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Wednesday, October 15, 2008
SBI October 2008 futures at discount
Turnover drops
Nifty October 2008 futures were near spot price at 3339.10, as compared to spot closing of 3338.40. NSE's futures & options (F&O) segment turnover was Rs 43,996.07 crore, which was lower than Rs 47,278.06 crore on Tuesday, 14 October 2008.
State Bank of India (SBI) October 2008 futures were at discount at 1479.60 compared to the spot closing of 1500.15.
Reliance Industries October 2008 futures were at premium at 1527.15 compared to the spot closing of 1520.20.
Reliance Capital October 2008 futures were at premium at 723 compared to the spot closing of 718.
In the cash market, the S&P CNX Nifty lost 180.25 points or 5.12% at 3338.40.
Asian Markets Alight The Flight Of Safety
Nikkei Extends The Gains While Other Regional Markets Give Up
The stock markets across the Asian region closed lower on profit taking from recent rallies. Wall Street's decline overnight, amid concerns that the government measures won't be sufficient to prevent the U.S. economy from entering a deep recession, prompted investors to sell stocks. The major averages all ended the session in negative territory, although the Nasdaq posted a much steeper loss. The Nasdaq closed down 65.24 points or 3.5 percent at 1,779.01, while the Dow closed down 76.62 points or 0.8 percent at 9,310.99 and the S&P 500 closed down 5.34 points or 0.5 percent at 998.01.
Oil prices held steady in the Asian session after the contract for November delivery fell overnight in U.S. trading. The crude oil fell below $78 a barrel on skepticism that a U.S. government plan to invest $250 billion in banks will be sufficient to bolster economic growth and spur fuel demand. Crude oil for November delivery fell as much as $1.18, or 1.5%, to $77.45 on the New York Mercantile Exchange. It traded at $77.30 a barrel at 11.24 a.m. London time.
In currency market, the Japanese yen rose against the dollar as investors turned risk averse. The U.S. dollar held steady in the upper 101-yen levels. The dollar was quoted at 101.82-101.87 in late Tokyo deals, down 0.64 yen from Tuesday's close of 102.46-102.47 yen in Tokyo.
The Australian dollar closed weaker as investors shied away from riskier assets following Wall Street's decline overnight. The local unit also lost ground after a non-voting member of the U.S. Fed's monetary policy committee questioned the need for more U.S. interest rate cuts. The Aussie finished the local session at US$0.7005-0.7009, down one U.S. cent from Tuesday's close of US$0.7106-0.7111.
The New Zealand dollar closed weaker following capital outflow from the local stock market. The kiwi finished the session at US$0.6170, down from US$0.6203 in early trade and US$0.6228 late Tuesday. The local unit rose to US$0.6350 overnight after the U.S. government pledged to pour US$250 billion into major banks.
The South Korean won fell against the U.S. dollar. The won ended the session at 1,239.5 a dollar, down from Tuesday's local close of 1,208.0 a dollar. The local unit pared some of the gains it logged for the past four sessions.
The Taiwan dollar ended the morning session at NT$32.396 to the US dollar, compared with the previous close of NT$32.388.
Coming back in Asian equities, the Hong Kong's Hang Seng index plunged 5% and India's Sensex fell nearly 6%. However, Japan's Nikkei index rebounded in late trade to end in positive territory.
The Japanese stock market closed higher, extending yesterday's rally. The market opened lower as investors locked in profits from the largest single-day gain in its postwar history, but rebounded in late trade on bargain hunting. The benchmark Nikkei 225 index closed up 99.9 points, or 1.1%, at 9,547.5, but the broader Topix index of all first-section issues closed down 0.8 point or 0.1% at 955.51.
On the monetary front, Japan’s central bank withdrew 1 trillion yen (9.94 billion dollars) from the money markets as interest rates fell. It was Bank of Japan’s first fund-draining operation since it began liquidity infusions on 16 September 2008.
In economic front, the Ministry of Finance said that the current account balance for Japan was having surplus of 988.8 billion yen in non-seasonally adjusted terms for August 2008, but the size of the surplus fell by 52.5% from a year ago, marking the sixth consecutive month for shrinking current surpluses. The balance of trade in goods and services posted a deficit of 327.6 billion yen, while the merchandise trade showed a deficit of 236.0 billion yen.
The Imports climbed up 20.2% from a year earlier, rising to 6957.0 billion yen. It marked an increase of 18.9% to 7059.7 billion yen as compared to the last month. Exports rose 0.9% as against the same period a year earlier with a surplus of 6721.0 billion yen. As compared to the previous month exports rose 8.7% to 7292.0 billion yen.
In another data release, the Ministry of Economy, Trade and Industry released the revised report cementing the fact that Japan's industrial production had continued to decline at a fastest pace in 7-½ years, accentuating the headwinds as the world's second-largest economy edges toward the brink of recession.
Industrial Production in August decreased 3.5% from the previous month - unchanged from the previous estimate, showing a decrease for the first time in two months. The monthly decline was the largest since January 2001 when it fell by 4.2%. On the year the production declined by 6.9% in August - unchanged from preliminary estimates.
The Chinese stock market closed lower, extending losses for a second consecutive trading session. Worries about corporate earnings, due to slowing economic growth, dented investor sentiment. The Shanghai Composite Index closed down 22.65 points or 1.12% at 1,994.67.
On the economic front, China's money supply growth slowed in September for the fourth month. M2, the broadest measure of money supply, rose 15.3% to 45.3 trillion yuan from a year earlier, according to the People's Bank of China. M2 gained 16% in August.
In Hong Kong, the stock index interrupted two days of winning streak to finish the session 5% lower as investors locked in profit on tracking negative cues from Wall Street overnight amid concerns that the US government measures won’t be enough to prevent the economy from entering into a deep recession. The Hang Seng Index tumbled 4.96% to 15,998.30, with selling intensifying in afternoon trading after European markets opened lower. The Hang Seng China Enterprises Index fell 6.4% to 7,894.06.
In Australia also the stock market closed lower, ending a two-day winning streak as investors locked in profits after the key index posted steep gains in the previous two trading sessions. The benchmark S&P/ASX 200 index closed down 35.2 points, or 0.81%, at 4,300.0 and the broader All Ordinaries index fell 39 points, or 0.9%, to 4,272.5.
On the economic front, a private sector forecast of Australia's economic activity showed an expectation of annualized growth of 2.5% in August. The Westpac Bank-Melbourne Institute leading index reading was down from expected growth of 3.3% forecast in July's survey, and well below the long-term trend of 4.0% annualized growth. The coincident index, which measures current activity, increased 0.4% on month in August to 2.0%, also below the long-term trend of 3.7% on-year growth.
The New Zealand stock market ended the session on lower side, giving away a portion of the 5.65% gains that it posted on yesterday. After a weak start, tracking Wall Street's decline overnight, the market extended its losses as Telecom announced plans to spend NZ$574 million on a new mobile network. The benchmark NZX 50 index closed down 44.33 points, or 1.53%, at 2,904.64 and the broader NZX All Capital index shed 38.98 points or 1.32% to 2,947.44.
