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Thursday, October 16, 2008

Deep Value Stocks

Deep Value Stocks

Post Session Commentary - Oct 16 2008

The Indian market on Thursday ended in red terrain due to global melt down after shedding some of its earlier loses. Market witnessed some pullback during final trading on some bouts of buying led by eased inflation. However, Finance Minister P Chidambaram’s announcement to enhance liquidity along with RBI’s cut in CRR by 100 bps to 6.5% had not contributed much to lift the sentiment. BSE Sensex went past 10,600 level and NSE Nifty ended below 3,300 mark. The domestic market started the day in deep red on global recession worries. Weak U.S. data renewed fears about sharp global economic slowdown. US retail sales in September tumbled for the third consecutive month to 1.2% month-over-month, which is largest decline in three years. Sales are down 1% as compared to last year, marking the first year-over-year decline since October 2002. Further market continued to trade downward till after noon but marginal recovery in European markets led smart recovery in Indian markets from days low. Market was not able to continue the momentum of its recovery and finally ended lower. On the sectoral front, most of the selling pressure was led by Capital Goods, Oil & Gas, Metal, IT and Auto stocks. However, Reality, FMCG and Bank stocks were in limelight as witnessed most of the selling from these baskets.

Among the Sensex pack 14 ended in red while 16 in green. The market breadth was negative as 1733 stocks closed in red while 834 stocks closed in green and 56 stocks remained unchanged on BSE.

The BSE Sensex closed lower by 227.63 points at 10,581.19 and NSE Nifty ended down by 69.1 points at 3,369.3. The BSE Mid Caps and Small Caps closed with loss of 63.35 points at 3,657.13 and by 107.09 points at 4,286.36. The BSE Sensex touched intraday high of 10,787.2 and intraday low of 10,017.8.

Wholesale price index reduced to 11.44% for the week ended 4th October 2008, as against the previous week’s 11.80% mainly due to cooling off global commodity prices.

Losers from BSE Sensex pack are Hindalco (12.15%), Tata Motors (11.17%), TCS Ltd (8.64%), Grasim Indus (8.05%), Relaince (8.03%), L&T Ltd (7.55%), M&M Ltd (6.71%), BHEL (5.83%), Infosys Tech (4.85%), ONGC Ltd (4.22%) and HDFC Bank (4.15%).

Gainers from BSE Sensex pack are Reliance Communication Ltd (9.80%), DLF Ltd (8.25%), HUL (7.22%), HDFC (5.17%), SBI (3.13%), JP Associates (2.82%), Sterlite Indus (2.21%), HDFC (6.90%), Bharti Airtel (1.76%) and ITC Ltd (1.03%).

The BSE Capital Goods index closed lower by 423.21 points at 7,664.8. Losers are Suzlon Energy (8.91%), L&T Ltd (7.55%), Usha Martin (5.92%), Lakshmi MA W (5.84%), BHEL (5.83%) and Ealchand Industries (4.78%).

The BSE Oil & Gas index plunged 403.1 points to close at 6,827.77 as Cairn Ind (8.29%), Reliance (8.03%), ONGC Ltd (4.22%), Reliance Petroleum (3.49%) and Essar Oil Ltd (3.11%) ended in negative territory.

The BSE Metal index tumbled 135.98 points to close at 6,379.87. Major losers are Nalco (14.14%), Hindalco (12.15%), JSW Steel (5.53%), Tata Steel (1.28%) and Jindal Saw (1.01%).

The BSE Auto index ended down by 113.55 points at 3,195.91. Losers are Tata Motors (11.17%), Exide Indus (7.24%), Bharat Forge (6.84%), M&M Ltd (6.71%), Apollo Tyre (5.56%) and Excorts Ltd (4.56%).

The IT index lost 111.02 points to close at 2,669.17 as Financ Tech (10.17%), TCS Ltd (8.64%), Rolata India (8.28%), Tech Mahindra (5.70%), Oracle Fin (5.46%) and Infosys Tech (4.85%) in negative territory.

The BSE Reality index gained 137.78 points to close at 2,813.26. Major gainers are DLF Ltd (8.25%), Housing Dev (7.22%), Unitech Ltd (6.88%), Ansal Infra (5.66%), Sobah Dev (5.34%) and Mahindra Life (4.29%).

India Financial Services

India Financial Services

Infosys Technologies Limited

Infosys Technologies Limited

BSE Bulk Deals to Watch - Oct 16 2008

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
16/10/2008 532946 BANG MARUTI SECURITIES LTD B 73326 264.60
16/10/2008 515035 BELL CERAMIC MEGA RESOURCES LTD S 120924 4.00
16/10/2008 531489 CG VAK SOF E CHANDRIKA PRAVINBHAI PATEL B 40251 6.07
16/10/2008 531489 CG VAK SOF E SWAPNA AGRAWAL S 40000 6.07
16/10/2008 508860 DIAMANT INV FANCY INVESTRADE PVT LTD B 50450 87.60
16/10/2008 508860 DIAMANT INV DISTENT BARTER PVT LTD B 29250 87.60
16/10/2008 508860 DIAMANT INV SARSWATI VINCOM LTD S 29450 87.60
16/10/2008 508860 DIAMANT INV FOUNTAIN VANIJYA PVT LTD S 50000 87.60
16/10/2008 502865 FORBES & CO SEEPRA SUMEET KABRA B 77572 387.62
16/10/2008 502865 FORBES & CO SPS CAPITAL AND MONEY MNG SERVICES P.LTD S 67889 387.18
16/10/2008 531861 JOINDR CAP S JAYESHSHAH S 104200 10.25
16/10/2008 531687 KARUTURI GLO BSMA LIMITED S 3625000 10.95
16/10/2008 509011 LIVINGROOM L DASKABITA B 12500 39.10
16/10/2008 590057 NORTHGATE TE MARSHAL INDIA SECLECT FUND LTD B 850000 72.05
16/10/2008 531611 PRRANET INDU CHAMPALAL CHOUHAN B 1000000 1.55
16/10/2008 526049 SHRILAKSHMI NAV NIRMAN MERCANTILES LTD B 102838 34.34
16/10/2008 522085 STONE INDI L SANJIV DHIRESH BHAI SHAH S 44125 34.77
16/10/2008 531866 SUBHKAM CAP FANCY INVESTRADE PVT LTD B 34000 190.00
16/10/2008 531866 SUBHKAM CAP ANSU COMMERCIAL PVT LTD S 34000 190.00
16/10/2008 514211 SUMEET INDUS ATMARAM SARDA S 146933 7.02
16/10/2008 504605 UNIABEX AL P MONEYBEE SECURITIES PVT LTD B 30000 66.00
16/10/2008 504605 UNIABEX AL P MONEYBEE COMMODITIES PVT LTD S 29500 66.00

NSE Bulk Deals to Watch - Oct 16 2008

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
16-OCT-2008,20MICRONS,20 Microns Limited,PRASHANT JAYANTILAL PATEL,BUY,259972,25.85,-
16-OCT-2008,GRABALALK,Grabal Alok Impex Limited,PASHA FINANCE PVT LTD,BUY,199161,40.00,-
16-OCT-2008,GREENPLY,Greenply Industries Ltd,BLUE MOON SECURITIES PVT. LTD.,BUY,426500,75.02,-
16-OCT-2008,PNC,Pritish Nandy Comm. Ltd.,JMDE PACKAGING AND REALTIES LIMITED,BUY,106000,19.02,-
16-OCT-2008,PNC,Pritish Nandy Comm. Ltd.,TAKESHI INVESTRADE PRIVATE LIMITED,BUY,2,18.90,-
16-OCT-2008,20MICRONS,20 Microns Limited,PRASHANT JAYANTILAL PATEL,SELL,184994,27.01,-
16-OCT-2008,20MICRONS,20 Microns Limited,VALLABH REALTORS PVT LTD,SELL,74647,22.59,-
16-OCT-2008,GRABALALK,Grabal Alok Impex Limited,SOMERSET IND FUND- RHODES FCCB,SELL,199240,40.00,-
16-OCT-2008,KNL,Karuturi Networks Limited,BSMA LIMITED,SELL,3625000,10.95,-
16-OCT-2008,PNC,Pritish Nandy Comm. Ltd.,TAKESHI INVESTRADE PRIVATE LIMITED,SELL,106020,19.02,-

