Weekly Wrap - Nov 7 2008
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Friday, November 07, 2008
BSE Bulk Deals to Watch - Nov 7 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
7/11/2008 505665 ABC BEARINGS COPTHALL MAURITIUS INVESTMENT LIMITED B 86455 39.00
7/11/2008 505665 ABC BEARINGS BSMA LIMITED S 86455 39.00
7/11/2008 517552 ADVAN MICR D MANISH GARODIA B 33000 32.06
7/11/2008 517552 ADVAN MICR D RADHA KISHAN GARODIA S 33000 31.94
7/11/2008 533029 ALKALI EUREKA STOCK AND SHARE BROKING SERVICES LIMITED B 59194 179.94
7/11/2008 533029 ALKALI SAM GLOBAL SECURITIES LTD B 108722 183.62
7/11/2008 533029 ALKALI EUREKA STOCK AND SHARE BROKING SERVICES LIMITED S 59194 180.29
7/11/2008 533029 ALKALI SAM GLOBAL SECURITIES LTD S 108722 183.60
7/11/2008 531381 ARIH FOUND H COPTHALL MAURITIUS INVESTMENT LIMITED B 204724 49.00
7/11/2008 531381 ARIH FOUND H BSMA LIMITED S 204724 49.00
7/11/2008 511664 BGIL FL TEC CHETAN DOGRA S 39710 19.64
7/11/2008 500059 BINANI INDUSTRIES LTD. COPTHALL MAURITIUS INVESTMENT LIMITED B 149581 31.50
7/11/2008 500059 BINANI INDUSTRIES LTD. BSMA LIMITED S 149581 31.50
7/11/2008 509486 CAPRIHAN IND COPTHALL MAURITIUS INVESTMENT LIMITED B 306482 21.25
7/11/2008 509486 CAPRIHAN IND BSMA LIMITED S 306482 21.25
7/11/2008 533026 CHEMCEL NEW PLANET TRADING CO PVT LTD S 219077 2.90
7/11/2008 532823 EURO CERAMIC COPTHALL MAURITIUS INVESTMENT LIMITED B 102738 43.20
7/11/2008 532823 EURO CERAMIC BSMA LIMITED S 102738 43.20
7/11/2008 531508 EVEREDY INDL COPTHALL MAURITIUS INVESTMENT LIMITED B 400000 18.25
7/11/2008 531508 EVEREDY INDL BSMA LIMITED S 400000 18.25
7/11/2008 530117 H.K.FINECHEM MONEYBEE SECURITIES PVT LTD B 75000 18.45
7/11/2008 530117 H.K.FINECHEM MONEYBEE COMMODITIES PVT LTD S 75000 18.45
7/11/2008 532714 KEC INTERN FIL INVESTMENT MANAGEMENT HONG KONG LIMITED S 375147 115.00
7/11/2008 532313 MAHINDRALIFE COPTHALL MAURITIUS INVESTMENT LIMITED B 635065 183.00
7/11/2008 532313 MAHINDRALIFE BSMA LIMITED S 635065 183.00
7/11/2008 512167 MATRA REALT KOTAK MAHINDRA INVESTMENTS LIMITED S 68924 2.69
7/11/2008 526169 MULTIBASE 1 COPTHALL MAURITIUS INVESTMENT LIMITED B 367692 19.00
7/11/2008 526169 MULTIBASE 1 BSMA LIMITED S 367692 19.00
7/11/2008 513023 NAV BHAR VEN COPTHALL MAURITIUS INVESTMENT LIMITED B 1431102 107.50
7/11/2008 513023 NAV BHAR VEN BSMA LIMITED S 1431102 107.50
7/11/2008 531092 OM MET INFRA COPTHALL MAURITIUS INVESTMENT LIMITED B 1054951 10.70
7/11/2008 531092 OM MET INFRA BSMA LIMITED S 1054951 10.70
7/11/2008 532675 PRITHVI INFO COPTHALL MAURITIUS INVESTMENT LIMITED B 247902 43.80
7/11/2008 532675 PRITHVI INFO BSMA LIMITED S 247902 43.80
7/11/2008 500365 REMI METALS COPTHALL MAURITIUS INVESTMENT LIMITED B 1108119 4.25
7/11/2008 500365 REMI METALS BSMA LIMITED S 1108119 4.25
7/11/2008 531898 SANGUINE MD BHROSEMAND COMMODITIES PVT. LTD. B 85000 9.48
7/11/2008 526885 SARLA PER F COPTHALL MAURITIUS INVESTMENT LIMITED B 118460 68.00
7/11/2008 526885 SARLA PER F BSMA LIMITED S 118460 68.00
NSE Bulk Deals to Watch - Nov 7 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
07-NOV-2008,20MICRONS,20 Microns Limited,PRASHANT JAYANTILAL PATEL,BUY,78848,20.65,-
07-NOV-2008,ALKALI,Alkali Metals Limited,AMBIT SECURITIES BROKING PVT. LTD.,BUY,189565,182.66,-
07-NOV-2008,ALKALI,Alkali Metals Limited,B K SHAH CO KETAN BHAILAL SHAH,BUY,56178,176.90,-
07-NOV-2008,ALKALI,Alkali Metals Limited,CHOKHANI SECURITIES LTD,BUY,144335,182.17,-
07-NOV-2008,ALKALI,Alkali Metals Limited,CPR CAPITAL SERVICES LTD.,BUY,152934,181.97,-
07-NOV-2008,ALKALI,Alkali Metals Limited,SANJAY BHANWARLAL JAIN,BUY,155378,183.85,-
07-NOV-2008,ALKALI,Alkali Metals Limited,SMC GLOBAL SECURITIES LTD.,BUY,87420,183.66,-
07-NOV-2008,ALKALI,Alkali Metals Limited,TRANSGLOBAL SECURITIES LTD.,BUY,60581,184.58,-
07-NOV-2008,ALKALI,Alkali Metals Limited,YUVAK SHARE TRADING PVT LTD,BUY,93769,183.22,-
07-NOV-2008,BHARATFORG,Bharat Forge Ltd,SUNDARAM TRADING AND INVESTMENT PVT LTD,BUY,5000000,100.00,-
07-NOV-2008,ELGITYRE,Elgi Tyre & Tread Limited,RAMSINGH MOTILAL AGARWAL,BUY,775000,6.01,-
07-NOV-2008,TREADS,Treadsdirect Limited,RAMSINGH MOTILAL AGARWAL,BUY,1550000,3.60,-
07-NOV-2008,20MICRONS,20 Microns Limited,PRASHANT JAYANTILAL PATEL,SELL,56478,20.51,-
07-NOV-2008,ALKALI,Alkali Metals Limited,AMBIT SECURITIES BROKING PVT. LTD.,SELL,189560,182.73,-
07-NOV-2008,ALKALI,Alkali Metals Limited,B K SHAH CO KETAN BHAILAL SHAH,SELL,54391,176.50,-
07-NOV-2008,ALKALI,Alkali Metals Limited,CHOKHANI SECURITIES LTD,SELL,144335,183.47,-
07-NOV-2008,ALKALI,Alkali Metals Limited,CPR CAPITAL SERVICES LTD.,SELL,152434,182.03,-
07-NOV-2008,ALKALI,Alkali Metals Limited,SANJAY BHANWARLAL JAIN,SELL,155378,183.88,-
07-NOV-2008,ALKALI,Alkali Metals Limited,SMC GLOBAL SECURITIES LTD.,SELL,87420,184.03,-