In South Korea, the equity bourse ended 2% lower with steel makers and banking issues leading the retreat from yesterday's sharp gains, as worries about a weakening global economy and its impact on consumer sentiment deepened. The Korea Composite Stock Price Index ended down 2.00% at 1,340.28 points after closing 6.1 percent higher on Tuesday, its biggest one-day rise since February 2002.
On the economic front, the South Korean jobless rate fell to 3% in September, after staying at 3.1% in August and July, the National Statistical Office announced Wednesday. On a seasonally adjusted basis, the unemployment rate was 3.1%, down from 3.2% in August. The number of employed persons increased 112,000 in September compared to around 159,000 in the prior month.
BSE Bulk Deals to Watch - Oct 15 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
15/10/2008 532989 BAFNA PHARMA R K PATWARI HUF S 92159 16.90
15/10/2008 530393 DB(INTR) STBR SULABH PLANTATIONS AND FINANCE S 17000 22.73
15/10/2008 522163 DIAMON CABLE AMANSA CAPITAL PTE LTD B 248138 128.00
15/10/2008 522163 DIAMON CABLE CREDIT SUISSE SINGAPORE LIMITED S 248138 128.00
15/10/2008 505242 DYNAMATIC TE AMANSA CAPITAL PTE LTD B 42466 860.00
15/10/2008 505242 DYNAMATIC TE CREDIT SUISSE SINGAPORE LIMITED S 42466 860.00
15/10/2008 505200 EICHER MOTORS LTD. AMANSA CAPITAL PTE LTD B 156727 201.00
15/10/2008 505200 EICHER MOTORS LTD. CREDIT SUISSE SINGAPORE LIMITED S 156727 201.00
15/10/2008 504000 ELPRO INTERN REKHA MUKESH GUPTA B 56500 282.00
15/10/2008 504000 ELPRO INTERN INDIA MAX INVESTMENT FUND LTD. S 56500 282.00
15/10/2008 513059 G.S. AUTO SPJSTOCK B 26604 62.48
15/10/2008 531602 KOFF BR PICT PRAVIN D GALA B 62808 28.64
15/10/2008 531096 MOUNT EVE MI TREE LINE ASIA MASTER FUND SINGAPORE PTE LTD B 2541300 84.80
15/10/2008 531096 MOUNT EVE MI GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD S 2541300 84.80
15/10/2008 531209 NUCLEU SOF E AMANSA CAPITAL PTE LTD B 167165 87.00
15/10/2008 531209 NUCLEU SOF E CREDIT SUISSE SINGAPORE LIMITED S 167165 87.00
15/10/2008 531611 PRRANET INDU CHAMPALAL CHOUHAN B 1200000 1.60
15/10/2008 532886 SEL MANUF SPJSTOCK B 220274 98.30
15/10/2008 532886 SEL MANUF SPJSTOCK S 219274 98.29
15/10/2008 508976 SPANC TELESY KAPILPURI B 300000 45.00
15/10/2008 526733 SUASHIS DIAM SOMERSET EMERGING OPPORTUNITIE B 243000 419.11
15/10/2008 512070 UNITED PHOSP TREE LINE ADVISORS HONG KONG LTD. ACCOUNT B 1957847 228.00
15/10/2008 512070 UNITED PHOSP GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD S 1957847 228.00
15/10/2008 506720 ZANDU PHAR W EMAMI LIMITED B 33314 14356.60
Post Session Commentary - Oct 15 2008
The markets extended its fall to more than 5% on Wednesday to close in deep red on growing worries about liquidity condition and a looming global recession. RBI’s extension for banks'' special short-term lending (repo) facility to mutual funds was unable to lift the sentiments. European markets also weighed on the sentiments as extended its losses to trade weak. BSE Sensex ended below 10,900 level along with NSE Nifty below 3,300 mark. Domestic market opened sharply lower on negative global cues as fears of slowdown in the economy have gripped global markets. US government’s move to infuse another $250 billion in the system failed to avert the slide on the bourses. Worries about the earning also crept in after government''s plan to buy stakes in the nation''s largest financial institutions that are crashed. Further market continued its downward journey and benchmark indices crushed badly. Finally, extremely negative pressure forced market to close with huge losses. On the sectoral front, all sectoral indices ended down and Capital Goods and Consumer Durable stocks underperformed the benchmark index as closed with cut of more than 8% each. Apart from that heavy selling was witnessed in the Metal, Oil & Gas, Bank, IT and Reality stocks. Midcap and Smallcap stocks also followed the same trend and ended with deep cut of more than 4% each.
Among the Sensex pack all 30 stocks ended in red. The market breadth was negative as 2117 stocks closed in red while 499 stocks closed in green and 39 stocks remained unchanged on BSE.
The BSE Sensex closed lower by 674.28 points at 10,809.12 and NSE Nifty ended down by 180.25 points at 3,338.40. The BSE Mid Caps and Small Caps closed with loss of 171.55 points at 3,720.48 and by 222.44 points at 4,393.45. The BSE Sensex touched intraday high of 11,257.15 and intraday low of 10,760.33.
Losers from BSE Sensex pack are JP Associates (14.47%), Reliance Communication Ltd (12.24%), Reliance Infra (12.11%), L&T Ltd (11.01%), Tata Steel (10.35%), Sterlite Industries (10.11%), TCS Ltd (8.46%), ICICI Bank (7.36%), HDFC (6.90%), Hindalco (6.70%) and BHEL (6.28%).
The BSE Capital Goods index closed lower by 788.19 points at 8,088.01. Losers are Areva (14.37%), Punj Lloyd (13.30%), Crompton Greaves (12.65%), Thermax Ltd (12.12%), L&T Ltd (11.01%) and Usha Martin (9.77%).
The BSE Metal index tumbled 535.86 points to close at 6,315.85. Major losers are Welspan Guajrat Sr (13.34%), JSW Steel (11.12%), Jindal Steel (10.56%), Tata Steel (10.35%), Sterlite Industries (10.11%) and Ispat Industries (6.80%).
The BSE Oil & Gas index went down by 392.53 points at 7,230.87 as Essar Oil Ltd (16.23%), Aban Offshore (13.23%), Cairn India (7.10%), Reliance (6.20%) and Reliance Natural Resources (5.09%) ended in negative territory.
The BSE Consumer Durables index ended down by 204.91 points at 2,125.85. Losers are Titan Ind (14.05%), Videocon Ind (9.14%), Gitanjali Ge (5.40%), Rajesh Export (4.97%) and Blue Star L (0.62%).
The BSE Bank index dropped 196.47 points to close at 5,841.60. Major losers are ICICI Bank (7.36%), Yes Bank (6.18%), Karnataka (6.01%), DrIndus Ind Bank (5.99%), Indian Overseas Bank (5.53%) and IDBI Bank (4.67%).
