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Wednesday, October 08, 2008
SBI, ICICI Bank October 2008 futures at premium
Turnover falls
Nifty October 2008 futures were at 3553.50, at a premium of 39.85 points as compared to spot closing of 3513.65. NSE's futures & options (F&O) segment turnover was Rs 57,666.95 crore, which was lower than Rs 59,767.70 crore on Tuesday, 7 October 2008.
State Bank of India (SBI) October 2008 futures were at premium at 1329.75 compared to the spot closing of 1318.30.
ICICI Bank October 2008 futures were at premium price at 459.50 compared to the spot closing of 453.75.
NTPC October 2008 futures were at discount at 175.30 compared to the spot closing of 175.75.
In the cash market, the S&P CNX Nifty lost 92.95 points or 2.58% at 3513.65.
Rupee bounces back
Ends at 47.99/48.01
Rupee erased most of its losses on Wednesday, springing back from a more than six year low, after central banks around the world cut key lending rates in a coordinated move to shore up the global economy.
Rupee ended at 47.99/48.01 per dollar, off a high of 47.85 and 0.15 percent weaker than 47.915/930 at close on Tuesday.
Asian Markets Press ‘Panic Button’
Fed, ECB, BoE Cut Interest Rates
The stock markets across the Asian region slumped after U.S. stocks plunged for the fifth straight session overnight, with the Dow closing at its lowest level in over five years. Mounting fears of a global recession dented investor sentiment. On Tuesday, the Dow and the S&P 500 set five-year closing lows, while the Nasdaq set a four-year closing low. The Dow closed down more than 508 points or 5.1% at 9,447, the Nasdaq fell more than 108 points or 5.8% to 1,754, and the S&P 500 shed more than 60 points or 5.7% to 996.
Crude oil fell to a 10-month low as U.S. and European rescue measures failed to assuage concerns the financial crisis will escalate. The fall aggravated on the concerns that the global financial crisis will reduce demand for energy overshadowed signs that OPEC was considering a supply cut.
Crude oil for November delivery fell as much as $4.01, or 4.5%, to $86.05 a barrel in electronic trading on the New York Mercantile Exchange, the lowest since 6 December 2007. It traded at $87.29 a barrel at 10:04 a.m. in London.
In currency market, the U.S. dollar fell to the upper 99-yen level in Tokyo about half an hour before the Tokyo market ended the day's trading, but has recovered to the mid 100-yen range in late trade. On Tuesday, the dollar was quoted in the upper 102-yen levels in late Tokyo deals.
The Australian dollar continued its free-fall, hitting a five-year low on Wednesday. The Aussie finished the session at US$0.6832-0.6836, down from Tuesday's close of US$0.7268-0.7275.
The New Zealand dollar remained under pressure as global economic uncertainty weighed on equity markets and eroded risk appetite, but it held above two-year lows. The kiwi, which rallied late after the Reserve Bank of Australia's surprise 1% interest rate cut. The kiwi ended the session at US$0.6242-0.6252 compared to Tuesday's close of US$0.6383-0.6393.
The South Korean won plummeted to a 10-year low against the U.S. dollar. The won finished today's local session at 1,395.0 to a dollar, down from yesterday's close at 1,328.1 to a dollar. For investors bought the dollar due to growing concerns over volatility in financial markets.
In Philippines the Bangko Sentral ng Pilipinas (BSP), sold dollars to prevent the peso from sliding past a 17-month trough it first hit on 7 October 2008. The peso hit P47.81 per dollar, a level it first hit yesterday, taking its losses in two weeks to 3.5% as part of a broad slide in Asian currencies succumbing to a deepening global credit crisis.
Coming back in equities, Japan led the dive, with the key Nikkei 225 index tumbling 9.4% to its lowest level in five years. Hong Kong followed with an 8.2% drop. South Korea fell nearly 6% and China closed down 3%.
The Japanese stock market tumbled, recording its biggest one-day percentage drop in 21 years, as investors dumped stocks after Wall Street extended its losses for the fifth straight trading session.
The benchmark Nikkei 225 index plunged 952.58 points, or 9.4%, to close at over five-year lows of 9,203.32, extending its losses for the fifth consecutive trading session. It was the Nikkei's third largest percentage decline ever and the steepest drop since October 1987. Further, a stronger yen weighed on exporters. The broader Topix index of all the Tokyo Stock Exchange First Section issues sank 78.6 points, or 8%, to finish at 899.01.
On the economic front, the Conference Board reported that its leading economic index for Japan decreased 0.6 percent in August. The board's coincident index also fell 0.6 percent. Among other data released today, the number of bankruptcies shot up 10.2% on month and 42.9% annually in September, while Eco watchers survey showed that the current index stood at 28 in September compared to 28.3 last month and outlook index fell to 32.1 from 32 in August.
The Chinese stock market closed sharply lower for the third straight trading session, led by financial stocks, amid escalating fears over the global credit crisis. The benchmark Shanghai Composite Index closed down 65.62 points or 3.04% at 2,092.22. The index has fallen nearly 202 points or about 8.8% in the first three trading days of this month.
The Hong Kong stock market closed sharply lower, with the key index finishing at its weakest level in nearly 28 months. The Hang Seng Index lost 1,372.03, or 8.2 percent, to 15,431.73, its first close below 16,000 since June 29, 2006, and its lowest close since June 14, 2006. The drop was the most since Jan. 22. The benchmark index has lost more than half its value since its Oct. 30 record close of 31,638.22. The Hang Seng China Enterprises Index, which tracks so- called H shares of Chinese companies, declined 11 percent to 7,452.74, its worst close since Oct. 27, 2006.
The Hong Kong Monetary Authority cut the city's lending rate by 1.0% effective Thursday, adding its weight to the growing number of central banks unveiling monetary easing in response to the global credit turmoil.
The Hong Kong Monetary Authority, which manages the city's U.S.-dollar pegged currency, said it would change the formula it uses to set the base rate, reducing the spread above the U.S. federal funds rate from 150 basis points to 50 basis points. The reduction will bring Hong Kong's base rate to 2.5% from the current 3.5%.
On the economic front, Hong Kong’s official foreign currency reserve assets of Hong Kong amounted to US$160.6 billion at the end of September 2008 compared to US$158.1 billion in end of August 2008. Including unsettled forward contracts, the foreign currency reserve assets of Hong Kong at the end of September 2008 also stood at US$160.6 billion compared to 2008 US$158.1 billion in end-August 2008.
The Australian stock market plummeted, giving away gains after the Reserve Bank of Australia unexpectedly cut interest rate by 100 basis points. The local market slumped 5%, recording the biggest one-day fall for both the major averages since January 22 this year. The benchmark S&P/ASX 200 index closed down 230.6 points, or 5.0%, at 4,388.1 and the broader All Ordinaries index lost 228.1 points, or 5.0%, to finish at 4,369.8.
On the economic front, Westpac Bank and the Melbourne Institute's monthly survey report showed an 11% drop in consumer sentiment for October from its levels in September. The index posted a seasonally adjusted reading of 82 points for the month, down from 92.2 points in September.
Meanwhile, approvals for new housing loans in Australia declined in both number and value in August, according to data released by the Australian Bureau of Statistics. The bureau said that the total number of commitments to purchase established dwellings fell a seasonally adjusted 1.9% from a month before to 48,903. In terms of value, overall dwelling finance commitments, excluding alterations and additions, were down by a seasonally adjusted 3.0% to A$17.513 billion.
The New Zealand stock market closed sharply lower, extending its losses for the fourth consecutive trading session. However, the market performed better than other markets in the Asia-Pacific region. The benchmark NZX 50 index closed down 55.9 points, or 1.9%, at 2,948.3 and the broader NZX All Capital index fell 58.32 points, or 2.0%, to 2,993.1.
The South Korean market plunged after it ended a six-day losing streak with mild gains on Tuesday. The benchmark Korea Composite Stock Price Index or KOSPI plummeted 79.41 points, or 5.81%, to 1,286.69, falling to its lowest level since August 2006.
On the economic front, overseas construction orders won by South Korean companies surpassed the record $40 billion mark on strong demand from oil-rich Middle Eastern countries, a government report said Wednesday. The Ministry of Land, Transport and Maritime Affairs said that as of Tuesday orders stood at $40.4 billion, up 45.4% from a year earlier.
Meanwhile, South Korea's National Statistical Office said that retail sales grew 10.5% on year in August, slower than the 12.3% increase seen in July. On a monthly basis, sales fell 2.7%, reversing a 3.4% rise recorded in the previous month. Retail sales excluding vehicle fuel was up 6.5% in August from the previous year.
Elsewhere, the Bank of Korea reported that the producer price index grew 11.3% annually in September, compared to a 12.3% rise in August. On a monthly basis, the PPI fell 0.3%.
The Philippines stock exchange continued plunging on 8 October 2008, posting their sixth successive weak closing, slumping to a twenty-six month low. The PSEi slipped 4.80% or 116.45 points as fears of global economic slowdown continued to haunt investors.
The benchmark index PSEi thrashed 4.80% or 116.45 points to 2,307.74. All six-sub indices tagged along with the composite index with industrial stock losing the most, sliding 108.16 points or 6.43% to 2,620.12.
On the economic front, the producer price index for the manufacturing industry registered an increase of 5.8 percent in August 2008, compared with the year ago level.
Monthly price increases were observed in seventeen major sectors, with two-digit growth observed petroleum products which increased 36.9%, basic metals which jumped 20.6%, textiles up12.4%, food manufacturing up11.3% and rubber and plastic products added 10.3%. On the other hand, three sectors registered percentage decline led by furniture and fixtures by 15.4%.
On a month-on-month basis, PPI declined by 0.2 percent in August. This was brought about by the price decreases exhibited by nine major sectors with single-digit 6.6 percent decrease led by petroleum products.
Indonesia's stock exchange halted share-market trading for the first time in eight years after the benchmark index plunged 10%, the biggest decline since the 1998 Asian financial crisis.
Indonesia's international reserves fell to $57.11 billion on September 29, from $58.36 billion at the end of August. Bank Indonesia said that base money increased to 392.14 trillion rupiah ($41.01 billion) in the fourth week of September, from 343.63 trillion rupiah at the end of August.
In Thailand, the benchmark SET index plunged by more than 6% on 8 October 2008 by 36.37 points to end the session at 492.34. The fall was relatively larger than the previous decline of 4.18% on 7 October 2008. The SET 100 recorded a decrease of 7.38% or 58.21 points to close at 730.28. Likewise, the Set 50 fell by 7.28% or 26.76 points ending the session at 340.62.
During the day the Bank of Thailand left its main interest rate at 3.75%, after a fall in inflation gave it room to focus on the risks to growth from the global credit crisis. Inflation fell in August and September thanks to cheaper oil, petrol subsidies and other government measures such as free public transport for the poor.
In the other regional markets, European shares slumped as global recession fears continued to rock markets and commodity producers in particular, though British banks were mixed after a 50 billion pound government plan to recapitalize the sector.
