India Equity Strategy
India Equity Analysis, Reports, Recommendations, Stock Tips and more!
Search Now
Recommendations
Wednesday, October 01, 2008
Turnover drops
Nifty October 2008 futures at premium
Nifty October 2008 futures were at 3969, at a premium of 18.25 points as compared to spot closing of 3950.75. NSE's futures & options (F&O) segment turnover was Rs 47,733.85 crore, which was lower than Rs 56,549.63 crore on Tuesday, 30 September 2008.
Reliance Industries October 2008 futures were at premium at 1920 compared to the spot closing of 1906.70.
Reliance Capital October 2008 futures were at premium at 1142.10 compared to the spot closing of 1141.10.
Larsen & Toubro October 2008 futures were near spot price at 1216 compared to the spot closing of 1216.10.
In the cash market, the S&P CNX Nifty rose 29.55 points or 0.75% at 3950.75.
BSE Bulk Deals to Watch - Oct 1 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
1/10/2008 520155 ABG INFRALOG DEUTSCHE SECURITIES MAURITIUS LIMITED B 120513 247.00
1/10/2008 520155 ABG INFRALOG MACQUARIE BANK LIMITED S 120603 246.99
1/10/2008 532870 ANKIT METAL GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD B 737000 43.25
1/10/2008 532870 ANKIT METAL MORGAN STANLEY MAURITIUS COMPANY LIMITED S 737000 43.25
1/10/2008 531530 BETALA GLO S CHHOTALAL R BHANDERI B 9511 7.94
1/10/2008 531530 BETALA GLO S SONIA GULATI S 10170 7.87
1/10/2008 521244 CHITRA.SPIN. RAMESH BABU P B 50420 4.41
1/10/2008 521244 CHITRA.SPIN. RAMESH KORITALA S 45565 4.41
1/10/2008 526550 COUNTRY CLUB GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD B 284508 258.00
1/10/2008 526550 COUNTRY CLUB MORGAN STANLEY MAURITIUS COMPANY LIMITED S 284508 258.00
1/10/2008 513059 G.S. AUTO SPJSTOCK B 64201 77.14
1/10/2008 513059 G.S. AUTO HARDIK M MITHANI S 47823 75.43
1/10/2008 513059 G.S. AUTO SPJSTOCK S 63350 78.46
1/10/2008 531863 GEEKAY FINAN KAMAL KUMAR KESWANI S 25000 43.35
1/10/2008 522217 GUJ APO IND AJITKUMAR TRIBHOVANDAS PATEL B 166467 145.80
1/10/2008 522217 GUJ APO IND PATEL AJITKUMAR TRIBHOVANDAS HUF S 166467 145.80
1/10/2008 532081 K SERA SERA S V ENTERPRISES B 969286 21.54
1/10/2008 532081 K SERA SERA S V ENTERPRISES S 1015286 21.61
1/10/2008 532899 KAVERI SEED INDIA EMERGING INFRASTRUCTURE PVT LTD B 156875 175.96
1/10/2008 532899 KAVERI SEED DIWAKAR BHAGWATI GANDHI S 91000 175.10
1/10/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD B 54509 40.05
1/10/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD S 35000 39.37
1/10/2008 532045 NEXXOFT INFO CHETAN VAGHJIBHAI SHAH B 85150 41.30
1/10/2008 532045 NEXXOFT INFO MUKESH HIRALAL DOCTARIA B 87612 41.28
1/10/2008 532045 NEXXOFT INFO MANOJ H.MEHTA S 44192 41.27
1/10/2008 532045 NEXXOFT INFO YRAVIPRASAD S 50000 41.30
1/10/2008 531996 ODYSSEY CORP ANNUANILAGRAWAL S 46801 30.18
1/10/2008 532904 SUPREME INFR MAVI INVESTMENT FUND LTD. B 163809 63.49
1/10/2008 513216 UTTAM GALVA PANKAJ RAJKUMAR SUREKA S 665246 30.28
1/10/2008 518051 VINAY CEME L JASMIT SINGH B 417000 42.80
1/10/2008 533011 VISHAL INFO HIRENKUMARPARSHOTTAMBHAIPATEL S 64551 325.28
1/10/2008 517498 WEBEL SL ENE NOVEL APARTMENTS PRIVATE LIMITED B 65259 225.74
1/10/2008 517498 WEBEL SL ENE SOHANLALCAGARWAL S 50000 226.00
1/10/2008 532788 XL TEL ENE GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD B 358415 136.50
1/10/2008 532788 XL TEL ENE MORGAN STANLEY MAURITIUS COMPANY LIMITED S 358415 136.50
NSE Bulk Deals to Watch - Oct 1 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
01-OCT-2008,EVERONN,Everonn Systems India Lim,DEUTSCHE SECURITIES MAURITIUS LIMITED,BUY,168888,343.60,-
01-OCT-2008,RAJSREESUG,Rajshree Sugars & Chem,RAJSHREE PATHY,BUY,418886,50.50,-
01-OCT-2008,EVERONN,Everonn Systems India Lim,MACQUARIE BANK LIMITED,SELL,168888,343.60,-
01-OCT-2008,RAJSREESUG,Rajshree Sugars & Chem,SBI MUTUAL FUND,SELL,423000,50.50,-
IT Spending to fall
IT spending by global financial institutions may shrink by a fifth in 2009 as large entities such as Bear Stearns, Lehman Brothers, Merrill Lynch and Wachovia Corp become victims of the worsening credit crisis in the US.
The financial services sector is the biggest spender on technology worldwide and Indian service providers rely on the sector to earn over a third of their revenues.
Research firm Celent estimates IT spending on products and services by global financial institutionss to grow at 5.9 per cent to $362.4 billion in 2008 and to $386.8 billion in 2009.
“As of today, 20 per cent of the IT budgets for 2009 will be cut,” said Mr Sudin Apte, analyst and head of for Forrester Inc’s India operations. Consolidation and disappearance of some large entities from the financial services arena would lead to budget cuts.
“There will be immediate scrutiny of new discretionary projects and compliance will become a key as government plans a bail-out package. As a result, there will be more spending on compliance,” Mr Apte said.
Recently Forrester said 40 per cent of the large businesses in North America and Europe have reduced their overall IT budgets for 2008 in reaction to a slowing economy.
About half of the financial services clients surveyed by Forrester have slashed their IT budgets for 2008.
‘Worse than expected’
“The crisis is turning out to be worse than expected and I guess that some 600-800 small and medium banks in the US will go out of business as the credit flow dries up,” said Mr Phaneesh Murthy, CEO of iGATE Corp.
“As a result of this credit squeeze and consolidation, I think there will be a 15-20 per cent cut in IT budgets of financial services sector for 2009,” Mr Murthy added.
Slowdown
Celent estimates indicate that IT spending by financial institutions has already slowed down in past two years. IT spending stood at $342.1 billion in 2007, a year-on-year increase of 5.9 per cent, but lower than 8.7 per cent growth achieved in 2006.
“I guess there would be a moderate cut of 10-15 per cent because of consolidation and reduction in scale” Mr S.Sabyasachi, research director at neoIT, an offshore advisory firm.