07-NOV-2008,ALKALI,Alkali Metals Limited,TRANSGLOBAL SECURITIES LTD.,SELL,59081,184.74,-
07-NOV-2008,ALKALI,Alkali Metals Limited,YUVAK SHARE TRADING PVT LTD,SELL,93694,183.54,-
07-NOV-2008,ASIANELEC,Asian Electronics Ltd,TATA TDWATERHOUSETRUSTEE CO.P.LTD-A/C TATAMF,SELL,180000,28.79,-
07-NOV-2008,BHARATFORG,Bharat Forge Ltd,FID FUNDS MAURITIUS LIMITED,SELL,4825011,100.00,-
07-NOV-2008,ELGITYRE,Elgi Tyre & Tread Limited,ADITYA INTERNATIONAL LTD,SELL,770000,6.00,-
07-NOV-2008,KEC,KEC International Limited,FIDELITY INVESTMENTS MANAGEMENT (HONG KONG) LTD A/C FID INVT,SELL,375000,115.01,-
07-NOV-2008,TREADS,Treadsdirect Limited,ADITYA INTERNATIONAL LTD,SELL,1540000,3.60,-
Post Session Commentary - Nov 7 2008
The domestic market snapped its two days losing streak and ended last day of week with gains on the back of selective buying across the sectoral indices, after showing volatility during the first half of the trading. The Indian market opened weak and soon turned choppy on the back of negative cues from the US markets. Market continued its sea saw movement till mid session but initiated recovering since afternoon. Further, market continued to march ahead till end on positive. European markets and significant buying interest, improvements on the Asian markets and a positive mood in US index futures also added to the sentiments. The BSE Sensex bounced back to 10,000 level during final trading but ended below that level and NSE Nifty closed above 2,900. From the sectoral front, the Power, PSU, Oil & Gas, Metal, Reality, Teck, IT and Bank stocks were in limelight as most of the buying was seen from these baskets. Midcap and Smallcap stocks were also able to gain favour.
Among the Sensex pack 25 stocks ended in green territory and 5 in red. The market breadth was positive as 1423 stocks closed in green while 1116 stocks closed in red and 77 stocks remained unchanged.
The BSE Sensex closed higher by 230.07 points at 9,964.29 and NSE Nifty ended up by 80.35 points at 2,973. The BSE Mid Caps and Small Caps closed with gains of 36.97 points 3,355.38 and by 19.83 points at 3,900.10. The BSE Sensex touched intraday high of 10,065.37 and intraday low of 9,631.59.
Gainers from the BSE Sensex pack are Reliance Infra (10.92%), Hindalco (6.61%), Reliance Com Ltd (5.53%), JP Associates (4.87%), NTPC Ltd (4.78%), JP Associates (4.65%), Reliance (3.95%), DLF Ltd (3.60%)), ITC Ltd (3.59%) and Sterlite Industries (3.49%).
Losers from the BSE Sensex pack are M&M Ltd (1.83%), ICICI Bank (0.67%), Maruti Suzuki (0.38%), ONGC Ltd (0.29%) and Tata Motors (0.16%).
The BSE Power index surged (4.43%) or 75.34 points to close at 1,777.57. Gainers are Suzlon Energy (17.64%), Neyveli LIG (12.09%), Reliance Infra (10.92%), GMR Infra (8.35%) and Torrent Power (7.57%).
The BSE Oil & Gas index gained (3.38%) or 196.63 points to close at 6,013.57. Major gainers are HPCL (10.31%), IOC Ltd (7.13%), BPCL (6.85%), Gail India (5.45%), Cairn Ind (4.79%) and Reliance (3.95%).
The BSE Metal index ended higher by (3.18%) or 158.89 points at 5,123.33. Major gainers are Nalco (10.68%), Hindalco (6.61%), Hind Zinc (5.97%), SAIL (5.56%), Ispat Industries (4.75%) and Wespan Gujarat SR (4.05%).
The PSU index ended up by (3.01%) or 143.11 points at 4,965.80 as Neyveli LIG (12.09%), ST Trade Corp (11.59%), NALCO (10.68%), HPCL (10.31%), Power Grid (7.49%) and IOC Ltd (7.13%) in positive territory.
The BSE Reality index advanced by (2.72%) or 62.14 points to close at 2,342.82. Losers are Pheonix Mill (9.94%), Omaxe Ltd (4.45%), Orbit Co (3.97%), Mahindra Life (3.95%), Anant Raj (3.80%) and DLF Ltd (3.60%).
The BSE FMCG index ended higher by (2.22%) or 42.79 points to 1,968.70 as Godrej Cons (5.49%), ITC Ltd (3.59%), United Brew (1.88%), HUL (1.65%), United Spr (1.52%) and Tata Tea (0.85%) ended in negative territory.
Volatile but high
The market wiped out losses of over 102 points incurred in the first half after a strong bout of buying led by Reliance Infrastructure and Hindalco Industries triggered a wide spread buying. In a highly volatile trading session, the Sensex resumed 102 points lower at 9,632 following weakness in Asian indices. While the market was on a recovery path thereafter, the Sensex witnessed a sharp turnaround in afternoon as gains in heavyweights, power, oil & gas and Metal stocks propelled it to an intra-day high of 10,065. After gyrating 433 points during intra-day trades, the Sensex ended 230 points higher at 9,964, while Nifty finished 80 points up at 2,973.
The market breadth was positive. Of the 2,616 stocks traded on the BSE, 1,424 stocks declined whereas 1,124stocks advanced. Seventy five stocks ended unchanged. All the 13 sectoral indices advanced today. BSE Power led the pack gaining 4.43% at 1,702 followed by BSE Oil & Gas (up 3.38% at 5,817) and BSE Metal (up 3.18% at 4,993).