The U.K. FTSE 100 index fell 3.6% to 4,436.82, the German DAX 30 index dropped 4.4% to 5,091.23 and the French CAC-40 index declined 4.5% to 3,562.91.
On the economic front, the euro zone's economy contracted for the first time in the second quarter of 2008 due to falling investment and private consumption.
The economy of the euro zone shrank 0.2% versus the first three months of 2008, confirming an earlier estimate that had sparked fears that recession had started in the single currency area. Year-on-year, the economy expanded by 1.4%, also in line with its previous reading.
The quarterly contraction was the first since the data series for the euro zone started in 1995. The next weakest result was 0.0 percent growth in the second quarter of 2003.
In U.K, the shop prices index has eased in September as food prices have declined somewhat compared to the previous month, according to data released by the British Retail Consortium.
The BRC shop prices index has risen 3.6% in September from the same month last year, a somewhat softer increase than the 3.8% posted in August, posting the first decline in the overall shop price inflation since March.
In another release, the Nationwide house price index last week showed property prices fell 1.7% last month to stand 12.4% lower than a year earlier - their biggest annual drop since comparable records began in 1991.
However the biggest development of day took place after the closure of the Asian Markets. The Federal Reserve, European Central Bank and four other central banks lowered interest rates in an unprecedented, emergency coordinated bid to ease the economic effects of the financial crisis.
The Fed cut its benchmark rate by a half point to 1.5 percent the Fed also approved a 50-basis point cut in the discount rate to 1.75%. In similar moves, the Frankfurt-based European Central Bank trimmed its key refi rate to 3.75% from 4.25%, while the Bank of England cut its key rate to 4.5% from 5%.
``The recent intensification of the financial crisis has augmented the downside risks to growth and thus has diminished further the upside risks to price stability,'' according to a joint statement by the central banks. ``Some easing of global monetary conditions is therefore warranted.''
NSE Bulk Deals to Watch - Oct 8 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
08-OCT-2008,20MICRONS,20 Microns Limited,BHARAT SECURITIES PVT LTD,BUY,99896,26.59,-
08-OCT-2008,20MICRONS,20 Microns Limited,NAMAN SECURITIES & FINANCE PVT LTD,BUY,87185,26.52,-
08-OCT-2008,20MICRONS,20 Microns Limited,PRASHANT JAYANTILAL PATEL,BUY,94521,27.74,-
08-OCT-2008,ALCHEM,Alchemist Ltd,MAVI INVESTMENT FUND LIMITED (MM WARBURG BANK(SCHWEIZ)AG),BUY,300000,76.00,-
08-OCT-2008,AUTOIND,Autoline Industries Limit,PARIKH AMAL NIRANJAN,BUY,69920,103.00,-
08-OCT-2008,HINDDORROL,Hindustan Dorr-Oliver Ltd,MAVI INVESTMENT FUND LIMITED (MM WARBURG BANK(SCHWEIZ)AG),BUY,500000,60.00,-
08-OCT-2008,KOHINOOR,Kohinoor Foods Limited,A S CONFIN PVT.LTD.,BUY,300000,119.17,-
08-OCT-2008,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD,BUY,2300307,20.35,-
08-OCT-2008,PNC,Pritish Nandy Comm. Ltd.,BHAVESHBHAI JAYNTIBHAI METALIYA,BUY,92004,20.95,-
08-OCT-2008,SOMATEX,Soma Textiles & Ind. Ltd.,ALKA INDIA LIMITED,BUY,303001,30.00,-
08-OCT-2008,VISESHINFO,Visesh Infotecnics Limite,NENDEJ TIEUP PRIVATE LIMITED,BUY,400000,8.40,-
08-OCT-2008,ZODJRDMKJ,Zodiac JRD- MKJ Ltd,STANDARD STOCK BROKERS LTD,BUY,34623,14.29,-
08-OCT-2008,20MICRONS,20 Microns Limited,BHARAT SECURITIES PVT LTD,SELL,99896,26.67,-
08-OCT-2008,20MICRONS,20 Microns Limited,NAMAN SECURITIES & FINANCE PVT LTD,SELL,87193,27.35,-
08-OCT-2008,20MICRONS,20 Microns Limited,PRASHANT JAYANTILAL PATEL,SELL,94521,26.93,-
08-OCT-2008,ALCHEM,Alchemist Ltd,BASICS SOFTSOLUTIONS PRIVATE L,SELL,180000,76.00,-
08-OCT-2008,ALCHEM,Alchemist Ltd,ENDOGRAM LEASING & TRADING CO.,SELL,70000,76.00,-
08-OCT-2008,AUTOIND,Autoline Industries Limit,CHOLAMANDALAM DBS FINANCE LTD,SELL,112754,103.15,-
08-OCT-2008,GOLDTECH,Goldstone Tech Ltd.,GOPAL MARATHE,SELL,115500,107.70,-
08-OCT-2008,HINDDORROL,Hindustan Dorr-Oliver Ltd,CROWN SECURITIES PVT LTD,SELL,500000,60.00,-
08-OCT-2008,KOHINOOR,Kohinoor Foods Limited,A S CONFIN PVT.LTD.,SELL,2899,121.62,-
08-OCT-2008,KOHINOOR,Kohinoor Foods Limited,NEMANI UMANG,SELL,160093,120.12,-
08-OCT-2008,KOHINOOR,Kohinoor Foods Limited,UMANG NEMANI,SELL,171025,118.24,-
08-OCT-2008,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD,SELL,2300307,20.35,-
08-OCT-2008,SOMATEX,Soma Textiles & Ind. Ltd.,KII LTD.,SELL,300000,30.00,-
08-OCT-2008,VISESHINFO,Visesh Infotecnics Limite,IVORY CONSULTANTS PVT LTD.,SELL,400000,8.40,-
08-OCT-2008,ZODJRDMKJ,Zodiac JRD- MKJ Ltd,RAJIV MEHTA,SELL,34623,14.29,-
It's national bankruptcy for Iceland
This volcanic island near the Arctic Circle is on the brink of becoming the first "national bankruptcy" of the global financial meltdown.
Home to just 320,000 people on a territory the size of Kentucky, Iceland has formidable international reach because of an outsized banking sector that set out with Viking confidence to conquer swaths of the British economy — from fashion retailers to top soccer teams.
The strategy gave Icelanders one of the world's highest per capita incomes. But now they are watching helplessly as their economy implodes — their currency losing almost half its value, and their heavily exposed banks collapsing under the weight of debts incurred by lending in the boom times.
"Everything is closed. We couldn't sell our stock or take money from the bank," said Johann Sigurdsson as he left a branch of Landsbanki in downtown Reykjavik.
The government had earlier announced it had nationalized the bank under emergency laws enacted to deal with the crisis.
"We have been forced to take decisive action to save the country," Prime Minister Geir H Haarde said of those sweeping new powers that allow the government to take over companies, limit the authority of boards, and call shareholder meetings.
A full-blown collapse of Iceland's financial system would send shock waves across Europe, given the heavy investment by Icelandic banks and companies across the continent.
One of Iceland's biggest companies, retailing investment group Baugur, owns or has stakes in dozens of major European retailers — including enough to make it the largest private company in Britain, where it owns a handful of stores such as the famous toy store Hamley's.
Kaupthing, Iceland's largest bank and one of those whose share trading was suspended last week to stop a huge sell-off, has also invested in European retail groups.
Thousands of Britons have accounts with Icesave, the online arm of Landsbanki that regulators said was likely to file for bankruptcy after it stopped permitting customers to withdraw money from their accounts Tuesday.
To try to wrest control of the spiralling situation, the government also loaned USD 680 million to Kaupthing to tide it over and said it was negotiating a USD 5.4 billion loan from Russia to shore up the nation's finances.
The speed of Iceland's downfall in the week since it announced it was nationalizing Glitnir bank, the country's third largest, caught many by surprise despite warnings that it was the "canary in the coal mine" of the global credit squeeze.
Famous for its cod fishing industry, geysers, moonscape and the Blue Lagoon, Iceland was the site of the Cold War showdown in which Bobby Fischer of the United States defeated Boris Spassky of the Soviet Union in 1972 for the world chess championship. Last year, Iceland won the UN's "best country to live in" poll, with its residents deemed the most contented in the world.
No more.
Despite sunny skies Tuesday after three days of unseasonably cold weather, Reykjavik's mood remained grim — cafes were half-empty, real estate agents sat idle, and retailers reported few sales.
"I'm really starting to get worried now. Everything is bad news. I don't know what's happening," said retiree Helga Jonsdottir as she headed to a supermarket.
Icelanders are also beginning to question how a relative few were able to generate the disproportionate wealth — and associated debt — that Haarde has warned puts the entire country at risk of bankruptcy.
Iceland's reinvention from the poor cousin in Europe to one of the region's wealthiest countries dates to the deregulation of the banking industry and the creation of the domestic stock market in the mid-1990s.
Those free market reforms turned Iceland from a conservative, inward-looking country to one of a new generation of internationally educated young businessmen and women who were determined to give Iceland a modern profile far beyond its fishing base.
Entrepreneurs become its greatest export, as banks and companies marched across Europe and their acquisition wallets were filled by a stock market boom and a well-funded pension system. Among the purchases were the iconic Hamley's toy store and the West Ham soccer team.
Back home, the average family's wealth soared 45 percent in half a decade and gross domestic product rose at around 5 percent a year.
But the whole system was built on a shaky foundation of foreign debt.
The country's top four banks now hold foreign liabilities in excess of $100 billion, debts that dwarf Iceland's gross domestic product of USD 14 billion.
Those external liabilities mean the private sector has had great difficulty financing its debts, such as the more than USD 5.25 billion racked up by Kaupthing in five years to help fund British deals.
Iceland is unique "because the sheer size of its financial sector puts it in a vulnerable situation, and its currency has always been seen as a high risk and high yield," said Venla Sipila, a senior economist at Global Insight in London.
The krona is suffering in part from a withdrawal by a falloff in what are called carry trades — where investors borrow cheaply in a country with low rates, such as Japan, and invest in a country where returns, and often risks, are higher.
After watching the free-fall for several days, the Central Bank of Iceland stepped in Tuesday to fix the exchange rate of the currency at 175 — a level equal to 131 krona against the euro.
Haarde said he believed the measures had renewed confidence in the system. He also was critical of the lack of an Europe-wide response to the crisis, saying Iceland had been forced to adopt an "every-country-for-itself" mentality.
He acknowledged that Iceland's financial reputation was likely to suffer from both the crisis and the response despite strong fundamentals such as the fishing industry and clean and renewable energy resources.
As regular Icelanders begin to blame the government and market regulators, Haarde said the banks had been "victims of external circumstances."
Richard Portes of the London Business School agreed, noting the banks were well-capitalized and had not bought any of the toxic debt that has brought down banks elsewhere.
"I believe it is absolutely wrong to say these banks were reckless," said. "Quite the contrary. They were hugely unlucky.
British govt with a rescue act!
