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Friday, September 19, 2008
US Govt Rescue Plan - What it means ?
The US Govt has come to the rescue of the financials - here is what it means
- Govt will give hundreds of billion $ to buy bad debt/mortgages the financials are stuck with. That means that mess is as big as most thought (1 trillion $)
- At what price the bad debt will be bought is not known - unclear
- Will use Tax Payers' money to fund this bail out
- Also will use the $50 billion Exchange Stabilization Fund created to protect the $ - They need all the money that they can
- Can print extra $ ? Dollar to fall ?
What it means for US citizens
- May get home loans again ;-) - would anyone qualify for such a loan anymore
- You are screwed, because there is not going to be any CHANGE - be it from Obama or McCain - they are gonna tax you higher for sure
- Temporary relief - many can still get to keep their jobs
- Interest rates won't come down - because your govt has bought all this mess and they want to recover that money from the existing owners
- Paulson doesn't have a clue as of now how this plan is going to work otherwise he would have answered lot more questions
Feel free to leave a comment of what you think!
Comeback, and How!
After a subdued trend in the last few sessions, the market staged a solid comeback today. The bulls were back in action after closing flat yesterday. Taking lead from buoyant international markets, the Sensex started the day at 13,764 (448 points above its previous close) on the back of strong buying in heavyweights, realty, information technology, Teck, oil & gas, power and banking stocks. At its day's high of 14,097 by afternoon, the Sensex closed the session 726 points higher at 14,042 and Nifty advanced 207 points to close at 4,245.
The market breadth was highly positive, Of the 2,700 stocks traded on the BSE, where 1,888 stocks advanced only 740 stocks declined. 72 stocks ended unchanged. All the sectoral indices notched up significant gains. BSE Realty index was the biggest gainer and soared 7.59% followed by BSE IT index (up 6.67%), BSE Teck index (up 5.86%), BSE Oil & Gas index (up 5.52%), BSE Power index (up 5.16%), BSE Bankex (up 5.03%) and the BSE CD index (up 4.72%).
Barring few, all the stocks in the Sensex basket ended at higher levels. Satyam Computer Services led the upsurge and flared 10.48% at Rs370.10. Among the other major gainers ICICI Bank surged 9.07% at Rs628.10, HDFC Bank moved up by 8.32% at Rs2308.45 and Tata Power advanced 8.30% at Rs1,027.30. DLF vaulted 7.78% at Rs426.90, ONGC shot up by 7.30% at Rs1072.10, Infosys Technologies added 6.59% at Rs1,623.85 and Tata Consultancy Services rose 6.37% at Rs766. However, HDFC Bank, BHEL, Reliance Industries, Jaiprakash Associates and Reliance Communications ended with gains of over 4-5% each.
Realty stocks were the stars of the day. Ansal Properties & Infrastruture soared 18.36% at Rs89.95, Indiabulls Realestate jumped 17% at Rs224.05, Akruti City added 11.52% at Rs908.20 and Peninsula Land gained 5.65% at Rs50.50.
Over 1.48 crore JP Associates shares changed hands on the BSE followed by Reliance Natural Resources (1.33 crore shares), IFCI (1.27 crore shares), Sesa Goa (1.12 crore shares) and Kohinoor Broadcasting Corporation (0.75 crore shares).
Post Session Commentary - Sep 19 2008
Domestic markets rallied sharply on the back of strong supportive cues from the global markets as the US treasury has come out with a plan to create a Resolution Trust-like operation to calm the economic turmoil and the financial crisis. This led to sustained buying across the board. The major Asian markets out performed during the trade and the strong European markets also added to the positive sentiments. BSE Sensex returned back to the 14,000 level and NSE Nifty crossed 4,200 mark. Indian markets today opened on optimistic note tracking strong global cues and kept on marching forward till the closing bell. Further, markets extended their gains and continued to trade sharply higher on strong buying over the counters. Finally, bulls become more powerful during final hours of trading as markets closed with gains of more than 5%. From the sectoral front, all indices ended with gains and among those reality stocks outperformed the benchmark index as closed with gain of more than 7%. Along with that, Oil & Gas, Capital Goods, Bank, Metal and IT stocks witnessed healthy buying from these baskets. The market breadth was positive as 1888 stocks closed in green while 740 stocks closed in red and 72 stocks remained unchanged.
Inflation rose marginally to 12.14% for the week ended 6th September 2008, as against 12.1% recorded a week earlier on account of the rise in primary and food articles. Primary articles were up by 1%, food articles rose 1.4% and non-food articles 0.2 %. The annual inflation rate was 3.46% during the corresponding week of the previous year.
The BSE Sensex closed higher by 726.72 points at 14,042.32 and NSE Nifty ended up by 207.10 points at 4,245.25. The BSE Mid Caps and Small Caps closed with gains of 149.65 points at 5,228.78 and by 140.56 points at 6,215.99. The BSE Sensex touched intraday high of 14,097.44 and intraday low of 13,674.96.
Gainers from the BSE are Satyam Comp (10.48%), Ranbaxy Lab (6.60%), ICICI Bank Ltd (9.07%), HDFC (8.32%), Tata Power (8.30%), DLF Ltd (7.78%), ONGC Ltd (7.30%), Infosys Tech (6.59%), TCS Ltd (6.37%), HDFC Bank Ltd (6.32%) and BHEL (6.31%).
The BSE Oil & Gas index ended higher by 495.53 points at 9,468.42 as ONGC Ltd (7.30%), Cairn India (6.86%), Reliance (6.16%), Essar Oil Ltd (4.55%), Gail India (4.44%) and Reliance Natural Resources (3.50%) ended in positive territory.
The BSE Capital Goods index closed up by 491.57 points at 11,740.07 Gainers are Usha Martin (7.88%), Punj Lloyd (6.92%), Walchand In (6.92%), BHEL (6.32%), Crompton Greaves (5.93%) and Thermax Ltd (5.55%).
The BSE Metal index surged 343.54 points to close at 10,033.59. Major gainers are %), Gujarat NRE C (7.70%), Steel Authority (7.05%), Jindal Steel (6.89%), Sesa Goa Ltd (5.26%), NMDC Ltd (4.98%) and Nalco (4.67%).
The BSE Bank index closed higher by 340.25 points at 7,109.08. Gainers are ICICI Bank Ltd (9.07%), Kotak Bank (8.48%), Canara Bank (6.55%), HDFC Bank Ltd (6.32%), Federal Bank (5.55%) and Indus Ind Bank (5.43%).
The BSE Reality index advanced by 289.53 points to close at 4,102.64. As Ansal Infra (18.36%), Indiabull Real (17.00%), Akruti City (11.52%), Housing Dev (8.13%), Penland Ltd (5.65%) and Mahindra Life (5.60%) closed in positive territory.
The BSE IT index gained 229.35 points to close at 3,666.75. As Satyam Comp (10.48%), HCL Tech (8.15%), Infosys Tech (6.59%), TCS Ltd (6.37%), Oracle Fin (6.36%) and Tech Mahindra (5.74%) closed in positive territory.
