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Friday, December 05, 2008
Asian Markets Close The Week On Mixed Note
Nikkei, New Zealand close lower while Shanghai, Hang Seng post good gains
The stock markets across the Asian region closed mixed after Wall Street suffered a late session sell-off overnight as dismal economic data pointed to a deepening of the economic recession. On Wall Street, The Dow closed down 215.5 points or 2.5% at 8,376.2, the Nasdaq shed 46.8 points or 3.1% to 1,445.6 and the S&P 500 closed down 25.5 points or 2.9% at 845.2. Investors in Asia were also cautious ahead of the U.S. jobs data scheduled for release later in the day.
In the commodity market, crude oil prices rose above $44 a barrel in Asian trade Friday. Oil was quoted at $44.06 a barrel, up $0.42, by 4.55 a.m. ET after the contract for January delivery plunged $3.12 or 6.7% to its lowest level in almost four years to $43.67 a barrel on the New York Mercantile Exchange on Thursday - the lowest settlement price since January 2005.
In currency trading, the U.S. dollar fell to lower 92-yen levels in late Tokyo deals. The dollar was quoted at 92.29-92.32 yen, down from the mid 92-yen range in early trade and upper 92-yen range late Thursday.
The Australian dollar closed slightly weaker as financial markets awaited potentially dire jobs data from the U.S. on Friday night. The Aussie finished the session at US$0.6442-0.6445, down from Thursday's close of US$0.6449-0.6454.
The New Zealand dollar closed slightly higher against the greenback. The kiwi finished the session at US$0.5337 compared to US$0.5327 in early trade and US$0.5325 late Thursday.
The South Korean won rose against the U.S. dollar. The won finished the domestic session at 1,475.5 a dollar compared to Thursday's close of 1,477.0 a dollar.
The Taiwan dollar closed at 33.493 to the US dollar, compared with the previous close of 33.550.
The dollar moved off against the Philippine peso after hitting a 2-day high in early Asian deals on Friday. The pair, which closed yesterday's deals at 49.29, is presently trading at 49.1650.
Coming back in equities, the Japanese stock market closed slightly lower. The key Nikkei index traded in positive territory for most part of the trading session, despite Wall Street's sharp overnight sell-off, possibly due to buying by government-controlled funds.
The benchmark Nikkei 225 fell 6.73 points or 0.08% to 7,917.5, extending yesterday's losses. Stocks lost about 7% for the week. It is the smallest change since 30 July 2008, when it rose 0.07%. The Topix index of all the Tokyo Stock Exchange First Section issues fell 2.86 points or 0.36% to 786.02.
In Mainland China, the stocks ended higher because of hopes that a meeting of top economic planners early next week would produce more government action to aid the economy. The Shanghai Composite Index fluctuated around its previous close before finishing up 0.86% at 2,018.656 points. The smaller Shenzhen Component Index added 13.28 points or 2.26% to close at 600.71.
In Hong Kong, the share prices close higher as Chinese property and financial stocks rallied on talks Beijing may further ease key interest rates and cut reserve requirements on bank deposits to spur the economy. The Hang Seng index closed up 336.31 points or 2.49 pct at 13,846.09. The Hang Seng China Enterprises index was up 201.35 points or 2.79% at 7,428.54.
The Australian stock market closed lower, as resources stocks fell following a big drop in crude oil prices. The benchmark S&P/ASX 200 index dropped 42.50 points or 1.20% to 3,489.90, extending yesterday's mild losses. The broader All Ordinaries index shed 40.90 points or 1.18% to 3,427.20. For the week, the ASX 200 index lost about 6.8%, giving up most of last week's record 9.5% advance. The broader All Ordinaries index fell 6.7% for the week.
On the economic front, the performance of construction index, published by the Australian Industry Group and Housing Industry Association, stood at 32.0 in November, down 4.4 points from the month before. A reading below 50.0 indicates contraction of activity in the sector.
The New Zealand stock market closed lower for the first time in three days. The benchmark NZX 50 index closed down 23.96 points or 0.88% at 2,706.72 and the broader NZX All Capital index lost 23.3 points or 0.9% to finish at 2,732.4.
The South Korean stock market closed sharply higher, ending a four-day losing streak. The benchmark Korea Composite Stock Price Index or Kospi climbed 21.59 points or 2.14% to 1,028.13.
In economic news, a report released by the Credit Finance Association showed that credit card spending in South Korea declined 3.5% in November to 25.0 trillion won from a month earlier amid a deepening economic slump.
Meanwhile, reports also indicated that South Korea is planning to buy bad loans from local banks and other financial companies. On Wednesday, the government had said that the state-run Korea Asset Management Corporation would purchase 1.3 trillion won worth of loans extended by savings banks to finance real estate projects that are highly likely to turn sour.
In Philippines, the stock market continued its downward momentum closing the week on a negative note. The benchmark index PSEi trimmed 0.10% or 1.93 points to 1,888.96.
On the economic front, Philippines annual inflation rate eased to 9.9% in November, which the central bank chief said offered authorities leeway in setting interest rates. Month on month inflation dropped by 0.6% in November from a drop of 0.4% registered in October and September.
Core inflation, which strips out some volatile food and fuel items, came in at 7.9% in November - the highest since March 2005 and above the 7.8% recorded in October. But central bank governor Amando Tetangco said core inflation appeared to be losing steam.
In another release the gross international reserves (GIR) showed a rise to US$36.2 billion end November 2008 from US$36 billion a month ago.
In Taiwan, stock markets closed lower in thin trading as gains in financial and tourism stocks were offset by continued weakness in the technology sector. Financial heavyweights outperformed on expectations that they would benefit from a memorandum of understanding on financial supervision likely to be signed by Taiwan and China early next year. Tourism shares also attracted buying on signs that greater numbers of mainland Chinese tourists are taking advantage of more convenient air links across the Taiwan Strait.
The weighted index closed down 29.89 points or 0.7% at 4,225.07, off a high of 4,261.32 and a low of 4,190.02. This is the lowest closing since 20 November 2008. For the week, the index fell 235.42 points, or 5.28%.
In India, concerns about the weakening global economy, lower European markets, fall in US index futures and media reports of a shootout at New Delhi's international airport, pulled the Indian market to a fresh intraday low in mid-afternoon trade. At 15.14 IST, the BSE 30-share Sensex was down 265.37 points, or 2.91%, shedding 371.61 points from the day's high.
Elsewhere, Singapore’s strait times gained 15.49 points or 0.94% closing the day at 1659.17; Malaysia's KLCI closed down 1.01% at 838.28 and Indonesia’s Jakarta composite closed the day 2.98 points or 0.25% lower at 1,202.34.
In other regional markets, European markets fell, paced by oil producers and mineral extractors, as investors await more signs of a contracting economy with the release of key U.S. jobs data out later in the session.
Overall, the U.K. FTSE 100 index dropped 1.8% to 4,089.27, the German DAX 30 index lost 2.9% to 4,430.16 and the French CAC-40 index declined 2.9%% to 3,071
Petrol cheaper by Rs 5, diesel by Rs 2
In order to usher a feel-good factor dovetailed with the fiscal impetus package to be announced on Saturday, oil & petroleum minister Murli Deora has cut the price of petrol by Rs 5 per litre and diesel by Rs 2 per litre from Saturday, leaving cooking gas LPG and kerosene unchanged.
The interim decision to cut oil prices comes in line of falling oil prices.
Earlier, the government announced to cut petrol price by Rs 10 a litre, diesel by Rs 3 a litre and domestic liquified petroleum gas (LPG) by Rs 20 per cylinder due to fall in global oil prices.
