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Friday, December 12, 2008
Post Session Commentary - Dec 12 2008
The domestic market ended the day with marginal gains after recovering from initial losses on upturn in US index futures from early fall. Resumption of buying by foreign funds also aided recovery on the domestic bourses. Benchmark indices reported a smart bounce back from earlier fall which was by the failure of the proposal to bail out the US auto industry in a procedural vote in the Senate late, 11 December 2008. During the final trading market ignored weak opening of European markets and the grim IIP data as expecting more rate cuts to aid the economic slowdown.
The Indian market opened with a negative gap tracking weak cues from Asian markets after collapse of the US auto bailout. Further, market continued to trade in red on huge sell off ahead of October IIP number. The market was not showing any sign of recovery as much eyed IIP number for the month of October fell for the first time in many years by 0.4% in October, softened by manufacturing sector. However, during final trading, benchmark indices took a sharp rebound from its losses to move into the positive zone on recovery in US index futures. Expectation of another cut in rates by RBI also lifted sentiments. From the sectoral front Consumer Durables, Oil & Gas, Reality, Capital Goods, Metal and Bank stocks were in limelight as witnessed most of the buying from these baskets. Midcap and Smallcap stocks also supported the market. However IT, Teck, FMCG, Pharma and PSU stocks remained out of favor.
Among the Sensex pack 17 stocks ended in green territory and 13 in red. The market breadth was positive as 1547 stocks closed in green while 851 stocks closed in red and 81 stocks remained unchanged.
The BSE Sensex closed higher by 44.61 points at 9,690.07 and NSE Nifty ended slightly up by 1.20 points at 2,921.35. The BSE Mid Caps and Small Caps ended with gains of 47.40 points and 87.37 points at 3,050.48 and 3,530.96 respectively. The BSE Sensex touched intraday high of 9,745.41 and intraday low of 9,281.89.
Gainers from the BSE Sensex pack are DLF Ltd (7.73%), Reliance Infra (7.25%), Reliance Communication Ltd (4.18%), Reliance (3.76%), Hindalco (3.12%), Tata Power (2.71%), M&M Ltd (2.32%), JP Associates (1.71%), HDFC (1.79%), SBI (1.38%), ICICI Bank (1.28%) and ITC Ltd (0.91%).
Losers from the BSE Sensex pack are TCS Ltd (5.00%), Wipro Ltd (4.52%), Tata Motors (4.02%), ONGC Ltd (2.78%), Bharti Airtel (2.69%), Infosys Tech (2.52%), Satyam computer (1.60%), NTPC Ltd (1.23%), BHEL (1.06%) and Grasim Industries (0.86%).
The Index of Industrial Production number for October stands at a negative 0.4% as compared to 4.8% of earlier month. It was 12.22% during the corresponding period of previous year. A negative IIP number has happened for the second time in India''s history and was last seen 10 years back. Manufacturing production, which accounts for 80% of the index fell 1.2% in October 2008 from 13.8% a year earlier.
The BSE Reality index ended up by (3.94%) or 80.60 points at 2,128.18. Major gainers are Anant Raj (9.94%), DLF Ltd (7.73%), Ansal Infra (4.12%), Penland Ltd (2.80%), Mahindra Life (2.49%) and Housing Dev (2.11%).
The BSE Consumer Durables index advanced by (2.93%) or 49.60 points to close at 1,743.05. Main gainers are Titan Ind (4.87%), Gitanjali GE (4.12%), Rajesh Export (2.95%), Blue Star L (0.53%) and Videocon Ind (0.30%).
The BSE Oil & Gas index surged (2.34%) or 140.36 points to close at 6,145.35 as BPCL (5.72%), HPCL (5.51%), Essar Oil Ltd (4.69%), Reliance (3.76%), Cairn India (2.95%) and IOC (2.61%) ended in green.
The BSE Bank index ended higher by (1.20%) or 59.95 points at 5,063.25 as IDBI Bank (4.27%), Indian Overseas Bank (3.70%), Indus Ind Bank (3.20%), Punjab National Bank (2.69%), Bank oIndia (2.67%) and Axis Bank (2.49%) ended in positive territory.
The BSE IT index ended down (2.88%) or 67.87 points at 2,291.33. Losers are HCL Tech (7.27%), TCS Ltd (5.00%), Wipro Ltd (4.52%), Financ Tech (3.51%), NIIT Ltd (3.12%) and Infosys Tech (2.52%).
The BSE Teck index ended lower by (1.70%) or 34.48 points at 1,990.45 as TCS Ltd (5.00%), Wipro Ltd (4.52%), Financ Tech (3.51%), DTL Ltd (3.47%), NIIT Ltd (3.12%) and Bharti Airtel (2.69%) ended in red.
Markets put a brave front
The market wiped out a loss of over 363 points incurred during intra-day trades after a strong bout of buying led by DLF, Reliance Infrastructure and Reliance Industries in afternoon changed the sentiment to bullish. The 50-stock benchmark of the BSE, Sensex, was 274 points down at 9,371 at the opening bell taking cues from weak Asian indices, and crashed to the day's low of 9,282 on relentless selling pressure amid high volatility. The market showed strong optimism thereafter and the Sensex witnessed a sharp turn-around as gains in heavyweight, reality, oil and consumer durable stocks propelled it to an intra-day high of 9,746. The market turned extremely choppy and gyrated between the positive and negative territories for the later part of the trading session and the Sensex closed with a gain of 45 points at 9,690. Nifty ended a point up at 2,921.
The market breadth was marginally positive. Of the 2,479 stocks on the BSE, 1,547 stocks advanced, 851 stocks declined
and 81 stocks ended unchanged. Most of the sectoral indices ended in the green. BSE Realty advanced 3.94% followed by BSE CD (up 2.93%) and BSE Oil & gas (up 2.34%). However, BSE IT slipped 2.88%, BSE Teck (down 1.70%) and BSE HC (down 0.32%).
Among the Sensex stocks, DLF was the leading gainer and its stock price soared 7.73% at Rs276.50, Reliance Infrastructure advanced 7.25% at Rs648.30, Reliance Communications jumped 4.18% at Rs249.20, Reliance Industries gained 3.76% at Rs1,306.20, Hindalco Industries moved up by 3.12% at Rs52.90, Tata Power added 2.71% at Rs750.80 and Mahindra & Mahindra surged 2.32% at Rs292.95. Among the laggards, Tata Consultancy Services slipped 5% at Rs482.25, Wipro shed 4.52% at Rs238.70, Tata Motors declined by 4.02% at Rs154.10, ONGC fell by 2.72% at Rs646.45 and Bharti Airtel lost 2.69% at Rs722.30.
