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Wednesday, December 31, 2008
2008 Events
The global economic downturn made 2008 a forgettable year. It had its usual share of ups and downs for India Inc. Here’s a look at some of the events that shaped the year:
10 Jan: ‘Nano´ is born. The world’s cheapest car costing Rs100,000 unveiled at 9th Auto Expo in Delhi by Ratan Tata.
15 Jan: India’s largest IPO by Reliance Power to raise Rs11,000 crore opens. The issue closed on 18 January but was hammered in the market on debut. The company issued bonus shares to retain investor confidence.
8 Feb: Developer Emaar MGF Land Ltd calls off Rs7,000 crore IPO following poor investor response.
11 Mar: Real estate firm BPTP strikes India’s biggest ever land deal by shelling out Rs5,006 crore for a 95 acre commercial plot at Noida. As financial crisis deepens, the company is now facing problems paying the sum.
26 Mar: Tata Motors announces agreement with Ford Motor to acquire Jaguar Land Rover for $2.3 billion.
19 Apr: Cancer drug maker Dabur Pharma acquired by Singapore-based Fresenius Kabi for nearly Rs1,000 crore.
6 May: Telecom operator Bharti Airtel in talks with South Africa’s MTN Group for a deal that would give it presence in 21 African and Asian countries.
24 May: Bharti Airtel backs out from MTN deal.
28 May: Anil Ambani-run Reliance Communications begins discussions for reverse merger with MTN. Talks fail in July.
11 June: Japanese drug firm Daiichi Sankyo acquires control of Ranbaxy for over Rs22,000 crore - essays biggest Indian pharma industry deal.
18 June: India gets first commercially available hybrid car when Honda Siel launched its Civic Hybrid priced at Rs21.5 lakh.
25 June: Idea Cellular acquires 40.8% stake in a smaller rival Spice Communications for about Rs2700 crore.
27 June: Russia’s Severstal outbids Essar’s $1.2 billion offer for US-based Esmark.
11 July: Gurgaon-based WNS (Holdings) Ltd acquires UK insurance major Aviva’s BPO business Aviva Global Services (AGS) for around $228 million (Rs980 crore).
8 Aug: South Korean steel giant Posco gets approval from Supreme Court to go ahead with its Rs51,000 crore steel project in Orissa after getting environmental clearance.
11 Aug: Low-cost airline Spicejet secures $100 million investment from Goldman Sachs and WL Ross.
21 Aug: Apple’s iPhone makes India debut.
16 Sep: US Foods and Drug Administration bans 30 drugs manufactured by Ranbaxy Laboratories at its two facilities in Dewas and Poanta Sahib.
23 Sep: UAE telecom giant Emirates Telecommunications Corp (Etisalat) buys about 45% of Swan Telecom for up to $900 million.
26 Sep: HCL Technologies makes a cash offer of 650 pence a share for acquiring UK-based SAP consulting firm Axon Group.
3 Oct: Tata Motors pulls out of Singur, where it planned to set up the mother plant for Nano at an investment of Rs1,500 crore.
7 Oct: Tata Motors announces new Nano plant will come up at Sanand in Gujarat at an investment of Rs2000 crore.
Oct 8: TCS acquires 96.3% stake in Citigroup Global Services Ltd, the BPO outfit of the American bank, for $505 million.
13 Oct: Jet Airways and Kingfisher Airlines form operational alliance to cut costs.
15 Oct: Jet Airways lays off 1900 of its employees in various work profiles. Two days later, company Chairman Naresh Goyal orders reinstatement of all the sacked employees.
30 Oct: Real estate major Unitech sells 60% stake in telecom venture Unitech Wireless to Norway-based Telenor for Rs 6,120 crore.
4 Nov: Kolkata-based FMCG firm Emami completes acquisition of Zandu Pharmaceuticals.
12 Nov: Japan’s largest mobile operator by users, NTT DoCoMo picks up 26% stake in mobile and wireline operator Tata Teleservices (TTSL) for $2.7 billion.
21 Nov: Dabur India acquires 72.15% stake in women’s skin-care company Fem Care Pharma (FCPL) for Rs203.7 crore.
11 Dec: State-owned telecom operator MTNL launches third generation (3G) services.
16 Dec: India’s fourth largest IT firm Satyam Computer announces acquisition of Maytas Properties and Mytas Infra for $1.6 billion dollars.
17 Dec: Satyam calls off acquisition after angry shareholders response. Since then, four of the company’s independent directors have quit.