Eleventh-hour buying saves grace

Weak global cues and negative breadth in yesterday's trades led the market open at a lower today. The Sensex was 524 points down at the opening bell and remained subdued, as investors booked profits after the recent gains. Oil & Gas and capital goods (CG) stocks took the major beating, but realty stocks bucked the downtrend on gains in Unitech and Housing Development and Infrastructure (HDIL). The index capitulated under selling pressure by afternoon and slipped to the day's low of 10,018. While the market fluctuated sharply thereafter, firm bullish sentiment and strong buying in heavyweights and realty stocks in late trades helped the Sensex erase most of its losses. The Sensex finally ended the session by shedding 2.11% or 228 points at 0,581. Nifty slipped by 69 points at 3,269.

The market breadth was negative. Of the 2,622 stocks traded on the BSE, 1,733 stocks declined whereas 833 stocks advanced. Fifty seven stocks ended unchanged. Most of the sectoral indices ended in the red. The BSE Oil & Gas dropped 5.57% at 6,827 followed by BSE CG (down 5.23% at 7,665), BSE IT (down 3.99% at 2,669) and BSE Auto (down 3.43% at 3,196). However, BSE Realty gained 5.15% at 2,813 and BSE FMCG was up 1.73% at 1,903.

Heavyweights led the fall in the Sensex. Hindalco Industries slipped by 12.15% at Rs69.75, Tata Motors slumped by 11.17% at Rs250.55, Tata Consultancy Services shed 8.64% at Rs495.20, Grasim Industries lost 8.05% at Rs1,371.75, Reliance Industries was down 8.03% at Rs1,397.25 and Larsen & Toubro (L&T) tumbled by 7.55% at Rs825.75. Among the gainers Reliance Communications jumped 9.80% at Rs258.90, DLF gained 8.25% at Rs324.90, Hindustan Unilever soared 7.22% at Rs247.90, HDFC rose by 5.17% at Rs1,801.15 and the State Bank of India (SBI) was up 3.13% at Rs1,543.90, while JP Associates, Sterlite Industries, Bharti Airtel and ITC ended with modest gains.

Over 1.21 crore IFCI shares changed hands on the BSE followed by Chambal Fertilisers and Chemicals (1.16 crore shares), Reliance Natural Resources (1.07 crore shares) and Suzlon Energy (0.96 crore shares).

Reliance Industries registered a turnover of Rs418 crore on the BSE followed by Reliance Capital (Rs258 crore), ICICI Bank (Rs239 crore), SBI (Rs212 crore) and L&T (Rs170 crore).

Turnover surges

RIL October 2008 futures at discount

Nifty October 2008 futures were near spot price at 3269.90, as compared to the spot closing of 3269.30. NSE's futures & options (F&O) segment turnover was Rs 55,892.70 crore, which was higher than Rs 43,996.07 crore on Wednesday, 15 October 2008.

Reliance Industries (RIL) October 2008 futures were at discount at 1390.95 compared to the spot closing of 1391.95.

ICICI Bank October 2008 futures were at premium at 417.20 compared to the spot closing of 416.15.

NTPC October 2008 futures were at premium at 166.35 compared to the spot closing of 165.90.

In the cash market, the S&P CNX Nifty lost 69.10 points or 2.07% at 3269.30.

Asian equities nosedive as investors fear the worse is yet to come

Major indices back on losing track as initial gains in the week get eroded

Asian equity markets plummeted sharply today as investors feared that the worst is yet to come for the global equity markets following a more than 700 points slide on the wall street yesterday. The massive collapse in the US equity markets, which came on the back of signs that the world’s largest economy deteriorated throughout the last month, spread the worries around that the last week’s hammering might not be the end of the tough times for the global equities. The current slide meant that all of the indices have lost out an opportunity to build up on the gains recorded at the start of the current week.

The US Federal Reserve said in its Beige book yesterday that "Economic activity weakened in September across all 12 Federal Reserve districts,” The report is published two weeks before officials meet to set interest rates. "Consumer spending decreased in most districts, with declines reported in retailing, auto sales and tourism.", the Fed noted further.

With the economy weakening under the effect of the yearlong financial crisis and housing recession, and with consumer prices easing, most investors anticipate the Fed will lower interest rates by a quarter of a point Oct. 29, following up on an emergency rate cut a week ago.

However, the prospects of weakening interest rates are failing to calm the fretted nerves around the globe as the equity market investors are unwilling to enter in the markets given that the secular, synchronized run in the world equities seems to have ended to give way for a period of prolonged stress amid shrinking global economic activity.

In the major news today, UBS AG, Switzerland's biggest bank, was forced into a $59.2 billion government bailout after piling up the biggest losses of any European lender from the global credit crisis. UBS will get a 6 billion Swiss francs capital injection from the government to help it set up a fund for as much as $60 billion of toxic assets that will be supported by the central bank.

All Asian equities were hammered with Japanese stocks getting thrashed as the Nikkei 225 Average plummeted by more than 11% for its worst single-day performance in more than two decades. The Kospi index plummeted 9.4% while the Chinese markets dropped more than 4%. The indices also faced a similar pounding with BSESENSEX ending down 2.11%, Jakarta Composite losing 3.76 and the Philippines stock exchange plunging 5.18%.

PSU banks rally on rate cut hopes

The key benchmark indices ended lower in choppy late trading sessions on global recession worries and on Indian stock market regulator's decision to raise margins in the derivatives segment. Sensex ended down 227.63 points or 2.11%. Measures by the central bank to boost liquidity in the banking system failed to avert a slide. Nevertheless, the market made a strong rebound from a sharp intraday fall as European stocks cut initial steep losses.

Banking stocks bounced back as fall in inflation raised hopes for cut in interest rates. Index stocks, Sterlite Industries, Reliance communications, HDFC, Bharti Airtel, and Tata Steel recovered sharply from their lows. European markets were down between 3.14% to 3.91%, after having fallen as much as 5.6% earlier on global recession worries. Trading in US index futures suggested the Dow would fall 14 points at the opening bell.

The BSE 30-share Sensex lost 227.63 points or 2.11% to 10,581.49. The index declined 791.32 points at the day's low of 10,017.80 hit in early afternoon trade, its lowest level since 24 July 2006. The Sensex fell 22 points at day’s high of 11,787.20 in mid-afternoon trade.

The S&P CNX Nifty ended down 69.10 points or 2.07% to 3,269.30. It hit a low of 3,099.90, its lowest level since 26 July 2006.

The barometer index BSE Sensex is down 9,705.50 points or 47.84% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 10,625.28 points or 50.1% below its all-time high of 21,206.77 struck on 10 January 2008.

BSE clocked a turnover of Rs 4540 crore today as compared to a turnover of Rs 3,581.21 crore on 15 October 2008.

Nifty October 2008 futures were near spot price at 3269.90, as compared to spot closing of 3269.30. NSE's futures & options (F&O) segment turnover was Rs 55,892.70 crore, which was higher than Rs 43,996.07 crore on Wednesday, 15 October 2008.

The BSE Mid-Cap index was down 1.7% at 3,657.23 outperformed Sense and The BSE Small-Cap index was down 2.44% at 4,286.36 underperformed the Sensex.

BSE Oil & Gas index (down 5.57% to 6,827.77), BSE Capital Goods index (down 5.23% to 7,664.80), BSE IT index (down 3.99% to 2,669.17), BSE Auto index (down 3.43% to 3,195.91), BSE Power index (down 2.24% to 1,863.01), BSE Metal index (down 2.15% to 6,179.87) underperformed the Sensex.

