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Tuesday, November 18, 2008
Pre Session Commentary - Nov 18 2008
Today Markets are likely to open negative as US markets closed in red and other Asian markets have opened with heavy blood bath. The domestic markets would follow the trends of other markets in Asia; however the news of economic summit to be held in Delhi by the Finance minister may further move the markets. One could expect more rate cuts by RBI to inject more liquidity into the system. Apart from that many more other measures might be unveiled by the finance minister to help irrigate the financial draught and economic slowdown. After yesterday’s volatile session today, we expect the markets to remain further volatile.
On Monday, domestic Markets opened positive but later dived into red territory. The sentiments were weak as European markets also traded in deep red amidst concerns of global economic meltdown. The market was surprised to the news that Japan also added to the list of recession stricken countries. The other Asian markets also ended in red. However during the end session the markets paired off its heavy losses and formed a U shape curve. Sensex and Nifty fell by 1.01% and 0.38% respectively. Realty, Bankex, CD and Metal were the worst hit as they fell by 5.17%, 3.87%, 3.26% and 3.08% respectively. During the trading session we expect the market to be trading volatile.
The BSE Sensex closed lower by 94.41 points at 9, and NSE Nifty ended lower by 10.80 points at 2,799.55. The BSE Mid Caps and Small Caps closed with losses of 65.19 points at 3,216.08 and by 48.33 points at 3,765.05. The BSE Sensex touched intraday high of 9,836.11 and intraday low of 9,267.49.
On Monday, US markets closed in red. The Citi group has planned to cut nearly 52,000 jobs out of its 3,52,000 work force, to reduce costs. The economic conditions across the globe remained weak as Japan too falls into recession first time since 2001.The New York empire manufacturing index fell to 25.4 from its October level of 24.6. Crude oil futures for the December delivery rose by $40 cents to $55.35 a barrel on New York Mercantile Exchange. As the US industrial production gained investors anticipate improvement in the demand of crude oil.
The Dow Jones Industrial Average (DJIA) closed lower by 223.73 points at 8273.58 NASDAQ index lost 34.80 points at 1,482.05 and the S&P 500 (SPX) also closed lower by 22.54 points to close at 850.75 points.
Indian ADRs ended mixed. In technology sector, Infosys fell by (1.17%) and Wipro ended low by (2.69%) followed by Satyam that ended low by (0.91%) and Patni Computers closing high by 0.36%. In banking sector ICICI Bank was low by (0.60%), while HDFC Bank fell (1.62%). In telecommunication sector, Tata Communication declined by (1.40%), while MTNL inclined by 2.62%. Sterlite Industries was high by 2.25%.
Today the major stock markets in Asia opened negative. The Shanghai Composite is trading low by 47.62 at 1,982.87. Hang Seng is low by 391.49 points at 13,138.04. Further Japan''s Nikkei is low by 172.71 points at 8,349.87. Straits Times is also trading low by 24.39 points at 1,725.28 and South Korea’s Seoul Composite is low by 35.47 points at 1,042.85.
The FIIs on Monday stood as net sellers in equity and net buyers in debt. The Gross equity purchased stood at Rs 2,152.00 Crore and gross debt purchased stood at Rs 1,930.40 Crore, while the gross equity sold stood at Rs 2,716.20 Crore and gross debt sold stood at Rs 1,43.20 Crore. Therefore, the net investment of equity and debt reported were (Rs 564.20) Crore and Rs 1787.10 Crore respectively.
On Monday, the partially convertible rupee ended at 49.34/36 per dollar, weaker by 0.7% on Friday closing at 49.01/03. Large companies buying dollar and nose-diving stock markets have increased the demand of dollar.
On BSE, total number of shares traded was 26.20 Crore and total turnover stood at Rs 3,230.17 Crore. On NSE, total volume of shares traded was 55.68 Crore and total turnover was Rs 8,902.46 Crore.
Top traded volumes on NSE Nifty – Unitech with total volume traded 42751089, followed by Suzlon Energy with 31932005, SAIL with 17529988, ICICI Bank with 14442323 and Tata Steel with 13005386 shares.