23 Dec: Country’s third-largest software services provider Wipro agrees to buy Citi Technology Services Ltd from Citigroup for about $127 million.
25 Dec: World Bank says Satyam barred from doing business with it for eight years; Reliance Petroleum commissions its 580,000 barrels per day refinery ar Jamnagar.
31 Dec: Stock market benchmark Sensex closes trading for the year down 69 points at 9,647.31. It had peaked to 21,206.77 points in January.
BSE Bulk Deals to Watch - Dec 31 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
31/12/2008 533029 ALKALI MANISH KUMAR GILADA B 60000 135.00
31/12/2008 530355 ASIAN OILFIE MASITIA CAPITAL SERVICES LIMITED B 100000 45.50
31/12/2008 530355 ASIAN OILFIE ENSO OIL PRIVATE LIMITED S 226000 45.03
31/12/2008 531335 CARN NUT ANA NATUBHAI HARIBHAI DESAI S 35000 73.95
31/12/2008 526033 CRYSTAL SOFT KAUSHAL NIRANJAN SHAH S 50554 8.71
31/12/2008 513059 G.S. AUTO RAJU GHANSHYAMDAS SHAH S 28000 17.95
31/12/2008 531646 RFL INTERNAT GEETA NARENDRA SHAH S 50000 1.19
31/12/2008 531898 SANGUINE MD COMFORT INTECH LIMITED S 103394 6.14
31/12/2008 514470 WINSOME TEXT SHAILESH SOMABHAI PATEL B 32787 20.62
NSE Bulk Deal Watch - Dec 31 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
31-DEC-2008,ALKALI,Alkali Metals Limited,GILADA MANISH KUMAR,BUY,60000,135.00,-
31-DEC-2008,HCIL,HIMADRI CHEMICALS AND IND,HIMADRI DYES & INTERMEDIATES LTD,BUY,350000,117.21,-
31-DEC-2008,VITLINFO,Vishal Information Techno,REAL MARKETING PVT LTD,BUY,104802,303.82,-
31-DEC-2008,ALOKTEXT,Alok Industries Limited,CARMONA INVESTMENT & FIN P LTD,SELL,1427100,18.03,-
31-DEC-2008,HCIL,HIMADRI CHEMICALS AND IND,DAMODAR PRASAD CHOUDHARY,SELL,350000,117.21,-
31-DEC-2008,PSTL,Pyramid Saimira Theatre L,PUNJAB NATIONAL BANK,SELL,200000,40.30,-
Post Session Commentary - Dec 31 2008
The Indian market closed on a negative note on the last trading day of the calendar year 2008 by breaking its past two days wining trend on the back selective profit booking across the sectoral indices. The market opened on a firm note tracking the favoring cues from the global markets. However, the market did not able to sustained at the higher level for so long as the volatility gripped the market. The investors took calculated steps through out the trading s4ession to book their positions. The market is waiting for the second stimulus package by the government to give a boost to the economy along with further rate cuts by the Central bank to take further directions.
Auto stocks gained on reports the government is likely to remove an additional excise duty of Rs 10,000-20,000 on large cars and sports-utility vehicles as part of the package for the auto industry which is facing downturn in sales for want to cheap retail credit. Further, Banking stocks declined on concerns of defaulters due to credit crisis. From the sectoral front, Consumer Durables outperformed the bench mark indices to close with gains of more than 1.5% while most selling pressures was witnessed in the bankex and Oil and Gas space.
Market is anticipating that, RBI may cut the CRR by 1% that will give banks some room to lend. In addition to this, it may also slash Repo Rate and Reverse Repo Rate for Banks by 1/2 % point each. Along with this, recent news from Mr. Montek Singh Ahluwalia, the deputy head of the Planning commission, of further easing monetary policy due to lower inflation and slowing economic growth have created scope for investors to have faith on market.
ICICI Bank cuts floating rates for home loans by 50 bps to 13.75 per cent along with the deposit rates cut by 50-75 bps. In line with this, the bank has cut PLR by 50 bps to 16.77 per cent w.e.f December 31.
Among the Sensex pack 20 stocks ended in negative territory and 10 ended in red. The market breadth was positive as 1499 stocks closed in green while 935 stocks closed in red and 108 stocks remained unchanged in BSE.