Over 2.37 crore shares of Reliance Natural Resources Ltd (RNRL) changed hands on the BSE followed by IFCI (1.87 crore shares), Suzlon Energy (1.75 crore shares), Unitech (1.49 crore shares), Reliance Petroleum Ltd (1.41 crore shares) and GVK Power & Infrastructure (1.22 crore shares).
Reliance Industries registered a turnover of Rs499 crore on the BSE followed by RNRL (Rs300 crore), Reliance Capital (Rs299 crore), DLF (Rs207 crore) and Reliance Infrastructure (Rs185 crore).
Foreign fund flows help market regain vigour
A strong booster dose by the government, in the form of a fiscal stimulus package for the economy and rate cut by the central bank, aided a recovery on the bourses last week. Besides the stimulus, after trading hours on Friday, 5 December 2008, the government had lowered petrol prices by Rs 5 per litre and diesel by Rs 2 per litre - the first reduction since February 2007 - following over $100 a barrel slump in world oil prices from record highs in mid-July 2008. The fuel price cut will bring down inflation further and will provide further room for the Reserve Bank of India (RBI) to cut rates.
Inflation based on the wholesale price index rose 8% in the year through 29 November 2008, lower than previous week's annual rise of 8.4%, data released by the government on 11 December 2008, 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.
The BSE 30-share Sensex rose 724.87 points or 8.09% to 9,690.07 in the week ended Friday, 12 December 2008. The S&P CNX Nifty rose 206.95 points or 7.62% to 2921.35 in the week.
The BSE Mid-Cap gained 157.53 points or 5.45% to 3,050.48 and the BSE Small-Cap index rose 207.42 points or 6.24% to 3,530.96 in the week. Both these indices underperformed the Sensex.
The market sentiment improved following resumption of buying by foreign funds this month. Foreign instittional investors bought shares worth Rs 2048.70 crore in December till 11 December 2008. They are net sellers of Rs 52688.50 crore in calendar year 2008 so far.
Doubts as to how much stimulus the already stretched government budget will be able to finance, pulled the market sharply off the higher level in late trade on Monday, 8 December 2008. The BSE 30-share Sensex rose up 197.42 points or 2.2% to 9,162.62. The S&P CNX Nifty gained 69.60 points or 2.56% at 2784. Market remained closed on Tuesday, 9 December 2008 on account of Bakri-Id.
Frenzied buying in index pivotals on speculation US lawmakers will approve a $15 billion bailout of American auto companies, boosted the domestic bourses Wednesday, 10 December 2008. The BSE 30-share Sensex surged 492.28 points or 5.37% to 9,654.90. The S&P CNX Nifty advanced 144.25 points or 5.18% to 2928.25.
Hopes that the central bank may cut rates further and reports that the government is likely to come out with a second fiscal stimulus for the economy helped the key benchmark indices bounce back in the last one hour of trade on Thursday, 11 December 2008. The BSE 30-share Sensex slipped 9.44 points or 0.10% to 9,645.46. The S&P CNX Nifty fell 8.10 points at 2,920.15.
Shrugging off a dismal industrial production data and failure of the plan to rescue US auto makers, the market ended in the green on Friday, 12 December 2008. The BSE 30-share Sensex rose 44.61 points, or 0.46%, to 9,690.07. The S&P CNX Nifty rose 1.20 points, or 0.04%, to 2921.35.
India's industrial output fell 0.4% in October 2008 from a year earlier, sharply below the previous month's upwardly revised 5.5%, data showed on Friday, 12 December 2008. Industrial production had expanded 12.2% in October 2007.
Real estate shares rallied after the Reserve Bank of India (RBI) on Saturday, 6 December 2008, announced several measures, including a refinance facility for the National Housing Bank and priority sector status for housing loans up to Rs 20 lakh. India's top real estate developer by market capitalisation DLF galloped 36.11%, Unitech (up 11.36%), and Housing Development & Infrastructure (HDIL) (up 23.65%), rose.
Banking shares vaulted on hopes rate cut will boost lending growth. India's largest private sector bank by net profit ICICI Bank rose 14.79%. India's second largest private sector bank by net profit HDFC Bank rose 3.52% and India's largest state-run bank by net profit State Bank of India rose 6.96%.
The RBI, on 6 December 2008, announced a 100-basis point cut in the repo rate and the reverse repo rate each. 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 also announced steps to improve liquidity and shore up economic activity.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 16.77% in the week. Reliance Industries is reported to have signed an agreement for a $400 million financing facility from JPMorgan. The 11-year facility will help Reliance buy equipments from 17 suppliers in the United States, and is guaranteed by the Export-Import Bank of the United States. Reliance has reportedly raised over $2.5 billion over the last four months to support its capital expenditure program.
India's largest oil exploration firm by market capitalisation Oil and Natural Gas Corporation fell 1.28% on reports Imperial Energy, which is in the process of being taken over by ONGC, has not renewed its licence to prospect oil in Kazakhstan. This revelation comes at a time when ONGC is critisized for overpaying for the acquisition.
The non-renewal of licence in Kazakhstan means that Imperial has lesser assets now than what it had five months ago when ONGC had agreed to buy it for $2.6 billion. Imperial Energy, a British oil company operating in West Siberia and Kazakhstan, held 75% stake in Kazakhstan's Sevkazgra which has a licence to prospect and produce oil at the North Torgai block in north-central Kazakhstan.
India's second largest cellular services provider by sales Reliance Communications jumped 26.34% on reports that strategic investors, including telecom groups from the US and Europe, are in talks with the company to acquire around 20-26% stake
Software exporters fell this week as outlook for the US market, their biggest market, still remains grim. India's second largest IT exporter by sales Infosys Technologies declined 2.49%. India's largest software exporter by sales TCS declined 7.56%, and India's fourth largest software exporter by sales Satyam Computer fell 1.63%. However, India's third largest software exporter by sales Wipro rose 5.08% in the week.