BSE Bulk Deals to Watch - Sep 19 2008
19/9/2008 532840 ADVANTA RELIANCE CAP TR CO LTD AC RELIANCE NATURAL RESOURCE FUND B 745200 662.50
19/9/2008 532840 ADVANTA TREE LINE ADVISORS HONG KONG LTD AC TREE LINE ASIA MASTER FD B 523168 692.00
19/9/2008 532840 ADVANTA MORGAN STANLEY MAURITIUS COMPANY LIMITED S 523168 692.00
19/9/2008 532840 ADVANTA WARD FERRY MNGT LTD AC WF ASIAN SMALLER CO FUND LIMITED S 360723 662.51
19/9/2008 532840 ADVANTA CITIGROUP GLOBAL MARKETS MAURITIUS PVT LTD S 302393 662.50
19/9/2008 512642 ARTILL BIO-I DONTHIREDDY BALACHANDRA REDDY B 20877 3.04
19/9/2008 533016 AUSTRAL COKE AMBIT SECURITIES BROKING PRIVATE LIMITED B 192118 248.73
19/9/2008 533016 AUSTRAL COKE OPG SECURITIES P LTD B 1020716 251.07
19/9/2008 533016 AUSTRAL COKE AMBIT SECURITIES BROKING PRIVATE LIMITED S 192118 248.04
19/9/2008 533016 AUSTRAL COKE OPG SECURITIES P LTD S 1020716 251.09
19/9/2008 517001 BIRLA POWER RAMCHAND KEWALRAM POPLEY B 225000 16.24
19/9/2008 517001 BIRLA POWER BNP PARIBAS ARBITRAGE S 670000 16.49
19/9/2008 590061 BRUSHMAN IND PRACHI AGENCIES PVT LTD B 143000 142.84
19/9/2008 590061 BRUSHMAN IND KIRTI STOCKS AND SECURITIES LT S 65000 143.00
19/9/2008 532413 CEREBRA INT SURESH VALANI B 50567 29.05
19/9/2008 532413 CEREBRA INT IMTIYAZ IBRAHIMBHAI DESAI S 131725 28.96
19/9/2008 532413 CEREBRA INT SURESH VALANI S 50567 30.29
19/9/2008 531216 COMFORT INTC KIRIT V DAVE S 51365 20.50
19/9/2008 520022 DEN SO INDIA ALLARD INVESTMENT FUND B 202649 59.00
19/9/2008 520022 DEN SO INDIA CLSA MAURITIUS LIMITED S 202649 59.00
19/9/2008 530407 EPIC ENERGY ASHOK PAMANI S 36811 48.32
19/9/2008 513059 G.S. AUTO HARDIK M MITHANI B 25855 94.54
19/9/2008 513059 G.S. AUTO RAJU GHANSHYAMDAS SHAH B 21461 94.42
19/9/2008 513059 G.S. AUTO SPJSTOCK B 171537 93.52
19/9/2008 513059 G.S. AUTO NARESH CHAND JAIN B 25066 93.84
19/9/2008 513059 G.S. AUTO HARDIK M MITHANI S 55855 92.63
19/9/2008 513059 G.S. AUTO RAJU GHANSHYAMDAS SHAH S 54470 93.29
19/9/2008 513059 G.S. AUTO SPJSTOCK S 121546 92.51
19/9/2008 513059 G.S. AUTO NARESH CHAND JAIN S 26066 94.17
19/9/2008 531137 GEMSTONE INV PREM M PARIKH B 30000 58.14
19/9/2008 531137 GEMSTONE INV BHAVESH P PABARI B 30000 58.42
19/9/2008 531137 GEMSTONE INV HEMANT MADHUSUDAN SHETH S 40640 58.63
19/9/2008 531137 GEMSTONE INV BHAVESH PRAKASH PABARI S 45500 58.27
19/9/2008 531439 GOLDSTON TEC BHARAT S THAKKAR B 114930 121.88
19/9/2008 531439 GOLDSTON TEC BHAVESH PRAKASH PABARI B 100000 119.37
19/9/2008 531439 GOLDSTON TEC BHARAT S THAKKAR S 106940 121.74
19/9/2008 531439 GOLDSTON TEC HEMANT MADHUSUDAN SHETH S 153008 120.59
19/9/2008 531602 KOFF BR PICT LEELABEN AMRUTLAL DARJI B 32457 38.90
19/9/2008 531366 KOHINOOR BRO ALKA INDIA LIMITED B 602599 6.60
19/9/2008 531366 KOHINOOR BRO ANGEL INFIN PRIVATE LIMITED B 833390 6.60
19/9/2008 531366 KOHINOOR BRO JMP SECURITIES PVT. LTD. B 917747 6.55
19/9/2008 531366 KOHINOOR BRO S V ENTERPRISES B 3272029 6.53
19/9/2008 531366 KOHINOOR BRO ANGEL INFIN PRIVATE LIMITED S 833390 6.58
19/9/2008 531366 KOHINOOR BRO JMP SECURITIES PVT. LTD. S 917747 6.54
19/9/2008 531366 KOHINOOR BRO S V ENTERPRISES S 3122029 6.60
19/9/2008 530149 KSL AND INDS GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD B 1884843 152.25
19/9/2008 530149 KSL AND INDS CITIGROUP GLOBAL MARKETS MAURITIUS PVT LTD S 1884843 152.25
19/9/2008 532529 NDTV LTD. DEUTSCHE SECURITIES MAURITIUS LIMITED B 1000000 263.50
19/9/2008 532529 NDTV LTD. MORGAN STANLEY MAURITIUS COMPANY LIMITED S 1000000 263.50
19/9/2008 532986 NIRAJ CEMENT NAYANBHAI RAMESHCHANDRA SHAH B 52100 39.94
19/9/2008 532606 PAREKH ALUM CONSOLIDATED SECURITIES LTD S 92158 124.95
19/9/2008 503100 PHOENIX MILL MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. S.V. B 2045000 151.50
19/9/2008 503100 PHOENIX MILL MORGAN STANLEY MAURITIUS COMPANY LIMITED S 762500 151.50
19/9/2008 503100 PHOENIX MILL MORGAN STANLEY INVESTMENTS MAURITIUS LIMITED S 1282500 151.50
19/9/2008 532718 PRATIBHA IND MORGAN STANLEY MAURITIUS COMPANY LIMITED S 143898 250.00
19/9/2008 524194 ROCK HARD PE DEEPAK P. GALIA B 54100 10.98
19/9/2008 500368 RUCHI SOYA SWISS FINANCE CORPORATION MAURITIUS LIMITED B 1642001 80.88
19/9/2008 500368 RUCHI SOYA MACQUARIE BANK LIMITED S 1540000 81.00
19/9/2008 532765 USHER AGRO AMARPBOMBLE B 109784 133.95
19/9/2008 532765 USHER AGRO SUPER VELOURS PVT LTD S 128335 132.09
19/9/2008 532765 USHER AGRO AMARPBOMBLE S 109784 139.73
19/9/2008 532360 VINTAGE CARD ARCADIA SHARE AND STOCK BROKERS PVT LTD B 5000 62.70
19/9/2008 532360 VINTAGE CARD VIRENDRASINGHKACHAWAH B 3202 62.70
19/9/2008 532360 VINTAGE CARD NARESH CHAND JAIN S 4000 62.70
18/9/2008 519532 ASIAN TEA EX ENCA FINLEASE LTD. B 121387 82.86
18/9/2008 519532 ASIAN TEA EX ENCA FINLEASE LTD. S 121000 82.95
18/9/2008 513059 G.S. AUTO SPJSTOCK B 131880 90.80
18/9/2008 513059 G.S. AUTO NARESH CHAND JAIN B 17163 90.85
18/9/2008 513059 G.S. AUTO SPJSTOCK S 160472 90.61
18/9/2008 513059 G.S. AUTO NARESH CHAND JAIN S 22477 91.52
18/9/2008 505840 JAIPAN INDUS ENCA FINLEASE LTD. B 76701 175.49
18/9/2008 531366 KOHINOOR BRO JAYDEV MODY S 892574 5.42
18/9/2008 531996 ODYSSEY CORP BHROSEMAND COMMODITIES PVT. LTD. S 37500 37.12
18/9/2008 520111 RATNAMA META PRUDENTIAL ICICI TRUST ACC FUSION II B 100000 659.01
18/9/2008 514304 S. KUMARS NAT CREDIT SUISSE SINGAPORE LIMITED B 5951726 54.25
18/9/2008 500575 VOLTAS LTD CREDIT SUISSE SINGAPORE LIMITED B 1879312 115.81
17/9/2008 530695 PRIME PROPTY LOTUS TIE UP PRIVATE LIMITED B 108850 59.03
17/9/2008 530695 PRIME PROPTY LOTUS TIE UP PRIVATE LIMITED S 108850 59.22
17/9/2008 531215 RTS POWER CO SHREE DHOOT TRADING AND AGENCIES LTD S 80000 164.08
17/9/2008 526049 SHRILAKSHMI NAV NIRMAN MERCANTILES LTD S 78500 63.46
12/9/2008 531996 ODYSSEY CORP BHANUMATIDHARAMRAJGIRI S 48600 35.80
19/8/2008 532606 PAREKH ALUM MANISH MARU B 100000 124.84
NSE Bulk Deals to Watch - Sep 19 2008
What the hell is Morgan Stanley doing ? Trading in the markets ? One day, they sell, the next day - they buy.
