by Icahn. Simultaneously, Icahn, who already owns about 5% of Yahoo shares, dropped his plan to put in place a rival slate of directors before the company's AGM.
The global steel industry has in recent years, been buoyed by robust demand from strongly growing economies of the BRIC (Brazil, Russia, India and China) countries, especially China. Steel demand in India has grown an average of 13% yoy since 2005 owing to strong and steady economic growth resulting in rise in demand from infrastructure, construction, engineering and auto sectors.
Although, consequently, steel prices have risen steadily since 2006, prices have seen a particular surge since January 2008 driven by input prices. Iron ore and coking coal, which comprise more than 60% of cost of steel, have risen 66% and 92% respectively in the period January-May 2008 compared to average 2007 prices. The strong demand for steel has enabled steel manufacturers to pass the input hikes to customers resulting in a 21% increase in hot rolled coil prices and a 19% increase in cold rolled coil prices.
The cost-push effect on steel prices has dominated the demand-pull effect, resulting in a marginal 1-1.5 basis points yoy rise in profit before interest, lease rent, depreciation and tax (PBILDT) in FY08, of the top five steel manufacturers in India by capacity, despite the increase in gross realizations. The full impact of the raw material price rise on profitability is expected to be seen in 1HFY09. CARE expects Indian steel manufacturers’ profitability to dip in FY09 if coking coal and iron ore prices continue their upward trend
With the political storm behind us and talk of reforms making a comeback, the bulls may continue to make headway next week as well. What's encouraging is that global markets are largely holding up, amid a steep fall in oil prices. The monsoon, which had a prolonged lull over the western and southern parts, also seems to be on a revival path. A sustained rainfall across the country will help boost kharif output, and will lead to some softening in food inflation. On the flip side, deficit rainfall will hit agri production, and thus could lead to further spikes in food prices. Inflation, at the moment looks to have peaked out, though reports suggest that steelmakers and auto companies may go for another round of price increases. Quite a few results have been reported and barring a few negative surprises most are in line with expectations, which in itself were quite low. Margins across the board are under pressure and are likely to remain so for a while. The next big trigger will be the RBI's quarterly policy review on July 29. The central bank is likely to announce more tightening steps as inflation remains near 13-year high. Falling oil prices could make the RBI tone down its hawkish stance though, which should cheer the bulls. On the whole, we are in for a short-term upturn in sentiment. But, one should ride it carefully, as the risk-reward in the short- to medium-term is still unfavourable.