The British government on Wednesday announced a 50 billion pounds emergency rescue plan to partly nationalise major banks, a day after the stock prices plunged raising investors fear about their survivability in the global financial meltdown.
Assuring that the move would help stabilise eight major British banks, the Prime Minister Gordon Brown billed it as a "radical" plan to restore public "confidence and trust" in the financial system.
Under the move unveiled half an hour before the markets opened today, the treasury said it would be investing upto 50 billion pounds in exchange for preference shares in eight of the country's largest banks and building societies: Abbey National PLC, Barclay's PLC, HSBC, HBOS, Lloyds TSB Bank, Royal Bank of Scotland, Nationwide building society and Standard and Chartered Bank.
Prime Minister Gordon Brown told newsmen at 10, Downing Street: "Extraordinary times call for the bold and far-reaching solutions."
"Our stability and restructuring programme is comprehensive, it is specific and it breaks new ground. This is not a time for conventional thinking or outdated dogma but for the fresh and innovative intervention that gets to the heart of the problem," he said.
Chancellor of Exchequer Alistair Darling said the scheme would see taxpayers' money used to buy stakes in major banks in an attempt to halt the meltdown in the financial sector.
And the Government said it stood ready to make at least another 25 billion pounds available for other eligible institutions.
The rescue plan came a day after the British banks stock prices plunged on investor fears that they wont be able to get through the global financial meltdown without help.
The Bank of England also announced that it will also make available 200-billion pounds in short term loans and issue 250-billion pounds to guarantee loans between banks.
In return for the public-backed cash injection, the Government is demanding that the banks must cap executive pay and shareholder dividends and commit to supporting lending to home-buyers and small businesses.
The Chancellor made it clear that the government was absolutely not seeking to take control of the banks.
"We are not going to run the banks. They will run as commercial operations, albeit with the government help in its restructuring," he said in a joint news conference with Brown.
Following the government intervention the market welcomed the treasury move and bank share prices began stabilising and recovering in early trading.
Emphasising that the taxpayer interests would be protected, an official statement said: "If the Government is to provide the capital, the issue will carry terms and conditions that appropriately reflect the financial commitment being made by the taxpayer.
The Prime Minister said the recovery plan would be funded through increased borrowing but insisted taxpayers would "earn a proper return".
The rescue plan marks a sharp turn in the fortunes of the British banks, which till now seemed immune to global financial crisis being faced by America's beleaguered financial institutions.
Just three weeks ago Barclays snapped up North American operations of Lehmann Brothers, the collapsed Wall Street giant.
Post Session Commentary - Oct 8 2008
The market made a smart pull back from the days lows to pare most of its initial losses on selective buying across the counters. After a strong bloodbath at the initial stage, the market pulled back as buying was witnessed at the lower levels. The market opened with a deep cut that led the Sensex tumbled by 950 points in the intraday trade as the concerns of credit crises took a lead that led both the benchmark indices to touch two year low during the trading session. However, the mid cap and small cap stocks continued to remain under selling pressures.
However after the market hours, the US Federal Reserve along with European Central bank and four other central banks announced an emergency cut in the interest rates to deal with the financial crises. The Federal Reserve cut its benchmark rate by 0.5% to 1.5%. Along with this, the Fed reduced its emergency lending rate to banks by half a percentage point to 1.75 percent. In Europe, the Bank of England cut its rate by half a point to 4.5 percent, while the European Central Bank sliced its rate to 3.75 percent.
Ranbaxy Laboratories shares bounced back to close with gains of more than 9% on media reports that the US Department of Justice had withdrawn a motion against the drugmaker, which was being probed for allegedly bringing adulterated and misbranded medications into the US.
From the sectoral point, heavy selling was witnessed from the Capital goods, Metal and Bankex space that closed more than 4% each. The Capital Goods also lost more than 3.5%. Among the Sensex pack all 24 stocks ended in red, while 6 in green. The market breadth was negative as 2165 stocks closed in red while 441 stocks closed in green and 46 stocks remained unchanged.
The BSE Sensex closed lower by 366.88 points at 11,328.36 and NSE Nifty fell by 92.95 points to close at 3,513.65. The BSE Mid Caps and Small Caps closed with losses of 246.68 points and 277.20 points at 4,010.48 and 4,699.19 respectively. The Sensex touched an intraday high of 11,405.73 and low of 10,740.76.
Losers from the BSE Sensex pack are JP Associates 9.91% followed by Wipro 7.91%, Sterlite Inds 6.85%, ICICI bank 6.53%, SBI 6.10%, Tata Steel 5.36%, Tata Motors 5.27%, Satyam Comp 5.14%.
The BSE Capital Goods index closed lower by 325.15 points at 8,793.37. Losers are Jyoti structures 11.75%, Walchand Inds 10.16%, Reliance Industrial Infra 9.58%, Suzlon energy 8.79%, Elecon Eng 8.74%, Siemens 8.36%.
The BSE Bank index fell by 266.98 points to close at 5,772.27. Major losers are Yes bank 12.60%, IDBI bank 7.17%, ICICI Bank 6.53%, SBI 6.10%, Federal bank 5.25%, Axis bank 5.37%.
The BSE Metal index plunged 324.57 points to close at 7,209.46. Major losers are Gujarat NRE 16.77%, Jindal Saw 7.92%, Welspun Gujarat 7.23%, Sesa Goa 7.20%, Sterlite Inds 6.85% and Ispat Inds 6.25%.
The BSE IT index ended down by 139.07 points at 2,701.23. Losers are Finance Tech 12.96%, Rolta India 10.57%, Tech Mahindra 9.92%, Oracle Fin 9.07%, Patni Comp 8.31%, Wipro 7.91%.
The BSE Oil & Gas index lost 215.72 points to close at 7,796.46 as Aban Offshore 17.49%, BPCL 8.84%, Essar Oil 7.72%, HPCL 6.58%, IOCL 6.06%, RNRL 5.08% and RPL 3.66% closed in negative territory.
From the Realty basket, Phoenix Mill 12.14%, HDIL 10.51%, Mahindra Life 9.80%, Indiabull Real 9.68%, Anant Raj Inds 9.36%, Penland Ltd 8.06% and Sobha dev 7.48% closed in red.
Late buying trims losses
The Sensex bucked the major downtrend across the Asian markets and trimmed 580 points of losses on late buying in heavyweights. The market was once again hit by a substantial selling pressure and both Sensex and Nifty tumbled by above 8% amid a choppy trading session. Taking cue from weak global markets, Sensex opened on a negative note at 11,316 and fell sharply to touch an intra-day low of 10,741. While the market witnessed a fluctuating trend for a while, the afternoon trades saw sudden buying interest in frontline stocks and Sensex chopped off most of its losses to close at 11,328, down 367 points or 3.14%. Nifty, too, bounced back sharply and closed at 3,514, down 93 points.
The market breadth was negative. Of the 2,652 stocks traded on the BSE, 2,165 stocks declined whereas only 441 stocks advanced. Fourty six stocks ended unchanged. All the 13 sectoral indices were largely weak. The BSE CD index lost 6.75%, BSE FMCG index declined by 5.18% and BSE IT shed 4.90%. The remaining indices lost 1-4%.
Among the 30 Sensex stocks, 24 ended in the red. Among the major losers JP Associates tanked by 9.91% at Rs90.95, Wipro tumbled by 7.91% at Rs282.35, Sterlite Industries declined by 6.85% at Rs292.55, ICICI Bank plunged by 6.53% at Rs453.50, State Bank of India dropped 6.10% at Rs1322.15, Tata Steel crumbled by 5.36% at Rs338.20, Satyam Computer Services slumped 5.14% at Rs264.70, ITC fell by 5.13% at Rs165.60 and Tata Consultancy Services declined by 5.07% at Rs546.60. However, Ranbaxy Laboratories advanced 9.08% at Rs279.25, Tata Power jumped 4.79% at Rs804.60, Mahindra & Mahindra surged 2.75% at Rs486 and DLF gained 1.95% at Rs308.80, while Reliance Communications closed with marginal gains.
Over 2.23 crore JP Associates shares changed hands on the BSE followed by Reliance Natural Resources (1.25 crore shares), GVK Power and Infrastructure (1.22 crore shares), Chambal Fertilizers & Chemicals (0.78 crore shares) and IFCI (0.70 crore shares).
Reliance Industries was the most actively traded counter on the BSE and registered a turnover of Rs434 crore followed by Reliance Capital (Rs287 crore), ICICI Bank (Rs251 crore), JP Associates (Rs209 crore) and the State Bank of India (Rs152 crore).
Sensex off 13% from recent high
Institutional buying and short covering helped the market stage a strong rebound in the latter part of the trading session. The BSE 30-share Sensex lost 366.88 points. The barometer index had slumped about 950 points to a 2-year low in early afternoon trade in a sell-off in global markets triggered by concerns that the deepening of the credit crisis will push the global economy into a recession
Recovery in European markets and US futures from earlier steep losses helped the recovery on the domestic bourses gather steam in late trade. Ranbaxy Laboaratories spurted close to 10%. Reliance Industries, Reliance Communications, Maruti Suzuki India recovered.
The BSE 30-share Sensex lost 366.88 points or 3.14% to 11,328.36. The index tanked 954.48 points at the day's low of 10,740.76 in early afternoon trade, its lowest level since 2 August 2006. The Sensex fell 289.51 points at day’s high of 11,405.73, in late trade.
The S&P CNX Nifty was down 73.25 points or 2.03% to 3,533.35 as per the provisional figures. The index hit a low of 3,329.45 in early afternoon trade, its lowest level since 12 September 2006.
BSE clocked the turnover of Rs 5085 crore today as compared to a turnover of Rs 4,741.54 on 7 October 2008.
Nifty October 2008 futures were at 3553.50, at a premium of 39.85 points as compared to spot closing of 3513.65. NSE's futures & options (F&O) segment turnover was Rs 57,666.95 crore, which was lower than Rs 59,767.70 crore on Tuesday, 7 October 2008.
From the recent high of 13,055.67 on 1 October 2008, the Sensex has lost 1,727.31 points or 13.23%. The barometer index Sensex is down 8,958.63 points or 44.15% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 9,878.41 points or 46.58% below its all-time high of 21,206.77 struck on 10 January 2008.
The BSE Mid-Cap index was down 5.79% at 4,010.48 and the BSE Small-Cap index was down 5.57% at 4,699.19. Both these indices underperformed the Sensex.
All the sectoral indices on BSE were in red. BSE Consumer Durables index (down 6.75% to 2,380.15), BSE FMCG index (down 5.18% to 1,947.33), BSE IT index (down 4.9% to 2,701.23), BSE Bankex (down 4.42% to 5,772.27), BSE Metal index (down 4.31% to 7,209.46), BSE Teck index (down 3.74% to 2,264.73), BSE Capital Goods index (down 3.57% to 8,793.37), BSE Realty index (down 3.31% to 2,844.34) underperformed the Sensex.
