Weekly Wrap - Sep 12 2008
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Friday, September 12, 2008
Weakness may persist
The market may remain under pressure next week as US financial sector woes continue to weigh on the investor sentiment. Problems at US investment bank Lehman Brothers reminded jittery investors that the global credit woes were yet to run their course, triggering worries of more withdrawals by foreign funds who have pressed heavy sales on the domestic bourses this year.
According to reports, the US Treasury and the Federal Reserve have been working on prospects of Lehman Brothers’ sale. Potential suitors include several big banks including Bank of America, HSBC, Nomura, Credit Suisse, Barclays and Deutsche Bank, as well as several private equity companies. The deal may be announced before Asian markets open on 15 September 2008, reports suggest.
Software stocks will be closely watched. According to reports, IT businesses in developed countries have cut their IT budgets by 40%.
A softening of inflation for a third consecutive week has raised hopes that Indian market may in the last lap of the interest rate hike cycle. Inflation based on the wholesale price index rose 12.10% in the 12 months to 30 August 2008, below the previous week's annual rise of 12.34%, data released by the government on 11 September 2008, showed. Inflation, however, remains far above central bank’s target level of 7% towards the year ending March 2009.
The sharp fall in oil prices to $101 per barrel on 12 September 2008 from a record high of $147.27 a barrel struck on 11 July 2008 augurs well for the global economy. The sharp fall in oil prices will help reduce inflation worries.
Better-than-expected industrial production data may boost capital goods stocks. Industrial output rose 7.1% in July 2008 from a year earlier, above the previous month's 5.4% rise, data released by the government on 12 September 2008, showed. The figure was above market expectations of a 6.5% growth. Manufacturing production rose 7.5% in July 2008 from a year earlier.
The market will closely watch developments on the Indo-US nuclear deal. The 45-nations Nuclear Supplier Group (NSG) on Saturday, 6 September 2008, lifted a 34-year-old embargo on nuclear trade with India. The NSG’s acceptance of the US proposal to drop a ban on nuclear trade with India will now put the Indo-US nuclear deal on the fast track. However, the nuclear deal still needs to be ratified by the US Congress before it could take force. The Congress must act before adjourning in late September 2008 for US presidential elections. If that does not happen, the deal could be left to an uncertain fate under a new US administration that takes office next year.
Foreign institutional investors (FIIs) sold shares worth Rs 2935.90 crore in the first few days of September 2008 (till 11 September 2008). They sold shares worth Rs 31449.70 crore in the calendar year 2008 so far (till 11 September 2008). Mutual funds bought shares worth Rs 61.70 crore in September 2008 (till 10 September 2008).
Market tumbles on weak global equities
Weak global cues pulled the market sharply lower. The key indices surged on the first day of the week on positive news on the Indo-US nuclear deal. But weakness in the US market hit investor sentiments as the week proceeded. The sentiments were so weak that a steep slide in crude oil and a softening of India’s inflation for a third consecutive week were unable to take markets higher.
The 45-nations Nuclear Supplier Group (NSG) on 6 September 2008, lifted a 34-year-old embargo on nuclear trade with India. The NSG’s acceptance of the US proposal to drop a ban on nuclear trade with India will now put the Indo-US nuclear deal on the fast track.
However, the nuclear deal still needs to be ratified by the US Congress before it could take force. The Congress must act before adjourning in late September 2008 for US presidential elections. If that does not happen, the deal could be left to an uncertain fate under a new US administration that takes office next year.
The 30-share BSE Sensex shed 483.02 points or 3.33% to 14,000.81 in the week ended Friday, 12 September 2008. The S&P CNX Nifty fell 123.85 points or 2.84% to 4228.45.
The BSE Mid-cap index declined 216.58 points or 3.76% to 5,537.14. The BSE Small-cap index slipped 193.68 points or 2.80% to 6,711.54.
Key benchmark indices surged on Monday, 8 September 2008, after the 45-nations Nuclear Supplier Group (NSG) on Saturday, 6 September 2008, lifted a 34-year-old embargo on nuclear trade with India. Strong Asian and European markets, too, supported the domestic bourses. The BSE 30-share Sensex jumped 461.14 points or 3.18% at 14,944.97. The S&P CNX Nifty jumped 130 points or 2.99%, to settle at 4482.30.
On 9 September 2008, the key benchmark indices ended a choppy session lower weighed down by weak Asian markets. The BSE 30-share Sensex declined 44.21 points or 0.3%, to settle at 14,900.76. The S&P CNX Nifty slipped 13.60 points or 0.3%, to end at 4468.70.
Weak global markets weighed heavily on the domestic bourse on 10 September 2008. Nevertheless, the key benchmark indices cut losses in late trade led by recovery in banking stocks. Volatility was high throughout the session. The BSE 30-share Sensex slipped 238.15 points or 1.6%, to settle at 14,662.61. The S&P CNX Nifty slipped 68.45 points or 1.53% at 4400.25.
Bears ruled the roost for the third day in a row on 11 September 2008. Weak global markets triggered fall on the domestic bourses on that day. The market remained weak throughout the trading session. The BSE 30-share Sensex lost 338.32 points or 2.31% to 14,324.29. The S&P CNX Nifty slipped 109.95 points or 2.5% to 4,290.30.
On 12 September 2008, heavy selling in index pivotals ICICI Bank and Reliance Industries pulled the BSE Sensex below 14,000 mark in late trade. The BSE 30-share Sensex ended down 323.48 points or 2.26% to 14,000.81. The S&P CNX Nifty slipped 61.85 points or 1.44% to 4228.45.