BSE Realty index (up 5.15% to 2,813.26), BSE FMCG index (up 1.73% to 1,902.51), BSE Consumer Durables index (up 0.75% to 2,141.90), BSE Bankex (up 0.43% to 5,866.76), BSE HealthCare index (down 0.93% to 3,297.32), BSE PSU index (down 1.1% to 5,494.30), BSE Teck index (down 1.45% to 2,198.21), outperformed the Sensex.

The market breadth was weak. On BSE, 833 shares advanced as compared to 1,733 that declined. 57 shares remained unchanged.

India’s largest private sector company by market capitalization and oil refiner Reliance Industries fell 8.03% to Rs 1,397.25. The stock came off from a 52-week low of Rs 1,327. The stock declined for the second day in a row today 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. The stock had slumped 6.2% yesterday, 15 October 2008.

Metal stocks recovered from lower level. Sterlite Industries rose 2.21% to Rs 298.80, off the day’s low of Rs 255.50. India’s largest steel maker by sales Tata Steel fell 1.28% to Rs 269.75 off day’s low of Rs 251.10.

Telecom stocks bounced back. India’s largest telecom services provider by market share Bharti Airtel rose 1.79% to Rs 731.45 off the day’s low of Rs 655. India's second largest telecom services provider by sales Reliance Communications jumped 9.8% to Rs 258.90, off the day’s low of Rs 214.20 and was the major gainer form the Sensex pack.

Jaiprakash Associates (up 2.82% to Rs 77), Reliance Infrastructure (up 0.31% to Rs 557.40), Tata Power Company (up 0.7% to Rs 800) edged higher from the Sensex pack.

Among the major losers from the Sensex pack were Hindalco Industries (down 12.15% to Rs 69.75), Tata Motors (down 11.17% to Rs 250.55), Grasim Industries (down 8.05% to Rs 1,375.50), Larsen & Toubro (down 7.55% to Rs 825.75).

Softening of inflation and the cental bank's liquidity boosting measures triggered recovery in bank stocks from an initial slump. India’s largest private sector bank by net profit ICICI Bank rose 0.19% to Rs 415 off the session's low of Rs 376.25. ICICI Bank ADR slumped 14.19% in US on 15 October 2008.

India’s largest private sector bank by net profit HDFC Bank dipped 4.15% to Rs 1,087.35, off the day’s low of Rs 1,041. HDFC Bank's net profit rose 42.28% to Rs 527.98 crore on 62.88% rise in total income to Rs 4634.32 crore in Q2 September 2008 over Q2 September 2007. The bank company announced the result at the closing trade today 16 October 2008

State Bank of India, India's biggest commercial bank, was up 3.13% to Rs 1,543.90 off day’s low of Rs 1,420.55.

A host of other state-run banks rose. Punjab National Bank, Indian Bank, Corporation Bank, Dena Bank IDBI Bank, Canara Bank, Bank of India, Syndicate Bank, Bank of Baroda, Union Bank of India, Allahabad Bank and Indian Overseas Bank rose between 2.03% to 8.07%.

India’s largest home loan lender by sales HDFC rose 6.27% to Rs 1,820, off the day’s low of Rs 1,600.

IndusInd Bank surged 3.91%, as net profit jumped 50.67% to Rs 33.66 crore in Q2 September 2008 over Q2 September 2007.

Lower inflation may trigger cut in interest rate by the Reserve Bank of India (RBI) which may spur lending. Inflation based on the whole price index rose 11.44% in year through 4 October 2008, lower than previous week’s 11.8% rise, data released by the government today, 16 October 2008, showed.

The Reserve Bank of India cut cash reserve ratio by 100 basis points and announced a slew of other measures on Wednesday, 15 October 2008, including disbursal of Rs 25,000 crore to banks for farm loan waiver scheme, to boost liquidity in the banking system.

The BSE Realty index surged 5.15% to 2,813.26, on hopes of reduction in interest rates on home loans. The index bounced back from a record low of 2,436.55 struck in the day. India's largest real estate player by sales DLF rose 8.25% to Rs 324.90 off day's low of Rs 279.80. Housing Development & Infrastructure, Indiabulls Real Estate and Unitech rose between 1.13% to 7.22%.

IT stocks cut initial losses on weak rupee. India's third largest IT exporter by sales Satyam Computer Services down rose 0.26% to Rs 273.05, off the session's lows of Rs 240. India's largest IT exporter by sales Infosys fell 4.85% to Rs 1,266.70 off the day's low of Rs 1,101. Infosys' American depository receipt (ADR) tanked 10.98% overnight.

India's largest IT exporter by sales Tata Consultancy Services fell 8.86% to Rs 495.20 off the day's low of Rs 467. Most IT companies earn their revenue in dollars and fall in rupee results in higher revenue. The partially convertible rupee was at 49.00/15 per dollar compared with Wednesday's close of 48.525/540.

India’s largest steel maker by sales Tata Steel fell 1.28% bouncing back from 52-week low after its UK unit signed pact for procuring iron ore, a key raw material.

Allcargo Global Logistics slumped 4.91% on BSE, even as the company decided to consider stock-split proposal.

Oil exploration firm Cairn India slumped 8.29% on BSE as fall in crude oil price to a 14-month low will reduce realisations.

Refex Refrigerants was locked at 5% lower limit at Rs 76.10 on BSE, as net profit fell 23.3% to Rs 2.76 crore in Q2 September 2008 over Q2 September 2007.

Orchid Chemicals & Pharmaceuticals rose 0.96% after the company received US Food & Drug Administration approval for a new drug.

Biocon fell 3.13% as net profit fell 23.81% to Rs 33.53 crore in Q2 September 2008 over Q2 September 2007.

Monnet Ispat Energy declined 8.24%, even as the company decided to consider a proposed for buyback of its own shares.

Financial Technologies India tumbled 10.17% on BSE, after the company announced an overseas acquisition

HCL Technologies lost 1.49% despite reporting turnaround results in Q1 September 2008.

Container Corporation of India declined 3.80% on BSE, despite net profit surging 28.48% to Rs 223.68 crore in Q2 September 2008 over Q2 September 2007.

IFCI clocked the highest volume of 1.21 crore shares on BSE. Chambal Fertilisers and Chemicals (1.16 crore shares), Reliance Natural Resources (1.07 crore shares), Indiabulls Real Estate (96.9 lakh shares) and Suzlon Energy (86.03 lakh shares) were the other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 418.91 crore on BSE. Reliance Capital (Rs 258.68 crore), ICICI Bank (Rs 239.24 crore), State Bank of India (Rs 212.86 crore) and Larsen & Toubro (Rs 170.59 crore) were the other turnover toppers in that order.

The market regulator Securities & Exchange Board of India (Sebi) has tightened margins in the derivatives segment to ward defaults and curb volatility. The exposure margin for gross open positions in single stock futures and gross open positions in stock options will now be higher of 10% or 1.5 times the standard deviation in the notional value of the positions.

A warning of tough times ahead by Federal Reserve Chairman Ben Bernanke sent Asian markets sharply lower, as investors brace for looming recession. Key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 3.25% to 11.41%.

Shrugging off recent optimism about massive government efforts to prop up the global financial system Wall Street , yesterday, 15 October 2008, suffered its worst one-day percentage decline since the stock market crash of 1987.

Crude oil for November delivery fell as much as $1.58, or 2.1%, to $72.96 a barrel on the New York Mercantile Exchange on 15 October 2008, the lowest since 30 August, 2007.

Economy Update, HCL Tech, Jubilant, L&T

Economy Update, HCL Tech, Jubilant, L&T

Readers Soundoff - Best stocks to sell even now!

What do you think are the best stocks to sell even now ? Give the other investors a flight of safety even now :)

Any sectors maybe worth dumping even at these levels ?