The IT index lost 159.68 points to close at 2,780.19 as Aptech Ltd (16.50%), Moser Bayer (15.34%), Tech Mahindra (11.30%), TCS Ltd (8.46%), NIIT Ltd (8.28%) and Oracle Fin (8.20%) in negative territory.
NSE Bulk Deals to Watch - Oct 15 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
15-OCT-2008,20MICRONS,20 Microns Limited,PRASHANT JAYANTILAL PATEL,BUY,96896,22.63,-
15-OCT-2008,EDUCOMP,Educomp Solutions Limited,CITY OF NEW YORK GROUP TRUST ,BUY,87609,2380.14,-
15-OCT-2008,KEYCORPSER,Keynote Corp Serv Ltd,INDIA MAX INVESTMENT FUND LTD,BUY,100000,124.00,-
15-OCT-2008,NICCO,Nicco Corporation Limited,SHAILESH A. JHAVERI HUF,BUY,919972,7.05,-
15-OCT-2008,UBHOLDINGS,United Breweries (Holding,RUANE,CUNNIFF&GOLDFARB INC SUB A/C.ACACIA BANYAN PARTNERS,BUY,342277,132.22,-
15-OCT-2008,ZANDUPHARM,Zandu Pharma works Ltd,EMAMI LIMITED,BUY,4103,14440.90,-
15-OCT-2008,20MICRONS,20 Microns Limited,PRASHANT JAYANTILAL PATEL,SELL,34675,24.65,-
15-OCT-2008,AHMEDFORGE,Ahmednagar Forgings Ltd,VENUS CAPITAL MANAGEMENT INC A/C ITF MAURITIUS,SELL,268932,49.94,-
15-OCT-2008,KEYCORPSER,Keynote Corp Serv Ltd,TARUN S AGARWAL,SELL,100000,124.00,-
15-OCT-2008,NICCO,Nicco Corporation Limited,BHAVANI PORTFOLIO PRIVATE LTD,SELL,919972,7.05,-
Below 11k again
The Sensex had witnessed a pull back in the last two days and had surged around 1,000 points on a strong buying support. However, the bears hit back strongly and triggered a major sell-off in the market during the intra-day trades. Tracking subdued Asian markets, the Sensex began the session below its previous close and continued to slide on sustained selling in frontline stocks. After plunging below the 11,000 mark to touch the day's low of 10,760, the market moved within a range with a negative bias. The market witnessed panic selling towards the close and the Sensex ended the session with a loss of 674 points at 10,809 whereas Nifty shed 180 points to close at 3,338.
All the 13 sectoral indices ended lower. The BSE CG and BSE CD dropped over 8% each, while BSE Metal, BSE Teck, BSE Power, BSE IT, BSE Oil & Gas were down over 5-7% each.
The breadth of the market was extremely negative. Of the 2,655 stocks traded on the BSE, 2,117 stocks declined whereas 499 stocks advanced. Thirty nine stocks ended unchanged. All the Sensex stocks ended in the red. JP Associates was a major loser and tumbled by 14.47% at Rs72.70. Reliance Communications at Rs235.80, Reliance Infrastructure at Rs555.70, Larsen & Toubro at Rs893.15, Tata Steel at Rs273.25, Sterlite Industries at Rs292.15 slumped over 10-12% each. Among the other major losers Tata Consultancy Services dropped 8.46% at Rs542.05, ICICI Bank lost 7.36% at Rs414.20, HDFC fell 6.90% at Rs1,712.60 and Hindalco Industries declined by 6.70% at Rs79.40.
Capital goods stocks lost ground on profit taking. Areva T&D India dropped 14.37% at Rs903.95, Punj Lloyd slumped 13.30% at Rs186.10, Crompton Greaves shed 12.65% at Rs191.65 and Thermax slipped by 12.12% at Rs299.75. Usha Martin, Walchand, Elecon Engineering Company and Suzlon Energy also ended weak.
Strong buying was evident in several small-cap stocks. Binayak Tex Processors at Rs22.25 and Maharashtra Polybutenes at Rs74.35 hit their new highs.
Over 1.05 crore Core Project and Technologies shares changed hands on the BSE followed by Reliance Natural Resources (0.92 crore shares), Cals Refineries (0.76 crore shares), IFCI (0.58 crore shares) and JP Associates (0.44 crore shares).
Indian market underperforms global peers as Sensex tanks nearly 6%
Worries over liquidity conditions in the financial system and weak global markets pulled the domestic bourses sharply lower today. The BSE Sensex which opened about 240 points lower on weak global cues extended the losses and showed no sign of recovery to end 674.28 points or 5.87%. At the day’s low Sensex was down 725 points. Reliance Industries slumped. The Indian market vastly underperformed Asian and European stocks which fell between 0.8% to 3.7%.
US, euro zone and Japanese economies are all widely expected to slip into recessions, threatening growth in emerging markets. Recession fears returned to centre stage today after trillions of dollars pledged for bank bailouts from Europe to Asia helped allay fears of an imminent financial meltdown. Trading in US index futures suggested the Dow would fall 142 points at the opening bell.
The Reserve Bank of India's extension of banks' special short-term lending (repo) facility to mutual funds, which have been witnessing redemption pressure, failed to avert the slide on the bourses.
Larsen & Toubro fell more than 11% after it announced its Q2 September 2008 results. Reliance Communications and Reliance Infrastructure fell more than 12 % each. Jaiprakash Associates fell 14.47%. The market breadth was weak as selling was witnessed across the board. Capital goods and Consumer durables stocks plummeted.
The BSE 30-share Sensex ended 674.28 points or 5.87% lower at 10,809.12. The index declined 723.07 points at the day's low of 10,760.33 hit in late trade. The Sensex fell 226.35 points at day’s high of 11,257.15, in early trade.
The S&P CNX Nifty ended down 180.25 points or 5.12% to 3,338.40.
BSE clocked a turnover of Rs 3,372 crore today as compared to a turnover of Rs 4,252.13 crore on 14 October 2008.
Nifty October 2008 futures were near spot price at 3339.10, as compared to spot closing of 3338.40. NSE's futures & options (F&O) segment turnover was Rs 43,996.07 crore, which was lower than Rs 47,278.06 crore on Tuesday, 14 October 2008.
The barometer index BSE Sensex is down 9,477.87 points or 46.71% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 10,397.67 points or 49.02% below its all-time high of 21,206.77 struck on 10 January 2008.
As per the provisional figures on BSE, Foreign institutional investors (FII)s sold shares worth Rs 1,030.79 crore today,15 October 2008 and domestic funds bought shares worth Rs 669.96 crore.
The BSE Mid-Cap index was down 4.41% at 3,720.48 and the BSE Small-Cap index was down 4.82% at 4,393.45. Both the indices outperformed the Sensex.
BSE Capital Goods index (down 8.88% to 8,088.01), BSE Consumer Durables index (down 8.79% to 2,125.85), BSE Metal index (down 7.82% to 6,315.85), BSE Teck index (down 6.03% to 2,230.60), BSE Power index (down 6.02% to 1,905.72) underperformed the Sensex.