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
19-SEP-2008,ADVANTA,Advanta India Limited,TREE LINE ADVISORS(HONG KONG)LTD A/C TREE LINE ASIA MASTERFD,BUY,177745,675.05,-
19-SEP-2008,APTECHT,Aptech Limited,CREDIT SUISSE (SINGAPORE) LIMITED A/C CREDIT SUISSE (SINGAPO,BUY,271102,186.01,-
19-SEP-2008,APTECHT,Aptech Limited,MORGAN STANLEY MAURITIUS COMPANY LTD,BUY,18612,186.00,-
19-SEP-2008,AUSTRAL,Austral Coke & Projects L,AMBIT SECURITIES BROKING PVT. LTD.,BUY,357855,248.84,-
19-SEP-2008,BBL,BHARAT BIJLEE LTD,ARISAIG INDIA FUND LTD,BUY,55458,1200.00,-
19-SEP-2008,CESC,CESC Ltd.,TREE LINE ASIA MASTER FUND SINGAPORE PTE LTD,BUY,2034484,285.50,-
19-SEP-2008,EDUCOMP,Educomp Solutions Limited,GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD,BUY,90394,3719.06,-
19-SEP-2008,EDUCOMP,Educomp Solutions Limited,TREE LINE ASIA MASTER FUND (SINGAPORE) PTE LTD,BUY,320294,3473.00,-
19-SEP-2008,GOLDTECH,Goldstone Tech Ltd.,ANKIT RAJENDRA SANCHANIYA,BUY,103868,121.59,-
19-SEP-2008,GOLDTECH,Goldstone Tech Ltd.,PABARI BHAVESH PRAKASH,BUY,101000,122.14,-
19-SEP-2008,JPASSOCIAT,Jaiprakash Associates Lim,MORGAN STANLEY MAURITIUS COMPANY LTD,BUY,805000,131.95,-
19-SEP-2008,RELCAPITAL,Reliance Capital Limited,MORGAN STANLEY MAURITIUS COMPANY LTD,BUY,1362423,1228.01,-
19-SEP-2008,SEJALGLASS,Sejal Architectural Glass,NAVMEE SECURITIES PRIVATE LIMITED,BUY,145000,46.75,-
19-SEP-2008,TATAPOWER,Tata Power Co. Ltd.,DEUTSCHE SECURITIES MAURITIUS LIMITED,BUY,3001597,977.52,-
19-SEP-2008,VINCARDS,Vintage Cards & Creations,URJA INVESTMENT PVT. LTD.,BUY,3003,61.85,-
19-SEP-2008,VINCARDS,Vintage Cards & Creations,YUVAK SHARE TRADING PVT LTD,BUY,9805,61.85,-
19-SEP-2008,ADVANTA,Advanta India Limited,BNP PARIBAS ARBITRAGE,SELL,177745,675.05,-
19-SEP-2008,APTECHT,Aptech Limited,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,265865,185.73,-
19-SEP-2008,AUSTRAL,Austral Coke & Projects L,AMBIT SECURITIES BROKING PVT. LTD.,SELL,357854,249.45,-
19-SEP-2008,BBL,BHARAT BIJLEE LTD,KOTAK MUTUAL FUND A/C KOTAK INDO-WORLD INFRASTRUCTURE FUND,SELL,28625,1200.00,-
19-SEP-2008,CESC,CESC Ltd.,CLSA (MAURITIUS) LIMITED,SELL,2034484,285.50,-
19-SEP-2008,EDUCOMP,Educomp Solutions Limited,GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD,SELL,342664,3468.55,-
19-SEP-2008,GOLDTECH,Goldstone Tech Ltd.,ANKIT RAJENDRA SANCHANIYA,SELL,103868,121.24,-
19-SEP-2008,JPASSOCIAT,Jaiprakash Associates Lim,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,8160000,132.25,-
19-SEP-2008,ORBITCORP,Orbit Corporation Limited,EVERLONE TRADING PVT. LTD.,SELL,490500,226.84,-
19-SEP-2008,PRAENG,Prajay Engineers Syndicat,J.P.MORGAN SEC- COPTHALL FCCB,SELL,161250,49.42,-
19-SEP-2008,SEJALGLASS,Sejal Architectural Glass,NAVMEE SECURITIES PRIVATE LIMITED,SELL,150000,46.75,-
19-SEP-2008,TATAPOWER,Tata Power Co. Ltd.,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,3000000,977.50,-
19-SEP-2008,VINCARDS,Vintage Cards & Creations,URJA INVESTMENT PVT. LTD.,SELL,3003,61.85,-
19-SEP-2008,VINCARDS,Vintage Cards & Creations,VAISHNAV RAJESH CHANDRAKANT,SELL,7800,61.88,-
19-SEP-2008,VINCARDS,Vintage Cards & Creations,YUVAK SHARE TRADING PVT LTD,SELL,9021,61.85,-
Nifty September 2008 futures above 4200
Turnover declines
Nifty September 2008 futures were at 4283.10, at a premium of 37.85 points as compared to spot closing of 4245.25. NSE's futures & options (F&O) segment turnover was Rs 73,792.36 crore, which was lower than Rs 74,094.75 crore on Thursday, 18 September 2008.
Reliance Industries September 2008 futures were at premium at 2070.10 compared to the spot closing of 2055.10.
Larsen & Toubro September 2008 futures were at premium at 2656 compared to the spot closing of 2644.15.
IFCI September 2008 futures were at premium at 40.75 compared to the spot closing of 40.50.
In the cash market, the S&P CNX Nifty surged 207.10 points or 5.13% at 4245.25.
Asian Stocks Soar Reversing Four Straight Sessions of Steep Losses
Shanghai, Hang Seng Jumped More Than 9%
The stock markets across the Asian region closed the session and the week on sharply jump, reversing four straight sessions of steep losses, after Wall Street rallied overnight after central banks in major global economies injected billions of dollars to encourage financial institutions to continue to lend to each other, and regulators in the U.S. and the U.K. moved to temporarily halt short trading. Furthermore, lawmakers in the U.S. called for the government to create a new federal agency that gave relief to troubled savings and loans
On Wall Street, the U.S. market rallied yesterday on a report that U.S. Treasury Secretary Henry Paulson was considering creating an entity to absorb banks' bad debt. The Dow jumped 410 points or 3.9% to 11,019, the Nasdaq rose 100 points or 4.8% to finish at 2,199 and the broader S&P 500 gained 50 points or 4.3% to close at 1,206.
Oil held steady in Asian trading after the contract for October settlement closed higher on Thursday. Crude futures rose for a third day, adding as much as 149 cents to $99.37 a barrel by 5:39 a.m. ET. The contract for October delivery added 72 cents to settle at $97.88 a barrel on the New York Mercantile Exchange after hitting a high of $102.24.
In the currency market, the U.S. dollar rallied to trade in the mid 107-yen levels in late Tokyo deals, up from Thursday's close in the mid 105-yen range.
The Australian dollar closed at US$0.8112-0.8117, up about 1.3 U.S. cents from Thursday's close of US$0.7986-0.7990.
The New Zealand dollar's rally was interrupted by a resurgent U.S. dollar and weaker than expected current account balance data. The kiwi finished the session at US$0.6735, losing as much as US$0.0025 after the release of the data. The local unit finished Thursday's session at US$0.6640-0.6650.
The South Korean won gained against the greenback. The won closed at 1,139.7 a dollar compared to Thursday's close of 1,153.3 a dollar.
Coming back in Asian equity markets, investor sentiment was buoyed by Wall Street's rally overnight and hopes that the actions taken by the world's major central banks and the U.S. plan to create a repository for banks' bad debt would resolve the credit crisis. The Chinese market surged 9.3% and the Hong Kong market jumped 6.6%.
The Japanese market showed a strong rebound with the key Nikkei 225 index jumping 3.8% or 431 points to finish at 11,920. The broader Topix index of all First Section issues on the Tokyo Stock Exchange closed up 51 points, or 4.7%, at 1,149.
On the economic front, Japan's Ministry of Finance provided weekly capital inflows of stocks and bonds. For the week ending September 13, foreign residents were net sellers of Japan stocks for the second straight week, having dumped a net 401.2 billion yen worth of stocks. However, foreigners were net purchasers of Japan bonds and notes for the week, having bought bonds worth a net 878.5 billion.
Meanwhile, the final figures for Japan's leading index came in at 91.4 in July, recovering slightly from a dip that had taken the index down to 91.3 in June, the Economic and Social Research Institute said. Economists had been expecting the final figure to match the preliminary reading of 91.6. The research institute also reported that Japan's coincident index increased to 103.5 in July from the 101.6 reported in June.
The Chinese market closed sharply higher Friday, with the key Shanghai Composite index closing up 9.46% after regulators cancelled the stamp duty on share purchases and the sovereign wealth fund announced plans to buy shares in state-owned banks. Wall Street's rally overnight also added to the positive sentiment. Almost all stocks rose by the daily limit. The key index closed up 179.25 points at 2,075.09, recording its biggest single-day rise since October 23, 2001.
In Hong Kong, the Hang Seng Index rose even higher, finishing 9.6% up at 19,327.73 on a burst of late buying activity for its first up day in eight sessions.
