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Monday, November 03, 2008
BSE Bulk Deals to Watch - Nov 3 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
3/11/2008 524804 AUROBINDO PH KOTAK MAHINDRA UK LTD B 280926 130.00
3/11/2008 524804 AUROBINDO PH MORGAN STANLEY MAURITIUS COMPANY LIMITED S 354863 129.99
3/11/2008 532845 BHAGWATI BAN ANAND YOGESH SHARES AND CONSULTANCY PVT. LTD. S 149205 26.25
3/11/2008 531932 C G IMPEX DAXABEN VASANTKUMAR SHAH B 45922 4.46
3/11/2008 512199 CORE PROJECT OPG SECURITIES P LTD B 629072 69.22
3/11/2008 512199 CORE PROJECT OPG SECURITIES P LTD S 629072 69.38
3/11/2008 530885 JAISAL SECUR JSUBRAMANIAN B 22400 41.74
3/11/2008 532519 JK SUGAR LTD HARI SHANKAR SINGHANIA B 120000 14.30
3/11/2008 532519 JK SUGAR LTD SIDHI VINAYAK INVESTMENT LTD. S 120000 14.30
3/11/2008 532714 KEC INTERN SOPHIA GROWTH A SHARE CLASS OF SOMERSET INDIA FUND B 280000 116.00
3/11/2008 532714 KEC INTERN FIL INVESTMENT MANAGEMENT HONG KONG LIMITED S 280000 116.00
3/11/2008 530273 LIBERTY PHOS ARJUN RAMESH S 51514 10.50
3/11/2008 532998 LOTUS EYE ANAND YOGESH SHARES AND CONSULTANCY PVT. LTD. B 420100 14.12
3/11/2008 532998 LOTUS EYE HARSHA R. JHAVERI S 177135 14.00
3/11/2008 532998 LOTUS EYE VICKY R. JHAVERI S 115000 13.98
3/11/2008 532469 MATHER PUMPS PELICAN PORTFOLIO B 120681 153.14
3/11/2008 532469 MATHER PUMPS QUEST PORTFOLIO S 73348 150.00
3/11/2008 512167 MATRA REALT KOTAK MAHINDRA INVESTMENTS LIMITED S 65659 3.26
3/11/2008 513446 MONNE ISPAT COPTHALL MAURITIUS INVESTMENT LIMITED B 1478856 157.25
3/11/2008 513446 MONNE ISPAT BSMA LIMITED S 1478856 157.25
3/11/2008 514328 NACHMO KNITE AMRAKADAMB INVESTMENTS PRIVATE LIMITED B 134514 0.90
3/11/2008 514328 NACHMO KNITE NIAGRA DISTRIBUTORS PVT LTD S 209514 0.92
3/11/2008 512047 NATRAJ FIN SHINGAR DYES AND CHEMICALS LTD B 24965 30.65
3/11/2008 512047 NATRAJ FIN BHARTI NARENDRA BAHUVA S 24767 30.65
3/11/2008 531746 PRAJAY ENG S COPTHALL MAURITIUS INVESTMENT LIMITED B 760000 20.85
3/11/2008 531746 PRAJAY ENG S BSMA LIMITED S 760000 20.85
3/11/2008 532675 PRITHVI INFO CREDIT SUISSE SINGAPORE LIMITED S 100000 40.90
3/11/2008 514304 S. KUMARS NAT COPTHALL MAURITIUS INVESTMENT LIMITED B 1724654 29.90
3/11/2008 514304 S. KUMARS NAT BSMA LIMITED S 1724654 29.90
3/11/2008 532543 SAHPETROLEUM GLOBE CAPITAL MARKET LIMITED B 338000 33.70
3/11/2008 513151 STI INDIA LI LRS PORTFOLIO AND ADVISORY SER P LTD B 217000 17.00
3/11/2008 513151 STI INDIA LI GLOBE CAPITAL MARKET LIMITED S 300000 17.00
3/11/2008 524394 VIMTA LABS L RAICHAND H.DHARAMSHI B 200000 20.30
NSE Bulk Deals to Watch - Nov 3 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
03-NOV-2008,AHMEDFORGE,Ahmednagar Forgings Ltd,MSR MARKETING PRIVATE LTD,BUY,206101,36.15,-
03-NOV-2008,BAJAJFINSV,Bajaj Finserv Limited,BAJAJ HOLDINGS AND INVESTMENT LIMITED,BUY,3000000,120.00,-
03-NOV-2008,EDUCOMP,Educomp Solutions Limited,FEDERATED GLOBAL INVESTMENT MGMT CORP,BUY,225450,2508.06,-
03-NOV-2008,GTOFFSHORE,Great Offshore Limited,ELEVENTH LAND DEVELOPERS PRIVATE LIMITED,BUY,200000,348.01,-
03-NOV-2008,LOTUSEYE,Lotus Eye Care Hospital L,ANAND YOGESH SHARES AND CONSULTANCY PVT LTD,BUY,392000,14.05,-
03-NOV-2008,LOTUSEYE,Lotus Eye Care Hospital L,VICKY R JHAVERI,BUY,135,14.89,-
03-NOV-2008,PNC,Pritish Nandy Comm. Ltd.,OHM STOCK BROKER PRIVATE LIMITED,BUY,94500,20.05,-
03-NOV-2008,SAHPETRO,Sah Petroleums Limited,GLOBE CAPITAL MARKET LTD,BUY,210000,33.64,-
03-NOV-2008,SAHPETRO,Sah Petroleums Limited,SETU SECURITIES LTD,BUY,198166,33.65,-
03-NOV-2008,UNIPLY,Uniply Industries Limited,HIRANAT PREMLATHA,BUY,154864,6.26,-
03-NOV-2008,BAJAJFINSV,Bajaj Finserv Limited,FID FUNDS MAURITIUS LIMITED,SELL,2856784,120.00,-
03-NOV-2008,LOTUSEYE,Lotus Eye Care Hospital L,HARSHA RAJESHBHAI JHAVERI,SELL,177000,14.10,-
03-NOV-2008,LOTUSEYE,Lotus Eye Care Hospital L,VICKY R JHAVERI,SELL,115000,14.00,-
03-NOV-2008,PNC,Pritish Nandy Comm. Ltd.,TEJASVI INVESTMENTS,SELL,95000,20.05,-
03-NOV-2008,SAHPETRO,Sah Petroleums Limited,SETU SECURITIES LTD,SELL,158166,33.65,-
03-NOV-2008,UNIPLY,Uniply Industries Limited,HIRAWAT RAJENDRA KUMAR,SELL,83494,6.30,-
Post Session Commentary - Nov 3 2008
The Indian market extended its gains on heavy buying interest on the back of strong move by RBI to cut its benchmark interest rates like repo rate, CRR and SLR. Also, the firm global cues supported the move. Prime Minister''s assurance to the industry leaders that Indian banks were safe and the government will take all necessary steps to keep the economy protected from the global financial turmoil also lifted the sentiments. The NSE Nifty ended above 3,000 level and BSE Sensex above 10,300 mark. Today market started the day on pleasant note tracking firm cues from the both domestic and global arena. Stocks continued to trade higher on the back of heavy buying by fund houses as well as retailers. Post RBI''s move, the commercial banks are expected to reduce the interest rate in next few days, which in turn will boost the sentiments of the interest sensitive industries. Further, market gained more ground to end the day sharply higher. Positive European markets also contributed the positive sentiments. From the sectoral from front, all indices ended in green and most of the buying was seen in the Reality, Capital Goods, Bank, Power, Oil & Gas, Metal and FMCG stocks. Mid Cap and Small Cap stocks also ended higher with gains of more than 4% each.