Transformational and business process reengineering projects could take a back-seat as financial institutions look to efficiency to cut their costs, Mr Sabyasachi added
Post Session Commentary - Oct 1 2008
The Indian market closed on a positive note after dwindling at the initial stage. The market made a smart recovery from the initial fall on the expectations of a new bail out plan in US to deal with the financial crisis. The US Senate will vote today i.e. on, 1 October 2008, on a new version of the $700 billion financial sector bailout package. Additionally, the US Senate is all set to take up the vote on the Indo-US Civil Nuclear agreement today, which also gave a further boost to the market. From the sectoral point, the IT scrips remained the centre of attraction of the investors as most buying was seen from this basket due to decline of rupee versus dollar that touched fresh 5 year low to 47.23 at the initial stage of the session. Along with this, the bankex scrips also attracted investor’s confidence as the Finance Minister yesterday stated that the Indian banks are well capitalized and regulated and also added that “The Indian market is a sound, attractive and well regulated market,”. The BSE Sensex closed above 13,000 level and the NSE Nifty above the 3950 mark. The market breadth was positive as 1476 stocks closed in green while 1123 stocks closed in green and 73 stocks remained unchanged.
The BSE Sensex closed higher by 195.24 points at 13,055.67 and NSE Nifty ended up by 29.55 points at 3,950.75. The BSE Mid Caps and Small Caps closed with gains of 25.87 points and by 29.33 points at 4,824.16 and 5,606.80 respectively. The BSE Sensex touched intraday high of 13,203.86 and intraday low of 12,697.30.
Gainers from the BSE Sensex are Satyam Comp 7.47%, JP Associates 7.02%, HDFC Bank 5.26%, Grasim Inds 4.63%, Tata Power 4.46%, Infosys Tech 4.03%, ICICI Bank 3.10% and Tata Steel 3.07%.
Losers from the BSE Sensex are DLF 2.03%, Reliance Inds 2.01%, Tata Motors 1.44%, Reliance Infra 1.11%, M&M 0.53%.
The IT index closed with handsome gains of 122.82 points at 3,217.90. Scrips that gained are Satyam Comp 7.47%, Patni Comp 7.43%, HCL Tech 5.87%, Infosys Tech 4.03%, Finance Tech 3.20%, Rolta India 3.18% and Mosear Baer 2.94%.
The BSE Bank index closed in green with gains of 209.43 points at 6688.28. As HDFC Bank (5.26%), Federal Bank (4.65%), Bank of baroda (4.52%), Indus Ind bank (4.06%), Punjab national Bank (4.02%) and Oriental Bank (4.01%) all closed in positive territory.
The Consumer Durables index gained 86.27 points to close at 3,015.45. The only gainers are Videcon Industries (13.87%) and Titan Industries (0.38%) while Gitanjali GE (2.10%) and Blue Star L (1.26%) were the losers in the index.
The BSE Capital Goods index closed with marginal gains of 11.78 points at 10,592.13. Major gainers are As Usha Martin (15.05%), Gammon India (7.13%), Alstom Project (4.95%), BEML Ltd (2.77%), Crompton Greaves (2.43%) and Punj Lloyd (1.64%).
The BSE Oil & Gas index closed down by 99.73 points at 8939.55 as Reliance natural resource (2.11%), Reliance Industry (2.01%), Reliance petroleum (1.99%), Essar oil (1.63%), HPCL (0.80%) and IOC ltd (0.62%) ended in negative territory.
The BSE Reality index closed lower by 81.56 points at 3,427.21. Losers are Mahindra Lifespace Developers (6.47%), Indiabulls reality (5.08%), Orbit Co (4.62%), Anant Raj Industries (4.42%), Omaxe Ltd (3%) and Ansal Infrastructure (2.94%).
The BSE Metal index surged by 59.59 points to close at 9051.65. Major gainers are Welspun Gujrat SR (5.43%), Tata Steel (3.07%), Jindal Steel (2.70%), Jindal SAW (1.81%), NMDC Ltd (1.80%), Hindustan Zind (1.15%) and Hindalco Industries (0.87%).
Volatile but buoyant
The market wiped out a loss of over 163 points incurred in the first half after a strong bout of buying led by information technology (IT)and banking stocks triggered a wide-spread buying. The Sensex started the day 147 points higher at 13,007 following weakness in Asian indices and crashed to the day's low of 12,697 on relentless selling. While the market recovered thereafter, the Sensex witnessed a sharp turnaround in afternoon as gains in heavyweights, IT, banking and consumer durable stocks propelled it to an intra-day high of 13,204. After gyrating 507 points during the intra-day trades, the Sensex gained 195 points to close at 13,056, while the Nifty ended 30 points higher at 3,951.
The market breadth was positive. Of the 2,672 stocks traded on the BSE, 1,476 stocks advanced whereas 1,123 stocks declined. Seventy three stocks ended unchanged. The BSE IT index led the pack and gained 3.97% followed by BSE Bankex (up 3.23%) and BSE CD (up 2.95%).
Satyam Computer Services was the star performer among the heavyweights and the stock soared 7.47% at Rs318.75. Among other major gainers, JP Associates advanced 7.02% at Rs118.90, HDFC Bank jumped 5.26% at Rs1,294, Grasim Industries rose 4.63% at Rs1,765.70 and Tata Power moved up by 4.46% at Rs946.50. Infosys Technologies advanced 4.03% at Rs1,453.90, ICICI Bank gained 3.10% at Rs551.45 and Tata Steel added 3.07% at Rs438.65. However, Larsen & Toubro, DLF and Reliance Industries inched lower.
Over 1.23 crore shares of Reliance Natural Resources changed hands on the BSE followed by IFCI (0.81 crore shares), JP Associates (0.71 crore shares), Chambal Fertilisers and Chemicals (0.55 crore shares) and Ispat Industries (0.49 crore shares).
Sensex garners 460 points in two days
The key benchmark indices extended yesterday’s gains as investors bet US lawmakers would approve a bailout package for the US financial sector. The BSE 30-share Sensex advanced 195.24 points. With today's rise, Sensex has gained 459.82 points in last two trading sessions. The market remains closed tomorrow, 2 October 2008, on account of Gandhi Jayanti
IT pivotals surged as the rupee dropped to a fresh five-year low against the dollar. Banking stocks gained. Satyam Computer Services and Jaiprakash Associates rose more than 7% each. HDFC Bank rose more than 5%. The market breadth was positive on BSE.
European shares were mixed France’s CAC 40 and UK’s FTSE 100 rose between 0.04% to 1.35%. Germany’s DAX fell 0.53%.
The BSE 30-share Sensex rose 195.24 points or 1.52% to 13,055.67. The index shed 163.13 points at the day's low of 12,697.30, hit in mid-morning trade. The Sensex rose 343.43 points at day’s high of 13,203.86, in mid-afternoon trade.
The S&P CNX Nifty was up 29.55 points or 0.75% to 3,950.75.
BSE clocked a turnover of Rs 4,315 crore today as compared to a turnover of Rs 5,179.86 crore on 29 Setember 2008.
Nifty October 2008 futures were at 3969, at a premium of 18.25 points as compared to spot closing of 3950.75. NSE's futures & options (F&O) segment turnover was Rs 47,733.85 crore, which was lower than Rs 56,549.63 crore on Tuesday, 30 September 2008.
The BSE Sensex is down 7,231.32 points or 35.64% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 8,151.10 points or 38.43% below its all-time high of 21,206.77 struck on 10 January 2008.