The Australian market rebounded on Friday, ending a four-day losing streak. The market started off firm, tracking Wall Street's rally overnight following reports that the U.S. Treasury and the Federal Reserve are devising a plan to remove bad assets from corporate balance sheets, and finished near the day's high. Financial stocks rallied, with Australia's largest investment bank Macquarie Group jumping nearly 40%.
The benchmark S&P/ASX200 index surged 198.2 points, or 4.3%, to close at 4,805.5, posting the largest one-day gain since 25 January 2008. The index has moved back to March 2005 highs. The broader All Ordinaries index jumped 193.2 points, or 4.2%, to finish at 4,845.1.
The New Zealand market closed higher Friday, recouping a portion of the 3.5% loss that it posted on Thursday. The market started off higher after Wall Street rallied overnight following reports that the U.S. Treasury is considering creating a facility to take on financial firms' bad debts, but gave away some of the day's gains going into the close of the trading session. The benchmark NZX 50 index closed up 28.2 points or 0.9% at 3,187.1 and the broader NZX All Capital index advanced 23.2 points or 0.7% to finish at 3,211.3.
On the economic front, New Zealand's current account deficit fell more than expected to NZ$3.91 billion in the second quarter. Analysts expected a deficit of NZ$3.42 billion. The deficit for the first quarter was revised upward to NZ$2.11 billion from NZ$2.16 billion. According to the report by Statistics New Zealand, a rise in goods imports, mainly petroleum and petroleum products, contributed to the fall. Exports also fell slightly, with a reduction in dairy exports.
Among other data released, short-term visitor arrivals from overseas totaled 162,500 in August, down 1% from August 2007. For the full year to August, there were 2.48 million visitor arrivals, an increase of 7,300.
The South Korean market soared more than 4.5%, recouping more than yesterday's loss of 2.3%. The Korea Exchange, the nation's bourse operator, temporarily suspended program selling in the morning due to volatile futures prices. The benchmark Korea Composite Stock Price Index or Kospi surged 63.36 points to finish at 1,455.78.
On the economic front, a report from the Bank of Korea showed that South Korean corporate bankruptcies decreased to 178 in August from 209 in July, marking its lowest level since March. At the same time, the number of start-ups fell to 3,713 from July's 5,006. The central bank said the decrease in start-ups mirror economic slowdown in South Korea.
In India, frenzied buying in battered index pivotals along with short covering triggered a solid rally in the key benchmark indices. The BSE 30-share Sensex was up 764.28 points or 5.75% to 14,079.88, as per provisional closing. The Sensex opened with a huge 448.23-point upward gap at 13,763.83. At the day's high of 14,097.44 hit in late trade, the Sensex gained 781.84 points. At the day’s low of 13,674.96, the Sensex rose 359.36 points in early trade. The S&P CNX Nifty advanced 213.45 points or 5.29% to 4,251.60 as per provisional closing.
On the economic front, the wholesale price index showing inflationary level across the country rose 12.14% in the 12 months to 6 September 2008, marginally above the previous week's rise of 12.10%, data released after market hours on Thursday, 18 September 2008 showed.
Elsewhere, Taiwan's Taiex zoomed up 5.8% at 5,970.38; Singapore's STI gained 5.8% to 2,559.07; Malaysia's KLCI closed up 3.4% at 1,025.70 and Indonesia's Jakarta Composite index closed up 5.8% at 1,891.73.
In the other part of the world, European shares surged, with banks rallying massively as investors responded to efforts by regulators to crack down on the short selling of financial stocks and hopes for a longer-term solution to stabilize the financial sector.
Of national indexes, The U.K. FTSE 100 index jumped 6% to 5,176.60, the German DAX 30 index soared 4.1% to 6,103.56 and the French CAC-40 index climbed 5.6% to 4,177.7. At 11.38 GMT continued to gain further as U.K. FTSE 100 index increased by 8% to 5,266.90. The German DAX 30 index increased by 4.3% to 6,118.01, while the French CAC-40 index was up by 6.6% to 4,218.46.
Global events will set the course
Investors will be keenly watching the news emanating from the US financial sector. The market sentiments remain fragile on sustained selling by foreign institutional investors. A deep financial crisis engulfed the global markets when 158-year-old investment banking giant Lehman Brothers filed for bankruptcy, Merrill Lynch was bought over by Bank of America in a distress sale and the world's largest insurer AIG had to seek government help to thwart an imminent collapse. Any further bad news abroad will impact domestic bourses.
Global stocks witnessed a fresh lease of life on Friday, 19 September 2008, after US Treasury Secretary Henry Paulson proposed to congressional lawmakers a proopsal that would create an entity to deal with the billions of dollars of bad debt still choking the financial system.
Foreign institutional investors (FIIs) sold shares worth Rs 6,995.70 crore in September 2008 (till 17 September 2008). FIIs sold shares worth Rs 35,509.50 crore in the calendar year 2008. Mutual funds bought shares worth Rs 1,031.20 crore in September 2008 (till 17 September 2008).
The market will also eye development on the Indo-US nuclear deal. Reports from Washington say the US Congress aims to vote on the deal before it adjourns in a week's time, ahead of the November presidential elections. The civil nuclear agreement between the US and India, if approved, is seen as a milestone in bilateral relations, and will give India access to western technology and cheap atomic energy.
Shares of state-run oil marketing firms will be under pressure on rebound in crude oil prices from recent lows. These firms face huge underrecoveries as they have to sell fuel at mandated prices set by the government. Crude oil for October 2008 was hovering at $97.88 a barrel on the New York Mercantile Exchange. It had fallen to as low as $90.51 earlier in the week, continuing an almost steady decline since hitting a record $147.27 on 11 July 2008.
Softening of inflation has raised hopes that Indian market may be in the last lap of the interest rate hike cycle. Inflation based on the wholesale price index rose 12.14% in 12 months to 6 September 2008, marginally above the previous week's annual rise of 12.10%, data released by the government on 18 September 2008, evening showed.
Meanwhile, India Inc’s top 20 taxpayers showed mixed signals, with almost 35% paying lower advance tax in September this year. 15 September 2008 was the last date for payment of the second installment of advance tax.
Market ends in green in choppy trade
The domestic market recovered all the losses posted earlier in the week as the global stocks witnessed a fresh lease of life on Friday, 19 September 2008, after US Treasury Secretary Henry Paulson proposed to congressional lawmakers a proposal that would create an entity to deal with the billions of dollars of bad debt still choking the financial system.
A deep financial crisis engulfed the global markets eariler in the week when the US investment banking giant Lehman Brothers filed for bankruptcy, Merrill Lynch was bought over by Bank of America in a distress sale and the world's largest insurer AIG had to seek US government help to thwart an imminent collapse.
The barometer index BSE Sensex rose 41.51 points or 0.3% to settle at 14,042.32 in the week ended Friday, 19 September 2008. The S&P CNX Nifty gained 16.80 points or 0.39% at 4,245.25 in the week.
The BSE 30-share Sensex is down 6,244.67 points or 30.78% in calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 7,164.45 points or 33.78% away from its all-time high of 21,206.77 struck on 10 January 2008.
The BSE Mid-Cap index fell 308.36 points or 5.57% to 5,228.78 in the week ended Friday, 19 September 2008. The BSE Small-Cap index slipped 495.55 points or 7.38% to 6,215.99 in the week.
BSE Realty index (down 12.59% to 4,102.64), BSE Oil & Gas index (up 3.86% to 9,468.42), BSE IT index (down 3.68% to 3,666.75),), BSE Power index (down 0.66% to 2,529.79), BSE Metal index (down 7.79% to 10,033.59), BSE Capital Goods index (down 0.82% to 11,740.07), BSE Auto index (up 0.16% to 3,958.25) underperformed Sensex in the week. BSE Bankex outperformed the Sensex rising 1.15% to 7,109.88 in the week.
The Sensex lost 469.54 or 3.35% at 13,531.27 on Monday, 15 September 2008. Bears ruled the roost on the bourses for the fifth consecutive day after US investment bank Lehman Brothers filed for bankruptcy protection, making it the largest and highest-profile casualty of the global credit crisis. Nonetheless, news that China's central bank has cut interest rates helped the domestic bourses cut steep intra-day losses.
The BSE 30-share Sensex slipped 12.47 points or 0.09% at 13,518.80 on Tuesday, 16 September 2008. Buying in index pivotals coupled with short covering after five straight days of fall helped key benchmark indices erase sharp early losses in highly choppy session. Higher Dow & Nasdaq and crude oil at 7-month low also aided the intra-day rebound.