India’s largest private sector firm by market capitalization and oil refiner Reliance Industries (RIL) slumped 7.11% to Rs 1931.40 in the week. As per reports, the Prime Minister’s Office (PMO) may recommend levy of export tax or even ban petroleum product exports from Reliance's export oriented refineries in Jamnagar.
India’s largest cellular services provider in terms of market capitalisation Bharti Airtel fell 3.15% to Rs 778.70.
India’s largest aluminium and copper maker by sales Sterlite Industries plunged 17.13% to Rs 487.10. Sterlite Industries on Tuesday, 9 September 2008, said its parent company, Vedanta Resources PLC approved a restructuring program of the group's businesses. Under the scheme, Sterlite will demerge its aluminium and energy businesses to Madras Aluminium which will be later renamed Sterlite Aluminum. Sterlite Industries shareholders would get seven shares in Madras Aluminium for every four shares held as part of a restructuring. Madras Aluminium jumped 7.75% to Rs 164 in the week.
India’s largest private sector bank by market capitalisation ICICI Bank shed 5% to Rs 652.85.
India’s second largest software services exporter Infosys Technologies fell 4% to Rs 1644.10. Foreign brokerage house UBS said a sharp and sudden appreciation of the dollar against the British pound and euro would hit IT firms' revenue in dollar terms by 1-2%.
US crude for October 2008 delivery rose 45 cents to $101.37 a barrel on 12 September 2008 as the markets kept a watchful eye on the path of Hurricane Ike that could disrupt refineries and production in the United States for weeks. It lost $1.71 a barrel on Thursday, 11 September 2008 after falling to $100.10, its lowest level in 5-month in intra-day trade.
Inflation based on the wholesale price index rose 12.10% in the 12 months to 30 August 2008, below the previous week's annual rise of 12.34%, data released by the government on 11 September 2008, evening showed. Inflation for the week ended 5 July 2008 was revised up to 12.19% from 11.91%.
Industrial output rose 7.1% in July 2008 from a year earlier, above the previous month's 5.4% rise, data released by the government today, 12 September 2008, afternoon showed. The figure was above market expectations of a 6.5% growth. Manufacturing production rose 7.5% in July 2008 from a year earlier.
Passenger car sales fell for the second straight month in August 2008, the Society of Indian Automobile Manufacturers said. Car sales declined 4.4% to 94,584 units in August 2008 over August 2007. Sales of trucks and buses fell 6.3% to 34,294 units in August 2008 over August 2007.
Foreign institutional investors (FIIs) sold shares worth Rs 1525.40 crore in September 2008 (till 10 September 2008). FIIs sold shares worth Rs 30039.10 crore in the calendar year 2008 so far. Mutual funds bought shares worth Rs 61.70 crore in September 2008 (till 10 September 2008).
NSE Bulk Deals to Watch - Sep 12 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
12-SEP-2008,AUSTRAL,Austral Coke & Projects L,AMBIT SECURITIES BROKING PVT. LTD.,BUY,226351,247.39,-
12-SEP-2008,AUSTRAL,Austral Coke & Projects L,ASIT C MEHTA INVESTMENT INTERRMEDIATES LTD,BUY,172417,249.10,-
12-SEP-2008,AUSTRAL,Austral Coke & Projects L,TRANSGLOBAL SECURITIES LTD.,BUY,167024,248.27,-
12-SEP-2008,GOLDTECH,Goldstone Tech Ltd.,PABARI BHAVESH PRAKASH,BUY,100000,113.90,-
12-SEP-2008,KPRMILL,K.P.R. Mill Limited,S KOMATHI,BUY,220000,91.00,-
12-SEP-2008,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD,BUY,2254592,35.68,-
12-SEP-2008,RAJTV,Raj Television Network Li,ADROIT FINANCIAL SERVICES PVT LTD,BUY,106978,118.31,-
12-SEP-2008,RAJTV,Raj Television Network Li,FIN BRAINS SECURITIES (INDIA) LTD.,BUY,102172,119.78,-
12-SEP-2008,RAJTV,Raj Television Network Li,KANCHAN SUNIL MANSINGHANI,BUY,88747,117.35,-
12-SEP-2008,RAJTV,Raj Television Network Li,MBL & COMPANY LTD.,BUY,156728,119.67,-
12-SEP-2008,RAJTV,Raj Television Network Li,MITHUN SECURITIES PVT. LTD.,BUY,71000,118.31,-
12-SEP-2008,RAJTV,Raj Television Network Li,SHRI BRIJ SECURITIES PVT.LTD.,BUY,65998,120.15,-
12-SEP-2008,RAJTV,Raj Television Network Li,TRANSGLOBAL SECURITIES LTD.,BUY,114268,117.66,-
12-SEP-2008,SHLAKSHMI,Shri Lakshmi Cotsyn Limit,KARAN MAHESHKUMAR HADVANI,BUY,76884,110.98,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,ANKITA VISHAL SHAH,BUY,181361,40.05,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,HARESH VITTHALDAS RAMI,BUY,523560,41.51,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,MAHALAXMI BROKRAGE INDIA PRIVATE LIMITED,BUY,73482,40.18,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,MBL & COMPANY LTD.,BUY,193593,41.11,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,MITHUN SECURITIES PVT. LTD.,BUY,66468,41.71,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,PRAKASH & CO,BUY,88505,40.60,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,PRASHANT JAYANTILAL PATEL,BUY,160253,41.03,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,RAMESH VINODCHANDRA SHAH,BUY,184456,40.96,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,SAMIR HARSHADRAY JANI,BUY,100002,42.32,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,YUVAK SHARE TRADING PVT LTD,BUY,66935,41.71,-
