Wednesday, November 12, 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
12/11/2008 533029 ALKALI OPG SECURITIES P LTD B 133187 159.57
12/11/2008 533029 ALKALI OPG SECURITIES P LTD S 133187 159.45
12/11/2008 519485 ASIA IND NET DEVANG J GADOYA S 21200 12.74
12/11/2008 506894 CHEMF ALKAL TITANIUM EQUIPMENT AND ANODE MFG. CO. LTD B 160000 35.00
12/11/2008 506894 CHEMF ALKAL DR. RAO HOLDINGS PTE LTD. S 160000 35.00
12/11/2008 526504 DOLPH MED SE INTEGRATED FINANCIAL SERVICES LTD B 110000 3.21
12/11/2008 526504 DOLPH MED SE SAROJINI FINANCE AND INVESTMENT PVT LTD S 110000 3.21
12/11/2008 531777 INTELLVIS SO COPTHALL MAURITIUS INVESTMENT LIMITED B 169930 24.70
12/11/2008 531777 INTELLVIS SO BSMA LIMITED S 169930 24.70
12/11/2008 530955 KAILASH FICO DASH PHARMACEUTICALS PVT LTD B 150000 24.75
12/11/2008 531497 MADHUCON PRO COPTHALL MAURITIUS INVESTMENT LIMITED B 525229 56.80
12/11/2008 531497 MADHUCON PRO BSMA LIMITED S 525229 56.80
12/11/2008 532469 MATHER PUMPS QUEST PORTFOLIO B 83162 204.88
12/11/2008 531096 MOUNT EVE MI TATA TEA LTD B 244322 92.16
12/11/2008 512047 NATRAJ FIN SPARKLE TOOTHBRUSH MFG CO PVT B 30000 34.45
12/11/2008 507609 OLYMPIC OIL PUNNISANGHAVI B 5000 3.85
12/11/2008 507609 OLYMPIC OIL PATIL VIJAY BALWANT S 5000 3.85
12/11/2008 517417 PATEL AIRTEM PRAGATI TI UP PVT LTD S 28000 33.10
12/11/2008 531646 RFL INTERNAT ALPHA GRAPHIC INDIA LTD S 79295 0.75
12/11/2008 531646 RFL INTERNAT KALAVATIBEN BHARATKUMAR SHAH S 31667 0.76
12/11/2008 531646 RFL INTERNAT RAVI THANVI S 72474 0.77
12/11/2008 526861 RISHI LASER RAKESHRADHEYSHYAMJHUNJHUNWALA B 380000 29.65
12/11/2008 526861 RISHI LASER REKHARAKESHJHUNJHUNWALA S 380000 29.65
12/11/2008 526365 SHYAM STAR SETU SECURITIES PVT LTD B 223886 22.21
12/11/2008 532730 STL GLOBAL SURESH BABULAL SHAH B 108600 7.49
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
12-NOV-2008,ALKALI,Alkali Metals Limited,SHRI BRIJ COMMODITIES PVT LTD,BUY,67981,157.51,-
12-NOV-2008,HERITGFOOD,Heritage Foods (I) Ltd.,NIRVANA HOLDINGS PRIVATE LIMITED,BUY,702260,98.65,-
12-NOV-2008,HITECHPLAS,Hitech Plast Limited,OMEGA PROPERTIES PRIVATE LTD,BUY,105000,43.83,-
12-NOV-2008,ALKALI,Alkali Metals Limited,SHRI BRIJ COMMODITIES PVT LTD,SELL,67981,157.68,-
12-NOV-2008,HERITGFOOD,Heritage Foods (I) Ltd.,TEMPLETON MUTUAL FUND,SELL,700000,98.65,-
12-NOV-2008,HITECHPLAS,Hitech Plast Limited,PRIME BROKING COMPANY ( INDIA ) LTD - PWM,SELL,117358,42.84,-
The Indian market tumbled for the second straight session to close with deep cut on heavy selling pressures across the sectoral indices. The market opened on the back foot tracking the weak cues from the global markets and recovered a bit on the back of growth in IIP figures that rose 4.8% in September 2008 much higher than 1.4% rise in August 2008. However, this does not hold the market for so long and gave up to drift downward after the mid session. The investors took calculated steps to book their position ahead of the state elections starting from next week. Five Indian states go to the polls in the next few weeks. Polls will be held in two phases on 14 November 2008 in Chhattisgarh, followed by Madhya Pradesh on 25 November 2008. Delhi and Mizoram will go to the polls on 29 November 2008 and Rajasthan on 4 December 2008. The BSE Sensex ended above 9,500 level with loss of more than 3% and NSE Nifty closed above 2,840 with fall of more than 3%. From the sectoral front, the Retail index tumbled to close with loss of more than 7%.