Among the Sensex pack 28 stocks ended in green terrain and 2 in red. The market breadth was in favour of advances as 1970 stocks closed in green while 633 stocks closed in red and 49 stocks remained unchanged.
The BSE Sensex closed higher by 549.62 points at 10,337.68 and NSE Nifty ended up by 158.25 points at 3,043.85. The BSE Mid Caps and Small Caps closed with gains of 155.52 points 3,355.54 and by 161.99 points at 3,927.10. The BSE Sensex touched intraday high of 10,373.17 and intraday low of 10,112.66.
Gainers from the BSE Sensex pack are Reliance Infra (17.15%), DLF Ltd (14.89%), JP Associates (13.36%), Ranbaxy Lab (12.33%), SBI (11.81%), Tata Motors (11.12%), L:&T Ltd (10.78%), ICICI Bank Ltd (7.91%), NTPC Ltd (7.58%), Grasim Industries (7.30%) and HUL (7.14%).
Only two losers from the BSE Sensex pack are Satyam Computer (1.54%) and Infosys Tech (0.23%).
RBI has cut the repo rate by 50 basis points to 7.5% with effective from 3rd November. It has also cut CRR, by 100 basis points in two stages to 5.5%. The first stage of CRR cut would be with effect from 25th October and the second stage would come into effect from 8th November. The central bank has also reduced the statutory liquidity ratio (SLR), the amount which banks are mandated to park in government securities, by 100 basis points to 24%. The SLR cut would inject about Rs 40,000 crore into the banking system.
The BSE Reality index ended up by (8.29%) or 164.04 points at 2,142.28. Gainers are Orbit Co (33.15%), Penland Ltd (14.91%), DLF Ltd (14.89%), Parsvnath (11.59%), Ansal Infra (7.12%), Indiabull Real (6.10%) and Omaxe Ltd (4.84%).
The BSE Capital Goods index gained (8.19%) or 574.61 points to close at 7,592.22 as Reliance Industrial Infra (25.37%), Lakshmi Machines (10.93%), L&T Ltd (10.78%), Crompton Greaves (10.28%), Areva (10.24%) and Elecon Eng C (9.97%) ended in positive territory.
The BSE Bank index ended higher by (7.51%) or 376.15 points to close at 5,387.39 as Yes Bank (14.36%), SBI (11.81%), Kotak Bank (9.77%), Federal Bank (9.25%), Union Bank (8.87%) and Oriental Bank (7.93%) in positive territory.
The BSE Power index surged (6.48%) or 102.62 points at 1,685.99. Gainers are Lanco Infra (21.37%), Reliance Infra (17.15%), Torrent Power (12.34%), Crompton Greaves (10.28%), Neyveli LIG (9.68%) and Siemens Ltd (9.36%).
The BSE Oil & Gas index gained (5.67%) or 351.50 points to close at 6,547.12. Major gainers are Reliance Natural Resources (23.42%), Aban Offshore (10.94%), HPCL (9.20%), Essar Oil Ltd (8.55%), Cairn India (7.43%) and ONGC Ltd (6.11%).
The BSE Metal index ended higher by (4.75%) or 254.77 points at 5,622.37. Major gainers are Wespan Guajrat Sr (12.92%), Guajrat NRE C (10.00%), Jindal Saw (8.29%), Tata Steel (7.21%), SAIL (5.78%) and Hindalco (5.48%).
Sensex up 21.4% in four days
A surprise rate cut by the central bank over the weekend, the stock market regulator’s decision to increase tenure for lending and borrowing of stocks, and firm Asian stocks, boosted the domestic bourses. The BSE Sensex rose 549.62 points or 5.62% led by gains in capital goods, banking, auto and realty stocks. The market also got support from the Prime Minister assurance to business leaders that government will take measures to protect growth.
Lower rates boosts stocks as they help lift corporate bottomline by way of lower borrowing costs. The Reserve Bank of India (RBI) on Saturday, 1 November 2008, unexpectedly cut its main short-term lending rate viz. the repo rate for the second time in as many weeks to ease a growing cash squeeze, spur faltering economic growth and fend off damage from the global financial crisis.
The Securities & Exchange Board of India (Sebi)'s decision to extend the tenure for lending and borrowing of stocks is aimed making the domestic stock lending and borrowing (SLB) mechanism more robust and increase liquidity in the secondary markets. Short selling refers to selling of shares one does not own and a SLB mechanism facilitates this activity.
Prime Minister Manmohan Singh told top business leaders on Monday, 3 November 2008, that the government will take all the necessary monetary and fiscal policy measures to protect growth. The Prime Minister also said the government was working closely with other countries to ensure coordinated policy action for the containment of the global financial crisis.
European shares rose on Monday, 3 November 2008, to track gains on the Wall Street and in Asia, as investors hoped recent worldwide steps to stem the financial crisis and likely rate cuts in Europe this week would calm market nerves. The key benchmark indices in France, UK and Germany were up by between 0.38% to 0.81%.
Asian stocks edged up for a fifth straight day on Monday on hopes policy efforts so far to dampen the impact of the financial crisis would ultimately take hold, though data still painted an ugly picture of the global economy. Key benchmark indices in Hong Kong, Taiwan, Singapore and South Korea rose by between 1.44% to 3.93%. China’s Shanghai composite fell 0.52%.
The BSE 30-share Sensex jumped 549.62 points or 5.62% to 10,337.68. The market rose amid intermittent bouts of profit taking after a recent steep surge. The Sensex jumped 585.11 points at the day's high of 10,373.17 in late trade. The Sensex rose 324.60 points at day’s low of 10,112.66 in mid-afternoon trade.
The S&P CNX Nifty was up 158.25 points or 5.48% to 3,043.85.
BSE clocked a turnover of Rs 3,668 crore today as compared to a turnover of Rs 3,717.17 crore on Friday,31 October 2008.
Nifty November 2008 futures were at 3047.65, at a premium of 3.80 points as compared to spot closing of 3043.85. NSE's futures & options (F&O) segment turnover was Rs 34,113.94 crore, which was lower than Rs 36,959.23 crore on Friday, 31 October 2008.
The market has staged a solid rebound after a recent steep fall. From a low of 8,509.56 on 27 October 2008, the BSE Sensex has risen 1,828.12 points or 21.48% in four trading sessions. There has been a massive erosion in investors' wealth this year. The barometer index BSE Sensex is down 10.017.99 points or 49.38% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 10,869.09 points or 51.25% below its all-time high of 21,206.77 struck on 10 January 2008.