As per the provisional figures on BSE, the foreign institutional investors (FII)s sold shares worth Rs 274.90 crore and domestic funds bought shares worth Rs 48.65 crore today, 1 October 2008.
The BSE Mid-Cap index was up 0.54% at 4,824.16 and BSE Small-Cap index was up 0.53% at 5,606.80.
BSE IT index (up 3.97% to 3,217.90), BSE Bankex (up 3.23% to 6,688.28), BSE Consumer Durbles index (up 2.95% to 3,015.45), BSE Teck index (up 2.6% to 2,612.17) outperformed Sensex.
BSE Realty index (down 2.32% to 3,427.21), BSE Oil & Gas index (down 1.1% to 8,939.55), BSE Capital Goods index (up 0.11% to 10,592.91), BSE Auto index (up 0.35% to 3,687.73), BSE Metal index (up 0.66% to 9,051.65), BSE HealthCare index (up 1.05% to 3,710.89), BSE Power index (up 1.08% to 2,284.70), BSE Power index (up 1.08% to 2,284.70), BSE PSU index (up 1.11% to 6,315.43) and BSE FMCG index (up 1.4% to 2,190.94) underperformed Sensex.
The market breadth was positive on BSE with 1476 shares advancing as compared to 1123 that declined. 73 shares remained unchanged.
India’s largest private sector company by market capitalization and oil refiner Reliance Industries fell 2.01% to Rs 1,907.25. The stock came off from the session's high of Rs 1,986.50.
IT stocks gained. The BSE IT index rose 3.97% to 3,217.90. Satyam Computer Services (up 7.47% to Rs 318.75), Infosys (up 4.03% to Rs 1,453.90), Wipro (up 2.78% to Rs 349.10), Tata Consultancy Services (up 1.24% to Rs 671) edged higher.
The Indian rupee dropped to a fresh five-year low in early trade today, 1 October 2008 on worries foreign investors would continue to sell their local investments amid a spreading global financial crisis.
Banking stocks rose. BSE Bankex rose 3.23% to 6,688.28. HDFC Bank (up 5.26% to Rs 1,293.65), ICICI Bank (up 3.1% to Rs 551.45) and State Bank of India (up 2.44% to Rs 1,501.45) edged higher.
Jaiprakash Associates (up 7.02% to Rs 118.90), Tata Power Company (up 4.46% to Rs 946.50), Grasim Industries (up 4.63% to Rs 1,765.70), edged higher from the Sensex pack.
DLF (down 2.03% to Rs 345.25), Tata Motors (down 1.44% to Rs 339.25), Reliance Infrastructure (down 1.11% to Rs 781.50) edged lower from the Sensex pack.
India’s largest tractor maker by sales Mahindra & Mahindra fell 0.53% to Rs 506.55. The stock came off from the session's high of Rs 506.55. The firm has reportedly created a trust, which would hold 8.7% stake in the company after the merger of two of its subsidiaries - Punjab Tractors and Mahindra Holding Finance - with itself. The trust has already acquired 4.96% stake in the parent company, added reports.
India’s largest car maker by sales Maruti Suzuki India gained 1.54% to Rs 697.70 after the company reported 5.3% rise in sales to 71,000 units in September 2008 over September 2007.
Reliance Natural Resources clocked the highest volume of 1.23 crore shares on BSE. IFCI (81.85 lakh shares), Jaiprakash Associates (71.52 lakh shares), Chambal Fertilisers & Chemicals (55.87 lakh shares) and Ispat Industries (49.59 lakh shares) were the other volume toppers in that order.
Reliance Capital clocked the highest turnover of Rs 400.63 crore on BSE. Reliance Industries (Rs 280.48 crore), ICICI Bank (Rs 246.37 crore), Axis Bank (Rs 235.23 crore) and State Bank of India (Rs 178.03 crore) were the other turnover toppers in that order.
The US Senate will vote on Wednesday, 1 October 2008, on a new version of the $700 billion financial sector bailout package, rekindling hopes that the credit crisis can be stemmed before claiming yet more banks and causing further damage to the global economy. US stock futures were in red. Nasdaq futures were down 14.50 points and Dow Jones futures were down 86 points.
Meanwhile, the US accounting regulators lent a hand Tuesday, 30 September 2008, to struggling financial institutions facing the possibility of big write-downs on mortgage assets. The Securities and Exchange Commission, in junction with the Financial Accounting Standards Board, issued guidelines under "fair value" accounting rules for financial firms trying to peg the value of hard-to-trade assets on their balance sheets.
Fair value accounting has been blamed for exacerbating the meltdown in the US banking system, forcing investment and commercial banks to write down well over $100 billion in assets.
Asian markets were trading mixed today, 1 October 2008. Japan's Nikkei and Taiwan's Taiwan Weighted Average rose between 0.78% to 0.96%. Taiwan stocks rose after Taiwan's government announced a two-week ban on all short selling to support the market. However, South Korea's Seoul Composite was down 0.58%. Stocks markets in China, Hong Kong and Singapore were closed today, 1 October 2008 for various holidays.
Global money markets remained in near paralysis after London interbank offered rates shot to record levels on Tuesday, 30 September 2008, as banks remained wary of lending to each other. The central banks of Japan and Australia kept injecting extra funds into their markets on Wednesday, 1 October 2008, and overnight dollar borrowing costs stayed near 6% in Asia -- three times the Federal Reserve's target for overnight rates.
France, Belgium and Luxembourg have this week poured 6.4 billion euros ($9 billion) into Franco-Belgian bank Dexia to avoid defaults on its loans, and France promised new bank measures to help depositors. Dutch-Belgian banking and insurance group Fortis, partially nationalized earlier this week, halted $4 billion worth of asset sales to China's Ping An and Deutsche Bank.
Meanwhile, with the end of third quarter of the calendar year 2008 on Tuesday, 30 September 2008, hedge fund are bracing for heavy redemption amid US financial sector crisis which has already spread to Europe. Investors in hedge funds are usually allowed to exit funds only on the final day of the financial quarter. Large-scale investor redemption in hedge funds may trigger further selling by foreign funds in India. Hedge funds mainly operate through the participatory notes route in India.
The United States Senate will take up the India-US nuclear deal bill for a debate and vote after on Wednesday (early Thursday morning IST).
India’s current account deficit jumped to $10.72 billion in Q1 June 2008 as compared to a deficit of $6.3 billion Q1 June 2007, as oil import bill has grown faster than income from software services exports and remittances from the Indian diaspora. The current account in the balance of payments measures the net position of a country’s exports and imports of goods and services.
The Bombay Stock Exchange (BSE) will launch exchange-traded rupee futures today, 1 October 2008. In August 2008, the National Stock Exchange of India (NSE) kicked off exchange-traded currency futures trading.
US light crude for November 2008 delivery rose 81 cents to $101.45 a barrel today, 1 October 2008 buoyed by hopes that Washington would find a way to pass a rescue plan to head off a deep recession in the United States and abroad.
October Snaps September Losing Streak
Asian Markets Starts The Last Quarter of 2008 With Positive Closing
The stock markets across the Asian region closed higher, except for South Korea, snapping a six-day losing streak. Speculation that the U.S. Senate will approve a $700 billion bank rescue plan to revive the credit markets boosted Asian investor sentiment. The stock markets in China, Hong Kong, Indonesia, Malaysia and Singapore remained closed on account of public holidays.