The BSE 30-share Sensex lost 255.90 points or 1.89% at 13,262.90 on Wednesday, 17 September 2008. Intense selling pressure in key index pivotals dragged the key benchmark indices lower in volatile trade. ICICI Bank shed over 4.5% and Reliance Industries shed over 3%.
The BSE 30-share Sensex rose 52.70 points or 0.4%, to close at 13,315.60 on Thursday 18 September 2008. 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. 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 jumped 726.72 points or 5.46% to 14,042.32 on Friday, 19 September 2008. Frenzied buying in battered index pivotals along with short covering triggered a solid rally in the key benchmark indices. Markets across the globe rallied on hopes of a more comprehensive US government approach in taming the global credit crisis.
India’s largest private sector bank in terms of net profit ICICI Bank fell 3.79% to Rs 628.10 in the week. The bank's chief executive officer K V Kamath said in a media interview on Friday, 19 September 2008, that the bank is an extremely healthy institution and has ample capital. Kamath further added that the Indian banks are in a different position, and ICICI Bank being an Indian bank with limited exposure to the global market place, a strong balance sheet and a strong capital adequacy position is different from a global bank.
India’s largest oil exploration firm by sales Oil & Natural Gas Corporation gained 4.8% to Rs 1,072.10. Reports on 19 September said the company would invest Rs 19,338 crore in oil and gas hunt during the current fiscal year, 10% higher than last year. On 16 September company said it has agreed to give Rocksource ASA, a Norwegian company, 10% participating interest in deep water block in the eastern offshore.
India's largest cement manufacturer in terms of annual production capacity ACC rose 2.45% to Rs 605. The company said on 18 September 2008 it proposes to delist the global depositary shares that are presently listed in the London stock exchange.
India’s largest IT exporter by sales Tata Consultancy Services declined 5.22% to Rs 766. The company said on 17 September 2008 it had got a five-year application management contract in Sweden.
Tata Power Company rose 2.46% to Rs 1,027.30. The company said on 117 September 2008 it has submitted a bid for setting up four hydroelectric projects in Himachal Pradesh with a total capacity of 1,125 megawatts.
India’s largest drug maker by sales Ranbaxy Laboratories slumped 21.39% to Rs 356.85. The reports on 17 September 2008 said 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 commercial bank State Bank of India surged 3.46% to Rs 1564.60. The bank paid 48% higher advance tax at Rs 1,560 crore in Q2 September 2008 over Q2 September 2007.
India’s third largest IT exporter by sales Satyam Computer Services declined 8.97% to Rs 370.10 The company said on Monday, 15 September 2008, it has bagged a SAP implementation contract from Oman-based Khimji Ramdas LLC.
India’s largest car maker by sales Maruti Suzuki India rose 5.39% to Rs 74.65. As per reports on 15 September 2008 the company may sell a million units in the domestic market within the next two years. A newspaper report quoted Shinzo Nakanishi, Maruti’s managing director as saying that Maruti is on track to sell a million units in the domestic market within the next two years besides exporting another two lakh units. This, despite the current downturn and the impending launch of low-cost cars such as the Tata Nano.
Infosys (down 1.23% to Rs 1,623.85), Wipro (down 0.69% to Rs 416.85), Reliance Communications (down 4.37% to Rs 374.05) edged lower from the Sensex pack
Tata Motors (up 2.67% to Rs 422.85), Reliance Industries (up 6.24% to Rs 2,051.85) edged higher from the Sensex pack.
National Stock Exchange (NSE) on Tuesday, 16 September 2008, said there were no outstanding open positions/settlement obligations of Lehman Brothers Securities currently in the cash market segment and derivatives segment of NSE.
Inflation based on the wholesale price index rose 12.14% in 12 months to 6 September 2008, marginally above the previous week's annual rise of 12.10%, data released by the government on 18 September 2008, evening showed.
Crude oil for October 2008 was hovering at $97.88 a barrel on the New York Mercantile Exchange. It had fallen to as low as $90.51 earlier in the week, continuing an almost steady decline since hitting a record $147.27 on 11 July 2008.
India Inc’s top 20 taxpayers showed mixed signals, with almost 35% paying lower advance tax in September this year. 15 September 2008 was the last date for payment of the second installment of advance tax.
Market soars on hopes of US govt package, global rally
Frenzied buying in battered index pivotals along with short covering triggered a solid rally in the key benchmark indices today, 19 September 2008. The BSE 30-share Sensex jumped 726.72 points. Markets across the globe rallied on hopes of a more comprehensive US government approach in taming the global credit crisis.
Strong US stock futures further boosted the domestic bourses in late trade. US stock futures rose after the Securities and Exchange Commission announced a temporary ban on short selling of 799 financial stocks effective Friday, 19 September 2008.
Back home, realty, banking and IT stocks were at the forefront of the rally. Index heavyweight Reliance Industries (RIL) surged over 6%. The market breadth was strong. 29 from the 30-member Sensex pack logged gains. Satyam Computer Services and ICICI Bank spurted over 10% each. Turnover on BSE was above Rs 6,000 crore.
As per provisional data released by the stock exchanges after trading hours, foreign funds today, 19 September 2008, bought shares worth a net Rs 1016.18 crore. Domestic funds bought shares worth a net Rs 43.91 crore.
The BSE 30-share Sensex jumped 726.72 points or 5.46% to 14,042.32. The Sensex opened with a huge 448.23-point upward gap at 13,763.83. At the day's high of 14,097.44 hit in late trade, the Sensex gained 781.84 points. At the day’s low of 13,674.96, the Sensex rose 359.36 points in early trade.
The S&P CNX Nifty advanced 207.10 points or 5.13%, to settle at 4245.25. Nifty September 2008 futures were at 4283.10, at a premium of 37.85 points as compared to spot closing.
The barometer index BSE Sensex is down 6224.67 points or 30.78% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 7164.45 points or 33.78% below its all-time high of 21,206.77 struck on 10 January 2008.
US markets on Thursday, 18 September 2008, recorded biggest one-day percentage gain since October 2002 after the US Treasury Secretary Henry Paulson proposed to congressional lawmakers a proposal to create an entity to deal with the billions of dollars of bad debt still choking the financial system. The Dow Jones industrial average jumped 410.03 points, or 3.86%, to 11,019.69. The S&P 500 index advanced 50.12 points, or 4.33%, to 1,206.51, and the Nasdaq Composite index surged 100.25 points, or 4.78%, to 2,199.10.
European markets, which opened after Indian markets, surged today, 19 September 2008, boosted by a four-month ban by UK on short-selling of financial stocks. Key benchmark indices in UK, Germany and France were up by between 4.33% to 8.29%.
Battered Chinese stocks soared 9.46% in response to an unprecedented package of government measures to support the market. Stocks rose across Asia. Key benchmark indices in Hong Kong, Singapore, Japan, Taiwan, and South Korea were up by between 4.55% and 9.61%.
Back home, the market breadth was strong on BSE with 1873 shares advancing as compared to 777 that declined. 68 remained unchanged.
The BSE Mid-Cap index rose 2.95% to 5,228.78 and the BSE Small-Cap index gained 2.31% to 6,215.99.
The total turnover on BSE amounted to Rs 6202 crore as compared to Rs 7,376.23 crore on Thursday, 18 September 2008. NSE's futures & options (F&O) segment turnover was Rs 73,792.36 crore, which was lower than Rs 74,094.75 crore on Thursday, 18 September 2008.
India’s largest private sector firm in terms of market capitalization and oil refiner Reliance Industries advanced 6.38% to Rs 2056.25 on 16.60 lakh shares. The stock had hit a 52-week low of Rs 1764 yesterday, 18 September 2008. The company has reportedly struck gas at eight more locations in the Krishna-Godavari basin, which it intends to develop at an approximate cost of $3 billion.
IT pivotals rallied on fresh buying on hopes of a solution to the US financial crisis. India’s fourth largest software services exporter Satyam Computer Services galloped 10.97% to Rs 371.75 on 13.39 lakh shares. It was the top gainer from Sensex pack.
Other IT pivotals, Infosys (up 6.52% to Rs 1622.90), Wipro (up 5.09% to Rs 417.30), and TCS (up 6.94% to Rs 770.10), edged higher. Indian IT firms count US financial services firms among their top clients.
Battered realty stocks made a strong comeback today. India’s largest real estate developer by market capitalisation DLF galloped 7.70% to Rs 426.60 on high volumes of 31.29 lakh shares.
Ansal Infrastructure (up 18.49% to Rs 90.10), Akruti City (up 11.52% at Rs 908.20), Indiabulls Real Estate (up 17.65% to Rs 225.30), Unitech (up 3.15% to Rs 125.90), and Housing Development & Infrastructure (up 8.08% to Rs 224.05), advanced.