BSE HealthCare index (down 2.24% to 3,328.35), BSE Bankex (down 3.25% to 5,841.60), BSE Auto index (down 3.48% to 3,309.46), BSE PSU index (down 3.53% to 5,555.49), BSE FMCG index (down 3.65% to 1,870.08), BSE Realty index (down 4.61% to 2,675.48), BSE Oil & Gas index (down 5.15% to 7,230.87) and BSE IT index (down 5.43% to 2,780.19), outperformed the Sensex.
The market breadth was weak. On BSE, 499 shares advanced as compared to 2,117 that declined. 39 shares remained unchanged.
India’s largest private sector company by market capitalization and oil refiner Reliance Industries was down 6.2% to Rs 1,519.25 on fears the company may report fall in its gross refining margins in Q2 September 2008 over Q2 September 2007 largely due to sluggish demand for petroleum products in key Western markets.
All the 30 Sensex constituents were in the red. Reliance Communications (down 12.24% to Rs 235.80), Sterlite Industries (down 10.11% to Rs 292.15), Jaiprakash Associates (down 14.47% to Rs 72.70) and Tata Steel (down 10.35% to Rs 273.25) were the major losers from the Sensex pack.
India’s largest engineering and construction firm Larsen & Toubro declined 11.01% on profit taking after it announced Q2 results. The company’s net profit rose 32.25% to Rs 460.26 crore on 41.98% to Rs 7,842.26 crore in Q2 September 2008 over Q2 September 2007. The firm announced the result today during the market hours.
Bharat Heavy Electricals and Suzlon Energy fell between 6.28% to 7.56%.
Consumer durables stocks tumbled on fears the credit crunch and the stock market crash might hit sales this festive season. Titan Industries, Videocon Industries and Gitanjali Gems fell between 5.4% to 14.05%.
India's top mobile operator by market share Bharti Airtel was down 5.95%. The company today said it had tied up with Infosys Technologies, India’s second largest IT services provider by sales Infosys, to deliver its direct-to-home (DTH) television service. Infosys plunged 5.72%. As part of the agreement, Infosys will provide technology products that will help Bharti to offer digital and interactive applications on its DTH TV service.
Reliance Infrastructure was down 12.11%. Reliance Infrastructure reportedly plans to raise Rs 2500 crore as loan this fiscal and is in talks with banks including IDBI, Axis Bank and IIFCL for raising the funds.
India’s largest realty player by market capitalization DLF fell 3.38% to Rs 300.15. The company said on Tuesday, 14 October 2008, its share buyback for about Rs 1100 crore will open on Friday, 17 October 2008, after complying with regulatory requirements. The buyback of up to 2.2 crore shares at a maximum of Rs 600 each was set to open today, but was rescheduled following clarifications sought by the Securities and Exchange Board of India (Sebi).
Sanwaria Agro Oils rose 5.41%, as net profit jumped 56.02% to Rs 22.07 crore in Q2 September 2008 over Q2 September 2007.
Hindustan Construction Company plunged 11.7%, even after the company said that Bank of India has invested Rs 150 crore in its subsidiary Lavasa Corporation, in the form of convertible debentures.
Moser Baer India plunged 15.34%, even as the company said on Wednesday, 15 October 2008, it has set up a state-of-the-art digital video processing facility in Chennai, Tamil Nadu.
Koffee Break Pictures rose 2.7%, after the company said on Tuesday, 14 October 2008, its board will meet on 16 October 2008 to consider a 10-for-1 stock split.
New Delhi Television tumbled 17.34% after net loss rose to Rs 13.04 crore in Q2 September 2008, from Rs 3.95 crore in Q2 September 2007.
Honeywell Automation India surged 5.36% after the company reported 58.20% spurt in net profit to Rs 28.95 crore on 4.89% rise in net sales to Rs 238.21 crore in Q3 September 2008 over Q3 September 2007.
Gemini Communication fell 1.88%, after the company said on Tuesday, 14 October 2008, its board will meet on 22 October 2008 to consider buyback of equity shares.
JSW Steel plunged 11.22% on reports the company may cut product prices by end-October 2008 in line with a fall in metal prices globally.
Britannia Industries fell 3.08% on reports the Nusli Wadia Group will acquire the foreign joint venture firm Groupe Danone's entire stake in the company with a committed $200 million funding from ICICI Bank.
GMR Infrastructure declined 5.91%, after the company said on Tuesday, 14 October 2008, it has acquired 50% stake in InterGen N.V, a global power generation company, for $954 million.
Chettinad Cement Corporation gained 2.11%, after the company said its board will meet on 16 October 2008 to consider issue of equity shares on rights basis.
ICI India galloped 7.68%, after the company said on Wednesday, 15 October 2008, its board will meet on 23 October 2008 to consider buyback of equity shares at a price not exceeding Rs 575 a share.
Omaxe slipped 7.67% after credit rating firm Fitch downgraded the company's long-term debt rating also revised the outlook to negative from stable.
Core Projects & Infrastructure clocked the highest volume of 1.05 crore shares on BSE. Reliance Natural Resources (92.39 lakh shares), Cals Refineries (76.22 lakh shares), IFCI (58.2 lakh shares) and JAiprakash Associates (44.87 lakh shares) were the other volume toppers in that order.
Reliance Capital clocked the highest turnover of Rs 230.68 crore on BSE. Reliance Industries (Rs 217.84 crore), Larsen & Toubro (Rs 205.60 crore), ICICI Bank (Rs 147.92 crore) and State Bank of India (Rs 143.43 crore) were the other turnover toppers in that order.
European markets which opened after Indian market were trading lower. France’s CAC 40, Germany’s DAX and UK’s FTSE 100 were down by between 2.17% to 3.27%.
Asian markets were trading lower today, 15 October 2008 on concern the massive bank rescue of global would come at a huge economic cost and do little to repair the damage already done by a 14-month credit crunch. China's Shanghai Composite, Hong Kong's Hang Seng, Japan's Nikkei, Singapore's Straits Times, South Korea's Seoul Composite and Taiwan's Taiwan Weighted fell between 0.86% to 3.72%.
The partially convertible rupee was at 48.40 per dollar today 15 October 2008, compared with Tuesday's close of 48.04/06.
Pre Session Commentary - Oct 15 2008
Today Markets are likely to open negative on the back of some selling pressure that was seen in the later session of trading yesterday. The US markets closed negative on the back of selling pressures and the other Asian markets have also opened with negative gaps. One could expected not much movement today as in the previous two trading days the markets have already moved in huge numbers. Throughout the trading session we expect the market to be little volatile with range bound movements.
On Tuesday, domestic Markets opened with huge gap and due to profit booking after post mid session it pared off early gains and closed with a marginal gain. The sentiments in the morning was phenomenal on the back of good growth in the US and Asian Markets. Later in the trading session Metal stocks were caught by the intense selling pressure which simultaneously pared the early gains in the markets. Since the market has already gained huge numbers on Monday, it looked very obvious that on Tuesday investors would book profits. The fine opening of European markets also added good support for the domestic markets. The banking stocks became favourite in the European markets as Washington is all set to unveil its $250 billion into its banks easing off the apprehensions about banking and finance sectors across the world. In the domestic markets IT, HC, Tech, Realty, CG and Banking indices recorded moderate gains of 5.36%, 4.66%, 3.74%, 1.84% and 1.14% respectively. During the trading session we expect the market to be trading range bound.