Leave a comment on this post !

PS: Please note that comment may take some time to appear as it is moderated.

Reliance Power, ONGC dumped. Sesa Goa, IDFC, LT and Reliance Industries accumulated

As bourses witness a stocks meltdown, Anil Ambani-led Reliance Power and PSU energy giant ONGC are among those seeing the maximum flight of investors from their books.

The stock market's latest entrant from Anil Ambani group is accompanied by two other private sector firms, Orchid Chemicals and Tech Mahindra, among the top ten companies with maximum decline in the number of their shareholders during the latest quarter ended September 30.

However, this league is heavily dominated by the public sector with as many as seven entries, led by the country's most valued PSU firm ONGC and includes Bank of Baroda, NTPC, BPCL, Union Bank, Indian Oil and LIC Housing Finance.

In contrast, there is not a single PSU entity among the top ten firms in which has noted increase in the number of shareholders during the same period.

This league is led by Vedanta group's Sesa Goa and comprises of IDFC, L&T, Mukesh Ambani-led Reliance Industries, Tata Motors, Mercator Lines, Axis Bank, Nagarjuna Fertilisers and Chemicals, Development Credit Bank and Indian Hotels.

However, the total number of companies where number of shareholders went down during the July-September quarter is still below the number of those having registered an increase in the number of their shareholders.

While 190 companies witnessed an increase in the number of their shareholders during the quarter, another 131 firms took a dip on this front among the entities whose latest quarter shareholding pattern is available with the bourses.

Reliance Power, which debuted on bourses earlier this year after India's biggest ever IPO of about three billion dollars, saw the number of its shareholders plunging by 63,931, while ONGC was a distant second at 25,611.

R-Power still remains the country's most widely held company with more than 40 lakh shareholders, the maximum for any Indian entity. Two other Anil Ambani group firms RNRL and Reliance Infra saw an increase in number of their shareholders.

A total of 22 companies have so far reported a fall of more than a thousand shareholders in their books during the quarter including Tata Communications, Indian Bank, Uttam Galva, Cadila Health, Bosch Chassis, Jindal Saw, ACC, Ultra Tech Cement, Rain Commodities, Coromandel Fertilisers, BSEL Infra and Thermax.

Besides, the number of shareholders declined by over 100 in companies like Syndicate Bank, Canara Bank, Mahindra Lifespace, 3i Infotech, Dishman Pharma, OnMobile Global and Emami.

Among the companies witnessing an increase in the number of shareholders, Sesa Goa recorded a surge of 1,22,766 entities on its books, followed by 50,727 for IDFC, L&T's 48,398 shareholders and an addition of 36,453 shareholders for RIL.

Besides, Tata Motors registered an increase of more than 20,000 shareholders and firms like Mercator Lines, Axis Bank, Nagarjuna Fertilisers, DCB and Indian Hotels added 9,000- 17,000 shareholders to their books.

A further seven companies added more than 5,000 shareholders comprising JSW Steel, Lanco Infratech, Gujrat Mineral Development, RNRL, HDFC, GMR Infra and Bombay Dyeing.

About 50 companies recorded an increase of more than 1,000 shareholders and these firms included Reliance Infra, Hotel Leela Ventures, Godrej Industries, Adani Enterprises and Financial Technologies. So far, 114 companies have shown an increase on more than 100 shareholders on their books.

via Asia Pulse

Slide to continue

Market may slide further on account of weak Asian markets in morning trades and overnight fall in the US markets. Political uncertainties and continued selling pressure may also drag the domestic indices further down. Key indices, the Nifty may get support at 3300 level and on the upside it could test higher levels at 3300. The Sensex has a likely support at 10,600 and may face resistance at 11,000.

US indices declined on Wednesday as recession fears resurface. While the Dow Jones slipped 733 points at 8578, while the Nasdaq lost 151 points to close at 1628.

All the Indian ADRs fell in tune with the broader market. ICICI Bank led the slump and tumbled 14.19% followed by HDFC Bank (down 13.21%), VSNL (down 12.36%), Dr Reddy (down 13.47%), Satyam (down 11.54%) and Infosys (down 10.98%) while Wipro, Tata Motors and Rediff slipped by over 5-9% each.

Crude oil prices lost sharply as investors saw further signs of economic weakness and worried that a U.S. recession could kill demand for fuel. With the Nymex light crude oil for November delivery moved down by $4.09 to close at $74.54 a barrel. In the commodity space, the Comex gold for December series lost $0.50 to settle at $839 a troy ounce.

SGX Nifty Update - 3 - Oct 16 2008

SGX Nifty down by -216.5 at 3,122.5 points

Daily Call - Oct 16 2008

Unlike the western Governments and regulators, which are awfully behind the curve, the Indian ensemble is being proactive and moving with speed and authority. A further 100 basis points cut in CRR, rushing of the farm loan waiver money, added capitalisation of Indian banks, doubling of the FII limit on investments in corporate bonds, are steps that only a confident man like Manmohan and his crack team can take. Other synchronized moves by regulators to double the margins on F&O positions is also a pre-emptive step to reduce outstanding positions, although they are not much.

The banks could not have so much of a good news on a single day. If experience is anything to go by, the markets are likely to adopt the age old tenet of selling on news. Markets are likely to take the path of least resistance, which is lower and may even test the lows seen earlier. Coming back to our regulatory action, while SEBI’s direction to FIIs and their account holders to report every Tuesday and Friday the stocks which they have lent overseas is laudatory, it is akin to closing the barn after the horses have bolted. If the Government really means business and wants to undo the harm, it should call back all stocks lent and then we could have the mother of all rallies. Till that point of time, we will have to be a part of the choir that sings the dirge for Uncle Sam and keep popping honey and ginger laced pills to sooth our soar throat.

Recession looming large

Key benchmark indices are likely to open weak mirroring global peers which witnessed a huge sell-off on renewed worries over a prolonged global economic recession, thereby ignoring the Reserve Bank of India’s 1% cash reserve requirement cut on late evening Wednesday, 15 October 2008 in a bid to boost liquidity. The SGX October 2008 Nifty futures were down 227.5 points.

Back home, the Reserve Bank of India (RBI) slashed its cash reserve requirement (CRR) for banks by 100 basis points to 6.5% with effect from 11 October 2008, whichwill release Rs 40,000 crore into the banking system to boost liquidity. CRR is the amount that banks park with the central bank. Among the other measures announced were the release of Rs 25000 crore to banks for a farm loan waiver scheme, doubling the cap on foreign investment in corporate debt to $6 billion from $3 billion as authorities sought to get money flowing through squeezed markets.

On 10 October 2008, RBI had cut CRR, by 150 basis points to 7.5% to infuse liquidity into the system. This included a 50 bps CRR cut on 6 October 2008.The cut injected liquidity to the tune of Rs 60,000 crore into the system.

Among frontline companies, HDFC Bank will declare their September quarterly results today, 16 October 2008.

US stocks plunged the most on Wednesday, 15 October 2008, since the crash of 1987 after the Federal Reserve Chairman Ben Bernanke said economic activity weakened across the United States in September 2008 as businesses rethought capital investments, and consumers curtailed spending. Fed Chairman acknowledged the US economy faced a significant threat and global efforts to unlock credit markets would not prevent recession.

The Dow Jones Industrial Average slumped 733.08 or 7.9% to 8,577.91, its second-biggest point drop ever. The Nasdaq Composite Index lost 150.68, or 8.5%, to 1,628.33 and the Standard & Poor's 500 Index sank 90.17 points, or 9%, to 907.84.