BSE Power index (down 1.94% to 2,034.08), BSE Auto index (down 1.97% to 3,442.66), BSE HealthCare index (down 2.43% to 3,344.47), BSE Oil & Gas index (down 2.69% to 7,796.46), BSE PSU index (down 3.1% to 5,795.22), outperformed the Sensex.
The market breadth was extremely weak. On BSE, 441 shares advanced as compared to 2,165 that declined. 46 shares remained unchanged.
India’s largest private sector company by market capitalization and oil refiner Reliance Industries was down 1.54% to Rs 1,649.60. The stock recovered from 52-week low of 1,511 hit today. Reliance Industries will reportedly commission a new 5,80,000 barrels per day (bpd) refinery by the end of November 2008, ahead of the targeted December 2008 deadline.
Six stocks rose while rest 24 stocks fell from the Sensex pack. India’s largest drug maker by sales Ranbaxy Laboaratories spurted 9.08% to Rs 279.25 on reports the US Department of Justice had withdrawn a motion against the drugmaker for allegedly bringing adulterated and misbranded medications into the Unietd States. The stock was the major gainer form the sensex pack. The stock recovered from intraday low of Rs 236.
Most Sensex stocks recovered from their intra day low by the end of trading. Tata Power Company rose 6% to Rs 813.90 after touching a low Rs 671. DLF jumped 3.66% to Rs 314, recovering from a low of Rs 279. Reliance Communications rose 2.95% to Rs 309, bouncing back from a low of Rs 263.80. Mahindra & Mahindra rose 2.75% to Rs 486, off intraday low of Rs 447.10. Maruti Suzuki India jumped 3.13% to Rs 692, recovering from a low of Rs 628.
India’s largest commercial vehicle maker by sales Tata Motors fell 5.27% to Rs 299.90. The stock hit a 52 week low of Rs 295.20 today. The company on Tuesday, 7 October 2008, signed an agreement with Gujarat to make the Nano car there days after the company pulled out of West Bengal.
Among the major losers from Sensex pack were, Jaiprakash Associates (down 9.91% to Rs 90.95), Wipro (down 7.91% to Rs 282.35), Sterlite Industries (down 6.95% to Rs 292.55), ICICI Bank (down 6.53% to Rs 453.50), State Bank of India (down 6.1% to Rs 1,322.15)
Among the sectoral indices, consumer durables stocks index was the major loser. Videocon Industries (down 10.04% to Rs 160), Titan Industries (down 7.49% to Rs 890.90) and Blue Star (down 4.29% to Rs 256.45) edged lower.
FMCG stocks fell. ITC (down 5.13% to Rs 165.60), Hindustan Unilever (down 4.44% to Rs 238.05) and United Spirits (down 17.52% to Rs 619.55) edged lower.
India’s second largest IT exporter by sales Infosys Technologies lost 3.81% at Rs 1,254.35 ahead of its Q2 September 2008 results on Friday, 10 October 2008. The stock recovered from a 52 week low of Rs 1,196 today. Reports suggest that Infosys Technologies is widely expected to lower its dollar guidance for the current year ending March 2009 on the back of the events that have shaken the financial world. It is also expected to miss its revenue guidance in dollar terms for the September 2008 quarter. However, the company is likely to beat its rupee guidance aided by the rupee’s depreciation against the dollar.
India’s largest IT exporter by sales Tata Consultancy Services (TCS) fell 5.07% to Rs 546.60. The stock hit a 52-week low of Rs 510 today. The company announced today it will acquire Citigroup Global Services, the India based captive business process outsourcing (BPO) arm of Citigroup Inc for all cash consideration of $ 505 million. In addition, TCS will provide process outsourcing services to Citi for $2.5 billion over a period of 9.5 years.
Reliance Industries clocked the highest turnover of Rs 434.73 crore. Reliance Capital (Rs 287.26 crore), ICICI Bank (Rs 251.96 crore), Jaiprakash Associates (Rs 209.60 crore) and State Bank of India (Rs 152.25 crore) were the other turnover toppers in that order.
Jaiprakash Associates clocked the highest volume of 2.23 crore shares on BSE. Reliance Natural Resources (1.25 crore shares), GVK power Infrastructure (1.22 crore shares), Chambal Fertilisers and Chemicals (78.24 lakh shares) and IFCI (70.64 lakh shares) were the other volume toppers in that order.
Just after the Indian market closed, the Federal Reserve, European Central Bank and four other central banks announced cut in interest rates in an unprecedented, emergency coordinated bid to ease the economic effects of the financial crisis. The Fed cut its benchmark rate by 0.5% to 1.5%.
Earlier in the day, in a major development, the UK Treasury announced a $87.4 billion plan to inject money into the banking system to prevent a collapse of the UK banking system.
Europen markets were mixed. France’s CAC 40 and Germany’s DAX were down between 0.21% to 1.04%. UK’s FTSE 100 was up 0.34%.
Key benchmark indices in Asia were down by between 3.04% to 9.38% today, 8 October 2008.
US stocks plunged on Tuesday, 7 October 2008, amid escalating worries about credit markets and the financial sector. The Dow lost more than 500 points and all the major indexes slid more than 5%. The Standard & Poor's 500 index saw its first close below 1,000 in five years. Steps by the Federal Reserve to reinvigorate the dormant credit markets ultimately weren't enough to calm nervous investors.
Pre Session Commentary - Oct 8 2008
Today Markets would open negative amidst concerns over weak US market and falling Asian Markets. After yesterday’s volatile session, one could gauge the weak sentiment of bulls that was further slaughtered by the bears in the later trading sessions. The market is absolutely in tight control of bears as there is no sign of relief coming from the macro economic front. The Mutual fund houses and FIIs are pulling out their funds and even the insurance companies are facing tough business. The investors are very skeptic about strength of the markets and hence fresh capital inflow is locked. One could only wait any good news coming from the SEBI with regard to the P-Notes. The markets seem to be caught in the tight claw of fury of the bears.
On Tuesday, domestic Markets opened positive with phenomenal recovery but couldn’t sustain the selling pressure and later ended mixed. At the end Sensex closed in red with a marginal loss of 106 points however Nifty managed to grip the green zone. The market sustained on the back of good news in the form of 50bps CRR cut by RBI. However, the selling pressure whacked out the stocks of CG, IT and Bankex after an early pick in the morning session. Asian markets and European markets also traded mixed and showed marginal movements. CG, IT, Bankex and Realty recorded fall of 3.96%, 3.04%, 2.15% and 1.94% respectively. Whereas Oil & Gas index performed well with a gain of 1.30% due to softening in the crude oil prices by $4.42 per barrel to $87.56 in New York Mercantile Exchange. During the trading session we expect the market to be trading in red.
The BSE Sensex closed at 11,695.24 registering a marginal fall of 106.46 points and NSE Nifty ended flat at 3,606.60. The BSE Mid Caps and Small Caps closed with loss of 87.07 points and 110.54 points at 4,257.16 and 4,976.39. The BSE Sensex touched intraday high of 12,181.43 and intraday low of 11,501.85.
On Tuesday, the US market was once again caught in the tight grip of bears as Fed Chariman Mr. Ben Bernanke made some cautious comments about Federal Reserve’s plan to improve liquidity in the short term corporate borrowing. He also stated that this economic turmoil could prevail in 2009. On the other hand Bank of America recorded lower than expected third quarter earnings and has plans to raise $10 billion in common stock offering. It has further cut it dividend by 50% to $0.32. Crude oil for November delivery fell gained by $2.25 to $90.06 per barrel on the New York Mercantile Exchange. The Crude oil gained some momentum because OPEC president Chakib Khelil stated that the organization could take up some measures to keep the price of Oil stable. On the other hand Libya’s top official called for a cut in production of Crude oil.
The Dow Jones Industrial Average (DJIA) was low by 508.39 points at 9,447.11 along with NASDAQ index which was low by 108 points at 1,754.01 and the S&P 500 (SPX) also declined by 60.66 points to close at 996.23 points.
Indian ADRs ended down. In technology sector, Wipro closed lower by (7.79%) followed by Satyam that ended down by (7.81%) and Patni Computers by (7.76%). In banking sector ICICI Bank fell by (14.57%), while HDFC Bank lost (3.19%). In telecommunication sector, Tata Communication fell the lowest by (18.92%), while MTNL plunged (6.07%). Sterlite Industries fell by (10.11%).
Today the major stock markets in Asia opened negative amidst concerns of weak sentiments in US markets. The Shanghai Composite is low by 65.75points and trading at 2,092.089. Further Japan''s Nikkei is low by 460.78 points at 9,695.12, Straits Times is also low by 92.68 points at 2,084.87 and South Korea’s Seoul Composite was low by 48.55 points at 1,317.55.
The FIIs on Tuesday stood as net sellers in equity and net buyers in Debt. Gross equity purchased stood at Rs1995.20 Crore and gross debt purchased stood at Rs187 Crore, while the gross equity sold stood at Rs3116.60 Crore and gross debt sold stood at Rs95.70 Crore. Therefore, the net investment of equity and debt reported were (Rs1121.40 Crore) and Rs91.40 Crore respectively.
On Tuesday, the partially convertible rupee ended at 47.92/93 per dollar, weakest since five and half years. The sharp selling in the Capital markets and the consequent huge outflow of foreign funds brought the rupee to the lowest. After an early sharp fall the rupee moderated as Banks started selling dollar in the current cash market and simultaneously took position in the forward market.
On BSE, total number of shares traded were 28.46 crores and total turnover stood at Rs4,741.54 Crore. On NSE, total volumes of shares traded were 58.15 crores and total turnover was Rs12,804.08 Crore.
Top traded volumes on NSE Nifty – ITC with total volume of 17629022 shares followed by Reliance Petro 15876513 shares, Unitech 13576436 shares, ICICI Bank 12438534 shares and Suzlon Energy 9545330 shares.
On NSE Future and Options, total number of contracts traded in index futures was 1242125 with a total turnover of Rs21301.02 Crore. Along with this total number of contracts traded in stock futures were 1003247 with a total turnover of Rs14052.5 Crore. Total number of contracts for index options was 1213234 and total turnover was Rs23687.84 Crore and total number of contracts for stock options was 45962 and notional turnover was Rs726.34 Crore.
Today, Nifty would have a support at 3,450 and resistance at 3,655 and BSE Sensex has support at 11,350 and resistance at 12,050.
Daily Call - Oct 8 2008
The markets breathed easier Tuesday, with just a 100 odd points fall in the Sensex. The Nifty managed to keep its head above water. But yesterday’s relatively balanced day should be see in the light of the fact that PNs issuance was opened up and CRR had been cut. If these two things were not enough to charge the markets higher for one single day, God knows what will. The writing on the wall is clear. With each passing day, the value of the cash in hand is growing. If on January 9, Rs 21,000 could buy 1 Sensex, you can buy 1.8 Sensex now.
Markets are likely to move towards the 11K mark in the Sensex. There are no meaningful supports in the vicinity, except the round figures. Banking stocks have given renewed bearish signals. Cut your losses or book profits with a clinical bent of mind. Buy Puts in the Bank Nifty. The day the rates that bank charge each other for three months loan start declining in Europe, that may be the time to start looking for a temporary bottom in the markets.