Yesterday on Wall Street the stocks rebounded following its biggest sell-off in years on Monday. The Dow jumped 485 points or 4.7% to finish at 10,850 after falling nearly 7% on Monday to its lowest close in nearly three years. The S&P 500 index gained 58 points or 5.3% to finish at 1,164, and the Nasdaq composite index climbed 98 points or 5.0% to end at 2,082.
Oil prices held steady above $101 a barrel in Asia on Wednesday. By 4:23 a.m. ET, oil was quoted at $101.86 a barrel, up $1.22. The contract for November settlement rose by $4.27 to settle at $100.64 a barrel on the New York Mercantile Exchange on Tuesday.
In the currency market, the U.S. dollar was trading in the lower 106-yen levels in late Tokyo deals, flat with its levels in early trade, but higher compared to the upper 104-yen range late Tuesday in Tokyo.
The Australian dollar closed at a two-week low as the multi-government rescue of yet another European bank encouraged traders to sell the euro and buy the US currency. The Aussie finished the session at US$0.7962-0.7966, down from Tuesday's close of US$0.8045-0.8048, recording the weakest close since September 16 when it finished at US$0.7886-0.7890.
The New Zealand dollar finished a quiet trading session at US$0.6703, flat with its opening quote at US$0.6702 and Tuesday's local close of US$0.6700.
The South Korean won rebounded from a 64-month low against the U.S. dollar on revived hopes that U.S. lawmakers will salvage a rejected bailout plan for the troubled financial sector. The won finished the session at 1,187 a dollar; up from Tuesday's close of 1,207.0 a dollar, recording its first gain in eight sessions. The won has lost about 21% against the dollar so far this year.
Coming back to Asian equities, the Japanese stock market rebounded Wednesday, but gains were limited due to weaker-than-expected tankan survey data released by the Bank of Japan. Exporters gained on the back of a weaker yen. The benchmark Nikkei 225 Index closed up 108.40 points or 0.96% at 11,368.26, ending a four-day losing streak. The broader Topix Index of all First Section issues gained 13.72 points or 1.3% to finish at 1,101.13.
The Bank of Japan's tankan corporate sentiment survey report showed that Japanese business sentiment has turned pessimistic for the first time in five years. Investors turned cautious after the headline diffusion index fell to minus 3 in September, recording the first negative result since June 2003. The index stood at 5 in the second quarter. The outlook survey for the fourth quarter was projected as minus 4.
Among other economic reports released today, the average cash earnings for workers in Japan dropped 0.3% on year compared to analysts' expectations for a flat reading and a 0.3% annual increase in July. Meanwhile, Japanese auto sales declined at a slower pace of 5.3% year-over-year in September compared to a sharp 14.9% fall in August.
The Australian stock market closed sharply higher, ending a four-day losing streak. Stocks started off firm, tracking a rebound on Wall Street overnight, and extended gains after Australia's regulator cleared BHP's bid for Rio. The benchmark S&P/ASX 200 index closed up 194.1 points or 4.2% at 4,794.6, recouping most of the losses that it posted on Tuesday. The broader All Ordinaries index jumped 183.2 points or 4.0% to finish at 4,814.5.
In economic news, manufacturing activity fell for a fourth straight month in September. The Australian Industry Group-PricewaterhouseCoopers Australian performance of Manufacturing Index rose 0.2 index points to 47.2 points in September.
Meanwhile, preliminary estimates for September indicated that the commodity prices index rose by 0.5% in SDR terms, following a revised 2.0% increase in August, according to the Reserve Bank of Australia.
The New Zealand stock market closed sharply higher, reversing most of Tuesday's losses. The benchmark NZX 50 index closed up 97.74 points or 3.16% at 3,187.96 after losing as much as 3.18% on yesterday. The broader NZX All Capital index jumped 100.40 points or 3.12% to finish at 3,214.87.
The South Korean market pared early gains and closed volatile session slightly lower. The Korea Composite Stock Price Index or Kospi closed down 8.39 points or 0.58% at 1,439.67, extending losses for the fourth straight trading session.
On the economic front, South Korea's trade deficit narrowed to US$1.9 billion in September from US$3.81 billion a month before, mainly due to falls in crude oil and raw material prices, according to a government report. Exports rose 28.7% from a year earlier, while imports shot up 45.8%, the Ministry of Knowledge Economy said Wednesday.
Meanwhile, the National Statistical Office announced that the Consumer Price Index increased 5.1% on year in September, slower than the 5.6% recorded in the previous month.
In India, a bout of volatility was witnessed on the bourses in mid-afternoon trade, with the key benchmark indices paring gains. The BSE 30-share Sensex closed up 196.24 points or 1.52% to 13,055.67. The S&P CNX Nifty closed up 0.78% to 3,951.7
Markets in China, Hong Kong, Indonesia, Malaysia, Singapore, the Philippines and Pakistan were closed for public holidays.
Elsewhere, Taiwan's Taiex closed up by 0.78% to 5,746.01 while Thailand Set plunged by 0.35% to 594.45.
In other regional market, European shares started the last quarter of the year on an upbeat note Wednesday, with deal hopes helping the mining sector and banks advancing amid fresh hopes that a U.S. bailout plan will succeed after all.
In the opening trade, the U.K. FTSE 100 index rose 1.2% to 4,961.39, the French CAC-40 index advanced 0.4% to 4,047.11 and the German DAX 30 index inched up 0.1% to 5,835.11. At 10.53 GMT, the U.K. FTSE 100 index was hovering around the same level as it was up by 1.2% to 4,960.81, the German DAX 30 index lost 0.4% to 5,805.34 and the French CAC-40 index gained 0.3% to 4,044.28.
On the economic front there was slew of economic events. Starting with Germany, the retail sales posted their biggest rise in nearly two years in August, offering a ray of light to Europe's largest economy as it battles to avoid recession.
Total sales including cars and turnover at gas stations rose by 4.6 percent on the month in August. The monthly rise, which followed two sizeable falls in the previous two months, was the biggest since December 2006 -- a month of unusually high spending that preceded a 3% rise in sales tax in January 2007. If we exclude December 2006, the monthly increase in August in German retail sales was the biggest since March 1998. On the year, sales fell by 0.6 percent in August.
In U.K, the manufacturing sector contracted much more sharply than expected in September, as activity levels wilted to their lowest level for 17 years. Data from market sources showed that the Purchasing Managers Index for the U.K’s manufacturing sector dropped to a reading of 41.0 in September from a downwardly revised 45.3 in August - the lowest reading since the series began in 1992.
Meanwhile, the U.K’s services output rose 0.6% on the month in July but stagnated in the quarter to July - the first time there was no quarterly growth in production since 2002. The 0.6% monthly rise in output comes after services output declined 0.5% in June and 0.4% in May. In the three months to June, services output had increased 0.2% and it climbed 0.4% in the quarter to May.
Looking at the whole region the unemployment rate showed an increased in August in the countries signaling that declining economy is starting to translate into lay-offs.