12-SEP-2008,AUSTRAL,Austral Coke & Projects L,AMBIT SECURITIES BROKING PVT. LTD.,SELL,226351,247.51,-
12-SEP-2008,AUSTRAL,Austral Coke & Projects L,ASIT C MEHTA INVESTMENT INTERRMEDIATES LTD,SELL,172417,249.08,-
12-SEP-2008,AUSTRAL,Austral Coke & Projects L,TRANSGLOBAL SECURITIES LTD.,SELL,167024,248.43,-
12-SEP-2008,DCB,Development Credit Bank L,Kotak Securities Pms a/c,SELL,1028517,49.38,-
12-SEP-2008,KPRMILL,K.P.R. Mill Limited,KOTAK MAHINDRA BANK LTD,SELL,219401,91.00,-
12-SEP-2008,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD,SELL,2254592,35.67,-
12-SEP-2008,RAJTV,Raj Television Network Li,ADROIT FINANCIAL SERVICES PVT LTD,SELL,106978,118.43,-
12-SEP-2008,RAJTV,Raj Television Network Li,FIN BRAINS SECURITIES (INDIA) LTD.,SELL,102172,120.02,-
12-SEP-2008,RAJTV,Raj Television Network Li,KANCHAN SUNIL MANSINGHANI,SELL,88747,118.33,-
12-SEP-2008,RAJTV,Raj Television Network Li,MBL & COMPANY LTD.,SELL,156728,119.77,-
12-SEP-2008,RAJTV,Raj Television Network Li,MITHUN SECURITIES PVT. LTD.,SELL,71000,118.40,-
12-SEP-2008,RAJTV,Raj Television Network Li,SHRI BRIJ SECURITIES PVT.LTD.,SELL,65998,120.40,-
12-SEP-2008,RAJTV,Raj Television Network Li,TRANSGLOBAL SECURITIES LTD.,SELL,114268,117.91,-
12-SEP-2008,SHLAKSHMI,Shri Lakshmi Cotsyn Limit,KARAN MAHESHKUMAR HADVANI,SELL,30972,110.17,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,ANKITA VISHAL SHAH,SELL,112361,41.03,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,HARESH VITTHALDAS RAMI,SELL,508701,40.49,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,MAHALAXMI BROKRAGE INDIA PRIVATE LIMITED,SELL,73482,40.30,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,MBL & COMPANY LTD.,SELL,193593,41.20,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,MITHUN SECURITIES PVT. LTD.,SELL,66468,41.72,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,PRAKASH & CO,SELL,87271,40.65,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,PRASHANT JAYANTILAL PATEL,SELL,154253,41.08,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,RAMESH VINODCHANDRA SHAH,SELL,184456,39.46,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,SAMIR HARSHADRAY JANI,SELL,100002,40.48,-
12-SEP-2008,TULSI,Tulsi Extrusions Limited,YUVAK SHARE TRADING PVT LTD,SELL,66928,41.68,-
12-SEP-2008,VISESHINFO,Visesh Infotecnics Limite,BNP PARIBAS ARBITRAGE,SELL,195000,17.16,-
Indian IT stocks plunge on US Financial news
Despite rupee depreciating to a 2-year low against the dollar, stocks of Indian IT majors tumbled on Friday following the collapse of Lehman Brothers and mainly on foreign brokerage UBS saying a sharp appreciation in the dollar against the British pound and euro would hit IT firms' revenue in dollar terms by 1-2 per cent.
Lehman is trying to raise capital and shed devalued real estate assets after $8.2 billion in write-downs and credit losses in the past year. The 4th largest investment bank in the US posted a loss of $3.9 billion for the June quarter.
The US Treasury and Federal Reserve are working in co-ordination with Lehman on a sale, after with Korea Development Bank failed. A deal may be announced by Monday.
Meanwhile, in its latest report to clients, UBS said the dollar has risen 5.5 per cent, 13.8 per cent and 13 per cent respectively against the Indian rupee, pound and euro in the current quarter (ending September).
“Indian IT majors have a large exposure to the US BFSI sector. This sector is already in worsening path, more so after the Lehman collapse,” said V Theegala, an analyst with a local brokerage.
“Lehman is not able to find a buyer yet. Federal Reserve and US Treasury are negotiating to find a buyer. The intervention by the US government itself indicates a weakness,” Theegala added.
American depository receipts of IT majors slipped in US markets on Thursday. Infosys Technologies ADR fell 5.13 per cent, Wipro lost 4.65 per cent and Satyam Computer shed 2.65 per cent.
At 2:48 pm on NSE, Infosys shares plunged 5.59 per cent, Hexaware slumped 5.05 per cent, Patni Computer fell 4.17 per cent and I-Flex dropped 3.39 per cent.
via ET
Post Session Commentary - Sep 12 2008
Domestic markets suffered another setback today and close down deep in red. It was one more terrible session for the markets, as were under pressure for the fourth successive day. BSE Sensex closed around 14,000 level and NSE Nifty ended around 4,200 mark. After a strong start to the session the market was not able to sustain the momentum and gave up its gains to trade sharply lower despite a fall in weekly inflation figures to 12.1% along with more than expected growth in IIP numbers to 7.1% in July 2008 against 5.4% previous month. The bears took complete charge as markets showed harsh slide during last trading hours to end the day with huge losses. Weak European markets also contributed to the sentiments. From the sectoral front, all the indices ended with losses and IT stocks were major contributor to drag down the market as closed with loss of more than 4%. Mid cap and Small cap stocks also remained unfavorable as they closed with a cut of more than 1%. Other than that, heavy selling was seen in Oil & Gas, Reality, Metal, Bank and Capital Goods stocks. The market breadth was negative as 1848 stocks closed in red while 818 stocks closed in green and 74 stocks remained unchanged.
