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Thursday, November 20, 2008
BSE Bulk Deals to Watch - Nov 20 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
20/11/2008 532919 ALLIED COMP SHREE BHIKSHU FIN. PVT LTD. B 500000 5.00
20/11/2008 531682 CAT TECHNOL S V ENTERPRISES S 160302 3.01
20/11/2008 533026 CHEMCEL NAINESH HIMAT JATANIA B 200000 2.65
20/11/2008 532696 EDUCOMP SOLN OPG SECURITIES P LTD B 87942 1718.97
20/11/2008 532696 EDUCOMP SOLN OPG SECURITIES P LTD S 87942 1721.03
20/11/2008 513059 G.S. AUTO SPJ STOCK B 60000 22.65
20/11/2008 513059 G.S. AUTO HARDIK M MITHANI S 56019 22.65
20/11/2008 532855 HARYA CAPFIN DHARAM PAL JINDAL AND SONS HUF B 35000 22.09
20/11/2008 532544 INDIABULLS THE BANK OF NEW YORK JPMORGAN SECURITIES LTD B 6000000 90.45
20/11/2008 532544 INDIABULLS ORIENT GLOBAL CINNAMON CAPITAL LIMITED S 6000000 90.45
20/11/2008 530955 KAILASH FICO MANDVI DYES AND CHEMICALS PVT B 118310 22.71
20/11/2008 531611 PRRANET INDU PANNALAL H GULECHA HUF B 500000 1.69
20/11/2008 531646 RFL INTERNAT ISHITA MOHATTA B 100000 0.64
20/11/2008 531646 RFL INTERNAT GEETA NARENDRA SHAH S 28173 0.64
20/11/2008 530461 SABOO SOD CH HARDIK M. MITHANI B 72100 8.10
20/11/2008 531898 SANGUINE MD COMFORT INTECH LIMITED S 81277 7.07
NSE Bulk Deals to Watch - Nov 20 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
20-NOV-2008,ALKALI,Alkali Metals Limited,SHINDE BALASO VITHAL,BUY,28108,181.89,-
20-NOV-2008,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,BUY,131624,1705.26,-
20-NOV-2008,KESORAMIND,Kesoram Industries Ltd.,CENTURY TEXTILE & INDUSTRIES L,BUY,229062,128.01,-
20-NOV-2008,ZANDUPHARM,Zandu Pharma works Ltd,VAIPA PHARMACITICAL PVT LTD,BUY,5765,6510.00,-
20-NOV-2008,ALKALI,Alkali Metals Limited,SHINDE BALASO VITHAL,SELL,54108,186.25,-
20-NOV-2008,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,SELL,131624,1706.70,-
20-NOV-2008,HDIL,Housing Development and I,Copthall Mauritius Investment Ltd,SELL,1905092,87.95,-
Post Session Commentary - Nov 20 2008
The Indian markets closed with deep cut on heavy selling pressures across the sectoral indices. The weak cues from the global markets led the domestic market to open on the backfoot and kept on hovering I the negative territory throughout the trading session without showing any sign of recovery. The fall in weekly inflation figures fell to give a support to the market. The wholesale price index rose 8.90% in the 12 months to 8 November 2008, marginally below the previous week''s annual rise of 8.98%. From the sectoral front, the Realty index was the worst hit that closed with a cut of more than 8%. Along with this, Consumer Durables, Oil & Gas, Bankex, Metal and Auto indices also remained out of favor that closed with losses of more than 4% each. The BSE Sensex ended below 8,500 level and NSE Nifty closed below 2,600 mark. The Midcap and Small cap stocks were also under extreme pressures.
Among the Sensex pack 25 stocks ended in red territory and 5 in green. The market breadth was negative as 1899 stocks closed in red while 594 stocks closed in green and 77 stocks remained unchanged.
The BSE Sensex closed lower by 322.77 points at 8,451.01 and NSE Nifty ended down by 81.85 points at 2,553.15. The BSE Mid Caps and Small Caps closed with losses of 102.60 points and 107.78 points at 2,895.79 and 3,385.34 respectively. The BSE Sensex touched intraday high of 8,540.46 and intraday low of 8,316.39.
Losers from the BSE Sensex pack are DLF 8.56%, Reliance Communication 8.32%, Sterlite Inds 7.96%, ICICI Bank 7.87%, HDFC bank 7.30% and JP Associates 6.66%.
The BSE Realty index dropped by (8.30%) or 151.88 points to close at 1,679.06. Losers are HDIL 11.06% along with Unitech 9.87%, Ansal Infra 9.71%, Indiabull Real 9.57%, Orbitco 8.99%, DLF 8.57% and Penland 7.04%.
The BSE CD index lost (4.95%) or 91.97 points to close at 1,763.93. Major losers are Blue Star 8.76%, Rajesh Exports 7.22%, Gitanjali GE 4.61%, Videocon Inds 4.37% and Titan Inds 2.80%.
The BSE Oil and Gas index ended down by (4.64%) or 255.47 points at 5,252.01 as Reliance Inds 6.58%, Cairn India 5.37%, Aban Offshore 4.56%, RPL 4.31%, Gail India 4.05%, RNRL 3.31% and HPCL 2.47% closed lower.