Among the Sensex pack 28 stocks ended in negative territory and 2 in positive. The market breadth was negative as 1701 stocks closed in red while 818 stocks closed in green and 76 stocks remained unchanged.
The BSE Sensex closed lower by 303.36 points at 9,536.33 and NSE Nifty fell by 90.2 points at 2,848.45. The BSE Mid Caps and Small Caps closed with losses of 75.43 points and 74.63 points at 3,281.27 and 3,813.38. The BSE Sensex touched intraday high of 9,928.60 and intraday low of 9,376.73.
Losers from the BSE Sensex pack are JP Associates 9.13%, DLF 8.61%, ICICI Bank 8.31%, Reliance Infra 6.53%, Hindalco Inds 5.75% and Sterlite Inds 4.57%.
The BSE Realty index closed lower by (7.34%) or 162.07 points at 2,046.64. Major losers are Indiabull Real (13.82%), DLF (8.61%), Anant Raj (6.55%), Penland (4.96%), Ansal Infra (4.38%) and Unitech (4.02%)
The BSE Bankex index fell (4.38%) or 237.83 points to close at 5,187.67. Losers are ICICI Bank (8.35%), Axis bank (6.82%), Yes bank (5.48%), PNB (4.48%), Indus Ind (3.87%) and SBI (3.86%).
The BSE Metal index dropped by (3.67%) or 191.88 points to close at 5,041.89. Scrips that fell are Welspun Guj (8.81%), SAIL (8.24%), Jindal Saw (7.22%), Jai Corp (6.44%), Hindalco Inds (5.75%), NMDC (4.97%) and Sterlite Inds (4.57%).
The BSE CG index fell (3.63%) or 7,257.53 points to close at 7,257.53 as Thermax 8.69%, Crompton Greaves 7.87%, Reliance Industrial Infra 7.48%, Gammon India 6.25%, ABB 5.10% and L&T 4.20% closed in negative.
The BSE Oil and Gas index dropped by (2.96%) or 175.07 points to 5,747.54 as Aban Offshore 9.36%, Cairn India 3.92%, Reliance Industries 3.72%, ONGC 3.20%, Gail India 3.02% and RPL 2.92% closed in red.
The market saw high volatility during the day, as stocks gyrated between the either sides of the zones throughout the session with the Sensex witnessing an intra-day swing of 551 points. The market opened lower on overnight loss in the US markets, but pared early losses as investors' sentiment turned positive and touched the day’s high of 9,929, up 59 points. Thereafter, sustained selling in frontline, realty and banking stocks saw the Sensex enter into negative territory. After displaying some range-bound moves, the market plunged deep into the red on heavy selling towards the close to touch the day's low of 9,377. The Sensex finally closed the session at 9,536, down 303 points. Nifty had a close at 2,855, down 84 points.
The breadth of the market was negative. Of the 2,593 stocks traded on the BSE, 1,673 stocks declined, whereas 845 stocks advanced. Seventy five stocks ended unchanged. Among the sectoral indices BSE Realty shed 7.34%, BSE Bankex fell 4.38% and BSE Metal was down 3.67%. The remaining indices were 1-3% down.
Selling was evident in select heavyweights. JP Associates dropped 9.13% at Rs77.10, DLF declined 8.61% at Rs244.60, ICICI Bank tumbled 8.35% at Rs397.90, Reliance Infrastructure shed 6.53% at Rs540.70, Hindalco Industries dipped 5.75% at Rs56.55, Hindustan Unilever was down 4.79% at Rs234.65 and Sterlite Industries shed 4.57% at Rs237.05.
Over 1.74 crore shares of Tata Teleservices changed hands on the BSE followed by Suzlon Energy (1.73 crore shares), GVK Power and Infrastructure (1.60 crore shares), JP Associates (87 lakh shares) and Reliance Natural Resources (86 lakh shares).