According to the latest employment survey by Euro stat the seasonally adjusted unemployment rate has ticked up to 7.5% from the 7.4% rate in the previous three months, once July’s reading has been revised up from the 7.3% previously estimated. Spanish labour market has suffered the largest impact from the crisis as the construction boom has come to an end, which has produced local unemployment to rise to 11.3% in August from 8.3% in August 2007. On the bright side, Germany, the largest EU economy, shows a rather healthy labour market, with its unemployment rate falling to 7.2% in August, from 7.3% in July.
Manufacturing activity in the euro zone contracted for the fourth straight month in September, as production and new orders fell at the sharpest rate since the fourth quarter of 2001. The PMI for the euro zone's factory sector fell to 45.0 in September from 47.6 in August. Output shrank faster than expected in Germany, France, Italy and Spain, adding to fears that the euro zone is already in recession and that the downturn is set to be deeper than expected.
Looking ahead the day is scheduled to release MBA weekly mortgage application data, which will be followed by ADP employment change for the month of September. In the evening we have statistics on the construction spending which will be followed by ISM manufacturing survey for the September.
Vote now !
If you haven't already voted (like most of you!) - Do vote and let us know how your portfolio is doing. We could do with as many votes as possible to get a trend of the market.
The Poll is on the right top side of this page.
All the votes are COMPLETELY ANONYMOUS - we won't be able to track you if that's what you are scared of
Let's get atleast few hundred votes more!
Forward this page to everyone you know so that we can get some diversity as well!
Daily Call - Oct 1 2008
After producing the worst point fall in history on Monday, Dow again dived into the record books on Tuesday to produce the third highest point rise ever recorded. The rebound has run its course and to move the US markets or our Indian markets from here, it will need some action on the ground. The fact that our markets would be closed for Gandhi Jayanti and Id tomorrow, punters may like to take their profits.
The regulators in India were on full alert on Tuesday, and rightly so, to stem the rot in the aftermath of US slide. This propelled our banks further. With the result season now just a few days away, stocks will cease to move as a class and may begin to move on Individual results. Take your profits early in the day and postpone any shopping plans.
Pre Session Commentary - Oct 1 2008
Today the Market would open in green as the US market showed some sign of relief and also the major Asian markets have opened on positive note. The House of Representatives have also decided for a reviewed bail out plan to be disclosed on the end of the week. One could see some positive momentum today as the over all atmosphere of the domestic financial industry looks good on the back of assertion from the Finance minister as well as the RBI about the financial industry’s strength and resilience.
On Tuesday, the market opened with a brutal loss, but later during the post mid session it recovered enough to end in the green territory. The optimism in the market was seen after the Asian markets started recovering from their opening trade loss. Further, the European market also showed some sign of relief as CAC 40, FTSE and many other indices opened in positive note and also ended in green. This positive influence was further augured by the assertion from the Finance minister and RBI about the resilience of Indian financial sector. The RBI further clarified about the ICICI bank’s liquidity strength in its current account with the RBI to meet the requirements of its depositors. The banks have also borrowed a whopping Rs.90,075 Crore from the RBI through the LAF so as to meet their liquidity requirements. Besides, banks have also urged RBI to relax its CRR and Repo rate and infuse more money in the liquidity stricken financial industry. Therefore during the day Bankex was leading the sectoral indices with a gain of 4.92% followed by Realty and CG at 3.02% and 2.96% respectively. During the trading session we expect the market to remain range bound.
The BSE Sensex closed with a phenomenal gain of 264.68 points at 12,860.43 and NSE Nifty ended down by 135.2 points at 3,850.05. The BSE Mid Caps and Small Caps closed with gains of 68.96 points and 24.44 points at 4,798.29 and 5,577.47. The BSE Sensex touched intraday high of 12,995.20 and intraday low of 12,153.55.
On Tuesday, the US market gained some momentum and closed in green after a heavy blood bath on the previous day. The positive momentum in the US market was backed by some news that the Congress is still working on some bail out plan to rescue the current crisis. Crude oil for November delivery closed at $100.64 per barrel on the New York Mercantile Exchange, up $4.27, or 4.4%, after falling as low as $97.80.
The Dow Jones Industrial Average (DJIA) was up by 485.21 points at 10,850.66 along with NASDAQ index which was up by 98.60 points at 2,082.33 and the S&P 500 (SPX) was also higher by 58.35 points to close at 1,164.74 points.
Indian ADRs ended in green. In technology sector, Wipro was up by (9.79%), Patni Computers was up by (5.08%). In banking sector HDFC Bank and ICICI Bank grew by (7.74%) and (9.46%). In telecommunication sector, Tata Communication and MTNL grew (5.74%) and (11.57%). Sterlite Industries increased by (6.88%).
Today the major stock markets in Asia opened in green following the trend of the US market which also closed in green. Hang Seng index is trading up by 135.53 points at 18,016.21. Followed by, Japan''s Nikkei which was up by 77.54 points at 11,337.40 and Singapore''s Straits trading is closed due to local holiday.
The FIIs on Tuesday stood as net buyers in equity and debt. Gross equity purchased stood at Rs3394.60 Crore and gross debt purchased stood at Rs308 Crore, while the gross equity sold stood at Rs3007.70 Crore and gross debt sold stood at Rs138.20 Crore. Therefore, the net investment of equity and debt reported were Rs387 Crore Rs169.80 Crore respectively.
On BSE, total number of shares traded were 30.03 crores and total turnover stood at Rs5,179.86 Crore. On NSE, total volumes of shares traded were 63.59 crores and total turnover was Rs14793.95 Crore.
Top traded volumes on NSE Nifty – ICICI Bank with total volume of 21452818 shares followed by Suzlon Energy 21379313 shares, Unitech 14207104 shares, SAIL 12961546 shares and Reliance Petro 11293997 shares.
On NSE Future and Options, total number of contracts traded in index futures was 1025921 with a total turnover of Rs18738.96 Crore. Along with this total number of contracts traded in stock futures were 1034688 with a total turnover of Rs15239.54 Crore. Total number of contracts for index options was 1046757 and total turnover was Rs21747.05 Crore and total number of contracts for stock options was 51755 and notional turnover was Rs824.09 Crore.
Today, Nifty would have a support at 3,850 and resistance at 4,205 and BSE Sensex has support at 12,550 and resistance at 13,115.