The BSE Bankex index ended lower by (4.32%) or 198.66 points to 4,398.29 as Yes bank 8.34%, ICICI Bank 7.87%, Indus Ind Bank 7.48%, HDFC bank 7.30%, Oriental bank 5.41%, IOB 5.37%, Axis bank 5%, Federal bank 4.82% closed in negative.
The BSE Metal index ended down by (4.18%) or 185.65 points at 4,250.49. Major losers are Gujarat NRE Coke 8.25%, Sterlite Inds 7.96%, Jindal Steel 7.48%, Sesa Goa 7.47%, JSW Steel 7.21%, NMDC 5.81% and Hind Zinc 4.47%.
The BSE Auto index plunged (4.14%) or 97.27 points to close at 2,252.97. Losers are Bharat Forge 8.15%, Maruti Suzuki 6.52%, Tata Motors 6.47%, Amtek Auto 6.17%, Bajaj Auto 5.41% and Hero Honda 5.21%.
Sensex acts valiant but late
Weak global cues and negative breadth in yesterday's trades led the market open at a lower today. The Sensex was 373 points down at the opening and remained subdued, as investors booked profits after the recent gains. Realty and consumer durables stocks took the major beating. The index faltered under selling pressure by afternoon and slipped to the day's low of 8,316. While the market fluctuated sharply thereafter, firm bullish sentiment and strong buying in heavyweights and fast moving consumer goods stocks in late trades helped the benchmark index erase most of the losses. The Sensex finally ended the session by shedding 3.68% or 323 points at 8,451. Nifty slipped 81 points at 2,553.
The market breadth was negative. Of the 2,560 stocks traded on the BSE, 1,889 stocks declined whereas 601 stocks advanced. Seventy stocks ended unchanged. All the 13 sectoral indices ended in the red. BSE Realty dropped 8.30% followed by BSE CD (down 4.95%), BSE Oil & Gas (down 4.64%), BSE Bankex (down 4.32%), BSE Metal (down 4.18%) and BSE Auto (down 4.14%).
Heavyweights led the fall in the Sensex. DLF slipped 8.56% at Rs205.20, Reliance Communications slumped by 8.32% at Rs182.25, Sterlite Industries shed 7.96% at Rs200.50, ICICI Bank lost 7.87% at Rs320.35 and HDFC Bank was down 7.30% at Rs822.25. Among the laggards JP Associates moved down 6.70% at Rs59.55, Reliance Industries lost 6.66% at Rs1,058.60, Maruti Suzuki India declined 6.52% at Rs482.85, Tata Motors was down by 6.47% at Rs126.45 and Tata Power was down 6.39% at Rs633.90, while ACC, National Thermal Power Corporation, State Bank of India, Ranbaxy Laboratories and Hindustan Unilever Ltd ended with modest gains.
Over 1.78 crore shares of GVK Power & Infrastructure changed hands on the BSE followed by Suzlon Energy (0.89 crore shares), Reliance Petroleum Ltd (0.86 crore shares), Reliance Natural Resources Ltd (0.72 crore shares) and HDIL (0.66 crore shares).
Market extends losses for the seventh straight day
Weak global markets pulled the domestic bourses down for the seventh consecutive trading session. It was a choppy trading session with wild swing in share prices. The BSE 30-share Sensex lost 322.77 points, or 3.68%. World stocks fell on worries of a deep global recession and fears that there could be another wave in the global credit crisis.
Selling by foreign funds pulled the domestic bourses lower. As per the provisional data released by the stock exchanges after trading hours, foreign institutional investors (FIIs) today, 20 November 2008, sold shares worth a net Rs 762.94 crore. FIIs are dumping stocks in Indian and other emerging markets to shore up resources to beat the global liquidity crunch. FII outflow reached Rs 52,820.80 crore in calendar 2008, so far, till 19 November 2008, as against an inflow of a huge Rs 71,440.10 crore in the corresponding period last year.
Volatility was high. The market cut losses in the last 20 minutes of trade as bank shares recovered on rate cut hopes. Earlier, an intraday recovery from a steep slide had proved short lived.
A further fall in inflation has raised hopes the central bank will cut interest rates further to shield the domestic economy from the global economic slowdown. Lower interest rates boost stocks as lower borrowing costs help lift corporate profits. Inflation based on the wholesale price index rose 8.90% in the 12 months to 8 November 2008, marginally below the previous week's annual rise of 8.98%, data released by government data at about 12:00 IST showed. Inflation has been softening since peaking at 12.91% on 2 August 2008.
The RBI has aggressively cut rates over the past two months. The repo rate has been cut by 150 basis points to 7.5% since October this year and the cash reserve ratio, the proportion of deposits that banks have to keep with the central bank, has been reduced by 350 basis points to 5.5%. In response, government owned banks lowered prime lending rates by up 75 basis points, but large private lenders like ICICI Bank and HDFC Bank are yet to do so.
European stocks fell, led lower by pharmaceuticals, banks and commodities stocks, as investors remained nervous due to the prospect of a prolonged global economic downturn. The key benchmark indices in France, Germany and UK were down by between 1.23% to 1.88%. Trading in US futures suggested Dow could fall 47 points at the opening bell.
Asian shares tumbled as economic data indicated a global recession could get even uglier. In Japan the Nikkei 225 average slumped nearly 7% as exports registered a biggest annual decline in seven years in October 2008, the latest data showed. Key benchmark indices in Hong Kong, South Korea, Singapore, China and Taiwan were down by between 1.67% to 6.7%.