Sensex, Nifty outperform global peers
Shrugging off a dismal industrial production data and failure of the plan to rescue US auto makers, key benchmark indices edged higher as index heavyweight Reliance Industries (RIL) staged a sharp comeback from early slump. Volatility was high. The BSE 30-share Sensex rose 44.61 points and 0.46%, recovering 408.18 points from the day' low. The domestic boures outperformed their global peers.
The BSE Sensex had fallen 339.89 points or 3.65% to 9,305.47 in early afternoon trade following a dismal industrial production data and on failure of the plan to rescue US auto makers.
Buying by foreign funds this month has lifted sentiments. Foreign funds have bought shares worth Rs 2,048.70 crore, till 11 December 2008. They are net sellers of Rs 52,688.50 crore in calendar 2008, so far.
Foreign institutional investors (FIIs) were net sellers worth Rs 16.52 crore while mutual funds bought shares worth Rs 325.81 crore today, 12 December 2008, according to provisional data on NSE.
A likely second fiscal stimulus package by the government also aided the rebound. Commerce Minister Kamal Nath yesterday, 11 December 2008 said the government is working on a second package aimed at generating employment and ensuring that the credit needs of the companies are met.
The package assumes significance as the World Bank in its report on 10 December 2008 expressed fears of a deeper and prolonged slowdown which may pull down the global economic growth to less than 1% in 2009. Also many of the developed nations like the US, Japan and some countries in the Eurozone are already in recession and India is witnessing the ripple effects of the global slowdown.
The first stimulus package unveiled by the government on Sunday, 7 December 2008, involved Rs 20,000 crore in additional government expenditure, an across-the-board 4% excise duty cut amounting to Rs 8,700 crore and benefits worth Rs 2,000 crore for exporters.
The market was volatile right from the onset of the trading session. The Sensex swung 463.62 points between the day's high and low. The market had cut losses in early trade after an initial sell-off triggered by the collapse of the US auto bailout. The intraday recovery was short-lived as the market weakened again in morning trade. The market cut losses later. It weakened in early afternoon trade again following dismal industrial production data for October 2008, before recovering from lower level helped by rebound in index heavyweight RIL. The market moved into positive zone in mid-afternoon trade as RIL extended gains.
India's industrial production declined 0.4% in October 2008, as compared to an upwardly revised 5.5% growth in September 2008, data released by the government today, 12 December 2008, showed. Manufacturing production fell 1.2% in October 2008 from a year earlier.
The US Senate failed on Thursday night to reach a last-ditch compromise to bail out automakers, effectively killing any chance of congressional action this year. Trading in US index futures indicated the Dow could fall 320 points at the opening bell.
Asian and European stocks slumped as the collapse of the US Senate's $14 billion auto bailout plan threatened to deepen the global economic slump. In Asian, key indices in China, Hong Kong, Japan, Singapore, South Korea, and Taiwan were down by between 3% and 5.48%. In Europe, key benchmark indices in Germany, France and UK were down by between 4.18% and 5.48%, in Europe.
The White House said it would evaluate its options in light of the collapse of the auto sector bailout legislation. The Bush administration has resisted Democrats' past demands to use some money from the $700 billion bailout package approved in October 2008 to help struggling financial institutions to help the automakers.
The US auto industry is reeling from depressed sales, made worse by the credit crunch and the recession. General Motors (GM) and Chrysler have warned of near-term collapse if they did not receive a government bailout. A failure of any one of the three US automakers - GM, Ford or Chrysler, would threaten countless jobs and reverberate not only through the global supply chain but in financial markets as well
The BSE 30-share Sensex rose 44.61 points and 0.46% to 9,690.07. At the day's high of 9,745.51, the Sensex rose 100.05 points in late trade. At the day's low of 9,281.89, the Sensex lost 363.57 points in early trade.
The S&P CNX Nifty gained 1.2 points or 0.04% at 2,921.35. Nifty December 2008 futures were at 2910.25, at a discount of 11.5 points as compared to the spot closing.
The barometer index BSE Sensex is down 10596.92 points or 52.23% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 11516.70 points or 54.30% below its all-time high of 21,206.77 struck on 10 January 2008.
The total turnover on the BSE amounted to Rs 4471 crore as compared to Rs 4,638.42 crore on Thursday, 11 December 2008. Turnover on NSE's futures & options (F&O) segment increased to Rs 41,078.17 crore from Rs 38,606.17 crore on Thursday, 11 December 2008.
The market breadth, indicating the overall health of the market, was strong in contrast to a weak breadth earlier in the day. On BSE, 1391 shares rose as compared with 889 that advanced. 89 shares remained unchanged.
The BSE Realty index (up 3.94%), the Bankex (up 1.20%), BSE Oil & Gas index (up 2.34%), BSE Consumer Durables index (up 2.93%), outperformed the Sensex.
The BSE Auto index (down 0.01%), the BSE Metal index (up 0.23%), the BSE Teck index (down 1.70%), the BSE IT index (down 2.88%), the BSE HealthCare index (down 0.32%), the BSE Capital Goods index (up 0.25%), the BSE Power index (up 0.14%), the BSE FMCG index (up 0.05%), and the BSE PSU index (down 0.05%), underperformed the Sensex.
Among the 30-member Sensex pack, 20 declined while the rest gained. Tata Motors (down 3.39% to Rs 155.10), Bharti Airtel (down 1.93% to Rs 728), and HindustanUnilever (down 1.43% to Rs 238), edged lower from the Sensex pack.
HDFC (up 2.59% to Rs 1648.95), Hindalco (up 3.70% to Rs 53.20), and Jaiprakash Associates (up 1.99% to Rs 84.40), edged higher from the Sensex pack
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) jumped 4% to Rs 1313.20, recovering sharply from day's low of 1212.60. On Thursday, 11 December 2008, the government withdrew an affidavit filed in the Bombay High Court wherein it had asserted that RIL cannot sell its Krishna-Godavari basin gas to anyone without its approval to the pricing formula. In its affidavit filed last month, the government had also said that RIL could not sell KG basin gas at a price less than $4.20 per million British Thermal Units.
The withdrawal came following insistence by Anil Dhirubhai Ambani Group (ADAG) firm Reliance Natural Resources (RNRL)'s counsel Ram Jethmalani to cross-examine the government on the issue. RNRL rose 0.65% to Rs 55.10. While the government approved price of gas for KG basin is $4.20 per million British Thermal Units (mBTU), RNRL is seeking the gas at $2.34 mBTU.