Daily News Roundup
M&M creates a trust that will hold 8.7% stake in the company post merger with Punjab Tractors and Mahindra Holding Finance (ET)
RIL to sell KG oil at US$5 discount to Brent (BS)
Cipla, GSK and FDC to be affected by NPPA’s move to cut prices of three bulk drugs (ET)
RCOM plans to spend Rs300bn on capacity expansion in FY09 (BS)
BHEL wins order worth Rs9.9bn for setting-up a 500MW thermal power plant in Rajasthan (BS)
SAIL and L&T ink JV for setting up captive power plants (ET)
JSW Steel may increase capacity of its Vijaynagar plant to 16mtpa in phases (DNA)
BEL plans Rs5.7bn capex over the next two years (BS)
NMDC may raise iron ore prices by 50-55% for long-term contracts (DNA)
Ambuja Cements plans to invest nearly Rs16bn in captive power generation (BL)
Ashok Leyland sets up a JV with US-based John Deere to make construction equipments (BL)
ONGC to invest Rs350mn on expansion of Desalter plant at Nawagam near Kheda (FE)
HUL has raised prices of ‘Lux’ soaps by 5-8% in Q2 FY09 (DNA)
IOC expects its oil import cost to increase by 70% to US$45bn in current fiscal (mint)
RCOM will participate in 3G and wireless auctions (ET)
IDEA Cellular rolls out operations in Bihar (ET)
Lanco Group gets LoI to build Vizhinjam International Transhipment Terminal Port (DNA)
Dabur India’s Gulf plant will start production of personal care products by December 2008 (BL)
BEL wins Rs1bn order for voting machines from the Election Commission (BL)
Shriram EPC looks to offload 40% stake in Singapore JV (mint)
Dishman Pharma to foray into global oncology market (DNA)
Systema to invest over US$1.5bn on expansion of Shyam Telelink’s network (ET)
Polaris to buy US Insurance firm SEEC Inc in an all-cash deal (ET)
PSTL to invest Rs2bn over next 18 months to modernize 250 theaters in South India (ET)
Economic Front Page
India and France sign agreement on civil nuclear cooperation (BL)
India’s fiscal deficit at US$25bn in the first five months already at 87.7% of the full-year target for FY09 (ET)
Oil companies cut ATF prices by 5.4% (BL)
Direct tax receipts in April-September 2008 rises by 29.3% yoy to Rs1,500bn (mint)
Government is considering a proposal to increase FDI to 100% in single-brand retail and allow 51% FDI in multi-brand retail for electronic goods, computers, sports goods and watches (BS)
Petroleum Minister wants Cairn and ONGC to lay oil pipeline to Gujarat (FE)
Forex reserves increases by just US$2.2bn in Q1 FY09 (ET)
Steel prices could soften further by US$150/tone (BS)
October-December sugar supply seen at over 5.1mn tone (ET)
India’s wheat and rice production likely to grow by 7% and 8% respectively by 2012 (ET)
The mines ministry wants the export duty on iron ore to be rolled back (ET)
India’s iron ore export may fall 33% on demand slowdown from China (mint)
Don’t take anything for granted!
Most human beings have an almost infinite capacity for taking things for granted.
Things we take for granted are no longer the same. Money, for example, is not only getting dearer, but is also hard to come by. Global credit markets are choked as banks are refusing to lend to each other amid fears of more pain going ahead. Liquidity has emerged as the key variable. Several closely watched measures of bank lending have hit all-time highs, as lenders continued to hoard funds. Only a substantial easing of the cash crunch can pull the global markets out of the current mess.
For that to happen, the US Congress must pass the Bush government's bailout plan in some form or the other. The Senate will take up a new bill on Wednesday for a vote. A positive outcome here will go a long way in reviving the credit markets and restore investor confidence in financial markets. Until that happens, one must remain careful and keep a close watch on developments underway globally, especially in the US.
At the same time don’t lose sight of local factors, like tight liquidity conditions, a weak currency, worsening deficits, persistent FII outflows, high inflation and hardening interest rates. The upcoming quarterly results will throw more light on how India Inc. is coping with the multiple headwinds so far.
Today, we expect a higher opening on the back of the rebound across global markets and hope of the bank rescue plan passing the litmus test in the US Congress. Given that the markets will be shut on Thursday and the level of uncertainty, we advise all to stay cautious and alert and refrain from taking undue risks. After all, you can’t take anything for granted!
US stocks staged a strong come back on Tuesday, a day after the Dow Jones Industrial Average posted its biggest ever point loss in the wake of the rejection of the bank bailout plan by the House of Representatives.
The blue chip index jumped by nearly 500 points on hope that the Congress will eventually pass a toned down version of the government's US$700bn rescue plan.
The Dow surged by 485.21 points, or 4.7%, to 10,850.66, a level that has the blue-chip index down 6% from the end of August, and 4.4% for the third quarter. Of the Dow's 30 components, all but one ended higher, with blue-chip financials pacing the advance.
The S&P 500 Index climbed 58.34 points, or 5.3%, to 1,164.73, with the broad-market index off 9.2% for the month, and 9% for the quarter. Financials led gains that stretched across all 10 of the index's industry groups.
The Nasdaq Composite index jumped 98.60 points, or 5%, to finish at 2,082.33, leaving the technology-laden index with a monthly loss of 12%, and a quarterly decline of 9.2%.
Trading volume was moderate following Monday's crash. On the New York Stock Exchange, advancers beat decliners 4 to 1 on volume of 1.62bn shares. On the Nasdaq, winners topped losers by more than 3 to 2 on volume of 2.43bn shares.
Meanwhile, a closely watched measure of the housing sector showed that home prices in July fell by the largest rate ever, although the pace of monthly declines slowed.
The Chicago PMI, a key manufacturing report, fell to 56.7 in September from 57.9 in the prior month. However, the decline was smaller than economists were expecting. Any reading over 50 suggests growth.
The September consumer confidence index topped forecasts, the Conference Board reported. It climbed to 59.8 from a revised 58.5 in August, surprising economists who thought it would fall to 55.
US light crude oil for November delivery rose US$4.27 to settle at US$100.64 per barrel on the New York Mercantile Exchange. On Monday, oil prices plunged US$10.52 a barrel in the second-biggest one-day plunge ever.
Gasoline prices fell for the 13th day in a row, according to a nationwide survey of credit card activity. COMEX gold for December delivery fell US$13.60 to settle at US$880.80 an ounce. In currency trading, the dollar fell against the euro and gained against the yen.
European shares closed higher on Tuesday after the previous session's bruising, but ended the third quarter down roughly 12% after a month of staggering events in the financial sector.
After a 5.5% drop on Monday, the pan-European Dow Jones Stoxx 600 index ended 1.8% higher at 256.01, with miners and drug makers advancing. European stocks shook off early losses on Tuesday on hopes a US government rescue plan could still be implemented.
The UK's FTSE 100 rose 1.7% to 4,902.45 and the French CAC-40 advanced 2% to 4,032.10. Germany's DAX 30 edged up 0.4% to 5,831.02.
In the emerging markets, the Bovespa in Brazil soared by 7.6% to 49,541 while the IPC index in Mexico climbed 3.9% to 24,888. The RTS index in Russia rose by nearly 1.5% to 1211 and the ISE National 30 index in Turkey gained 1.6% to 45,472.
Markets ended with healthy gains reversing early losses. The bounce back came after Finance Minister P Chidambaram and SEBI assured investors whose worries resurfaced after the rejection of much-awaited US$700bn package.
The rally was led by banking and realty stocks. ICICI Bank was the biggest gainer among the 30-components of Sensex. Finally, the BSE benchmark Sensex recovered over 700 points and the NSE Nifty index recouped nearly 210 points from their respective day’s low.
Sensex gained 264 points to close at 12,860 and the NSE Nifty index gained 71 points to close at 3,921.
Areva T&D gained by 1.6% to Rs1423 after reports stated that GE Consumer and Areva have jointly announced a strategic alliance. The scrip touched an intra-day high of Rs1438 and a low of Rs1322 and recorded volumes of over 28,000 shares on BSE.
Shares of Dena Bank gained by over 4% to Rs41.1 after the company announced that it has raised Lower Tier II Bonds (Series X) Capital funds to augment long term resources of the Bank and to meet its future Capital Adequacy Ratio requirements in the nature of Debentures on Private Placement Basis for an amount of Rs3bn including Green shoe option.
The scrip touched an intra-day high of Rs41.9 and a low of Rs36.5 and recorded volumes of over 16,00,000 shares on BSE.