Domestic bourses to track weak global stocks
A fresh setback in global markets will result in a further fall on the domestic bourses today, 8 October 2008. Investors are unlikely to build large positions as the market remains closed tomorrow, 9 October 2008, on account of Dasara. Some of the equipment makers for the nuclear power plants may rise on reports India and United States are likely to sing the civilian nuclear deal on Friday, 10 October 2008.
US stocks plunged on Tuesday, 7 October 2008, amid escalating worries about credit markets and the financial sector. The Dow lost more than 500 points and all the major indexes slid more than 5 percent. The Standard & Poor's 500 index saw its first close below 1,000 in five years. Steps by the Federal Reserve to reinvigorate the dormant credit markets ultimately weren't enough to calm nervous investors.
Key benchmark indices in Asia were down by between 2.9% to 5.7% today, 8 October 2008, even as central banks across Asia stepped up to offer more support to commercial banks on to try to ease painful pressure on funding costs from a vicious global credit squeeze.. The troubles that started with an overheated housing market in the US have infected financial markets around the world, making banks fearful of lending to other banks, let alone to businesses and consumers.
Back home, after Monday’s (6 October 2008) heavy slide, the market witnessed highly choppy trade on Tuesday, 7 October 2008. While the 30-share BSE Sensex slid 106.46 points, the S&P CNX Nifty rose 4.25 points.
Foreign institutional investors (FIIs) have been pulling out their investments from India and other emerging markets to shore up resources to beat the global liquidity crunch. In India, FIIs sold shares worth a net Rs 8278.10 crore last month. The outflow has reached Rs 39159.10 crore in calendar year 2008 (till 6 October 2008).
As per provisional data released by the stock exchanges, foreign funds sold worth a net Rs 680.42 crore on Tuesday, 7 October 2008. Domestic funds bought shares worth a net Rs 548.29 crore.
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. However, there is no data available on the quantum of hedge funds’ investment in India.
The barometer index is down 8,591.75 points or 42.35% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 9,511.53 points or 44.85% below its all-time high of 21,206.77 struck on 10 January 2008.
Meanwhile, as per reports, United States and India plan to sign a potentially lucrative agreement on Friday, 10 October 2008, to open up nuclear trade between the two countries for the first time in three decades. The pact will provide India with access to US nuclear fuel, reactors and technology, overturning a ban on such trade instituted after India first conducted a nuclear test in 1974.
Trading Calls - Oct 8 2008
Considering the unprecedented carnage in the global financial markets and uncertainty over the fate of the US and other major economies, we would like to refrain from giving any intra-day trading ideas. We continue to advise caution at this stage.
Investors should stay on the sidelines till the global selloff abates and markets stabilise. One should not get carried away if there is any kind of a relief rally, as further selling is expected. Any advance in Indian stocks can only be sustained if global markets recover.
Daily News Roundup - Oct 8 2008
ONGC-Mittal Energy plans to set up its first refinery in Nigeria with an investment of ~US$4bn. (ET)
Tata Group to set up Mother Plant of Nano car in Sanand in Gujarat. (DNA)
Bharti Airtel to launch its DTH services in 62 cities from October 9, 2008. (FE)
RNRL to produce sections of Reliance MoU in High Court today. (BL)
Infosys is looking to expand its consulting business through acquisitions. (BL)
IOC gets a credit allowance of Rs1.5bn from New Delhi for uninterrupted supply of petroleum products to Kathmandu. (FE)
Kumar Mangalam Birla, promoter has increased his stake in Hindalco to 31.59%. (Mint)
Tata Sons sells 1% stake in TCS for Rs7.01bn. (ET)
IVRCL Infrastructure secures order worth Rs4.99bn from Andhra Pradesh Government. (FE)
United Spirits plans to offer 500 shares for each acre to grape growers. (BL)
NHPC defers IPO till market conditions improve. (ET)
United Phosphorus plans to spin off its fledgling toxic gas detection instrument business. (Mint)
ITC’s Wills Lifestyle to open 50 more outlets in next two years. (BL)
ICICI Bank, Dish TV launches interactive banking service. (Mint)
Spanco and Omnia BPO to form 50:50 JV for domestic BPO. (ET)
Opto Circuits drops plans to acquire company in Europe. (Mint)
Monnet Ispat plans to enter service sector and provide total solution for setting up coal washeries. (BL)
Tata Group to set up agri, marine biology research institute. (ET)
M&M to bring its car service business in Pune in next 12-15 months. (FE)
Everonn Systems has bagged Rs68.5mn project from Nagpur Municipal Corporation. (FE)
GVK Power & Infra divests entire stake in GVK Aviation. (FE)
Essar Oil signs a product purchase and infrastructure sharing MoU with IOC. (BL)
Bajaj Electricals plans to set up lighting unit in Saudi Arabia in next 15-18 months. (FE)
Bajaj Electricals secures Rs90mn Bandra Worli Sea-Link order. (BL)
Consolidated Construction Consortium is planning to enter into nuclear power projects sector. (ET)
Consolidated Construction Consortium secures Rs12.12bn order from Airport Authority of India to expand Chennai airport terminal. (BL)
Strides Arcolab gets USFDA approval for its oral dosage manufacturing unit in Bangalore. (DNA)
REcap partners LLC to acquire HOV services for ~Rs9.5bn. (BS)
Marksans Pharma is looking for more acquisition targets in US and Europe. (BL)
Country Club launches new clubbing concept to increase its presence globally. (FE)
Essar Group may drop plan to set up wind-turbine JV. (BS)
Provogue India plans to foray into food and grocery retailing sector. (BS)
Premji Invest picks up 3% stake in NSE for US$100mn. (BS)
Economic Front Page
The Government asks states to exempt local taxes on coal transfers by JV firms from captive coal blocks. (ET)
Exploration, refiners and miners gets permission to raise US$500mn per year from ECBs. (ET)
The Ministry of Shipping to propose on the revival of the ship building subsidy to the cabinet in the next week. (FE)
GSM based mobile operator’s approaches government to seek permission to separate their non-voice revenues. (BL)
The Government is considering overseas dollar bond float to ease Indian banks and companies access to liquidities. (BS)
Vijaydashami…pray it gets auspicious!
It is better to conquer yourself than to win a thousand battles. Then the victory is yours.
The war between the bulls and the bears seems to be one-sided for long. Nine nights of Navratri is set to culminate but there are no signs of survival, forget victory for the bulls. Indian financial markets are closed tomorrow on account of Vijaydashami, also known as Dussehra. It is considered an auspicious day to begin new ventures in life. Given the suffering most market players have undergone, one can only pray that things get better on a personal level. Conquer your fear and avoid the temptation of overcoming your losses in a hurry. Today, we expect another weak opening in the face of the sharp cuts across global markets. Lower level buying may set it in. Given Infosys’ results on Friday and other global developments which one has to contend with, it is prudent to avoid carrying any positions.
Sentiment-boosting measures announced by SEBI and the RBI failed to assuage concerns of a deepening financial malaise. Even the Finance Minister's bold and brave proclamation that the Indian economy has nothing to fear, but fear itself, failed to work its magic on the market. He believes that the GDP in the current fiscal will be around 8% and bounce back to 9% next year. However, it remains to be seen if those numbers will be attained in the face of a severe global credit crisis and sharp slowdown in the domestic economy. The IMF and many other economists warn that India will be hit by the current financial tsunami causing unprecedented destruction in the western world. There is no where to run, and nowhere to hide. The worst global financial crisis is underway and it’s anybody's guess how deep and long it will be. There could be considerable pain going ahead as the market desperately looks for some succour and of course a bottom.
As far as India is concerned, there is some encouraging news which says that the tight liquidity situation is likely to ease over the next few weeks. But, the RBI's constant intervention in the currency market and a busy bond auction calendar on the part of the Centre may undo some of that relief. Another positive news is that a few companies that had deferred their IPO plans are now confident enough to re-start the process all over again. Having said that, there is no guarantee that these public issues will get fully subscribed. Some of them may fare badly. Coming to the financial markets, though the liquidity condition is strained, credit offtake remains pretty strong as does the money supply, both of which are running way above the RBI's comfort levels. On top of that, inflation continues to be quite high despite dipping below 12%. The rupee too is under considerable pressure amid relentless selling of Indian stocks by the FIIs. Hence, it will be really tough for the RBI to take a call on cutting interest rates.
US stocks slumped further on Tuesday, declining for a fifth session in a row, as investors found little respite in the Federal Reserve's latest steps to ease frozen credit markets.
Stock benchmarks remained under pressure as minutes from the FOMC's last meeting revealed that rate cuts were discussed at the mid-September gathering, and after Fed chairman Ben Bernanke opened the door for a possible monetary easing soon.
The Fed step to buy commercial paper initially propelled the Dow Jones Industrial Average back above the 10,000 level, breached on Monday for the first time since October 2004.
The S &P 500 Index ended below 1,000 for the first time since 2003, on speculation that banks and real-estate companies are running short of money as the credit crisis worsens.
Bank of America tumbled 26% after cutting its dividend in half and saying it plans to sell $10bn in common stock to brace for a recession. Morgan Stanley, KeyCorp and JPMorgan Chase slid more than 10% as investors shrugged off signs the Fed will reduce interest rates.
General Growth Properties Inc., a mall owner, plunged 42% on concern it won't be able to repay debt.
The S&P 500 slid 60.66 points, or 5.7%, to 996.23, extending its 2008 tumble to 32% in the market's worst yearly slump since 1937. The Dow dropped 508.39 points, or 5.1%, to 9,447.11, giving it a 29% fall in 2008 that would also be the worst in 71 years. The Nasdaq lost 5.8% to 1,754.88.
Fed chief Bernanke's dour economic outlook in an afternoon speech added to the day's weakness. And a report showed consumer borrowing in August fell for the first time since January 1998.
The Fed said it will buy commercial paper, short-term debt that companies use to finance daily operations, from individual companies. Panicky investors have been less willing to buy this kind of debt lately, making it hard for companies to get the money they need to operate.
Credit markets remained tight, but showed some improvement from the previous day. Treasury prices inched lower, with the yields modestly higher. The dollar slumped versus other major currencies. Oil and gold prices gained.
After the close, aluminum maker Alcoa reported weaker quarterly sales and earnings that missed estimates due to a weakening in aluminum prices and demand. The Dow component also suspended its dividend. Alcoa stock fell 6% in extended-hours trading.
Treasury prices dipped, propelling the yields. The benchmark 10-year note fell, lifting the corresponding yield to 3.47% from 3.45% on Monday.
US light crude oil for November delivery settled up $2.25 to $90.06 a barrel on the New York Mercantile Exchange, after ending the previous session at an eight-month low. The price of gasoline decreased for the 20th consecutive day, according to a survey of credit card activity.