The BSE Sensex closed at 11,309.09 registering flat gain of 174.31 points and NSE Nifty closed flat with a marginal gain of 27.95 points to close at 3,518.65. The BSE Mid Caps and Small Caps closed with gains of 61.45 points and 101.74 points at 3,892.03 and 4,615.89. The BSE Sensex touched intraday high of 11,870.22, and intraday low of 11,410.49.
On Tuesday, US markets tumbled on the back of selling pressures with profit booking. The markets had earlier gained huge numbers hence investors traded in cautious note. The quarterly numbers of Johnson & Johnson were better than the estimates, however Pepsico reported smaller than expected numbers. The US Treasury is all set to buy up to $250 billion in preferred stock of qualifying US financial institutions. The investors were still skeptic about the economic slowdown and the consequent adversary effects.
The Dow Jones Industrial Average (DJIA) closed with a fall of 76.62 points at 9310.99. NASDAQ index fell by 65.24 points at 1779.01 and the S&P 500 (SPX) also declined by 5.34 points to close at 998.01 points.
Indian ADRs ended mixed. In technology sector, Wipro gained by (2.55%) followed by Satyam that ended high by (0.66%) and Patni Computers was low by (1.86%). In banking sector ICICI Bank was low by (13.07%), while HDFC Bank fell (0.94%). In telecommunication sector, Tata Communication declined by (2.74%), while MTNL fell by (2.97%). Sterlite Industries was also low by (5.60%).
Today the major stock markets in Asia opened negative. The Shanghai Composite is low by 30.59 points, trading at 1,986.73 and the Hang Seng is low by 378.26 points at 16,454.62. Further Japan''s Nikkei is low by 156.74 points at 9,290.83. Straits Times is trading is also trading low by 35.65 points at 2,092.66 and South Korea’s Seoul Composite is low by 28.81 points at 1,338.88.
The FIIs on Tuesday stood as net sellers in equity and Debt. Gross equity purchased stood at Rs3150.80 Crore and gross debt purchased stood at Rs403.50 Crore, while the gross equity sold stood at Rs3993.00 Crore and gross debt sold stood at Rs779.90 Crore. Therefore, the net investment of equity and debt reported were (Rs842.20 Crore) and (Rs.376.40 Crore) respectively.
On Tuesday, the partially convertible Indian Rupee ended at 48.10 per dollar, off a high of 47.58, but 15 paise stronger than 48.25/27 at the close on Monday. It trimmed gains in final trading after the stock market came off the day''s high.
On BSE, total number of shares traded were 30.22 crores and total turnover stood at Rs4,252.13. On NSE, total volumes of shares traded were 58.80 crores and total turnover was Rs11,845 Crore.
Top traded volumes on NSE Nifty – ICICI bank with total traded volume of 20682919 shares, followed by Unitech with 9830116 shares, Reliance Comm with 9811309 shares, Suzlon Energy 9761603 shares and Reliance Petro with 8353293 shares respectively.
On NSE Future and Options, total number of contracts traded in index futures was 893925 with a total turnover of Rs15052.93 Crore. Along with this total number of contracts traded in stock futures were 892522 with a total turnover of Rs11437.73 Crore. Total number of contracts for index options was 1066885 and total turnover was Rs20037.05 Crore and total number of contracts for stock options was 51294 and notional turnover was Rs750.34 Crore.
Today, Nifty would have a support at 3,420 and resistance at 3,625 and BSE Sensex has support at 11,250 and resistance at 11,750.
Daily call - Oct 15 2008
Indian Investors are going to wake up to a languorous morning, to find the International markets in a mild retreat, something that resembles gentle profit taking and one which could be considered as bullish. However, with the major announcements in Europe on Monday morning and in the US on Tuesday, the good news has run its course. Now it is the time for some reality check.
The three-month dollar Libor, a measure of the rate banks charge one another for large loans, declined 12 basis points to 4.64%. It is sign that the ice is thawing. This small retreat in the rate, however, is not proportionate to the magnitude of good news that has come in for the banking space. While it may thaw a little more, it is unlikely to come down to market’s comfort level before the October 21 Lehman CDS pay out happens uneventfully. Unlike Monday, positions were curtailed Tuesday, which is healthy. Hope for a mild correction and take a neutral attitude to things after 200 points have been shaved from yesterday’s close in the Sensex.
Wall Street sheds all its early gains
Traders continue to fear that economy will continue to face challenges despite rescue plan
After starting the day on a strong note, US stocks slipped in the red following the lunch hours and finally ended in the red on Tuesday, 14 October, 2008. Though the Dow had surged up by more than 400 points in first couple of hours of trading, it gave up a part of its gains during the noon hours. Weakness in retail and technology stocks was the main reasons for the market to trade in this manner.
The Dow Jones Industrial Average ended the day down by 76 points, to 9,310. The Nasdaq Composite Index, finished lower by 65 points at 1,779. S&P 500 finished lower by 5 points at 998.
Twenty one out of thirty Dow components ended in the red. Microsoft, Intel and Coco Cola were the main Dow laggards. Citibank and Bank of America were two main Dow winners today surging by 16% and 18% respectively. Johnson and Johnson was another Dow winner soaring by 2% after the company’s earnings beat estimates.
The buying interest at the open came as credit markets showed signs of some improvement and the U.S. government followed European efforts to improve the financial system.
Ahead of the open on Wall Street, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke discussed the government's bank rescue plan, offering reassurances that it would work.
As per the plan announced today, the Treasury will buy up to $250 billion in preferred stock from qualifying U.S. financial institutions. Participation in the plan is voluntary, although it appears that there will be plenty of firms taking the Treasury up on its offer. Nine of the largest financial institutions in the world will receive $125 billion, including Bank of America, Citigroup, JPMorgan Chase, Morgan Stanley and Wells Fargo. To participate in the program, firms will have to agree to executive compensation limits, including the elimination of golden parachutes.
In addition to that, the FDIC will guarantee the newly issued unsecured debt from banks through 30 June, 2012. Meaning that if a bank fails, holders of newly issued debt will be paid by the FDIC. This includes interbank lending, which has seized up as banks hoarded cash. Separately, noninterest bearing deposit accounts will now be fully guaranteed, up from the current limit of $250,000, until the end of 2009.
With these plans, the financial stocks soared today trying to give the market the most needed support.
Among earning news, Johnson & Johnson posted third quarter earnings growth that topped estimates and raised its full year outlook.
Nasdaq spent the entire day in the red today. The Intel share shed 6.2% ahead of its earning report which was slated after today’s close.
