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Thursday, September 18, 2008
AIG - still in trouble ?
American International Group's deal with the government is a bankruptcy liquidation in all but name, and the $85 billion it has borrowed may not be enough extra money to pay off all its obligations, particularly in its derivatives books.
AIG had $971.7 billion of liabilities at the end of June, but a subsidiary also has about $447 billion of credit derivatives on its books. That compares with a little more than $1 trillion of assets. There is a real question mark around the credit derivatives.
The $447 billion is the amount of principal the company has protected, but how that translates to actual losses is difficult to forecast without detail about the real risk. But even if AIG does not ultimately make payouts on the credit default contracts, it could have to post more collateral and write down the derivatives as markets gyrate. Financial companies have continually underestimated their potential risk during the credit crisis, and this time may not be different.
"There is substantial risk in that credit derivatives book," said Sean Egan, co-founder of rating agency Egan-Jones Rating Co. AIG declined to comment. The government has a major role in AIG's operations now - it essentially named a new chief executive, Edward Liddy, and owns nearly 80 percent of the company's stock.
But the government is widely expected to sell off AIG's assets to get its money back, rather than aggressively pursue new business, because the United States' main priority is to get its money back, rather than to maximize profit for shareholders, experts said.
"I can't imagine they'll be in business creation mode," said Dan Alpert, a banker at Westwood Capital in New York. Customers, meanwhile, are likely to try to reduce their business with AIG. Worried clients in Singapore thronged the office of an AIG unit earlier this week to try to redeem their policies. Press reports said the same happened elsewhere in Asia, one of AIG's most important markets.
"To say that confidence has been shaken is an understatement. In the insurance business, trust is of the utmost importance," said Walter Todd, portfolio manager at Greenwood Capital Associates in Greenwood, South Carolina. In other words, AIG can't grow out of its problems, and will in fact likely be forced to shrink.
But selling off assets to meet obligations is difficult when most other financial institutions around the world are reducing the assets, depressing valuations. When it's all said and done, AIG might not have enough assets to meet its obligations, which is why the company's corporate bonds are trading at less than 50 cents on the dollar, analysts said.
"Attorneys will spend the next five years sorting through this mess," said Egan-Jones' Egan.
Rupee trims losses
Ends at 46.42/43
Rupee trimmed losses to close at the day's high on Thursday helped by dollar selling by the central bank and a recovery in the local share market, which slumped more than 5 percent in early trade.
Rupee ended at 46.42/43 per dollar, still 0.2 percent weaker than 46.33/35 at close on Wednesday. On Tuesday, it fell to 46.99, its lowest since July 2006, according to Reuters data.
Asian Markets Step In Wall Street’s Shoes
Markets In Philippines, New Zealand Plunge By More Than 3%
The stock markets across the Asian region were trading sharply lower, led by banks, after Wall Street plunged to a three-year low overnight amid concerns that a government bailout of troubled American International Group might not stem the financial turmoil. The U.S. government's bailout of the beleaguered insurer American International Group failed to allay investor concerns about further fallout from the credit crunch and the U.S. stocks finished at a three-year low on yesterday. The Dow Jones Industrial Average plunged 4.1% and the tech-dominated Nasdaq composite index nose-dived 4.9%.
Crude oil prices held mostly steady in the Asian session, trading at $96.83 a barrel, down $0.34, by 5:22 a.m. ET. The contract for October settlement shot up $6 a barrel Wednesday, on fears of a spreading crisis in the U.S. financial sector, and settled at $97.16 a barrel on the New York Mercantile Exchange.
In the currency market, the U.S. dollar traded in the lower 105-yen levels in late Tokyo deals, up from the upper 104-yen range in early trade. The dollar closed Wednesday's session in the lower 105-yen levels. The dollar met with broad selling on heightened fears about the U.S. financial sector.
The South Korean won finished at 1,153.3 a dollar; down 37.3 from Wednesday's close of 1,129.9 a dollar. Foreign purchased the dollar after dumping shares in the local stock market.
The Australian dollar ended the local session slightly weaker amid a surge in the price of gold and weaker financial markets. The Aussie closed at US$0.7986-0.7990, down from Wednesday's close of US$0.80110-8015.
The New Zealand dollar strengthened against the U.S. dollar amid increasing concerns about the recent developments in the U.S. financial sector. The kiwi was quoted at US$0.6640-0.6650 in late local trade, up from Wednesday's close of US$0.6583-0.6589.
Coming back in Asian equities, the Japanese market closed sharply lower, but off the day's low, reversing yesterday's gains. The key Nikkei 225 index slid 2.2% to a three-year closing low, with financial stocks tumbling on the back of growing crisis in the U.S. credit markets. The benchmark Nikkei index shed 260.49 points to end at 11,489.30, its lowest close since June 2005. The broader Topix lost 23.75 points or 2.1% to finish at 1,097.68.
On the economic front, the indices of tertiary industry activity in Japan increased 1.2% in July to a seasonally adjusted score of 110.6 from previous month, while nationwide department store sales continued to decline for the sixth month in a row in August as fears of economic slowdown and higher prices reduced household spending. Japan Department Stores Association said that nationwide department store sales decreased 3.1% on year in August, quicker than a 2.5% fall seen in July. Meanwhile, machine tool orders fell 13.9% on year in August.
The Bank of Japan cut its assessment on business investment in its monthly economic report, citing the impact of weaker corporate profits. The central bank reiterated that economic growth was sluggish due to higher energy costs and weakening export growth, keeping its overall assessment unchanged.
The Chinese stock market closed lower, extending its losses for the third consecutive trading session. The benchmark Shanghai Composite Index closed down 33.21 points or 1.72% at 1,895.84, recovering substantially from the day's low of 1,802.33.
Hong Kong stocks went on a wild roller-coaster ride before ending little changed, with the session highlighting investor worries about a raging global financial crisis as well as anguish over beaten-down valuations.
In a stunning turnaround, the benchmark Hang Seng Index lost more than 1,350 points in the morning session to its lowest level in more than two years, only to claw back all of the lost ground and then some in the closing moments. The index, which lost 15.2% in the previous six sessions, finally ended 0.03% lower at 17,632.46.
On the economic front, Hong Kong's seasonally adjusted unemployment rate stood at 3.2% in June - August 2008, same as that in May - July 2008 which was the lowest level since early 1998. On the other hand, the underemployment rate also held stable at 1.9% in both periods.
In another data release, the volume of Hong Kong's total exports and imports of goods increased by 7.3% and 10.9% in July 2008, over a year earlier. Prices of total exports and imports of goods increased by 4.9% and 5.9% respectively.
The sharp recovery was aided by news that the Federal Reserve and other major central banks planned to inject hundreds of billions of dollars worth of liquidity into the financial system in a bid to thaw frozen short-term money markets.
The Australian stock market tumbled to close near three-year low, extending losses for the fourth consecutive trading session. The key index started off sharply lower, tracking Wall Street's slump overnight, and fell as much as 3% in intraday trading. However, bargain hunting emerged in late trade and the key index recovered some ground to finish 2.4% lower. Financial stocks tumbled on the back of persisting credit market concerns, but gold miners surged after the price of the precious metal recorded its biggest one-day gain in nine years on Wednesday.
The benchmark S&P/ASX 200 index gave away 114.9 points to end at 4,607.3, its lowest close since December 2005. The market has fallen 6% so far this week. Meanwhile, the broader All Ordinaries index fell 117.8 points or 2.5% to finish at 4,651.9.
On the economic front, an index measuring industrial trends continued to expand, but at a slowing pace in the third quarter, according to a survey by Westpac-ACCI. The index stood at 50.8, slowing down from 53.9 in the previous quarter. However, expectations for the fourth quarter are firmer, displaying seasonal strength, lifting the Expected Composite Index 1.0 point to 51.2. Meanwhile, the Reserve Bank of Australia said that it sold A$307 million in the forex market in August.
The New Zealand market plunged on, recording the biggest one-day fall in nearly six years. The market started off weak, tracking Wall Street's 4.1% drop overnight, and extended losses as the stock markets across the Asia-Pacific region slumped amid persisting credit jitters. The benchmark NZX index fell 111.0 points or 3.5% to close at 3,158.9 after rising 1.3% on yesterday. The broader NZX All Capital index shed 113.6 points or 3.6% to finish the session at 3,188.1.