The BSE Realty index surged 7.59% to 4,102.64 and was the top gainer among the BSE sectoral indices today, after striking a 52-week low of 3,598.36 on Thursday, 18 September 2008.
India's largest private sector bank in terms of net profit ICICI Bank surged 10.17% to Rs 634.40, after its chief executive officer K V Kamath said the bank is an extremely healthy institution and has ample capital. The bank had on Wednesday, 17 September 2008, denied rumours of top management selling shares following a sell-off in the counter.
Other banking shares HDFC Bank (up 6.22% to Rs 1298), and State Bank of India (up 0.30% to Rs 1566), edged higher.
India’s top tractor maker by sales Mahindra & Mahindra was the lone loser from Sensex pack. The stock lost 0.10% to Rs 550.
The wholesale price index rose 12.14% in the 12 months to 6 September 2008, marginally above the previous week's rise of 12.10%, data released after market hours on Thursday, 18 September 2008 showed.
Telecom pivotals surged in late trade. India’s top cellular services provider by market capitalisation Bharti Airtel jumped 6.54% to Rs 810.10. In late trade, 12.23 lakh shares, or 0.06% of company's equity changed hands in a block deal at Rs 798.50 on BSE.
India’s second largest cellular services provider by market capitalisation Reliance Communcations rose 5.63% to Rs 375.50.
Capital goods heavyweights advanced. India’s largest power equipment maker by sales Bharat Heavy Electricals surged 6.57% to Rs 1715. Larsen & Toubro, the country’s largest engineering & construction company by sales, advanced 4.27% to Rs 2650.
India’s largest oil exploration company by market capitalisation Oil & Natural Gas Corporation soared 7.27% to Rs 1071.80 on reports the company would invest Rs 19,338 crore in oil and gas hunt during the current fiscal year, 10% higher than last year.
India’s largest private sector aluminium maker by sales Hindalco Industries rose 0.31% to Rs 112.80. The company’s rights issue will open on Monday, 22 September 2008.
HDFC (up 8.86% to Rs 2320), Tata Power (up 8.69% to Rs 1031), and Jaiprakash Associates (up 6.08% to Rs 135.15) edged higher from Sensex pack.
Reliance Capital was the top traded counter on BSE with turnover of Rs 441 crore followed by Reliance Industries (Rs 336.25 crore), Bharti Airtel (Rs 266 crore), ICICI Bank (Rs 229.35 crore) and State Bank of India (Rs 197 crore), in that order.
Jaiprakash Associates topped volumes chart on BSE with volumes of 1.48 crore shares followed by Reliance Natural Resources (1.34 crore shares), IFCI (1.27 crore shares), Sesa Goa (1.13 crore shares) and Kohinoor Broadcasting (75.66 lakh shares) in that order. Among side counters, Reliance Capital (up 14.27% to Rs 1284), Engineers India (up 14.31% to Rs 620), and Educomp Solutions (up 14.65% to Rs 3800), surged.
HCL Technologies spurted 8.28% to Rs 213.25 on reports the company would go for a large $1-2 billion acquisition in the US or Europe before 2011.
Patel Engineering jumped 3.02% to Rs 363 after the company bagged an order worth Rs 695.57 crore from the Andhra Pradesh state government. The company made this announcement during trading hours today, 19 September 2008.
Phoenix Mills spurted 2.06% to Rs 146 after 20.45 lakh shares, or 1.41% the company's equity, changed hands in a block deal at Rs 151.50 each on BSE at 10:07 IST.
Videocon Industries surged 6.26% to Rs 230.95 after the company said its overseas unit VB (Brasil) Petroleo has acquired 100% stake in EnCana Brasil Petroleo of Brazil for consideration of $165 million. The company made this announcement during trading hours today, 19 September 2008.
Light, sweet crude for October 2008 delivery added 72 cents to settle at $97.88 a barrel on Thursday, 18 September 2008 on the New York Mercantile Exchange.
Stock On Wall Street Manages To Turn Around
Efforts of The Global Central Banks Helped To Soothe Wall Street
Stocks on Wall Street got off to a positive start as central banks attempted to calm concerns in the banking system by infusing billions of dollars into the global financial system. The advance was countered with selling pressure that turned an early 2% Dow advance into a 1.4% midday loss. However, the combined influence of an announcement prohibiting short selling in the U.K. and reports Treasury is considering a plan to create a Resolution Trust-like operation as a solution to the financial crisis stimulated huge buying interest late in the day. The Dow finished with a 3.9% gain, near its session high.
The major averages moved sharply higher in the final hour of trading, ended the day just off of their session highs. The Dow closed up 410.03 points or 3.9 percent at 11,019.69, the Nasdaq closed up 100.25 points or 4.8 percent at 2,199.10 and the S&P 500 closed up 50.12 points or 4.3 percent at 1,206.51.
Sector wise, all ten of the economic sectors advancing as the U.S. Federal Reserve along with five other central banks in Europe enacted plans to deal with the elevated pressures in U.S. dollar short-term funding markets. Among the efforts, the Fed provided an extra $180 billion to the other central banks involved via its temporary reciprocal currency arrangements or swap lines, valid through January 30, 2009. This increased capacity is intended to provide dollar funding for both term and overnight liquidity operations by the other central banks.
While the efforts of the global central banks helped to soothe Wall Street, investors continued to worry over the health of the financials. Following yesterday’s $85 Federal million loan to AIG along with Lehman Brothers’ announcement that it is seeking bankruptcy protection and Bank of America’s plan to acquire Merrill Lynch, some investors are wondering who will be next.
Washington Mutual and Morgan Stanley have both come under extreme pressure as of late amid continued credit worries. Media reports have tied both companies to potential mergers - Washington Mutual to Citigroup or Wells Fargo and Morgan Stanley to Wachovia.
Fueling the speculation with Washington Mutual, a major investor waived a provision of its agreement that would have required a potential buyer or other major investor to pay the firm hundreds of millions of dollars in addition to whatever money was injected into Washington Mutual.
Consolidation is also taking place overseas. U.K. banking giant Lloyds TSB Group announced it is acquiring struggling U.K. mortgage lender HBOS in an all-stock deal valued at roughly $22.2 billion. The U.K. government brokered the deal, and is overriding anti-monopoly regulations, according to reports.
The financial sector was able to garner favor as word that the Financial Services Authority, the United Kingdom's independent financial regulator, issued a temporary ban on short selling financial companies. Meanwhile, the New York Attorney General said he wants to freeze short selling in financial stocks, according to Dow Jones.
The sector was helped even more after reports surfaced that Treasury Secretary Paulson is talking about a Resolution Trust Corporation-type solution that would help end the current crisis.
Financials were down 6.2% at their low, but closed with a gain of 11.7%. Still, the heavy losses incurred earlier in the week have the sector looking at a 5.7% week-to-date decline.
The significance of the Fed's actions and developments from the financial sector caused participants to generally overlook most other happenings.
Meanwhile, there were several economic reports released earlier in the day. Among the various reports, the Federal Reserve Bank of Philadelphia released its report on activity in the Philadelphia-area manufacturing sector. In the report, the Philly Fed said that the sector unexpectedly expanded in the month of September, with the Philly Fed Index climbing into positive territory. The Philly Fed said its index of current activity rose to a positive 3.8 in September from a negative 12.7 in August, with a positive reading indicating growth in the sector. Economists had expected the index to come in at a negative 10.0.
In another economic release, initial jobless claims for the week ended 13 September increased 10,000 to 455,000 while the four-week moving average bumped up to 445,000 from 440,000. The weekly figure was above the consensus estimate of 440,000. The four-week moving average sits roughly where it did in mid-August, but still reflects a soft labor market.
Tracking the index in detail, the Dow components ended the session with substantial gains, after showing a lack of direction throughout most of the day pushing the blue chip index sharply higher. With the rally, none of the Dow components ended the day on the downside.
Citigroup was one of the biggest gainers on the Dow, boosted by the strength seen in the financial sector. Shares of the financial services giant closed up 18.7%, reversing some of its recent losses. With the gain, the stock climbed off of an eleven-year closing low set in the previous session. Earlier in the day, Citigroup announced that it is appointing Mark Shafir as head of its Global Mergers and Acquisitions department.
Other financial stocks within the Dow saw substantial gains as well, including Bank of America, JP Morgan Chase and American Express. Bank of America closed up 12.4 %, JP Morgan Chase closed up 12.7% and American Express closed up 14.2%.