The BSE Mid-Cap index was up 4.86% at 3,355.44 and the BSE Small-Cap index was up 4.3% at 3,927.10. Both the indices underperformed the Sensex.
The BSE Realty index (up 8.29% to 2,142.28), the BSE Capital Goods index (up 8.19% to 7,592.22), the BSE Bankex (up 7.51% to 5,387.39), the BSE Power index (up 6.48% to 1,685.99), the BSE PSU index (up 6.14% to 4,845.25), the BSE Oil & Gas index (up 5.67% to 6,547.12) outperformed the Sensex.
The BSE IT index (up 0.43% to 2,874.36), the BSE Consumer Durables index (up 1.52% to 2,104.51), the BSE Auto index (up 2.24% to 2,745.82), the BSE Teck index (up 2.66% to 2,218.95), the BSE HealthCare index (up 2.86% to 2,858.04), the BSE FMCG index (up 4% to 1,871.90), and the BSE Metal index (up 4.75% to 5,622.37), underperformed the Sensex.
The market breadth was strong. On BSE, 1,970 shares advanced as compared to 633 that declined. 49 shares remained unchanged.
India’s largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) jumped 4.84% to Rs 1,437.05 on 20.77 lakh shares, on reports its retail arm Reliance Retail and UK-based supply-chain firm Wincanton have called off their proposed joint venture (JV). Wincanton withdrew from the JV after it thought RIL was unlikely to meet its initial growth projections and generate expected volumes, a media report quoted sources as saying. The stock was highly volatile hitting a high of Rs 1448.80 and a low of Rs 1397.10 in the day.
Ranbaxy Laboratories (up 12.33% to Rs 190.35) and Jaiprakash Associates (up 13.36% to Rs 81.45) were the major gainers from the Sensex pack.
Reliance Infrastructure galloped 17.35% on reports the promoter may raise stake beyond 50% to ward off a hostile takeover bid and was the biggest gainer from the Sensex pack.
India’s second largest telecom services provider by sales Reliance Communications rose 5.41% to Rs 232.65. In a volatile trade, the stock after hitting a high of Rs 237.70 in early trade, hit a low of Rs 221.50 in mid-morning trade, only to bounce back again in late trade.
Capital goods stocks jumped. Larsen & Toubro and Suzlon Energy rose by between 3.37% to 10.78%. India’s largest electric equipment maker by sales Bharat Heavy Electricals (BHEL) jumped 4.65% to Rs 1341.15 on reports of seeking an expression of interest for turbines and generators of 700 megawatt and above for nuclear power plants. The stock after a firm start slumped to a low of Rs 1278.60 in mid-afternoon trade but surged in late trade to hit a high of Rs 1,378.
Banking stocks were boosted by the Reserve Bank of India’s latest initiative to prop up liquidity in the financial system, with hopes lower rates will boost lending. India’s largest private sector bank by net profit ICICI Bank jumped 7.91% as American depository receipt (ADR) spurted 7.18% on Friday, 31 October 2008 in US. The bank's ICICI Bank's chief executive K.V. Kamath today the bank will review interest rates in the next few days.
India’s largest commercial bank State Bank of India rose 11.81%. India’s second largest private sector bank by net profit HDFC Bank gained 4.61%, as ADR jumped 1.41% on Friday.
India’s largest home loan lender by operating income HDFC rose 7.2%.
Many PSU banks rose. Punjab National Bank, Bank of India, Bank of Baroda, Union Bank of India, Federal Bank, IDBI Bank, Canara Bank, Indian Overseas Bank, Allahabad Bank, IndusInd Bank rose by between 1/36% to 8.87%.
Besides a cut in the repo rate, the central bank took other liquidity boosting measures on Saturday, including a cut banks' cash reserve ratio (CRR) by 100 basis points to 5.5%. The RBI also cut banks' statutory liquidity ratio (SLR) by 100 bps to 24% of their deposits with effect from 8 November 2008.
The CRR is the percentage of deposits which the banks must keep with the central bank. The CRR cut is expected to release Rs 40000 crore into the system. The SLR is the ratio of government bonds and other approved securities that banks have to hold as a percentage of their total deposits.
The central bank today said it would conduct a special 14-day money market operation for mutual funds and non-banking finance companies (NBFC) on Monday, 3 November 2008, for a cumulative amount of Rs 60000 crore ($12.2 billion) to help meet their liquidity needs.
Auto stocks jumped on hopes lower interest rates may spur sales which are largely driven through finance. India’s largest commercial vehicle maker by sales Tata Motors rose 11.12% even sales fell 20% in October 2008 over October 2007, the largest drop in at least four years, as tighter lending and a slowing economy damped demand for commercial vehicles.
India's largest car maker by sales Maruti Suzuki India rose 6.62% even as total sales fell 6.21% at 64,490 units in October 2008 over October 2007. India’s largest tractor maker by sales Mahindra & Mahindra rose 3.14%.
India’s largest motorbike maker by sales Hero Honda Motors fell 3.06% on fall of more than 3% in sales at 3,52,449 units in October 2008 over October 2007.
Bajaj Auto slumped 8.56% after October 2008 motorcycle volumes fell 34% at 1.63 lakh units against 2.48 lakh units in the same month last year.
IT stocks were mixed amid weak ADRs and a stronger rupee. India's third largest IT exporter by sales Satyam Computer Services fell 1.54% to Rs 300.10, off the day’s high of Rs 319, as ADR fell 2.24%. The company won a SAP implementation contract in Kuwait from First Holding, a leading business group that handles multiple businesses in Kuwait.
India's fourth largest IT exporter by sales Wipro rose 1.51% even as ADR declined 5.26%. India's second largest IT exporter by sales Infosys slipped 0.23% to Rs 1378.10 off day’s high of Rs 1,457, even as ADR gained 0.03%.
India's largest IT exporter by sales Tata Consultancy Services rose 2.09% to Rs 548.70 , on reports of entering genetic diagnostics and medicine after clinching some pharma deals in the last two years.
A stronger rupee affects IT firms negatively as they earn most of their revenues in dollar terms. The rupee rose in opening deals after the rate cut by the central bank and took liquidity boosting measures over the weekend. The partially convertible rupee was at 49 per dollar, compared to Friday's close of 49.44/46.
Rate sensitive realty stocks rose on hopes lower interest rates would spur demand for residential poperties. Indiabulls Real Estate, DLF and Unitech rose by between 1.98% to 14.89%.
Housing Development & Infrastructure fell 4.06% even as net profit rose 15.8% to Rs 265.68 crore in Q2 September 2008 over Q2 September 2007.
Nagarjuna Construction Company rose 4.69% on bagging two orders aggregating to Rs 527 crore from two different clients.
IVRCL Infrastructure & projects moved up 22.85% extending gains for the second day in a row, boosted by strong quarterly performance.