The IIP data came in better than expected as it rose 7.1% in July 2008 as against 5.4% in the previous month 8.3% for the same period of previous year. Capital Goods showed a descent growth to 21.9% as compared to 12.3%(YoY). However, growth in manufacturing declined to 7.5% from 8.8%(YoY).
The BSE Sensex closed lower by 323.48 points at 14,000.81 and NSE Nifty ended down by 61.85 points at 4,228.45. The BSE Mid Caps and Small Caps closed with losses of 110.06 points at 5,537.14 and by 107.39 points at 6,711.54. The BSE Sensex touched intraday high of 14,433.20 and intraday low of 13,933.87.
Losers from the BSE are Reliance Infra (6.32%), Infosys Tech (6.00%), Reliance (4.13%), ICICI Bank Ltd (4.89%), HDFC (3.84%), DLF Ltd (3.64%), Satyam Comp (3.47%), TCSLtd (3.34%), Reliance (3.31%), Seterlite In (3.11%) and JP Associates (2.96%).
The BSE Oil & Gas index closed lower by 223.30 points at 9,116.44 as Reliance Natural Resources (3.67%), Reliance (3.31%), HPCL (2.61%), Essar Oil Ltd (2.50%), Gail India (1.56%) and ONGC Ltd (1.22%) ended in negative territory.
The BSE IT index dropped by 183.70 points to close at 3,806.74. As Infosys Tech (6.00%), NIIT Ltd (5.35%), Oracle Fin (5.07%), Rolta India (4.37%), HCL Tech (3.68%) and Patni Comp (3.64%) closed in negative territory.
The BSE Reality index plunged 182.11 points to close at 4,693.72. As Indiabull Real (6.27%), Orbit Co (5.73%), Ansal Infra (5.50%), Pheonix Mill (5.22%), Housing Dev (5.10%) and Akruti City (4.92%) closed in negative territory.
The BSE Bank index closed lower by 181.44 points at 7,029.22. Losers are Kotak Bank (5.33%), ICICI Bank Ltd (4.89%), Oriental Bank of Commerce (4.76%), Yes Bank (4.24%), Canara (2.75%) and Karnataka Bank (2.01%).
The BSE Metal index lost 110.37 points to close at 10,881.42. Major losers are Jindal Steel (4.03%), Seterlite In (3.11%), Welspan Gujarat Sr (2.86%), Jai Corp Ltd (2.65%), Ispat Indus (1.93%) and NMDC Ltds (1.17%).
The BSE Capital Goods index ended down by 104.42 points at 11,836.58. Major losers are Gammon India (3.67%), Suzlon Energy (3.49%), Alstom Proje (3.02%), Siemens Ltd (2.82%), Bharat Bijli (2.74%) and Reliance Industrial Infra (2.59%).
Out of sorts, markets buckle
Nervousness gripped the market for the fourth consecutive session, as selling pressure since early trades saw the index remain weak all through the trading session. Although the Sensex resumed 108 points above its previous close at 14432 and moved up to touch an early high of 14433, the market soon snapped gains owing to the emergence of selling pressure. As correction continued unabated, the index tumbled below the mark to touch the intra-day low of 13,971 by end of the trade. While the market languished in negative territory through the noon trades, the Sensex signed off the session with a loss of 187 points at 14107. The Nifty also ended in the red at 4191, down 75 points.
The market breadth was weak, as of the 2,739 stocks traded on the BSE, 67% stocks (1,846 stocks) declined, while only 30% stocks (821 stocks) advanced. 72 stocks ended unchanged. All the 13 sectoral indices ended at lower levels. The BSE IT index fell 4.60%, the BSE Realty index dipped 3.73%, the BSE Teck index shed 2.97% and the BSE Bankex was down 2.52%.
Among the draggers, Reliance Infrastructure dropped 7.16% at Rs921, Infosys Technologies shed 5.92% at Rs1,645.40, ICICI Bank tumbled 4.95% at Rs652.50, DLF declined 4.56% at Rs463.40, Tata Motors was down 4.51% at Rs405, HDFC tumbled 4.24% at Rs2,170 and Sterlite Industries lost 4.23% at Rs481.50. Reliance at Rs1,922, Tata Consultancy Services at Rs805, Mahindra & Mahindra at Rs542.90, Satyam Computer Services at Rs407 and Jai Prakash Associates at Rs156.90 were down around 3% each.
Select index heavyweights managed to register decent gains. Maruti Suzuki India rose 3.61% at Rs703.70, BHEL gained 1.92% at Rs1,696.75, Hindustan Unilever scaled up 0.83% at Rs248.90, Bharti Airtel added 0.32% at Rs778.70 and NTPC jumped by 0.12% at Rs173.65.
IT stocks came under sharp hammering. NIIT slumped 5.35% at Rs79.55, Oracle lost 5.07% at Rs1,123.70, Rolta India declined 4.37% at Rs319.40 and HCL Technologies was down 3.68% at Rs228.90. Patni Computer Systems, Aptech, Mphasis, Tech Mahindra, Financial Technologies India and Wipro dipped 1-3% each.
Over 1.79 crore Reliance Natural Resources shares changed hands on the BSE followed by IFCI (1.45 crore shares), Chambal Fertilisers & Chemicals (0.55 crore shares), Austral Coke & Projects (0.55 crore shares) and Reliance Power (0.46 crore shares).
Late sell-off grips bourses
Heavy selling in index pivotals ICICI Bank and Reliance Industries pulled the BSE Sensex below 14,000 mark in late trade. Sensex provisionally ended down 383.76 points. Reliance Infrastructure tumbled. The market had recovered sharply from lower level in early afternoon trade after an initial slide on improved industrial output data for July 2008 which hit the market at 12:00 IST. But the recovery proved short-lived.