Volume on the New York Stock Exchange neared 1.9 billion, with advancing stocks trumping decliners by a 17-to-14 margin. On the Nasdaq, 1.3 billion shares changed hands, as decliners edged ahead of advancers, roughly 3 to 2.
Crude prices slipped today below the $80 mark. The expectations among investors were left largely intact that the financial crisis will hasten a decline in consumption of oil. Crude-oil futures for light sweet crude for December delivery closed at $78.63/barrel (lower by $2.56 or 3.2%) on the New York Mercantile Exchange. On a yearly basis, crude price is higher by 6.5%.
Coca-Cola and JPMorgan Chase are among major companies for tomorrow morning's earnings announcements. Other than that, the September Producer Price Index is due ahead of Wednesday's opening bell. Advance retail sales are due at the same time. Business inventories for August and Fed's Beige Book are to follow them.
Trading Calls - Oct 15 2008
Nifty (3519) Sup 3450 Res 3570
Sell ACC (552) SL 558 Target 540, 238
Sell Cipla (198) SL 201 Target 192, 191
Sell Jet Air (289) SL 294 Target 279, 278
Sell Orchid (182) SL 186 Target 174, 173
Buy Amtek Auto (108) SL 105 Target 114, 115
Weak global cues to trigger negative start
Key benchmark indices are likely to see lower start today, 15 October 2008 tracking weak global cues as worries about the slowdown in the global economy resurfaced.
The Prime Minister Manmohan Singh met Finance Minister P Chidambaram and Reserve Bank of India (RBI) Governor Duvvuri Subbarao late Tuesday, 14 October 2008 to discuss the economic crisis. Without divulging details of the meeting, Chidambaram said that India economy was stable. A meeting of high-level bankers and experts group led by Finance Secretary Arun Ramanathan is scheduled today, 15 October 2008.
Among frontline companies, Larsen & Toubro and HCL Technologies will declare their September quarterly results today, 15 October 2008.
The US government in a meeting held on Tuesday, 14 October 2008 said it will inject $250 billion into the nation's banking system, with about half of it going to nine major institutions. In return, the government will receive equity stakes in the participating institutions. The proposed cash injection is part of a $700 billion rescue plan, which was approved by the US Congress earlier this month.
The beneficiaries of this effort include Citigroup, Goldman Sachs, Wells Fargo, JPMorgan Chase, Bank of America, Merrill Lynch, Morgan Stanley, State Street, and the Bank of New York Mellon. This move follows pledges of more than $1.3 trillion by the governments of Britain, Germany, France, and other European countries in an effort to bolster their banks.
Asian markets were trading lower today, 15 October 2008 on concern the rescue would come at a huge economic cost and do little to repair the damage already done by a 14-month credit crunch. China's Shanghai Composite was down 1.29% or 26.03 points at 1,991.31, Hong Kong's Hang Seng plunged 2.41% or 405.05 points at 16,427.83, Japan's Nikkei fell 1.44% or 136.35 points at 9,311.22, Singapore's Straits Times tumbled 2.12% or 45.11 points at 2,083.20, South Korea's Seoul Composite declined 2.52% or 34.5 points at 1,333.19 and Taiwan's Taiwan Weighted slipped 1.58% or 83.48 points at 5,208.08.
US markets ended lower on Tuesday, 14 October 2008 as the enthusiasm about the government's plan to buy stakes in the nation's largest financial institutions died down and worries about earnings crept in. The Dow Jones slipped 76.62 points, or 0.82%, to 9,310.99. The S&P 500 index was down 5.34 points, or 0.53%, to 998.01 and the Nasdaq plunged 65.24 points, or 3.54%, to 1,779.01.
The U.S. saw its budget deficit balloon to a record for the 2008 fiscal year. As per the Treasury Department, the shortfall for the year ending September 2008 hit $455 billion. The deficit represented 3.2% of America's gross domestic product, up from last year's 1.2%. The largest-ever percentage of deficit to GDP occurred in 2004, when it hit 3.6%.
Back home, the key benchmark indices logged decent gains boosted by the Reserve Bank of India’s announcement to infuse more liquidity coupled with strong global markets. The BSE 30-share Sensex rose 174.31 points or 1.54% to 11,483.40 and the S&P CNX Nifty rose 27.95 points or 0.8% to 3,518.65, on that day.
Foreign institutional investors (FIIs) were net equity buyers worth Rs 898.25 crore while mutual funds sold shares worth Rs 252.37 crore on Tuesday, 14 October 2008, according to provisional data on NSE. FIIs were net buyers of Rs 1,747.68 crore in the futures & options segment on that day.
U.S crude fell 53 cents to $78.10 a barrel, while London Brent crude slipped 23 cents to $74.30 today, 15 October 2008 on fears as a global recession just about outweighed optimism for an economic recovery spurred by bank rescue schemes.
Actions may not speak louder for bulls
There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction – John F Kennedy.
The bulls seem to have second thoughts about the success of the series of actions aimed at combating the credit crisis and restoring confidence in the banking system. Comfortable inaction may be key to market participants for the time being as things continue to remain uncertain. The gains in recent days causes worry of a sudden slide again. Our market could not hold on to the morning's gains, though the key indices did manage a modest rally after Monday's stupendous advance. A similar trend played out on Wall Street and this morning, most Asian markets too are in the red. The only exception is the European markets, which were up 2-3%. Russian stocks surged by nearly 10% after several days of vicious declines. Shares in emerging markets like Brazil, Mexico and Turkey too managed to build on Monday's rally. However, stock market in Iceland was not so lucky as it crashed by an unprecedented 76% after a three-session halt in trading. US stock futures were pointing to another weak opening, though things may change by the time the opening bell rings on Wall Street later today.
Coming to our market's outlook today, we expect a cautious to flat opening given the reversals in global markets and skepticism over the string of bailout plans. We also have to factor in the substantial weakness in the domestic economic fundamentals and a slowdown in the earnings growth momentum. Also, experts are not sure whether world stock markets hit a bottom last week, and if the global economy can avert a recession. Nouriel Roubini, the professor who predicted the financial crisis in 2006, says that the US will suffer its worst recession in 40 years, driving the stock market further down. Former Fed chairman Paul Volker says the US is already in recession. Singapore slipped into one last week. Europe and Japan are also staring at one notwithstanding the bank bailout plans. The latest version of the US government's rescue package for banks may also not lead to a quick turnaround in its economy.
Stay cautious and not get carried away by any sort of a rally like on Monday. Moreover, do not get lost in the maze of ‘expert views’ and daily movements in the markets. Stick to basics and take your call based on your own risk appetite, long-term goals and of course purchasing power. To put it simply, if you have the money and the time to wait, go ahead and purchase at lower levels.
Given that there is still considerable amount of uncertainty, traders who have been turned into investors…. and investors who have been turned into traders, should lock in gains at higher levels, as the upside appears to be capped. In case one cannot resist the temptations of buying, stick to the large caps as they are most likely to lead any turnaround. The small and mid-caps, though compelling are just not worth the risk.