The BSE Sensex closed lower by 68.85 points at 9,647.31 and NSE Nifty ended down by 20.35 points at 2,959.15. The BSE Mid Caps and Small Caps also ended with gains of 19.05 points and 47.63 points at 3,235.05 and 3,683.11 respectively. The BSE Sensex touched intraday high of 9,825.90 and intraday low of 9,587.92.
Gainers from Sensex Pack are Satyam Computers closed higher (5.95%) along with Ranbaxy Labs (4.43%), Tata Motors (1.89%), Hindalco (1.87%) and M&M (1.63%).
Losers from the BSE Sensex pack are HDFC closed lower by (2.75%) followed by ICICI Bank (2.12%, HDFC bank (2.02%), Sterlite Inds (1.62%) and Reliance Inds (1.50%).
The Consumer Durables index closed up by (1.56%) or 29.33 points at 1,913.74. Pushed it up are Blue Star closed higher by (4.98%) along with Videocon Inds (3.72%), Titan Inds (0.68%) while Gitanjali GE and Rajesh Exports closed lower by (6.07%) and (2.17%) respectively.
The Auto index closed higher by (0.95%) or 23.07 points at 2,444.71. Major gainers are Bosch (2.73%), Cummins Ind (2.45%), Tata Motors (1.89%), Bharat Forge (1.70%), M&M (1.63%) and Bajaj Auto (1.23%).
The Health Care index gained (0.62%) or 18.42 points at 2,966.19. Scrips that closed in green are Bilcare (4.62%) followed by Ranbaxy Labs (4.43%), Aurobindo Pharma (4.16%), Lupin Ltd. (3.79%), Cadila Healthcare (3.54%), Biocon (1.52%), Cipla (1.47%) and Ipca Lab (1.17%).
The Capital Goods index closed higher by (0.49%) or 33.40 points at 6,911.12. Major gainers are Bharat Electrical (5.28%), AIA Engineering (4.15%), Jyoti Structure (2.95%), Siemens (2.90%), BEML (2.13%), Gammon India (1.88%), Punj Lloyd (1.20%).
The Power index grew by (0.27%) or 4.86 points at 1,829.31. Pushed it up are GVK Power higher by (4.71%) along with Lanco Infra (2.51%), Suzlon Energy (2.47%), Torent Power (1.70%), Power Grid (1.40%), Tata Power (1.20%) and Crompton Greaves (1.54%).
The IT index gained (0.09%) or 1.90 points at 2,227.96. Scrips that closed in green are Satyam Comp (5.95%) followed by Moser Bear (2.69%), Patni Computer (1.42%) and Rolta Ind. (0.22%). However, Financial Technologies (2.52%), Mphasis (1.84%), Oracle Fin (1.72%), TCS (0.87%) and Wipro (0.81%) closed in red.
The BSE Bankex index closed with losses of (1.29%) or 71.12 points at 5,454.54. Major losers are Yes Bank (3.53%) along with Canara bank (2.97%), Federal bank (2.49%), ICICI Bank (2.12%), HDFC Bank (2.02%), Bank Of India (2.01%), Kotak bank (1.26%), Oriental bank (1.16%).
The BSE Oil and Gas index fell (0.98%) or 59.91 points to close at 6,050.04 as BPCL (2.27%), HPCL (2.19%), Essar Oil (1.64%), Reliance Inds (1.50%), RPL (1.13%) closed in red.
Mute welcome to the New Year
Sensex opened 91 points above its previous close tracking positive Asian markets. However, it could not hold on to its gains as trading progressed due to lack of buying. Prevailing bearish sentiment kept the market range-bound with a negative bias in the latter part of the session on the back of selling in banking and oil & gas stocks. Towards the fag end selling in frontline stocks saw Sensex touch its day's low of 9,588. Sensex finally ended the day with a loss of 69 points at 9,647, while Nifty slipped 20 points at 2,959.
Market breadth however was positive on BSE. One thousand four hundred Ninety nine stocks advanced, while 935 stocks declined. One hundred and eight stocks ended unchanged. On sectoral front, BSE Bankex was the biggest loser, dropping by 1.29% followed by BSE Oil & Gas (down 0.98%) and BSE Realty (down 0.41%). BSE CD index, however, overcame the sluggish trend and jumped 1.56% while BSE Auto, BSE HC, BSE CG and BSE Power were marginally up.