On NSE Future and Options, total number of contracts traded in index futures was 1093140 with a total turnover for the same was Rs 14117.03 crores. Along with this total number of contracts traded in stock futures were 830107 with a total turnover of Rs 8,467.49 Crore. Total numbers of contracts for index options were 1236078 and total turnover was Rs 18033.62 Crore and total numbers of contracts for stock options were 44312 and notional turnover was Rs 468.76 Crore.
Today, Nifty would have a support at 2,720 and resistance at 2,915 and BSE Sensex has support at 8,825 and resistance at 9,495.
Weak global indices may weigh on sentiment
The market is likely to remain under pressure after a overnight fall on the US market and weakness among major Asian indices in the ongoing trades. However, On the technical front, the Nifty could test higher levels at 2850 and may find support at 2750, while the Sensex may face resistance at 9450 and find support at 9150.
Stocks tumbling in US markets on Tuesday as investors eyed Citigroup's massive job losses and a weak manufacturing report, while awaiting the fate of a potential bailout for the automakers. The Dow Jones slipped 224 points to close at 8274, the Nasdaq lost 35 points to close at 1482.
All the Indian ADRs fell in tune with the broader market except few. Rediff led the slump and tumbled 3.91% followed by Wipro (down 2.69%), HDFC Bank (down 1.62%), VSNL (down 1.40%), Infosys (down 1.17%), Dr Reddy (down 0.62%), ICICI Bank (down 0.60%) and Satyam (down 0.19%). However Tata Motors gained 6.97%, MTNL & Patni Compuetrs soared marginally.
Oil prices fell Monday, ended at a 21-month low as fears over the global economic slowdown accelerated on news that Japan officially fell into a recession. Crude oil prices for December delivery fell $2.09 to close at $54.95 a barrel. In the commodity space, the Comex gold for December delivery lost 50 cents to settle at $742 an ounce.
Losses mount at Wall Street
Rise in October's industrial production fails to keep buyers in the front for long
Stocks at Wall Street ended with losses once again on Monday, 17 November, 2008 as stocks failed to stick to a brief gain that it had witnessed during the day. Market started the day in the red and Dow was down by more than 250 points at one time. Bit then, it soon slipped into the green. But then, Dow was again down by 50 points. Financial sector was the main laggard today with job cuts news dominating today's market. Crude prices were trading higher earlier but then ultimately closed $2 lower around $55.
At the end, the Dow Jones Industrial Average ended lower by 223 points at 8,273. The Nasdaq Composite Index, ended lower by 35 points at 1,482. S&P 500 ended lower by 23 points at 850. All the ten economic sectors ended in the red today led by financial sector.
Twenty seven out of thirty Dow stocks ended in the red today. Citigroup and IBM were main Dow laggards while GM tried to support Dow to the extent possible.
This morning Citigroup said it will cut 52,000 jobs from its 352,000 workforce. Citi has already cut roughly 36,000 positions in 2008.
Among earnings reports for the day, Lowe's topped expectations for the third quarter, but issued downside guidance for the fourth quarter after warning that consumers will likely delay discretionary home improvement and big ticket purchases. Retailer, Target reported in-line earnings for the third quarter, but decided to temporarily suspend its share repurchase program.
The Federal Reserve reported today, that industrial production (the output of the nation's factories, mines and utilities) increased 1.3% in October after falling a revised 3.7% in September, which was the biggest decline in 59 years. September's decline was originally reported as negative 2.8%.
The increase should be seen as temporary as it was in part due to recovery in mining and regional manufacturing output following hurricane Gustav.
Excluding energy, industrial output slipped 0.1% in October. Excluding motor vehicles, manufacturing output increased 0.8% in October.
Industrial production was down 4.1% compared with a year earlier. Industrial production is one of four monthly economic indicators used to judge whether the economy is in a recession.
Capacity utilization rose to 76.4% in October from 75.5% in September. In manufacturing alone, capacity utilization increased to 73.8% from 73.5%, far below typical usage rates.
In another economic report for the day, the November New York Empire Manufacturing Index, a regional manufacturing survey, showed that manufacturing activity declined to -25.4 from its October level of -24.6. While the reading reflects contraction in manufacturing in the New York region, it was slightly better than the -26 that market expected.