The Indian market today underperformed the world boursres. Stocks rose in Asia and Europe on optimism that talks about a possible sale of troubled US investment bank Lehman Brothers would help ease the financial sector's woes.
Infosys and Reliance Infrastructure fell more than 6% each while ICICI Bank fell more than 4.5%. HDFC and DLF fell more than 3.5% each. Maruti Suzuki India rose over 3.5%.
Industrial output rose 7.1% in July 2008 from a year earlier, above the previous month's 5.4% rise, data released by the government today, 12 September 2008, afternoon showed. The figure was above market expectations of a 6.5% growth. Manufacturing production rose 7.5% in July 2008 from a year earlier.
The wholesale price index-based inflation rose 12.10% in the week ended 30 August 2008, below the previous week’s annual rise of 12.34%, government data released after market hours on Thursday, 11 September 2008 showed. The annual inflation rate was 3.72% during the corresponding week of the previous year.
The BSE 30-share Sensex provisionally ended down 383.76 points or 2.68% to 13,940.53. At the day’s low of 13,933.87 hit in late trade Sensex fell 390.42 points. At the day’s high of 14,433.20 hit in early trade, the Sensex rose 108.91 points.
The S&P CNX Nifty was down 89.35 points or 2.08% to 4,200.95 as per the provisional figures.
The market breadth was weak on BSE with 1,880 shares declining as compared to 818 that advanced. 45 remained unchanged.
Among the 30-member Sensex pack, 27 declined while the rest gained.
The BSE Mid-Cap index fell 2.28% to 5,518.31 and BSE Small-Cap index fell 1.9% to 6,689.18.
BSE clocked a turnover of Rs 5,078 crore today 12 September 2008 compared to a turnover of Rs 4,798.08 on 11 September 2008.
India’s largest private sector firm in terms of market capitalization and oil refiner Reliance Industries fell 3.78% to Rs 1,922.
Reliance Infrastructure (down 6.32% to Rs 929.30), ICICI Bank (down 4.89% to Rs 652.85), HDFC (down 3.84% to Rs 2,179.10), DLF (down 3.64% to Rs 467.90) edged lower from the Sensex pack.
Capital goods pivotals rose after the latest data showed that the capital goods sector clocked a robust 21.9% growth in production in July 2008. India’s largest electric equipment maker by sales Bharat Heavy Electricals rose 1.16% to Rs 1,684. It came off from its high of Rs 1,750.
India’s largest engineering and construction firm by sales Larsen & Toubro fell 1.51% to Rs 2,625. The stock came off from its high of Rs 2,700.
BSE IT index fell 4.7% to 3,803.06 and was the top loser from the sectoral indices on BSE. IT stocks declined on overnight fall in their American depository receipts (ADRs) and after foreign brokerage house UBS said a sharp and sudden appreciation of the dollar against the British pound and euro would hit IT firms' revenue in dollar terms by 1-2%. Infosys (down 5.92% to Rs 1,645.40), Satyam Computer Services (down 3.36% to Rs 407), Wipro (down 2.08% to Rs 418), Tata Consultancy Services (down 3.72% to Rs 805) edged lower.
Infosys ADR fell 5.13%, Wipro ADR lost 4.65% and Satyam Computer ADR shed 2.65% yesterday, 11 September 2008.
Maruti Suzuki India (up 3.81% to Rs 705), Hindustan Unilever (up 0.1% to Rs 247.10) edged higher from the Sensex pack.
India’s largest tractor maker by sales Mahindra & Mahindra fell 2.13% to Rs 551.30. The comopany said on Thursday it has decided to transfer the logistics business to Mahindra Logistics, a wholly owned subsidiary of the company for a consideration of Rs 32 crore.
India’s largest telecom services provider by sales Bharti Airtel fell rose 0.32% to Rs 778.70. It recovered from session’s low of Rs 744.The company added 2.7 million users in the month of August 2008 taking its total subscriber base to 74.8 million.
US crude for October 2008 delivery rose 45 cents to $101.37 a barrel today, 12 September 2008 as the markets kept a watchful eye on the path of Hurricane Ike that could disrupt refineries and production in the United States for weeks. It lost $1.71 a barrel on Thursday, 11 September 2008 after falling to $100.10, its lowest level in 5-month in intra-day trade.
European markets were in green. France’s CAC 40, Germany’s DAX and UK’s FTSE 100 were up between 0.87% to 1.24%.
Asian markets were trading higher today, 12 September 2008. China's Shanghai Composite, Hong Kong's Hang Seng, Taiwan's Taiwan Weighted, Japan's Nikkei, Singapore's Straits Times and South Korea's Seoul Composite were up by between 0.83% to 2.4%.
US stocks rose on Thursday, 11 September 2008, as a report that major U.S. investment bank Lehman Brothers is shopping itself to possible suitors, including Bank of America, drove a last-minute rebound in financial shares. The Dow Jones gained 164.79 points, or 1.46%, to 11,433.71. The S&P 500 index advanced 17.01 points, or 1.38%, to 1,249.05, while the Nasdaq Composite index added 29.52 points, or 1.32%, to 2,258.22.
Market may exhibit strong volatility
After witnessing a strong correction last week, the market is likely to remain uncertain on the back of a strong intra-day volatile moves. However, mixed Asian indices in current trades and overnight gain in US indices may release some pressure from local indices in morning trades. Among the local indices, in the near term the Nifty could test 4350 on the upside while on the downside the index may get support at 4250. The Sensex is likely to get support at 14200 and may face resistance at 14500.
US indices rallied on Thursday, with the Dow Jones gaining 165 points to close at 11434 after falling for 3-4 straight sessions and the Nasdaq to end 30 points higher at 2258.