Several index heavyweights lifted the market. Satyam Computer Services led the pack, shooting by 5.95% at Rs170.15. Ranbaxy Laboratories soared 4.43% at Rs252.40, Tata Motors surged 1.89% at Rs159.05, Hindalco Industries flared up by 1.63% at Rs51.65 and Tata Steel jumped by 1.20% at Rs216.85. However, HDFC dropped 2.75% at Rs1,487.55, ICICI Bank slipped 2.12% at Rs448.35, HDFC Bank lost 2.02% at Rs997.60 and Sterlite Industries dipped 1.62% at Rs260.75. Reliance Industries, Grasim Industries, DLF, Bharti Airtel, Reliance Infrastructure and JP Associates slipped marginally.
Over 2.78 crore shares of Reliance Natural Resources changed hands on BSE followed by Satyam Computer Services (2.72 crore shares), Unitech (2.36 crore shares), GVK Power & Infrastructure (2.24 crore shares) and Suzlon Energy (1.71 crore shares).
Five-year bull run ends as Sensex tumbles 52% in 2008 on global financial crisis
Profit booking after two-day gains pulled key benchmark indices lower on the last trading day of 2008. Selling pressure in index heavyweights in the second half of the day's trade pulled the market lower. Volatility was the hallmark of the day's trading session with indices swinging wildly throughout the day. The BSE 30-share Sensex lost 68.85 points or 0.71%, shedding 178.59 points from the day's high. The market shed more than half its value in 2008, its worst performance ever, and the outlook remained downbeat in the near term on dismal corporate earnings outlook.
Volatility was high. After a firm start triggered by positive cues from the global markets, the Sensex soon slipped into the red. The market soon bounced back. It, however, pared gains soon before recovering again later in volatile trade. Fall in index heavyweight Reliance Industries (RIL) pulled the market into the red in afternoon trade. It later gained positive zone. The market weakened in mid-afternoon trade on fall in banking shares and further decline in RIL.
The BSE Sensex had gained 387.24 points or 4.15% in previous two trading sessions on hopes of rate cuts and a second stimulus package from the government. But hopes for hefty rate cuts were dented after a television channel quoted finance ministry officials as saying rate reductions may not be steep. The television channel also cited unnamed bankers as saying they were not in a position to cut deposit rates due to competition from the government's small savings plans. This meant they can not lower lending rates as well.
Expectations of cut in interest rates by the central bank have strengthened after the central bank governor D. Subbarao met Prime Minister Manmohan Singh on Monday, 29 December 2008. Budget constraints are forcing India to rely more on interest-rate cuts to buoy the economy.
Yet, the market is awaiting a second government stimulus package for the economy. Planning Commission Deputy Chairman Montek Singh Ahluwalia on Monday said the government will come out with a second stimulus package for this fiscal and another package for fiscal year 2009-10 in the next few days to spur economic growth. With industrial production contracting by 0.4% in October 2008, for the first time in 15 years, and the exports declining by over 12% during the month, the government came out with a stimulus package on 7 December 2008 to spur growth and help the industry combat the impact of global financial meltdown.
As part of the stimulus package, the government cut excise duty by 4% across the board, except on petroleum products, and announced raising of the public expenditure by Rs 20,000 crore to boost demand.
European markets were firm on overnight gains on Wall Street. UK's FTSE 100 index rose 0.86% and France's CAC 40 index gained 0.94%.
Asian stocks were mixed. Key benchmark indices in Hong Kong and Taiwan rose by 0.05% to 1.07%. However, indices in China and Singapore were down by 0.66% and 0.51. Japan and South Korea markets were shut.
US stocks ended higher on Tuesday, 30 December 2008 after the government expanded its bailout of the auto industry, bolstering hopes that lawmakers would continue to take steps to minimize the severity of the year-long recession. The Dow Jones Industrial Average rose 184.46 points, or 2.17%, at 8,668.39. The Standard & Poor's 500 Index gained 21.22 points, or 2.44%, at 890.64 and the Nasdaq Composite Index advanced 40.38 points, or 2.67%, at 1,550.70.
The Bush Administration said late Monday, 29 December 2008, it would extend an additional $1 billion loan to General Motors (GM) and take a $5 billion stake in the automaker's financing arm, GMAC, in the latest move to ease the credit crisis.
The BSE 30-share Sensex lost 68.85 points or 0.71% at 9647.31. At the day's high of 9,825.90, the Sensex rose 109.74 points in early trade. The Sensex declined 128.24 points at the day's low of 9,578.92 in mid-afternoon trade.