Reliance Infrastructure was the star performer among the heavyweights and the stock soared 10.92% at Rs560.90. Among the other major gainers, Hindalco Industries advanced 6.61% at Rs60.45, Reliance Communications jumped 5.53% at Rs228, Tata Consultancy Services rose 4.87% at Rs524.55, National Thermal Power Corporation moved up by 4.78% at Rs151.20, JP Associates advanced 4.65% at Rs87.70, Reliance Industries gained 3.95% at Rs1,217.85 and DLF added 3.60% at Rs280.90. However, Mahindra & Mahindra, ICICI Bank, Maruti Suzuki India, ONGC and Tata Motors inched lower.
Over 2.52 crore shares of Suzlon Energy changed hands on the BSE followed by GVK Power & Infrastructure (2.23 crore shares), Reliance Natural Resources (1.18 crore shares), HDIL (0.87 crore shares) and Tata Teleservices (0.79 crore shares).
Sensex regains 10,000
Data showing rise in infrastructure sector output and positive global cues boosted the domestic bourses, with the BSE Sensex regaining the psychological 10,000 level just a day after it had fallen below that mark on Thursday, 6 November 2008. The Sensex provisionally rose 316.20 points or 3.25%.
Metal stocks rose on recovery in metal prices on the London Metal Exchange. PSU banks rose on cut in lending rates. IT stocks rose as a weak rupee offset fall in American depository receipts overnight.
Data showing rise in infrastructure output offset concerns of economic slowdown triggered by productions cuts announced by commercial vehicle makers in the last two days and steel maker JSW Steel today and reduction in gross domestic product (GDP) forecast for 2009 by the International Monetary Fund. India's infrastructure sector output grew 5.1% in September 2008 from a year earlier, well above 2.3% annual growth in August 2008, government data released earlier in the day showed.
The International Monetary Fund, or IMF, on Thursday, 6 November 2008, predicted lower growth in India and economic contractions in the US, Japan and euro region next year, calling for further interest rate cuts and fiscal stimulus. Its estimate for India's growth in 2009 is now 6.3%, 0.6% lower than its earlier estimate of 6.9% made just a month ago. Its estimate for the country's growth in 2008 is down 0.1% to 7.8%.
European shares edged higher as commodities stocks tracked stronger crude and metals prices and banking shares gained following interest rate cuts in the previous session. Key benchmark indices in France, Germany and UK were up by between 0.13% to 0.94%. The Bank of England slashed the key interest rate by a steep 1.5% on Thursday, 6 November 2008 and on the same day the European Central Bank cut the key rate by 50 basis points.
Bargain hunting following a 25 basis points rate cut by the central bank in South Korea on Friday, 7 November 2008, and rate cut in Europe triggered a recovery in Asian stocks from an intra-day fall. South Korea's Kospi was up almost 4% boosted by the rate cut. Key benchmark indices in China, Singapore, Hong Kong, Taiwan, rose by between 1.034% to 3.29%. Japan's Nikkei average was down 3.55% with bargain hunting helping the benchmark pared losses that had taken it down over 6% earlier in the day. The rate cut in Europe were announced after Asian markets had closed on Thursday, 6 November 2008.
Trading in US index futures indicated the Dow will rise 120 points at the opening bell.
As per the provisional figure the 30-share BSE Sensex was up 316.20 points or 3.25% at 10,050.42. The index rose 331.15 points at the day's high of 10,065.37 in late trade. The index fell 121 points at the day's low of 9,631.59 hit in early trade.
The 50-unit S&P Nifty was up 109.40 points or 3.78% to 3,002.05 as per the provisional closing.
The BSE clocked a turnover of Rs 3447 crore today as compared to a turnover of Rs 4010.92 crore on 6 November 2008
The BSE Mid-cap index was up 1.43% to 3,365.81, while the BSE Small-cap index was up 0.71% to 3,907.97. Both the indices underperformed the sensex.
The market breadth turned positive later in the day from earlier weak breadth. On BSE, 1101 stocks declined while 1440 gained. 74 stocks remained unchanged.
India's largest private sector firm by market capitalisation and oil refiner Reliance Industries rose 4.05% to Rs 1,219 despite reports it may delay commercial operations of its Jamnagar refinery to early 2009 as it finishes the final testing of the facility.
Reliance Communications (up 6.8% to Rs 230.90), Jaiprakash Associates (up 6.15% to Rs 88.95) and Tata Power Company (up 4.11% to Rs 748.10) were the major gainers from the Sensex pack.
India’s largest tractor maker by sales Mahindra & Mahindra fell 0.58% and was the lone loser from the Sensex pack.
India's largest commercial vehicle maker by sales Tata Motors recovered from the day's low. The stock was down 0.16% to Rs 158.90, off the day's low of Rs 148. Its ADR lost 3.81% overnight after the company on 6 November 2008 had announced closing of the commercial vehicle plant at Jamshedpur owing to a demand slump.
Power stocks gained. NTPC, Tata Power Company, Reliance Infrastructure, Reliance Power, Power Grid Corporation of India rose by between 4.11% to 12.72%.
Metal stocks gained tracking recovery in metal prices on the London Metal Exchange. Tata Steel, Sterlite Industries, Steel Authority of India, Hindustan Zinc, National Aluminum Company rose by between 2.82% to 12.82%.
India’s largest aluminum maker by sales, Hindalco Industries spurted 8.38% on reports the company has cleared the bridge loan taken to acquire Canada's Novelis.
India’s largest state-run oil explorer by market capitalization ONGC gained 1.92% on reports Russia has allowed the company to purchase London-listed Imperial Energy.
India's largest drug maker by sales Ranbaxy Laboratories rose 0.95% recovering from earlier fall as Daiichi Sankyo Co, Japan's No. 3 drugmaker, said on Friday it had completed the takeover of Ranbaxy Laboratories, buying a 63.9 % stake for Rs 19980 crore ($4.20 billion). Daiichi Sankyo reached an agreement with the generic drugmaker in June 2008 to buy a stake of at least 50.1% through a tender offer, the private placement of new shares and the purchase of outstanding shares from the founding family.
Most of the IT stocks spurted after weak start as a weak rupee offset slide in weak American depository receipts overnight caused by worries the US outsourcing business will be curtailed and the direct impact will be on IT sector after Barack Obama won the US presidential election early this week. India's third largest IT exporter by sales Satyam Computer Services rose 3.16% to Rs 277.75, off the day’s low of Rs 263. Its American depository receipt (ADR) fell 7.19% overnight.
India's second largest IT exporter by sales Infosys rose 1.15% to Rs 1262.50, off the day’s low of Rs 1205.25 even as ADR fell 10.47%. India's fourth largest IT exporter by sales Wipro rose 2.9% to Rs 260.45 even as ADR slipped 8.56%. The stock had slipped 6.31% in previous trading session. India's largest IT exporter by sales Tata Consultancy Services rose 4.87% to Rs 524.55 off day’s low of Rs 485.10. The stock had slipped 1.08% in previous trading session.