Other Anil Dhirubhai Ambani Group (ADAG) firms - Reliance Infrastructure (up 6.53% to Rs 644), and Reliance Communications (up 4.06% to Rs 248.90) rose.
Banking shares moved in positive zone from negative zone in late trade on hopes of further interest rate cuts to shield the weakening economy from a global recession after industrial production fell for the first time in 15 years.
India's top private sector bank by net profit ICICI Bank rose 1.19% to Rs 411.10, after touching a low of Rs 382. State Bank of India (up 0.74% to Rs 1207, off day's low of Rs 1142.60), and HDFC Bank (up 0.29% to Rs 920, off day's low of Rs 880), gained.
The Reserve Bank of India (RBI) on 6 December 2008, announced a 100-basis point cut in the repo rate and the reverse repo rate each. 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.
Real estate shares cut early losses on hopes housing demand will improve in a soft interest rate regime. India's top real estate developer by market capitalisation DLF jumped 7.15% to Rs 275, recovering from the session's low of Rs 236.90. It was the top gainer from the Sensex pack.
Unitech (down 0.72% to Rs 34.40, off day's low of Rs 31.20), Indiabulls Real Estate (down 2.26% to Rs 125.70, off day's low of Rs 118.25), and Akruti City (down 1.69% to Rs 642, off day's low of Rs 638), though in the red, cut intraday losses.
As per reports, home loan interest rates are set to be cheaper as public sector banks are planning to cut rates on small-ticket home loans by up to 300 basis points.
India's second largest private sector power generation firm by sales Tata Power rose 3.28% to Rs 755, off day's low of Rs 700. Reportedly Tata Sons is unlikely to convert over 10 million preferential warrants issued by the company 18 months ago, into equity shares, as the company's stock is currently trading around 45% lower than the conversion rate.
Auto shares rebounded from early slump triggered by weak sentiment for the sector after a proposal to bail out the US auto industry failed in a procedural vote in the Senate. India's top tractor maker by sales Mahindra & Mahindra rose 1.29% to Rs 290, rebounding sharply from day's low of Rs 262. The early fall came after the company's farm equipment unit announced a cut in production, due to slackening demand. The company announced the production cut after trading hours on Thursday, 11 December 2008.
India's biggest small car maker by sales Maruti Suzuki India recovered from low of Rs 465.60 and settled 0.35% higher at Rs 512
Down 3.39% Rs 155.10, Tata Motors, India's top truck maker by sales Tata Motors, recovered from an intraday low of Rs 147.
Auto parts maker Bosch fell 2.71% to Rs 3052.05 after the firm said it has decided to declare a lockout at its plant in Jaipur due to a strike by workers. The company announced this after trading hours on Thursday, 11 December 2008.
Outsourcing focused IT pivotals were the chief casualty for the second straight day as fears that a weak global economy would cut the amount firms spent on technology offset a weaker rupee. India's largest IT exporter by sales Tata Consultancy Services lost 4.70% to Rs 483.80 and was the top loser from the Sensex pack.
India's second largest IT exporter by sales Infosys slipped 2.64% to Rs 1106. India's third largest IT exporter by sales Satyam Computer Services slipped 0.95% to Rs 222.25. India's fourth largest IT exporter by sales Wipro shed 3.48% to Rs 241.30
The rupee was weaker at 48.60/62 per dollar, compared to Thursday's close of 48.33/34, following a decline in Asian stock markets. A weak rupee benefits IT firms as they earn most of the revenues in dollar terms.
Metal stocks declined as the news of the failed bailout of the US auto sector knocked metal and oil prices in the commodities markets. India's top copper producer by sales Sterlite Industries (India) slipped 2.48% to Rs 287.80 on profit booking after advancing 8.43% on Thursday, 11 December 2008. Its American depository receipt (ADR) rose 3.92% on Thursday, 11 December 2008.
Tata Steel (down 0.07% to Rs 217.70), Sesa Goa (down 2.23% to Rs 78.75), Nalco (down 8.31% to Rs 179.75), and JSW Steel (down 6.49% to Rs 223.75), slipped.
India's largest oil exploration firm by market capitalisation Oil and Natural Gas Corporation (ONGC) was down 3.02% to Rs 644.70 as oil prices fell. US crude prices fell by nearly $2 to $46.11 a barrel.
Reliance Industries was the top traded counter on BSE with turnover of Rs 499.35 crore followed by Reliance Natural Resources (Rs 300.30 crore), Reliance Capital (Rs 299.50 crore), DLF (Rs 207 crore) and Reliance Infrastructure (Rs 185.50 crore).
Reliance Natural Resources led the volumes chart on BSE clocking volumes of 5.37 crore shares followed by IFCI (1.87 crore shares), Suzlon (1.75 crore shares), Unitech (1.50 crore shares) and Reliance Petroleum (1.41 crore shares).
State-run oil marketing firms advanced on reports the government is considering a proposal to de-regulate the pricing of petrol and diesel.
HPCL (up 6.67% to Rs 239), BPCL (up 8.79% to Rs 352.55), and IOC (up 2.44% to Rs 386.20), gained.
The proposed deregulation of fuel prices, will provide full freedom to oil companies to set petrol and diesel prices.
Fertliser shares rallied on recent reports of government giving bonds worth Rs 10,000 crore to 23 fertiliser companies.
Deepak Fertiliser (up 4.94%), Nagarjuna Fertiliser (up 5.26%), Chambal Fertiliser & Chemicals (up 3.84%), RCF (up 2.80%), and Coramandel Fertiliser (up 2.64%), surged.
Reportedly the government on 11 December 2008 issued special bonds worth Rs 10,000 crore of coupon rate 7% to 23 fertiliser companies as compensation for subsidising prices in the current financial year.
Tulip Telecom galloped 17% to Rs 507 after a bulk deal of 4 lakh shares was struck on the counter at Rs 433.95 at 10:02 IST on BSE
Nitin Fire Protection Industries galloped 18.02% to Rs 196.80 after it bagged an order worth Rs 2.3 crore. The company announced the order win during trading hours today, 12 December 2008.
Ruchi Soya Industries surged 5.15% to Rs 25.50 after a block deal of 41.60 lakh shares was executed on BSE at Rs 23.30 per share. The block deal constituted 2.13% of the company's equity.
Daily Call - Dec 12 2008
The markets are likely to edge lower in the morning trade as some profit taking could creep-in as the package for the US Auto companies is still hanging fire in the Senate. The slide in the Dollar, however, will keep the embers hot for the commodities, though the related stocks may see some profit booking. But keep an eye on news channels, for that Auto package, which may be passed later today.