Steel stocks spurted after government, on Friday, 31 October 2008, withdrew export duty on items such as pig iron, iron and steel ingots, bars and rods on Friday, 31 October 2008.. Tata Steel, Steel Authority of India, Jindal Steel, JSW Steel, Welspun Gujarat Stahl Rohren rose by between 1.71% to 7.21%.
As per latest reports, India's leading steel producers have slashed prices of their products by up to Rs 6,000 a tonne to ward off the threat of cheaper imports from countries like China and Ukraine amid a dip in demand. State-run Steel Authority of India, along with private producers Essar Steel and JSW Steel, announced lowering of prices while the biggest private sector producer Tata Steel is still weighing its options.
Iron ore miner Sesa Goa jumped 3.61% after government rejig the tax structure to improve the export competitiveness of the mining industry. The 15% ad valorem export duty on iron ore fines has been replaced with a specific duty of Rs 200 a tonne. However, the export duty on iron ore lumps has been kept unchanged at 15%.
Gujarat NRE Coke spurted 10%, as net profit surged 718.73% to Rs 102.75 crore in Q2 September 2008 over Q2 September 2007.
PSU OMCs rose as crude oil prices fell. BPCL, HPCL and Indian Oil Corporation rose by between 3.8% to 7.73%. Lower oil prices will reduce underrecoveries at the state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.
Crude oil fell as reduced imports by Asian refiners reinforced concerns that a demand slowdown is spreading to emerging markets. Crude oil for December 2008 delivery dropped as much as $1.27 or 1.9 %, to $66.54 a barrel in electronic trading on the New York Mercantile Exchange today.
Jindal Drilling & Industries galloped 9.49% on BSE, on bagging a large order for rig deployment.
Airline stocks spurted after the government scrapped the basic customs duty of 5% on jet fuel and after oil firms slashed jet fuel prices. SpiceJet, Kingfisher Airlines and Jet Airways jumped by between 4.81% to 22.57%.
The sale price of aviation turbine fuel (ATF) has been reduced by 15-17% across the four metros. This will help bring down costs of domestic airlines. In the near term, it will reduce their losses. In the medium term it may lead to fare reductions. This is primarily because fuel constitutes 45-50% of the operating cost of most domestic airlines.
Reliance Natural Resources clocked the highest volume of 2.13 crore shares on BSE. Suzlon Energy (1.54 crore shares), Cals Refineries (99.9 lakh shares), GVK Power & Infrastrucutre (90.16 lakh shares) and Unitech (88.04 lakh shares) were the other volume toppers in that order.
Reliance Industries clocked the highest turnover of Rs 295.41 crore on BSE. HDFC (Rs 178.20 crore), ICICI Bank (Rs 148.26 crore), Reliance Capital (Rs 140.81 crore) and State Bank of India (Rs 133.65 crore) were the other turnover toppers in that order.
Advanta India was locked at upper limit of 20% to Rs 535.65 on BSE, extending gains for the second successive session on strong Q3 September 2008 numbers.
Ipca Laboratories rose 2.05% as the company mulls share buyback.
Essar Shipping Ports & Logistics was locked at 5% upper limit at Rs 35.15 at 10:33 IST on BSE, as net profit surged 275.10% to Rs 60.77 crore in Q2 September 2008 over Q2 September 2007.
ABG Shipyard galloped 9.02% after the company bagged its first rig order.
Winning streak continues
The market continued to add to its value for the fourth consecutive session as firm Asian indices and strong buying in frontline stocks helped the sentiment remain bullish for the whole trading session. After accumulating over 1,300 points in the last three sessions, the Sensex opened marginally above its previous close and rallied sharply to touch an intra-day high of 10,373. While, the market remained well above 10,100 mark in the first half, it came off the high, as traders booked profits at higher levels. However, resumption of buying at lower levels in realty and capital goods (CG) stocks towards the close saw the Sensex recover from its lows. The Sensex finally ended the session with a gain of 550 points at 10,338, while Nifty added 158 points to close at 3,044.
The market breadth was neutral. Of the 2,652 stocks traded on the BSE, 1,968 stocks advanced whereas 634 stocks declined. Fifty stocks ended unchanged. Among the sectoral indices, the BSE Realty jumped 8.29% followed by BSE CG (up 8.19%), BSE Bankex (up 7.51%) and BSE Power (up 6.14%).
Most of the heavyweights ended with solid gains though some select frontline stocks closed with marginal losses. Among the blue chips, Reliance Infrastructure shot up by 17.15% at Rs535.10, DLF soared 14.89% at Rs253.05, JP Associates surged 13.36% at Rs81.45 and Ranbaxy Laboratories advanced by 12.33% at Rs190.35. State Bank of India (SBI) added 11.81% at Rs1,240.55, Tata Motors moved up 11.12% at Rs190.90 and Larsen & Toubro (L&T) scaled up 10.78% at Rs892.25. Among the laggards Satyam Computer Services fell 1.54% at Rs300.10 and Infosys Technologies slipped 0.23% at Rs1,378.50.
Realty stocks shone in today's trades and closed with strong gains. Orbit Corporation vaulted 33.15% at Rs70.70, Peninsula Land soared 14.91% at Rs23.50, DLF surged 14.89% at Rs253.05 and Parsvnath Developers advanced by 11.59% at Rs45.25.
Over 2.13 crore Reliance Natural Resources shares changed hands on the BSE followed by Suzlon Energy (1.54 crore shares), Cals Refineries (0.99 crore shares), GVK Power & Infrastructure (0.89 crore shares) and Unitech (0.87 crore shares).
Daily Call - Nov 3 2008
The latest move of RBI to cut SLR, CRR and Repo seems to be done under "guidance" of north block, and not an independent regulator's thoughtfully taken action. How else would you justify the RBI action just a week after the formal policy meeting, at which the Governor just twiddled his thumbs and did nothing? Has anything transpired in the intervening period that would have warranted this move?
Frittering away with policy ammunition when environment is tough makes us worried on one bastion of RBI, which was earlier well taken care of under our good old jovial man, Dr.Reddy.
When markets opens higher with a gap, index would have retraced 30% from its low it touched on 27th October. It is natural to expect profit booking at higher levels. Sensex has resistance at 10250, which is 380 points higher from its Friday close. 10800 and 11800 are the two major hurdles on way up, while support comes in at 8900.
Steel companies had to lower the prices to stay afloat, just a day after government withdrew 15% export duty does not auger well for the long term, though stock may gain with broader markets. Select PSUs and Midcap are the best place to hide when storm approaches.
Good weekly gains at Wall Street
October does not turn out to be that bad as investors had perhaps expected
October continues to be the worst market in US stock market history as always but this year perhaps it was not so bad. The worst month till date this year was booked by September, 2008. In October, stocks got some strength in the final days of the month. Wall Street managed to register some decent gains for the week that ended on Friday, 31 October, 2008 after weeks of incurring losses.
Though earning reports were better than expected in most cases, it was the cautious guidance coming from most companies that played the spoilsport. Economic reports were mixed in nature but most pointed out their fingers towards a recession that has already started gripping the US economy.