The South Korean market closed sharply lower, reversing most of yesterday’s 2.7% gains. Persisting credit concerns overshadowed the economy's designation as a developed market by a global equity index compiler. The benchmark Korea Composite Stock Price Index or Kospi plunged 32.84 points or 2.3% to close the session at 1,392.42 after falling to an intra-day low of 1,366.88. South Korea's inclusion in the Financial Times Stock Exchange advanced market category also did not have a major impact on the market.
The Philippines stock market continued to freefall, after a slight recovery a day earlier, with the main index plunging at 4.25%. The market followed the regional trend which mirrored the overnight plunges on Wall Street as credit dried up and fears rose that more financial companies would fail.
The benchmark PSEi index lost 104.63 points to close at 2,352.37 points from Wednesday's finish of 2,457.00. Yesterday the PSEi was up by 1.45%. While the all-shares index fell 3.68 % to 1,502.15 points. The biggest drop was seen in the prorperty index, which shed around 6%.
In India, a coordinated effort from global central banks to ease a funding squeeze in money markets helped the key benchmark indices reverse sharp early losses and end in green. The Sensex snapped a seven-day losing streak, provisionally gaining 63.61 points. A $21.7-billion deal by British bank Lloyds TSB to prevent another UK victim of the credit crisis also helped ease investor jitters after US stocks hit a three-year low on Wednesday, 17 September 2008.
The BSE 30-share Sensex was up 63.61 points or 0.48% to 13,326.51 as per provisional closing. At the day’s high of 13,346.79 hit in mid-afternoon trade, the Sensex rose 83.89 points. The Sensex opened with a huge downward gap of 550.08 points at 12,712.82. At the day's low of 12,558.14 hit in early trade, the Sensex lost 704.76 points. The S&P CNX Nifty rose 35.70 points or 0.89% to 4,043.95.
Elsewhere, Taiwan's Taiex closed down 2.74% at 5,641.95; Singapore's STI closed at par with 2,419 on screen; Malaysia's KLCI closed down 1.13% at 991.66 and Indonesia's Jakarta Composite index closed up 1.0% at 1,787.67.
In the other part of the world, European shares moved higher in a see-saw session on Thursday morning, as investors bought up banks and miners, although central bank intervention in the money markets served as a reminder of the current stresses in the financial system.
Of national indexes, the U.K. FTSE 100 index rose 1.2% to 4,970.60, the German DAX 30 index advanced 0.4% to 5,881.42 and the French CAC-40 index rose 0.7% to 4,026.85, retaking the 4,000 level. At 11.38 GMT continued to gain further as U.K. FTSE 100 index increased by 1.84% to 5,002.70. The German DAX 30 index increased by 1.3% to 5,937.82, while the French CAC-40 index was up by 1.3% to 4,052.99.
On the economic front, British retailers saw a 1.2% monthly rise in sales volume in August and a 3.3% annual increase, the Office for National Statistics reported today. The largest contribution to growth came from textile, clothing and footwear stores, where sales saw a monthly rise of 4.1%, the ONS said.
Looking ahead for the day the weekly data on Jobless claims from US statistical house, which will be followed by the Philadelphia manufacturing survey for the month of September and also by the leading indicators for the month of August. From Canada we have series of data release, which will start with the leading economic indicators and will be followed by the wholesale sales for the month of July.
Post Session Commentary - Sep 18 2008
Indian markets bounced back after the mid sessions to recover smartly from the dip fall on the back of Finance Minister’s strong statement about India’s financial health led to sustained buying across the sectors. Also the bounce back in Asian markets from days low on relaxation in policies in China for second time this week and along with further pump of $28 billion money into the markets by Japan, Australia and India, also added to positive sentiment. Indian markets today opened on extremely negative note on the back of financial crises across the globe. US red ink led bloody session on market. Further, markets continued to crash as heavyweights took huge beating of the bourses. Finally, markets started recovering in last hours of trading to close with gains. BSE Sensex ended above 13,300 level and NSE Nifty closed above 4,000 mark. From the sectoral front, Oil & Gas, Bank, Capital Goods, and Auto stocks were in limelight as witnessed most of the buying from these baskets. However, Reality, Consumer Durables, Metal and IT stocks remained out of favor as witnessed selling pressure. Mid cap and Small cap stocks also suffered due to negative sentiment as ended with cut of more than 1% and 2% respectively. The market breadth was negative as 1977 stocks closed in red while 676 stocks closed in green and 70 stocks remained unchanged.
According to the Finance minister of India, Indian operations of US based AIG and commercial banks in the country are in sound health. There is no need to worry as AIG''s life and non-life insurance businesses in India are in 26:74 ratio with the Tata.
To protect the depreciating currencies, Asian authorities are discharging money into the markets. Along with that China relaxed its policies for second time this week and Japan, Australia and India pumped a further $28 billion into money markets. Bank of Japan injected an additional $14.35 billion into the short-term money market to provide liquidity. Australian Central Bank added A$23.92 billion, bringing its injection this week to A$11.2 billion. In India, the central bank supplied $1.35 billion to banks. China central bank allowed yields on its three-month bills to drop 4 basis points to at an auction after keeping the rate steady for six month.
The BSE Sensex closed higher by 52.70 points at 13,305.60 and NSE Nifty ended up by 29.90 points at 4,035.70. However, the BSE Mid Caps and Small Caps closed with losses of 60.50 points at 5,079.13 and by 139.32 points at 6,075.43. The BSE Sensex touched intraday high of 13,346.79 and intraday low of 12,558.14.
Gainers from the BSE are Sterlite In (3.46%), HDFC Bank Ltd (3.17%), Reliance (3.16%), NTPC Ltd (3.05%), ICICI Bank Ltd (2.78%), Maruti Suzuki (2.70%), M&M Ltd (2.46%), Reliance Infra (2.43%), TCS Ltd (2.77%), SBI (2.14%) and ONGC (2.02%).
The BSE Oil & Gas index ended up by 206.65 points at 8,972.89 as BPCL (3.24%), Reliance (3.16%), Aban Offshore (3.03%), ONGC Ltd (2.02%), Essar Oil Ltd (1.99%) and HPCL (1.99%) ended in positive territory.
The BSE Bank index closed higher by 176.67 points at 6,769.63. Gainers are IOC (7.49%), Bank of Baroda (5.80%), Kotak Bank (4.72%), PNB (4.38%), OBC (3.18%) and HDFC Bank Ltd (3.17%).
The BSE Capital Goods index gained 105.59 points to close at 11,248.50 Major gainers are Suzlon Energy (6.54%), Siemens Ltd (2.64%), Punj Lloyd (2.59%), Aiaengineer (1.98%), ABB Ltd (1.63%) and L&T Ltd (1.48%).
The BSE Reality index plunged 178.82 points to close at 3,813.11. As Anant Raj (9.26%), Indiabull Real (8.81%), Mahindra Life (8.47%), Penland Ltd (6.82%), Unitech Ltd (4.46%) and Sobha Dev (3.57%) closed in negative territory.
The BSE Consumer Durables index dropped by 133.11 points to close at 3,161.87. As Blue Star L (6.91%), Rajesh Export (6.26%), Videocon Ind (3.89%) and Titan Ind (3.60%) closed in negative territory.
The BSE Metal index lost 124.88 points to close at 9,690.05. Major losers are Gujarat NRE C (8.27%), Sesa Goa Ltd (7.66%), NMDC Ltd (7.09%), JSW SL (6.58%), Wespan Gujarat Sr (6.24%) and NALCO (4.98%).