FIIs were net buyers of Rs8.98bn (provisional) in the cash segment on Tuesday while the local institutions pulled out Rs2.5bn. In the F&O segment, the foreign funds were net buyers at Rs17.47bn. On Monday, FIIs were net sellers of Rs8.42bn in the cash segment, taking their total outflows this year to more than $10.8bn.
Key Results Today: CMC, CONCOR, Electrosteel Castings, HCL Tech, ICSA, Kavveri Telecom, LG Balakrishnan, L&T, Sanwaria Agro and TTK Prestige.
US stocks failed to extend their biggest rally since the 1930s, with the main indices ending in the red on Tuesday, led by the technology space. Poor outlook for earnings growth offset the euphoria over the US$2 trillion global push to shore up the battered banking system.
The US government's plan to spend US$250bn and pick up stakes in banks failed to enthuse investors, who continue to fret about the strength of the world's biggest economy. Shares of consumer-discretionary and technology companies were among the worst hit.
Credit markets eased a bit, with a key overnight bank lending rate falling. Treasury prices slumped, raising the corresponding yields. The dollar fell against the euro and the yen. Oil, gold and gasoline prices eased.
The Dow Jones Industrial Average lost 76 points, after having fallen as much as 302 points in the afternoon and having risen as much as 406 points in the morning. The decline was equal to 0.8%.
The Standard & Poor's 500 index lost 0.5% after having been on both sides of unchanged throughout the session.
The Nasdaq Composite tumbled 3.5%, with some of its large technology shares slumping after the previous session's advance. The Nasdaq had been higher in the morning and lower in the afternoon.
The S&P 500 Index slipped 5.34 points to 998.01 after gaining 12% on Monday. The Dow decreased 76.62 points to 9,310.99 after a 936-point rally on Monday. The measure swung more than 700 points from its low to its high today. The Nasdaq declined 65.24 points to 1,779.01.
After the close, Intel reported higher quarterly earnings that edged Wall Street estimates on higher revenue that was short of forecasts. The chipmaker also reported a bigger-than-expected rise in gross margins. Shares gained 5.5% in extended-hours trading.
US stocks rallied in the morning as the US government unveiled the details of its bank bailout plan. But the early advance fizzled out as investors showed some caution after Monday's huge rally.
The Dow rallied 936 points on Monday - its best one-day point gain ever and best day on a percentage basis since 1933 - on hopes that the worst of the financial crisis is over.
Investors welcomed more specifics on the US$700bn bank bailout plan as well as a series of global initiatives aimed at loosening up credit. The S&P 500 rose 104 points, its best single-day point gain ever. The Nasdaq's jumped nearly 195 points, its 10th best ever.
In the short term, market experts will be looking for signs as to whether last week's lows marked a bottom for the bear phase. The US stock market is not out of the woods yet, according to some. Economic reports are likely to remain weak and third-quarter results will reflect that.
The next few weeks of trading will tell if indeed Wall Street and global markets have bottomed out. Some analysts expect several sessions of flat to modestly lower trading and a few good days in between.
Dow component Johnson & Johnson reported quarterly earnings that rallied from a year earlier and topped estimates. The healthcare company also boosted its full-year profit forecast. Shares gained 2%.
PepsiCo reported lower quarterly earnings that missed estimates, warned that 2008 profits won't meet forecasts, and said it was cutting jobs as part of a global cost-cutting plan. Shares fell 12%.
A variety of financial services stocks gained. JPMorgan Chase defied the trend, sliding ahead of its quarterly earnings due out Wednesday morning. Wells Fargo is also reporting Wednesday morning.
European shares rose, building on the previous session's sharp gains, as efforts to rescue distressed banks and limit the fallout to the economy gathered pace around the globe. The Dow Jones Stoxx 600 index closed up 3% at 232.17, helped by big gains from oil producers and strength in banking and technology stocks.
The UK's FTSE 100 ended up 3.2% at 4,394.21, while the French CAC-40 climbed 2.8% to 3,628.52 and Germany's DAX 30 advanced 2.7% to 5,199.19.
Iceland's OMX 15 share index dropped 76.2% to 716.27 points when it restated trading. The all-share index fell 65.6% to 953.14 points. Last week, trading was suspended after the country's Financial Supervisory Authority took control of Kaupthing Bank, Landsbanki Islands and Glitnir Bank.
In the emerging markets, the Russian markets rallied almost 10% to 869. Elsewhere, the Bovespa in Brazil was up 1.8% at 41,569 while the IPC index in Mexico rose 0.7% to 22,274 and Turkey's ISE National 30 index jumped 5.5% to 38,940.
After a strong start markets were unable to hold on to their gains led by selling witnessed in the metals and the PSU stocks. The BSE benchmark Sensex lost over 400 points and the NSE Nifty index fell over 150 points from their respective day’s high. Finally, the BSE benchmark Sensex ended 174 points higher to close 10,483 and the NSE Nifty index was up 27 points to close at 3,518.
Among the 30 components of the Sensex, 19 stocks ended in the green and 11 stocks ended with negative bias. ONGC, HDFC Bank, RCom and NTPC were among the major laggards. However among the major gainers were, Infosys, Reliance Industries and ICICI Bank.
Shares of Sonata Software was locked at 20% upper circuit at Rs21.4 after the company announced its Q2 results with net profit at Rs216.3 (up 81.3%) and net sales at Rs4.19bn (up 25.4%). The scrip touched an intra-day high of Rs21.4 and a low of Rs18.5 and recorded volumes of over 1,00,000 shares on BSE.
McLeod Russel gained by 1% to Rs67 after the company announced that it acquired Vietnam-based Phu Ben Tea company for ~US$7mn. The scrip touched an intra-day high of Rs71.9 and a low of Rs66 and recorded volumes of over 1,00,000 shares on BSE.
Orbit Corp advanced 2% to Rs102 after the company announced that it posted a consolidated net profit of Rs137.1mn for the Q2 ended September 2008. The total revenue on consolidated basis stands at Rs740.7mn. The earnings per share on consolidated basis is Rs3.78 per equity share for Q2 FY09. The scrip touched an intra-day high of Rs117 and a low of Rs100 and recorded volumes of over 3,00,000 shares on BSE.
California Software announced a multi-level partnership with Ixia, to make a joint investment to establish an Ixia Center of Excellence (COE) in Chennai, India. The COE will be an R&D lab focused on jointly developing solutions for the global market.
It will be equipped with the latest Ixia IP test hardware and applications and will be staffed by Calsoft development, quality assurance, and support engineers. Calsoft will staff the center with 100 engineers over the next twelve months.
California Soft slipped by 6% to Rs50.1 touching an intra-day high of Rs55 and a low of Rs48 and recorded volumes of over 3,000 shares.