Shares of Panacea Biotech gained by 5% to Rs241 after 0.5mn shares changed hands in two block trades.
About 499,760 shares were sold on the BSE and 500,000 shares on the NSE at an average price of Rs222 per share. The scrip touched an intra-day high of Rs242 and a low of Rs214 and recorded volumes of over 5,00,000 shares on BSE.
Zee News advanced by over 2% to Rs40 after almost 1mn equity shares of the company changed hands at an average price of Rs39.3 on the NSE. The scrip touched an intra-day high of Rs40.9 and a low of Rs36.7 and recorded volumes of over 13,00,000 shares on NSE.
Compact Disc has announced that iMedia Ventures Ltd content developer offered to invest US$10mn the expansion projects of CDI. This debt has been offered at 2.5% per annum over LIBOR inclusive of withholding tax or other applicable taxes for a period upto 10 years.
iMedia Ventures have also shown keen interest in buying 15% equity in CDI. Both these offers will be considered in the next meeting of the board of directors of the company to be held during the third week of October, 2008.
Compact Disc dropped by over 11% to Rs43 touching an intra-day high of Rs45.8 and a low of Rs39 and recorded volumes of over 2,00,000 shares on BSE.
BHEL surged by over 5% to Rs1586 after the company announced that it won order worth Rs9.9bn to set up thermal sets of 259MW in Rajasthan. The scrip touched an intra-day high of Rs1621 and a low of Rs1430 and recorded volumes of over 6,00,000 shares on BSE.
M&M creates a trust that will hold 8.7% stake in the company post merger with Punjab Tractors and Mahindra Holding Finance (ET)
RIL to sell KG oil at US$5 discount to Brent (BS)
Cipla, GSK and FDC to be affected by NPPA’s move to cut prices of three bulk drugs (ET)
RCOM plans to spend Rs300bn on capacity expansion in FY09 (BS)
BHEL wins order worth Rs9.9bn for setting-up a 500MW thermal power plant in Rajasthan (BS)
SAIL and L&T ink JV for setting up captive power plants (ET)
JSW Steel may increase capacity of its Vijaynagar plant to 16mtpa in phases (DNA)
BEL plans Rs5.7bn capex over the next two years (BS)
NMDC may raise iron ore prices by 50-55% for long-term contracts (DNA)
Ambuja Cements plans to invest nearly Rs16bn in captive power generation (BL)
Ashok Leyland sets up a JV with US-based John Deere to make construction equipments (BL)
ONGC to invest Rs350mn on expansion of Desalter plant at Nawagam near Kheda (FE)
HUL has raised prices of ‘Lux’ soaps by 5-8% in Q2 FY09 (DNA)
IOC expects its oil import cost to increase by 70% to US$45bn in current fiscal (mint)
RCOM will participate in 3G and wireless auctions (ET)
IDEA Cellular rolls out operations in Bihar (ET)
Lanco Group gets LoI to build Vizhinjam International Transhipment Terminal Port (DNA)
Dabur India’s Gulf plant will start production of personal care products by December 2008 (BL)
BEL wins Rs1bn order for voting machines from the Election Commission (BL)
Shriram EPC looks to offload 40% stake in Singapore JV (mint)
Dishman Pharma to foray into global oncology market (DNA)
Systema to invest over US$1.5bn on expansion of Shyam Telelink’s network (ET)
Polaris to buy US Insurance firm SEEC Inc in an all-cash deal (ET)
PSTL to invest Rs2bn over next 18 months to modernize 250 theaters in South India (ET)
Economic Front Page
India and France sign agreement on civil nuclear cooperation (BL)
India’s fiscal deficit at US$25bn in the first five months already at 87.7% of the full-year target for FY09 (ET)
Oil companies cut ATF prices by 5.4% (BL)
Direct tax receipts in April-September 2008 rises by 29.3% yoy to Rs1,500bn (mint)
Government is considering a proposal to increase FDI to 100% in single-brand retail and allow 51% FDI in multi-brand retail for electronic goods, computers, sports goods and watches (BS)
Petroleum Minister wants Cairn and ONGC to lay oil pipeline to Gujarat (FE)
Forex reserves increases by just US$2.2bn in Q1 FY09 (ET)
Steel prices could soften further by US$150/tone (BS)
October-December sugar supply seen at over 5.1mn tone (ET)
India’s wheat and rice production likely to grow by 7% and 8% respectively by 2012 (ET)
The mines ministry wants the export duty on iron ore to be rolled back (ET)
India’s iron ore export may fall 33% on demand slowdown from China (mint)
Trading Calls - Oct 1 2008
Nifty (3921) Sup 3830 Res 4010
Buy ABB (789)
SL 781 Target 805, 808
Buy Reliance Infra (790)
SL 782 Target 806, 810
Buy NTPC (172)
SL 169 Target 178, 179
Sell Fed Bank (206)
SL 210 Target 198, 196
Sell CESC (275)
SL 279 Target 267, 265
Intra-day volatility still exist
Intra-day volatility may see the market swing both ways and hold back the local players from taking fresh positions. The market may open positive following overnight gain in the US markets and mixed Asian indices in morning trades. As the overall sentiment remains bearish, the market may not slip from positive to negative. The Nifty may witness resistance at 3950 on the upside while the near-term support at 3900 is seen on the downside. The Sensex has a likely support at 12600 and could witness resistance at 13000.
US indices finished on a positive side on Tuesday. While the Dow Jones ended in positive at 10851 advanced by 485 points, the Nasdaq up by 99 points at 2082.
Among the Indian ADRs on the US bourses. Except Rediff rest of all were performing in positive territory, from which VANL was leading by 19.24%, followed by Infosys advanced 13.49%, HDFC Bank gain 11.57%, Satyam moved up by 9.79% and Wipro gains 9.46% at Rs9.72. While, ICICI Bank, Patni Computer, MTNL, Tata Motors and Dr Reddy closed with the gain of about 3-5% each.
In the commodity segment, the Comex gold for the December declined $13.60 to settle at $880.80 an ounce. The Nymex light crude oil for October delivery gained $4.27 to close at $100.64 a barrel.
Bullion metals fall with strong dollar
Gold registers first quarterly drop in almost a year
Bullion metals ended considerably lower on Tuesday, 30 September, 2008 after dollar rallied against the euro and other major currencies reducing the precious metal’s appeal as a hedge against inflation. Silver prices also declined. With today’s fall, gold also registered the first quarterly drop in price in almost a year.
On Tuesday, Comex Gold for December delivery fell $13.6 (1.5%) to close at $880.8 an ounce on the New York Mercantile Exchange. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly since then.
Gold prices ended 5.5% higher this month of September, 08. Prior to this, gold had lost 8.8% in August, 2008. In July, 2008, it ended lower by $11 (1.1%). For the year, gold has gained 6.3% till date in FY 2008.
For the third quarter that ended today, gold prices ended lower by 5.1%. It was the first quarterly loss for the yellow metal since the second quarter in FY 2007. Prior to that, the yellow metal ended second quarter with a marginal gain of 0.7%. For first quarter prices gained 10.7%.