On Monday, crude-oil futures for light sweet crude for December delivery closed at $54.95/barrel (lower by $2.09 or 3.7%) on the New York Mercantile Exchange. It touched a high of $59.85 during intra day trading. Prices reached a high of $147 on 11 July but have dropped almost 63% since then. Last week, prices fell by 6.6%. On a yearly basis, crude price is lower by 45.7%. For this year in 2008, crude prices have dropped 49.2%.
Trading volume was thin, with nearly 1 billion shares traded on the New York Stock Exchange, where decliners overtook advancers 2 to 1. On the Nasdaq, almost 675 million shares traded, and decliners topped advancers 3 to 2.
For tomorrow, the October producer price index is due before the market opens. Other than that, earning reports will dominate where Home Depot is a major name.
Trading Calls - Nov 18 2008
Nifty 2800 Sup 2720 Res 2860
Sell Cipla (186) SL 190
Target 179, 177
Sell Siemens (282) SL 288
Target 2670, 267
Sell Cairn (136) SL 139
Target 130, 128
Buy Wipro (252) SL 247
Target 260, 262
Buy Rolta (176) SL 172
Target 184, 186
Daily News Roundup - Nov 18 2008
Infosys Technologies maintains its quarterly and FY09 revenue guidance. (BL)
Air India to receive a US$1bn loan and Jet Airways is close to striking a deal for a Rs5bn loan from Indian Overseas Bank for aircraft funding. (BS)
Five state-owned entities have come together to lend about Rs8bn to Gammon Infrastructure Projects Ltd for setting up container terminal at Mumbai port. (Mint)
Unitech Ltd to sell its 200-room budget hotel Courtyard by Marriott in Gurgaon ahead of its inauguration in January 2009. (BS)
Unitech plans to sell all its six hotel projects under construction in Gurgaon and Kolkata, to reduce its capital expenditure and raise cash to fund its other ongoing projects. (ET)
Unitech repays Rs2bn loan to Indiabulls Financial. (ET)
Holcim may review the current capacity expansion projects in India amid global slowdown and poor pricing situation. (BS)
Cairn India Ltd has approached the Petroleum Ministry to take an early call on the refineries it will nominate to lift Rajasthan crude. (BL)
L&T has bagged four contracts worth Rs16.37bn from HPCL-Mittal Energy and Hyderabad Metro Water Supply. (FE)
UTV is shutting down its Delhi operations to cut costs. (BS)
Reliance Industries is keen to sell products in the domestic markets from its existing export oriented refinery and the soon to be commissioned refinery at Jamnagar SEZ. (FE)
Suzlon Energy is foraying into solar energy sector and has identified sites in Gujarat and Rajasthan. (ET)
The three media companies TV18, Dow Jones and Lokmat seek FIPB nod for expansion. (BS)
Bharti Airtel has launched VeriSign Identity Protection (VIP) services for its enterprise customers in India. (FE)
Ispat Industries may cut as much as 40% of its production as demand slumps from Ashok Leyland and Tata Motors. (BS)
Infosys eyes US$600-700mn acquisitions in Europe and Japan. (BS)
JSW Steel has tied up with UK-based Severfield-Rowen to float an equal-stake joint venture company for manufacturing construction steel. (BS)
The Government may allow Gail India and NTPC to keep 5mtpa LNG terminal as an integral part of the 1,850MW power project. (ET)
Vijay Mallya is likely to divest 15% stake in United Spirits to the world’s largest liquor manufacturer, Diageo. (FE)
Tata Chemicals plans to ramp up its current capacity in Gujarat by 66%, from 0.9mtpa to 1.5mtpa, in a phased manner. (BS)
Coal India Ltd to finalise the deals to develop seven underground and 19 abandoned mines in next six month's time. (BS)
Jubilant Organosis has acquired Canada-based TrialStat Clynical Analytics for a consideration of Canadian dollar 0.75mn.