Reliance Infra plans to raise Rs25bn via loan in the current fiscal for reality, rail and road projects. (BS)
OVL, a subsidiary of ONGC is likely to bid for 8 oil and gas blocks auctioned in Iraq. (BS)
Jet Airways has decided to lay off over 800 of its employees. (BS)
Dabur India is in talks to acquire Fem Care Pharma for Rs2.7-3bn. (ET)
RIL plans power foray with mining and coal-to-oil projects. (ET)
Tata Motors acquires 50.3% in Norwegian e-vehicle major Miljo Greenland for Rs94mn. (ET)
G R Gopinath is believed to be considering an offer to buy-back Air Deccan. (ET)
Zydus Cadila gets WHO nod to sell rabies vaccine to UN agencies. (ET)
Emami Group is close to buy-out owner’s stake in Zandu Pharma. (ET)
Kingfisher Jet Airways deal is on MRTPC radar. (ET)
NTPC officials may discuss the possibility of an out-of-court settlement with RIL. (ET)
DLF defers buy back offer, due to open on October 15th. (BS)
Elecon Engineering bags order worth Rs517mn. (BS)
Hero Honda resumes production at its Dharuhera plant. (BS)
Pirmal Life Sciences defers fund raising plans. (BS)
Colombia takes back a part of OVL oil field. (BS)
Bharti Airtel enters into agreement with Infosys for DTH roll-out. (BS)
Reliance Capital buys 15% stake in Hong Kong Mercantile Exchange. (BS)
Corporation Bank raises deposit rates by 50 bps. (BS)
JSW Steel may cut steel prices by end of this month. (DNA)
SCI buys two large vessels from Hyundai Samho Heavy Industries a Korea based company. (DNA)
Subhash Projects JV bags order worth Rs960mn. (DNA)
GMR Infra acquires 50% stake in Netherlands based InterGen for US$954mn. (DNA)
Dr Reddy’s arm launches dermatology product in US (BL)
Spicejet is considering a cut in fares to stimulate demand (BL)
Bank of Baroda and Union Bank of India to slash home loan rates by 25 bps (FE)
Bank of India to invest Rs1.5bn in HCC Lavasa project (FE)
Indian Hotels to develop a 200-room hotel in Kochi (FE)
Wadia’s to get ICICI funds for Danone. (ET)
Economic Front Page
Government is considering a proposal to hike insurance cover on bank deposits. (ET)
Power companies to buy 20mn tons coal from overseas in FY09. (ET)
India’s crude oil import bill double’s in April-August. (ET)
Government is considering relaxing the 3G auction guidelines to make it easier for telecom companies to pay large sums. (ET)
Government to meet steel producers on Oct 18th to consider their demand to waive import and export duty on some products. (BS)
Government plans to introduce competitive bidding for allocation of coal blocks. (BS)
India’s Jewellery and Gem exports rise 18% in April-September. (BS)
Yellow metal dives again
Fresh rescue plan for the financial crisis reduces precious metal’s appeal
A partial rebound in US stocks earlier during the day pushed precious metals lower for fourth straight day on Tuesday, 14 October, 2008. Investors generally tend to seek safety in gold when the economy falls into turmoil and vice versa. But silver prices again rose for the day as copper prices once again rebounded today.
Ahead of the open on Wall Street, investors reacted favorably as Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke discussed the government's bank rescue plan, offering reassurances that it would work. Stocks in Europe and Asia rose for a second day after Treasury Secretary Henry Paulson announced plans to buy stakes in financial firms to ease the lending crisis.
On Monday, Comex Gold for December delivery fell $3 (0.4%) to close at $839.5 an ounce on the New York Mercantile Exchange. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly since then. Last week, gold prices ended higher by 3.1%.
This year, gold prices have gained 0.2% till date. 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%.
On Monday, Comex silver futures for December delivery gained 27 cents (2.5%) to $11.06 an ounce. Till date, silver has lost 26% this year. Silver had ended month and quarter of September 2008 with a loss of 10%. For the second quarter, it had gained a paltry 1.4%. Silver had gained 16% in Q1. The metal also had gained for seven straight years.
In the US stock market on Monday, 14 October, the Dow surged up by more than 400 points in first couple of hours of trading, but then it gave up a part of its gains during the noon hours. At the end all the indices ended in the red.
The buying interest at the open came as credit markets showed signs of some improvement and the U.S. government followed European efforts to improve the financial system.
Ahead of the open on Wall Street, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke discussed the government's bank rescue plan, offering reassurances that it would work.
As per the plan announced today, the Treasury will buy up to $250 billion in preferred stock from qualifying U.S. financial institutions. Participation in the plan is voluntary, although it appears that there will be plenty of firms taking the Treasury up on its offer. Nine of the largest financial institutions in the world will receive $125 billion, including Bank of America, Citigroup, JPMorgan Chase, Morgan Stanley and Wells Fargo. To participate in the program, firms will have to agree to executive compensation limits, including the elimination of golden parachutes.
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 11 (0.08%) at Rs 13,079 per 10 grams. Prices rose to a high of Rs 13,207 per 10 grams and fell to a low of Rs 12,935 per 10 grams during the day’s trading.
At the MCX, silver prices for December delivery closed Rs 5 (0.02%) higher at Rs 18,769/Kg. Prices opened at Rs 18,840/kg and rose to a high of Rs 18,985/Kg during the day’s trading.
Crude slips
Traders still doubt the demand for energy despite financial recovery package
Crude prices slipped today below the $80 mark on Tuesday, 14 October, 2008 despite the recovery effort by US to solve the financial crisis partly were well accepted by investors. The expectations among investors were left largely intact that the financial crisis will hasten a decline in consumption of oil.
Crude-oil futures for light sweet crude for December delivery closed at $78.63/barrel (lower by $2.56 or 3.2%) on the New York Mercantile Exchange. Prices rose to a high of $82.52 during intra day trading. Prices reached a high of $147 on 11 July but have dropped almost 47% since then. Crude coughed up 17% last week. On a yearly basis, crude price is higher by 6.5%.
Ahead of the open on Wall Street, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke discussed the government's bank rescue plan, offering reassurances that it would work.
As per the plan announced today, the Treasury will buy up to $250 billion in preferred stock from qualifying U.S. financial institutions. Participation in the plan is voluntary, although it appears that there will be plenty of firms taking the Treasury up on its offer. Nine of the largest financial institutions in the world will receive $125 billion, including Bank of America, Citigroup, JPMorgan Chase, Morgan Stanley and Wells Fargo. To participate in the program, firms will have to agree to executive compensation limits, including the elimination of golden parachutes.
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 rose 3.3 cents to close at $1.8848 a gallon on Nymex, November heating oil shed 8.1 cents to end at $2.2597 a gallon.
November natural gas futures added 3.9 cents to close at $6.727 per million British thermal units.
The U.S. Energy Information Administration will release its petroleum supply data on Thursday at 11 a.m. EDT, a day late this week due to Monday's Columbus Day holiday. The department's report is forecast to show that U.S. crude oil and gasoline inventories rose last week.
At the MCX, crude oil for November delivery closed at Rs 3,929/barrel, lower by Rs 43 (1.02%) against previous day’s close. Natural gas for October delivery closed at Rs 326.3/mmbtu, higher by Rs 3.1/mmbtu (0.9%).
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