Asian markets declined sharply today, 16 October 2008 on global recession concerns. China's Shanghai Composite slipped 3.62% or 72.19 points at 1,922.47, Hong Kong's Hang Seng tumbled 5.77% or 923.24 points at 15,075.06, Japan's Nikkei plunged 9.55% or 911.91 points at 8,635.56, Singapore's Straits Times dropped 5.48% or112.78 points at 1,946.61, South Korea's Seoul Composite fell 6.81% or 91.26 points at 1,249.02 and Taiwan's Taiwan Weighted lost 3.11% or 163.30 points at 5,082.96

Back home, the BSE 30-share Sensex ended 674.28 points or 5.87% lower at 10,809.12 and the S&P CNX Nifty ended down 180.25 points or 5.12% to 3,338.40 on Wednesday, 15 October 2008 on worries over liquidity conditions in the financial system and weak global markets.

Foreign institutional investors (FIIs) were net sellers worth Rs 1030.79 crore while mutual funds bought shares worth Rs 669.96 crore on Wednesday, 15 October 2008, according to provisional data on NSE.

US hit by economic data

Economic reports point their fingers towards a clear recession in US economy

A weak batch of economic data sent US stocks deep down in the red on Wednesday, 15 October, 2008. The Dow witnesses another more than 700 point drop as sell-off intensified in the last couple hours of trading. Market had started the day in the red. Signs of recession got all the more intensified overshadowing all types of global efforts to sort out the current financial crisis. Better than expected earning reports from three Dow components failed to inject any sort of positive momentum among traders. Energy sector continued to be the main laggard following drop in crude prices.

The Dow Jones Industrial Average ended the day down by 733 points, to 8,577. The Nasdaq Composite Index, finished lower by 150 points at 1,628. S&P 500 finished lower by 90 points at 907.

Among the Dow components, all but one of the thirty Dow components ended in the red today. Exxon Mobil, Caterpillar and Alcoa were the main Dow laggards. The only Dow winner was Coco Cola. CoCo Cola, JP Morgan Chase and Intel – the three components came out with their earning reports. All three beat market expectations. JP Morgan announced a 85% drop in quarterly profit. JP Morgan and Intel closed lower by 5.5% and 6% respectively.

Among major economic reports for the day, the Commerce Department reported today that U.S. retail sales fell 1.2% in September, 2008, the worst drop in three years and the third decline in a row. It just sent another signal that the US economy has sunk into a recession. The 1.2% decline came against a forecast figure of 0.8% decline.

Sales in July and August were revised marginally lower, signaling that real consumer spending likely fell in the quarter for the first time in 17 years. It was the first time sales had fallen three months in a row since early 1991.

As per the report, sales were weak in September in almost all kinds of stores. Excluding the 3.8% drop in auto sales, retail sales fell 0.6%. Hurricanes Gustav and Ike may had reduced sales in the Gulf Coast states.

The Commerce Department also reported today that U.S. businesses added to their inventories in August as their sales slumped. Total Sales fell 1.8%, the biggest decline in two years, while inventories rose 0.3%. The key inventory-to-sales ratio ticked up to 1.27 from 1.24 in July, a sign that inventories are building up from very low levels. Inventories at retail auto dealers plunged 1.6%.

In another separate report, the Labor Department in US reported today, that producer prices fell 0.4% while core prices rose 0.4%. For the producer prices, it was the second consecutive monthly decline as energy dropped but food rose. Excluding food and energy, core producer prices rose 0.4% last month.

Stocks extend their declines in the afternoon as Fed Chairman Bernanke spoke at the Economic Club of New York. In Bernanke's text, he said that during past economic crises the government took too long to act, but during the current turmoil the government acted swiftly, which will help to restore market functioning quicker. Despite the swift action, Bernanke noted that credit markets "will take some time to unfreeze" and the economic recovery "will not happen right away."

Volume on the New York Stock Exchange topped 1.6 billion, with nine shares on the decline for every issue on the rise. On the Nasdaq, 743 million shares traded, and decliners outran advancers 6 to 1.

Crude prices slipped today below the $75 mark for the first time in a year on Wednesday, 15 October, 2008 despite the recovery effort by US to solve the financial crisis. The expectations among investors were left largely intact that the financial crisis will hasten a decline in consumption of oil. At the same time, The Organization of Petroleum Exporting Countries (OPEC) cut its 2009 demand forecast because of ``dramatically worsening'' conditions in financial markets.

Crude-oil futures for light sweet crude for November delivery closed at $74.54/barrel (lower by $4.09 or 5.2%) on the New York Mercantile Exchange. Prices fell to a low of $73.66 during intra day trading. Prices reached a high of $147 on 11 July but have dropped almost 49% since then. Crude coughed up 17% last week. On a yearly basis, crude price is lower by 13%. For this year in 2008, crude prices have dropped 22%.

Earnings announcements will dominate from tomorrow onwards. Citigroup, Merrill Lynch, and United Technologies are expected to report results. Among economic reports for the day, the September Consumer Price Index and the weekly jobless claims report are both due prior to Wednesday's opening bell. Industrial Production data for September are due just ahead of tomorrow's start followed by the Philadelphia Fed Survey for October and the department of energy’s weekly inventory data.

Daily Tech - Oct 16 2008

Daily Tech - Oct 16 2008

Daily Market Outlook - Oct 16 2008

Daily Market Outlook - Oct 16 2008

Daily Technicals - Oct 16 2008

Daily Technicals - Oct 16 2008

Pre Session Commentary - Oct 16 2008

Today Markets are likely to open with negative gap as the US markets closed in deep red and other Asian markets have also opened with blood bath. The domestic financial industry is likely to get a cushion against the foreign economic meltdown as RBI has further reduced the CRR by 100bps to 6.50%. The RBI is all set to lend a whopping Rs.250 billion into the banking sector so as to provide enough liquidity in the system. However today except the banking sector other sectors are likely to face huge selling pressure amidst global meltdown concerns.

On Wednesday, domestic Markets opened with heavy blood bath on the back of huge selling pressures that started since the previous post mid session trading. The Asian markets started the carnage as majority of Asian indices except Nikkei open with blood bath. This negative sentiment poured oil to the burning bearish sentiment in the domestic markets. The investors were very skeptic about any base or support level of the market and hence the insecurity felling led heavy selling pressures. The sectors that got ablaze were CG, CD, Metal, Teck and Power that recorded fall of 8.88%, 8.79%, 7.82%, 6.03% and 6.02% respectively. During the trading session we expect the market to be trading in deep red.

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 losses 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.

On Wednesday, US markets got butchered on the back of weak economic concerns. The Retail sales in US plummeted by 1.2%, the lowest in three years time. Further Fed Chairman Ben Bernake ad the release of Fed’s Beige Book brought negative sentiments with assertions that the recovery from the present scenario would take time. The energy sector was hit the hardest due to concerns of fall in demand. The good quarterly numbers of many companies could not save the market from the downfall, which shows cues of inevitable bearish and cautious sentiments. Crude oil futures for the month of November delivery fell a barrel by $4.09 at $74.54 a barrel on New York Mercantile Exchange, lowest since 5th September 2007. Oil dropped below $ 75 a barrel as OPEC reduced its 2009 petroleum demand forecast in the course of signs that the global economy is headed for a severe downturn

The Dow Jones Industrial Average (DJIA) closed with a fall of 733.08 points at 8577.91. NASDAQ index fell by 150.68 points at 1628.33 and the S&P 500 (SPX) also declined by 90.17 points to close at 907.84 points.

Indian ADRs ended with blood bath. In technology sector, Wipro fell by (11.54%) followed by Satyam that ended low by (5.21%) and Patni Computers was low by (5.21%). In banking sector ICICI Bank was low by (9.69%), while HDFC Bank fell (14.19%). In telecommunication sector, Tata Communication declined by (10.32%), while MTNL fell by (13.21%). Sterlite Industries had fallen the most by (16.85%).

Today the major stock markets in Asia opened negative. The Shanghai Composite is low by 79.366 points, trading at 1,915.301. Hang Seng is also low by 1207.44 points at 14,790.86. Further Japan''s Nikkei is low by 911.91 points at 8,635.56. Straits Times is trading is also trading low by 132.26 points at 1,927.13 and South Korea’s Seoul Composite is low by 92.79 points at 1,247.49.