Obama has strong reservations on outsourcing from the US. He had made many statements during his election speeches that he would discourage outsourcing from the US when he comes into power.
Meanwhile, the Indian rupee weakened on Friday as expectations of further foreign investor outflows from the stock market weighed on sentiment. The partially convertible rupee was at 47.77/78 per dollar, 0.1 % weaker than 47.66/69 at close on Thursday.
PSU banks rose after top state-owned banks on Thursday, 6 November 2008, cut their prime lending rates (PLR). Bank of Baroda, Allahabad Bank, Central Bank of India, Oriental Bank of Commerce and Corporation Bank rose by between 2.09% to 6.21%. All of them reduced lending rates by 75 bps to 13.25% with effect from 10 November 2008.
India's largest commercial bank State Bank of India (SBI) rose 2.79% on a decision to cut the PLR by 75 basis points (bps) with effect from 10 November 2008 and deposit rates by 25 to 50 bps across all maturities effective 1 December 2008.
India's largest private sector bank by net profit ICICI Bank fell 0.67% as American depository receipt (ADR) lost 2.68% overnight. ICICI Bank's chief executive K.V. Kamath said on 3 November 2008, the bank will review interest rates in the next few days.
India's second largest private sector bank by net profit HDFC Bank rose 2.64% to Rs 1,088.55 off day’s low of Rs 1,032 even as ADR slumped 4.81% on Thursday.
India's largest home loan lender by operating income HDFC jumped 2.64%. HDFC is yet to revise its rates, since the firm's borrowing costs have not come down.
The Reserve Bank of India (RBI) on Saturday, 1 November 2008, unexpectedly cut its main short-term lending rate viz. the repo rate to ease a growing cash squeeze, spur faltering economic growth and fend off damage from the global financial crisis.
Meanwhile, inflation based on the wholesale price index rose 10.72% in the year through 25 October 2008, higher than previous week’s 10.68% rise.
Shares of fertiliser makers extended gains after the fertiliser minister said on Thursday, 6 November 2008, he expected gas supply to fertiliser units to more than triple by 2011/12 from current levels. Rashtriya Chemicals , Tata Chemicals, Chambal Fertilisers & Chemicals, GNFC, Nagarjuna Fertilizers & Chemicals and National Fertilizers were up by 2% to 5%.
Roman Tarmat rose 8.51%, on bagging runways upgradation order.
Pre Session Commentary - Nov 7 2008
Today a market is expected to have negative opening on weak global cues. US markets ended in deep red and today Asian markets are trading sharply lower. Thursday, Indian market ended with heavy loses after showing smart recovery due to increase in inflation number to 10.72% for the week ended 25th October 2008. Market opened shapely lower following weak sentiments from global markets. US markets crashed badly and Asian markets were also lower due to disappointing US economic data. Private nonfarm employment in US fell by a larger-than-expected 157,000 in October, according to ADP. Further, market continued to trade lower with little volatility. Though market tried to recover and came out of days’ low on rebound in realty and capital goods shares during last hours of trading but was unable to hold that and drifted down again. From the sectoral front most major contributors of negative sentiments were Metal, Oil & Gas, Reality, Teck, IT, Bank and Auto stocks. However, Reality and Pharma stocks were able to favor from the market. Mid Cap and Small Cap stocks also remained out of favor as ended with cut of more than 2% each. We expect that market may lose further grounds during the trading session.
The BSE Sensex closed lower by 385.79 points at 9,734.22 and NSE Nifty ended down by 102.30 points at 2,892.65. The BSE Mid Caps and Small Caps closed with losses of 76.20 points 3,318.41 and by 84.51 points at 3,880.27. The BSE Sensex touched intraday high of 10,109.45 and intraday low of 9,635.22.
Wholesale price index stood at 10.72% for the week ended 25th October 2008, marginally above the previous week''s 10.68%. The annual inflation rate was 3.11% during the corresponding week of the previous year.
As an aid to the slowing economy, The European Central Bank cut its key lending rate by 50 basis points to 3.25% on Thursday. This is second cut within a month after reduction of 50 basis points on 8th October. Earlier the Bank of England cut rates by 150 basis points and the Swiss National Bank by 50 basis points.
Thursday, the US markets ended lower for second consecutive day on economic concerns and poor earnings. Weekly jobless claims also weighted on the sentiments as for the week ended 1st November stood at 481,000, down 4,000 from the previous week. Further, October unemployment rate is due today. Crude oil futures for the December delivery fell $4.53 to $60.77 a barrel on New York Mercantile Exchange. Crude oil dropped to their lowest level since March 2007, on concern about the impact of a global economic recession on oil demand and steep losses on the markets all over the world.
The Dow Jones Industrial Average (DJIA) dropped by 443.48 points to close at 8,695.79. The NASDAQ Composite (RIXF) index decreased by 72.94 points to close at 1,608.70 and the S&P 500 (SPX) lost 47.89 points to close at 904.88.
Indian ADRs ended down. In technology sector, Infosys ended lower by (10.47%) along with Wipro lost (8.56%), Satyam ended down by (7.19%) and Patni Computers closed lower by (6.14%). In banking sector HDFC Bank and ICICI Bank lost (4.81%) and (2.68%). In telecommunication sector, Tata Communication advanced by (0.15%), while MTNL was down by (1.98%). Sterlite Industries decreased by (15.59%).
Today major stock markets in Asia are trading lower. Japan''s Nikkei is trading lower by 386.85 points at 8,512.29. Further, Hang Seng lost 292.28 points at 13,497.76 and Singapore’s Straits Times plunged 49.82 points at 1,769.38. The Taiwan Weighted tumbled 35.75 points at 4,658.37 and South Korea’s Seoul Composite declined 5.86 points at 1,086.36.
The FIIs on Thursday stood as net buyer in equity and net seller in debt. Gross equity purchased stood at Rs2432.30 Crore and gross debt purchased stood at Rs51.60 Crore, while the gross equity sold stood at Rs2092.80 Crore and gross debt sold stood at Rs382.50 Crore. Therefore, the net investment of equity and debt reported were Rs339.50 Crore and (Rs330.90 Crore) respectively.
On Thursday, the Indian rupee ended at 47.66/69, 0.4% weaker from 47.46/50 at close on Wednesday. India''s rupee ended lower due to heavy losses in the stock market that raised worries of further foreign fund outflows.
On BSE, total number of shares traded was 32.07 Crore and total turnover stood at Rs. 4,010.92 Crore. On NSE, total volume of shares traded was 68.79 Crore and total turnover was Rs 10,894.60 Crore.