Both the earnings results and economic data this week were fairly unimpressive. But despite that, the Dow Jones Industrial Average gained 946 points (11.3%) for the week to end at 9,325. Tech - heavy Nasdaq gained 168.9 points (10.9%) at 1,720.95. S&P 500 gained 91.9 points (10.5%) to end at 968.
Amid a period of record volatility, the market managed to pare its losses and ended the month of October down only 17%.
On Friday, 31 October, 2008, the last day of the month, the Dow Jones Industrial Average ended the day up by 144 points, to 9,325. The Nasdaq Composite Index, finished higher by 22 points at 1,720. S&P 500 finished higher by 14.68 points at 968.75.
The FOMC cut the fed funds rate by 50 basis points to 1% during the week, which was widely expected. The discount rate was cut 50 basis points to 1.25%. The action was unanimously approved, with the Fed citing increased economic risks and improving inflation expectations.
As per Fed, the pace of economic activity has "markedly" slowed as consumer expenditures declined, while inflation pressures are expected to moderate due to the drop in commodity prices and weaker economic prospects. The FOMC believes that over time this action, along with the Fed's other measures, will help promote moderate economic growth.
Separately, the Fed established temporary currency swap lines with the central banks of Brazil, Mexico, South Korea and Singapore. The move is meant to improve liquidity and complement the Fed's current swap lines with 10 other central banks.
The biggest piece of economic news during the week was that real GDP figure for the third quarter declined 0.3% on an annualized basis in the third quarter as consumer spending declined at the fastest rate in 28 years. Market was expecting a 0.5% drop rate. The 0.3% decline in real gross domestic product was the largest since the end of the last recession in late 2001. The economy grew at a 2.8% pace in the second quarter.
The GDP data followed a report from the Conference Board that consumer confidence hit a record low in September and accompanied an initial jobless claims report that showed the 4-week moving average at a recession-like level of 475,500.
The Chicago Purchasing Managers Index didn't do anything to help improve the economic outlook. It fell from 56.7 in September to 37.8 in October. A number below 50 is considered to be a sign of contraction.
New home sales, up 2.7% in September, provided some good news, as did the report that orders for durable goods increased 0.8% in September.
Among earning reports for the week, Procter & Gamble reported a 9% rise in first-quarter profit but also lowered the bottom end of its earnings forecast for fiscal 2009. Whirlpool cut its 2008 forecast and announced it was cutting 5,000 jobs.
Integrated oil major Exxon Mobil posted better than expected result, but with crude prices slipping, future earnings was an important question. On the other hand, Colgate-Palmolive also saw strong numbers, but it expects double-digit earnings growth to continue.
Also, during the week, Chevron reported better-than-expected third quarter results. Its net income more than doubled, thanks largely to record high oil prices. Internet search companies Yahoo! and Google posted mixed results after reports suggested a business deal between the pair is looking unlikely due to regulatory requirements.
Crude prices ended with little gains on Friday, 31 October, 2008 after trading lower for almost the entire day. The firm dollar and the current global crisis were the main reasons behind the subdued crude prices. Friday’s weak economic data also added to this. On Friday, crude-oil futures for light sweet crude for December delivery closed at $67.81/barrel (higher by $1.85 or 2.8%) on the New York Mercantile Exchange. Prices earlier touched a low of $63.12. For the week, prices rose by 5.7%. On a yearly basis, crude price is lower by 31%. For this year in 2008, crude prices have dropped 29.4%.
For the year, Dow, Nasdaq and S&P 500 are down by 29.7%, 35% and 34% respectively.
Tuesday's presidential election in US will be one of the major determiners as to how Wall Street will behave in the next few months. Other than that, pressing economic questions, reports due on manufacturing, the service sector and, most important, employment, could determine whether the market stays above its current levels or plunges to new lows.
Market may extend gains on rate cut
The market may extend Friday's (31 October 2008) solid gains after a surprise rate cut by the central bank over the weekend and on firm Asian stocks. Heavy buying by foreign funds and the stock market regulator’s decision to increase tenure for lending and borrowing of stocks from seven days to 30, may also aid an upmove.
Lower rates boosts stocks as they boost corporate bottomline by way of lower borrowing costs. The Reserve Bank of India (RBI) on Saturday, 1 November 2008, unexpectedly cut its main short-term lending rate for the second time in as many weeks to ease a growing cash squeeze, spur faltering economic growth and fend off damage from the global financial crisis.
The Securities & Exchange Board of India (Sebi)'s decision to extend the tenure for lending and borrowing of stocks is aimed making the domestic stock lending and borrowing (SLB) mechanism more robust and increase liquidity in the secondary markets. Short selling refers to selling of shares one does not own and a SLB mechanism facilitates this activity.
Meanwhile, in contrast to heavy selling for the last few months, foreign funds made substantial purchases on Friday. As per provisional data released by the stock exchanges, foreign institutional investors (FIIs) bought shares worth a net Rs 1237.21 crore. FII outflow in October 2008 totaled Rs 15,347.30 crore (till 29 October 2008). FII outflow reached Rs 52,139 crore in calendar 2008, so far, till 29 October 2008
Asian stocks edged up for a fifth straight day on Monday, 3 November 2008, on hopes policy efforts so far to dampen the impact of the financial crisis would ultimately take hold, though data still painted an ugly picture of the global economy.
Back home, the BSE Sensex jumped 743.55 points or 8.22% on Friday, boosted by a steep rate cut by the US Federal Reserve, decline in inflation for the fifth successive week and market buzz the government was considering more measures to pump in liquidity in the financial system
Pre Session Commentary - Nov 3 2008
Today a market is expected to have gap up opening on firm global cues. Reserve Bank of India’s triple dose of cut in repo rate, CRR and SLR, will also contribute to life the sentiments. The move comes close with the US Federal Reserve’s cut in its benchmark interest rates by 0.5% to 1% on October 30 and Bank of Japan’s cut in interest rates from 0.5% to 0.3%.
On Friday, domestic market closed with huge gains on significant buying across the ground. Sentiments got boosted on drop in inflation number for the fifth successive week and firm global markets. Market witnessed strong rally also on speculation that RBI may ease monetary policy following rate cuts across the world, including in the US, China and Japan this week. Bank of Japan cut rates for the first time in seven years, to 0.30% from 0.50% to ease the financial crisis. Today market opened after a holiday with handsome gains tracking positive cues from global markets. Stocks continued to gain ground on sustained buying over the counters. However, market gave up some of initial gains during afternoon on profit booking, but further continued its upward trend till end. From the sectorial front, buying support was seen across all the indices mainly led by the Metal, Oil & Gas, Bank, Capital Goods, IT and Auto stocks. We expect that market to continue its momentum and gain further ground during the trading session.
The BSE Sensex closed higher by 743.55 points at 9,788.06 and NSE Nifty ended up by 188.55 points at 2,885.60. The BSE Mid Caps and Small Caps closed with gains of 105.54 points 3,200.02 and by 90.50 points at 3,765.11. The BSE Sensex touched intraday high of 9,870.42 and intraday low of 9,361.66.