Nifty November futures at discount
Nifty November 2008 futures were at 2,836.35, at a discount of 12.10 points as compared to spot closing of 2,848.45. Turnover in NSE's futures & options (F&O) segment surged to Rs 49,617.63 crore from Rs 40,386.80 crore on Monday, 10 November 2008.
Reliance Industries November 2008 futures were at discount at 1,157.40 compared to the spot closing of Rs 1,162.20.
Infosys Technologies November 2008 futures were at discount at 1,254.15 compared to the spot closing of Rs 1,259.45.
ICICI Bank November 2008 futures were at premium at 398 compared to the spot closing of Rs 397.30.
In the cash market, the S&P CNX Nifty lost 90.20 points or 3.07% at 2,848.45.
Key benchmark indices slumped in volatile trade, extending Tuesday's (11 November 2008) losses on political uncertainty ahead of the beginning of assembly polls in five states. Volatility on the domestic bourses was partly due to volatility on the global markets. The BSE 30-share Sensex was down 303.36 points or 3.08% All the BSE sectoral indices were in the red.
Selling by foreign funds pulled the market down. As per the provisional data released by the stock exchanges after trading hours, foreign funds today, 12 November 2008, dumped shares worth Rs 735.14 crore. Domestic funds bought stocks worth Rs 215.48 crore.
Trading was choppy on the domestic bourses. By early afternoon trade, the market had cut earlier steep losses on higher-than-expected industrial production growth in September 2008 and gains in US index futures. Sensex rose 88.91 points in early afternoon trade soon after the industrial production data hit the market at about 12:00 IST, recovering 369.27 points from a low of 9,559.33 hit in early trade. The upmove was short-lived and a sell-off gripped the market in mid-afternoon trade. The barometer index tumbled 462.96 points at the day's low in mid-afternoon trade.
Five Indian states go to the polls in the next few weeks in what is widely seen as a test of the popularity of the country's main political parties viz. the Congress and the BJP, ahead of national elections in the first half of calendar year 2009. Polls will be held in two phases on 14 November 2008 in Chhattisgarh, followed by Madhya Pradesh on 25 November 2008. Delhi and Mizoram will go to the polls on 29 November 2008 and Rajasthan on 4 December 2008. The results of these five states are expected on 8 December 2008.
Asian markets, which opened before Indian markets, dropped in volatile trade on gloomy US corporate news overnight. Key benchmark indices in Singapore, Japan, Taiwan, Hong Kong, and South Korea were down by between 0.43% and 1.29%. China's Shanghai Composite rose 0.84%
US aluminium maker Alcoa said on Tuesday, 11 November 2008, it plans to cut 3,50,000 tonnes of worldwide aluminum-making capacity due falling demand and a weak global economy. Another US firm Tyco International gave a dismal future outlook and US coffee chain operator Starbucks Corp provided more evidence that consumers are cutting back in a harsh economic environment.
European markets, which opened after Indian market, rose in choppy trade as mining stocks tracked firmer metals prices and banks advanced after recent losses. Key benchmark indices in UK, Germany and France were up by between 0.18% and 0.55%.
US index futures reversed earlier gains. Trading in US index futures indicated the Dow could fall 2 points at the opening bell
India's industrial production rose 4.8% in September 2008, much higher than an upwardly revised 1.4% growth in August 2008, data released by the government at about 12:00 IST today showed. But there has been a steep slowdown in growth this year. The cumulative increase in industrial production during April-September 2008 period was 4.9% as against 9.5%, during the corresponding period last year.
Another data that reflected slowdown in industrial activity and trade was a 5% fall in excise and customs collection during October 2008. The data was released by the government on Tuesday, 11 November 2008.
The BSE 30-share Sensex was down 303.36 points or 3.08% to 9,536.33. The S&P CNX Nifty lost 90.20 points, or 3.07%, to 2,848.45.
Nifty November 2008 futures were at 2,836.35, a discount of 12.10 points as compared to spot closing. Turnover in NSE's futures & options (F&O) segment surged to Rs 49,617.63 crore from Rs 40,386.80 crore on Tuesday, 11 November 2008.
The market had witnessed a sharp fall in the past two trading sessions. The BSE Sensex has declined 999.83 points or 9.48% in the past two trading sessions from 9,536.33 on 10 November 2008. The Sensex had tumbled 696.47 points or 6.61% to 9,839.69 on Tuesday, 11 November 2008 on dip in exports in October 2008 for the first time in any month in five years and on weak global cues.