Odyssey puts on hold expansion in new cities. (BL)
Tata Investment Corp. Ltd has approached shareholders seeking their approval to make provisions for up to Rs1.35bn for current and future diminution in value of investments. (Mint)
General Motors Corp to raise US$230mn by selling its 3% stake in Suzuki Motor Corp. (BS)
GVK Power plans to divest 25% stake in its energy business, valued at ~US$500-700mn. (ET)
Ranbaxy expects early resolution to USFDA ban. (ET)
Oil PSU employees have deferred their proposed indefinite strike by one week. (ET)
Rio Tinto and ArcelorMittal, and domestic majors including RNRL, Sterlite, Essar and JSW Steel have evinced interest in reviving 18 abandoned mines of Coal India. (ET)
SBI, ICICI Bank and PNB have raised non-resident deposit rates. (FE)
Bhoruka Power plans to raise second round of PE investments in the next year in a bid to increase its installed power generating capacity in renewable energy sector to 300MW by 2012. (FE)
Himatsingka Seide has paid Rs92mn to HDFC bank to settle dispute over a foreign exchange derivative contract. (ET)
Mutual funds have borrowed about Rs110bn until Friday from banks through the special repo window to tide over the liquidity crisis. (BS)
The government is working on a fiscal package for exporters and reviewing the target of US$200bn for this fiscal. (BS)
USFDA to set up office in India by September 2009. (BS)
Banks hike NRI deposit rates by 75 basis points. (BS)
Major public sector banks expect loans for purchase of cars and other passenger vehicles to grow 20-25% in the current fiscal.(BL)
The Government may increase period for post-shipment credit by another 30-60 days and is also reviewing refund of Rs12bn of terminal excise duty to exporters. (ET)
Group of Ministers will meet today to decide on FIIs being allowed to acquire a higher stake than the set FDI limit. (ET)
The Petroleum ministry will soon seek the approval of the cabinet for rig holiday to oil exploration and production companies. (FE)
India will have power capacity addition of 13,000 MW by FY09 against the capacity addition of 7,300 MW in FY08. (FE)
Ignorance is no bliss here!
Most people ignore most poetry because most poetry ignores most people
The market conditions may make people turn to fiction and poetry for some time. Who wants to read crisis and job cuts all over. Even relatively positive news continue to get ignored. The market may have recovered towards the end of Monday but the outlook remains as murky and hazy as the Mumbai sky. IIP and inflation numbers were something to cheer about. But bulls chose to ignore the same. On Monday again, investors largely ignored the latest round of steps taken by the RBI to boost liquidity and spur lending by banks. Some soothing words from the Commerce Minister and expectations of a stimulus package from the Government too failed to lift the sagging spirits of the bulls.
The G-20 declaration too fell short of market expectations, as no concrete proposals came out of the much-hyped Washington summit. Perhaps further rate cuts could bring some temporary relief to the battered markets. Further rate cuts are inevitable, be it in India or elsewhere in the world, as the economic gloom is fast spreading its tentacles. One by one, the world's top nations are slipping into recession. So, if the eurozone fell into one last week, it was Japan's turn to make the dreaded announcement yesterday. The US, the UK and France too are on the brink of formally announcing a recession, though they may already have entered into one.
Adding to the grim situation are the daily announcements of job cuts. The latest, and perhaps the biggest one in the current crisis came from Citigroup on Monday. The New York bank is planning to lay off over 50,000 employees. The job losses are only going to mount going forward, as companies around the world move to cut costs amid gloomy prospects for future earnings. In the US, the Bush regime is debating a bailout for the Big Three automakers, as they slide towards bankruptcy, inflicting more damage to the already sinking economy.
A global recession was imminent, but no one knows how long it's going to last. For the short term, it makes sense to stay on the sidelines right now. We expect another weak opening given the fall across Asian markets and overnight losses in the US and Europe. And this time we aren’t recommending that you add some stocks. Volatility will remain high as has been the case in the past few sessions. The global de-leveraging process may continue for a while, as jittery investors run for cover amid no sign of a recovery in equity markets. Risk aversion is the name of the game today, and will continue till the blood-letting subsides.
FIIs were net sellers at Rs5.21bn (provisional) in the cash segment on Monday while the local institutions too pulled out Rs1.78bn. In the F&O segment, FIIs were net sellers at Rs1.06bn.
Foreign funds were net sellers of Rs5.64bn on Friday, taking it's total outflows in the year 2008 to US$12.8bn. Mutual Funds were net sellers in the cash segment at Rs3.05bn on Friday.