RBI has cut the repo rate by 50 basis points to 7.5% with effective from 3rd November. It has also cut CRR, by 100 basis points in two stages to 5.5%. The first stage of CRR cut would be with effect from 25th October and the second stage would come into effect from 8th November. The central bank has also reduced the statutory liquidity ratio (SLR), the amount which banks are mandated to park in government securities, by 100 basis points to 24%. The SLR cut would inject about Rs 40,000 crore into the banking system.
Friday, the US stock market rallied for second successive day. Stocks gained after J.P. Morgan unveils $70B mortgage-modification. September personal income and spending numbers were down 0.3%. Crude oil futures for the December delivery rose $1.85 to $67.81 a barrel on New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed higher by 144.32 points at 9,325.01. NASDAQ index gained 22.43x points to 1,720.95 and the S&P 500 (SPX) surged 14.66 points to close at 968.75 points.
Indian ADRs ended mixed. In technology sector, Infosys ended higher by (0.03%) while Wipro lost (5.26%), Satyam ended down by (2.24%) and Patni Computers closed lower by (1.36%). In banking sector ICICI Bank was up by (7.18%) and HDFC Bank gained (1.41%). In telecommunication sector, Tata Communication inclined by (20.50%), and MTNL was up by (0.68%). Sterlite Industries increased by (16.35%).
Today major stock markets in Asia are trading higher. Hang Seng is higher by 566.46 points at 14,535.13. Further Taiwan Weighted jumped 116.69 points at 4,987.35 and Singapore''s Straits Times also surged 94.89 points at 1,889.09. The South Korea’s Seoul Composite gained 40.18 points at 1,153.24. Japan''s Nikkei is closed today for the Culture day holiday. It will reopen on Tuesday.
The FIIs on Friday stood as net seller in equity and net buyer in debt. Gross equity purchased stood at Rs2685.90 Crore and gross debt purchased stood at Rs156.70 Crore, while the gross equity sold stood at Rs3760.80 Crore and gross debt sold stood at Rs135.20 Crore. Therefore, the net investment of equity and debt reported were (Rs1074.90 Crore) and Rs21.50 Crore respectively.
On Friday, the Indian rupee extended its gain for the third straight session on Friday closing higher at 49.44/46. India''s rupee strengthened due to the gains in domestic stock market, which raised hopes of some further cash inflows.
On BSE, total number of shares traded was 26.98 Crore and total turnover stood at Rs. 3,717.17 Crore. On NSE, total volume of shares traded was 66.55 Crore and total turnover was Rs 12,242.1 Crore.
Top traded volumes on NSE Nifty – Suzlon Energy with total traded volume of 37494677 shares, followed by Hindalco with 34649169 shares, Unitech Ltd with 25139509 shares, RPL with 21266401 shares and ICICI Bank with 14134982 shares respectively.
On NSE Future and Options, total numbers of contracts traded in index futures were 1072629 with a total turnover of Rs.14,412.82 Crore. Along with this total number of contracts traded in stock futures were 903388 with a total turnover of Rs.9,819.66 Crore. Total numbers of contracts for index options were 806308 and total turnover was Rs.12.273.03 Crore and total numbers of contracts for stock options were 40077 and notional turnover was Rs.453.72 Crore.
Today, Nifty would have a support at 2,837 and resistance at 3,043 and BSE Sensex has support at 9,546 and resistance at 10,284.
Daily Market Strategy - Nov 3 2008
Expect more than others think is possible.
Given the market rise on Friday, one would be forced to think that the market did have some wind of the the RBI move, which was officially announced on Saturday. RBI has more or less matched the expectations on the street and we could expect a strong opening. Remember, when the RBI maintained a status quo at the end of October the Sensex had crashed badly. Friday's rise has just managed to make up for some of the lost gains.
Given the RBI move we could expect Friday's gains to continue at least at the opening session. FIIs are also reported to have bought on Friday. We will have to wait for the official figures to see if there was indeed some large scale buying. For the time being, avoid some fresh buying in large quantities as we are yet to get clarity on the economy. The fall in inflation and drop in crude prices may augur well for the time being but we still have to get some confidence.
On Saturday, the Reserve Bank of India cut the benchmark repurchase rate from 8% to 7.5% , effective today, after reducing it by one percentage point in a surprise move on Oct. 20.The bank also further reduced the cash reserve ratio or CRR from 6.5% to 5.5%. This move unleashes an additional $8.1bn into the financial system.
The Reserve Bank of India says the additional liquidity is needed to fuel growth as "early signs of a global recession are becoming evident" and falling commodity prices have made inflation less of a concern.
Meanwhile, foreign investors have pulled $12.9bn from India's equity markets this year and the rupee has fallen more than 25% against the dollar.
Banks like ICICI Bank say they have no immediate plans to lower rates for consumers. However, IDBI Bank on Saturday reduced its home and educational loan rates by 0.5%with immediate effect.
KV Kamath of ICICI Bank, who also dons the cap of CII head, said that corporate defaults beginning with small and medium enterprises cannot be ruled out. Besides, infrastructure sector that needs a mammoth USD 750 billion of investment could be a casualty and affect India's competitiveness, warned Kamath, saying these issues were high on his agenda for Prime Minister Manmohan Singh's meeting with corporate leaders today. The prime minister is scheduled to meet corporate head honchos to discuss the impact of the slowdown.
Steel producers have cut prices of their products by up to Rs6,000 a tonne. SAIL, along with private producers Essar Steel and JSW Steel, announced lowering of prices while Tata Steel is yet to announce its plans.
Tata Motors reported 20% decline in total vehicle sales during October at 39,729 units as against 49, 354 in the same month last year. The domestic passenger vehicle sales during the month of October declined by 6 per cent at 17,014 vehicles as against 18,021 in the same period last year, said the company in a statement.
We expect better action in Hero Honda as it reported its highest-ever retail sales in a month, with more than six lakhs units of two-wheelers being sold in the festive month of October. This highest-ever retail sales in a month represents more than 12 per cent growth over its previous highest – 5.31 lakh units sold in October 2006. The despatch numbers for the month of October stood at 352,449 units, as compared to 365,022 two-wheelers sold in October 2007.
Asian stocks gained for fifth straight trading session extending last week's rally, on speculation economic fallout from the global credit crisis can be contained.
The Hang Seng index slipped 751 points or 5.4% at 14,726. Shanghai Index was marginally up by 9 points or 0.2% at 1,729. The Nikkei 225 Index was closed.
However, the Taiwan Taiex index gained 101 points or 2.8% at 4,972, Straits Times was up 85 points or 4.7% at 1,878. While, Australia's S&P/ASX gained 119 points or 3% at 4,137.
South Korea plans to pump about US$10.8bn into the economy next year via extra spending and tax benefits as it steps up efforts to prevent the nation's first recession in a decade.
The government announced that it would spend 3.4 trillion won to help smaller companies and farmers.
Australian manufacturing contracted at a record pace in October, the performance of manufacturing index fell 6.8 points from September to 40.4, the lowest level since the index was started in 1992.