COMEX gold for December delivery rallied $15.80 to settle at $882 an ounce. In currency trading, the dollar slipped against the euro after hitting a 14-month high against the European currency on Monday. The dollar also slipped against the yen, giving up earlier gains.
In a hugely volatile session, Europe stocks ended on Tuesday with moderate losses. One day after closing with the worst percentage loss on record, the pan-European Dow Jones Stoxx 600 index closed down 0.4% to 240.55. The index rose as much as 2.5% during the day - and fell up to 1.7%.
The UK's FTSE 100 index rose 0.2% to 4,596.42 and the French CAC-40 index advanced 0.5% to 3,732.22. Germany's DAX 30 index , however, fell 1.1% to 5,326.63.
Among the emerging markets, the Russian RTS index was down 0.95% to 858. Elsewhere, the Bovespa in Brazil was down 4.7% to end at 40,139 while the IPC index in Mexico tumbled 4% to 20,884 and Turkey's ISE National 30 index rose 0.2% to 39,498.
Indian market started the day with a positive gap after a huge cut in the previous trading session. The early spurt could be attributed to the central bank’s decision to cut cash reserve ratio by 50 bps.
Further, market regulator, SEBI’s decision to lift curbs on the issuance of the P-Notes by the FIIs lifted the sentiments on Dalal Street.
However, markets witnessed high volatility throughout the trading session. The benchmark index gyrated 680 points and the Nifty index swung 195 points between their respective high’s and low’s. Finally, the BSE benchmark Sensex ended 106 points lower to close 11,695 and the NSE Nifty index ended flat at 3,606.
Among the 30 components of the Sensex, 16 stocks ended in the red and 14 stocks ended with positive bias. L&T, HDFC Bank, ITC and TCS were among the major laggards. However, among the top gainers were, Reliance Industries, Bharti Airtel and NTPC.
Market breath was very weak, 1,802 stocks declined against 809 advances, while, 70 stocks remained unchanged.
Among the BSE Sectoral indices, BSE Capital Goods index (down 4%), BSE IT index (down 3%), BSE Bankex index (down 2.1%) and BSE Realty index (down 2%). Even the Mid-Cap and the Small-Cap stocks ended with losses. Both the indices lost over 2% each.
However, among the gainers were BSE Oil & Gas index (up 1.3%) and BSE PSU index (up 1%).
Shares of IVRCL Infra came off its day’s low and gained Rs21 after the company announced that it secured a lift irrigation order worth Rs4.99bn. The scrip touched an intra-day high of Rs207 and a low of Rs174 and recorded volumes of over 11,00,000 shares on BSE.
HOV Services surged by over 8% upper circuit at Rs65.4 after the board of directors of the company announced that it would meet on October 08, 2008, to review an offer received from Recap, LLC to purchase; all assets owned by HOV Services, LLC. The scrip touched an intra-day high of Rs66.5 and a low of Rs62.
Shares of Bharti Airtel advanced up by over 2.6% to Rs749 after the company announced that it would launch DTH services on October 9, 2008. The company also said that the TV service would be available in 62 Indian cities. The scrip touched an intra-day high of Rs766 and a low of Rs730 and has recorded volumes of over 11,00,000 shares on BSE.
Hindalco announced that one of the promoter M/s. IGH Holding Pvt. Ltd on October 06, 2008 have acquired 1,968,213 (Nineteen Lacs sixty eight thousands two hundred thirteen) Equity shares of Hindalco Industries Ltd from the Stock Exchanges.
Shares of Hindalco slipped by 1.6% at Rs94 touching an intra-day high of Rs98 and a low of Rs94 and recorded volumes of over 22,00,000 shares on BSE.
Shares of Cambridge Solutions hit 5% upper circuit at Rs65.5 after Xchanging Plc, a U.K. based back-office services provider agreed to acquire 75% of the company for ~US$147mn in stock and cash. The scrip touched an intra-day high of Rs65.5 and a low of Rs65.5 and recorded volumes of over 93,000 shares on BSE.
NTPC sparked up by over 4% to Rs175 after reports stated that Reliance Industries offered an out-of-court settlement to the company to resolve the dispute over gas supply from its Krishna-Godavari gas fields, off the southern India state of Andhra Pradesh. The scrip touched an intra-day high of Rs177 and a low of Rs169 and recorded volumes of over 22,00,000 shares on BSE.
Shares of TTML slipped 1.2% to Rs19.2. According to reports, Quippo Telecom Infrastructure was all set to strike a partnership with the hived-off tower arm of the company. The scrip touched an intra-day high of Rs20.5 and a low of Rs19 and recorded volumes of over 1,200,000 shares on the BSE.
Investor wealth eroded
Amid the financial crisis in the US, Indian investors have witnessed an erosion of about Rs 2.3 lakh crore in their wealth in September, says a report.
Domestic equity market continued to be battered following negative global cues with the benchmark Nifty registering a fall of about 10 % in the last month.
"It is estimated that Rs 2.3 lakh crore of shareholders' wealth eroded in the background of the situation in the US financial markets," Crisil Research said in a report.
On the contrary, the fall in the US markets was lower with the S&P 500 and Dow Jones both declining by around nine % and six %, respectively, while emerging markets lost around 18 % during the month.
Pessimism in the financial markets following the filing for bankruptcy by Lehman Brothers, Merrill Lynch's sell-off, the bail out of AIG and perceived uncertainty around the US bail-out package added to investor fears.
Investor sentiment was also affected on news of the possibility of Fortis filing for bankruptcy, indicating problems in the European financial markets as well, the report added.
"The BSE Realty Index and the BSE Metal Index were the most severely affected during the month, dropping by 32 per cent and 25 %, respectively. Concerns over slowing demand in the real estate market due to a liquidity crunch and increased cost of funding weighed in on investor sentiment in the realty sector," Crisil Research Head-Equities Chetan Majithia said.
Bullion metals continue to rise
Gold gains more than $50 in the past two days
Despite a relatively stronger dollar, bullion metals continued to rise and once again ended higher on Tuesday, 07 October, 2008. The yellow metal gained after the stocks at Wall Street continued to plunge on global economic worries thereby strengthening the yellow metal’s demand as a safe haven for investment. Chances of another interest rate cut by Federal Reserve by at least 50 bps to 1.5% also imparted further shine on the yellow metal. Silver prices also gained today. Investors tend to seek safety in gold when the economy falls into turmoil.
On Tuesday, Comex Gold for December delivery gained $15.8 (1.8%) to close at $882 an ounce on the New York Mercantile Exchange. In the past two days, gold has gained more than $50. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly since then.
For the third quarter ended September, 2008, 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%. This year, gold prices have gained 5.3% till date.
On Tuesday, Comex silver futures for December delivery slightly rose 9.5 cents (0.8%) to $11.38 an ounce. Silver had 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 lost 24% 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 gained against the yen but remained under pressure after the Federal Reserve said it would buy commercial paper in an attempt to revive frozen credit markets and ease overall borrowing costs. The yen rallied against both the dollar and the euro as investors fled to safe-haven currencies on ongoing worries about credit markets and the impact of the financial crisis on institutions in the U.S. and Europe. The dollar index, which measures the U.S. unit against a basket of major currencies, remained under pressure, trading at 81.093, down from 81.300 in morning trade and 81.593 on late Monday.
At the crude market on Tuesday, crude-oil futures closed higher to score their first gain in five sessions as prices bounced back after touching an eight-month low. Prices found support as traders looked for fresh indications on global energy demand and digested reports of renewed tension in the Middle East, but crude finished off the day's high as U.S. stocks weakened. Crude for November delivery rose $2.25, or 2.6%, to close at $90.06 a barrel on the New York Mercantile Exchange.
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 higher by Rs 177 (1.3%) at Rs 13,513 per 10 grams. Prices rose to a high of Rs 13,599 per 10 grams and fell to a low of Rs 13,192 per 10 grams during the day’s trading.
At the MCX, silver prices for December delivery closed Rs 157 (0.82%) higher at Rs 19,585/Kg. Prices opened at Rs 19,007/kg and rose to a high of Rs 19,585/Kg during the day’s trading.
Crude gains after four sessions of drop
Crude prices gain on fresh Middle East tensions
After four sessions of drop, crude oil prices rose for the first time today, Tuesday, 07 October, 2008. Prices rose after fresh Middle East tensions resurfaced and investor worries fell a bit as they thought that global energy demand will not drop drastically in the coming months. Crude finished off the day's high as U.S. stocks weakened.
Crude-oil futures for light sweet crude for December delivery closed at $90.06/barrel (higher by $2.25 or 2.6%) on the New York Mercantile Exchange. Prices rose to a high of $90.6 during intra day trading. Prices reached a high of $147 on 11 July but have dropped almost 50% since then. Till date this year, prices have dropped by 6.2% till date.
As per reports today, Iran claimed that it forced down a Western aircraft on Sunday that accidentally entered its airspace, then allowed it to continue the next day to Afghanistan after questioning the passengers. This perked up crude prices partly today.
At the currency markets on Tuesday, the dollar gained against the yen but remained under pressure after the Federal Reserve said it would buy commercial paper in an attempt to revive frozen credit markets and ease overall borrowing costs. The yen rallied against both the dollar and the euro as investors fled to safe-haven currencies on ongoing worries about credit markets and the impact of the financial crisis on institutions in the U.S. and Europe. The dollar index, which measures the U.S. unit against a basket of major currencies, remained under pressure, trading at 81.093, down from 81.300 in morning trade and 81.593 on late Monday.
For the third quarter of the year crude prices ended lower by 28%. This was the biggest quarterly drop since 1991. Before that, 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%.
Investors are concerned that a prolonged credit crisis would further undermine an already waning demand for energy as global growth slows down.
Against this background, November reformulated gasoline closed at $2.0628 a gallon, up 0.4 cent, while November heating oil gained 3.2 cents to end at $2.5057 a gallon.
Natural gas for November delivery declined by 6.7 cents to finish at $6.768 per million British thermal units.
At the MCX, crude oil for October delivery closed at Rs 4,205/barrel, lower by Rs 47 (1.09) against previous day’s close. Natural gas for October delivery closed at Rs 328.2/mmbtu, lower by Rs 5.8/mmbtu (1.7%).
The U.S. Energy Department's Energy Information Administration will issue a weekly update on petroleum supplies tomorrow. Expectations for the data were mixed.