State-run oil marketing companies (OMC) started earning extra returns from November with current month profit on petrol at Rs 14.89 a litre and on diesel at Rs 3.03 a litre. However, the three OMCs continue to lose Rs 17.26 a litre on kerosene and Rs 148.32 on a cylinder of LPG.
In June, the government raised the price of petrol by Rs 5 a litre, diesel by Rs 3 a litre and domestic LPG by Rs 50 per cylinder due to the high international prices of crude oil which touched a peak of USD 147 a barrel mid-July.
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BSE Bulk Deals to Watch - Dec 5 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
5/12/2008 509550 GAMMON INDI COPTHALL MAURITIUS INVESTMENT LIMITED B 1370674 50.07
5/12/2008 509550 GAMMON INDI FIDELITY INVESTMENT TRUST FIDELITY OVERSEAS FUND S 1000000 49.00
5/12/2008 530955 KAILASH FICO RAJRATAN TRADING PVT LTD B 100000 26.00
5/12/2008 530955 KAILASH FICO PADMAWATI CREDIT C PVT LTD S 64276 26.00
5/12/2008 530461 SABOO SOD CH HARDIK M MITHANI B 114401 8.03
5/12/2008 530461 SABOO SOD CH BDS SHARE BROKERS PVT LTD B 49991 8.74
5/12/2008 530461 SABOO SOD CH HARDIK M. MITHANI B 86687 9.09
5/12/2008 530461 SABOO SOD CH HARDIK M MITHANI S 114401 8.00
5/12/2008 530461 SABOO SOD CH BDS SHARE BROKERS PVT LTD S 41991 9.21
5/12/2008 530461 SABOO SOD CH HARDIK M. MITHANI S 240697 8.62
5/12/2008 530461 SABOO SOD CH INKAM FINVEST PVT.LTD S 50000 8.97
5/12/2008 530461 SABOO SOD CH CHANDUBHAI S.PATEL S 52710 8.87
5/12/2008 512527 SUPER SAL IN PRINCIPAL MUTUAL FUND S 151073 45.00
5/12/2008 532691 TULIP TELE SANSAR CAPITAL MAURITIUS LTD B 240000 405.00
5/12/2008 531574 VAS INFRA MAVI INVESTMENTS FUND LTD S 161000 8.30
5/12/2008 514470 WINSOME TEXT PARESH SANAT RACHH B 40000 12.00
NSE Bulk Deals to Watch - Dec 5 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
05-DEC-2008,ALKALI,Alkali Metals Limited,MANSUKH SECURITIES & FINANCE LTD,BUY,52774,137.60,-
05-DEC-2008,ARIHANT,Arihant Foundations & Hou,ISHA INVESTMENT,BUY,38696,27.69,-
05-DEC-2008,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,BUY,86766,2162.38,-
05-DEC-2008,EIHOTEL,EIH Ltd,PIVET FINANCES LIMITED,BUY,3608324,124.85,-
05-DEC-2008,GAMMONIND,Gammon India Ltd.,Sundaram Mutual Fund (Growth Fund),BUY,1143000,49.74,-
05-DEC-2008,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,BUY,2502461,93.74,-
05-DEC-2008,TULIP,Tulip Telecom Limited,SANSAR CAPITAL (MAURITIUS) LTD,BUY,160000,405.00,-
05-DEC-2008,UNITECH,Unitech Ltd,TOTAL SECURITIES LIMITED,BUY,10153639,31.39,-
05-DEC-2008,ALKALI,Alkali Metals Limited,MANSUKH SECURITIES & FINANCE LTD,SELL,52774,137.74,-
05-DEC-2008,ARIHANT,Arihant Foundations & Hou,ISHA INVESTMENT,SELL,565,27.95,-
05-DEC-2008,ARIHANT,Arihant Foundations & Hou,MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. SVB,SELL,37676,27.21,-
05-DEC-2008,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,SELL,86766,2163.70,-
05-DEC-2008,EDUCOMP,Educomp Solutions Limited,CITIGROUP GLOBAL MKTS (M) PVT LTD,SELL,109000,2195.02,-
05-DEC-2008,GAMMONIND,Gammon India Ltd.,Fidelity Funds - Emerging Markets,SELL,1230050,49.81,-
05-DEC-2008,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,SELL,2502461,93.81,-
05-DEC-2008,RELIGARE,Religare Enterprises Limi,INDOPARK HOLDINGS LIMITED,SELL,3763092,275.00,-
05-DEC-2008,ROHITFERRO,Rohit Ferro-Tech Limited,FOSTER CAPITAL VENTURES LTD,SELL,223574,15.37,-
05-DEC-2008,UNITECH,Unitech Ltd,TOTAL SECURITIES LIMITED,SELL,10156339,31.41,-
Post Session Commentary - Dec 5 2008
The Indian market retreated from Thursday’s strong rally to end the day with losses. The market was downbeat on fears of weakening global economy along with negative European markets and media reports of a shootout at New Delhi''s international airport. Cues from the markets all over the world were weak on expected deterioration in the US job market due to the planned job cuts. Initial claims for the week ended November 29 declined by 21,000 to 509,000.
Domestic markets opened in red tracking negative cues from the US markets. Soon after opening market gained some ground on expectation of stimulus package but was not able to hold the momentum and sentiments again turned weak. Further market continued to trade in red terrain with volatility. Benchmark Indices extended their losses till end on significant selling pressure over the counters. The investors are eyeing at the RBI’s meeting as it is expected that central bank could lower the interest rates and announce a stimulus plan to give a boost to the economy. NSE Nifty managed to close around 2,700 mark and BSE Sensex slipped below 9,000 level. From the sectoral front, Consumer Durables and IT counters witnessed heavy selling pressure and ended with a deep cut of more than 4%. Along with this, profit booking was also visible in Reality, Metal, Oil & Gas, Teck, PSU and Bank stocks. However, Auto index was able to gain favor from the market.
The investors are eyeing at the RBI''s meeting on December 06 (Saturday) as it is expected that central bank could lower the interest rates and announce a stimulus plan to give a boost to the economy. RBI is expected to cut Repo and Reverse Repo rates in an attempt to safeguard the domestic economy against the global economic slowdown. Besides this, the government is likely to announce an export package, a further relaxation in external commercial borrowing norms and a package for infrastructure.
Among the Sensex pack 25 stocks ended in red territory and 5 in green. The market breadth was negative as 1104 stocks closed in green while 985 stocks closed in red and 71 stocks remained unchanged.
The BSE Sensex closed lower by 264.55 points at 8,965.20 and NSE Nifty ended down by 73.60 points at 2,714.40. The BSE Mid Caps and BSE Small Caps ended with losses of 29.85 and 8.26 points at 2,892.95 and 3,323.54 respectively. The BSE Sensex touched intraday high of 9,340.69 and intraday low of 8,914.38.
Losers from the BSE Sensex pack are JP Associates (6.62%), TCS Ltd (5.10%), Infosys Tech (4.94%), DLF Ltd (4.87%), HDFC (4.84%), Hindalco (4.78%), Sterlite Industries (4.69%), Reliance (3.51%), Satyam Computer (3.50%), ONGC Ltd (2.91%) and Bharti Airtel (2.90%).
Gainers from the BSE Sensex pack are Tata Motors (1.46%), Gradim Industries (1.01%), Maruti Suzuki (0.56%), Reliance Communication Ltd (0.15%) and ACC Ltd (0.04%).
The BSE Consumer Durables index lost (4.37%) or 75.76 points to close at 1,658.77. Main losers are Titan Ind (5.34%), Videocon Ind (4.57%), Blue Star L (3.71%) and Gitanjali GE (2.08%).