US stocks continued their descent on Monday, extending the big sell-off on Friday, as reports that Citigroup is planning massive job cuts and persistent weakness in the nation's manufacturing sector heightened concerns over deteriorating economic gloom.
US stocks tumbled through the morning but turned higher near midday before retreating again in the afternoon. Trading volume was light, with investors holding back ahead of some key economic reports due later in the week and the hearings on the future of the Detroit automakers.
The Dow Jones Industrial Average slid 223.73 points, or 2.6%, to 8,273.58, with aluminum producer Alcoa pacing the slide, off 10.8%. Of the blue-chip index's 30 components, 27 closed in the red.
The S&P 500 Index shed 22.54 points, or 2.6%, to 850.75, while the Nasdaq Composite Index lost 34.8 points, or 2.3%, to end at 1,482.05. Financials, consumer discretionary and materials led declines, which included all of the S&P's 10 industry groups.
Market breadth was negative. Three stocks fell for each that rose on the New York Stock Exchange.
Shares of Citigroup slumped 6.6% after the bank said it would cut about 50,000 jobs in the latest and perhaps the biggest round of layoffs in the battered financial sector. The New York-based bank has already slashed its payrolls by around 23,000 over the last year. In addition to job cuts, Citi is looking to cut expenses by about 20%, and that it has already cut its assets by over 20% since the first quarter of 2008.
GM shares were up 5.7%. The automaker - looking for a bailout from Washington - said it would raise US$232mn by selling a 3% stake in Japan's Suzuki Motor Corp.
On Capitol Hill, Democratic lawmakers and the Bush administration agreed on the need for federal help for GM, Ford and Chrysler. However, they failed to agree on details, including how much money should be involved or where the funds would come from.
US Congress is debating this week whether to bail out the hard-hit industry with an additional US$25bn in support on top of the US$25bn GM, Ford and Chrysler have already received. The money would come from the US$700bn bank bailout plan and a vote is expected as soon as Wednesday.
Over the weekend, Goldman Sachs said seven top executives, including the company's chief executive, have opted out of receiving cash or stock bonuses this year as a result of the ongoing credit crisis. Shares fell 6.4%.
UBS said that in 2008 it will stop making bonus payments to top executives and that next year it will not pay a bonus to its chairman. In addition, in 2009, top executives will be penalized if the bank performs badly. Shares gained 1.7%.
Retail major Target reported a steep decline in third-quarter earnings that met estimates and a rise in revenue that was short of forecasts. Like many retailers, the company has seen weaker sales amid a consumer spending slowdown. Its shares slipped 4%.
Another retailer, Lowe's too reported weaker quarterly earnings that topped forecasts.
In the day's economic news, the New York Empire State index, a regional reading on manufacturing, worsened to negative 25.4 in November from negative 24.6 in October. That was short of forecasts for a reading of negative 26 but still brought the index to the lowest point in its seven-year history.
Another report showed industrial production grew more than expected in October after September's drop-off, the worst in 62 years. Capacity utilization increased a bit short of forecasts.
Reports are due later in the week on producer and consumer prices, housing starts and building permits, leading economic indicators and the minutes from the last Federal Reserve meeting.
The US is already in a recession and likely to stay in a recession for quite some time, according to a majority of economists surveyed by the National Association for Business Economics. Over the weekend, Japan said it is in recession, joining Europe and other nations.
The dollar fell against the euro, but gained versus the yen. COMEX gold for December delivery fell 50 cents to settle at US$737.40 an ounce.
US light crude oil for December delivery eased US$2.05 to settle at US$54.95 a barrel on the New York Mercantile Exchange, the lowest close since January 2007.
Gasoline prices dipped another 1.8 cents to a national average of US$2.087 a gallon. The decline marks the 61st consecutive day that prices have decreased. During that time, prices dropped by US$1.77 a gallon, or 45.8%.
Treasury prices gained, lowering the yield on the benchmark 10-year note to 3.67% from 3.72% late on Friday.