Federal Reserve officials on Wednesday, 19 November 2008, pared their outlook for growth in the world's biggest economy to minimal levels. The weaker forecast came on a day in which data showed US consumer prices in October 2008 posted their biggest drop since monthly records began in 1947, while new-home buildings slumped to fresh lows.
US stocks plunged to their lowest in five-and-a-half years on Wednesday, 19 November 2008, as investors girded for a lengthy economic downturn and automotive executives predicted a far-reaching calamity without a government lifeline. The Dow Jones industrial average tumbled 427.47 points, or 5.07%, to 7,997.28. The Standard & Poor's 500 Index fell 52.54 points, or 6.12%, to 806.58. The Nasdaq Composite Index lost 96.85 points, or 6.53%, to 1,386.42.
Turmoil in the US commercial real estate market deepened on Wednesday as securities backed by loans on commercial properties such as office buildings fell in value. Citigroup shares tumbled to a 13-year low as investors questioned survival prospects on concerns about mounting losses from credit cards, mortgages and toxic debt.
The BSE 30-share Sensex was down 322.77 points, or 3.68%, to 8,451.01. At the day's high of 8,540.46 hit in late trade, the Sensex fell 233.32 points. The Sensex lost 457.38 points at the day's low of 8,316.39 in early afternoon trade.
The S&P CNX Nifty was down 81.85 points, or 3.11%, to 2,553.15.
Fears of a global recession, slowdown in the domestic economy and selling by foreign funds have pulled the Sensex down 2,085.15 points or 19.79% in the last seven trading sessions from 10,536.16 on 10 November 2008. The barometer index is down 11,835.98 points or 58.34% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 12,755.76 points or 60.14% below its all-time high of 21,206.77 struck on 10 January 2008.
The BSE clocked a turnover of Rs 2,893 crore today as compared to a turnover of Rs 3,545.97 crore on 19 November 2008.
Nifty November 2008 futures were at 2574, at a premium of 20.85 points as compared to the spot closing of 2553.15. Turnover in NSE's futures & options (F&O) segment was Rs 37,983.83 crore, which was lower than Rs 41,656.37 crore on Wednesday, 19 November 2008.
The market breadth, indicating the overall health of the market, was weak. On BSE, 594 shares rose as compared with 1,899 that declined. 68 shares remained unchanged.
The BSE Mid-Cap index down 3.42% to 2,895.79 and The BSE Small-Cap index down 3.09% to 3,385.34. Both the indices outperformed the Sensex.
The BSE Realty index (down 8.3% to 1,679.06), the BSE Consumer Durables index (down 4.95% to 1,763.93), the BSE Oil & Gas index (down 4.64% to 5,252.01), the BSE Bankex (down 4.32% to 4,398.29), the BSE Metal index (down 4.18% to 4,250.39), the BSE Auto index (down 4.14% to 2,252.97) underperformed the Sesex.
The BSE FMCG index (down 0.51% to 1,856.56), the BSE HealthCare index (down 1.44% to 2,764.43), the BSE PSU index (down 1.91% to 4,368.94), the BSE Power index (down 2.24% to 1,495.70), the BSE IT index (down 2.77% to 2,343.84), the BSE Capital Goods index (down 2.93% to 6,209.38), the BSE Teck index (down 3.49% to 1,831.93) underperformed the Sensex.
Reliance Infrastructure (down 6.7% to Rs 425.35), Jaiprakash Associates (down 6.66% to Rs 59.55), Tata Power Company (down 6.39% to Rs 633.90) were the major losers from the Sensex pack.
NTPC (up 1.54% to Rs 138.10), Ranbaxy Laboratories (up 0.79% to Rs 218.10) and Hindustan Unilever (up 0.32% to Rs 234.30) were the major gainers from the Sensex pack.
State Bank of India (SBI) led recovery in banking pivotals on hopes a further fall in interest rates may boost lending growth. SBI rose rose 1.21% to Rs 1,092.55, recovering from the session's low of Rs 1025. Though down 7.87% to Rs 320.35, India's largest private sector bank by net profit ICICI Bank, recovered sharply from the day's low of Rs 308.50. ICICI Bank's ADR lost 13.63% on Wednesday, 19 November 2008. India's second largest private sector bank by net profit HDFC Bank slipped 7.3% as ADR slumped 10.14% on Wednesday.
India's largest home loan lender by operating income HDFC fell 5.59% on fears Citigroup may sell its stake in the company to offset its sub-prime related losses.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) slipped 6.58% to Rs 1,058.60 on concerns a global slowdown would hit demand for petrochemicals.
Oil exploration firms fell on falling crude oil prices. India's largest oil exploration firm by revenue ONGC fell 0.33%. Cairn India slipped 5.37% on reports the union cabinet has rejected an oil ministry proposal to award a deepwater block off the west coast to the company.
Oil prices dropped for a fifth straight session to below $53 a barrel. Oil on Wednesday, 19 November 2008, fell to its lowest settlement since late January 2007 as investors expect a sharp slowdown in demand for a commodity that just in July this year hit a record high at about $147 a barrel.
Real estate stocks declined after real estate body, Confederation of Real Estate Developers' Associations of India (CREDAI) asked realty firms to lower prices given the general slowdown in the economy. Unitech, Indiabulls Real Estate, DLF, Housing Development & Infrastructure, and Omaxe were down by 5% to 11%.