BSE Bulk Deals to Watch - Sep 18 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
18/9/2008 523395 3M INDIA LTD ALLARD GROWTH FUND B 96116 1485.00
18/9/2008 523395 3M INDIA LTD CITIGROUP GLOBAL MARKETS MAURITIUS PVT LTD S 126518 1485.00
18/9/2008 532727 ADHUNIK MET DEUTSCHE SECURITIES MAURITIUS LIMITED B 604889 69.50
18/9/2008 532727 ADHUNIK MET MORGAN STANLEY MAURITIUS COMPANY LIMITED S 606533 69.51
18/9/2008 531429 ADVEN COM SE HET FINANCE PVT. LTD B 100000 4.68
18/9/2008 512642 ARTILL BIO-I DONTHIREDDY BALACHANDRA REDDY B 16609 2.70
18/9/2008 503940 ASIAN ELECT J P M S L AC COPTHALL MAURITIUS INVESTMENT LTD B 710302 65.45
18/9/2008 503940 ASIAN ELECT MORGAN STANLEY MAURITIUS COMPANY LIMITED S 710302 65.45
18/9/2008 530355 ASIAN OILFIE VSB INVESTMENTS PVT LTD S 100000 88.50
18/9/2008 530355 ASIAN OILFIE VSB INVESTMENTS P LTD S 100000 88.75
18/9/2008 533016 AUSTRAL COKE OPG SECURITIES P LTD B 207007 259.46
18/9/2008 533016 AUSTRAL COKE OPG SECURITIES P LTD S 207007 259.47
18/9/2008 505036 AUTOMO COR G ZA CAPITAL LLP AC ZAIMF MAURITIUS LIMITED B 168822 220.00
18/9/2008 505036 AUTOMO COR G GOLDMAN SACHS INVESTMENT MAURITIUS LTD AC SHORT TERM S 168822 220.00
18/9/2008 530095 BHAGWAND MET ASHOK M DALMIA B 18976 4.98
18/9/2008 532413 CEREBRA INT IMTIYAZ IBRAHIMBHAI DESAI B 131725 26.54
18/9/2008 532413 CEREBRA INT SURESH VALANI B 60000 26.00
18/9/2008 532413 CEREBRA INT DIPAK RAMNIKLAL SHAH B 50000 25.51
18/9/2008 532413 CEREBRA INT RAVI P B 40000 28.43
18/9/2008 532413 CEREBRA INT ANANDH T P S 44931 25.50
18/9/2008 532413 CEREBRA INT DIPAK RAMNIKLAL SHAH S 50000 28.00
18/9/2008 532413 CEREBRA INT SUNIL RAHEJA S 100000 25.65
18/9/2008 517326 CMC LTD ZA CAPITAL LLP AC ZAIMF MAURITIUS LIMITED B 183015 493.50
18/9/2008 517326 CMC LTD GOLDMAN SACHS INVESTMENT MAURITIUS LTD AC SHORT TERM S 183015 493.50
18/9/2008 520022 DEN SO INDIA ALLARD GROWTH FUND B 212631 58.00
18/9/2008 520022 DEN SO INDIA GORDON E AND BETTY I MOORE FOUNDATION B 127900 57.50
18/9/2008 520022 DEN SO INDIA CITIGROUP GLOBAL MARKETS MAURITIUS PVT LTD S 281441 58.00
18/9/2008 520022 DEN SO INDIA CLSA MAURITIUS LIMITED S 1334056 57.50
18/9/2008 523890 DS KULKARNI DEUTSCHE SECURITIES MAURITIUS LIMITED B 856581 68.50
18/9/2008 523890 DS KULKARNI MORGAN STANLEY MAURITIUS COMPANY LIMITED S 856581 68.50
18/9/2008 500128 ELECTROSTEEL CASTINGS LTD. TRAFELET CO UK LLC AC DELTA FUND MANAGEMENT LTD B 3131000 25.65
18/9/2008 500128 ELECTROSTEEL CASTINGS LTD. MORGAN STANLEY MAURITIUS COMPANY LIMITED S 3205500 25.64
18/9/2008 513059 G.S. AUTO HARDIK M MITHANI B 50997 91.47
18/9/2008 513059 G.S. AUTO HARDIK M MITHANI S 45150 90.01
18/9/2008 526367 GANESH HOU C WELLINGTON MANAGEMENT COMPANY LLP B 955202 153.00
18/9/2008 526367 GANESH HOU C MORGAN STANLEY MAURITIUS COMPANY LIMITED S 1105202 153.14
18/9/2008 531137 GEMSTONE INV BHAVESH P PABARI B 20750 56.48
18/9/2008 531439 GOLDSTON TEC BHAVESH PRAKASH PABARI S 121500 114.49
18/9/2008 532836 GREMAC INFRA GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD B 395000 58.00
18/9/2008 532836 GREMAC INFRA MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. S.V. S 395000 58.00
18/9/2008 500160 GTL LIMITED MORGAN STANLEY MAURITIUS COMPANY LIMITED S 634471 180.75
18/9/2008 500185 HINDUS CONST WELLINGTON MANAGEMENT CO L L P B 1223348 79.60
18/9/2008 500185 HINDUS CONST J P M S L AC COPTHALL MAURITIUS INVESTMENT LTD S 1223348 79.60
18/9/2008 532514 INDRA GAS ALLARD GROWTH FUND B 2233162 114.35
18/9/2008 532514 INDRA GAS CLSA MAURITIUS LIMITED S 3134012 114.35
18/9/2008 522263 JMC PROJECT WELLINGTON MANAGEMENT COMPANY LLP B 274431 143.00
18/9/2008 522263 JMC PROJECT MORGAN STANLEY MAURITIUS COMPANY LIMITED S 274431 143.00
18/9/2008 526209 K S OILS LTD DEUTSCHE SECURITIES MAURITIUS LIMITED B 7035960 56.05
18/9/2008 526209 K S OILS LTD MORGAN STANLEY MAURITIUS COMPANY LIMITED B 1950910 52.00
18/9/2008 526209 K S OILS LTD MORGAN STANLEY MAURITIUS COMPANY LIMITED S 9100428 55.15
18/9/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD B 43824 39.56
18/9/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD S 43824 37.83
18/9/2008 531366 KOHINOOR BRO ALKA INDIA LIMITED B 552500 6.01
18/9/2008 531366 KOHINOOR BRO S V ENTERPRISES B 2169551 5.65
18/9/2008 531366 KOHINOOR BRO S V ENTERPRISES S 1715487 5.80
18/9/2008 519570 LAKSHMI OVER MORGAN STANLEY MAURITIUS COMPANY LIMITED S 2566183 275.00
18/9/2008 500260 MADRAS CEMNT ZA CAPITAL LLP AC ZAIMF MAURITIUS LIMITED B 173589 2530.00
18/9/2008 500260 MADRAS CEMNT GOLDMAN SACHS INVESTMENT MAURITIUS LTD AC SHORT TERM S 173589 2530.00
18/9/2008 532408 MEGASOFT LTD DEUTSCHE SECURITIES MAURITIUS LIMITED B 1751086 55.50
18/9/2008 532408 MEGASOFT LTD MORGAN STANLEY MAURITIUS COMPANY LIMITED S 1751086 55.50
18/9/2008 532850 MIC ELECT MORGAN STANLEY MAURITIUS COMPANY LIMITED S 2399820 99.80
18/9/2008 513446 MONNE ISPAT WELLINGTON MANAGEMENT CO L L P B 811946 430.00
18/9/2008 517334 MOTH SUMI SY SAMVARDHANA MOTHERSON FINANCE LTD B 3000000 89.25
18/9/2008 517334 MOTH SUMI SY GANPATI AUTO INDUSTRIES S 3000000 89.25
18/9/2008 500075 NAGA FERT CH TRAFELET CO UK LLC AC DELTA FUND MANAGEMENT LTD B 3500000 29.30
18/9/2008 500075 NAGA FERT CH MORGAN STANLEY MAURITIUS COMPANY LIMITED S 3174500 29.30
18/9/2008 531996 ODYSSEY CORP MOHAMMEDALI EBRAHIM GHEEWALA B 27000 37.15
18/9/2008 517195 ORG INFORMAT DEUTSCHE SECURITIES MAURITIUS LIMITED B 770179 24.80
18/9/2008 517195 ORG INFORMAT MORGAN STANLEY MAURITIUS COMPANY LIMITED S 770179 24.80
18/9/2008 530555 PARAMO COMMU DEUTSCHE SECURITIES MAURITIUS LIMITED B 5040175 15.49
18/9/2008 530555 PARAMO COMMU MORGAN STANLEY MAURITIUS COMPANY LIMITED S 5040175 15.49
18/9/2008 531746 PRAJAY ENG S WELLINGTON MANAGEMENT COMPANY LLP B 300000 47.15
18/9/2008 531746 PRAJAY ENG S MORGAN STANLEY MAURITIUS COMPANY LIMITED S 300000 47.15
18/9/2008 526801 PSL LIMITED SWISS FINANCE CORP MAURITIUS LTD B 671000 280.00
18/9/2008 526801 PSL LIMITED GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD S 579889 280.00
18/9/2008 532524 PTC INDIA MORGAN STANLEY MAURITIUS COMPANY LIMITED S 1449612 65.50
18/9/2008 531228 RANDER CORPO GIRISH GULATI S 33183 5.75
18/9/2008 500366 ROLTA IND MORGAN STANLEY MAURITIUS COMPANY LIMITED S 1989898 249.50
18/9/2008 500368 RUCHI SOYA DEUTSCHE SECURITIES MAURITIUS LIMITED B 4790186 76.55
18/9/2008 500368 RUCHI SOYA GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD S 2202641 76.60
18/9/2008 500368 RUCHI SOYA MORGAN STANLEY MAURITIUS COMPANY LIMITED S 2587545 76.50
18/9/2008 514304 S. KUMARS NAT MORGAN STANLEY MAURITIUS COMPANY LIMITED S 13194126 54.66
18/9/2008 520086 SICAL LOG INDEA LONG TERM OPPORTUNITIES MASTER FUND B 1013673 68.50
18/9/2008 520086 SICAL LOG MACQUARIE BANK LIMITED S 1013673 68.50
18/9/2008 523756 SREI INFRA MORGAN STANLEY MAURITIUS COMPANY LIMITED S 766224 84.99
18/9/2008 503806 SRF LIMITED* ZA CAPITAL LLP AC ZAIMF MAURITIUS LIMITED B 801719 116.75
18/9/2008 503806 SRF LIMITED* GOLDMAN SACHS INVESTMENT MAURITIUS LTD AC SHORT TERM S 801719 116.75
18/9/2008 532374 STER TECH MORGAN STANLEY MAURITIUS COMPANY LIMITED S 484612 153.46
18/9/2008 532887 SUJANATOWER DEUTSCHE SECURITIES MAURITIUS LIMITED B 1500000 46.25
18/9/2008 532887 SUJANATOWER SWISS FINANCE CORP MAURITIUS LTD B 521000 48.93
18/9/2008 532887 SUJANATOWER CITIGROUP GLOBAL MARKETS MAURITIUS PVT LTD S 521000 48.92