Top traded volumes on NSE Nifty – Suzlon Energy with total traded volume of 47058457 shares, followed by Unitech Ltd with 31007469 shares, RPL with 18432508 shares, DLF Ltd with 13359479 shares and ICICI Bank with 13076384 shares respectively.
On NSE Future and Options, total numbers of contracts traded in index futures were 1125600 with a total turnover of Rs.15,371.33 Crore. Along with this total number of contracts traded in stock futures were 983999 with a total turnover of Rs.10,624.26 Crore. Total numbers of contracts for index options were 1121250 and total turnover was Rs.17,279.69 Crore and total numbers of contracts for stock options were 50245 and notional turnover was Rs.560.80 Crore.
Today, Nifty would have a support at 2,724 and resistance at 2,942 and BSE Sensex has support at 9,145 and resistance at 9,932.
Market to extend losses
The market may extend last two days’ fall that followed an earlier strong rebound, tracking weak Asian stocks. Asian stocks fell sharply for a third day as layoffs and corporate profit warnings piled up in the face of a rapidly slowing global economy. Back home, an unexpected rise in inflation had pulled the Sensex down nearly 4% on Thursday, 6 November 2008, in a highly choppy trade.
The rise in inflation shattered hopes of further interest rate cuts by the Reserve Bank of India. Inflation based on the wholesale price index rose 10.72% in the year through 25 October 2008, higher than previous week’s 10.68% rise.
The Indian rupee fell more than half a percent in opening deals on Friday, 7 November 2008, on expectations that losses in overseas markets would lead the stock market to drop and spur foreigners to continue withdrawing their investments. At 9:02 IST, the partially convertible rupee was at 47.95/96 per dollar, compared to Thursday's close of 47.66/69 per dollar.
South Korea's central bank cut interest rates on Friday for the third time in a month, joining a global wave of monetary easing aimed at shoring up the world economy and calming panicked financial markets. The Bank of England spooked investors on Thursday, 6 November 2008, by slashing its key rate by 1.5%, bringing borrowing costs down to the lowest since the 1950s.
US stocks overnight posted their worst two-day slide since October 1987, though S&P 500 futures were mostly unchanged as investors awaited the latest US payroll report due on Friday
US crude oil futures fell to a 1-1/2-year low below $60 a barrel on expectations for a drastic pullback in energy demand
The BSE Sensex lost 8.4% in two trading sessions to 9,734.22 on Thursday, 6 November 2008, from 10,631.12 on 4 November 2008. The slide followed a 24.93% jump in the preceding five trading sessions.
Wall Street bleeds in losses
Dow goes back below the 9,000 mark
US Market started the day, Thursday, 06 November, in the red and gradually went further down throughout the day and ultimately ended considerably lower. Losses kept mounting at Wall Street and Dow closed down by more than 400 points. Uncertainty continued to govern trading action. Disappointing earnings results and guidance along with extremely weak same-store sales results from a host of retailers were the main reasons for today’s negative market sentiment. The market also did not get any support from energy sector as oil prices tumbled by more than 7% once again and was back below $60 today.
The Dow Jones Industrial Average ended lower by 443 points, at 8,695. The Nasdaq Composite Index, ended lower by 72 points at 1,608. S&P 500 ended lower by 48 points at 904.
All thirty Dow stocks are trading in the red today. GM led way for Dow laggards being down by more than 12%. Merck, P&G and Wal Mart are the only three Dow gainers earlier in the day but at the end, they also slipped in the red. Wal-Mart dropped the least today.
The Labor Department reported today that the number of U.S. residents collecting state unemployment benefits reached the highest level in 25 years, rising by 122,000 to a seasonally adjusted 3.84 million in the week ending 25October, 2008.
Meanwhile, the number of first-time applications for benefits fell by 4,000 to 481,000 in the week ending 1 November, 2008. The jobless claims report shows businesses are laying off workers at a rapid pace, while finding a replacement job is ever harder.
Separately, another report showed that nonfarm business productivity rose at a 1.1% annual rate in the third quarter. This was generally in-line with expectations.
Retailers came out with some truly disappointing same-store sales results for October, reflecting the weak state of the consumer. Nordstrom, Target, Macy's and Gap all reported a drop in sales from stores open at least one year. But Wal-Mart beat estimates in the current scenario.
Among earning reports for the day, Media giant News Corp reported earnings per share results that were below expectations. On the other hand, Cisco posted better-than-expected earnings per share results for the latest quarter, but expects a downturn in quarterly revenue.
Yesterday, the ADP national employment report in US had stated that nonfarm private employment declined by 157,000 in October, 2008. A drop of 100,000 was expected. The ADP report is further indication that the economy weakened substantially last month given the negative impacts of the credit crunch, housing market recession and Wall Street turmoil.
The report had also detailed that service industries lost 31,000 jobs in October, while goods-producing industries cut 126,000 jobs, including 85,000 in manufacturing. September was revised to a decrease of 26,000 from a decrease of 8,000.
Volume on the New York Stock Exchange topped 1.5 billion, with declining stocks outpacing advancers 5 to 1. On the Nasdaq, more than 1 million shares exchanged hands, with decliners outpacing advancers roughly 11 to 3.
On Thursday, crude-oil futures for light sweet crude for December delivery closed at $60.77/barrel (lower by $4.53 or 7%) on the New York Mercantile Exchange. Prices reached a low of $60.2 during intra day trading. Prices reached a high of $147 on 11 July but have dropped almost 63% since then. On a yearly basis, crude price is lower by 37%. For this year in 2008, crude prices have dropped 38%.
At the currency market today, the dollar gained as much as 1.6% against a weighted basket of six major currencies after the Bank of England and the European Central Bank slashed benchmark interest rates to stimulate slumping economies. The Bank of England took drastic action earlier Thursday, slashing its key interest rate to 3% from 4.5% previously. The European Central Bank, which sets monetary policy for the 15-nation euro zone, and the Swiss National Bank also moved to cut rates by smaller amounts.
The main focus tomorrow will be the government's employment report before market opens. Following that there will be pending home sales and the wholesale trade report. Consumer credit will be released at 3:00 PM ET. Among companies due for earning reports, GM and Ford are the major names.