Sobha Developers dropped 1.12%, as reports of the realty firm cutting property prices raised concerns of fall in margins.
Metal stocks declined as worries that global economic slowdown will hit demand offset imposition of 5% import duty on steel by the government on 18 November 2008 to protect the domestic industry. Hindalco Industries, Sterlite Industries, Tata Steel, Jindal Steel, JSW Steel, National aluminum Company fell by between 0.4% to 7.96%.
Steel Authority of India slipped 0.51% on reports it may consider cut in production due to the global economic slowdown.
Hindustan Copper declined 10.03% on reports it expects 10% fall in production in the year ending March 2009
IT stocks slipped on mounting worries about the US economy after the Federal Reserve slashed its growth forecasts for the economy. India's second largest IT exporter by sales Infosys slipped 3.82%, as ADR fell 1.23% on Wednesday. India's fourth largest IT exporter by sales Wipro lost 1.33% as ADR lost 7.25% on Wednesday. India's third largest IT exporter by sales Satyam Computer Services lost 0.02% as ADR fell 6.09% overnight.
India's largest IT exporter by sales Tata Consultancy Services was down 2.36% despite reports it has emerged the lowest bidder for an e-governance contract to computerise Employee State Insurance Corporation and provide smart cards, beating Wipro and Infosys. TCS bid at Rs 1677 crore, suggest reports.
Indian IT firms derive a lion's share of revenue from exports to US. The Indian rupee recovered from a record low of 50.60 per dollar reached in early trade on Thursday, helped by heavy dollar selling by the central bank. The partially convertible rupee was at 50.00/02 per dollar, off a high of 49.94, and little changed from its close of 50.02/03 on Wednesday. A stronger rupee affects the operating margins, as IT firms earn most of their revenues from exports.
Auto stocks fell on a worsening global economic outlook and declining domestic demand due to high interest rates and higher fuel prices. Maruti Suzuki India, Mahindra & Mahindra, Hero Honda Motors, Tata Motors slipped by between 0.64% to 6.52%.
Capital goods stocks slumped on worries global economic slowdown would crimp orders. Larsen & Toubro, Bharat Heavy Electricals and Suzlon Energy fell by between 2.72% to 3.46%.
Cement stocks were mixed despite slowdown in cement demand. Ambuja cements, Grasim Industries fell by between 1.27% to 3.61%. However, Ultratech Cement, ACC rose by between 1.55% to 1.58%.
The 205 million-tonne domestic cement industry has seen the lowest despatch growth rate in the last four years. During April-October 2008, the despatches growth stood at 6.27% against 8.7% during the same period last year.
Telecom firms slipped amid a controversy regarding the award of 2G telecom licenses. Bharti Airtel, reliance Communications and Idea Cellular fell by between 3.44% to 7.92%. The controversy centres on award of 2G telecom licenses for a total of Rs 9000 crore on 10 January 2008. It has been alleged that this amounted to severe underpricing, causing a loss of almost Rs 51000 crore to the exchequer.
FMCG stocks edged higher on defensive buying as investors find a safe haven in these stocks in slowing economy. Britannia India, Hindustan Unilever, Nestle India and REI Agro rose by between 0.06% to 0.32%. While, India's largest cigarette maker by sales ITC fell 0.33%.
GVK Power & Infrastructure clocked the highest volume of 1.78 crore shares on BSE. Suzlon Energy (89.04 lakh shares), Reliance Petroleum (86.83 lakh shares), Reliance Natural Resources (72.29 lakh shares) and Housing Development & Infrastructure (70.31 lakh shares) were the other volume toppers in that order.
Reliance Industries clocked the highest turnover of Rs 293.78 crore on BSE. Reliance Capital (Rs 154.88 crore), State Bank of India (Rs 29.44 crore), Educomp Solutions (Rs 128.72 crore) and ICICI Bank (Rs 124.97 crore) were the other turnover toppers in that order.
Cummins India tumbled 3.96% after the board approved sale of its power generation rental business.
Asian Paints plunged 4.72% on shutting phthalic anhydride plant in Gujarat due to inventory build up and for maintenance.
Wockhardt slipped 1.38% on reports US drug major Eli Lilly has sued the company for patent infringement on antidepressant drug.
Pre Session Commentary - Nov 20 2008
Today Markets are likely to open with heavy blood bath as US markets ended in deep red and other Asian markets have also opened with heavy losses. The US economic forecasts are very poor, which could affect the markets sentiments of various other nations severely. Apart from the weak global cues, the domestic economic scenario is not very encouraging to support the weak markets sentiments. Today one could witness the markets to be trading in deep red amidst weak sentiments across the markets around the world.
On Wednesday, domestic Markets opened positive but could not retain its charm till the end. The early gains were later paired off heavily and the markets plunged into red territory. The sentiments got worst after the post mid session as investors started booking profits. Sensex and Nifty fell by 1.83% and 1.79% respectively. CG, Bankex and Power were the worst hit as they fell by 3.47%, 2.86%, 2.68% respectively. During the trading session we expect the market to be trading in deep red.
The BSE Sensex closed lower by 163.42 points at 8,773.78 and NSE Nifty ended lower by 48.15 points at 2,635.00. The BSE Mid Caps and Small Caps closed with losses of 61.93 points at 2,998.39 and by 65.54 points at 3,493.12. The BSE Sensex touched intraday high of 9,236.27 and intraday low of 8,726.80.