The barometer index is down 10447.30 points or 51.49% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 11367.08 points or 53.60% below its all-time high of 21,206.77 struck on 10 January 2008.
The market breadth, indicating the overall health of the market, was weak on BSE with 1678 shares declining as compared with 848 that advanced. 74 shares remained unchanged.
The BSE mid-cap index fell 2.25% to 3,281.27 and the BSE small-cap index lost 1.92% to 3,813.38
The total turnover on the BSE amounted to Rs 3680 crore as compared to Rs 3,731.03 crore on Tuesday, 11 November 2008.
Among the 30-member Sensex pack, 28 declined while the rest gained.
India's largest dam builder Jaiprakash Associates tumbled 9.13% to Rs 77.10 on 87.11 lakh shares after foreign fund BSMA on Tuesday, 11 November 2008 sold around 1.97 crore shares at Rs 87.25 a share to another foreign fund Copthall Mauritius Investments in a buck deal on BSE. The scrip was the biggest loser from the Sensex pack.
Hindustan Unilever (down 4.81% to Rs 234.60), Reliance Infrastructure (down 4.40% to Rs 553), and Larsen & Toubro (down 4.13% to Rs 828.20), tumbled from the Sensex pack.
Realty shares declined on concerns the global credit crunch and a rise in borrowing costs will lead to a shortage of funds and thereby impact profitability. Unitech (down 3.04% to Rs 49.50), DLF (down 8.28% to Rs 245.50), and Indiabulls Real Estate (down 13.05% to Rs 113.60), dropped. The BSE Realty index tumbled 7.34% to 2046.64 and was the worst performing sectoral index on BSE.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) lost 3.56% to Rs 1164 in volatile trade on concern of further weakening in gross refining margins given sluggish global demand for petroleum products. The stock had plunged 7.37% on Tuesday, 11 November 2008, on reports of a likely delay for two key oil and gas projects.
Bank shares slipped on worries about bad loans in a slowing economy. Bankex was down 4.38% at 5,187.67. India's largest private sector bank by net profit ICICI Bank slumped 8.10% to Rs 399 after its American depository receipt (ADR) plunged 11.26% on Tuesday, 11 November 2008 on the NYSE.
India's second largest private sector bank by net profit HDFC Bank slipped 0.85% to Rs 1014 as its ADR shed 8.60% on Tuesday, 11 November 2008. India's top state-run bank by market capitalisation State Bank of India fell 4.14% to Rs 1172.10
Metal shares declined after commodity prices plunged on the London Metal Exchange on Tuesday, 11 November 2008. The BSE Metal index was down 3.67% at 5,041.89. Sterlite Industries (down 4.49% to Rs 237.55), Hindalco Industries (down 5.58% to Rs 56.65), and Tata Steel (down 2.41% to Rs 186.30), slipped.
Shanghai copper futures fell to their weakest in almost four years on Wednesday, 12 November 2008, chasing sharp losses overnight in London Metal Exchange (LME) on gathering gloom about the global economy. A measure of six metals traded on the London Metal Exchange (LME) declined 4.2% yesterday (11 November 2008) to the lowest level since September 2004.
Auto shares extended losses for the second running day after data showed automobile sales in the festive month of October fell 14.42%. The BSE auto index was down 2.59% at 2,542.19. Mahindra & Mahindra (down 4.30% to Rs 342), Tata Motors (down 3.22% to Rs 150.30), and Maruti Suzuki India (down 1.06% to Rs 566), edged lower.
The total number of automobiles (which include cars, commercial vehicles, two-wheelers etc) sold in October 2008 slipped to 8.65 lakh compared with 10.11 lakh units sold in October 2007. The key reason for the sharp decline in sales was the credit squeeze as 70% of vehicle sales in the country (90% in case of commercial vehicles) are financed through loans.
India's largest oil exploration firm by market capitalisation Oil and Natural Gas Corporation lost 3.27% to Rs 711. ONGC chairman R S Sharma on Tuesday, 11 November 2008, said it will lose Rs 300-400 crore annually if it followed a finance ministry directive to keep 60% of its surplus cash with state-run banks.