18/9/2008 532887 SUJANATOWER MORGAN STANLEY MAURITIUS COMPANY LIMITED S 709943 46.25
18/9/2008 532887 SUJANATOWER MORGAN STANLEY INVESTMENTS MAURITIUS LIMITED S 790057 46.25
18/9/2008 532691 TULIP TELE SWISS FINANCE CORP MAURITIUS LTD B 343077 942.99
18/9/2008 532691 TULIP TELE MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. S.V. S 343000 943.00
18/9/2008 517146 USHA MARTIN DEUTSCHE SECURITIES MAURITIUS LIMITED B 5365185 59.00
18/9/2008 517146 USHA MARTIN MORGAN STANLEY MAURITIUS COMPANY LIMITED S 5365185 59.00
18/9/2008 532411 VISESH INFOT BNP PARIBAS ARBITRAGE GDR S 620000 14.29
18/9/2008 500575 VOLTAS LTD MORGAN STANLEY MAURITIUS COMPANY LIMITED S 1816780 115.70
Sensex recovers dramatically
Today the market saw a smart rally despite weakness in global markets. Despite slipping over 700 points in early trades, the Sensex witnessed a relief rally led by across-the-spectrum buying. The index recovered from its lows and closed posstive, as value buying emerged at lower levels. The Sensex received major support from banking, oil & gas and power stocks. The market gathered steam towards the close and the Sensex crossed the mark of 13,300 and touched the day's high of 13,347 before closing at 13,263, up 52 points. The Nifty too bounced back sharply and advanced 30 points to close at 4,038.
The breadth of the market was extremely negative, as of the 2,690 stocks traded on the BSE, where only 676 stocks advanced, 1,927 stocks advanced. 70 stocks ended unchanged. Most of the sectoral indices closed with significant gains. The BSE Bankex was the major gainer and soared 2.68% followed by the BSE Oil & Gas index (up 2.36%) and the BSE CG index (up 0.95%). However, the BSE Realty and BSE CD index slipped over 4% each. The BSE IT index, BSE Teck index, BSE HC index and the BSE Metal index closed with marginal losses.
Attracting strong buying support, Sterlite Industries surged by 3.43% at Rs454.50, HDFC Bank shot up by 3.17% at Rs1,222, Reliance Industries jumped by 3.16% at Rs1,932.85, NTPC advanced by 3.05% at Rs174, ICICI Bank scaled up 2.78% at Rs575.85, Maruti Suzuki India zoomed 2.70% at Rs718.45, Mahindra & Mahindra added 2.46% at Rs550.55, Reliance Infrastructure vaulted by 2.43% at Rs849.60, ONGC firmed up by 2.14% at Rs999.15 and ACC climbed 2.02% at Rs601.35. Among the laggards, Ranbaxy Laboratories slipped 10.06% at Rs340.95, Jaiprakash Associates shed 6.73% at Rs127.40, Satyam Computer Services declined by 4.16% at Rs335, while Infosys Technologies, Tata Steel, DLF, Tata Power and HDFC fell 1-4% each.
Banking stocks witnessed sustained buying support. Indian Overseas Bank soared 7.49% at Rs110.45, Bank of Baroda added 5.80% at Rs327.35, Kotak Bank scaled up by 4.72% at Rs579.45 and Punjab National Bank gained 4.38% at Rs517.
Over 1.97 crore shares of Reliance Natural Resources changed hands on the BSE followed by IFCI (1.34 crore shares), S Kumars (1.33 crore shares), KS Oils (1.20 crore shares) and Jaiprakash Associates (1.10 crore shares).
NSE Bulk Deals to Watch - Sep 18 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
18-SEP-2008,APTECHT,Aptech Limited,CREDIT SUISSE (SINGAPORE) LIMITED A/C CREDIT SUISSE (SINGAPO,BUY,327436,175.13,-
18-SEP-2008,GOLDTECH,Goldstone Tech Ltd.,GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD,BUY,253316,114.25,-
18-SEP-2008,ICSA,ICSA (India) Limited,DEUTSCHE SECURITIES MAURITIUS LIMITED,BUY,1075000,269.50,-
18-SEP-2008,IFCI,IFCI Ltd.,AMBIT SECURITIES BROKING PVT. LTD.,BUY,3865143,37.62,-
18-SEP-2008,JAICORPLTD,Jai Corp Limited,DEUTSCHE SECURITIES MAURITIUS LIMITED,BUY,4415770,261.60,-
18-SEP-2008,JMFINANCIL,JM Financial Limited,DEUTSCHE SECURITIES MAURITIUS LIMITED,BUY,1629125,50.45,-
18-SEP-2008,MLL,Mercator Lines Limited,CRESTA FUND LTD. DEUTSCHE BANK,BUY,1600000,55.70,-
18-SEP-2008,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD,BUY,2828297,30.27,-
18-SEP-2008,NIITLTD,NIIT Limited,CITIGROUP GLOBAL MARKETS MAURITIUS PRIVATE LIMITED,BUY,1708559,59.68,-
18-SEP-2008,PRAKASH,Prakash Industries Ltd.,DEUTSCHE SECURITIES MAURITIUS LIMITED,BUY,2550000,115.00,-
18-SEP-2008,RELCAPITAL,Reliance Capital Limited,DEUTSCHE SECURITIES MAURITIUS LIMITED,BUY,2792887,1057.35,-
18-SEP-2008,RELCAPITAL,Reliance Capital Limited,MORGAN STANLEY MAURITIUS COMPANY LTD,BUY,206613,1048.85,-
18-SEP-2008,SICAL,Sical Logistics Limited,INDEA ABSOLUTE RETURN FUND,BUY,1013000,68.50,-
18-SEP-2008,SSWL,Steel Strips Wheels Limit,GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD,BUY,380526,101.00,-
18-SEP-2008,SUZLON,Suzlon Energy Limited,J P M S L A/c Copthall Mauritius Investment Ltd,BUY,15551945,195.24,-
18-SEP-2008,SUZLON,Suzlon Energy Limited,MORGAN STANLEY MAURITIUS COMPANY LTD,BUY,33489,198.13,-
18-SEP-2008,ANANTRAJ,Anant Raj Industries Limi,GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD,SELL,2057099,103.01,-
18-SEP-2008,APTECHT,Aptech Limited,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,310000,173.49,-
18-SEP-2008,GOLDTECH,Goldstone Tech Ltd.,MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. SVB,SELL,253316,114.25,-
18-SEP-2008,GOLDTECH,Goldstone Tech Ltd.,PABARI BHAVESH PRAKASH,SELL,100000,114.75,-
18-SEP-2008,IBREALEST,Indiabulls Real Estate Li,GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD,SELL,1724344,190.83,-
18-SEP-2008,ICSA,ICSA (India) Limited,GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD,SELL,1075000,269.50,-
18-SEP-2008,IFCI,IFCI Ltd.,AMBIT SECURITIES BROKING PVT. LTD.,SELL,3807215,37.65,-
18-SEP-2008,IFCI,IFCI Ltd.,CITIGROUP GLOBAL MKTS MAURITIUS PVT LTD- SELL CODE,SELL,6215633,37.58,-
18-SEP-2008,JAICORPLTD,Jai Corp Limited,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,4415770,261.60,-
18-SEP-2008,JMFINANCIL,JM Financial Limited,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,1629125,50.45,-
18-SEP-2008,JPASSOCIAT,Jaiprakash Associates Lim,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,8055110,124.11,-
18-SEP-2008,MLL,Mercator Lines Limited,MAVI INVESTMENT FUND,SELL,1600000,55.70,-
18-SEP-2008,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD,SELL,2828297,30.28,-
18-SEP-2008,NIITLTD,NIIT Limited,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,2302106,59.33,-
18-SEP-2008,PRAKASH,Prakash Industries Ltd.,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,2567500,115.00,-
18-SEP-2008,RELCAPITAL,Reliance Capital Limited,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,2737427,1057.51,-
18-SEP-2008,SICAL,Sical Logistics Limited,MACQUARIE BANK LIMITED,SELL,1013000,68.50,-
18-SEP-2008,SSWL,Steel Strips Wheels Limit,MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. SVB,SELL,380526,101.00,-
18-SEP-2008,SUZLON,Suzlon Energy Limited,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,13029945,194.00,-
Market snaps seven-day losing streak; turnover spurts
A coordinated effort from global central banks to ease a funding squeeze in money markets helped the key benchmark indices reverse sharp early losses and end in green. The Sensex snapped its seven-day losing streak, gaining 52.70 points. A $21.7-billion deal by British bank Lloyds TSB to prevent another UK victim of the credit crisis also helped ease investor jitters after US stocks hit a three-year low on Wednesday, 17 September 2008.