On Wednesday, US markets fell drastically on weak macro economic data. The CPI numbers have fallen by 1% as energy prices fell by 8.6%. Fed has reduced forecasts for GDP growth and inflation amidst concerns of economic slowdown. The housing construction data fell to lowest on records. For 2008, the Fed expects the economy will grow between 0.0% and 0.3%, down sharply from its previous forecast of 1.0% to 1.6%. The 2009 forecast now calls for growth between -0.2% and 1.1%, down from the previous forecast of 2.0% to 2.8%. The Fed also raised its unemployment forecast. Crude oil futures for the December delivery fell by $68 cents or 1.3% to $52.94 a barrel on New York Mercantile Exchange. The EIA on Wednesday reported that the demand fell by 7% against year ago as consumptions have shrunken due to economic crisis.
The Dow Jones Industrial Average (DJIA) closed lower by 427.47 points at 7997.28 NASDAQ index lost 96.85 points at 1,386.42 and the S&P 500 (SPX) also closed lower by 52.54 points to close at 806.58 points.
Indian ADRs ended negative. In technology sector, Infosys fell by (7.25%) and Wipro ended low by (6.74%) followed by Satyam that ended low by (6.09%) and Patni Computers closing low by (4.20%). In banking sector ICICI Bank was low by (13.63%), while HDFC Bank fell (10.14%). In telecommunication sector, Tata Communication declined by (14.97%), while MTNL declined by (6.33%). Sterlite Industries was low by (4.97%).
Today the major stock markets in Asia opened negative. The Shanghai Composite is trading low by 5.85 at 2,011.62. Hang Seng is low by 649.39 points at 12,166.41. Further Japan''s Nikkei is low by 357.59 points at 7,915.63. Straits Times is also trading low by 43.05 points at 1,622.54 and South Korea’s Seoul Composite is low by 45.57 points at 971.25.
The FIIs on Wednesday stood as net sellers in equity and debt. The Gross equity purchased stood at Rs 1,137.60 Crore and gross debt purchased stood at Rs 29.60 Crore, while the gross equity sold stood at Rs 1,506.90 Crore and gross debt sold stood at Rs 243.70 Crore. Therefore, the net investment of equity and debt reported were (Rs 369.30) Crore and (Rs 214.10) Crore respectively.
On Wednesday, the partially convertible rupee ended at 50.02/03 per dollar, weaker by 0.7% on Tuesday’s closing at 49.66/67. The concerns of falling stock markets and off-shore dollar demand have hurt the rupee badly.
On BSE, total number of shares traded was 24.07 Crore and total turnover stood at Rs 3,545.97 Crore. On NSE, total volume of shares traded was 51.40 Crore and total turnover was Rs 9,286.43 Crore.
Top traded volumes on NSE Nifty – Suzlon Energy with total volume traded 39584638, followed by SAIL with 19132332, Unitech with 17824847, ICICI Bank with 11769881, Reliance Petro with 11254154 and Reliance with 10156564 shares.
On NSE Future and Options, total number of contracts traded in index futures was 1099000 with a total turnover for the same was Rs 13904.47 crores. Along with this total number of contracts traded in stock futures were 999188 with a total turnover of Rs 10027.8 Crore. Total numbers of contracts for index options were 1206852 and total turnover was Rs 17220.49 Crore and total numbers of contracts for stock options were 46937 and notional turnover was Rs 503.61 Crore.
Today, Nifty would have a support at 2,490 and resistance at 2,620 and BSE Sensex has support at 8,205 and resistance at 8,730.
Market to extend losses on weak global cues
The market is likely to extend recent steep losses on concerns about the weakening domestic and global economy and selling by foreign funds. Fears of another wave in the global credit crisis have resurfaced following a meltdown in the US commercial real estate market. The weekly inflation data will be keenly watched as a further fall in inflation may provide leeway to the government to take steps to shield the domestic economy from the global economic slowdown.
Foreign funds are dumping stocks in Indian and other emerging markets to shore up resources to beat the global liquidity crunch. As per the provisional data released by the stock exchanges, foreign institutional investors (FIIs) on Wednesday, 19 November 2008, sold shares worth a net Rs 264.98 crore. FII outflow reached Rs 52,612.70 crore in calendar 2008, so far, till 18 November 2008, as against an inflow of a huge Rs 71,466.90 crore in the corresponding period last year.
Asian shares tumbled as economic data indicated a global recession could get even uglier. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 1.1% to 5.3%. Japan today, 20 November 2008, said exports logged their biggest annual decline in seven years in October 2008.
Federal Reserve officials on Wednesday, 19 November 2008, pared their outlook for growth in the world's biggest economy to minimal levels. The weaker forecast came on a day in which data showed US consumer prices in October 2008 posted their biggest drop since monthly records began in 1947, while new-home buildings slumped to fresh lows.
US stocks plunged to their lowest in five-and-a-half years on Wednesday, 19 November 2008, as investors girded for a lengthy economic downturn and automotive executives predicted a far-reaching calamity without a government lifeline. The Dow Jones industrial average tumbled 427.47 points, or 5.07%, to 7,997.28. The Standard & Poor's 500 Index fell 52.54 points, or 6.12%, to 806.58. The Nasdaq Composite Index lost 96.85 points, or 6.53%, to 1,386.42.