The markets are likely to watch with keen interest the reading of the Index of Industrial Production (IIP), which should come around 12 noon. The street expects a reading of 2% growth for the month of October. A lower growth would be disappointing. But going by the fact that the markets are showing very strong resilience, there could be a scenario, in which the markets may initially fall and then bounce back with a vengeance. In case of such an eventuality, it will mean that this rally has legs. But do not take that risk without stop losses. Things do not change materially unless we see a close below 2750.
Pre Session Commentary - Dec 12 2008
oday we expect the market to open with a negative gap as US markets have closed in red and other Asian markets opened with heavy blood bath. The IIP numbers to be announced today will also play an important role in the markets sentiments. Amidst the insecure feeling and cautious approach one would witness some early losses in the day’s trade. The feelings across the globe are bearish and hence investors would have to be very cautious in their holdings.
On Thursday, the markets moved highly volatile however later managed to end flat. The sentiments were not as strong as in the previous day and later during the trading session it collapsed by nearly 200 points. Asian markets were also trading volatile coupled with the European markets, which ended in red. Towards the end the good inflation numbers helped the markets pare off its losses and managed to close flat. Sensex and Nifty gained by 5.37% and 5.18%. Realty, Oil & Gas and Metal gained 2.12%, 1.67% and 1.37% respectively. During the trading session we expect the market to be trading volatile.
The BSE Sensex closed marginally lower by 9.44 points at 9,645.46 and NSE Nifty ended slightly down by 8.10 points at 2,920.15. The BSE Mid Caps and Small Caps ended with gains of 54.84 points and 48.14 points at 3,003.08 and 3,443.59 respectively. The BSE Sensex touched intraday high of 9,746.01 and intraday low of 9,441.97.
Inflation for the week ended 29th November 2008, stood at 8% as compared to 8.4% of the previous week. It was 3.89% during the corresponding week last year. Inflation rate for primary articles, which has a weight of 22% in the index number, fell to 11.66% in the reported week as compared to 11.98% in the previous week.
On Thursday, the US markets closed negative as the macro economic data pulled the sentiments. The U.S. House of Representatives approved yesterday a $14 billion plan to aid Ford, General Motors, and Chrysler, but the plan is encountering resistance in the Senate. On the other hand October trade deficit climbed to $57.2 billion from $56.6 billion as the exports dropped significantly. Initial jobless claims for the week ended December 6 increased 58,000 to 573,000. Continuing claims increased to 4.43 million from 4.09 million. Crude oil futures for the month of January delivery grew $4.46 to $47.98 per barrel on New York Mercantile Exchange. The crude futures soared on the back of sharp weakness in the dollar and expectations that the Organization of Petroleum Exporting Countries will deliver a significant production cut next week.
The Dow Jones Industrial Average (DJIA) closed lower with 196.33 points at 8,565.09 NASDAQ index lost 57.60 points at 1,507.88 and the S&P 500 (SPX) also closed lower by 25.65 points to close at 873.59 points.
Indian ADRs ended mixed. In technology sector, Infosys lost by 4.35% and Wipro ended low by 3.24% followed by Satyam that gained 0.0.08% and Patni Computers closing low by 3.93%. In banking sector ICICI Bank lost 0.71%, while HDFC Bank gained by 1.68%. In telecommunication sector, Tata Communication inclined by 0.66%, while MTNL inclined by 1.28%.
Today the major stock markets in Asia opened with heavy blood bath. The Shanghai Composite is trading low by 39.04 at 1,992.64 Hang Seng is low by 803.88 points at 14,810.02. Further Japan''s Nikkei is low by 110.37 points at 8,610.18. South Korea’s Seoul Composite is low by 31.25 points at 1,123.18 and Singapore’s Strait Times is low by 62.12 points at 1,732.04.
The FIIs on Thursday stood as net buyer in equity and net seller in debt. Gross equity purchased stood at Rs 2603.20 Crore and gross debt purchased stood at Rs 102.40 Crore, while the gross equity sold stood at Rs 1614.80 Crore and gross debt sold stood at Rs 555.40 Crore. Therefore, the net investment of equity and debt reported were Rs 988.40 Crore and Rs (453.00) Crore respectively.
On Thursday, the partially convertible rupee ended at 48.33/34 per dollar as against 48.25 on Friday last week. The rupee ended stronger by 1.4% as there was unwinding of long dollar positions in the non-deliverable markets, which prompted banks to sell dollars in the spot market.
On BSE, total number of shares traded was Rs 38.58 Crore and total turnover stood at Rs 4,638.42 Crore. On NSE, total volume of shares traded was Rs 84.74 Crore and total turnover was Rs 12,074.93 Crore.
Top traded volumes on NSE Nifty – Unitech with 69099536 shares, Suzlon Energy with total volume traded 57853064 shares, followed by Reliance Petro with 25300006 shares, DLF with 22908063 shares and SAIL with 18876949 shares.
On NSE Future and Options, total number of contracts traded in index futures was 942024 with a total turnover of Rs 12,693.06 Crore. Along with this total number of contracts traded in stock futures were 1107143 with a total turnover of Rs 10,989.57 Crore. Total numbers of contracts for index options were 949555 with a total turnover of Rs 14,057.38 Crore and total numbers of contracts for stock options were 81593 and notional turnover was Rs 866.16 Crore.
Today, Nifty would have a support at 2,795 and resistance at 2,905 and BSE Sensex has support at 9,180 and resistance at 9,580.
Auto sector pulls US Markets down
Uncertainty over bailout plan of auto sector unnerves investors
Disappointment over the auto bailout plan swept over Wall Street since the very start of the day on Thursday, 11 December, 2008. Though there was some optimistic earning reports, market ignored them and concentrated more on the negative economic reports. The energy sector tried to support the Dow with crude up by more than 10% today on hopes of production cuts by OPEC. The Dow flirted in the positive territory for a brief period, it soon slipped back in the red. Losses increased in the last hour of trading.
On Wall Street, the Dow Jones industrial average closed down 196 points at 8,565, the Nasdaq closed down by 57 points at 1,507 and the S&P 500 moved down 25 points at 873.
Nine out of ten sectors ended in the red today led by the financial sector. Financials continued to be a major laggard today. GM led the pack of Dow laggards down by 11%, closely followed by Bank of America, Citigroup and JP Morgan Chase.