The festival of light (Diwali) has indeed bought brightness to the Indian markets. Falling inflation, cooling crude and a host of measures by governments and central banks augur the market sentiment in particular. On Friday, Indian bourses ended with notable gains with the BSE benchmark Sensex and the NSE Nifty index surging over 7% each.
The Sensex shut shop at 9,788 surging 74 points and the Nifty closed at 2,885 gaining 188 points.
Shares of Bharti Airtel surged by over 5% to Rs649 after the company announced its consolidated results.
The group posted a net profit of Rs16681.3mn (up 1.5%) for the quarter ended September 30, 2008 as compared to Rs16437.60 million for the quarter ended September 30, 2007.
Total Income increased by 40% to Rs89527.3mn for the quarter ended September 30, 2008 from Rs63867.30 million for the quarter ended September 30, 2007. The scrip touched an intra-day high of Rs665 and a low of Rs596 and recorded volumes of over 13,00,000 shares on BSE.
Shares of Suzlon pared early gains and ended 3.5% lower at Rs44.4. The CMD Tulsi Tanti clarified that the company has excellent line of credit. He also adds that the future of wind energy is extremely strong.
The board of directors of the company also decided to drop plans to invest in new tower manufacturing facility and accordingly the total capex plan stood reduced by Rs6.69bn. The scrip touched an intra-day high of Rs49.4 and a low of Rs43 and recorded volumes of over 1,00,00,000 shares on BSE.
Eicher Motors was locked at 20% upper circuit to Rs199.65 after the board of directors of the company announced that it had approved stock buyback. The scrip touched an intra-day high of Rs199.65 and a low of Rs199 and recorded volumes of over 10,000 shares on BSE.
MIC Electronics surged by over 8% to Rs38 after the company announced that it entered into an MoU with Ceracchi Illuminazione Spa, a renowned lighting company in Italy for design, development and marketing of LED lighting solutions.
This relationship will enable MIC to have access to European Markets and others like Russia, Morocco & Eastern European Countries.
The scrip touched an intra-day high of Rs39.3 and a low of Rs36.3 and recorded volumes of over 1,00,000 shares on BSE.
SAIL is reportedly looking for new iron ore mines and renewal of its existing mines. The company is now charting expansion programmes of around Rs370bn.
SAIL has urged the Orissa government to accelerate the process of granting prospecting licence for two iron ore mines and renewal of the existing ones as the company requires raw material to meet demands from the expansion projects.
Shares of SAIL ended flat at Rs85.2 after hitting an intra-day high of Rs91.3 and a low of Rs82 and recorded volumes of over 19,00,000 shares on BSE.
India Cements announced its Q2 results with net profit declining 41% to Rs1.34bn in the three months ended Sept. 30 from Rs2.27bn a year earlier. However, sales rose 22% to Rs10.88bn.
The company also said that it reported a foreign-exchange loss of Rs295.5mn, compared with a gain of Rs47.4mn in the year earlier.
India Cements rallied by over 15% to Rs87 after hitting an intra-day high of Rs88 and a low of Rs75 and recorded volumes of over 3,00,000 shares on BSE.
With the RBI taking care of the liquidity problem in the system coupled with falling inflation and crude oil prices, Indian markets would continue its upsurge to the next week. The CRR of scheduled banks is reduced by 100bps from 6.5% to 5.5% of net demand and time liabilities (NDTL). This will be effected in two stages: by 50bps retrospectively with effect from the fortnight beginning October 25, and by a further 50bps prospectively with effect from the fortnight beginning November 8, 2008. This measure is expected to release around Rs400bn into the system.
However, a reversal in FII flows remains the big trigger for our markets. Till that happens, confidence levels may continue to remain lower. In uncertain times like this, we suggest you stick to blue chips rather than venturing in to the mid and the small caps. At every sharp rise, keep booking some profits.
Tata Motors Rs41.47bn rights issue fully subscribed with promoters picking up significant amount of stake. (BL)
JSW Steel lays foundation for a Rs350bn, 10mn ton steel project in West Bengal.(BS)
JSW Steel cuts prices of HR Coils by Rs5,500 per ton. (BL)
Anil Ambani, looking to increase his stake in Reliance Infrastructure by 5%. (BS)
SBI to decide about an interest rate cut later this week. (BS)
ONGC Videsh and its consortium partners to invest close to US$3bn to develop gas field in Iran. (BL)
NTPC may exit Dabhol project if government hives off the adjacent LNG import terminal and sells it to a third party.(TOI)
Cabinet approves capital restructuring of UcoBank.(FE)
GAIL signs an agreement with IOC to explore possibility of setting up of a Rs100bn petrochemical plant in Bihar.(BL)
Adlabs Films envisaging demerger of radio business.(FE)
Adlabs Films, Big Cinemas in talks with Delhi international airport for setting up 6D screens. (BS)
India Cements to invest Rs1.6bn for captive power plant.(BL)
PNB cuts PLR, deposit rates by 50bps.(BL)
M&M plans to develop a range of petrol engines to fuel growth. (BS)
Air Deccan, now Kingfisher Red has the highest number of customer complaints registered against deficiency in services.(ET)
Triveni Retail Ventures, a 100% subsidiary of Triveni Engineering, is understood to have sounded out leading retailers for selling off its rural superstore chain Triveni Khushali Bazaar. (ET)
IDFC is in talks with GE Commercial Finance, to acquire about 35% stake in the latter’s construction equipment finance business in India.(ET)
The government turns down request of steel producers to persuade state-run miner NMDC to roll back last month’s price hike on iron ore, saying it cannot intervene in the commercial decision of the PSU.(ET)
BEL, plans to set up its third central research laboratory at Hyderabad, which will focus on research in emerging technologies in the fields of opto-electronics and electronic warfare.(BS)
Jyoti Ltd has entered into technology tie-ups with German and Dutch companies for its windmill project.(BS)
Tata Motors is gearing up to roll out its first Nano car from Pantnagar in Uttarakhand.(BS)
SBI intends to start a private equity fund of US$1bn to US$1.5bn for infrastructure financing with Australia’s Macquarie Group and World Bank’s private sector financing arm International Finance Corporation. (BS)
PTC India is looking at picking up stakes in power generation projects across the country.(DNA)
Shoppers Stop to cut rights issue size to Rs3bn due to adverse market conditions.(BL)
Essar Steel cuts retail prices of steel by Rs4,000-5,000 per ton. (BL)
Apollo Tyres to begin its operations in Europe by opening its first sales, marketing and technical office in Germany in January. (BL)
IDBI Bank decides to sell its housing loan subsidiary, IDBI Homefinance (IHFL) and may invite bids from potential buyers. (BL)
Reliance Retail (RRL) and the UK-based supply chain powerhouse Wincanton have called off their proposed joint venture. (ET)
Tata Motors strengthen its position in South Africa unveils two new passenger vehicles and a one-ton pickup vehicle. (DNA)
Zee News acquires 26% stake in Sky B, West Bengal. (BS)
Zylog Systems to spend US$17.5mn for acquiring three overseas companies. (BL)
V-Guard Industries in talks of acquiring UPS firm overseas. (BS)
Economic Front Page
Oil companies cut ATF prices by 17%; government abolishes 5% customs duty on jet fuel.(FE)
Government scraps 15% export duty on iron, steel products.(BL)
Cabinet approves Insurance Bill that will pave the way for increasing FDI limit in domestic insurance companies to 49%.(FE)
Government to allow foreign companies to invest Rs360bn for the revival of eight closed fertilizer units. (BL)
The PM, Manmohan Singh to meet leaders of India Inc on November 3, 2008 to seek more measures to tide over the liquidity crunch. (BL)
The FM, P Chidambaram to ask the PSU banks to consider lowering lending rates. (BL)
Forex reserves declined by US$15.5bn to US$258bn for week ended October 24. (FE)
Public-private partnership body gives approval to port projects worth Rs10bn.(FE)
NBFCs have been allowed to raise short term foreign currency loans to meet their short term liabilities.(BL)
India Inc’s Q2 FY09 profit growth has fallen to 5.7% compared to 25.8% growth in Q2 FY08 and 9.9% growth during Q1 FY09 (ET)
Prices of bulk drugs have increased by 25-30% over the past few months. (ET)
India Cements - BUY
We recommend a buy in India Cements from a short-term perspective. It is clearly visible from the charts of India Cements that it has been on a long-term downtrend from its December peak of Rs 333 (52-week high), forming lower troughs and lower peaks. However, the stock recently found support at Rs 70 levels, which is a significant long-term support level and bounced up. On October 31, the stock penetrated the medium-term down trendline by jumping up almost 16 percent acco mpanied by high volume.