Turmoil in the US commercial real estate market deepened as securities backed by loans on commercial properties such as office buildings fell in value. Citigroup shares tumbled to a 13-year low as investors questioned survival prospects.
Closer home, given that parliamentary elections must be held before May 2009, the government will like to see that inflation is falling/under control before taking steps to revive the domestic economy. A cut in fuel prices in end-December 2008 after the ongoing assembly elections may help inflation to slide further. Inflation, as measured by the wholesale price index, declined sharply to 8.98% in the week ended 1 November 2008 from 10.72% in the previous week mainly due to sharp drop in oil prices.
Fears of a global recession, slowdown in the domestic economy and selling by foreign funds have pulled the Sensex down 1,762.78 points or 16.72% in the last six trading sessions to 8,773.78 on Wednesday, 19 November 2008, from 10,536.16 on 10 November 2008.
The rupee opened at a record low of 50.50 per dollar as a sharp fall in Asian share prices raised worries of foreigners cutting local equity holdings and repatriating the funds. At 9:01 IST, the partially convertible rupee was at 50.45/47 per dollar. Its previous record low was 50.29, which was hit in late October 2008. It had closed at 50.02/03 on Wednesday, 19 November 2008.
Oil prices dropped for a fifth straight session to below $53 a barrel. Oil on Wednesday, 19 November 2008, fell to its lowest settlement since late January 2007 as investors expect a sharp slowdown in demand for a commodity that just in July this year hit a record high at about $147 a barrel.
Market may slide further
The market is likely to remain under pressure following an sharp drop in the US market in yesterday's trades and weakness among major Asian indices in the ongoing trades. Persisting offloading of equities from FIIs in the domestic market may also add pressure. Among the key local indices, the Nifty has a key support at 2600 and a slip below this level could see it test lower levels around 2550, while on the upside the index could test 2670. The Sensex has a likely support at 8650 and may face resistance at 8890.
US market falls below 8000 for the first time since March 2003, as ongoing anxiety about the economy and uncertainty about the future of the auto industry weighed on the market. While the Dow index plunged 427 points at 7997 on Wednesday and the Nasdaq dropped 97 points to close at 1386.
All the ADRs ended with heavy losses on the US bourses. VSNL, ICICI Bank, HDFC Bank dropped over 10-14% each while Infosys, Satyam, Wipro, Dr Reddy, Tata Motors, MTNLm, Rediff and Patni Computers were down over 3-7% each.
Crude oil prices inched lower, with the Nymex light crude oil for December delivery slipping by 77 cents at $53.62 a barrel. In the commodity segment, the Comex gold for December series jumped $3.30 to settle at $736 an ounce.
Trading Calls - Nov 20 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 extreme 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 20 2008
TCS is likely to win the e-governance contract to computerize ESIC. (ET)
BHEL in talks for JV with UK based Sheffield Forgemaster International and Japan’s Kobe Steel for nuclear forging units. (BL)
Maruti launches A-Star with a price tag of Rs3.46 lac for the base version. (ET)
NALCO gets nod from Indonesian government for Rs170bn aluminium smelter and captive power projects. (FE)
HUL hikes prices of various products by 1-28% since October 2008. (BS)
Maruti cuts production at Gurgaon plant by 5%. (BS)
Biocon is planning to launch drugs for the treatment of cancer, diabetes and auto immune diseases in India. (ET)
DLF requests Haryana government to refund license fees worth Rs2.3bn for various commercial and residential projects in Gurgaon. (ET)
RIL is expected to start commercial production from D6 KG-Basin field by next month according to Canadian partner Niko Resources. (ET)
RIL writes to government to re-start retailing petrol and diesel. (ET)
The DLF-Fortis hospital joint venture facing delay. (FE)
IndusInd Bank gets RBI nod for expansion. (ET)
Asian Paints shuts its phthalic anhydride (PAN) plant in Gujarat. (BS)
Tata Steel aims to double its return on capital in the next four years via improving process at the European factories. (BS)
Powergrid boards approve investment plans of Rs75bn to set-up three power transmission projects. (BS)
HCL-Tech inks deal with Xerox for managed printing services. (ET)
Aurobindo Pharma gets US FDA nod for its alfuzosin hydrochloride extended realize tablets. (DNA)
Fitch affirms ICICI ratings, says market disruptions can hurt. (BS)
Andhra Bank hikes NRE term deposit rates. (BS)
Sobha Developers has reduced prices by 8% on an average in 25 of its 34 ongoing residential projects last week. (DNA)
MindTree has revised downwards its recruitment plans for the current fiscal by 40%. (DNA)
GAIL eyes Rs500bn revenues by FY11. (DNA)
US drug major Eli Lilly sues Wockhardt on anxiety drug patent. (FE)
NTPC and various state power firms appeals to coal ministry to resolve coal shortage issues. (FE)
Economic Front Page
CMIE revises India’s economic growth forecast to 8.2% from the earlier expectation of 8.7%. (ET)
Government to spend Rs8bn for uranium exploration projects. (BL)
RBI makes recast of realty loans tougher, forcing builders to cut house prices. (ET)
Import of sensitive items up 27% in first half of current fiscal. (ET)
Bailout package for Indian industry hit by global slowdown is likely to be finalized by this weekend. (ET)
Credit off take falls by ~Rs166bn between in week ended November 7th 2008. (ET)
Crude oil slips to 22-month low, touches US$53 per barrel. (BS)
Unreasonable movement!