On Tuesday, Comex silver futures for December delivery fell 75 cents (5.8%) to $12.275 an ounce. Silver ended month and quarter of September 2008 with a loss of 10%. It ended August with a loss of 2.4% and July 2008 with a gain of 3%. For the second quarter, it had gained a paltry 1.4%. Silver had gained 16% in Q1. Till date, silver has gained 7.4% this year. The metal also had gained for seven straight years.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies. Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices and vice versa.
At the currency markets on Tuesday, the dollar climbed the most ever against the 15-nation European currency as France and Belgium led a state-backed rescue of Dexia SA, the world's biggest lender to local governments. Major U.S. equity indexes rebounded from the worst plunge since October 1987 after lawmakers sought to repair a $700 billion financial rescue plan voted down yesterday.
Earlier this year, the weakening dollar and higher global demand for raw materials had led to records this year for commodities including gold. Gold reached a record in March as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. The Federal Reserve halted cuts to its target bank lending rate in April, after slicing it in seven steps to 2% from 5.25% in September.
Gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.
At the MCX, gold prices for December delivery closed lower by Rs 288 (2.1%) at Rs 13,272 per 10 grams. Prices rose to a high of Rs 13,690 per 10 grams and fell to a low of Rs 13,235 per 10 grams during the day’s trading.
At the MCX, silver prices for December delivery closed Rs 847 (4.04%) lower at Rs 20,109/Kg. Prices opened at Rs 21,000/kg and fell to a low of Rs 20,019/Kg during the day’s trading.
Crude manages to climb back to $100
Prices drop by more than 28% during the third quarter
Crude oil prices managed to climb back to the $100 level on Tuesday, 30 September, 2008 but registered substantial losses for the third quarter that ended today. Prices rose today after U.S. lawmakers said they intend to salvage a $700 billion bank-rescue package that may avert an economic slowdown.
Crude-oil futures for light sweet crude for November delivery closed at $100.64/barrel (higher by $4.27 or 4.4%) on the New York Mercantile Exchange. Prices fell to a low of $97.8 during intra day trading. Yesterday, prices had slipped by almost $11 on overall global meltdown. Prices reached a high of $147 on 11 July but have dropped 32% since then.
For the third quarter of the year that ended today, crude prices ended lower by 28%. This was the biggest quarterly drop since 1991. Prior to today, crude prices had gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years. For the month of September, prices registered drop of 13%. For the year, prices are still up by 5.2%.
Investors are concerned that a prolonged credit crisis would further undermine an already waning demand for energy as global growth slows down.
At the currency markets on Tuesday, the dollar climbed the most ever against the 15-nation European currency as France and Belgium led a state-backed rescue of Dexia SA, the world's biggest lender to local governments. Major U.S. equity indexes rebounded from the worst plunge since October 1987 after lawmakers sought to repair a $700 billion financial rescue plan voted down yesterday.
Against this background, November reformulated gasoline rose 9.6 cents to finish at $2.4577 a gallon, but it was 18.4% lower for the month. November heating oil gained 10.6 cents to end at $2.8947 a gallon, losing 9% for the month.
Natural gas futures advanced on speculation U.S. lawmakers will pass a $700 billion government bailout plan for the financial industry, preventing a further weakening of the economy and preserving energy demand. Natural gas for November delivery gained 21.7 cents (3%) to settle at $7.438 per million British thermal units. It was 6.4% lower for the month. Gas fell 44% in the third quarter, the first decline since the second quarter of 2007 and the biggest quarterly drop since the three months ended March 2001.
At the MCX, crude oil for September delivery closed at Rs 4,744/barrel, higher by Rs 106 (2.3%) against previous day’s close. Natural gas for October delivery closed at Rs 354.5/mmbtu, higher by Rs 10.2/mmbtu (2.9%).
US Markets gain
Market sentiments improve on increased optimism about the government relief plan
US market gained back part of its losses on Tuesday, 30 September, 2008 after it incurred huge losses a day before after the $700 billion bailout plan had got rejected. The Dow had suffered its worst one day loss in twenty-one years yesterday. Market registered gains today on increased optimism that the government will reach an agreement on a financial relief plan before the end of the week. Couple of better than expected economic reports also helped stocks made a U turn today at Wall Street. All ten sectors ended in the green led by the financials and the energy sector.
The Dow Jones industrial Average ended the day with a gain of 485 points at 10,850. The Nasdaq Composite Index, finished higher by 98.6 points at 2,082.3. S&P 500 finished higher by 58.3 points at 1,164.74.
Among economic news of the day at Wall Street, the Conference Board reported on Tuesday, 30 September, 2008 that U.S. consumer confidence rose in September for the third straight month, even as consumers' assessment of the current economy plunged to the lowest level in 15 years. Lower energy prices were responsible for most of the improvement in the confidence index in September.
As per the report, the September consumer confidence index rose to 59.8 from a revised August reading of 58.5.The present situation index fell to 58.8 from 65.0 in August. That's the lowest since 1993. The expectations index rose to 60.5 from 54.1 in August.
It was also reported today that manufacturing in the Chicago region continued to expand in September. Regional manufacturing survey, Chicago PMI fell 1.2 to 56.7, which was better than the forecast of 53. A reading above 50 is intended to represent growth.
In another report, home prices retreated in major metro areas in the month of July, marking the 25th consecutive month of price declines. According to the S&P/Case-Shiller 20-City Composite, July prices were down 16.3% compared to last year and fell 0.9% from June.
At the crude market on Tuesday, crude oil prices managed to climb back to the $100 level but registered substantial losses for the third quarter that ended today. Prices rose today after U.S. lawmakers said they intend to salvage a $700 billion bank-rescue package that may avert an economic slowdown. Crude-oil futures for light sweet crude for November delivery closed at $100.64/barrel (higher by $4.27 or 4.4%) on the New York Mercantile Exchange. Prices fell to a low of $97.8 during intra day trading. For the third quarter of the year that ended today, crude prices ended lower by 28%. This was the biggest quarterly drop since 1991.
At the currency markets on Tuesday, the dollar climbed the most ever against the 15-nation European currency as France and Belgium led a state-backed rescue of Dexia SA, the world's biggest lender to local governments. Major U.S. equity indexes rebounded from the worst plunge since October 1987 after lawmakers sought to repair a $700 billion financial rescue plan voted down yesterday.
For tomorrow, economic data will take center stage. September auto sales are expected to flow across the wires tomorrow. Providing a precursor for the government's official nonfarm payroll report, which is due later in the week, the September ADP employment report is due before market opens. Construction spending data for August and the September ISM Index are due simultaneously as soon as market opens followed by the crude inventories report.
Adani Enterprises - SELL
We recommend a sell in Adani Enterprises from a short-term perspective. It is evident from the charts that the stock has been in a long-term downtrend from its January high of Rs 1,335.
On September 29, the stock tumbled more then 9 per cent and found support around Rs 500 level, which is also the March trough. However, this halt proved to be temporary. The stock conclusively broke through this support level by declining 6 per cent with high volume on September 30, reinforcing the bearishness.
The counter is trading well below its 21 and 50-day moving averages. The daily and weekly relative strength indices are featuring in the bearish zone. Moreover, the daily and weekly moving average convergence and divergence are featuring in the negative territory. The long-term down trend line is intact and is still in place.
Our short-term forecast for the stock is negative. We expect the stock’s downtrend to prolong until it hits our price target of Rs 420 in the upcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 490.
via BL
Subscribe to:
Posts (Atom)