AIG also showed considerable strength, up 31.2%. Shares of the insurer have been in free fall for the past two weeks amid concerns over its liquidity. Late Tuesday, the Federal Reserve announced that it would issue AIG a 24-month emergency loan for $85 million.
Earlier in the day, the Dow announced that Kraft Foods would replace AIG in the Dow Jones Industrial Average, effective with the opening of trading on 22 September 2008. Kraft posted a 3.3% gain.
General Motors saw significant buying interest as well. Shares of the automaker closed 14.8 percent higher, reversing losses posted in the previous two sessions. On Wednesday, the stock set a monthly closing low.
General Electric, Home Depot and Pfizer also ended the session notably higher. General Electric closed up 7.4%, compared to a 5.2% gain by Home Depot. Pfizer ended the day 4.8% higher.
In other regional markets, the stock markets across the Asian region closed mostly lower after Wall Street plunged overnight. Japan’s Nikkei 225 average closed down 2.2%, well off of its worst level of the 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. The Australian S&P/ASX 200 index gave away 114.9 points to end at 4,607.3, its lowest close since December 2005.
Meanwhile, the major European averages ended the day mixed after seeing earlier strength. The German DAX Index closed slightly higher, while the French CAC 40 Index closed down 1.1% and the U.K’s FTSE 100 Index ended the day 0.7% lower.
Pre Session Commentary - Sep 19 2008
The Indian Market is expected to have positive opening as US markets closed in green and Asian markets are trading higher. On Thursday, Indian markets broke its seven days losing streak to recover smartly from the dip fall and close in green terrain. Markets bounced back on Finance Minister’s statement about India’s financial health. Recovery in Asian markets also lifted up the sentiments as china relaxed policies for second time in the week and Japan, Australia and India, pumped $28 billion money into the markets. Domestic markets opened on down beat note and crashed since initial bell on weak global cues. Further markets continued to lose ground on another bloody day. Markets took U turn after mid session and recovered to end with gains. From the sectoral front, Oil & Gas, Bank, Capital Goods, and Auto stocks were leaders of the day as witnessed most of the buying from these baskets. However, Reality, Consumer Durables, Metal and IT stocks remained out of favor. Mid cap and Small cap stocks were also losers as lost more than 1% and 2% respectively.
The BSE Sensex ended higher by 52.70 points at 13,315.60 and NSE Nifty ended up by 29.90 points at 4,038.15. 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. We expect that market may gain some ground during the trading session.
Inflation rose marginally to 12.14% for 6th September 2008, as against 12.1% recorded a week earlier on account of the rise in primary and food articles. Primary articles were up by 1%, food articles rose 1.4% and non-food articles 0.2 %. The annual inflation rate was 3.46% during the corresponding week of the previous year.
According to the Finance minister of India, the PSU banks have no exposure to US financial crisis. He said that there is no cause for alarm for the Indian financial institutions and banks that are largely insulated from the crisis that gripped the financial system of US. Indian operations of US based AIG and commercial banks in the country are in sound health. There is no reason and need to worry as AIG''s life and non-life insurance businesses in India are in 26:74 ratio with the Tata.
On Thursday, the US market rallied on hopes of a fix from Fed as government is considering a permanent solution to the credit crisis. Along with that world’s top central banks poured billion dollars into the global market to help banks in trouble. Crude oil for October delivery added 72 cents to settle at $97.88 a barrel on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed higher by 410.03 points to close at 11,019.69 followed by the NASDAQ index ended up by 100.25 points at 2,199.10 and the S&P 500 (SPX) gained 50.12 points to close at 1,206.51.
Indian ADRs ended up. In technology sector, Wipro ended higher by (7.52%) followed by Patni Computers advanced by (2.28%), Infosys gained (1.66%) and Satyam went up by (1.53%). In banking sector ICICI Bank and HDFC Bank gained (11.77%) and (11.21%). In telecommunication sector, MTNL and Tata Communication advanced by (15.19%) and (9.63%). Sterlite industries increased by (9.53%).
Today the major stock markets in Asia are trading higher. Hang Seng index is trading up by 1081.39 points at 18,713.85 along with Japan’s Nikkei higher by 378.90 points at 11,868.20, Taiwan Weighted gained 304.58 points at 5,946.53 and Singapore''s Straits surged 97.10 points at 2,516.31.
The FIIs on Thursday stood as net seller in equity and in debt. Gross equity purchased stood at Rs3,762.00 Crore and gross debt purchased stood at (Rs8,712.70) Crore while the gross equity sold stood at Rs5,095.50 Crore and gross debt sold stood at Rs629.20 Crore. Therefore, the net investment of equity reported was (Rs1,333.50) Crore and net debt was (Rs9,341.90) Crore.
On Thursday India''s rupee dropped on concern of global stocks disorder and Morgan Stanley’s talks on possible merger with Chinese bank CITIC. The rupee closed at 46.42/43 per dollar, 0.2% weaker than 46.34/35 at close on Wednesday.
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.
Today, Nifty has support at 3,976 and resistance at 4,254 and BSE Sensex has support at 13,038 and resistance at 13,984.
Market to stage a comeback
The rally in the US markets and a rise in all Asian indices in the ongoing trading session may help the domestic indices pull-back from lower levels. However, lack of clarity in the market and volatility may drag down the market. Among the indices, the Nifty could face a resistance at 4100-4150 levels and has a likely supports at 3995-3955 levels. The Sensex has a likely support at 13170 and could test higher levels at 13500.
US indices bounced back sharply and finished higher, helped several big bank stocks staged a significant late-afternoon rally Thursday along with the broader market after reports surfaced about a potential long-term government solution to the credit crunch. While the Dow Jones moved up by 410 points at 11,020, the Nasdaq managed to add 100 points at 2,199.
All the Indian floats had a field day on the US bourses. Tata Motors, ICICI Bank & HDFC Bank flared up over 11% each followed by MTNL jumped 9.74%, VSNL up by 9.63% & Wipro gained 7.52%, while Dr Reddy's, Rediff, Patni Computer, Infosys and Satyam gained around 1% each.
Crude oil prices eased a little, with the Nymex light crude oil for September delivery falling by 72 cents to close at $97.88 a barrel. In the commodity space, the Comex gold for August delivery gained by $46.50 to settle at $897 an ounce.
Indian Overseas Bank
We recommend a buy in Indian Overseas Bank from a short-term trading perspective. From the charts of the bank it is clearly visible that it has been medium-term uptrend from its 52-week low of Rs 69, recorded in July. We notice an ascending triangle pattern, spanning over the past two months. Generally, ascending triangle patterns are continuation patterns however; in rare cases they also occur as reversal patterns. At present this pattern operates as a reversal pattern. In early September, the stock penetrated the long-term down trendline which was in place since January. On September 18, the stock conclusively broke out of the triangle pattern by surging 7 per cent with high volume. The stock is trading well above its 21 and 50-day moving averages. The daily relative strength index is featuring in the bullish zone. The daily moving average convergence and divergence is also featuring in the positive territory. Our short-term forecast for the stock is positive. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 104. We anticipate the stock to move up until it hits our price target of Rs 122 in the forthcoming trading sessions.
Indices set to rally on strong global cues
A rally across the globe on hopes for a more comprehensive US government approach in taming the global credit crisis is likely to propel key benchmark indices today, 19 September 2008. However latest data showing rise in inflation may dampen the sentiment.
The wholesale price index rose 12.14% in the 12 months to 6 September 2008, marginally above the previous week's rise of 12.10%, data released after market hours on Thursday, 18 September 2008 showed.
Light, sweet crude for October 2008 delivery added 72 cents to settle at $97.88 a barrel on Thursday, 18 September 2008 on the New York Mercantile Exchange.
Meanwhile, speaking on the financial crisis, the US President George W Bush defended the government's actions over the last few days and said that the market may take a while to normalize. George W Bush added that in recent weeks the Federal Government has taken extraordinary measures to address the challenges confronting financial markets.
Asian markets rallied today, 19 September 2008. China's Shanghai Composite gained 9.40% or 178.14 points at 2,073.97, Hong Kong's Hang Seng was up 6.13% or 1081.39 points at 18,713.85, Japan's Nikkei rose 3.30% or 378.90 points at 11,868.20, Singapore's Straits Times advanced 4.01% or 97.10 points at 2,516.31, South Korea's Seoul Composite surged 4.60% or 63.99 points at 1,456.41, and Taiwan's Taiwan Weighted added 5.40% or 304.58 points at 5,946.53.