Among the eleven Indian ADRs only Dr Reddy ended in the green on the US bourses. Infosys & Wipro fell sharply and tumbled above 4-5% each. While Satyam, Tata Motors, ICICI Bank, HDFC Bank, MTNL, VSNL, Rediff and Patni computer declined over 1-2% each.
Crude oil tumbled more than $1.50 a barrel Thursday as the market dwells on global economy, stronger dollar. Hurricane Ike threatens oil on Texas Gulf Coast. While the Nymex light crude oil for October series falling by $1.71 at $100.87 per barrel. In the commodity space, the Comex gold for December delivery slumped $17 to settle at $745.50 a troy ounce.
Trading Calls - Sep 12 2008
Nifty (4290) Sup 4240 Res 4355
Buy Bank Baroda (309) SL 304 Target 319, 321
Buy Satyam Comp (421) SL 416 Target 431, 434
Buy IDFC (92) SL 89
Target 98, 99
Sell IVRCL Infra (290) SL 295
Target 281, 277
Sell Punj Lloyd (291) SL 296
Target 282, 280
From the bottom, things looks well!
A wise person can see more from the bottom of a well than a fool can from a mountain top.
Well we’ve had enough of weakness for some time and bulls are just waiting for some excuse to lift themselves. Contrary to expectations, no buying was seen towards the end. Today, hopefully will bring in the bulls at least in select counters. With inflation dipping to 12.1% and crude oil close to breaching the key $100 per barrel, the market may turn higher after three successive days of losses.
One school of thought believes that the RBI may not jack up rates given the moderation in inflation and sliding global commodity prices. That could prove to be a bit of a plus for the Indian market. The overnight rally in the US market and positive trend in Asian markets (barring Hang Seng) could help improve the sentiment. The icing on the cake would be a better than expected IIP number.
It will be interesting to see how Reliance Industries performs after falling under the Rs2,000 mark on Thursday. Falling oil prices is being seen as negative for the company, as its refining margins may come under pressure. Companies like ONGC and Cairn could also be hit once crude slips below $100. At the same time, oil marketing companies - IOC, HPCL and BPCL - may do well. One should also keep an eye on metal stocks, as global commodity prices have come under pressure due to the global economic slowdown.
The Nifty is likely to trade within the 4200 and 4600 range. On the whole, the undertone remains sluggish amid persistent concerns over the state of the advanced economies and the gloom prevailing in the western financial sector. In the meantime, much of the action will remain stock specific, as the bulls lack conviction to take bigger bets on the market's near-term direction. Despite the slump in crude oil prices and the consequent moderation in inflation, investors remain wary of the grim global situation. As a result, any rally will be short-lived and will be checked by profit booking.
The downside will hinge on daily newsflow emanating from the global markets. Much will depend on the movement in commodities (particularly crude oil prices), and the renewed pain in the US financial sector. Things are also starting to turn sour for the EU and Japan, with these economies too now in danger of slipping into recession. May be a desperate rate cut by the Federal Reserve will yet again cheer up the global markets. Whether Bernanke & Co. oblige the markets is a big question though. The Fed policymakers are scheduled to meet next week to take a call on interest rates and review the economic conditions.
FIIs were net sellers of Rs15.07bn (provisional) in the cash segment on Thursday while the local institutions poured in Rs5.87bn. In the F&O segment, the foreign funds were net sellers of Rs19.28bn. On Wednesday, the FIIs were net sellers at Rs8.7bn in the cash segment. Mutual Funds were net buyers at Rs1.15bn on the same day.
US stocks advanced on Thursday amid growing speculation that Lehman Brothers will be sold to a larger rival amid lingering doubts over its solvency. Transportation companies rallied on lower oil prices, while banking shares staged a comeback in the last half hour of trading.
The S&P 500 added 17 points, or 1.4%, to 1,249.05. The Dow Jones Industrial Average jumped 164.79 points, or 1.5%, to 11,433.71, erasing a 170-point drop. The Nasdaq Composite Index increased 29.52 points, or 1.3%, to 2,258.22.
Trading volume has been improving of late and that it will be important to see if that continues, as higher volumes are seen as a sign of greater conviction among investors. Market breadth was negative. About three stocks rose for every two that fell on the New York Stock Exchange.
The S&P 500 flirted with its 2008 lows and then managed to bounce back. The S &P 500 rebounded from a 1.7% fall and financial shares reversed a tumble of 4.2% to end the day 1.5% higher.
Washington Mutual and Wells Fargo led the gains in banks as prospects of a Lehman takeover eased concern of more bank failures.
In early trading, the S&P 500 fell below its lowest closing level since 2005 as Lehman slumped as much as 48% and dragged down all 87 financial companies in the index on worries about their financial health.
Meanwhile, a steeper-than-expected jump in the US trade deficit and a weak jobless claims report added to recession fears.
While bank shares remained under pressure in the afternoon, the selloff in oil prices gave a lift to companies that benefit directly from lower fuel prices, including transportation stocks. Consumer stocks benefited too, on lower inflation expectations.
But the market spiked heading into the close after the Wall Street Journal Web site reported that Lehman is actively shopping for a buyer, including Bank of America. The report boosted a number of bank stocks, but failed to lift Lehman, which slumped almost 42% on the session.
After the close, the Washington Post reported that the Treasury Dept. and the Fed are putting together a sale of Lehman through a group of private firms, with a deal expected to be announced this weekend. The US government and the Fed had also teamed up to engineer the rescue of Bear Stearns in March.
Washington Mutual sought to reassure investors that its capital position and credit outlook were stable, amid escalating worries. Following the announcement, ratings agency Fitch downgraded the company's debt rating.