The BSE IT index dropped by (4.36%) or 107.38 points to close at 2,357.36. Losers are Rolta India (6.02%), TCS Ltd (5.10%), Infosys Tech (4.94%), Aptech Ltd (3.98%), Satyam Computer (3.50%) and Mphasis Ltd (3.31%).
The BSE Reality index ended down by (3.50%) or 61.46 points at 1,692.19. Major losers are Indiabull Real (5.69%), Anant Raj (5.49%), DLF Ltd (4.87%), Housing Dev (4.55%), Akruti City (3.14%) and Sobha Dev (2.55%).
The BSE Metal index ended lower by (3.42%) or 164.18 points at 4,639.73 as Welspan Gujarat SR (6.14%), Steel Authority (6.09%), Jai Corp Ltd (5.57%), Jindal Saw (5.53%), Hindalco (4.78%) and Sterlite Industries (4.69%) ended in negative territory.
The BSE Oil & Gas index lost (3.30%) or 187.35 points to close at 5,495.33. Losers are HPCL (6.51%), BPCL (6.25%), Reliance Natural Resources (4.24%), Cairn Ind (3.94%), IOC (3.63%) and Reliance (3.51%).
The BSE Auto index gained (0.23%) or 5.21 points to close at 2,248.32 as Hero Honda Motors (1.54%), Tata Motors (1.46%), Bajaj Auto (1.30%), Maruti Suzuki (0.56%), Ashok Leyland (0.14%) and Bharat Forge (0.06%) ended in red.
Markets snap yesterday’s momentum
Taking cue from yesterday's gain of some 500 points, the Sensex opened on a weak note at 9,205, lower 25 points from the previous close (9,230). While the market witnessed a fluctuating trend for a while, afternoon trades saw the index tumble below 9,000 mark to touch the day's low of 8,914 amid relentless selling pressure. The Sensex finally ended the day with loss of 265 points at 8,965, while Nifty declined by 74 points to close at 2,714.
The market breadth was extremely weak as losers outpaced gainers. Of the 2,160 stocks traded on the BSE, 1,104 stocks declined whereas 985 stocks advanced. Seventy-one stocks ended unchanged. All sectoral indices except BSE Auto slipped sharply. BSE CD dropped 4.37% followed by BSE IT (down 4.36%), BSE Realty (down 3.50%), BSE Metal (down 3.42%), BSE Oil & Gas (down 3.30%) and BSE Teck (down 3.28%).
Most of the index heavyweights witnessed heavy correction. Among CD stock majors, Titan Industries tumbled 5.34% at Rs830.80, Videocon Industries dropped 4.57% at Rs92.90, Blue Star moved down by 3.71% at Rs127, and Gitanjali Gems lost 2.08% at Rs68.25. Among the other major losers, JP Associates slumped 6.62% at Rs66.35, Tata Consultancy Services slipped 5.10% at Rs521.70, Infosys Technologies shed 4.94% at Rs1135.70 and DLF lost 4.87% at Rs203.15. HDFC fell by 4.84% at Rs1436.30, Hindalco Industries crumbled 4.78% at Rs49.85 and Sterlite Industries dipped 4.69% at Rs245. Other front-line stocks lost between 2-3% each. Select counters, however, bucked the downtrend and ended with gains. Tata Motors advanced 1.46% at Rs153.10 and Grasim Industries moved up by 1.01% at Rs938, while Maruti Suzuki India and Reliance Communications ended with modest gains.
Over 3.30 crore Unitech shares changed hands on the BSE followed by Suzlon Energy (1.86 crore shares), HDIL (1.13 crore shares), GVK Power & Infrastructure (1.07 crore shares) and Reliance Natural Resources ( 74 lakh shares).
Bailout package to dictate trend
Key benchmark indices are likely to take cue early next week from the likely announcement of a fiscal stimulus and interest rate cuts on Saturday, 5 December 2008.
The stimulus package would add up to around Rs 75,000 crore, including use of up to $10 billion of foreign exchange reserves for funding infrastructure projects, lines of credit to banks and allowing non-banking financial companies to access foreign loans, reports suggest.
The Reserve Bank of India (RBI) may come out with cuts in repo rate and reverse repo rate to stimulate growth after inflation slipped to a 7-month low in the week ended 22 November 2008. Lower interest rates may help revive demand over the medium term.
Inflation based on the wholesale price index rose 8.4% in the year through 22 November 2008, lower than previous week's 8.84% rise, data released by the government on 4 December showed.
As per the market buzz, the RBI is expected to cut repo and reverse repo rates to the extent of 200 basis points and 125 basis points respectively. Repo rate is the rate at which RBI lends to commercial banks and reverse repo rate is the rate at which RBI accepts deposits from banks.
The RBI has aggressively cut rates over the past two months to support growth and cushion the economy against the spreading global turmoil. The repo rate has been cut by 150 basis points to 7.5% since October 2008 and the cash reserve ratio was reduced by 350 basis points to 5.5%.
Also, external commercial borrowing norms may be relaxed to allow industry to source funds outside the country and excise duty cuts are also on the cards.
However concerns about the weakening global economy and tension between Indian and Pakistan following terror attacks in Mumbai late last month, may keep the market sentiment edgy. Tension between India and Pakistan have mounted after the Mumbai attacks. India has blamed Islamist militants based in Pakistan for the attacks.
Meanwhile, economic, corporate and industry data continues to be weak in major economies. Japan said on Thursday, 4 December 2008, it may be in a deeper recession than first thought, in the latest signal that the global economic downturn is sparing few corners of the world. Earlier, a corporate survey in Japan signaled the country's economic performance in the third quarter may have been even worse than first reported. Australia's vehicle sales slumped in November 2008.
Closer home, the brokerages are downgrading their earnings estimates for Indian firms due to a plunge in demand. Foreign brokerage CLSA has been steadily downgrading earnings estimates; since June 2008, estimates for Sensex FY09 EPS have been cut 15%, while for FY10, the cut is 23%. Local brokerage Motilal Oswal cut the Sensex EPS by 11% for FY09 to Rs 908 and by 16% for FY10 to Rs 1,061.
India's industrial production data for October 2008 to be released on 12 December 2008 will be keenly watched. As per reports, industrial production is expected to grow marginally or register a dip for the first time since 1994. The index had expanded 12.2% in October 2007.
Small-cap, mid-cap stocks outperform the market
Hopes of stimulus package and expectations of a further rate cut by the central bank to boost the economy helped key benchmark indices cut early losses. The market edged lower in three out of five trading sessions. Small and mid-cap stocks outperformed the market.
The BSE 30-share Sensex lost 127.52 points or 1.40% to 8,965.20 in the week ended Friday, 5 December 2008. The S&P CNX Nifty declined 40.70 points or 1.47% to 2714.40 in the week.
The BSE Mid-Cap gained 46.48 points or 1.63% to 2,892.95 and the BSE Small-Cap index rose 25.81 points or 0.78% to 3,323.54 in the week. Both the indices outperformed the Sensex.
Sustained selling by the foreign institutional investors (FII) to shore up resources to beat the global liquidity crunch, have weighed heavily on the bourses since 2008. FIIs outflow reached Rs 54,521.80 crore in calendar 2008, till 4 December 2008.
Trading for the week started on a dull note as weak European indices, fall in US index futures and dismal economic data heightened concerns about the weakening domestic and global economy on Monday, 1 December 2008. The BSE 30-share Sensex lost 252.85 points, or 2.78%, to 8.839.87 and the S&P CNX Nifty slipped 72.20 points, or 2.62%, to 2,682.90.
The market extended losses the next day. The BSE 30-share Sensex was down 100.63 points and the S&P CNX Nifty fell 25.10 points, or 0.94%, to 2,657.80 on Tuesday, 2 December 2008.