BSE Bulk Deals to Watch - Oct 7 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
7/10/2008 533022 20 MICRONS EUREKA STOCK AND SHARE BROKING SERVICES LIMITED B 101285 30.25
7/10/2008 533022 20 MICRONS EUREKASTOCK AND SHARE BROKING SERVICES LIMITED S 101285 30.35
7/10/2008 526955 ABL BIOTECHN T P ANANDH B 50000 58.93
7/10/2008 513335 AHMEDNAGAR F MERILL LYNCH CAPITAL MARKETS ESPANA S A SV S 200000 75.00
7/10/2008 500009 AMBAL SARA E SARABHAI HOLDING PVT LTD B 3300000 10.00
7/10/2008 500009 AMBAL SARA E SPARK SECURITIES P LTD S 492811 10.01
7/10/2008 500009 AMBAL SARA E M PRASAD AND CO LTD S 740095 10.00
7/10/2008 500009 AMBAL SARA E KARNANI FINANCE ENTERPRISE LTD S 1604557 10.00
7/10/2008 530355 ASIAN OILFIE KINSFOLK INDUSTRIES P LTD B 55097 71.30
7/10/2008 530355 ASIAN OILFIE KINSFOLK INDUSTRIES P LTD S 71097 72.00
7/10/2008 530355 ASIAN OILFIE CONSOLIDATED SECURITIES LTD S 368517 72.00
7/10/2008 513059 G.S. AUTO SPJSTOCK B 144680 70.90
7/10/2008 513059 G.S. AUTO SPJSTOCK S 110301 70.30
7/10/2008 531439 GOLDSTON TEC HEMANT MADHUSUDAN SHETH B 277000 107.81
7/10/2008 531439 GOLDSTON TEC ANKIT RAJENDRA SANCHANIYA S 100000 109.19
7/10/2008 532859 HTMT GLOBAL MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. S 218135 155.00
7/10/2008 532081 K SERA SERA S V ENTERPRISES B 433695 24.39
7/10/2008 532081 K SERA SERA S V ENTERPRISES S 489284 24.14
7/10/2008 531366 KOHINOOR BRO S V ENTERPRISES B 1721454 6.11
7/10/2008 531366 KOHINOOR BRO S V ENTERPRISES S 1742350 6.05
7/10/2008 532985 KOTAK SENSEX KOTAK SECURITIES LTD B 13449 117.79
7/10/2008 532728 MALU PAPER KOTAK MAHINDRA INVESTMENTS LTD S 98965 13.78
7/10/2008 531996 ODYSSEY CORP MADINA GULAMALI GHEEWALA B 33000 29.81
7/10/2008 531996 ODYSSEY CORP COMFORT SECURITIES PVT.LTD. S 33355 30.28
7/10/2008 526490 PRATIK PANEL PRATIK GUNVANTRAJ SINGHVI B 19515 2.00
7/10/2008 526407 RIT PRO IND JUHI DINESHCHANDRA RASTOGI B 49102 60.10
7/10/2008 631703 TRIBHVAN HSG SOPHIA GROWTH S 386000 30.50
7/10/2008 532765 USHER AGRO NIKHIL SECURITIES LTD B 100000 132.99
NSE Bulk Deals to Watch - Oct 7 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
07-OCT-2008,20MICRONS,20 Microns Limited,ADROIT FINANCIAL SERVICES PVT LTD,BUY,140233,31.17,-
07-OCT-2008,20MICRONS,20 Microns Limited,AMBIT SECURITIES BROKING PVT. LTD.,BUY,198304,31.49,-
07-OCT-2008,20MICRONS,20 Microns Limited,ASIT C MEHTA INVESTMENT INTERRMEDIATES LTD,BUY,189961,31.20,-
07-OCT-2008,20MICRONS,20 Microns Limited,BHARAT SECURITIES PVT LTD,BUY,145501,30.63,-
07-OCT-2008,20MICRONS,20 Microns Limited,CPR CAPITAL SERVICES LTD.,BUY,146998,31.09,-
07-OCT-2008,20MICRONS,20 Microns Limited,NISSAR BROTHERS,BUY,96508,32.95,-
07-OCT-2008,20MICRONS,20 Microns Limited,PASHUPATI CAPITAL SERVICES PVT. LTD.,BUY,143738,31.26,-
07-OCT-2008,20MICRONS,20 Microns Limited,TRANSGLOBAL SECURITIES LTD.,BUY,144830,30.91,-
07-OCT-2008,20MICRONS,20 Microns Limited,YUVAK SHARE TRADING PVT LTD,BUY,164670,31.49,-
07-OCT-2008,DCB,Development Credit Bank L,INDEA ABSOLUTE RETURN FUND,BUY,1000000,31.70,-
07-OCT-2008,GOLDTECH,Goldstone Tech Ltd.,GOPAL MARATHE,BUY,126000,110.23,-
07-OCT-2008,GOLDTECH,Goldstone Tech Ltd.,GOPAL PRAKASH KANE,BUY,100000,109.76,-
07-OCT-2008,GOLDTECH,Goldstone Tech Ltd.,MASUMI OVERSEAS PVT LTD,BUY,11000,103.77,-
07-OCT-2008,MONNETISPA,Monnet Ispat Ltd,MAVI INVESTMENT FUND,BUY,310000,289.00,-
07-OCT-2008,NAHARINDUS,Nahar Industrial Enterpri,ASHISH DHAWAN,BUY,512310,37.50,-
07-OCT-2008,PAGEIND,Page Industries Limited,NALANDA INDIA FUND LIMITED,BUY,889000,454.97,-
07-OCT-2008,SUBHASPROJ,Subhash Proj & Mkt Ltd.,INDEA ABSOLUTE RETURN FUND,BUY,500000,99.50,-
07-OCT-2008,VINCARDS,Vintage Cards & Creations,SMK SHARES AND STOCK BROKING PVT. LTD.,BUY,4900,35.30,-
07-OCT-2008,VINCARDS,Vintage Cards & Creations,YUVAK SHARE TRADING PVT LTD,BUY,3586,35.30,-
07-OCT-2008,20MICRONS,20 Microns Limited,ADROIT FINANCIAL SERVICES PVT LTD,SELL,140233,31.06,-
07-OCT-2008,20MICRONS,20 Microns Limited,AMBIT SECURITIES BROKING PVT. LTD.,SELL,198304,31.65,-
07-OCT-2008,20MICRONS,20 Microns Limited,ASIT C MEHTA INVESTMENT INTERRMEDIATES LTD,SELL,189961,31.09,-
07-OCT-2008,20MICRONS,20 Microns Limited,BHARAT SECURITIES PVT LTD,SELL,145501,31.47,-
07-OCT-2008,20MICRONS,20 Microns Limited,CPR CAPITAL SERVICES LTD.,SELL,146998,31.14,-
07-OCT-2008,20MICRONS,20 Microns Limited,NISSAR BROTHERS,SELL,96508,32.91,-
07-OCT-2008,20MICRONS,20 Microns Limited,PASHUPATI CAPITAL SERVICES PVT. LTD.,SELL,143737,32.04,-
07-OCT-2008,20MICRONS,20 Microns Limited,PRIME INDIA INVESTMENT FUND LTD,SELL,162690,30.82,-
07-OCT-2008,20MICRONS,20 Microns Limited,TRANSGLOBAL SECURITIES LTD.,SELL,144830,31.06,-
07-OCT-2008,20MICRONS,20 Microns Limited,YUVAK SHARE TRADING PVT LTD,SELL,164669,31.67,-
07-OCT-2008,DCB,Development Credit Bank L,MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. SVB,SELL,1000000,31.70,-
07-OCT-2008,EDUCOMP,Educomp Solutions Limited,CITIGROUP GLOBAL MKTS MAURITIUS PVT LTD- SELL CODE,SELL,110000,2685.72,-
07-OCT-2008,GOLDTECH,Goldstone Tech Ltd.,MASUMI OVERSEAS PVT LTD,SELL,257751,109.90,-
07-OCT-2008,MONNETISPA,Monnet Ispat Ltd,ANUBHAV HOLDING PVT LTD,SELL,310000,289.00,-
07-OCT-2008,NAHARINDUS,Nahar Industrial Enterpri,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,511310,37.50,-
07-OCT-2008,PAGEIND,Page Industries Limited,MAHTANEY GULU - HUF,SELL,280000,455.00,-
07-OCT-2008,PAGEIND,Page Industries Limited,NARI GENOMAL,SELL,200000,455.00,-
07-OCT-2008,PAGEIND,Page Industries Limited,RAMESH GENOMAL,SELL,200000,455.00,-
07-OCT-2008,PAGEIND,Page Industries Limited,SUNDER GENOMAL,SELL,200000,455.00,-
07-OCT-2008,SUBHASPROJ,Subhash Proj & Mkt Ltd.,ABN AMRO BANK N.V. LONDON BRANCH,SELL,500000,99.50,-
07-OCT-2008,VINCARDS,Vintage Cards & Creations,SMK SHARES AND STOCK BROKING PVT. LTD.,SELL,1,35.30,-
07-OCT-2008,VINCARDS,Vintage Cards & Creations,YUVAK SHARE TRADING PVT LTD,SELL,3586,35.30,-
Post Session Commentary - Oct 7 2008
Domestic markets ended the day mixed after extreme volatile session due to the continuous buying and selling over the ground. BSE Sensex ended below 11,700 level with loss of 0.9% and NSE Nifty above 3,600 mark with marginal gain of 0.12%. The markets today made a sharp turnaround from the yesterday’s lows and opened significantly higher backed by RBI’s strategic move of CRR cut by 50 basis points to 8.50%, which will be implemented from October 11, 2008. Also, the move by market regulator SEBI gave a boost at the initial stage. SEBI relaxed norms for foreign institutional investors for managing the assets under participatory notes (P-Notes) by waiving 40% cap on assets in cash segment in the form of P-Notes as well as removing of bar on offshore derivatives. However the market failed to retain the initial gains and turned volatile to trade with negative bias as weak sentiments were not over yet and investors were looking puzzled. However, most of the Asian markets showed a sign of relief after a big interest rate cut by Australian Central Bank in order to ease the unfolding global credit crises, which has tattered the global market. European markets were also trading higher with volatility. Domestic markets managed to recover during last trading hours but still ended mixed. From the sectoral front, Capital Goods, Bank, Metal, IT and Pharma stocks pulled the market lower. However, Oil & Gas stocks were in limelight as witnessed most of the buying from these baskets. Midcap and Smallcap stocks were sufferers of negative sentiment as ended with cut of more than 2%. Among the Sensex pack all 16 stocks ended in red, while 14 in green. The market breadth was negative as 1822 stocks closed in red while 787 stocks closed in green and 74 stocks remained unchanged.
The BSE Sensex closed lower by 106.46 points at 11,695.24 while NSE Nifty ended marginally up by 4.25 points at 3,606.60. The BSE Mid Caps and Small Caps closed with losses of 87.07 points at 4,257.16 and by 110.54 points at 4,976.39. The BSE Sensex touched intraday high of 12,181.43 and intraday low of 11,501.85.
Losers from the BSE Sensex pack are TCS Ltd (7.02%), L&T Ltd (6.94%), Sterlite Indus (6.35%), HDFC Bank Ltd (6.17%), M&M Ltd (5.84%), Satyam Computer (5.18%), Wipro Ltd (4.07%), Tata Power (3.82%), ITC Ltd (3.08%) and State Bank of India (1.81%).
Gainers from the BSE Sensex pack are NTPC Ltd (4.27%), Ranbaxy Lab (3.88%), BHEL (3.26%), Bharti Airtel (2.66%), Reliance (2.04%), Tata Steel (2.03%), Reliance Infra (1.94%), Grasim Indus (1.73%) and Maruti Suzuki (1.68%).