As per the latest developments in the auto deal workout, late Wednesday, the House of Representatives approved a $14 billion federal loan package to the Big Three automakers in a 237-170 vote. However, the plan is expected to encounter resistance from the Senate.
Among major economic reports hitting the wires today, the Labor Department reported today that that the number of first-time filings for state unemployment benefits jumped by 58,000 to a 26-year high of 573,000. The number of people collecting unemployment benefits rose by 338,000 to stand at 4.43 million, also the highest since late 1982. The increase in continuing claims in the week ended 29 November was the most since 1974.
Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs.
The jobless claims report shows businesses are laying off workers at a rapid pace, and finding employment is ever harder for those who've lost their jobs. Compared with the same week a year ago, new jobless claims are up about 59%, while continuing claims are up 58%. In November, 533,000 nonfarm payroll jobs were lost, the most for a single month since 1974. The economy has shed 1.9 million jobs since the recession began in December 2007.
In a separate report, The US Department of Commerce, announced today that the October trade deficit climbed to $57.2 billion from $56.6 billion, which was unexpected. According to the data, exports dropped significantly and have been down three straight months. This is due to weak overseas demand and the strengthening dollar. Total October exports of $151.7 billion and imports of $208.9 billion resulted in a goods and services deficit of $57.2 billion, up from $56.6 billion in September, revised.
On the earnings front, wholesaler Costco topped earnings per share expectations for the latest quarter. Dow component Procter & Gamble confirmed its second quarter and fiscal 2009 outlook earlier today. Eli Lilly reaffirmed its outlook for fiscal 2008, and issued upside guidance for fiscal 2009. Despite these positive news, market failed to gather any sort of momentum.
October exports were $3.4 billion less than September exports of $155.1 billion. October imports were $2.7 billion less than September imports of $211.6 billion.
Crude prices shot up drastically today. This was the second consecutive rise for crude prices. Prices rose today due to the weak dollar and the on anticipation that OPEC will go for a drastic production cut in its next meeting scheduled next week.
On Thursday, crude-oil futures for light sweet crude for January delivery closed at $47.98/barrel (higher by $4.46 or 10.2%) on the New York Mercantile Exchange. Earlier in the day, prices touched a high of $49.12. For this year in 2008, crude prices have dropped 40%.
Trading volumes showed 1.4 billion shares exchanging hands on the New York Stock Exchange and 812 million trading on the Nasdaq stock market. Declining issues topped gainers by 3 to 1 on both the NYSE and on Nasdaq.
Tomorrow's economic reports include Producer Price Index, Retail Sales data, Business Inventories and Preliminary University of Michigan Consumer Sentiment.
Weak global cues may trigger lower start; IIP data eyed
Key benchmark indices are likely to see nervous start amid weak global cues. The Nifty futures traded as SGX CNX Nifty Index Futures in Singapore were down 80 points. The index of industrial production data for October 2008 scheduled to be announced later during the day will be closely watched.
As per reports, industrial production is expected to grow marginally or register a dip for the first time since 1994, on slowing demand and deepening recessions in major economies. The index had expanded 12.2% in October 2007.
Meanwhile, the Securities and Exchange Board of India's (Sebi) Mutual Fund Advisory Committee (MFAC) will meet today, 12 December 2008 to discuss key issues on the agenda, including further tightening of asset liability norms and valuation of non-traded debt. The meeting will also review limits on exposure to individual securities and whether there should be limits on exposure to pass-through certificates. Another related issue on the agenda of the committee is the valuation of non-traded debt securities. The most-debated issue of hiking the net worth requirement for an asset management company is also likely to be finally addressed.
Asian markets were trading weak today, 12 December 2008, on worries over the fate of the US auto industry bailout plan and a retreat in global banking shares while lower oil prices pressured commodity counters. China's Shanghai Composite plunged 1.94% or 39.37 points at 1,992.31, Hong Kong's Hang Seng slipped 2.41% or 375.87 points at 15,238.03, Japan's Nikkei was down 1.27% or 110.37 points at 8,610.18, Singapore's Straits Times declined 1.28% or 22.99 points at 1,771.17, South Korea's Seoul Composite fell 0.58% or 6.73 points at 1,147.70 and Taiwan's Taiwan Weighted was down 0.50% or 23.44 points at 4,632.13.
US markets closed on Thursday, 11 December 2008 on bleak prospects for a federal bailout of Detroit's Big Three automakers, while bleak comments about the banking sector from JPMorgan's chief executive hit financial shares.
The Dow Jones plunged 196.33 points, or 2.24%, to 8,565.09. The S&P 500 index declined 25.65 points, or 2.85%, to 873.59, and the Nasdaq Composite index fell 57.60 points, or 3.68%, to 1,507.88.
Closer home, hopes that the central bank may cut rates further and reports that the government is likely to come out with a second fiscal stimulus for the economy helped the market rebound in the last one hour of trade on Thursday, 11 December 2008. The BSE 30-share Sensex slipped 9.44 points or 0.10% to 9,645.46 and the S&P CNX Nifty fell 8.10 points at 2,920.15 on that day.
Foreign institutional investors (FIIs) were net buyers worth Rs 444.18 crore while mutual funds sold shares worth Rs 15.37 crore on Thursday, 11 December 2008, according to provisional data on NSE.
Trading Calls - Dec 12 2008
Nifty (2920) Sup 2830 Res 2990
Sell Ranbaxy (209) SL 213 Target 202, 200
Sell HPCL (224) SL 229 Target 214, 212
Sell Reliance Infra (604) SL 611 Target 590, 585
Sell Tata Power (731) SL 739 Target 715, 710
Buy Adlabs (182) SL 177 Target 190, 192
Daily News Roundup - Dec 12 2008
- Reliance Industries plans to enter the pharma business suffers a setback. (FE)
- HPCL’s plans to enter city gas distribution in Kolkata hits hurdle. (BL)
- Ranbaxy’s US sales drop 45% in 60 days. (DNA)
- TCS, Satyam, Wipro and HCL Tech are in the race for Rs3bn LIC contract. (BS)
- Union Bank of India declines merger with Bank of India. (FE)
- SBI to review interest rates following monetary measures taken by RBI. (BS)
- SBI plans to merge its wholly owned subsidiary, SBI Commercial and International Bank, with itself. (BS)
- ITC plans to buy EIH. (DNA)
- Taj Mahal Palace and Towers owned by Indian Hotels gets its first payment of Rs250mn from Tata AIG General Insurance. (DNA)
- Emirates Airlines and Jet Airways announced their partnership plans. (BL)
- GTL Infrastructure plans to utilize its Rs22bn cash reserves to buy back FCCBs and has deferred its acquisition plans. (BS)
- Orion Corporation files a lawsuit in US against Wockhardt for challenging the patents on its brand Stalevo. (BS)
No Fuel for thought!