Hopes of government measures to boost domestic economy, easing margin norms and firm Asian stocks supported domestic bourses on Wednesday, 3 December 2008. The BSE 30-share Sensex was up 8.19 points, or 0.09%, to 8,747.43.
Hopes of a cut in interest rates, firm European stocks and rebound in US index futures boosted the domestic bourses on Thursday, 4 December 2008. The BSE 30-share Sensex jumped 482.32 points, or 5.51%, to 9,229.75 and the S&P CNX Nifty jumped 131.55 points, or 4.95%, to 2,788
A sell-off in index heavyweights on concerns about the weakening global economy dragged market lower on Friday, 5 December 2008. The BSE 30-share Sensex lost 264.55 points or 2.87% at 8,965.20 and the S&P CNX Nifty fell 73.60 points or 2.64% to 2714.40 on that day.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 1.15% to Rs 1,118.60 on concerns a global slowdown would hit demand for petrochemicals.
Real estate stocks rose on reports the government will unveil measures for the realty sector, which may include incentives for low-cost housing and lower loan rates, on Saturday 6 December 2008. Indiabulls Real Estate (up 9.75% to Rs 103.60), DLF (up 2.47% to Rs 203.15), Unitech (up 33.33% to Rs 30.80), gained.
Banking stocks were mixed despite reports the Reserve Bank of India (RBI) may come out with cuts in repo rate and reverse repo rate on Saturday 6 December 2008 to stimulate growth
India's largest commercial bank State Bank of India (SBI) rose 4.48% to Rs 1135.60. India's largest private sector bank by net profit ICICI Bank rose 2.01% to Rs 358.45. However India's second largest private sector bank by net profit HDFC Bank slipped 3.42% to Rs 888.95
Most auto stocks slipped on dismal November 2008 monthly sales figures. India's largest tractor maker by sales Mahindra & Mahindra lost 10.46% to Rs 252.20 after total vehicle sales (excluding tractors) declined 41% at 10,430 units in November 2008 over November 2007.
India's largest motorbike maker by sales Hero Honda Motors fell 4.91% to Rs 761.50 after two-wheeler sales rose a marginal 0.5% to 2,89,426 units in November 2008 over November 2007.
India's largest scooter maker by sales Bajaj Auto slipped 1.82% to Rs 315 on 37% fall in two-wheelers sales to 1,32,421 units in November 2008 over November 2007.
India's largest car maker by sales Maruti Suzuki India declined 8.50% to Rs 490.30 on 24.4% fall in sales to 52,711 units in November 2008 over November 2007. The company unveiled the monthly sales data during trading hours on Monday, 1 December 2008.
However India's largest commercial vehicle maker by sales Tata Motors gained 12.28% to Rs 153.10 on reports the government is mulling excise duty cut on trucks and buses as well as extending the special line of credit for non banking financial companies that are instrumental in financing commerical vehicle sales.
IT stocks slipped on worries about the US economy which is already into a recession for a year now. Satyam Computer Services (down 7.65% to Rs 224.40), Infosys (down 8.46% to Rs 1135.70), Wipro (down 6.65% to Rs 227.15), and Tata Consultancy Services (down 6.51%. to Rs 521.70), slipped.
Indian IT firms derive a large part of revenue from exports to the United States.
India's largest steel maker by sales Tata Steel jumped 21.10% to Rs 182.80 after the company reported 215.77% surge in consolidated net profit to Rs 4703.64 crore on a 36.17% increase in total income to Rs 44283.34 crore in Q2 September 2008 over Q2 September 2007, on 2 December 2008.
State run oil marketing companies slipped on reports the government is mulling a hefty reduction in fuel prices. BPCL (down 3.90% to Rs 340.30), HPCL (down 5.3% to Rs 224.20), and Indian Oil Corporation (down 6.22% to Rs 383.95), declined.
Among the side counters, NDTV (up 42.72%), Sun TV (up 30.59%), LIC Housing Finance (up 29.26%), and EIH (up 27.26%), jumped.
However, Bombay Rayon Fashions (down 16.19%), Rolta India (down 15.28%), and Mercator Lines (down 14.10%), slipped.
The stock market regulator Securities & Exchange Board of India (Sebi), on Tuesday, 2 December 2008, extended the facility of cross margining across cash and derivatives segments to all categories of market participants.
Exports declined an annual 12.1% to $12.82 billion in October 2008, the first year-on-year fall in nearly three years, as slowing output at home and weakening economies in key overseas markets slashed demand, data released on Monday, 1 December 2008 showed.
Inflation based on the wholesale price index rose 8.4% in the year through 22 November 2008, lower than previous week's 8.84% rise, data released by the government on 4 December showed.
The Bank of England slashed interest rates by a full percentage point on 4 December 2008 to shore up Britain's crumbling economy and head off the threat of deflation. The cut took rates to 2% their lowest level since 1951. The central bank in Sweden slashed its key interest rate by a record 175 basis points to 2%, a shock move to try and prevent the economy from sliding deeper into recession. On the same day, the European Central Bank dropped its benchmark rate by 0.75 percentage point.
Meanwhile the US economy entered a recession a year ago this month, the panel that dates American business expansion said on 1 December 2008. Federal Reserve Chairman Ben Bernanke said the central bank is mulling extreme policy measures such as buying more government bonds to revive growth.
IT, metal stocks lead a near 3% Sensex slide
Index heavyweight Reliance Industries (RIL), metal and IT stocks pulled the market down in a highly volatile trade as concerns about the weakening global economy, lower European markets and media reports of a shootout at New Delhi's international airport early on Friday, 5 December 2008, marred the investor sentiment. The BSE 30-share Sensex lost 264.55 points, or 2.87%, shedding 375.49 points from the day's high.
Volatility was high. The barometer index swung 426.31 points between the day's high and low. A likely stimulus package from the government and the Reserve Bank of India (RBI) to pump prime the economy triggered a strong rebound after an initial fall caused by media reports of a shootout at New Delhi's international airport early on Friday, 5 December 2008. However, the market soon slipped into the red again in morning trade on likely lower opening of European shares and due to Indo-Pak tensions in the aftermath of last week's terror attacks in Mumbai.
The market cut losses in afternoon trade on a likely stimulus package from the government and the Reserve Bank of India (RBI) to pump prime the economy, firm Asian markets and on higher US index futures. The market weakened again in mid-afternoon trade as European shares dropped in early trade and as the US index futures slipped into the red.
European markets fell on Friday, 5 December 2008, tracking overnight losses in the US market, as the prospect of a deep economic downturn and deteriorating corporate outlook kept investors on edge ahead of US jobs data. The key benchmark indices in France, Germany and UK were down by between 0.99% to 2.98%.
Investors are worried that the November 2008 US employment report due later in the day will show a further deterioration in the US job market.
US drug giant Merck said Thursday that 2009 would be worse than Wall Street had expected as the company prepares to deal with a strengthening dollar and a weakening economy. US retailer Macy's Inc. on Thursday, 4 December 2008, said its same-store sales for November 2008 fell 13.3%. Another retailer Target Corp. said its same-store sales for the month fell 10.4%.
AT&T announced Thursday that it plans to lay off 12,000 people and curb spending on new equipment a sign that the telecommunications industry is beginning to feel the pain of the economic downturn. Chemicals maker DuPont on Thursday said it will cut 2,500 jobs, mostly in automotive and construction units, and forecast a fourth-quarter loss.
Trading in US index futures indicated the Dow could fall 25 points at the opening bell. The US index futures moved between positive and negative zone during trading hours in India.