The FIIs on Wednesday stood as net sellers in equity and net buyers in debt. Gross equity purchased stood at Rs3789.3 Crore and gross debt purchased stood at Rs95.3 Crore, while the gross equity sold stood at Rs3978.4 Crore and gross debt sold stood at Rs0.0 Crore. Therefore, the net investment of equity and debt reported were (Rs189.1 Crore) and Rs95.3 Crore respectively.

On Wednesday, the partially convertible Indian Rupee ended at 48.525/540 per dollar weaker than 48.04/06 on Tuesday’s closing. The Rupee fell on the back of falling stock markets across the world and also apprehensions of the offshore Dollar demand. The RBI is selling Dollars in the market to help resist the further rise in Rupee Dollar exchange rate.

On BSE, total number of shares traded were 22.26 crores and total turnover stood at Rs3,581.21. On NSE, total volumes of shares traded were 45.35 crores and total turnover was Rs9,748.04 Crore.

Top traded volumes on NSE Nifty – ICICI bank with total traded volume of 10262551 shares, followed by ITC with 9602501 shares, Reliance Comm with 9090589 shares, SAIL with 8634820 shares and Reliance Petro with 8188876 shares respectively.

On NSE Future and Options, total numbers of contracts traded in index futures were 862941 with a total turnover of Rs13767.49 Crore. Along with this total number of contracts traded in stock futures were 800400 with a total turnover of Rs10227.85 Crore. Total numbers of contracts for index options were 1063789 and total turnover was Rs19371.11 Crore and total numbers of contracts for stock options were 43442 and notional turnover was Rs629.64 Crore.

Today, Nifty would have a support at 3,125 and resistance at 3,320 and BSE Sensex has support at 10,200 and resistance at 10,675.

SGX Nifty Update - 2 - Oct 16 2008

SGX Nifty Down by -222.5 at 3,116.5 points

Morning Note - Oct 16 2008

Morning Note - Oct 16 2008

Trading Calls - Oct 16 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 16 2008

Infosys and Bharti Airtel have tied up to provide DTH services. (ET)
Rcom has slashed local and STD rates for its new pre-paid plans. (ET)
Tata Motors plans to launch hybrid buses in March 2009. (BL)
Punjab National Bank has decided to reduce the interest rates by 50 basis points on housing and car loans. (ET)
Cairn India plans to further invest Rs110bn between 2008 and 2009 in the Rajasthan project. (BL)
Cairn India has discovered a saline water reservoir near its Rajasthan oil field that will help pump crude oil to the ground level and enhance production. (BS)
DLF Ltd has announced plans to invest Rs40bn over a period of five years in various parts of Kerala. (BL)
Sterlite Industries has sought a reduction in its earlier valuation for copper miner Asarco, due to the liquidity crisis and weak copper prices. (ET)
Tight liquidity conditions have compelled Reliance Infrastructure to go slow on its real estate projects. (ET)
Gujarat cabinet has approved allotment of 1,100 acres of land in Sanand for Rs4bn to Tata Motors. (BS)
JSW Steel might cut steel prices again this month. (BL)
BPCL has informed government that it might default on its US$300mn ECB. (FE)
Tata Teleservices is working on an agreement to sell26% stake to NTT DoCoMo Inc, Japan’s biggest mobile operator for about US$2.5bn. (Mint)
Bhel has joined the race to acquire Czech power utility company Skoda Power. (ET)
HCL Technologies sees deals worth about US$2bn, on which decisions would be made by clients in the next 90 days. (BL)
Kingfisher is considering to lay-off few employees. (ET)
Jet Airways plans to terminate the services of 1,100 more employees in the next two days. (BL)
SpiceJet will offer up to 15% discount on advance bookings and withdrew a congestion charge. (ET)
Godrej Industries and Godrej Consumer Products have signed a 10-year outsourcing contract with Hewlett Packard. (ET)
Financial Technologies has acquired 90% stake in the UK-based Audit Control & Expertise Global (ACE) Group for US$22.5mn. (ET)
Fame India has signed a 75-screen digital cinema deployment agreement with Scrabble Entertainment for 2K DCI compliant systems. (BL)

Economic Front Page

RBI has reduced CRR by 100bps. (BL)
The DoT has proposed that telcos segregate their 2G and 3G revenues on the basis of traffic generated. (ET)
The health ministry will put on hold its plans to grant permissions to multinational pharma firms for conducting phase I clinical trials of molecules developed outside India until it finalizes guidelines for effective monitoring and supervision in the country. (ET)
Power equipment imported from china may have to clear CEA norms. (ET)
India’s tea exports rose 4% in volume during August due to a shortfall in output in Kenya. (ET)
The government announced that it would provide PSBs access to finance to raise their capital adequacy ratio up to 12%. (ET)
The government has decided to double foreign investment limits in corporate debt to US$6bn. (ET)
Union civil aviation minister Praful Patel will approach finance minister P Chidambaram, seeking easing of credit to airlines by banks and financial institutions. (ET)
TRAI is considering to levy license fees on tower companies. (BL)
Government is likely to impose 5% import duty on steel. (BS)

Well, it’s hell out there!

I never did give them hell. I just told the truth, and they thought it was hell – Harry Truman.

Well, well, well or should we say Hell, hell, hell? That’s what could happen at the opening bell as yet again hell seems to have broken loose on the markets. All that talk of the world markets having placed a bottom last week suddenly appears to have been too optimistic. A fresh bout of grim economic reports in the US, UK, Europe and Japan has heightened worries that a global recession is now inevitable. And, it could be a long and painful road to recovery.

Global investors continue to shun risky assets like equity and shift to safe haven assets like government bonds and gold. At the same time, growing concerns of a crippling global recession has sent crude oil into a tailspin. Which generally is seen to be quite a positive event for India, but the slide in the rupee has to a large extent nullified that advantage. Also, investors and traders are more concerned about the incessant selloff in the stock market. Meanwhile, governments and regulators across the globe continue to look for ways to stop the bloodletting and end the logjam in credit markets.

Coming to India, the Centre, RBI and SEBI are pulling out all stops to shore up liquidity, encourage more dollar inflows and check relentless selling in the stock market. There may be some temporary relief, but the weak global markets will once again play spoilsport. Brace up for another sharp fall as markets in the US, Europe and Asia have lost anywhere between 6-10%. And, though we had a fall of more than 5% yesterday, another round of selling is expected in the wake of the global rout. We would continue to advocate caution as the key indices may fall below last week's lows. One can only pray for some sort of rebound in Asian and European markets as the day wears on. That again should give you no reason to get in as yet.

The result season is of course on and L&T got beaten for really no fault. These are times when the last ones standing face the brunt and that could include the best of the blue chips. In fact, blue chips are getting chipped faster than one can imagine.

US stocks plummeted on Wednesday, sending the Dow Jones industrial average to its second biggest one-day point loss ever. A weak retail sales report and downbeat forecasts from the Federal Reserve, coupled with grim comments from Fed chairman Ben Bernanke, sent stocks tumbling.

The Dow Jones Industrial Average tumbled 733 points, its second biggest one-day point loss ever, second only to Sept. 29 of this year, when the House of Representatives initially rejected the government's $700bn bank bailout plan.

Wednesday's decline was equal to around 7.9%, the Dow's biggest one-day percentage loss since Oct. 26, 1987.

The Standard & Poor's 500 index slid 90 points, its second-worst one-day point loss ever, also second only to Sept. 29. The loss was equal to 9%, its second biggest slide on a percentage basis since Oct. 19, 1987, a.k.a. Black Monday.