We must embrace pain and burn it as fuel for our journey
After the gains, the pain is here for the market. Expect a weak start. US automaker bailout deal seems to have fallen apart in the Senate. Inflation falling to a seven-month low no longer fuels the bulls though rising inflation used to hurt a lot. The outlook for the day remains weak with wild swings likely once the IIP numbers for October are announced. Given the cut in production by various industries the bears may have a chance to rejoice as IIP numbers may be in the 2% range.
Talking about fuel, reports suggest that the Government plans to deregulate petrol and diesel prices. Besides political gains, this move will have a positive impact on inflation. The risks remain that companies may not be allowed to raise prices frequently and of course the government finances could take a hit.
Among other news:
The government is also likely to announce a second stimulus package to propel economic growth.
FIIs were net buyers in Index Future by Rs636cr with increase in open interest by 82,621 contracts (17.1%). In Single Stock Future, they have gone short to the tune of Rs71cr with increase in open interest by 11,895 contracts (1.3%). In the Index Option segment, they were net buyers by a mere Rs2cr. FIIs were net sellers in cash segment by Rs444cr (Provisional). DIIs were net sellers in cash segment by Rs16cr (Provisional).
RBI extends Rs90bn line of credit to NHB and Exim Bank. With RBI providing refinance to EXIM Bank, exporters will now be able to avail of lines of credit.
Index of 6 core industries fell to 3.4% in October against 4.6% in the same month last year.
India’s exports declined by 10% in November, showing a negative trend for the second month.
Excise and custom duty collections declined in November by 15% and 1% respectively.
PSU Banks are likely to announce 50-100bps cut in interest rates on home loans up to Rs2m. PSBs may waive pre-payment penalty on home loans up to Rs2m.
RBI may have relaxed norms for lending to commercial real estate by banks.
Government to miss indirect tax collection targets.
207 of the 516 central government projects, each costing Rs1bn are delayed.
Bank of America Corp. said Thursday it expects to cut 30,000 to 35,000 jobs over the next three years, as it faces a deteriorating economic environment and tries to absorb Merrill Lynch & Co.
The Government has withdrawn its affidavit from the RIL-RNRL case and that explains that volatility on these counters especially towards the end of trade.
Americans are pulling back on the debt they use to spend and fuel the economy, while their net worth is declining. The US government reported that household debt in the third quarter fell for the first time ever. Meanwhile, net worth dropped by the largest amount on record based on data going back to 1951.
US Stocks fell on Thursday on worries that the $14 billion auto rescue bill won't pass in the Senate due to Republican opposition.
The Dow Jones fell 196 points, or 2.2%. The Standard & Poor's 500 (SPX) index lost 2.9% and the Nasdaq composite (COMP) lost 3.7%.
Bank of America said it will cut up to 35,000 jobs over the next three years due to its purchase of Merrill Lynch and the weak economy.
Jobless claims continued to surge, according to a government report released Thursday. The number of Americans filing new claims for unemployment benefits rose to a 26-year high of 573,000, up 58,000 from the previous week and a bigger surge than expected. The number of people continuing to collect unemployment also hit a 26-year high.
The dollar fell versus the euro and the yen.
U.S. light crude oil for January delivery rose $4.46 to settle at $47.98 a barrel on the New York Mercantile Exchange.
COMEX gold for February delivery jumped $17.80 to settle at $826.60 an ounce.
A government report showed that China’s retail sales grew at the slowest pace in nine months
Japan’s Nikkei is down over a percent. South Korea’s Kospi Index is lower by half a percent. The MSCI Asia Pacific Index has fallen 44% this year.
Indian markets took a breather on Thursday after rallying over 5% on Wednesday. Markets traded in a range for major part of the trading session. However, key indices turned highly volatile in the second half of the day. The IT and capital goods stocks were the major losers. Also pharma and telecom stocks were under pressure.
Bucking the negative trend were, realty, oil & gas, metals and banking stocks. The BSE benchmark Sensex ended flat at 9,645 and the NSE Nifty index ended flat at 2,920.
Market breath was positive, 1,567 stocks advanced against 94 declines, while, 94 stocks remained unchanged.
Among the 30-components of Sensex, 18 stocks ended in the red and only 12 stocks ended in the positive terrain, the big gainers were JP Associates (11%), Sterlite Industries (9.5%), RCom (5.5%) and Reliance Industries (5.1%).
On the other hand, major sellers were TCS (6.5%), Satyam (5.5%), Wipro (5.2%), Hindalco (4%) and Infosys (3.3%).
Shares of Petronet LNG have advanced by 4.3% to Rs33 after the company announced that it signed one year LNG supply agreement beginning January 2009. The scrip touched an intra-day high of Rs34.2 and a low of Rs32.4 and recorded volumes of over 5,00,000 shares on BSE.
Shares of Suzlon Energy surged by over 2.5% to Rs50. according to reports, the company said that it has rejig the top management, CMD to steer company’s operations. The scrip touched an intra-day high of Rs54 and a low of Rs47 and recorded volumes of over 2,00,00,000 shares on BSE.
Shares of GMR Infrastructure gained by 4.5% to Rs65 after reports stated that the company’s Andhra Pradesh plant has started electricity generation. The scrip touched an intra-day high of Rs67.1 and a low of Rs63.4 and recorded volumes of over 31,00,000 shares on BSE.
KIC Metaliks shot up by over 18% to Rs22 after the company announced that the promoters of the company (Sri R K Kajaria, Smt. A Kajaria, R K Kajaria & Sons HUF have entered into a share purchase agreement on December 07, 2008 with Karni Syntex (P) Ltd, (the acquirer) to sell their collective holding of 47.67% of the paid up capital of the Company at Rs18 per share.
The scrip touched an intra-day high of Rs22.4 and a low of Rs19.5 and recorded volumes of over 14,000 shares on BSE.