Six of the globe's top central banks today, 18 September 2008, announced a series of measures to improve dollar liquidity in global money markets that this week had virtually frozen up completely. The US Federal Reserve said it had authorised a colossal $180 billion expansion of its temporary reciprocal currency arrangements, or swap lines.
Finance Minister P Chidambaram today, 18 September 2008, said more steps would be taken to provide liquidity if cash conditions were tight, adding global turmoil would partly impact credit availability in India. He also said public sector banks have virtually no exposure to the debt of Lehman Brothers, which filed for bankruptcy in the United States this week.
As per the provisional data released by the stock exchanges after trading hours, foreign funds today, 18 September 2008, sold shares worth a net Rs 1201.64 crore. Domestic funds bought shares worth a net Rs 1,192.20 crore.
The BSE 30-share Sensex rose 52.70 points or 0.4%, to close at 13,315.60. At the day’s high of 13,346.79 hit in mid-afternoon trade, the Sensex rose 83.89 points. The Sensex opened with a huge downward gap of 550.08 points at 12,712.82. At the day's low of 12,558.14 hit in early trade, the Sensex lost 704.76 points.
The S&P CNX Nifty rose 29.90 points or 0.75% at 4038.15. Nifty lost 208.70 points at the day’s low of 3799.55. Nifty September 2008 futures were at 4044, at a premium of 5.85 points as compared to spot closing.
The BSE Sensex had lost 1682.07 points or 11.25% in seven consecutive trading sessions from a recent high of 14,944.97 on 8 September 2008 to 13,262.90 on Wednesday, 17 September 2008. The barometer index is down 6,971.39 points or 34.36% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 7,891.17 points or 37.21% below its all-time high of 21,206.77 struck on 10 January 2008.
High turnover was the hallmark of today's trading session. NSE’s futures & options (F&O) segment clocked turnover of Rs 74,094.75 crore, as compared to Rs 58,546.48 crore on Wednesday, 17 September 2008. Turnover in the cash segment of BSE amounted to Rs 7383 crore, as against turnover of Rs 5813 crore on Wednesday, 17 September 2008.
The market breadth was weak on BSE with 1914 shares declining as compared to 703 that rose. 67 remained unchanged.
The BSE Mid-Cap index lost 1.18% to 5,079.13 and the BSE Small-Cap index fell 2.24% to 6,075.43.
European bourses were higher after subdued start. Key benchmark indices in UK, Germany and France were up by between 0.95% and 1.88%. Asian markets, too, rebounded from early lows. Key benchmark indices in China, Hong Kong, South Korea, Japan, Taiwan, and were down by between 0.03% and 2.74%. Singapore’s Straits Times ended unchanged.
Earlier in the day Asian authorities poured more cash into money markets today, 18 September 2008 and sprang to the defence of tumbling currencies, bonds and stocks to prevent upheaval on Wall Street from shattering regional confidence. In India, the central bank supplied banks with Rs 6240 crore ($1.35 billion), its biggest injection in at least a month.
Among the 30-member Sensex pack, 17 slipped while the rest gained.
Banking shares vaulted ahead of the inflation data for the 12 months to 6 September 2008 due after market hours today, 18 September 2008. Bankex shot up 2.68% to 6,769.63 and was the top gainer among the sectoral indices on BSE. HDFC Bank, the country’s largest private sector bank in terms of net profit rose 3.82% to Rs 1229.70 after touching a low of Rs 1090. It was the top gainer from Sensex pack.
India’s largest state run bank in terms of net assets State Bank of India advanced 1.75% to Rs 1555, off day’s low of Rs 1435. As per recent reports, the bank paid 48% higher advance tax to Rs 1560 crore in Q2 September 2008 over Q2 September 2007.
India's largest private sector bank in terms of net profit ICICI Bank also staged a comeback climbing 2.98% to Rs 577, off sharply from day’s low of Rs 518. ICICI Bank on Wednesday, 17 September 2008 denied rumours of top management selling shares over the last few days.
The bank said on Tuesday, 16 September 2008, it held 57 million euros ($81 million) of senior bonds issued by Lehman Brothers, and would increase its provision on the debt by about $28 million to cover half of that exposure. Brokerage Edelweiss Capital said it expected ICICI to post about $200 million in losses on bonds, including debt issued by Lehman.
Mid-cap banking shares also joined the rally. Indian Overseas Bank (up 7.49% to Rs 110.45), Bank of Baroda (up 5.98% to Rs 327.90), Kotak Mahindra Bank (up 5.36% to Rs 583), Punjab National Bank (up 4.72% to Rs 518.70), and Asia Bank (up 1.67% to Rs 676), surged.
Gains in two heavyweights Reliance Industries and Oil and Natural Gas Corporation propelled the BSE Oil & Gas index by 2.36%, to 8,972.89.
India’s largest private sector firm in terms of market capitalization and oil refiner Reliance Industries rose 3.18% to Rs 1933.20. The stock recovered sharply after hitting a 52-week low of Rs 1764 in opening trade. The company may reportedly start producing crude oil from its Krishna Godavari D6 block by this month end, while the gas production will start towards November-end. The initial oil output from the same block is estimated to be 10,000-15,000 barrels a day, which could be raised to 34,000 barrels with more wells.
India’s top oil exploration firm by market capitalisation Oil and Natural Gas Corporation (ONGC) advanced 2.31% to Rs 1002, off sharply from early low of Rs 935.10. The company on Wednesday, 17 September 2008 said it has agreed to give Rocksource ASA, a Norwegian company, 10% participating interest in deep water block in the eastern offshore.
Sterlite Industries (up 3.35% to Rs 454), Mahindra & Mahindra (up 2.54% to Rs 551), and NTPC (up 3.79% to Rs 175.25), edged higher from Sensex pack.
Ranbaxy Laboratories, India’s top drug maker by sales slumped 9.81% to Rs 341.90 and was the top loser from Sensex pack. The US government has banned more than 30 generic drugs made by the company citing poor quality in two of its Indian factories.
India’s largest private sector steel maker by sales, Tata Steel was down 3.14% to Rs 460. It had touched a 52-week low of Rs 440 in intra-day trade. As per reports, the company paid lower advance tax to Rs 300 crore in Q2 September 2008 as compared to Rs 350 crore in Q2 September 2007. The BSE metal index plunged 3.55%, to 9,814.93.
Bharti Airtel fell 1.18% to Rs 760.95 on 54.04 lakh shares. A block deal of 11.72 lakh shares was struck on the counter at Rs 717 and a block deal of 16.91 lakh shares was struck on the counter at Rs 725 on BSE.