The yield on the 3-month Treasury bill, seen as the safest place to put money in the short term, fell to 0.09 from 0.12% on Friday, with investors preferring to take a piddling return on their money than risk the stock market. In September, the 3-month yield reached a 68-year low around 0% as investor panic peaked.
European shares declined for the fourth time in five sessions. The pan-European Dow Jones Stoxx 600 index fell 2.6% to 200.37. The UK's FTSE 100 closed down 2.4% at 4,132.16, while Germany's DAX 30 dropped 3.3% to 4,557.27 and the French CAC-40 declined 3.3% to 3,182.03.
In the emerging markets, the Bovespa in Brazil was down 0.20% at 35,717 while the Bolsa index in Mexico fell 0.75% to 19,562. The RTS index in Russia tumbled nearly 6% to 605 and the ISE National-30 index in Turkey slid 5.8% to 30,525.
Indian stocks managed to engineer a smart recovery in late afternoon trade, but still ended lower for a fourth consecutive day. Mounting concerns over a deepening global economic slump countered new measures by the RBI to shore up liquidity and pump-prime the credit markets.
A possible relief package for the troubled exporters later today also failed to improve the sentiment, as data released today showed that Japan has entered into a recession. Last week, eurozone slipped into a recession, led by Germany and Italy. Hong Kong too slipped into a recession last week.
The G-20 group's resolve to fight off the unprecedented financial crisis through more coordinated efforts also didn't have any positive effect on Indian stocks. Britain's biggest business lobby said that the UK recession may be deeper than earlier predicted.
After yet another volatile day, the BSE Sensex closed at 9,291, down 94 points or 1%. It had earlier been as low as 8,956 and as high as 9,435. It opened at 9,396 as against Friday's close of 9,385. The index has lost 54% in 2008, making it one of the worst performers in Asia.
The BSE Small-Cap and Mid-Cap indices fared worse, falling by 2.75% and 2.5%, respectively.
The NSE Nifty shut shop at 2,799, down 0.4% after touching a low of 2,694 and a high of 2,835. This was the Nifty's lowest close since Oct. 29.
The market breadth was negative on the BSE, with 1800 shares declining and 679 shares advancing.
Total turnover in the NSE's cash segment was at Rs89.02bn versus Friday's Rs107.77bn. Traded volume stood at 5567.96 lakh shares versus 6,299 lakh shares on Friday.
Real Estate (5.2%), Banking (3.9%), Consumer Durable (3.3%) and Metals (3%) were among the biggest losers among BSE sectoral indices. FMCG (1.9%), auto (1.4%), Power (1.3%), Capital Goods (1.2%) and Pharma (1%) were the other notable losers.
BSE Oil & Gas index lost relatively less ground, on account of gains in public sector oil companies, even as Cairn, Gail, Essar Oil and RNRL came under pressure. IT stocks outperformed the market, led by gains in Wipro and Infosys. Satyam, TCS and Tech Mahindra still ended lower.
Within the Sensex, the top losers included HDFC Bank (7.7%), Reliance Infra (6.2%), Tata Steel (4%), DLF (3.9%), HDFC (3.8%), Satyam Computer (3.7%) and Hindalco (3.3%). Tata Power, ITC, M&M, ICICI Bank, TCS, Jaiprakash Associates and Ranbaxy lost 1-3%.
The list of big gainers was led by Wipro (4.6%), ACC (4.3%), Tata Motors (2.6%), Maruti (2.45%), Bharti Airtel (2.3%), NTPC (1.2%), Infosys (1.2%) and BHEL (1%). ONGC ended marginally higher while Hindustan Unilever was almost flat.
Outside the main indexes, the big losers were Lanco Infra, Great Offshore, Amtek Auto, Jai Corp., Chambal Fertilizers, Pantaloon Retail and Jindal Saw, losing between 10-20%.
HCC, Kotak Bank, Mercator Lines, GE Shipping, Godrej Ind, NIIT, Thermax, JSW Steel, Axis Bank, Indiabulls Realty, NMDC and GMDC were the other prominent losers.
Among the biggest gainers outside the indices included Rolta, NALCO, Indiabulls Financial, EIH, ACC, Ambuja Cement, BPCL, Power Grid Corp, MTNL, HPCL, Bombay Dyeing, IOC, Idea, TTML, Bajaj Holdings and Mundra Port.