Light, sweet crude for October fell $1.71 to settle at $100.87 a barrel on the Nymex, its lowest close since March 24. Oil prices have fallen nearly 32% since their peak at $147.27 on July 11. Gasoline prices rose overnight, climbing for the second day in a row as Hurricane Ike strengthened.
In the bond market, Treasury prices slipped, raising the yield on the benchmark 10-year note to 3.64% from 3.63% late on Thursday.
In the currencies market, the euro broke through its psychologically important level of $1.40. The dollar is also trading near its strongest level against the British pound in more than two years. The dollar rose to its highest level in nearly a year against the euro, even as the US trade deficit for July soared. Falling oil prices helped support the greenback. The US currency is up 13% since its bottom against the euro of $1.6038 on July 15.
Gold futures, suffering from the longest losing streak in eight years, dropped below $750 an ounce for the first time in nearly a year - and analysts say the price of the precious metal may have finally bottomed. Gold for December delivery fell $17, or 2.2%, to close at $745.50 an ounce on the Comex division of the New York Mercantile Exchange, the first time the metal closed below $750 since last October. After market closed, it moved higher in electronic trading.
European shares declined for the third straight day dragged down by banks. The pan-European Dow Jones Stoxx 600 closed slightly lower, falling 1.69 points, or 0.6% to 275.66. For the year, the index has dropped more than 24%. Germany's DAX 30 fell 31.42 points, or 0.5%, to 6,178.90, while the French CAC-40 dropped 34.59 points, or 0.8%, to 4,249.07 and the UK's FTSE 100 lost 47.80 points, or 0.9%, to 5,318.40.
In the emerging markets, Brazil's Bovespa rallied 3.3% to 51,270, while Mexico's IPC index fell 0.3% to 25,552. The RTS index in Russia was down 2.7% at 1298 and the ISE National-30 index in Turkey was down 5.1% at 46,269
Macro data, global cues to weigh
Markets ended with a deeper crack on Thursday as the NSE Nifty index close below the 4,300 mark. It was the third straight trading session where bears reigned supreme.
Along with weak global cues data released on Wednesday showed that core sector growth for July slipped to 4.3% from 7.2% last year which dampened the sentiment. In addition, traders and investors opted to stay light ahead of the announcement of Inflation and IIP data.
Among the 30 components of the Sensex 28 stocks ended in the red and only 2 stocks ended in positive terrain with only Tata Motors and Ranbaxy closing in green. Index heavyweights like Reliance Industries, Bharti Airtel and ONGC were among the major laggards.
Finally, the BSE benchmark Sensex closed at 14,324 plunging 338 points and the BSE Nifty index slipped 109 points to close at 4,290.
Market breath was weak, 1,786 declined against 854 advances, while, 74 stocks remained unchanged.
Shares of Reliance Industries, India’s most valuable company sharply fell below Rs2000 levels on back of sustain selling. The scrip ended lower by 4% at Rs1997, hitting an intra-day high of Rs2071 and an intra-day low of Rs1983. Reliance Industries ended below Rs2,000 levels for the first time since July 16.
Reliance Industries had hit 52week high of Rs3,298 on January 15 2008 and a 52-week low of Rs1,920 July 16 2008.
Shares of Apollo Tyres ended higher by 1.3% to Rs38 reports stated HDFC Standard life Insurance Co Ltd bought an additional 0.6% stake, increasing its holding to ~5%.
~20.01 lakh and 10.03 lakh shares of the company changed hands at Rs38 and Rs38.5 a piece respectively. The scrip touched an intra-day high of Rs39.9 and a low of Rs37.2 and recorded volumes of over 62,00,000 shares on BSE.
Shares of Mphasis closed at Rs249 gaining 1.5% after 2.3% of equity changed hands in two block trades. ~3.41mn and 1.29mn shares of the company were traded at Rs250 per share. The scrip touched an intra-day high of Rs253 and a low of Rs244 and recorded volumes of over 55,00,000 shares on BSE.
Asahi India Glass surged by over 8% to Rs58 after ~1.7% of equity changed hands in a single trade on BSE. ~2.7mn shares were sold at Rs55.45 per share. The scrip touched an intra-day high of Rs59.5 and a low of Rs52 and recorded volumes of over 32,00,000 shares on BSE.
Raj Television rallied by over 19% to Rs116 as the company is reportedly planning to enter the print business and is open to acquiring existing regional newspapers.
The company is looking to raise up to Rs1bn from PE firms, and would offer as much as 10% stake in the company, added reports. The scrip touched an intra-day high of Rs117 and a low of Rs100 and recorded volumes of over 6,00,000 shares on BSE.
Shares of Glodyne Technoserve have rallied by over 15% to Rs651. The scrip touched an intra-day high of Rs660 and a low of Rs565 and recorded volumes of over 82,000 shares on BSE.
Shares of IFCI ended trading higher by 1.4% to Rs48.1 on reports that the board of director of the company would meet on September 19, 2008 to initiate the process of introducing a strategic investors in to the company. There were also reports stating that IFCI has internally fixed Rs67 as the base price for all discussion for stake. The scrip touched an intra-day high of Rs48.5 and a low of Rs46 and recorded volumes of over 15,00,00,000 shares on BSE.