Slide to continue
After registering the loss of over 385 points in yesterday's trades, the market is likely to exhibit weak trends on the back of a strong intra-day volatile moves. The meltdown in US markets as fears of a prolonged recession sent investors running for the exits and mixed Asian indices in morning trades likely to put pressure on the domestic indices. On the upside, the Nifty could test around the 2950 level and may witness support around the 2850 level. The Sensex has a likely support at 9600 and may test higher levels of 9850. US indices slumped for a second straight session Thursday, bringing the Dow's losses to 929 points since Election Day. The Dow Jones sliding over 443 points to close at 8696 while the Nasdaq slipping by 73 points at 1609. Except VSNL all the Indian stocks trading on the US bourses fell sharply. Infosys tumbled over 10.47% followe by Wipro & Satayam slipped over 7-8%, while Patni Computers, HDFC Bank, Tata Motors, ICICI Bank, MTNL, Rediff and DR Reddy's were down over 1-6% each. Crude oil prices in the global market slipped on Thursday. The Nymex light crude oil for December series slipped $4.53 at $60.77 per barrel. In the commodity segment, the Comex gold for December delivery moved down by $10.20 to settle at $732.20 an ounce.
Chambal Fertilizers - SELL
We recommend a sell in Chambal Fertilisers and Chemicals from a short-term perspective. It is evident from the charts that this stock has been trending downwards since June high of Rs 96 (52-week high), forming lower peaks and lower bottoms. However, in early October, the stock found support at around Rs 32, which is a key long-term support level and began to trend up. This uptrend of the stock was a corrective up move and it encountered resistance at Rs 54. Subsequently, shaping a bearish engulfing candlestick pattern, the stock resumed its downtrend. On November 6, the stock tumbled over 8 per cent penetrating the corrective up trendline, reinforcing the bearishness. The daily relative strength index (RSI) is declining in the neutral region towards the bearish zone and the weekly RSI is featuring in the bearish zone. We are bearish on the counter from a short-term horizon. We anticipate the stock’s decline to continue until it hits our price target of Rs 38.5 in the forthcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 46.
via BL
Trading Calls - Nov 7 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 - Nov 7 2008
Reliance Industries’ Jamnagar refinery to start next year.(Mint)
Ashok Leyland cuts work to three days a week as demand for heavy duty CVs has fallen.(Mint)
Tata Motors may shut its passenger vehicle unit in Pune for six days.(DNA)
Government asks NTPC to surrender Chhatrasal coal mine block due to limited coal supply for the Sasan power project in Madhya Pradesh.(Mint)
Bharat Forge plans JV with an Alstom unit.(BL)
NTPC to set up four fly-ash based cement plants across the country over the next few years.(DNA)
SBI warns that bank’s NPA levels may rise due to increased level of ‘stressed assets’.(TOI)
ONGC is planning an IPO for its subsidiary that is building the Rs136bn petrochemical project at Dahej in Gujarat.(BS).
Reliance Industries is said to be offering discounts of 5-10% to customers willing to accept two months supplies at one go.(ET)
Bharti Teletech is planning to list next year. (ET)
RBI has rejected Ranbaxy Laboratories’ application for early redemption of US$440mn zero coupon convertible bonds.(ET)
Mahindra & Mahindra has formed a JV with its existing Australian importer and distributor TMI Pacific for marketing, promotion and retailing of its vehicles in Australia. (ET)
Hindalco Industries has raised a five year loan of US$1bn to refinance its US3bn bridge loan to buy Novelis.(BS)
International Coal Ventures, a SPV formed by PSUs eyeing 10% equity in an Australian mining firm.(Mint)
Syndicate Bank may raise Rs3-5bn Tier-II capital during the current fiscal.(BL)
Vedanta Resources has decided to reduce its capex plans by US$5.1bn.(BS)
Escorts shuts down its tractor unit in United States.(TOI)
Glenmark Generics launches hypertension drug in UK.(DNA)
Garware Offshore Services signs contract for acquisition of a Multipurpose Platform Supply Vessel for US$55mn.(DNA)
Sun Pharma has received FDA approval for marketing generic versions of tablets used in the treatment of Parkinson’s disease. (ET)
Kingfisher and Jet Airways may lower fares by upto Rs1,000 on domestic routes. (ET)
State Bank of India has decided to reproduce it prime lending rates by 75bps. (BS)
Videocon has delayed the launch of its Direct-to-home venture. (ET)
Plethico Pharmaceuticals is picking up around 20% stake in a UAE based pharma retail chain.(ET)
Four nuclear equipment makers in the race to become technology partners for the JV between BHEL and NPCIL.(BS)
India plans to import 16mn tonnes of coal in current fiscal.(Mint)
Costlier primary items push up inflation rate to 10.72% for week ended October 25.(BL)
Direct tax collection growth slows down to below 30% in April-October period.(TOI)
Government is not considering a cut in fuel prices as state-run firms are still incurring losses.(FE)
DoT would increase spectrum usage charge on telecom operators by up to 2%. (FE)
Government may restore the duty entitlement passbook scheme for the steel industry. (BS)
Around 30 proposals involving Rs60bn through holding companies have been cleared by the Foreign Investment Promotion Board. (ET)
Guidelines for mobile virtual network operators to launch operations in India are set to be unveiled soon.(ET)
Inconvenience indeed!
An adventure is only an inconvenience rightly considered. An inconvenience is an adventure wrongly considered.
Even the most adventurous are being inconvenienced by the wild swings in the market. Another day and another round of bloodbath in stocks across the globe! The story is all-too familiar by now, and could even be getting a bit monotonous. The writing is on the wall is that we are staring at a global recession. The major worry is how long and severe it will be? Nations across the world have been doing their best to limit the fallout from the unprecedented financial crisis. Those efforts still continue, with central banks cutting rates aggressively to boost lending and pump-prime the contracting economies.
Last week, there was some relief for global equities. This week too started on a promising note. But, the past couple of days have seen resumption of a savage worldwide sell-off, that is threatening to take indices to new lows. It is really tough to make any prediction on the movement of the stock indices, as volatility has increased. This morning's trade in Asian markets is a case in point, with key indices witnessing wild swings. We expect yet another weak opening today. There may be some technical bounce. But, stay light for the weekend and come back to pick up few goodies at lower prices next week.
FIIs were net sellers of Rs5.1bn (provisional) in the cash segment on Thursday while local institutions pumped in Rs3.5bn. In the F&O segment, the foreign funds were net sellers at nearly Rs12bn. On Wednesday, FIIs were net buyers of Rs3.39mn in the cash segment.
US stocks extended the post-election slump into Thursday, as a fresh batch of poor corporate earnings and economic reports heightened fears of a prolonged recession in the world's largest economy.
Disappointing sales reported by retailers coupled with a struggling auto industry and a bleak forecast from Cisco Systems sparked further selling. What was surprising was that the selloff came despite stabilization in the credit markets and rate cuts by major European central banks.
The last two days have been the worst in the US stock market since 1987. In 48 hours, the Dow Jones Industrial Average has dropped nearly 1,000 points, and the Standard & Poor’s 500-stock index has lost nearly 10%.