Asian shares edged higher following record rate cuts by central banks in Europe. The key benchmark indices in Hong Kong, China, South Korea, Singapore were up by between 0.86% to 2.14%. But Japan's Nikkei average edged down 0.1% as bank shares fell on fears about the potential fallout if big US automakers file for bankruptcy and ahead of what is expected to be a dismal US employment data due later in the day.
On Thursday the European Central Bank dropped its benchmark rate by 0.75 percentage point, while Sweden lopped 1.75 percentage points and the Bank of England cut rates by 1 percentage point. Governments are also taking action. South Korea repeated on Friday pledges to do more to keep Asia's fourth-largest economy on tack, and listed automobile, semiconductor and petrochemical firms as those hardest hit by the global downturn.
Closer home, a television channel reported that two sharp sounds had sparked a security scare at the New Delhi international. But no one was hurt. The police and commandos closed down the area by the heavily guarded airport, while an sports utility vehicle with a lone occupant sped away. Police gave chase but lost the vehicle, a television channel said.
Several attackers may have survived the three-day siege of Mumbai that killed 171 people last week, media reports said on Thursday.
The Indian government is reportedly considering various options including a strike on Pakistan to dismantle its terror bases in response to the recent Mumbai terror attacks. As a strike on Pakistan could lead to a full scale war between the two nuclear armed countries, India is maintaining a cautious approach and wants to gauge every possible ramification of its decision, reports suggest.
Tension between India and Pakistan have mounted after the Mumbai attacks. India has blamed Islamist militants based in Pakistan for the attacks.
Meanwhile, as per the market buzz, the Reserve Bank of India (RBI) is expected to cut repo and reverse repo rates to the extent of 200 basis points and 125 basis points respectively on Saturday, 6 December 2008, in an attempt to shield the domestic economy from the global economic slowdown. Repo rate is the rate at which RBI lends to commercial banks and reverse repo rate is the rate at which RBI accepts deposits from banks.
On Thursday, 4 December 2008, the RBI governor D Subbarao said the outlook for India was mixed and a period of painful adjustment was inevitable. The RBI government will hold a news conference on Saturday.
The Indian government is slated to announce a slew of measures on Saturday to pump prime the economy. The likely measures include a Rs 2000-crore export package, a further relaxation in external commercial borrowings norms and Rs 15,000-crore budgetary support for infrastructure.
Commerce Minister Kamal Nath today, 5 December 2008, said lowering interest rates and an interest subsidy on bank loans to exporters could form part of a stimulus package likely to be announced by the government and the Reserve Bank on Saturday, 6 December 2008.
The BSE 30-share Sensex was down 264.55 points, or 2.87%, to 8,965.20. At the day's high of 9,340.69 hit in mid-morning trade, the Sensex rose 110.94 points. The Sensex lost 315.37 points at the day's low of 8,914.38 in mid-afternoon trade.
The S&P CNX Nifty was down 73.60 points, or 2.64%, to 2,714.40.
The BSE clocked a turnover of Rs 3,745 crore today as compared to a turnover of Rs 3,747.69 crore on 4 December 2008.
Nifty December 2008 futures were at 2711.65, at a discount of 2.75 points as compared to the spot closing of 2714.40. Turnover in NSE's futures & options (F&O) segment surged to Rs 36,708.86 crore from Rs 34,123.92 crore on Thursday, 4 December 2008.
The barometer index BSE Sensex is down 11,321.79 points or 55.8% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 12,241.57 points or 57.72% below its all-time high of 21,206.77 struck on 10 January 2008.
The BSE Consumer Durables index (down 4.37% to 1,658.77), the BSE IT index (down 4.36% to 2,357.36), the BSE Realty index (down 3.5% to 1,692.16), the BSE Metal index (down 3.42% to 4,639.73), the BSE Oil & Gas index (down 3.3% to 5,495.33), the BSE Teck index (down 3.28% to 1,917.36), underperformed the Sensex.
The BSE Auto index (up 0.23% to 2,248.32), the BSE HealthCare index (down 0.9% to 2,823.43), the BSE Capital Goods index (down 1.51% to 6,408.77), the BSE Power index (down 1.66% to 1,648.59), the BSE FMCG index (down 1.81% to 1,919.28), the BSE Bankex (down 2% to 4,707.45) and the BSE PSU index (down 2.28% to 4,561.20), outperformed the Sensex.
The market breadth, indicating the overall health of the market, turned negative from a strong breadth earlier in the day. On BSE, 985 shares rose as compared with 1,104 that declined. 71 shares remained unchanged.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) slipped 3.51% to Rs 1,118.60 off day's high of Rs 1,182, on concerns a global slowdown would hit demand for petrochemicals. Meanwhile, as per reports the government has clarified that the selling price of RIL's gas from the Krishna Godavari basin, off the Indian east coast, will be $4.2 per unit excluding transportation costs and taxes. This will pave the way for RIL to gear up the gas production.
Real estate stocks declined on a recent brokerage report that realty prices are set to correct by 30% in the coming months given the general slowdown in the economy. Realty majors, Indiabulls Real Estate, DLF, Housing Development & Infrastructure slipped by between 4.55% to 5.69%.
Metal stocks declined on worries a weakening domestic and global economy will hit demand. Hindalco Industries, Sterlite Industries, Steel Authority of India, National Aluminum Company fell by between 0.85% to 6.09%.
Banking stocks fell after earlier gains as fears of rising defaults in a weakening economy offset hopes that a further fall in interest rates will boost lending growth. India's largest commercial bank State Bank of India (SBI) fell 2.88%. India's second largest private sector bank by net profit HDFC Bank fell 2.63% as its American depository receipt (ADR) fell 1.23% on Thursday.
India's largest private sector bank by net profit ICICI Bank slipped 1.58%.
India's largest home loan lender by operating income HDFC was down 4.84%.
IT stocks fell on weak ADRs, a stronger rupee and on worries about the US economy which is already into a recession for a year now. India's fourth largest IT exporter by sales Wipro fell 2.26% as its ADR slipped 6.46%. India's third largest IT exporter by sales Satyam Computer Services slipped 3.5% as ADR lost 6.96% on Thursday, 4 December 2008. India's second largest IT exporter by sales Infosys fell 4.94%, as ADR was down 5.45% overnight. As per reports Infosys has decided to freeze its annual hiring cycle following the global economic slowdown. India's largest IT exporter by sales Tata Consultancy Services slipped 5.1%.
IT firms earn more than 50% of their revenues from exports to US. A dismal a US November 2008 employment data is expected later in the day. Meanwhile, The Indian rupee trimmed gains in afternoon trade on Friday as losses in the domestic share market raised concerns over foreign fund flows while some dollar demand from oil refiners also weighed. The partially convertible rupee was at 49.72/73 per dollar, off a high of 49.54/50 but still stronger than its previous close of 49.87/89. It had hit a record low of 50.65 on Tuesday 2 December 2008. A stronger rupee affects operating margins of IT firms negatively as they earn most of their revenues from exports.
Capital goods stocks fell on worries a slowing economy will crimp orders. Bharat Heavy Electricals, Praj Industries, Areva T&D fell by between 1.38% to 8.08%.
India's largest engineering and construction firm by sales Larsen & Toubro fell 2.52% on reports it has deferred its entry into the commercial shipbuilding business and has also decided to scale back its investment for a new shipyard near Chennai.
Auto stocks rose on hopes lower interest rates will spur demand which is mainly driven by finance and on possible measures by the government to boost the commercial vehicles sector. Maruti Suzuki India and Hero Honda Motors rose by between 0.56% to 1.54%.
India's largest commercial vehicle maker by sales Tata Motors was up 1.46% gaining for the second day in a row on reports the government may cut excise duty cut on commercial vehicles as a part of the package to boost the economy. While, India's largest tractor maker by sales Mahindra & Mahindra fell 0.83%.