NTPC to set-up a power project in Bihar in JV with the state body (ET)
Rocksource to pick-up 10% stake in ONGC’s Cauvery deepwater block (ET)
Cairn India to invest US$110mn in Sri Lanka through a subsidiary (BS)
Essar Oil may raise US$5bn to fund expansion of its refineries in western India (BS)
Tata Tele, Datacom, Unitech and Swan gets GSM spectrum for offering services in Mumbai (ET)
Hindustan Zinc reduces lead prices by Rs3,400/ton while keeps zinc prices unchanged (BL)
NALCO lowers aluminium prices by 3%, a fourth reduction in two months (BL)
Infosys to participate in bids for public sector deals (ET)
Reliance Power to tap export credit route for financing its planned foray in nuclear power generation (ET)
GMR Energy plans to invest Rs100bn for setting-up a 2.000-3,000MW nuclear power plant in next 5-7 years (BS)
HPCL and Renuka Sugars to set-up an integrated sugar mill in Maharashtra (BL)
Bharti Airtel launches a Rs2bn venture fund to promote content and technology development (ET)
Wockhardt CFO held guilty for insider trading (BS)
LIC renewed its group insurance policy for Infosys employees with a sum assured of Rs240bn (ET)
GMR Energy is looking at acquiring coal mines in Indonesia and Africa to feed its plants in India (DNA)
Wipro opens second centre in Uttarakhand (BL)
Satyam Computers extends its strategic alliance with MSC.Software Corporation (BL)
Suzlon Energy’s overseas arm secures an order from Romania for supplying turbines (BL)
India Hotels launches The Gateway Hotels chain (BS)
Glenmark files its first individual molecule for Phase-I trials with US FDA (ET)
The promoters of Gujarat NRE Coke plans to raise stake in the company to 50% in three years from existing 40.7% (BL)
Simplex Infra expect 50% revenue growth in FY09 from projects in India & abroad (DNA)
Omaxe in talks for diluting 10% in NAFHIL project (DNA)
Indian Hotels has hiked ARR by 8-10% with effect from September 1 (DNA)
Parsvnath to invest Rs1.2bn for setting up a mall at Haryana (DNA)
Orchid Chemicals plans to sell stake in its research unit in 2009 (BL)
Era Infra bags Rs2.09bn contract from Naya Raipur Development Authority (DNA)
Dalmia Cements has started acquiring land in Himachal Pradesh for setting-up a cement plant (ET)
Ramco Systems cuts rights issue size to Rs1.31bn (BL)
Punjab Chemicals is scouting for acquisitions in the US and Europe (BL)
Economy Front page
Inflation dips for third week in a row to 12.1% for the week ended August 30th (ET)
Rupee falls to Rs45.50 on dollar demand (ET)
Government revises 11th five-year plan power capacity addition target to 90GW (ET)
CDMA operators will get 3G spectrum in the 800 MHz frequency through auction (ET)
RBI is considering easing participatory notes norms (BS)
Union Cabinet has approved a policy that aims to achieve 20% bio-fuel blending in all the auto fuels used in the country by 2017 (DNA)
Government relaxes norms for FM radio companies with respect to business restructuring (BL)
Sugar mills threatens to halt ethanol production after oil marketing companies denied a hike in ethanol procurement price (BS)
Hotel industry has hiked tariffs by 8-15% from September 1st (BL)
GSM client base rises by 6.3mn subscribers in August 2008 (BS)
Credit growth may slow down to 20%, as per S&P (BS)
Listed companies with low public float may have to hike public shareholding to minimum threshold level of 25% (ET)
Air passenger traffic falls 18% in August (ET)
India PC market record shipments of 2.08mn units in Q2, a growth of 8.1% yoy (ET)
IT end-user spending in India is expected to record a CAGR of 14.8% over 2007-12 and reach US$110bn, as per Gartner (ET)
National Mineral Policy (NMT) is set to delay as the Ministry of Mines seeks state’s views on the draft amendments to the MMDR Act (ET)
Government is planning to allow PIOs to buy property in India without mandatory RBI approval, Visa (ET)
The tussle between mining firms and steel producers over raw material pricing may end soon (ET)
Today's Pick - Dr Reddy's Labs
We recommend a sell in Dr Reddys Laboratories from a short-term perspective. It is clearly evident from the charts of Dr Reddys Laboratories that it has been on an intermediate-term downtrend from its June high of Rs 739 (a significant resistance level). In late July, the stock conclusively crossed below its 200-day moving average and has failed to surpass this average since then. We note that the stock has formed a descending triangle pattern, since august. This triangle pattern is a bearish continuation pattern, signalling that the stock’s downtrend would continue after the break out. On September 11, the stock broke through the lower boundary of the descending triangle pattern at Rs 570. The daily and weekly relative strength indexes have entered into the bearish zone. Moreover, the moving average convergence and divergence is signalling a sell, which supports our viewpoint. The stock is trading well below its 21 and 50-day moving averages. Our short-term forecast for the stock is negative. We anticipate the stock to decline further until it hits our price target of Rs 505 in the short-term. Traders with short-term horizon can sell the stock while maintaining a stop-loss at Rs 590.
Insurers are biggest investor in stocks
Riding on the huge popularity of Unit Linked Insurance Products (ULIP), insurance industry emerged as the largest investor in the stock market during 2007-08 surpassing the foreign institutional investors , according to Life Insurance Council.
The council, in a briefing to the media in Mumbai on Thursday said the net investment by life insurance companies in the equity markets during 2007-08 was Rs 55,000 crore against an investment of Rs 53,400 crore by foreign institutional investors.
The investment by mutual funds in the same period was estimated at Rs 16,300 crore.
S B Mathur, secretary general of Life Insurance Council, an apex organisation of all life insurance companies in the country, said the investment by insurance industry in the stock market in the first four months of this financial year was about Rs 25,000 crore. During 2006-07, investment by insurance companies in equities was only Rs 20,000 rore.
U S Roy, managing director and CEO of SBI Life Insurance Company said it was for the first time that the investment by insurance companies in the stock market was higher than the foreign funds.
He said the large investment made by the industry has helped the market to stabilise. The volatility in the market could have been much more but for the large investment by the insurance companies, he said.
According to the Council, 80 percent of life insurance business during last financial year was received by way of ULIP.
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