The S&P CNX Nifty lost 20.35 points or 0.68% at 2959.15. Nifty January 2009 futures were at 2965.10, at a premium of 5.95 points as compared to the spot closing. Turnover in NSE's futures & options (F&O) segment was Rs 30,033.26 crore, lower than Rs 33,326.10 crore on Tuesday, 30 December 2008.
The barometer index lost 10639.68 points or 52.44% in the calendar year 2008 from its close of 20,286.99 on 31 December 2007, on global financial crisis. It is 11559.46 points or 54.50% below its all-time high of 21,206.77 struck on 10 January 2008. Nifty lost 3179.45 points or 51.79% in 2008.
The BSE Sensex saw a sustained bull run in the past five years gaining 47.10% in 2007, 46.7% in 2006, 42.3% in 2005, 13.1% in 2004, 73% in 2003 and 3.52% in 2002.
The market breadth, indicating the overall health of the market, was strong on BSE with 1488 shares advancing as compared with 967 that declined. 103 shares remained unchanged.
The BSE Mid-cap index rose 0.59% to 3,235.05 and the BSE Small-Cap index gained 1.31% to 3,683.11. The BSE Mid-cap index lost 6554.44 points or 66.95% and the BSE Small-Cap index slipped 9665.26 points or 72.40% to 3,683.11, in 2008.
The total turnover on the BSE amounted to Rs 3733 crore as compared to Rs 3412 crore on Tuesday, 30 December 2008.
The BSE Auto index (up 0.95%), the BSE Realty index (down 0.41%), the BSE Capital Goods index (up 0.49%), the BSE Teck index (down 0.28%), the BSE IT index (up 0.09%), the BSE Power index (up 0.27%), the BSE FMCG index (down 0.12%), the BSE PSU index (down 0.05%), the BSE Consumer Durables index (up 1.56%), the BSE HealthCare index (up 0.62%), the BSE Metal index (up 0.18%), outperformed the Sensex.
The Bankex (down 1.29%), and BSE Oil & Gas index (down 0.98%), underperformed the Sensex.
Among the 30-member Sensex pack, 21 declined while the rest advanced. Ranbaxy (up 3.29%), Tata Power (up 1.05%), and Hindalco (up 2.07%), edged higher from the Sensex pack.
Grasim (down 1.43%), Jaiprakash Associates (down 1.07%), and Bhel (down 1.02%), edged lower from the Sensex pack.
India's fourth largest IT exporter by sales Satyam Computer Services jumped 8.03% to Rs 173.50, extending gains for the fourth day in a row, on reports the world's largest personal-computer maker Hewlett-Packard Company is evaluating the possibility of acquiring a stake in the company. It was the top gainer from the Sensex pack.
The stock had jumped 18.52% in the preceding two trading sessions on speculation of a change in management.
However other IT pivotals declined on a firm rupee. India's second largest IT exporter by sales Infosys fell 0.89% to Rs 1115. India's fourth largest IT exporter by sales Wipro lost 1.04% to Rs 233. India's largest IT exporter by sales Tata Consultancy Services slipped 1.10% to Rs 477.
Rupee firmed against the dollar tracking rise in some Asian markets and due to some month-end dollar demand from importers and oil refiners. The partially convertible rupee was at 48.42/43 per dollar compared with Tuesday's close of 48.47. A firm rupee negatively impacts operating margins of IT firms as IT firms derive a lion's share from exports to the US.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) shed 1.82% to Rs 1226.20, after global rating agency Standard & Poor's revised its rating outlook on the company to negative from stable, citing its increased debt and pressure on profitability. The stock moved in a volatile range of Rs 1217.05 and Rs 1265 in the day.
Banking shares declined as hopes for hefty rate cuts by the central bank were dented after a television channel quoted finance ministry officials as saying rate reductions may not be steep India's largest mortgage lender by total income HDFC lost 2.91% to Rs 1485 and was the top loser from the Sensex pack.
India's largest private sector bank by net profit ICICI Bank lost 2.46% to Rs 446.80. The bank said during trading hours today, 31 December 2008, it had bought back and extinguished overseas bonds worth $84.58 million. The bonds which it has bought back include 6.625% bonds totalling $79.58 million, and another $5 million worth of 5.75% bonds issued by an overseas branch.
India's second largest private sector bank by net profit HDFC Bank fell 2.57% to Rs 992. India's biggest bank in terms of total assets and branch network, State Bank of India, slipped 0.10% to Rs 1287.75.
India's top copper producer by sales Sterlite Industries fell 1.77% to Rs 260.35 after its American depository receipt slipped 1.12% overnight on the New York Stock Exchange.