Ashok Leyland rose 0.14% despite a 60.22% fall in sales to 2307 units in November 2008 over November 2007.
Cement stocks rose on hopes likely government measures to boost the infrastructure sector will spurt demand. Birla Corporation of India, Ultratech Cement, Ambuja Cements and Grasim Industries rose by between 0.15% to 3.68%.
India's largest cement producer by sales ACC rose 0.04% on reports it has raised Rs 200 crore via bond issue. The tenure of a bond is five years and the coupon rate will be 11.3%, payable annually. The amount raised will be used to part finance the company's capital expenditure requirement.
Binani Cement surged 4.43% after the domestic rating agency CARE upgraded its ratings on the cement manufacturer.
Consumer durables stocks fell on slackening demand in a slowing economy. Videocon Indusries, Blue Star and Titan Industries fell by between 4.51% to 5.34%.
PSU OMCs slipped on reports the government is mulling a hefty reduction in fuel prices. BPCL, HPCL and Indian Oil Corporatin fell by between 3.63% to 6.51%.
As per reports, the government is planning to reduce the price of petrol by up to Rs 10 a litre, diesel by Rs 3 a litre and cooking gas by Rs 20 per refill in the wake of sharp fall in global crude oil prices.
India's second largest telecom services provider by sales Reliance Communications rose 0.15% on reports the Communications and IT Ministry will refund about Rs 112 crore which the company had paid as part of the entry fee while taking approval for offering dual technology in 2007. The refund is on account of the company surrendering the permission for dual technology in six circles where it already has GSM services.
Unitech clocked the highest volume of 3.3 crore shares on BSE. Suzlon Energy (1.86 crore shares), Housing Development & Infrastructure (1.13 crore shares) and GVK Power & Infrastructure (1.07 crore shares) and Reliance Natural Resources (74.47 lakh shares) were the other volume toppers in that order.
Reliance Industries clocked the highest turnover of Rs 315.20 crore on BSE. ICICI Bank (Rs 268.62 crore), State Bank of India (Rs 228.53 crore), Educomp Solutions (Rs 183.17 crore) and Reliance Capital (Rs 139.08 crore) were the other turnover toppers in that order.
Marg was locked at 5% upper limit at Rs 36.10 at 15:21 IST on BSE, extending gains for the fourth consecutive day, on share buy back plan.
Mcleod Russel India soared 6.17% after the Reserve Bank of India raised the foreign invesment ceiling in the company.
Zicom Electronic Security Systems was locked at upper limit of 5% at Rs 59.70 on BSE on reports of the company bagging a Rs 8.50-crore order from Gurgaon police for security products.
Aurobindo Pharma rose 6.73% on receiving US approval for a new drug.
Wockhardt gained 0.46% on receiving US approval for a new drug.
Market to extend gains
The market may extend Thursday's (4 December 2008) solid gains on expectations of a stimulus package from the government and the Reserve Bank of India (RBI). However, Indo-Pak tension after the major terror strikes in Mumbai last week, will cap the upside.
The BSE Sensex rose 5.5% on Thursday to its highest close in more than two weeks as expectations for an interest rate cut received a boost from slower-than-expected rise in inflation. As per the provisional data released by the stock exchanges, foreign funds bought shares worth a net Rs 307.14 crore and domestic funds purchases shares worth a net Rs 79.24 crore on Thursday.
As per the market buzz, the Reserve Bank of India (RBI) is expected to cut repo and reverse repo rates to the extent of 200 basis points and 125 basis points respectively on Saturday, 6 December 2008, in an attempt to shield the domestic economy from the global economic slowdown. Repo rate is the rate at which RBI lends to commercial banks and reverse repo rate is the rate at which RBI accepts deposits from banks.
Inflation based on the wholesale price index rose 8.4% in the year through 22 November 2008, lower than previous week's 8.84% rise, data released by the government on Thursday, showed. Inflation had surged into double digits in early June this year after an increase in state-set retail fuel prices, and peaked at 12.91% on, 2 August 2008, the highest reading since annual numbers in the current data series became available in April 1995.
Meanwhile, the Indian government is slated to announce a slew of measures on Saturday to pump prime the economy. The likely measures include a Rs 2000-crore export package, a further relaxation in external commercial borrowings norms and Rs 15,000-crore budgetary support for infrastructure.
The Indian government is reportedly considering various options including a strike on Pakistan to dismantle its terror bases in response to the recent Mumbai terror attacks. As a strike on Pakistan could lead to a full scale war between the two nuclear armed countries, India is maintaining a cautious approach and wants to gauge every possible ramification of its decision, reports suggest.
Tension between India and Pakistan have mounted after the Mumbai attacks. India has blamed Islamist militants based in Pakistan for the attacks.
Asian stocks were mostly in the green on Friday, 5 December 2008 following record rate cuts by central banks in Europe. But caution prevail ahead of what is expected to be dismal US employment data due later in the day.
Trading Calls - Dec 5 2008
Nifty (2788) Sup 2725 Res 2830
Buy Maruti (488) SL 483
Target 498, 501
Buy Reliance Infra (546) SL 540 Target 558, 561
Sell Tata Motors (151) SL 154 Target 145, 143
Sell Rolta (154) SL 157
Target 148, 147
Market may exhibit volatility
The market may open on a cautious note as US indices ended on a negative note yesterday and Asian indices are exhibiting upward trends in the morning trades. Although the bias remains positive, investors should maintain caution as FIIs have remained net sellers in equities for last couple of sessions and profit taking at higher levels may pull down the market. However, the prevailing bullish trend may add to the market advantage and help the sentiment turn positive. Among the local indices the Nifty could test 2,750 and 2,700 on the downside while on the upper side it may move up to 2,830. The Sensex has a likely support at 9,050 and may face resistance at 9,400.
U.S. indices closed flat on Thursday after a rash of job cuts at major companies added to jitters ahead of the November jobs report. While the Dow Jones slipped by 215 points at 8,376, the Nasdaq moved up by 47 points to close at 1,446.
Indian floats trading on the US bourses had a mixed outing on Thursday, the major laggards were, Satyam lost over 6.96% while Wipro, Infosys, MTNL, Patni computer, Rediff and HDFC Bank lost over 1% to 6%. However, Tata Motors, Dr Reddy, VSNL and ICICI Bank gained over 0.36-5% each.
Crude oil prices are moving down gradually, while the Nymex light crude oil for January delivery lost by $3.12 to close at $43.67 a barrel. In the commodity segment, the Comex gold for February series dropped by $5 to settle at $765.50 an ounce.
Venus Remedies - BUY
We recommend a buy in Venus Remedies stock from a short-term perspective. It is evident from the charts of Venus Remedies that it was on an accelerated medium-term downtrend from its September high of Rs 400 to its 52 week low of Rs 143 touched during mid November.
However, the stock reversed direction from this low triggered by the positive divergence in both in the daily relative strength index (RSI) as well as moving average convergence and divergence. From its 52-week low the stock has been on a short-term uptrend.
On December 2, the stock conclusively penetrated the medium-term down trendline by jumping up 15 per cent, with good volume. The stock crossed over its 21-day moving average recently. Moreover, the weekly RSI is also displaying positive divergence and has recovered from deeply oversold levels.