Woes continued for realty stocks as the BSE Realty index slumped to a 52-week low of 3,598.36. It closed 4.48% lower at 3,813.11. DLF (down 3.60% to Rs 394), Anant Raj Industries (down 9.51% to Rs 107), Indiabulls Real Estate (down 9.52% to Rs 190), and Housing Development & Infrastructure (down 3.69% to Rs 206), declined.
Unitech declined 4.26% to Rs 122.35 even as the company said various rumors relating to investment of Lehman Brothers in its Mumbai project are baseless. The company made the clarification after trading hours on Wednesday, 17 September 2008
Jaiprakash Associates (down 7.76% to Rs 126.20), Infosys (down 3.65% to Rs 1518.60) edged lower from the Sensex pack.
Reliance Industries topped the turnover charts on BSE with turnover of Rs 452.40 crore followed by Reliance Capital (Rs 442.25 crore), Bharti Airtel (Rs 391.40 crore), ICICI Bank (Rs 254 crore) and HDFC (Rs 222.30 crore), in that order.
Reliance Natural Resources led the volumes chart on BSE clocking volumes of 1.97 crore shares followed by S Kumar Nationwide (1.34 crore shares), IFCI (1.34 crore shares), K S Oils (1.21 crore shares) and Jaiprakash Associates (1.10 crore shares), in that order.
US crude oil prices jumped $6.01 to $97.16 a barrel, on Wednesday, 17 September 2008 as a US government report showed nationwide energy inventories fell in the aftermath of the Gulf Coast hurricanes and as the greenback slid against the euro.
Reliance Capital surged 4.74% to Rs 1119, off session’s low of Rs 974.70 after about 27.30 lakh shares or 1.1% of the company's equity changed hands in a block deal on NSE at Rs 1,057 each.
Wall Street tumbled to a three-year low on Wednesday, 17 September 2008 as the Federal Reserve's rescue of insurer AIG failed to calm a crisis of confidence in global markets. The Dow Jones industrial average plunged 449.36 points, or 4.06%, to 10,609.66. The S&P 500 index slipped 57.21 points, or 4.71%, to 1,156.39, while the Nasdaq Composite index declined 109.05 points, or 4.94%, to 2,098.85.
Its PANIC TIME !
There is a serious crisis of confidence. The world's banks are no more lending to each other and every body wants to sit on liquidity. The US treasury three month bill were yielding 0.02% , their lowest yield since World War II, indicating the investor anxiety to buy safety at any cost. The rise in Gold also indicates that. All the world's bourses are at multi-year lows.
As this is a situation that no one amongst the working world citizens have seen, we should not treat this as another correction , that will pass. Brace for a sharp morning fall as the July 15 levels, 3790 in the Nifty and 12514 in the Sensex, come up for close inspection in the opening trade. The weakness in non-precious metals, construction, brokerages, real estate should continue and cement , engineering and banks will join the slide. We are moving to new lower levels today. Don't catch the falling knife, unless if you are donning the Option gloves.
Get ready to TUMBLE !
Key benchmark indices are likely to witness a gap down opening today, 18 September 2008 as fears that the global credit crisis could worsen further rattled investor confidence across the globe. Reports of Morgan Stanley being the next victim of credit crunch and spurt in crude oil may dampen the sentiment further. Volatility will be high ahead of the inflation data, which will be announced after market hours today, 18 September 2008.
The wholesale price index figure in the 12 months to 6 September 2008 will be watched closely. 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.
US crude oil prices jumped $6.01, the largest one-day percentage gain in three months, to $97.16 a barrel, on Wednesday, 17 September 2008 as a US government report showed nationwide energy inventories fell in the aftermath of the Gulf Coast hurricanes and as the greenback slid against the euro.
Asian markets tumbled today, 18 September 2008, tracking declines on Wall Street as investors feared more companies could succumb to the global financial crisis that forced the US to bail out troubled insurer American International Group Inc.
China's Shanghai Composite plunged 5.12% or 98.80 points at 1,830.24, Hong Kong's Hang Seng slipped 5.19% or 914.66 points at 16,722.53, Japan's Nikkei tumbled 3.18% or 374.22 points at 11,375.57, Singapore's Straits Times was down 3.72% or 89.98 points at 2,329.31, South Korea's Seoul Composite declined 3.57% or 50.88 points at 1,374.38 and Taiwan's Taiwan Weighted fell 3.50% or 202.83 points at 5,598.04.
Wall Street tumbled to a three-year low on Wednesday, 17 September 2008 as the Federal Reserve's rescue of insurer AIG failed to calm a crisis of confidence in global markets. The Dow Jones industrial average plunged 449.36 points, or 4.06%, to 10,609.66. The S&P 500 index slipped 57.21 points, or 4.71%, to 1,156.39, while the Nasdaq Composite index declined 109.05 points, or 4.94%, to 2,098.85.
Foreign institutional investors (FIIs) were net equity sellers worth Rs 1064.17 crore while mutual funds bought shares worth Rs 948.93 crore on Wednesday, 17 September 2008, according to provisional data on NSE.
FIIs were net buyers of Rs 382.80 crore in the futures & options segment on Wednesday, 17 September 2008. They were net buyers of index futures to the tune of Rs 267.58 crore and sold index options worth Rs 72.33 crore. They were net buyers of stock futures to the tune of Rs 196.31 crore and sold stock options worth Rs 8.87 crore
Pre Session Commentary - Sep 18 2008
The Indian Market is expected to have gap down opening as US markets closed in deep red and Asian markets are trading weak along with surge in crude oil. On Wednesday, Indian markets remained edgy for the whole day and closed in negative territory after giving up its initial gains. Rise in crude oil along with lower Asian markets, fueled the negative sentiments. Crude oil for October delivery raised $3.57, to $94.72 a barrel on the New York Mercantile Exchange. Domestic markets opened on upbeat note tracking positive cues from the global markets as AIG rescued by Fed and Barclays buys Lehman U.S. unit. Market was not able to sustain the initial momentum and slipped soon after start. Further markets continued to extend its losses though struggled to recover after mid session but slipped again. Finally, markets closed with losses on sustained selling pressure. From the sectoral front, Reality stocks remained in bear’s grip as lost more than 4% and closed in red along with all other indices. Selling pressure over the market was contributed mainly by the Bank, Metal, Oil & Gas, Capital Goods and Pharma stocks. Mid cap and Small cap stocks also remained out of favor as lost more than 1%.
The BSE Sensex closed lower by 255.90 points at 13,262.90 and NSE Nifty ended down by 66.65 points at 4,074.90. The BSE Mid Caps and Small Caps closed with losses of 77.62 points at 5,139.63 and by 74.66 points at 6,214.75. We expect that market may fall further during the trading session and a major concern for the market will be the liquidity concerns in the global markets. Also, the inflation data for the week ended 6th September 2008, due to be released today evening after market hours will give further directions to the market.
On Wednesday, the US market closed in deep red. In a bid to protect investors from so-called "naked" short selling of securities, the Securities and Exchange Commission is requiring short sellers and their broker dealers to deliver securities by the close of business on the settlement date, starting Thursday. The new SEC rules adopted Wednesday remove an exception for market makers in options on stocks from rules restricting naked short-selling and tighten anti-fraud regulations related to that activity. Fed’s bail out of AIG for $85 billion and Barclay’s plan to buy Lehman units fails to stem the fall in financial stocks. Some of the biggest losers include Boeing, JP Morgan, American Express and Walmart. Crude oil for October delivery raised $6.01, to settle at $97.16 a barrel on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed lower by 449.36 points to close at 10,609.66 followed by the NASDAQ index ended down by 109.05 points at 2,098.85 and the S&P 500 (SPX) lost 57.21 points to close at 1,156.39.
Indian ADRs ended down. In technology sector, Satyam ended lower by (6.59%) followed by Infosys dropped by (5.63%), Wipro lost (5.34%) and Patni Computers fell (2.35%). In banking sector ICICI Bank and HDFC Bank plunged (7.66%) and (5.27%). In telecommunication sector, MTNL and Tata Communication plunged (5.94%) and (2.81%). Sterlite industries decreased by (10.83%).
Today the major stock markets in Asia are trading lower on Wall Street losses over night. Hang Seng index is trading down by 717.51 points at 16,919.68 along with Japan’s Nikkei lower by 374.22 points at 11,375.57, Taiwan Weighted lost 215.20 points at 5,585.67 and Singapore''s Straits fell 82.86 points at 2,336.43.