Kingfisher Airlines' shares rose 6.6% to end at Rs28.15 amid reports that the company is seeking the Government's approval to sell a 25% stake to a foreign airline. It touched a day's high of Rs31.60 after opening at Rs27.50.
Shares of other airlines were also up after public sector oil marketing companies cut jet fuel prices by 12% over the weekend. SpiceJet ended flat at Rs12.96 after touching a peak of Rs14. Jet Airways fell 1.1% to Rs179.50 after being as high as Rs193.
State-run oil marketing companies' shares advanced as crude oil continued it's descent, but Cairn India shares declined.
Shipping shares came under pressure after charter rates for the largest commodities ships slid to a record low.
Real estate developer Unitech fell 6.6% on worries about a Rs3.5bn debt to Indiabulls Financial Services due on Monday.
Unitech said in a statement to the stock exchange issued half an hour before the close that it had repaid the entire debt.
Godrej Consumer Products rose 1.% after the FMCG company said its board will meet Nov. 25 to consider a share buyback.
Bullion metals drop
Strong dollar takes shine away from precious metals
Bullion metals ended lower on Monday, 17 November, 2008. Prices fell as the dollar climbed, reducing the appeal of the precious metal as an alternative investment. Silver prices also declined.
On Monday, Comex Gold for December delivery fell $0.50 (0.05%) to close at $742 an ounce on the New York Mercantile Exchange. Prices earlier fell to a low of $729.6. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (28%) since then. Last week, gold prices ended higher by 1.1%. For the month of October, gold had ended lower by 18%. It was the biggest percentage loss for gold since February, 1983.
This year, gold prices have lost 11% till date. Futures have averaged $882 in 2008. The dollar index has gained 16% 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 Monday, Comex silver futures for December delivery fell 16 cents (1.7%) to $9.33 an ounce. Last week, silver lost 4.7%. For the month of October, silver had slipped by 20%. Till date, silver has lost 22.5% 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 Monday, the dollar gained against a weighted basket of six major currencies, extending a two-week rally.
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 73 (0.61%) at Rs 11,881 per 10 grams. Prices rose to a high of Rs 11,908 per 10 grams and fell to a low of Rs 11,727 per 10 grams during the day's trading.
At the MCX, silver prices for December delivery closed Rs 52 (0.31%) lower at Rs 16,330/Kg. Prices opened at Rs 16,400/kg and fell to a low of Rs 16,182/Kg during the day's trading.
Crude drops again
Prices close more than $2 lower as Japan slips into recession
The fact that Japan has slipped into recession for first time in seven years took crude prices lower on Monday, 17 November, 2008. Crude prices fell even after climbing high during intra day trading. The strong dollar also pressured crude price today.
On Monday, crude-oil futures for light sweet crude for December delivery closed at $54.95/barrel (lower by $2.09 or 3.7%) on the New York Mercantile Exchange. It touched a high of $59.85 during intra day trading. Prices reached a high of $147 on 11 July but have dropped almost 63% since then. Last week, prices fell by 6.6%. On a yearly basis, crude price is lower by 45.7%. For this year in 2008, crude prices have dropped 49.2%.
For the month of October, 2008, crude prices ended lower by 32.6%, the biggest monthly drop since 1983.
In its latest monthly report, OPEC, today reduced its forecast for average oil consumption next year by 530,000 barrels a day, or 0.6% to 86.68 million barrels a day. It revised lower its 2008 view by 260,000 barrels a day to show minor growth of 280,000 barrels a day. In 2009, it expects world oil demand to rise by more than 500,000 barrels a day, which is a downward revision of around 200,000 barrels.
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 1st December meeting.
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 closed down 6.5 cents at $1.1746 a gallon. December heating oil finished at $1.791 a gallon, down 4.1 cents.
December natural gas futures rose 22.1 cents, or 3.5%, to end at $6.533 per million British thermal units.
At the MCX, crude oil for November delivery closed at Rs 2,878/barrel, higher by Rs 7 (0.24%) against previous day's close. Natural gas for November delivery closed at Rs 319.7/mmbtu, higher by Rs 10.8/mmbtu (3.5%).
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