Our short-term forecast is bullish for the stock. We expect the stock to move up until it hits our price target of Rs 240 in the upcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 202.
via BL
Daily News Roundup - Dec 5 2008
Reliance Industries to sell KG basin gas at US$4.2 per unit. (ET)
Tata Motors unit may see another three day block closure at its commercial vehicle plant at Pimpri. (ET)
Punj Lloyd enters into an agreement with US based Thorium Power for nuclear fuel technology JV. (BS)
BPCL signs MoU with MoneyGram International to offer international money transfer services. (BS)
Grasim and Lafarge not to defer RMC expansion plans. (BS)
BHEL wins a contract worth Rs20bn from Oman. (BS)
ACC to raise Rs2bn through non-convertible debentures. (BS)
Communication and IT ministry to refund Rs1.1bn to RCOM, which the company paid as entry fee for offering dual technology in six circles. (BL)
Dish TV plans to add high definition content as a separate bouquet in the next few months. (BS)
Kerala High Court puts a stay on Rs50bn Lanco Infratech Vizhinjam project. (DNA)
Tata Steel production of hot metal rose 27% in November yoy. (DNA)
Cipla receives US FDA approval to market multiple strengths of Pamidronate disodium injection. (DNA)
Wockhardt unit gets US FDA approval to market a pediatric drug. (DNA)
Ashok Leyland November sales drop by 60% yoy. (BS)
Orchid Chemicals receives US FDA approval for Divalproex Sodium. (BL)
Sundaram Industries plans to set up JV with Bridgestone to make anti-vibration rubber components for automobiles. (BL)
Essar Oil plans Rs40bn LNG terminal in Gujarat. (BL)
Kingfisher Airlines to start non-stop Mumbai to London flights from 5th of January 2009. (BL)
SBI to raise Rs20bn through issue of upper tier II bonds. (BL)
Hindustan Zinc cuts zinc prices by 4.5% and keeps lead prices unchanged. (BL)
Concor’s Durgapur terminal is likely to be commissioned in a month. (BL)
Shoppers Stop is planning to go ahead with expansion plans despite slackening sales and credit crunch. (ET)
Maytas Infra bags order worth Rs2.2bn from Powergrid. (ET)
Tata’s call off the proposed JV plans with CitizenM, a dutch company. (ET)
Inflation for the week ended 22nd November stood at 8.4%. (ET)
Indian railways hikes freight classification for cement, coal and coke by 7-8%. (DNA)
Government is likely to cut fuel prices next week. (ET)
India likely to add 1,500MW nuclear power next year, says Atomic Energy Commission chairman. (BS)
SEBI extends validity period of IPO’s to one year. (BL)
Ship breaking industry gets tax relief from Supreme Court. (BS)
Easy to dismay
Attempt easy tasks as if they were difficult, and difficult as if they were easy;
in the one case that confidence may not fall asleep, in the other that it may not be dismayed.
Peace and stability have evaded markets for some time now. Just yesterday the bulls felt stimulated. Today could be a different game with mixed global cues. With the market having already discounted the news on the impending economic stimulus package, including fresh round of rate cuts, the indices may not go too high from these levels. Having said that, the Indian market could extend gains if there is a fresh spike in European markets later in the day.
All eyes today will be on today's monthly unemployment report, which again is likely to paint a grim picture of the labour market scenario in the US. The fate of the Big Three automakers is still hanging in balance. Even if they get aid from Washington, the big question is will they be able to beat the global economic slump.
Regulators across the globe continue to be in the fire-fighting mode. European central banks were busy cutting rates aggressively to revive growth and avoid deflation. Here in India, SEBI chose to ease the pressure in the comatose primary markets by giving IPO-bound companies a breather. The market regulator has also sought to tackle any future redemption pressure in the mutual funds by banning premature withdrawals in close-ended schemes. Its remains to be seen whether the fresh set of measures will have any positive impact on sentiment. Past attempts at shoring up the mood in markets have failed to kick-start any sort of a rally.
Meanwhile, our market was on another planet altogether on Thursday. The key indices shot up 5% each on reports that the Government is set to unleash new fiscal and monetary steps to prop up the sliding economy. Traded volume and turnover both improved slightly and market breadth too was positive. Today, we expect the market to open on a cautious to slightly higher note. US shares were down 2.5-3%, while European and Emerging markets fell marginally. Asian markets are largely up this morning with markets in Tokyo, Hong Kong and Seoul leading the advance.
US shares closed lower on Thursday, snapping a two-day winning streak, as the Big Three automakers repeated their plea for federal aid even and retailers reported dismal sales. Announcement of big job cuts by corporate giants like AT&T and DuPont made investors nervous ahead of Friday's employment report for November.
The Dow Jones Industrial Average rose slightly early on only to slip again, accelerating losses as the session drew to a close. After falling by more than 300 points, the blue chip index recovered a bit to close down 215.45 points, or 2.5%, to 8,376.24.
Of the blue-chip index's 30 components, 25 finished in the red, with General Motors (GM) down the most, falling 16.1%. On Capitol Hill, executives from GM and struggling rivals Ford and Chrysler continued to make their case for federal aid.
JP Morgan Chase and McDonald's proved the Dow's biggest gainers, both climbing more than 2%.
The S&P 500 index declined 25.52 points, or 2.9%, to 845.22, with energy and IT pacing declines that included all but one of the index's 10 industry groups. Consumer discretionary was the only S&P sector to finish in the black.
The Nasdaq Composite index fell 46.82 points, or 3.1%, to 1,445.56 with technology stocks in the red, as chipmaker Advanced Micro Devices (AMD) joined the chorus of those warning of quarterly sales declines.
Executives from GM, Ford and Chrysler testified before a Senate panel in an effort to get a US$34bn aid package from Congress. They speak before a House panel on Friday. Reports said that GM has considered a pre-arranged bankruptcy filing and is exploring a reorganization with workers, creditors and lenders.
Ahead of Friday's employment report, a slew of major companies announced more than 20,000 job cuts.
AT&T said it would cut 12,000 jobs, or 4% of its workforce, while DuPont said it was cutting 2,500 jobs. Both companies are Dow components. Also, Swiss bank Credit Suisse said it was cutting 5,300 jobs, or about 11% of its workforce, in the US and globally.
A trio of financial services firms had announced 3,000 job cuts on Wednesday. Also on Wednesday, payroll-processing firm ADP said that 250,000 private sector jobs were cut.
In other employment news, the number of Americans filing for new claims for unemployment benefits last week dipped to 509,000 from a revised 530,000 the previous week. Economists had expected jobless claims of 540,000. It's the smallest number of initial jobless claims since the week ended Nov. 1. Claims have dropped for two straight weeks after hitting a 16-year high of 543,000.
However, the four-week moving average of new claims - which smoothes out distortions caused by one-time events such as holidays and weather - rose by 6,250 to 524,500, the highest in 16 years.
Mobile phone maker Nokia cut its industry outlook for the second time in less than a month and warned it may lose market share.
Wal-Mart Stores continued to outperform the overall retail sector. Wal-Mart reported a 3.4% rise in November same-store sales, or sales at stores open a year or more. That was above the company's growth forecast of 1% to 3%. But other chains had a rougher period.
In the day's economic reports, October factory orders fell 5.1% after declining a revised 2.5% in September. Economists thought orders would fall 4.5%.
On Friday, the government is expected to report that employers cut 325,000 non-farm jobs from their payrolls in November after cutting 240,000 in the previous month. The unemployment rate, generated by a separate survey, is expected to have risen to 6.8% from 6.5% in the previous month.
Federal Reserve chairman Ben Bernanke said that the housing market is the key to the economic recovery and that the government has to do more to deal with foreclosures. The Fed chief voiced support for expanding government programs and using additional federal funds to limit foreclosures.
Treasury bond prices rallied, lowering the yield on the benchmark 10-year note to 2.56% from 2.66% late on Wednesday. The 10-year yield dipped below 3% last week for the first time since the note was first issued in 1962.