The FIIs on Wednesday stood as net seller in equity and net buyer in debt. Gross equity purchased stood at Rs3,092.40 Crore and gross debt purchased stood at Rs9,047.90 Crore while the gross equity sold stood at Rs4,333.00 Crore and gross debt sold stood at Rs144.00Crore. Therefore, the net investment of equity reported was (Rs1,240.60) Crore and net debt was Rs8,904.00 Crore.
On Wednesday India''s rupee rebounded from a two year low, after the central bank announced measures to boost dollar supply and curb exchange rate swings. The rupee rose 1.2% to close at 46.34/35 per dollar against Tuesday’s close of 46.89/90 and touched a high of 46.26 and a low of 46.72.
Today, Nifty has support at 3,867 and resistance at 4,126 and BSE Sensex has support at 12,714 and resistance at 13,528.
Morning Call - Sep 18 2008
Market Grape Wine :
In House:
Nifty at a support of 3915 and 3830 with resistance at 4120 and 4167.
Cash: Sell RELIANCE below 1873 target 1810 with S/L 1900.
Cash: Sell SBI below 1528 target 1475 with S/L 1550.
Future: Sell ICICI BANK below 562 target 525 with S/L 575.
Future: Sell REL INFRA below 832 targets 800 with S/L 845.
Out House:
Markets at a support of 13045 & 12819 and resistance at 13425 & 13153 levels .
Markets to be very volatile , maintain strict stop loss for your trades .
Buy : LNT at dips
Buy : PunjLLoyd at dips
Buy : SBIN at dips
Buy : Kohinoor at dips
Dark Horse : HLL , ITC , INFY , LNT
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Sharp fall in global indices indicate negative open
Weakness across the global markets and rising global crude oil prices may drag down the local indices. Nervousness in the market is likely to continue following a slump in the overnight US market, escalating global crude oil prices and weak Asian indices in the morning trades. All the leading Asian indices like the Nikkie, the Hang Seng, the Straits Times, the Kosps index and the Jakarta index are down over 2-4% each. Although the domestic indices moved up sharply in the last couple of sessions, intra-day volatility remains the major concern. Among the local indices, the Nifty may slip to 3950 while on the upside it could test the 4040 level. The Sensex has a likely support at 13100 and could test higher levels at 13400.
US indices tumbled as the government's emergency rescue of AIG amplified fears about the stability of financial markets, as result the Dow Jones slumped 449 points to close at 10610 while the Nasdaq ended 109 points lower at 2099 on Wednesday.
All the Indian ADRs fell in tune with the broader market. Rediff led the slump and tumbled 8.16% followed by ICICI Bank down by 7.66%, Satyam, Infosys, Wipro, HDFC Bank and MTNL slipped over 5-6% each. Dr Reddy, Tata Motors, VSNL and Patni Computers dropped over 2-4% each.
Crude oil prices moved up sharply as Wall Street's precipitous decline sent investors scrambling to find other places to park their money. The Nymex light crude oil for September series rising by $6.01 at $97.16 a barrel. In the commodity space, the Comex gold for December delivery flared up by $70 to settle at $850.50 a troy ounce.
All that glitters is gold!
Better an ounce of luck than a pound of gold.
Investors are making a beeline for safe-haven assets like government bonds and gold. The bewildered bulls seem to be running out of luck in the equity markets. The mayhem is going to continue on local bourses, as global conditions remain fragile despite efforts by governments and central banks to stem the carnage.
There is talk of more failures in the western financial space, which may lead to further bailouts or M&As. Morgan Stanley is reportedly in talks for a partner, while Washington Mutual has also put itself up for sale. Barclays is acquiring Lehman Brothers' core businesses in North America. Lloyds TSB of London is buying embattled British home mortgage lender HBOS.
Despite the US government's rescue of insurance giant AIG, sentiment across global markets continues to be extremely nervous amid heightened fears of more trouble ahead. The inter-bank market in the west has seized up as banks refuse to lend to each other. Trust is hard to come by these days even as cost of borrowings has shot up. Oil prices have climbed as back-to-back hurricanes have hit US oil and refining facilities.
US securities regulator, the SEC, has come down hard on short sellers to prevent the slide in financial stocks. And, the IMF chief warns that the worst of the global financial meltdown may still lie ahead.
Asian stocks this morning have tumbled to the lowest in three years. European shares ended Wednesday with big losses for the third straight session. In Russia, the regulators halted stock market trading for a second straight day on Wednesday.
Confidence in the global economy has been shaken as the financial turmoil in the US worsens. Risk aversion has increased. No market or asset class is being spared, as investors' confidence is at an all-time low and plunging further.
We expect another weak opening for the Indian stocks amid the worldwide gloom. Any possibility of a rally will hinge on a recovery in global markets, even though the Prime Minister has expressed confidence in the Indian economy yet again. Of course, the inflation guessing may again cause some last half an hour swings.
After a day of relief, US stocks got pounded again on Wednesday, as investors feared that the ongoing financial turbulence might lead to more government bailouts and further consolidation among desperate banks and securities firms.
The Dow Jones Industrial Average skidded to its lowest close since late 2005 amid a virtual strike in the inter-bank market. Down more than 800 points, or 7%, so far this week, the Dow slid 449.36 points, or 4.1%, to finish at 10,609.66, its lowest closing level since Nov. 9, 2005.
All 30 of the blue-chip indexes' components finished in the red.
The S&P 500 index declined 57.2 points, or 4.7%, to 1,156.39, with financials leading sector losses among the index's 10 industry groups, off 9.2%.
The Nasdaq Composite index dived 109.05 points, or 4.9%, to end at 2,098.85, its first triple-digit decline since the first day of trading after the Sept. 11, 2001 terrorist strikes in New York.
Year-to-date, all three major gauges are down more than 20%.
Selling pressure eased somewhat in the mid-afternoon, as the jump in oil and gold prices boosted the underlying stocks. But the rear-guard action lost steam and the market finished the session just above the worst levels of the day.
Shares of Morgan Stanley and Goldman Sachs suffered their biggest one-day losses ever, falling 27% and 19%, respectively, as federal regulators rushed to tighten rules against short-selling to avoid another major collapse.
In a bid to protect investors from so-called "naked" short selling of securities, the Securities and Exchange Commission (SEC) asked short sellers and their broker dealers to deliver securities by the close of business on the settlement date.
Also weighing on stocks was the Commerce Department's report showing that the estimated count of new building permits for single-family homes fell to a 26-year low last month.
The Treasury Department said that it would sell US$40bn of debt for the Fed to help the central bank deal with the huge cash crunch in the wake of the credit crisis.
Meanwhile, a measure of corporate borrowing costs surged to levels not seen since around the time of the crash of 1987, as the three-month treasury bill rates fell to multi-year lows.
The TED spread measures the difference between what the Treasury pays for three-month loans and what banks charge each other. This shows that banks are charging each other a bigger premium than money lent to the US government.
US light crude oil for October delivery rose US$6.01 to settle at US$97.16 after settling at a seven-month low on Tuesday. Oil prices have plummeted since peaking at US$147.27 a barrel on July 11, as investors have bet that sluggish global growth will diminish oil demand.
Gasoline prices rose overnight, gaining for the 8th day in a row, according to a national survey of credit card activity.
Treasury prices rallied as investors sought safety in government debt, lowering the yield on the benchmark 10-year note to 3.41% from 3.49% Tuesday. In currency trading, the dollar gained versus the euro and the yen.
COMEX gold for December delivery rallied US$70 to settle at US$850.50 an ounce.
European shares continued to tumble for the third straight session. The pan-European Dow Jones Stoxx 600 index finished 2.1% lower at 258.04, its third day of losses in excess of 2%. Banks were by far the worst performers.
The UK's FTSE 100 closed below the 5,000 mark for the first time in three years, dropping 2.3% to 4,912.40. Germany's DAX 30 fell 1.7% to 5,860.98 and the French CAC-40 lost 2.1% to 4,000.11.
In the emerging markets, the Bovespa in Brazil plunged 6.7% to 45,908 while the IPC index in Mexico fell 4.7% to 23,456. The ISE National 30 index in Turkey was down 3.4% to 40,521.
Trading in Russia's major exchanges was suspended for a second day and the finance ministry moved to lend the three largest banks up to $44bn. Trading on the RTS exchange, where listings are denominated in dollars, came to a halt after a morning plunge of more than 6%.