The Nasdaq Composite index slumped 150.68 points, or 8.5% and closed at a new low for 2008, its worst level since June 30, 2003. The decline was its biggest one-day percentage loss since Aug. 31, 1998. On a point basis, it didn't rate among the 20 worst days.

The decline Wednesday equaled a loss of $1.1 trillion in market value, as measured by the Dow Jones Wilshire 5000, the broadest measure of the stock market. It was the second-biggest one-day loss ever, following Sept. 29.

The day's news included retail sales at a three-year low, a reading on manufacturing in the New York area at an all-time low, the Fed's weak forecast and comments from Bernanke.

Better-than-expected quarterly results from Intel, Coca-Cola, Wells Fargo, JPMorgan Chase and a host of regional banks had little impact amid worries about a recession.

The credit market showed some signs of easing, as a key overnight bank lending rate fell. But the improvement was slow and failed to reassure investors.

Treasury prices gained Wednesday, lowering the corresponding yields. The dollar gained versus the yen and fell against the euro. Oil and gas prices slipped, while gold prices rose.

Fed chief Bernanke, speaking in the afternoon, said that while policymakers now have the tools they need to fix the financial and credit markets, the economic rebound will take time.

The Fed's 'beige book' reading on economic activity, released in the afternoon, showed weakness in all 12 districts. The outlook was also pessimistic, with businesses unable to access much-needed credit.

After the close, eBay posted a higher-than-expected quarterly profit, but warned fourth-quarter results won't meet forecasts. The stock slid 5.5% in extended-hours trading.

Third-quarter earnings are currently on track to have fallen 9.8% from a year ago, according to the latest estimates from Thomson Reuters.

Shares in Europe plunged on Wednesday, falling for the first time in three sessions, amid renewed worries about worldwide economic recession. The pan-European Dow Jones Stoxx 600 index fell 6.5% to 217.17. The basic-resources sector led the way down.

The UK's FTSE 100 closed down 7.2% at 4,079.59, while Germany's DAX 30 dropped 6.5% to 4,861.63 and the French CAC-40 slid 6.8% to 3,381.07.

In the emerging markets, the Russian markets dived 9.3% to 788. Elsewhere, the Bovespa in Brazil was down 11.4% at 36,833 while the IPC index in Mexico fell by nearly 5% to 21,135 and Turkey's ISE National 30 index dropped 3.5% to 37,572.

Markets snapped a two-day rally to close in the negative terrain led by heavy selling in capital goods, consumer durables and metal stocks. Among the 30-stocks of Sensex JP Associates was the biggest loser, the stock fell by over 14%. Other major losers were L&T, RCom, Reliance Infra and. Finally, The BSE benchmark Sensex ended 674 points or 5.9% lower to close 10,809 and the NSE Nifty index was down 180 points to close at 3,338.

All the 30 components of the Sensex ended in the red with Reliance Industries, L&T, ICICI Bank, Infosys and HDFC were among the major laggards.

Among the BSE Sectoral indices, BSE Capital Goods index (down 9.3%), BSE Consumer Durables index (down 9.1%), BSE Metal index (down 8%) and BSE Power index (down 6.1%). Even the Mid-Cap and the Small-Cap indices declined over 4.5% each.

Electrosteel Castings announced that the board of directors of the company accorded its consent, to issue 42.4mn shares to two Non-Promoter overseas companies on a preferential basis at a price of not less than the price to be calculated as per SEBI guidelines or Rs38/- per share which ever is higher.

The stock was down by 2.5% to Rs19.1 touching an intra-day high of Rs21 and a low of Rs18 and recorded volumes of over 10,00,000 shares on BSE.

Bharti Airtel announced that it entered into an innovation and technology partnership with Infosys Technologies Ltd (Infosys) to deliver superior customer experience to the customers of Airtel digital TV, its Direct (DTH) TV service.

As part of its Digital Convergence Platform, Infosys will provide a suite of products including devices, application servers and interactive applications that will focus on providing an enhanced digital lifestyle to Airtel digital IV customers.

Bharti Airtel declined by over 6% to Rs718 touching an intra-day high of Rs752 and a low of Rs696 and recorded volumes of over 6,00,000 shares on BSE.

Chettinad Cement was up 2% at Rs480 after the company announced that the board of directors of the company would meet on October 16 to consider rights issue. The scrip touched an intra-day high of Rs480 and a low of Rs475 and recorded volumes of over 1,000 shares on BSE.

Sterlite Industries declined by 10% to Rs292 after reports stated that the company wouldn’t complete the US$2.6bn purchase of the bankrupt copper producer Asarco LLC without a price reduction of ``hundreds of millions of dollars,''. The scrip touched an intra-day high of Rs320 and a low of Rs283 and recorded volumes of over 26,00,000 shares on BSE.

Gold ends lower

Silver prices register almost 8% drop

Gold prices were little changed today, Wednesday, 15 October, 2008 as traders speculated that global meltdown will reduce the demand of the precious metal. But gold prices fluctuated throughout the day as US stocks once again sunk today. Investors generally tend to seek safety in gold when the economy falls into turmoil and vice versa. Silver prices also fell today.

On Wednesday, Comex Gold for December delivery fell $0.50 (0.05%) to close at $839 an ounce on the New York Mercantile Exchange. Prices rose to a high of $859.2 and fell to a low of $833.1. 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 Wednesday, Comex silver futures for December delivery fell 88 cents (8%) to $10.18 an ounce. Till date, silver has lost 34% 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 Wednesday, 15 October, the Dow fell by another 750 points despite good earning reports from Coco Cola, JP Morgan Chase and Intel. Drop in retail sales for month of September was responsible for today’s weakness in stocks as it once again highlighted limited spending ability of today’s US consumers.

The Commerce Department reported today that U.S. retail sales fell 1.2% in September, 2008, the worst drop in three years and the third decline in a row. It just sent another signal that the US economy has sunk into a recession. The 1.2% decline came against a forecast figure of 0.8% decline.

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 106 (0.81%) at Rs 13,185 per 10 grams. Prices rose to a high of Rs 13,399 per 10 grams and fell to a low of Rs 13,020 per 10 grams during the day’s trading.

At the MCX, silver prices for December delivery closed Rs 714 (3.8%) lower at Rs 18,055/Kg. Prices opened at Rs 18,850/kg and fell to a low of Rs 17,955/Kg during the day’s trading.

United Spirits - SELL

We recommend a sell in United Spirits from a short-term perspective. From the charts of United Spirits, we observe that after recording a life high of Rs 2,188 in October 2007, the stock has been on a long-term downtrend. Since then, the stock has been shaping lower peaks and lower bottoms. The downtrend accelerated in the early part of October and it plummeted sharply. The stock has recently penetrated the support level of Rs 1,000, accompanied with heavy volume. Moreover, on October 15, the stock tumbled 6 per cent, reinforcing the selling pressure. The stock is trading well below its 21- and 50-day moving averages. The daily and weekly relative strength indices are featuring in the bearish zone. The daily moving average convergence and divergence is also hovering over the negative territory. Our short-term forecast for the stock is bearish. We expect the stock’s decline to prolong further until it hits our price target of Rs 690 in the approaching trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 805.

Volatility Analysis - Oct 15 2008

Volatility Analysis - Oct 15 2008

Next Meltdown - Credit Card Debt - Size - $950 billion

Rising rates are accelerating credit-card defaults and soured debt could further undermine the financial system

The troubles sound familiar. Borrowers falling behind on their payments. Defaults rising. Huge swaths of loans souring. Investors getting burned. But forget the now-familiar tales of mortgages gone bad. The next horror for beaten-down financial firms is the $950 billion worth of outstanding credit-card debt—much of it toxic.