The yield on the 3-month Treasury bill inched up to 0.02% from 0.01% on Wednesday, but still near the 68-year low of zero hit last month. The 3-month is seen as the safest place to put money in the short term. A low yield means wary investors would rather preserve cash despite earning little or no interest on it than risk the stock market.
Lending rates eased. The 3-month Libor rate slipped to 2.19% from 2.20% on Wednesday, while overnight Libor fell to 0.52% from 0.88% on Wednesday. Libor is a key bank lending rate.
The dollar gained versus the euro and fell against the yen. COMEX gold for February delivery lost US$5 to settle at US$765.50 an ounce.
Oil prices at an almost 4-year low and a sell-off in gold and other metals kept the global recession in focus and added to the stock selling. US light crude oil for January delivery fell US$3.12 to settle at US$43.67 a barrel on the New York Mercantile Exchange, ending at a nearly 4-year low.
Gasoline continued its fall to nearly four-year lows, with prices down 1.4 cents to a national average of US$1.789 a gallon. Prices have been sliding for 2-1/2 months and have dropped more than US$2 a gallon, or 53%.
European shares fell on Thursday, notwithstanding the aggressive rate cuts announced by two of the continent's biggest central banks. Although stocks initially showed little reaction to the rate cut announcements, they soon turned lower.
The pan-European Dow Jones Stoxx 600 index declined 0.5% to 197.40, after trading as high as 202.32 before the rate cuts.
The UK's FTSE 100 index closed down 0.2% to 4,163.61, while the French CAC-40 index declined 0.2% to 3,161.16. Germany's DAX 30 index fell 0.1% to 4,564.23.
The European Central Bank (ECB) cut its key rate by 75 basis points to 2.50% and the Bank of England (BOE) slashed its key rate by 100 bps to 2%. The Swedish and Danish central banks also lowered their key rates.
The BSE benchmark Sensex regained the 9000 levels on Thursday on the back of heavy buying witnessed in scrips across the sectors after inflation further declined.
Inflation declined more than expected in the week ended November 22 due to a sharp drop in fuel prices. The annual point-to-point inflation was 8.4% in the week ended Nov. 22 versus 8.84% in the previous week
Buying was witnessed all over especially in the interest rate sensitive stocks. The BSE Realty index rose 12.5% and the BSE Bankex index rose 5.6%.
The media sector was in demand throughout the day with stocks like NDTV, TV Today, Zee Entertainment and UTV Software were among the major gainers.
Finally, the BSE benchmark Sensex climbed 482 points to close at 9,229 and the NSE Nifty index was up 131 points ending at 2,788.
Market breath was strong, 1,498 stocks advanced against 669 declines, while, 58 stocks remained unchanged.
All the 30-components of Sensex ended in the green, the big gainers were Tata Motors (13.4%), JP Associates (13%), Tata Steel (12%), DLF (12%), and Sterlite (8.3%).
Dr Reddy’s Lab gained by 1% to Rs480 after the company yesterday announced that it won order to supply seven drugs to Allgemeine, a Germany based company. The scrip touched an intra-day high of Rs486 and a low of Rs465 and recorded volumes of over 65,000 shares on BSE.
Shares of Ranbaxy surged by over 3.5% to Rs210 after reports stated that the company would partner with a US drug firm BioPro Pharmaceuticals to launch Brain tumour drug. The scrip touched an intra-day high of Rs212 and a low of Rs201 and recorded volumes of over 3,00,000 shares on BSE.
Shares of PVR advanced by 4.5% to Rs65.6 after the company announced that it plans to set-up 15 entertainment centres and gaming zone by 2012, according o reports. The scrip touched an intra-day high of Rs69.2 and a low of Rs63 and recorded volumes of over 63,000 shares on BSE.
TTML gained by 1.5% to Rs19.7 after reports stated that the company would invest Rs1bn in phase-I of expansion at Jammu and Kashmir. The scrip touched an intra-day high of Rs19.8 and a low of Rs19.4 and recorded volumes of over 71,00,000 shares on BSE.
Shares of IPCA Labs advanced by over 4.5% to Rs348 after reports stated that the company announced share buy-back at a maximum price not extending Rs600 per share. The scrip touched an intra-day high of Rs370 and a low of Rs341 and recorded volumes of over 7,000 shares on BSE.
Asian stocks open on a positive note
Asian stocks rose as speculation slumping oil prices will reduce energy costs and spur consumer spending countered a retreat by mining companies and energy producers.
Sony and Korea Electric Power gained more than 2% after oil fell below USD 44 a barrel and Merrill Lynch & Co. said prices may dive further. Inpex Corp tumbled more than 5%.
Japanese benchmark index Nikkei advanced 63.83 points, or 0.81%, to trade at 7,988.07.
Hong Kong`s Hang Seng index climbed 209.14 points, or 1.55%, to trade at 13,718.92.
China`s Shanghai Composite declined 11.66 points, or 0.58%, to trade at 1,989.85.
Taiwan`s Taiex index fell 28.57 points, or 0.67%, to trade at 4,226.39.
South Korea`s Kospi index rose 17.32 points, or 1.72%, to trade at 1,023.86.
Singapore`s Straits Times gained 16.39 points, or 1%, to trade at 1,660.07. (7.47 a.m., IST).
RIL, SBI December 2008 futures at premium
Turnover rises
Nifty December 2008 futures were at 2796, at a premium of 8 points as compared to the spot closing of 2788. Turnover in NSE's futures & options (F&O) segment rose to Rs 34,123.92 crore from Rs 33,606.23 crore on Wednesday, 3 December 2008.
Reliance Industries (RIL) December 2008 futures were at premium at 1169.50 compared to the spot closing of 1159.10.
State Bank of India (SBI) December 2008 futures were at premium at 1170.10 compared to the spot closing of 1168.90.
NTPC December 2008 futures were at discount at 164 compared to the spot closing of 165.05.
In the cash market, the S&P CNX Nifty surged 131.55 points or 4.95% at 2788.
Precious metals drop again
Mixed dollar impacts their appeal
Rising dollar decreased the appeal of the bullion metals and the same fell on Thursday, 04 December, 2008. Gold and silver prices fell due to the steady dollar. 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 and also vice versa.
On Thursday, Comex Gold for February delivery fell $5 (0.6%) to close at $765.5 an ounce on the New York Mercantile Exchange. It traded between the band of $763 and $790. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (26%) since then. Last week, gold prices ended higher by 3.1%. For the month of November, gold prices ended higher by 14%.
Prior to this, 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 9% till date. Futures have averaged $882 in 2008. The dollar index has gained 12% this year. For the third quarter ended September, 2008, gold prices ended lower by 5.1%. It was the first quarterly loss for the yellow metal since the second quarter in FY 2007. Prior to that, the yellow metal ended second quarter with a marginal gain of 0.7%. For first quarter prices gained 10.7%.
On Thursday, Comex silver futures for December delivery fell 7 cents (0.5%) to $9.52 an ounce. Last week, silver gained 7.5%. For the month of November, silver prices gained 5%. Till date, silver has lost 35% this year.
For the month of October, silver had slipped by 20%. 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.
At the currency market on Thursday, the dollar lost ground against most major rivals as investors bought back the euro after the European Central Bank and the Bank of England slashed interest rates in the face of rapidly-weakening economies. The dollar index , which tracks the performance of the dollar against a trade-weighted basket of six major currencies, fell to 86.533 from 86.811.
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 February delivery closed lower by Rs 113 (0.9%) at Rs 12,365 per 10 grams. Prices rose to a high of Rs 12,575 per 10 grams and fell to a low of Rs 12,345 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 5 (0.2%) higher at Rs 16,681/Kg. Prices opened at Rs 16,672/kg and rose to a high of Rs 16,844/Kg during the day's trading.
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