The BSE Capital Goods index closed lower by 376.41 points at 9,118.52. Losers are Praj Indus (7.98%), Bharat Bijli (7.13%), Siemens Ltd (7.05%), L&T Ltd (6.94%), Havells India (5.53%) and Lakshmi MA W (5.08%).
The BSE Bank index dropped by 132.75 points to close at 6,039.25. Major losers are Kotak Bank (9.02%), HDFC Bank Ltd (6.17%), Indus Ind Bank (4.56%), Karnataka Bank (3.53%), State Bank of India (1.81%) and ICICI Bank (1.07%).
The BSE Metal index plunged 102.62 points to close at 7,534.03. Major losers are Welspan Guajrat Sr (12.17%), JSW Steel (10.91%), Hindustan Zinc (9.30%), Gujarat NRE C (7.46%), Sterlite Indus (6.35%) and NMDC Ltd (4.98%).
The BSE IT index ended down by 88.95 points at 2,840.30. Losers are NIIT Ltd (14.64%), Orbit Co (11.25%), Tech Mahindra (10.90%), Financ Tech (8.74%), TCS Ltd (7.02%) and Aptech Ltd (6.86%).
The Pharma index lost 60.55 points to close at 3,427.52. As Opto Circuit (7.72%), BIL Care (7.17%), Dr Reddys Lab (5.70%), Glenmark Pharma (5.45%), Sun Pharma (5.27%) and Biocon Ltd (4.92%) closed in negative territory.
The BSE Oil & Gas index gained 102.68 points to close at 8,012.68 as Gail India (2.87%), Reliance Pet (2.09%), Reliance (2.04%), ONGC Ltd (1.25%) and Reliance Natural Resources (0.88%) ended in positive territory.
Sensex in red, Nifty in green
The key benchmark indices ended mixed on a highly volatile day of trade today. The BSE Sensex lost 106.46 points while Nifty rose 4.25 points. The market swung between positive and negative zone throughout the day. European stocks were green amid choppy trade amid reports the UK government may be forced to provide funding for Royal Bank of Scotland.
The BSE Sensex and the S&P CNX Nifty both hit two-year lows in mid-afternoon trade today, 7 October 2008. This was in contrast to an initial surge on the bourses that was triggered by liquidity boosting measures by Indian financial regulators announced after trading hours on Monday, 6 October 2008. Reliance Industries recovered sharply from 52 week low hit today. Bharat Heavy Electricals came off from the session’s lows. The market breadth was negative
US futures were up. Nasdaq futures were up 19.25 points and Dow Jones futures were up 33 points.
The BSE 30-share Sensex lost 106.46 points or 0.9% to 11,695.24. The index fell 299.85 points at the day's low of 11,501.85, hit in mid-afternoon trade, its lowest level in more than two years.
The Sensex surged 379.73 points at day’s high of 12,181.43, in early trade. The market regulator Securities & Exchange Board of India (Sebi)'s decision to lift restriction on issue of participatory notes and the Reserve Bank of India's surprise steep 50 basis cut in the cash reserve ratio had triggered a rebound on the bourses in early trade after steep losses of the past two trading sessions. Both the Sebi and RBI announcements were made after trading hours on Monday, 6 October 2008.
The barometer index is down 8,591.75 points or 42.35% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 9,511.53 points or 44.85% below its all-time high of 21,206.77 struck on 10 January 2008.
The S&P CNX Nifty was up 4.25 points or 0.12% to 3,606.60. Nifty hit a low of 3,537 in mid-afternoon trade, its lowest level since 5 October 2006.
BSE clocked a turnover of Rs 4,728 crore today as compared to a turnover of Rs 3,992.08 crore on 6 October 2008.
Nifty October 2008 futures were at 3640.10, at a premium of 33.50 points as compared to spot closing of 3606.60. NSE's futures & options (F&O) segment turnover was Rs 59,767.70 crore, which was higher than Rs 46,853.23 crore on Monday, 6 October 2008.
The BSE Mid-Cap index was down 2% at 4,257.16 and the BSE Small-Cap index was down 2.17% at 4,976.39.
BSE Capital Goods index (down 3.96% to 9,118.52), BSE IT index (down 3.04% to 2,840.30), BSE Bankex (down 2.15% to 6,039.25), BSE Realty index (down 1.94% to 2,941.72), BSE FMCG index (down 1.77% to 2,053.68), BSE HealthCare index (down 1.74% to 3,427.52), BSE Metal index (down 1.34% to 7,534.03), BSE Teck index (down 1.22% to 2,352.76), underperformed the Sensex.
BSE Oil & Gas index (up 1.3% to 8,012.18), BSE PSU index (up 0.84% to 5,980.92), BSE Power index (up 0.38% to 2,074.26), BSE Auto index (down 0.41% to 3,511.96), BSE Consumer Durables index (down 0.67% to 2,552.32), outperformed the Sensex.
The market breadth was weak on BSE with 787 shares advancing as compared to 1,822 that declined. 74 shares remained unchanged.
India’s largest private sector company by market capitalization and oil refiner Reliance Industries rose 2.04% to Rs 1,675.40. The stock recovered from a 52 week low of 1615.25 hit today.
Capital goods stocks declined. Larsen & Toubro (down 6.94% to Rs 1,008.10), and Suzlon Energy (down 1.97% to Rs 124.60) edged lower. However India’s largest electric equipment maker by sales Bharat Heavy Electricals surged 3.26% to Rs 1,496.70. The stock recovered from session’s low of Rs 1,440.10.
Bank shares pared gains after firm opening. India’s largest private sector bank by net profit ICICI Bank fell 1.07% to Rs 485.20. The stock came off from the session’s high of Rs 521.70. India’s second largest private sector bank by net profit HDFC Bank declined 6.17% to Rs 1,127.70. The stock came off from the session’s high of Rs 1,245. India’s largest commercial bank State Bank of India fell 1.81% to Rs 1,408. The stock came off from the session’s high of Rs 1,503.
The Reserve Bank of India (RBI), after trading hours on Monday, 6 October 2008, announced a 50 basis points cut in the cash reserve ratio (CRR) to 8.5%, with effective from 11 October 2008. RBI said the CRR cut is an ad hoc, temporary measure and it will be reviewed on a continuous basis in the light of the evolving liquidity conditions. RBI said it will give priority to liquidity management over the period ahead given the turbulence in international financial markets. RBI also said the overriding priority for monetary policy is to eschew any further intensification of inflationary pressures and to firmly anchor inflation expectations.
Tata Consultancy Services (down 7.02% to Rs 575.08), Sterlite Industries (down 6.35% to Rs 314.05), Satyam Computer Services (down 5.18% to Rs 279.09), edged lower from the Sensex pack.
NTPC (up 4.83% to Rs 176.85), Ranbaxy Laboratories (up 5.54% to Rs 260.10), and Bharti Airtel (up 3.6% to Rs 755), edged higher from the Sensex pack.
India’s largest oil exploration firm by revenue Oil and Natural Gas Corporation rose 1.25% to Rs 992.35. The stock came off from the session’s high of Rs 1,040. The company will shortly tie up with Uranium Corporation of India for exploring and mining the fissile material, suggest reports.
Reliance Natural Resources clocked the highest volume of 1.41 crore shares on BSE. Idea Cellular (1.18 crore shares), Chambal Fertilisers and Chemicals (1.02 crore shares), Reliance Petroleum (82.07 lakh shares) and IFCI (77.66 lakh shares) were the other volume toppers in that order.
Reliance Capital clocked the highest turnover of Rs 389.90 crore on BSE. Reliance Industries (Rs 344.76 crore), Larsen & Toubro (Rs 204.33 crore), State Bank of India (Rs 178.05 crore) and ICICI Bank (Rs 176.86 crore) were the other turnover toppers in that order.
In Europe, UK’s FTSE 100, France’s CAC 40 and Germany’s DAX were up between 0.75% to 1.95%. As per reports the UK government may be forced to provide funding for Royal Bank of Scotland. On Monday, credit ratings agency S&P cut its rating on RBS, citing earnings and further writedown risks.
European Union finance ministers gathered in Luxembourg on Tuesday, 7 October 2008, to discuss ways of protecting savers' deposits and counter the market turmoil that saw the region's stock markets suffer record losses on Monday, 6 October 2008. Australia's central bank cut its benchmark cash rate by 100 basis points to 6%, stunning investors with its biggest interest rate cut in 16 years.
Asian stocks outside Japan rose for the first time in four days on Tuesday, 7 October 2008, after a surprisingly large interest rate cut by Australia's central bank raised hopes that other policymakers would follow suit. Taiwan stocks ended up 0.34%, recouping sharp losses earlier in the day and rebounding from a more than four-year closing low the previous session as government funds helped bolster market heavyweights such as TSMC.
South Korea's KOSPI rebounded from a 21-month low and rose 0.54%. The country's regulator said it was considering steps to reduce volatility in the equity market, helping to stem some of the day's losses.
China's stock market fell but ended well off its lows as hopes for government support helped banks and property shares rebound from a sharp early slide. The Shanghai Composite Index, which had dropped as much as 4.64% in the morning, closed down 0.73% at 2,157.839 points. Singapore shares reversed early losses go gain about 2%.
Japan’s Nikkei was down 3.03% after The Bank of Japan kept interest rates unchanged at 0.5% on Tuesday, 7 October 2008, and maintained its assessment on the economy, which it said was sluggish.
Back home, the Sebi decision on lifting of restriction on P-notes comes at a time when foreign institutional investors (FIIs) have been pulling out their investments from India and other emerging markets to shore up resources to beat the global liquidity crunch. In India, FIIs sold shares worth a net Rs 8278.10 crore last month. The outflow has reached Rs 38037.30 crore in calendar year 2008 (till 3 October 2008).
Exactly a year ago, Securities & Exchange Board of India (Sebi) had announced stringent restrictions on P-notes, totally banning fresh issue of P-notes with Indian derivatives as underlying. It had also mandated unwinding of such positions within 18 months. Sebi had also restricted issuance of P-notes in the spot segment to 40% of assets under custody. P-notes are issued by foreign institutional investors registered in India to unregistered overseas investors.
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. However, there is no data available on the quantum of hedge funds’ investment in India.
The troubles that started with an overheated housing market in the US have infected financial markets around the world, making banks fearful of lending to other banks, let alone to businesses and consumers. That has led to worries that economies around the world might not only sputter but slide into reverse. Recently, governments across Europe rushed to prop up failing banks, while the governments of Germany, Ireland and Greece also said they would guarantee bank deposits.
Oil prices, down nearly 40% from their peak because of recession worries, climbed back to over $90 a barrel.
According to Finance Minister P Chidambaram Indian business and industry have placed India in a situation where the country can weather the global financial crisis. He counts robust revenues, exports and investment planned by Indian corporates as major positive factors which would help India through the global crisis.
The Finance Minister expects 8% GDP growth in the current financial year and 9% in financial year 2009-10.
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