US markets recorded biggest one-day percentage gain since October 2002 after the US Treasury Secretary Henry Paulson proposed to congressional lawmakers that would create an entity to deal with the billions of dollars of bad debt still choking the financial system. The Dow Jones industrial average jumped 410.03 points, or 3.86%, to 11,019.69. The S&P 500 index advanced 50.12 points, or 4.33%, to 1,206.51, and the Nasdaq Composite index surged 100.25 points, or 4.78%, to 2,199.10.
Back home, short covering in index heavyweights towards the fag end of the session helped key benchmark indices post small gains on Thursday, 18 September 2008 after a dismal start. The BSE 30-share Sensex rose 52.70 points or 0.4%, to close at 13,315.60 and the S&P CNX Nifty rose 29.90 points or 0.75% at 4038.15.
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.
Foreign institutional investors (FIIs) were net equity sellers worth Rs 1201.64 crore while mutual funds bought shares worth Rs 1192.20 crore on Thursday, 18 September 2008, according to provisional data on NSE.
FIIs were net buyers of Rs 995.58 crore in the futures & options segment on Thursday, 18 September 2008. They were net buyers of index futures to the tune of Rs 511.58 crore and bought index options worth Rs 461.71 crore. They were net buyers of stock futures to the tune of Rs 44.20 crore and sold stock options worth Rs 21.91 crore.
Bull Run Continue In Gold
Gains Of More Than 1500 In Two Days On MCX
Gold topped $900 an ounce in intraday trading on Thursday, adding to its historic rally from the day before. December gold closed at $897.00, up $46.50 on the session. Prices touched as high as $926.00, a seven-week high. Gold has gained more than $120 in two days as traders turn towards the precious metal as a hedge in an effort to avoid exposure to plunging equities. MCX Gold October expiry contract was at Rs 13310 per 10 grams at the closure, a gain of Rs 564 in the intra day session.
The dollar edged higher in early Friday trading, rising above the 106-figure versus the yen and pushing the euro lower toward the 1.42-region. The advance in the greenback and stocks was prompted by discussions for the creation of a government-sponsored entity that would remove the illiquid assets on bank balance sheets that are the underlying source of the current stresses in financial institutions and financial markets.
In doing so, the government aims to restore confidence in the recently battered financial industry following the string of failures and halt any additional fallout on the already slumping economy.
Global central banks announced coordinated efforts to pump massive amounts of liquidity into the financial system to alleviate "continued elevated pressures in the US dollar short-term funding markets". The BoC, BoE, ECB, SNB, BoJ and Federal Reserve increased their swap lines to provide improved liquidity in both term and overnight operations. The FOMC has approved a $180 billion expansion of its swap lines, with the facility while the ECB increased by $55 billion to up to $110 million and the Swiss National Bank by $15 billion to up to $27 billion.
The US economic reports released on Thursday included weekly jobless claims, which jumped to 455k from 445k in the previous week, the August leading indicators and the September Philadelphia Fed survey. The August leading indicators index came in at -0.5%, improving from -0.7% from July while the Philadelphia Fed business survey unexpectedly increased to 3.8 versus -12.7 in August. There are no data releases slated for the Friday session with market movements largely dictated by any new revelations over the government's ongoing efforts to resolve the current crisis and turmoil in the financial markets.
Crude Oil Rally Intensifies As Traders Jump Onto Commodities
Touches High Of 102 In Intra Day NYMEX Trading
Light, sweet crude for October delivery added 72 cents to settle at $97.88 a barrel on the New York Mercantile Exchange. The contract had reached as high as $102.24 as worries intensified about the stability of the U.S. financial system and as investors fled the equities market in favor of commodities. MCX Crude Oil for October expiry closed the session at Rs 4536 per barrel up Rs 89.
Day before yesterday, the Energy Information Administration said U.S. crude stocks fell by 6.3 million barrels for the week ending Sept. 12, much bigger than the 3.7 million barrel drop expected by analysts expected.
Gasoline inventories fell by 3.3 million barrels to 184.6 million barrels. Analysts expected stockpiles of the motor fuel to fall by 3.6 million barrels. Inventories of distillate fuel, which include diesel and heating oil, fell by 900,000 barrels to 129.6 million barrels for the week ended Sept. 12.
In economic front, Global central banks announced coordinated efforts to pump massive amounts of liquidity into the financial system to alleviate continued elevated pressures in the US dollar short-term funding markets. The BoC, BoE, ECB, SNB, BoJ and Federal Reserve increased their swap lines to provide improved liquidity in both term and overnight operations. The FOMC has approved a $180 billion expansion of its swap lines, with the facility while the ECB increased by $55 billion to up to $110 million and the Swiss National Bank by $15 billion to up to $27 billion.
Morning Call - Sep 19 2008
Market Grape Wine :
In House:
Nifty at a support of 3950 and 3830 with resistance at 4125 and 4190 levels.
Cash: Buy REL CAPITAL above 1124 target 1285.
Cash: Buy LT target 2625 with S/L 2530.
Future: Buy REL CAPITAL above 1128 target 1250 with S/L 1100.
Future: Buy RIL above 1943 target 2030 with S/L 1900.
Out House:
Markets at a support of 13050 & 13452 and resistance at 13786 & 14114 levels .
Markets to be very volatile , maintain strict stop loss for your trades .
Buy : LNT & Bhel
Buy : PunjLLoyd & Educomp
Buy : SBIN & IciciBank
Buy : Kohinoor
Buy : Core Project
Buy : RIL & RelCap
Buy : Suzlon
Dark Horse : LNT , Bhel , RIL , RelCap , Infy , Suzlon , Core & SKumar
TGIF : Thank God Its Friday : After a tormenting week book profits at higher levels .
Asian markets zoom
Asian stocks gained, lifting the region`s benchmark index from a three-year low, and US futures surged as governments took steps to shore up financial companies to prevent more failures.
Wachovia soared in US trading yesterday after a senator proposed an agency to pump capital into financial companies. Industrial & Commercial Bank of China, the nation`s biggest lender, climbed limit after the government said it will increase its controlling stake.
Japanese benchmark index Nikkei gained 378.906 points, or 3.30%, to trade at 11,868.20.
Hong Kong`s Hang Seng index rose 1,021.86 points, or 5.80%, to trade at 18,654.32.
China`s Shanghai Composite advanced 179.19 points, or 9.45%, to trade at 2,075.03.
Taiwan`s Taiex index gained 315.54 points, or 5.59%, to trade at 5,957.49.
South Korea`s Kospi index rose 64.8 points, or 4.65%, to trade at 1,457.23.
Singapore`s Straits Times gained 93.22 points, or 3.85 %, to trade at 2,512.43. (8.18 a.m., IST)
Rakesh Jhunjhunwala - on the markets
On the bear market:
What is a bear market, what is a bull market, I don't know. Numerically - surely, since we have broken the last lows that we had in August 2007, we'll have to term it as a bear mkt. But I don't think the long-term Indian stock bull market has ended. I think it’s in interruption mode.
On the macros:
I don't rule out anything in the financial markets. I always question- suppose I have to pay margin tomorrow, to Lehman Brothers, I would have questioned it. It may be Goldman Sachs. I will not pay if they are a position taking company. If you take position yourself, I'll not pay margin. Never believe that the BoE (Bank of
On the
I have made presentations to show in October, that this is going to be an unprecedented fall. And I have reasoned out how much is the lending to subprime, and that this problem cannot be stopped by reducing interest rates. The American bull market has come to an end. It may be a long correction.
On exercising caution:
If the Index instead of going from 3,000 to 21,000 had gone from 3,000 to 13,000, and then back to 11,000 - would that not have been a bull market? Then it would have been termed a bull market correction. So at levels, where you saw the participation, the valuations, you saw what was coming in the Western world, you saw the sheer corporate greed in
The mother of all bull runs is still to come
The mother of all bull runs is still to come. But I think the next high and the next bull market will be far bigger and have far more participation, and far more excesses than we had in the last one year.
via MoneyControl
Turnover spurts
Nifty September 2008 futures at premium
Nifty September 2008 futures were at 4044, at a premium of 5.85 points as compared to spot closing of 4038.15. NSE's futures & options (F&O) segment turnover was Rs 74,094.75 crore, which was higher than Rs 58,546.48 crore on Wednesday, 17 September 2008.
Reliance Capital September 2008 futures were at premium at 1135 compared to the spot closing of 1125.20.
ICICI Bank September 2008 futures were at premium at 578.10 compared to the spot closing of 577.15.
State Bank of India September 2008 futures were at discount at 1555 compared to the spot closing of 1566.60.
In the cash market, the S&P CNX Nifty gained 29.90 points or 0.75% at 4038.15
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