Bulls to dance to global tunes
A turnaround of the early rising trends on the other Asian bourses and a weak opening in equity markets across Europe on concerns over the health of US financial institutions also dampened sentiments on Dalal Street.
Offloading was witnessed all over, especially in the Realty, Bankex and Metal stocks dragging the NSE Nifty index below the 4,000 levels in intra-day. Finally, the BSE benchmark Sensex ended 256 points lower at 13,262 and the NSE Nifty index ended at 4,008 losing 67.
Among the BSE Sectoral indices, BSE Realty index was the top loser (down 4.1%), BSE Bankex index (down 3.8%), BSE Metal index (down 3.5%) and BSE FMCG index (down 3.1%). Even the broader indices i.e. the BSE Mid-Cap and the Small-Cap indices lost over 1% each.
Market breath was weak, 1,740 declined against 886 advances, while, 86 stocks remained unchanged.
Shares of McNally Bharat gained by 1.6%Rs107 after the company announced that it received an order worth Rs871.2mn from Damodar Valley Corporation for design, engineering, supply, erection, testing and commissioning of combined ash slurry disposal system for both coal based Bokaro TPS 'A' 1x(500 MW + 20%) and 'B' (3x210 MW). The scrip touched an intra-day high of Rs110 and a low of Rs106 and recorded volumes of over 4000 shares on BSE.
Shares Hydro S&S Industries ended flat at Rs41. The board of directors of the company approved buy back of equity shares not exceeding maximum buy back price of Rs60/- per equity share under.
The Board had also appointed M/s Keynote Corporate Services Ltd as Managers to the proposed Buy Back Scheme and also to appoint other intermediaries in this regard. The scrip touched an intra-day high of Rs46.7 and a low of Rs40 and recorded volumes of over 14,000 shares on BSE.
Shares of Aurobindo Pharma gained by half a percent to Rs310 after the company announced that it received the tentative approval to manufacture and market Abacavir Sulfate tablets 60mg from the US Food & Drug Administration (USFDA).
The company had earlier received tentative approvals to Abacavir Sulfate Tablets 300mg and Abacavir Sulfate Oral Solution 20mg/ml. This is Aurobindo's 77th ANDA approval from USFDA." The scrip touched an intra-day high of Rs313 and a low of Rs305 and recorded volumes of over 14,000 shares on BSE.
Shares of Surana Telecom rallied by over 14% to Rs32 after the after the board of directors of the company fixed Sept 30 as the commencement date for the buyback of equity shares and end date of buyback as April 20, 2009 or when the company has completed buyback to the extent of 18,00,000 shares under the offer at a maximum price of Rs50/- per share. The scrip touched an intra-day high of Rs33.5 and a low of Rs26 and recorded volumes of over 1,00,000 shares on BSE.
US FDA has banned the entry of over 30 medicines manufactured by Ranbaxy. (ET)
ONGC to invest US$5.3bn in developing gas finds in two of its eastern offshore KG basin blocks. (FE)
Aban Offshore wholly owned subsidiary, Aban Singapore Pte considering listing in Oslo stock exchange. (BL)
RIL to start D6 block gas output in November. (BL)
Infosys partners with Wartsila to service multi-year transformation of its product. (BL)
Wipro Technologies acquire a US based mortgage solution provider Gallagher Financial System. (BS)
PNB to raise Rs5bn by selling bonds. (BL)
Dena Bank to raise Rs3bn through lower Tier II bonds. (BL)
Videocon Industries set to acquire 10% stake in Thomson SA of France. (BS)
RIL files petition against Maharashtra government’s decision to hold a referendum in 22 villages for its 10,000-hectare SEZ in Raighad. (BS)
PSTL JV with Longzhe Culture and Theatre launches first Cineplex in China. (ET)
BHEL to raise power capacity to 20,000MW in three years. (DNA)
Aurobindo Pharma receives a US FDA approval to manufacture and market Abacavir Sulfate tablets. (BL)
PSTL plans to invest Rs1.5bn in next six month for expansion in China. (ET)
TCS signs 5 year contract with Ericsson in Sweden. (ET)
Telecom-Italia acquires 49% stake in Unitech’s telecom arm for US$2bn. (ET)
Jindal Stainless to float a wholly owned subsidiary, JSL Ventures PT in Singapore to control all overseas mining operations. (ET)
Sanghi Industries to commission the first part of its Rs2.5bn captive thermal power project in November. (ET)
Jindal Stainless not to cut stainless steel prices. (BL)
Novartis launches health care projects for rural markets. (BL)
RIL to set up its first solar power project of 5MW capacity in Nagaur. (BL)
NHPC signs pact with Myanmar government to develop two hydel power projects. (BL)
Glodyne Technoserve secured a contract worth Rs2.8bn from Bihar’s State Electronics Development Corporation. (BS)
IDBI seeks RBI’s approval for Rs15bn PE fund. (BS)
Gujarat NRE Coke plans to float a right issue with differential voting rights to ward off takeover threat. (BS)
ONGC finds traces of uranium in some of the 9,500 wells it has dug. (DNA)
Zensar Technologies launches infrastructure management unit. (BL)
GSPC plans to raise US$1bn in initial share sale by January 2010. (DNA)
Dewan Housing to raise Rs1.5-2bn by end of March 2009 via equity issuance. (DNA)
PSTL puts domestic expansion plans on hold. (DNA)
Mastek clarifies it doesn’t depend on Merrill Lynch or Lehman Brothers for any part of its revenue. (FE)
Economy Front page
DoT to consider a proposal for allowing foreign telecom company to bid as 100% entities in upcoming 3G auction. (ET)
Indian ship owner seeks approval from RBI to enter International freight derivatives market or forward freight agreement. (ET)
PM says India to grow at 8% in FY09 despite global slowdown. (ET)
Centre has no plans to review custom duty on Agriculture product. (ET)
Government may consider relaxing ECB norms by this month end. (DNA)
Government approves FDI worth Rs140bn. (FE)
Promoter stakes
Stake diluters: As mentioned above, 42% of the companies have witnessed a reduction in promoter shareholding in the period under consideration with the top honours going to the companies mainly from the infrastructure space. There could be two reasons behind such a move. Either the promoters have cashed out or they have diluted their stake for capital raising purposes. Going by the current macroeconomic environment, it looks like the latter is more likely to be the case. It should be noted that infrastructure companies by and large generate low returns on their capital employed and hence, when they are on a high growth path such as the one taking place in India currently on account of the infrastructure boom, there arises a need to raise capital. Hence, the reduced promoter shareholding of the sector companies is most likely a result of satiating increasing capital needs rather than cashing out.
Stake enhancers: Although 23% of the companies in the index under consideration have managed to increase promoter shareholding, the increases have been marginal in most of the cases. However, it is worth mentioning that barring Reliance Petroleum, all the companies that were part of the unified Reliance group and are now being run separately by the two managements have witnessed an increase in promoter shareholding. Looks like two of the largest wealth creating companies in India's corporate history in recent times still appear undervalued to their promoters.
At 31%, the number of companies that have seen their promoter shareholding remain intact is also significant. Thus, the study clearly points to the fact that while the stock markets may have witnessed a significant correction, most of the promoters seem to have faith in the growth prospects of their companies and are also willing to put their money where their mouth is. This could be either by diluting stake and pumping in more money into the business so that even more wealth could be generated in the future or by taking advantage of the market vagaries to enlarge their portion of the company value pie.
via EM
Asian markets open negative
Asian stocks tumbled to the lowest in three years while gold and US Treasuries surged as concerns mounted more financial firms will collapse.
US Treasury three-month bill rates dropped to the lowest since World War II as a loss of confidence in credit markets worldwide prompted investors to abandon higher-yielding assets for the safety of the shortest- term government securities.
Japanese benchmark index Nikkei dropped 374.224 points, or 3.18%, to trade at 11,375.57.
Hong Kong`s Hang Seng index fell 659.58 points, or 3.74%, to trade at 16,977.61.
China`s Shanghai Composite slipped 88.74 points, or 4.60%, to trade at 1,840.31.
Taiwan`s Taiex index fell 221.35 points, or 3.82%, to trade at 5,579.52.
South Korea`s Kospi index declined 42.53 points, or 2.98 %, to trade at 1,382.73.
Singapore`s Straits Times lost 83.31 points, or 3.44%, to trade at 2,335.98. (8.25 a.m., IST)
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