The government on Tuesday, 11 November 2008, asked Central public sector enterprises (CPSEs) to park at least 60% of their surplus funds amounting to over Rs 1,00,000 crore with public sector banks (PSBs) and desist from calling for competitive bids for making such deposits.
IT pivotals came off from higher levels but most of them managed to post small gains on weak rupee. The BSE IT index was down 0.08% to 2,632.89, and was the best performing sectoral index on BSE. India's fourth largest IT exporter by sales Wipro rose 0.89% to Rs 250 after hitting a high of Rs 261.25. India's second largest IT exporter by sales Infosys rose 0.18% to Rs 1257.90, off day's high of Rs 1305. India's largest IT exporter by sales Tata Consultancy Services eased from day's high of Rs 552.80, to settle 0.22% higher at Rs 527.25.
However India's third largest IT exporter by sales Satyam Computer Services fell 1.19% to Rs 266 as its ADR fell 5.73% overnight. The stock declined from high of Rs 274.50 during the day.
The rupee was trading at 48.84 per dollar slipping more than 1% on heavy dollar buying by banks and pick-up in demand from importers amid weak Asian equity markets. A weak rupee benefits IT firms as they derive a lion's share of revenue from exports.
Telecom pivotals succumbed to selling pressure for the second running day on reports new telecom companies planning to enter the Indian market to offer 3G services may have to pay 3% of their aggregate revenues to the government. India's top mobile operator by market capitalisation, Bharti Airtel lost 3.70% to Rs 633.50, after sliding 7.20% on Tuesday, 11 November 2008. India's second largest cellular services provider by market capitalisation Reliance Communications fell 1.07% to Rs 218 after declining 6.39% on Tuesday, 11 November 2008
Tata Teleservices (Maharastra), a unit of Tata Teleservices, spurted 8.25% to Rs 18.10, on reports NTT DoCoMo Inc, Japan's biggest mobile phone carrier, is set to announce a plan to buy a stake in TTML's parent firm Tata Teleservices today (12 November 2008).
As expected the deal was announced after trading hours. NTT DoCoMo Inc, acquired a 26% stake for $2.7 billion (Rs 13,070 crore) in Tata Teleservices, to expand into the world's fastest-growing major wireless market, valuing the company at $10.4 billion. Seperately, DoCoMo also expects to make an open offer to acquire up to 20% of TTML through a joint offer with Tata Sons.
Shares of three state-run oil marketing firms rose after after the crude oil price fell to its lowest since March 2007. Bharat Petroleum Corporation (BPCL) (up 6.06% to Rs 321.40), Indian Oil Corporation (IOC) (up 4.93% to Rs 377), and Hindustan Petroleum Corporation (HPCL) (up 6.84% to Rs 214), rose.
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. Meanwhile, oil minister Murli Deora today, 12 November 2008, said the government may consider cutting fuel prices if global crude prices and the rupee stabilise.
US crude oil dipped 8 cents a barrel to $59.25 today, 12 November 2008 after falling as far as $58.32 the previous day, the lowest level since March 2007.
Reliance Industries topped turnover chart on BSE clocking turnover of Rs 350.35 crore followed by State Bank of India (Rs 230 crore), Reliance Capital (Rs 176 crore), ICICI Bank (Rs 162.40 crore) and Reliance Infrastructure (Rs 148.25 crore).
Tata Teleservices led the volume chart on BSE notching volumes of 1.75 crore shares followed by Suzlon Energy (1.74 crore shares), GVK Power & Infrastructure (1.61 crore shares), Jaiprakash Associates (87.20 lakh shares) and Reliance Natural Resources (86 lakh shares).
Among the side counters, Incap (up 15.40% to Rs 12.74), Ceekay Daikin (up 12.40% to Rs 28.10), Savera Hotel (up 11.11% to Rs 40), Mather & Pumps (up 10% to Rs 205), and JL Morison (up 9.97% to Rs 180.85), surged.
However RTS Power (down 17.06% to Rs 106), Vyapar Industries (down 16.21% to Rs 46), Lloyd Metal (down 15.70% to Rs 16.65), Simplex Project (down 14.23% to Rs 66), and Atul Auto (down 14.17% to Rs 20.60), slipped.
The market remains shut on Thursday, 13 November 2008 on account of Gurunanak Jayanti
US shares ended lower for the second day in a row on Tuesday, as recession fears offset a new government plan to help troubled homeowners. Also, quarterly results and outlook from luxury home builder Toll Brothers and coffee retailer Starbucks heightened concerns over rapidly contracting consumer spending.