Reason has always existed, but not always in a reasonable form.
It’s not the season to give reasons. A rare positive opening in recent times ended in a whimper for the bulls on Wednesday. Blame it on fresh weakness in European markets. The Sensex and the Nifty lost 1.8% each after gaining as much as 3% in the morning, as worries mounted over the impact of a chronic global recession on India.
The accelerated selling in US stocks overnight had something to do with the fate of the auto industry besides reports of fresh troubles for Citigroup. US stocks hit five-year lows amid mounting worries over the rapidly sliding fortunes of the world's biggest economy. Grim readings on consumer price inflation and the battered housing sector coupled with a bleak forecast by the Federal Reserve added to the misery.
The mayhem was no less severe in Europe, where key indices fell by 4-5%. This morning's scene across Asia is anything but promising. The major indices (barring China) are down 3-5%. At the risk of sounding repetitive, we expect another weak opening for Indian stocks due to the global rout and the worsening macro-economic picture. The deepening financial and economic malaise across the globe will continue to pinch India and India Inc, notwithstanding the repeated assurances of the Finance Minister about the healthy state of affairs.
It goes without saying that one should not be adventurous in such a tough and volatile environment. Though the bulls might make an attempt to rebound after six successive days of losses, they may not meet with much success. Inflation numbers are expected to be flat. Even if they do manage a pull-back from the lows, the gains may prove to be short lived. So, remain on high alert, and gear up for another potentially bad day in office.
FIIs were net sellers at Rs2.65bn (provisional) in the cash segment on Tuesday while the local institutions pumped in Rs1.95bn. In the F&O segment, foreign funds were net buyers of Rs2bn. On Tuesday, FIIs were net sellers at Rs3.6bn in the cash segment, taking their total outflows in the year 2008 to more than US$13bn. Mutual Funds offloaded shares worth Rs450mn on the same day.
US stocks slumped on Wednesday, accelerating the recent slide, with all the three key stock indices touching five-year lows, as the nation's Big Three automakers continued their attempts to win government approval for a bailout plan.
Shares of banking giant Citigroup suffered its greatest ever one-day percentage drop as fears intensified about its fate. The grim economic outlook painted by the Federal Reserve in its minutes of the last policy meeting also added to the gloom.
After climbing in and out of positive and negative territory in the early trades, the major US stock indexes were down decisively in afternoon trades, with the losses intensifying in the final hour.
The Dow Jones Industrial Average closed below 8,000 for the first time since March 2003. The blue chip bellwether tumbled 427.47 points, or 5.1%, to 7,997.28, its lowest close since March 31, 2003. All of the Dow's 30 of its components finishing lower.
Citi weighed the most on Dow, falling 23.4% to end at USUS$6.40, its largest one-session decline since the market collapse on Oct. 19, 1987. The bank took on more than US$17bn in assets from structured investment vehicles (SIVs) and shut another hedge fund, raising concerns about its ability to raise money.
Shares of General Motors (GM) ended down 9.7% while that of Ford plummeted 25%. CEOs of GM, Ford and Chrysler returned to Capitol Hill for a second day to press for a government rescue package for the ailing auto industry.
Economists and automakers' CEOs have warned that a possible bankruptcy in the automotive industry could have dire consequences for the broader US economy. It would add to already rising unemployment, making it harder for the economy to recover.
US stocks were under pressure through much of Wednesday after the biggest-ever drop in consumer prices and another gloomy housing report. They continued the slide after the release of the FOMC minutes, which predicts that the US recession will last for as much as a year.
The S&P 500 Index fell 52.54 points, or 6.1%, to 806.58, a level last seen on March 12, 2003, when it closed at 804.19. The technology-laden Nasdaq Composite Index dropped 96.85 points, or 6.5%, to 1,386.42, its lowest closing level in more than five years.
Thirty stocks fell for each that rose on the New York Stock Exchange, where 1.6bn shares changed hands, up 8.6% over the three-month average.
In the day's economic news, US consumer prices fell in October by 1%, the largest drop in the history of the survey, raising the specter of deflation. The figure outpaced the 0.8% decline a consensus of economists had projected.
The closely watched core CPI, which removes volatile food and energy prices, fell 0.1%. Economists had expected a 0.1% rise after a 0.1% jump in September.
Separately, the Commerce Department reported that housing starts reached an annual rate of 791,000 in October, the lowest level on record. The rate was down 4.5% from the revised reading of 828,000 in September.
Building permits fell 12% to an annual rate of 708,000 in the month, breaking the previous low of 709,000 in March 1975. The annual rate for September was a revised 805,000. Building permits were expected to fall to an annual rate of 772,000 in October.
Meanwhile, the Fed policymakers significantly lowered its outlook for economic activity this year and next. It now expects the US economy to contract for as much as a year, with the risk that the slowdown could persist for even longer, according to edited minutes of the last FOMC meeting.
The dollar regained ground against the euro but fell against the pound and the yen. COMEX gold for December delivery rose US$3.30 to settle at US$736 an ounce.
US light crude oil for December delivery fell 77 cents to settle at a 21-month low of US$53.62 a barrel on the New York Mercantile Exchange. It was the lowest closing price since January 22, 2007 when oil settled at US$51.13 a barrel.