With the RBI governor indicating that the growth forecast might be revised downwards when the central bank reviews the annual policy in January 2009 bulls might lose their steam. Also, the IIP numbers to be announced later on Friday would be anxiously awaited.
Precious metals shine
Gold and silver shine as dollar continues to weaken
With a weak dollar, gold prices rose for the fourth straight day on Thursday, 11 December, 2008. Bullion metals rose due to the falling dollar which also led to rising crude price. 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 rose $17.8 (2.2%) to close at $826.6 an ounce on the New York Mercantile Exchange. The metal is already up 9.7% this week. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (20%) since then. Last week, gold prices ended lower by 8.2%.
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 1.1% till date. Futures have averaged $878 in 2008. The dollar index has gained 10% this year. For the third quarter ended September, 2008, gold prices ended lower by 5.1%. It was the first quarterly loss for the yellow metal since the second quarter in FY 2007. Prior to that, the yellow metal ended second quarter with a marginal gain of 0.7%. For first quarter prices gained 10.7%.
On Thursday, Comex silver futures for December delivery rose 23 cents (2.2%) to $10.43 an ounce. Last week, silver lost 7.7%. For the month of November, silver prices had gained 5%. Till date, silver has lost 28.4% 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 U.S. dollar fell sharply against other major currencies as a surge in jobless claims and other negative economic data put the greenback under heavy selling pressure. The dollar index, a measure of the greenback against a trade-weighted basket of six currencies, fell 1.2% today.
The Labor Department reported on Thursday, 11 December, 2008 that the number of first-time filings for state unemployment benefits jumped by 58,000 to a 26-year high of 573,000. The number of people collecting unemployment benefits rose by 338,000 to stand at 4.43 million, also the highest since late 1982. The increase in continuing claims in the week ended 29 November was the most since 1974.
Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs.
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.
It was reported earlier this week that gold production in South Africa fell by 14% year-on-year in October. The country's total mining production, however, rose by 3.5% year-on-year in October, with non-gold output rising 6.5%.
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 higher by Rs 99 (0.77%) at Rs 12,817 per 10 grams. Prices rose to a high of Rs 12,932 per 10 grams and fell to a low of Rs 12,605 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 95 (0.55%) higher at Rs 17,262/Kg. Prices opened at Rs 17,150/kg and rose to a high of Rs 17,430/Kg during the day's trading.
Crude registers massive jump
Prices rise more than 10% as traders anticipate big production cut by OPEC
Crude prices shot up drastically today, Thursday, 11 December, 2008. This was the second consecutive rise for crude prices. Prices rose today due to the weak dollar and the on anticipation that OPEC will go for a drastic production cut in its next meeting scheduled next week.
On Thursday, crude-oil futures for light sweet crude for January delivery closed at $47.98/barrel (higher by $4.46 or 10.2%) on the New York Mercantile Exchange. Earlier in the day, prices touched a high of $49.12. Prices reached a high of $147 on 11 July but have dropped almost 61% since then. On 5 Dec, 2008, prices touched a low of $40.5. Last week, prices coughed up 25%. That was the largest weekly loss for crude in past twenty five years. For this year in 2008, crude prices have dropped 40%.
For the month of November, crude prices ended lower by 19.7%. Before this, for the month of October, 2008, crude prices had ended lower by 32.6%, the biggest monthly drop since 1983.
The Organization of Petroleum Exporting Countries ended meeting in Cairo last month without any decision on a production cut to restore crude prices. OPEC President and Algerian Oil Minister Chakib Khelil said he expects oil demand to decline from a month ago, and said the group would take necessary action on 17 December when it meets in Oran, Algeria.
At the currency market on Thursday, the U.S. dollar fell sharply against other major currencies as a surge in jobless claims and other negative economic data put the greenback under heavy selling pressure. The dollar index, a measure of the greenback against a trade-weighted basket of six currencies, fell 1.2% today.
The Labor Department reported on Thursday, 11 December, 2008 that the number of first-time filings for state unemployment benefits jumped by 58,000 to a 26-year high of 573,000. The number of people collecting unemployment benefits rose by 338,000 to stand at 4.43 million, also the highest since late 1982. The increase in continuing claims in the week ended 29 November was the most since 1974.
Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs.
The EIA reported yesterday in its weekly inventory report that U.S. crude oil inventories rose by 400,000 barrels during the week ended 5 December, 2008 to stand at 320.8 million barrels. Market had expected a buildup of 2.7 million barrels in crude-oil stocks for the week.
The report also detailed that total motor gasoline inventories increased by 3.8 million barrels last week, and distillate fuel inventories increased by 5.6 million barrels.
EIA reported earlier this week in its monthly short-term energy outlook that the current global economic slowdown is now projected to be more severe and longer than it expected last month, leading to further reductions of global energy demand and additional declines in oil and other energy prices. The EIA is now expecting world GDP growth to slow to 0.5% in 2009, down from an expectation of 1.8% in last month's outlook.
For the third quarter of the year crude prices ended lower by 28%. This was the biggest quarterly drop since 1991. Before that, crude prices had gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years. For the month of September, prices registered drop of 13%.
Against this background, January reformulated gasoline rose 11 cents, or 11%, to end at $1.08 a gallon and January heating oil gained 11 cents to finish at $1.51 a gallon.
EIA reported today that U.S. natural-gas inventories fell by 67 billion cubic feet to stand at 3,291 billion cubic feet during the week ended 5 December. January natural gas ended down 9 cents at $5.60 per million British thermal units on Nymex.
At the MCX, crude oil for December delivery closed at Rs 2,336/barrel, higher by Rs 133 (6%) against previous day's close. Natural gas for December delivery closed at Rs 273.2/mmbtu, lower by Rs 3.7/mmbtu (1.3%).
Reliance Communications - news verification
News Verification : The media had reports that strategic investors may acquire around 20-26 percent stake in the company. The Exchange, in order to verify the accuracy or otherwise of the information reported in the media and to inform the market place so that the interest of the investors is safeguarded, had written to the officials of the company. Reliance Communications Limited has vide its letter inter-alia stated, "The Company has been receiving various proposals from time to time from reputed international telecom companies expressing interest in acquiring a strategic equity stake in the Company. The Company evaluates such proposals, in line with the Company's policy to constantly endeavor to enhance overall shareholder value. The company will comply with all its obligations including timely disclosures, at the appropriate time."
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