Deteriorating outlook for the American industry and crude oil's drop below US$59 a barrel signaled that the worldwide economic slump will last longer than thought.
GM shares tumbled to the lowest price since 1943 as the automaker crept closer to bankruptcy, while Tyco International, the world's largest maker of security systems, sank 14% on a profit forecast that trailed analysts' estimates.
Hartford Financial Services Group slid 23% after Goldman Sachs said that investment losses may force insurers to raise more capital and threaten credit ratings. All 40 energy shares in the S&P 500 Index decreased as crude declined to a 19-month low.
The S&P 500 index fell 20.26 points, or 2.2%, to 898.95. The Dow Jones Industrial Average dropped 176.58 points, or 2%, to 8,693.96 as 29 of its 30 companies declined. The Nasdaq Composite Index slid 2.2% to 1,580.9.
Market breadth was negative. Five stocks declined for each that rose on the New York Stock Exchange.
US stocks slumped through the early afternoon on recession fears, then recovered most of those losses after the government's mortgage modification plan was unveiled. But the recovery attempt fizzled out by the close.
Corporate news dominated on Tuesday, as government offices and Treasury markets were closed for Veterans Day.
In the afternoon, the Bush administration released its plan to help borrowers. The current plan focuses on Fannie Mae and Freddie Mac - which own or back a combined US$5 trillion in mortgages. However, the plan does not provide any direct financial help from the US government.
American Express shares fell 6.6% despite the Federal Reserve giving the approval for the company and its American Express Travel unit to become bank holding companies.
GM and Ford continued to slide on worries that the companies won't be able to stay afloat without government intervention. GM plunged to a 65-year low after it said it will idle an additional 1,900 jobs on top of those already announced. On Friday, GM posted a steep loss and said it is running out of cash.
Citigroup said it will modify US$20bn in home loans in an effort to keep 130,000 challenged borrowers from defaulting. Citigroup joins Bank of America and JPMorgan in announcing loan modification programs.
Late on Monday, Starbucks reported weaker earnings and higher revenue, both of which missed estimates. Shares declined modestly on Tuesday.
Luxury homebuilder Toll Brothers warned that fiscal fourth-quarter homebuilding revenue fell sharply from a year ago. The company's CEO said that signs of stabilization in the sector that were present a few months ago have reversed amid the financial crisis.
General Growth Properties, the No. 2 mall operator, plunged 64% in unusually active NYSE trade after the company warned it may file for bankruptcy because of near-term debt issues. After the close, S&P said GGP will be removed from the index after the close of trade on Wednesday and replaced by biotech Cephalon.
Altria, the parent of Philip Morris USA, said it has started to cut jobs because of the economic turmoil.
The dollar gained against the euro and fell versus the yen. COMEX gold for December delivery fell US$1.40 to settle at US$732.80 an ounce.
US light crude oil for December delivery fell US$3.08 to settle at a 19-month low of US$59.33 a barrel on the New York Mercantile Exchange.
Gasoline prices dipped another 2 cents to a national average of US$2.22 a gallon. The decline marks the 55th consecutive day that prices have decreased. During that same time period, prices dropped by US$1.63 a gallon, or 42.4%.
The credit market continued to improve, with lending rates continuing to retreat from accelerated levels.
The 3-month Libor fell to 2.18% from 2.24% on Monday, a four-year low. Overnight Libor stood at 0.35%, unchanged from Monday and up modestly from an all-time low of 0.32% last week. Libor is a key inter-bank lending rate.
The Libor-OIS spread, a measure of cash scarcity, fell to 1.69% from 1.80% on Friday. The TED spread, a key indicator of risk, narrowed to 1.96% from 2.03% on Monday.
Recession worries drag bullion metals lower
Bullion metals ended considerably lower on Tuesday, 11 November, 2008. Gold and silver prices fell following the big drop in US stocks at Wall Street today. Investors became concerned that global recession will definitely lower the demand for the precious metals.
On Tuesday, Comex Gold for December delivery fell $13.7 (1.8%) to close at $732.8 an ounce on the New York Mercantile Exchange. Prices earlier fell to a low of $725.5. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (29%) since then. Last week, gold prices ended higher by 2.2%. 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 12.8% till date. The dollar index has gained 10% 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 Tuesday, Comex silver futures for December delivery fell 41.5 cents (4.1%) to $9.805 an ounce. Last week, silver gained 2.3%. For the month of October, silver slipped by 20%. Till date, silver has lost 26.3% 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. 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.