Gasoline prices dipped another 2.1 cents overnight to a national average of US$2.047 a gallon. The decline marks the 63nd consecutive day that prices have decreased. Prices have now dropped by more than half since the record high was set in July.
Treasury prices gained, lowering the yield on the benchmark 10-year note to 3.44% from 3.52% late on Tuesday.
The yield on the 3-month Treasury bill, seen as the safest place to put money in the short term, rose to 0.11% from 0.13% on Tuesday, 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.
Borrowing rates were little changed from the previous day, with the credit market continuing to stall after a month long improvement. The 3-month Libor rate fell to 2.17% from 2.22% Tuesday, while overnight Libor rose to 0.44% from 0.4%. Libor is a key bank lending rate.
Separately, risk premiums on commercial mortgage-backed securities have spiked in the past week, making this corner of the debt market the latest to show signs of mounting distress.
European stocks dropped sharply Wednesday, with banks getting pounded for the third straight session. The pan-European Dow Jones Stoxx 600 index fell 4% to 193.77, with the index shedding nearly 10% over the past month of trade.
UK's FTSE 100 closed down 4.8% at 4,005.68, while Germany's DAX 30 dropped 4.9% to 4,354.09 and the French CAC 40 lost 4% to 3,087.89.
Shares of BASF slumped 13.7% as the world's biggest chemicals firm warned that adjusted earnings won't grow this year and said it would temporarily shut down 80 plants and reduce production at 100 plants.
In yet another volatile trading session, Indian equities continued their southward journey on Wednesday for sixth consecutive trading day. Recently, it has become a sort of habit for the market participants to overlook any positive trigger. May it be a sharp decline in inflation or in-line IIP numbers. Not even, assurance by the FM that the Indian economy will bounce back next year to a 9% GDP growth has helped in reviving the sentiments on Dalal Street.
Today, Indian equities closed well off their intra-day peak, unable to continue early gains in the afternoon trades. Earlier, in the day, Indian markets had engineered a smart rally after being in the red for last five trading sessions. However, selling pressure at higher levels brought the indices lower. Moreover, negative cues coming in from the major European indices also pulled the markets lower from day’s high. DAX Index was down by 1.2%, FTSE Index was down by 2% and CAC Index was down by 1.5%.
Within the Sensex, the top losers included L&T, HDFC, HDFC Bank, Bharti Airtel, ICICI Bank, SBI and RCOM. Selling pressure was also seen in capital goods stocks with L&T down by over 4% to Rs730, Siemens is down by 3% to Rs265 and BHEL down by 3% to Rs1231.
Finally, the BSE Sensex closed lower by 163 points at 8,774 and NSE Nifty lost 48 points points at 2,635, after touching a day's high of 2,772 and a low of 2,618.
Among the BSE sectoral indices, the top losers were capital goods (3.5%), banking (2.9%), Metal (1.8%), IT (1.5%) and pharma (1%).
The market breadth was negative on the BSE, with 1,718 shares declining and 778 shares advancing.
IT stocks continue to be among the worst performers, dragging the key indices into negative territory. The turmoil in the US financial markets and its adverse fallout on the sector's future prospects are hurting IT stocks. Infosys, Wipro and Satyam Computers were among the major losers.
The cut in import duty on iron, steel and soya oil, coupled with the Government's promise to do more may also perk up the mood. However, heavy selling in afternoon trades brought the metal stocks lower. With major steel companies considering a cut in output as also prices, to counter slowing demand and falling international prices is hurting the performance of metal stocks. Tata Steel was down by 2% to Rs162, Nalco was down by 5% to Rs152 and SAIL lost 4% to Rs59.
Sugar stocks continue to trade lower after Allahabad HC refused to pass any interim order staying the sugarcane SAP. Renuka Sugars was down by 6% to Rs50, Bajaj Hind was down by 4% to Rs46 and Balrampur Chini lost 2% to Rs39.
Jet Airlways fell by over 2% to Rs166 despite reports that the government is likely to classify ATF as 'declared goods'.
Bullion metals end mixed again
Gold manages to end higher as dollar stays steady
Bullion metals ended mixed for third straight day on Wednesday, 19 November, 2008. Gold prices rose as the dollar remained steady. But silver prices fell as overall global economic worries reduced the appeal of the precious metal as an alternative investment.
On Wednesday, Comex Gold for December delivery rose $3.3 (0.5%) to close at $736 an ounce on the New York Mercantile Exchange. Prices earlier rose higher by more than 4%. 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 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 11.8% till date. Futures have averaged $882 in 2008. The dollar index has gained 14% 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 Wednesday, Comex silver futures for December delivery fell 24 cents (2.5%) to $9.31 an ounce. Last week, silver lost 4.7%. For the month of October, silver had slipped by 20%. Till date, silver has lost 38.5% 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 Wednesday, the dollar was little changed against a weighted basket of six major currencies after climbing 1.2% in the previous two sessions. The dollar tumbled as much as 1.4% against the basket of currencies before erasing losses.
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 99 (0.8%) at Rs 11,939 per 10 grams. Prices rose to a high of Rs 12,217 per 10 grams and fell to a low of Rs 11,835 per 10 grams during the day's trading.
At the MCX, silver prices for December delivery closed Rs 17 (0.1%) lower at Rs 16,371/Kg. Prices opened at Rs 16,450/kg and fell to a low of Rs 16,241/Kg during the day's trading.
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