That's bad news for players like JPMorgan Chase (JPM) and Bank of America (BAC) that have largely sidestepped—and even benefited from—the mortgage mess but have major credit-card operations. They're hardly alone. The consumer debt bomb is already beginning to spray shrapnel throughout the financial markets, further weakening the U.S. economy. "The next meltdown will be in credit cards," says Gregory Larkin, senior analyst at research firm Innovest Strategic Value Advisors. Adds William Black, senior vice-president of Moody's Investors Service's structured finance team: "We still haven't hit the post-recessionary peaks [in credit-card losses], so things will get worse before they get better." What's more, the U.S. Treasury Dept.'s $700 billion mortgage bailout won't be a lifeline for credit-card issuers.

The big firms say they're prepared for the storm. Early last year JPMorgan started reaching out to troubled borrowers, setting up payment programs and making other adjustments to accounts. "We have seen higher credit-card losses," acknowledges JPMorgan spokeswoman Tanya M. Madison. "We are concerned about [it] but believe we are taking the right steps to help our customers and manage our risk."

But some banks and credit-card companies may be exacerbating their problems. To boost profits and get ahead of coming regulation, they're hiking interest rates. But that's making it harder for consumers to keep up. That'll only make tomorrow's pain worse. Innovest estimates that credit-card issuers will take a $41 billion hit from rotten debt this year and a $96 billion blow in 2009.

Those losses, in turn, will wend their way through the $365 billion market for securities backed by credit-card debt. As with mortgages, banks bundle groups of so-called credit-card receivables, essentially consumers' outstanding balances, and sell them to big investors such as hedge funds and pension funds. Big issuers offload roughly 70% of their credit-card debt.

But it's getting harder for banks to find buyers for that debt. Interest rates have been rising on credit-card securities, a sign that investor appetite is waning. To help entice buyers, credit-card companies are having to put up more money as collateral, a guarantee in case something goes wrong with the securities. Mortgage lenders, in sharp contrast, typically aren't asked to do this—at least not yet. With consumers so shaky, now isn't a good time to put more skin in the game. "Costs will go up for issuers," warns Dennis Moroney of the consultancy Tower Group.

Sure, the credit-card market is just a fraction of the $11.9 trillion mortgage market. But sometimes the losses can be more painful. That's because most credit-card debt is unsecured, meaning consumers don't have to make down payments when opening up their accounts. If they stop making monthly payments and the account goes bad, there are no underlying assets for credit-card companies to recoup. With mortgages, in contrast, some banks are protected both by down payments and by the ability to recover at least some of the money by selling the property.


Making matters worse, the subprime threat is also greater in credit-card land. Risky borrowers with low credit scores account for roughly 30% of outstanding credit-card debt, compared with 11% of mortgage debt. More than 45% of Washington Mutual's credit-card portfolio is subprime, according to Innovest. That could become a headache for JPMorgan Chase, which agreed on Sept. 25 to buy the troubled thrift's credit-card business and other assets for $1.9 billion. Says a JPMorgan spokeswoman

via Businessweek

Derivatives - Oct 16 2008

Derivatives - Oct 16 2008

Crude drops below $75 for first time in last one year

OPEC and EIA cut their demand forecasts for oil

Crude prices slipped today below the $75 mark for the first time in a year on Wednesday, 15 October, 2008 despite the recovery effort by US to solve the financial crisis. The expectations among investors were left largely intact that the financial crisis will hasten a decline in consumption of oil. At the same time, The Organization of Petroleum Exporting Countries (OPEC) cut its 2009 demand forecast because of ``dramatically worsening'' conditions in financial markets.

Crude-oil futures for light sweet crude for November delivery closed at $74.54/barrel (lower by $4.09 or 5.2%) on the New York Mercantile Exchange. Prices fell to a low of $73.66 during intra day trading. Prices reached a high of $147 on 11 July but have dropped almost 49% since then. Crude coughed up 17% last week. On a yearly basis, crude price is lower by 13%. For this year in 2008, crude prices have dropped 22%.

In the US stock market on Wednesday, 15 October, the Dow fell by another 750 points despite good earning reports from Coco Cola, JP Morgan Chase and Intel. Drop in retail sales for month of September was responsible for today’s weakness in stocks as it once again highlighted limited spending ability of today’s US consumers.

The Commerce Department reported today that U.S. retail sales fell 1.2% in September, 2008, the worst drop in three years and the third decline in a row. It just sent another signal that the US economy has sunk into a recession. The 1.2% decline came against a forecast figure of 0.8% decline.

In the latest monthly prediction, the Organization of the Petroleum Exporting Countries said today that global oil consumption will grow 550,000 barrels a day this year compared with a year ago, down 330,000 barrels from last month's forecast. Total consumption will stand at 86.5 million barrels a day. For the next year, demand will grow 800,000 barrels a day, down 100,000 barrels from OPEC's September prediction.

The Energy Information Administration, the statistics arm of the U.S. Energy Department, also lowered its growth outlook for this year's global oil consumption by 350,000 barrels from a month ago.

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 fell 10.3 cents, or 5.4%, to finish at $1.7822 a gallon on Nymex, and November heating oil shed 6.9 cents to close at $2.1905 a gallon.

November natural-gas futures closed 13.5 cents lower at $6.592 per million British thermal units after trading as low as $6.56.

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. The natural gas inventory data is also scheduled for tomorrow.

At the MCX, crude oil for November delivery closed at Rs 3,728/barrel, lower by Rs 201 (5.1%) against previous day’s close. Natural gas for October delivery closed at Rs 324.1/mmbtu, lower by Rs 2.2/mmbtu (0.67%).

CRR cuts to bring down lending rates

Bankers on Wednesday said that lending rates may come down in response to a series of cuts by RBI in mandatory deposit requirements for banks but hastily added that a soft interest rate regime could still be some time away.

As a precursor, country's second largest PSU lender Punjab National Bank has already effected 50 basis point cut in retail loans including housing and auto loans.

Commenting on the CRR reduction, PNB Chairman and Manging Director K C Chakrabarty said, "It is a welcome step and would ease liquidity pressure. To ensure credit to the borrowers at a lower rate during the festive season we already have cut interest rate in the retail segment even before RBI announced the measure."

However, the bank has to assess the asset liability condition as well as the market rate before taking decision on further cut in interest rates, he said.

PNB today slashed interest rate on housing, educational and car loans by 50 basis points, he said.

"Our bank is the first bank to reduce interest rate on the above loans to pass the benefits to our customers on account of reduction of Cash Reserve Ratio by RBI," he said.

Once the liquidity condition eases, the logical conclusion is moderation in the interest rates, said Indian Bank Chairman and Managing Director M S Sundara Rajan.

Welcoming the move that would infuse Rs 40,000 crore in the banking system, he said, it would help in credit expansion for the productive sector.

RBI in last 10 days have announced 2.5 per cent reduction in CRR infusing liquidity to the tune of Rs 1,00,000 crore in the cash-starved banking system.

Softening in interest rates would come with a time lag. The fresh cut, however, would stabilize the rates immediately, said Oriental Bank of Commerce, Executive Director Ratnakar Hegde.

Going forward, easing liquidity condition would definitely have some impact on rates, Hegde said.

Bank of Maharashtra Chairman and Managing Director Allen C A Pereira said immediately there would not be any impact on rates. Before cutting rates banks have to re-work cost of fund as most of them have raised deposits at high cost.

Banks have to take the cost of borrowing into account while deciding about the lending rate, he said.

In one stroke, the government and RBI announced infusion of Rs 65,000 crore in the market. Out of the this, Rs 40,000 crore is being released to the bank through CRR cut of one per cent and Rs 25,000 crore would be release to financial institution by RBI under the debt waiver scheme immediately.

"RBI is monitoring developments in the financial markets closely and continuously and would respond swiftly and even pre-emptively to any adverse external developments impinging on domestic financial stability," the apex bank said in a release.

Similar cuts announced by RBI since October 6 has injected a whopping Rs 60,000 crore and along with today's development, banks would get Rs 1,00,000 crore.

SGX Nifty Update - Oct 16 2008

SGX Nifty currently trading at 3138.5, down 200.5 pts