At the currency market on Tuesday, the dollar was firmer against all major counterparts other than the Japanese yen as risk appetite faded and equity markets weakened. The dollar index, a measure of the greenback against a trade-weighted basket of six major currencies, rose to 87.034 from 85.977 in late North American trading Monday.
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 37 (0.3%) at Rs 11,624 per 10 grams. Prices rose to a high of Rs 11,654 per 10 grams and fell to a low of Rs 11,505 per 10 grams during the day's trading.
At the MCX, silver prices for December delivery closed Rs 228 (1.3%) lower at Rs 16,732/Kg. Prices opened at Rs 16,951/kg and fell to a low of Rs 16,490/Kg during the day's trading.
Prices drop to such levels for first time in twenty months
Crude prices ended substantially lower on Tuesday, 11 November, 2008 and dropped below the $59 mark for the first time in twenty months. Crude prices following the big drop in US stocks at Wall Street today. Investors became concerned that global recession will definitely lower the demand for crude in coming months.
On Tuesday, crude-oil futures for light sweet crude for December delivery closed at $59.33/barrel (lower by $3.08 or 4.9%) on the New York Mercantile Exchange. Prices reached a low of $58.6 during intra day trading. Prices reached a high of $147 on 11 July but have dropped almost 66.3% since then. Last week, prices fell by 10%. On a yearly basis, crude price is lower by 40%. For this year in 2008, crude prices have dropped 41.5%.
For the month of October, 2008, crude prices ended lower by 32.6%, the biggest monthly drop since 1983.
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 decided to cut by 1.5 million in November. After that, Organization of the Petroleum Exporting Countries has pledged to cut production even deeper if prices are not in the $70-$90 range in its 1& December meeting.
It was also reported today that, IEA (International Energy Agency), which coordinates energy policy in 28 developed countries, will reduce the estimated growth in global demand for a third month in a report tomorrow.
The IEA already has cut its 2008 forecast about 1.3 million barrels a day in seven revisions this year. Last week, it published a summary of its annual World Energy Outlook, slashing its 2030 projection by 9.4% to 106 million.
Before that, earlier last month, in the latest monthly prediction, the Organization of the Petroleum Exporting Countries said that global oil consumption will grow 550,000 barrels a day this year compared with a year ago, down 330,000 barrels from last month's forecast. Total consumption will stand at 86.5 million barrels a day. For the next year, demand will grow 800,000 barrels a day, down 100,000 barrels from OPEC's September prediction.
The Energy Information Administration, the statistics arm of the U.S. Energy Department, also lowered its growth outlook for this year's global oil consumption by 350,000 barrels from a month ago.
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 6.2 cents, or 4.5%, to close at $1.3059 a gallon and December heating oil dropped 7.7 cents to end at $1.929 a gallon.
Natural gas for December delivery sank 7.5% to close at $6.705 per million British thermal units.
At the MCX, crude oil for November delivery closed at Rs 2,881/barrel, lower by Rs 17 (0.58%) against previous day's close. Natural gas for November delivery closed at Rs 331.6/mmbtu, lower by Rs 10.4/mmbtu (3%).
The energy department is scheduled to release its weekly report on 13 November at 11 a.m. in Washington. The report is being delayed by a day because of today's Veterans Day holiday.
We recommend a buy in EIH from a short-term trading perspective. It is evident from the charts of EIH that it has been on a medium-term downtrend from its September peak of Rs 172, gradually forming lower troughs and lower peaks.
However, the stock recently found support at around Rs 75 (June 2006 trough) and in pausing there. As the stock recovered from this long-term support level, the medium-term downtrend appears to have been arrested. The stock is currently testing the medium-term down trendline. The daily relative strength index (RSI) is displaying bullish divergence, signalling trend reversal and is heading towards the neutral region from the bearish zone.
The weekly RSI is recovering from the oversold territory. Moreover, the moving average convergence and divergence is indicating a buy, supporting our view. Our short-term forecast for the stock is positive. We expect the stock to penetrate the down trendline and rally until it hits our price target of Rs 92 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 79.