Investors were also nervous ahead of Friday’s key monthly jobs report, which is also likely to pain a grim picture of the labour market. The report is expected to show that US companies cut hundreds of thousands of jobs in October.
The Dow closed at 8,695.79, down 443.48 points, or 4.9%, its lowest finish since Oct. 28, after swinging in a 518-point range. The S&P lost 47.89 points, or 5%, to 904.88, and the Nasdaq Composite index fell 72.94 points, or 4.3%, to 1,608.70.
The Russell 2000 Index of small US companies declined 3.7% to 495.84.
The two-session decline of 929 points, or 9.7%, in the Dow marked the biggest two-session point loss ever and the biggest two-session percentage decline in 21 years, according to Dow Jones.
The declines on Wall Street came despite sharp reductions in interest rates by leading European central banks seeking to further ease the tight credit markets.
The Bank of England (BOE) lowered its benchmark rate by 1.5%, much more than analysts had expected, and the European Central Bank (ECB) cut its benchmark rate by half a percentage point.
October retail sales at the nation's chain stores were pretty bad, with some discount operators like Wal-Mart managing to buck the trend. The housing market collapse, and the ensuing credit crunch and worsening labor market have hit consumer spending.
Even the sharp fall in oil and gasoline prices has not had any positive impact on consumer spending.
Automakers were hit especially hard on continued worries about their ability to stay afloat without government help. GM slumped 13.7% and Ford lost 5.3%.
Cisco said late on Wednesday that it has stopped hiring and that revenue for the current quarter won't meet forecasts. That overshadowed the company's better-than-expected earnings report. Shares fell 2.6%.
Las Vegas Sands continued to plummet on worries that it may default on certain debt obligations and that it can't raise enough capital. The company operates the Venetian and Palazzo casinos and a pair of casinos in China.
The dollar rallied against the euro and the pound after monetary policy makers in Europe cut interest rates in response to growing economic weakness. However, the greenback edged lower versus the Japanese yen.
COMEX gold for December delivery fell 10.20 to settle at US$732.20 an ounce.
US light crude oil for December delivery fell to a 19-month low, sinking US$4.53 to settle at US$60.77 a barrel on the New York Mercantile Exchange.
Gasoline prices fell another 2.5 cents to a national average of US$2.34 a gallon. The decline marks the 50th consecutive day that prices have decreased. During that same time period, prices dropped by US$1.51 a gallon, or 39.2%.
The credit market continued to improve. The 3-month Libor fell to 2.39% from 2.51% on Wednesday, a nearly four-year low. Overnight Libor rose slightly to 0.33%, bouncing off an all-time low of 0.32% the previous day. Libor is a key interbank lending rate.
The yield on the 3-month Treasury bill, seen as the safest place to put money in the short term, fell to 0.30% from 0.39% on Wednesday. Last month, the 3-month yield reached a 68-year low around 0% as investor panic peaked.
Treasury prices were little changed, with the yield on the benchmark 10-year note at 3.70%.
European stocks ended sharply lower on Thursday, notwithstanding the rate relief from the ECB, the Swiss National Bank and a sharp one from the Bank of England. The pan-European Dow Jones Stoxx 600 index ended 5.6% lower to 215.48 as stocks in the basic resources sector took heavy falls.
All of the 15 Stoxx sector indexes traded lower. Across the exchanges of London, Paris, and Frankfurt, decliners outnumbered advancers by about a 3-to-1 ratio.
UK's FTSE 100 index dropped 5.7% to 4,272.41, slightly outperforming their euro-zone counterparts. Germany's DAX 30 index slid 6.8% to 4,813.57 and the French CAC 40 index slumped 6.4% to 3,387.25.
Overnight losses in the US and the Asian markets coupled with selling pressure in index pivotal dragged the key indices to open with a negative gap. Bulls although managed to stage a strong come back ahead of inflation announcement.
However, markets were unable to hold on to their gains and slipped sharply after India’s Inflation for the week ended Oct 25 rose to 10.72% missing market expectation of 10.49%. Government also announced that it revised inflation for the week ended to August 30 to 12.38% versus 1.1%
Finally, after a volatile session, Indian market fell on Thursday extending its fall to second straight trading session. The BSE benchmark Sensex fell 373 points or 3.7% to close 9,746 and the NSE Nifty index was down 102 points to close at 2,892.
Among the 30-components of Sensex, 24 stocks were in the negative terrain and 6 stocks ended in the green. Reliance Industries, Infosys, Bharti Airtel, HDFC and ICICI Bank were among the major losers. On the other hand, bucking the negative trend were, HUL, JP Associates, Ranbaxy and DLF were among the major gainers.
Shares of Hindustan Zinc slipped by 4% to Rs297 after the company announced that it has cut zinc prices by Rs5,000 per ton, stated reports. The scrip touched an intra-day high of Rs310 and a low of Rs292 and recorded volumes of over 19,000 shares on BSE.
Shares of KLG Systel snapped its rally erased all its gains and finally ended 3% lower at Rs110. The company announced that the Power System Solutions (PSS) Division of the company received orders of Rs1.32bn from Punjab State Electricity Board under Rajiv Gandhi Gramin Vidyutikaran Yojna for design, engineering, erection and commissioning of 11 KV lines, 25 KVA substations and release of around 1.48 lacs new connections to Below Poverty Line (BPL) households. The scrip touched an intra-day high of Rs125 and a low of Rs106 and recorded volumes of 72,000 over shares on BSE.
SBI announced that it would cut its lending rate by 75 basis points, following a reduction in the benchmark rate by the central bank and measures to free up cash in the system. The reduction would be effective from November 10. The stock ended down by 4.5% to Rs1215 hitting an intra-day high of Rs1265 and a low of Rs1201 and recorded volumes of over 14,00,000 shares on BSE.
Suzlon Energy announced that the New Zealand based TrustPower Ltd on November 02, 2008 did an official public opening of Stage 1 of its first Australian wind farm located at Snowtown 170 km north of Adelaide. The said wind farm comprises of 47 numbers of Suzlon S88 turbines. The stock gained 3% to Rs60 after hitting an intra-day high of Rs63 and a low of Rs52 and recorded volumes of over 2,00,00,000 shares on BSE.
Bulls might look to make a come back on Friday after sliding over atleast in the morning trades as in a surprising move major central banks in Europe cut interest rate. The Bank of England slashed its key interest rate by as much as 1.5 percentage points.
However, given the bleak economic background, both globally and locally, stocks are unlikely to rise too much. There may be some more room on the upside, but there will be selling after every spurt.
India Inflation Update
Inflation based on the wholesale price index (WPI) for the week ended October 25, 2008 increased to 10.72% as compared to 10.68% a week ago.