This reversal was triggered by the positive divergence in the daily relative strength index (RSI), which has entered in to the neutral region from the bearish zone. The weekly RSI is recovering from the deep oversold area. Moreover, we notice a weekly bullish piercing candlestick pattern that indicates short-term trend reversal.
We are bullish on the stock from a short-term perspective. We anticipate the stock to rally until it hits our price target of Rs 98 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 82.
via BL
Precious metals continue to drop
Bullion metals give up more than 18% in October
Gold prices ended lower on Friday, 31 October, 2008. This was due to the dollar that remained relatively firm. Silver prices also fell on that day.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies. Losses in equity markets had also forced traders to sell gold. Since past couple of weeks, precious metals, mainly gold, had dropped as traders tried to gain back some of the money that had lost in other markets.
On Friday, Comex Gold for December delivery fell $20.3 (2.7%) to close at $718.2 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 (31.7%) since then. For the week, gold prices ended lower by 1.6%. For the month of October, gold ended lower by 18%. It was the biggest percentage loss for gold since February, 1983.
This year, gold prices have lost 13.9% till date. The dollar index has gained 12% this year. 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 Friday, Comex silver futures for December delivery fell by 0.6% to $9.73 an ounce. For the week, silver fell 1.9%. For the month of October, silver slipped by 20%. Till date, silver has lost 31% 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.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies. Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices and vice versa.
In the currency market on Friday, the U.S. dollar rose against the euro and the British pound. The dollar index gained 11% in October, 2008.
On Friday, crude for December delivery closed at $67.81 per barrel on the New York Mercantile Exchange, up $1.85, or 2.8%, after trading lower for nearly all of the session. It gained 5.7% for the week but ended 32.6% lower for the month of October, 2008.
Earlier this year, the weakening dollar and higher global demand for raw materials had led to records this year for commodities including gold. Gold reached a record in March as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. In the latest move, the Federal Reserve has cuts its target bank lending rate to 1% from 5.25% in September, 2007. The Fed did it in eight steps.
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 102 (0.9%) at Rs 11,732 per 10 grams. Prices rose to a high of Rs 11,741 per 10 grams and fell to a low of Rs 11,661 per 10 grams during the day’s trading.
At the MCX, silver prices for December delivery closed Rs 90 (0.53%) higher at Rs 16,948/Kg. Prices opened at Rs 16,898/kg and rose to a high of Rs 16,979/Kg during the day’s trading.
Crude gains in last minutes
Prices slip by more than 32% in October
Crude prices ended with little gains on Friday, 31 October, 2008 after trading lower for almost the entire day. The firm dollar and the current global crisis were the main reasons behind the subdued crude prices. Friday’s weak economic data also added to this.
On Friday, crude-oil futures for light sweet crude for December delivery closed at $67.81/barrel (higher by $1.85 or 2.8%) on the New York Mercantile Exchange. Prices earlier touched a low of $63.12. Prices reached a high of $147 on 11 July but have dropped almost 54% since then. For the week, prices rose by 5.7%. On a yearly basis, crude price is lower by 31%. For this year in 2008, crude prices have dropped 29.4%. For the month of October, 2008, crude prices ended lower by 32.6%, the biggest monthly drop since 1983.
In the currency market on Friday, the U.S. dollar rose against the euro and the British pound. The dollar index gained 11% in October, 2008.
In an important economic release on Friday, data showed that September personal income and spending numbers were down 0.3%, reaffirming what was indicated in the advance third quarter GDP release.
There were also reports in the market during the week that OPEC was thinking about another production cut. Last week, OPEC had decided on a production cut. The decision, however, failed to perk up crude prices as traders still remained extremely worried that an ongoing recession will curtail demand for energy in the coming months.
The U.S. Energy Information Administration reported earlier this week that crude supplies climbed 500,000 barrels to 311.9 million for the week ended 24 October, 2008. They've climbed 21.7 million barrels in five weeks.
EIA also reported that motor gasoline supplies unexpectedly fell for the first time in five weeks, down 1.5 million barrels for the week ended Oct. 24 to total 195 million barrels. Supplies of the fuel had climbed 17.8 million barrels is the past four weeks. But they are still 2% below the year-ago level. And distillate stocks, which include heating oil, rose 2.3 million barrels to 126.6 million.
OPEC officials decided last Friday at its meeting at Vienna that OPEC will pare production by 1.5 million barrels a day w.e.f 1 November, 2008. The official production quota is currently 28.8 million barrels, and it will be cut by 1.5 million in November.
Last week, the Centre for Global Energy Studies said that global oil demand may fall for the first time in 15 years in 2008 and stagnate next year.
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%.
Against this background, November reformulated gasoline fell 1.8% to close at $1.4413 per gallon, while November heating oil added 1.1% to end at $2.0063 per gallon. The November contract expired at the end of the Nymex trading session on Friday. December reformulated gas closed at $1.4959 a gallon, up 3.4% and December heating oil climbed by 4.2% to close at $2.0842 a gallon.
Natural-gas futures were biggest winners in the energy sector on Friday. December natural gas rose 4.2% to close at $6.783 per million British thermal units, finishing 5% higher for the week. But front-month natural-gas futures saw a loss of around 8.8% for the month. They're down 9.4% year to date.
At the MCX, crude oil for November delivery closed at Rs 3,332/barrel, higher by Rs 125 (3.9%) against previous day’s close. Natural gas for November delivery closed at Rs 331.2/mmbtu, higher by Rs 9.6/mmbtu (2.9%).
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