The Index for all commodities for the week increased to 238.50 as compared to 238.30 in the previous week. The increase in the WPI index is due to increase in the prices of primary articles. Fuel, power, light remains unchanged and manufactured products have decreased.
The wholesale price-based inflation was 3.11% during the corresponding week last year.
IMF - India to slowdown
The International Monetary Fund (IMF) on Thursday lowered India's
economic growth forecast for next year to 6.3 percent - 0.6 percent less than what it had projected last month - as the financial crisis envelops the world.
Growth in world economic output for next year is also likely to suffer, with the multilateral funding agency projecting it to fall by 0.8 percent at 2.2 percent.
The forecast was part of the World Economic Outlook Update the Fund released today.
Painting a scary picture of world trade, the IMF forecast suggests that the global growth in volume of trade in goods and services would slide from 7.2 percent to 4.6 percent in 2008 and dip to 2.1 percent next year.
The world economic growth is likely to slowdown from 5 percent in 2002 to 3.37 percent in 2008, while India's economic growth for this year is expected to dip by just 0.1 percent to 7.8 percent than what was forecast last month.
As per the IMF projections, India is likely to record an economic growth of 6.6 percent during October-December as against 8.9 percent in the corresponding period in 2007.
"The downward revisions to 2009 real GDP growth projections are somewhat larger in emerging economies, averaging one percent," the IMF said.
In line with the market development, IMF has revised petroleum price projection from 100 dollar a barrel to 68 dollar a barrel for 2009.
According to IMF projections, the UK will be the worst hit on account of the global crisis and may witness contraction of its economy by 1.3 percent in 2009.
In addition, the advanced countries which will witness negative growth in 2009 include the US, Germany, France, Italy, Spain and Japan.
Turnover surges
RIL November 2008 futures at premium
Nifty November 2008 futures were at 2883.30, at a discount of 9.35 points as compared to spot closing of 2892.65. NSE's futures & options (F&O) segment turnover was Rs 43,836.07 crore, which was higher than Rs 38,550.94 crore on Wednesday, 5 November 2008.
Reliance Industries (RIL) November 2008 futures were at premium at 1174 compared to the spot closing of 1170.55.
Bharti Airtel November 2008 futures were at discount at 636 compared to the spot closing of 639.40.
ICICI Bank November 2008 futures were at discount at 428.60 compared to the spot closing of 433.40.
In the cash market, the S&P CNX Nifty lost 102.30 points or 3.42% at 2892.65.
Bullion metals turn further pale
Firm dollar post interest rate cuts in Europe pressure bullion metals
Bullion metals ended lower today, Thursday, 06 November, 2008. Gold prices dropped as dollar firmed up today and also as investors once again began cautious about the weakness in the economy. Silver prices also dropped today.
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 Thursday, Comex Gold for December delivery fell $10.2 (1.4%) to close at $732.2 an ounce on the New York Mercantile Exchange. Prices earlier rose to a high of $761. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (29.7%) since then. Last 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 11.9% till date. The dollar index has gained 10.6% 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 Thursday, Comex silver futures for December delivery rose by 38 cents (3.8%) to $10.055 an ounce. Last week, silver fell 1.9%. For the month of October, silver slipped by 20%. Till date, silver has lost 32% 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.
At the currency market today, the dollar gained as much as 1.6% against a weighted basket of six major currencies after the Bank of England and the European Central Bank slashed benchmark interest rates to stimulate slumping economies. The Bank of England took drastic action earlier Thursday, slashing its key interest rate to 3% from 4.5% previously. The European Central Bank, which sets monetary policy for the 15-nation euro zone, and the Swiss National Bank also moved to cut rates by smaller amounts.
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 lower by Rs 181 (1.5%) at Rs 11,559 per 10 grams. Prices rose to a high of Rs 11,778 per 10 grams and fell to a low of Rs 11,471per 10 grams during the day’s trading.
At the MCX, silver prices for December delivery closed Rs 232 (1.4%) higher at Rs 17,165/Kg. Prices opened at Rs 16,931/kg and rose to a high of Rs 17,249/Kg during the day’s trading.
Crude back at $60
Prices drop by almost $5 for second consecutive day
Crude prices dropped by a huge amount on Thursday, 06 November, 2008. Economic concerns and weak economic report were the main reasons for this drop. Also yesterday’s weekly inventory report stating that motor gasoline inventories witnessed unexpected jump pressured crude prices.
On Thursday, crude-oil futures for light sweet crude for December delivery closed at $60.77/barrel (lower by $4.53 or 7%) on the New York Mercantile Exchange. Prices reached a low of $60.2 during intra day trading. Prices reached a high of $147 on 11 July but have dropped almost 63% since then. Last week, prices rose by 5.7%. On a yearly basis, crude price is lower by 37%. For this year in 2008, crude prices have dropped 38%.
For the month of October, 2008, crude prices ended lower by 32.6%, the biggest monthly drop since 1983.
At the currency market today, the dollar gained as much as 1.6% against a weighted basket of six major currencies after the Bank of England and the European Central Bank slashed benchmark interest rates to stimulate slumping economies. The Bank of England took drastic action earlier Thursday, slashing its key interest rate to 3% from 4.5% previously. The European Central Bank, which sets monetary policy for the 15-nation euro zone, and the Swiss National Bank also moved to cut rates by smaller amounts.
The Labor Department reported today that the number of U.S. residents collecting state unemployment benefits reached the highest level in 25 years, rising by 122,000 to a seasonally adjusted 3.84 million in the week ending 25October, 2008.
Meanwhile, the number of first-time applications for benefits fell by 4,000 to 481,000 in the week ending 1 November, 2008. The jobless claims report shows businesses are laying off workers at a rapid pace, while finding a replacement job is ever harder.
Separately, another report showed that nonfarm business productivity rose at a 1.1% annual rate in the third quarter. This was generally in-line with expectations.
The EIA reported yesterday that crude supplies were unchanged last week and remained at 311.9 million barrels for the week ended 31 October, 2008. Data show that crude stocks had climbed nearly 22 million barrels over the last six weeks. But motor gasoline supplies climbed unexpectedly, up by 1.1 million barrels in the latest week to 196.1 million. Supplies of distillates, which include heating oil, rose 1.2 million to 127.8 million.
OPEC officials decided last month 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 cut by 1.5 million in November.
Last month, 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, December reformulated gasoline fell 8 cents to $1.34 a gallon and December heating oil dropped 11 cents to end at $1.94 a gallon.
December natural-gas futures dropped 27 cents to $6.98 per million British thermal units. EIA reported today that natural-gas inventories rose by 12 billion cubic feet for the week ended 31 October, 2008.
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