India's second largest cellular services provider by sales Reliance Communications (RCom) retraced from day's high of Rs 237.90 to close 0.35% lower at Rs 227.30, on profit taking. The stock had risen 7.16% yesterday, 30 December 2008, after company announced the rollout of GSM-based cellular services, which will be available in 11,000 towns countrywide from Wednesday, 31 December 2008. The company made the announcement during trading hours on Tuesday. GSM services would be available in 24,000 towns within a few months, RCom said positioning it to better take on market leader Bharti Airtel, India's largest cellular services provider by sales. Bharti shares fell 1.23% to Rs 713.50
Realty shares slipped as hopes of a sharp interest rate cut suffered a blow. DLF (down 1.51% to Rs 281), Housing Development & Infrastructure (down 3.60% to Rs 129.90), and Indiabulls Real Estate (down 0.76% to Rs 130.70), slipped.
India's largest engineering and construction company by sales Larsen & Toubro gained 0.26% to Rs 772 on hopes lower interest rates would keep order flows strong and aid project funding.
However India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) fell 1.02% to Rs 1360, on profit booking after advancing 5.69% in the preceding two trading days boosted by a large order win. The company said on Friday, 26 December 2008, it had secured a Rs 5,040-crore contract from Jindal Power for setting up 2,400 megawatt power plant in Chhatisgarh.
Punj Lloyd rose 1.41% to Rs 147.35 after the company's Singapore unit bagged an order worth Singapore $44.70 million. The stock had risen 0.5% to Rs 145.30 on Tuesday, 30 December 2008, when the company announced the order win during trading hours.
India's largest oil exploration firm by market capitalisation ONGC fell 0.45% to Rs 668 after it acquired control over Imperial Energy with nearly 97% shareholders tendering shares in the open offer. ONGC's acquisition of Imperial pegged at 1.3 billion pounds ($1.9 billion) is seen expensive given the sharp fall in oil prices. Oil prices are now hovering at $40 a barrel as compared to $147 per barrel in July 2008 when ONGC decided to acquire Imperial, a Russia focussed oil exploration firm.
Auto shares extended yesterday's, 30 December 2008 gains, on reports the government is likely to remove an additional excise duty of Rs 10,000-20,000 on large cars and sports-utility vehicles as part of the package for the automobile industry which is facing downturn in sales for want of cheap retail credit. India's biggest commercial vehicles maker by sales Tata Motors rose 0.47% to Rs 156.85. India's biggest small car maker by sales Maruti Suzuki India gained 0.25% to Rs 518.90. India's top utility vehicles maker by market share Mahindra & Mahindra advanced 1.87% to Rs 275.50
Punjab Tractors jumped 5.26% to Rs 98 after the company signed an agreement to sell its entire 14.04% stake in its joint venture company to Japan's Sumitomo Corporation.
Satyam Computer Services was the top traded counter on BSE wit turnover of Rs 465.81 crore followed by Reliance Industries (Rs 254.80 crore), Reliance Natural Resources (Rs 162.45 crore), DLF (Rs 149.44 crore) and Reliance Capital (Rs 136.97 crore).
Reliance Natural Resources led the volume chart with trades of 2.79 crore shares followed by Satyam Computer Services (2.72 crore), Unitech (2.36 crore), GVK Power & Infrastructure (2.25 core) and Suzlon Energy (1.72 crore).
Consumer durable stocks gained on hopes of recovery in sales led by growth in the rural economy. Videocon Industries (up 4.31%), Titan Industries (up 0.45%), and Blue Star (up 5%), gained.
Sugar shares rallied after Bajaj Group chairman Rahul Bajaj bought 3.99 crore shares or 28.2% of outstanding equity of sugar producer Bajaj Hindusthan in two block deals on the Bombay Stock Exchange (BSE) on Tuesday, 30 December 2008 at an average price of Rs 64.50 each as part of a family settlement. Bajaj Hindusthan jumped 9.98% to Rs 72.70. Balrampur Chini Mills (up 3.22% to Rs 49.75), and Shree Renuka Sugars (up 4.71% to Rs 73.40), surged.
Aurobindo Pharma gained 4.78% to Rs 168.80 on receiving final approval for launch of a drug in United States. The company made the announcement of the approval during trading hours today, 31 December 2008.
Oil slid below $39 a barrel on Wednesday, 31 December 2008, closing out its worst year ever after falling 60 percent, with a rapid reversal in the economic outlook having brought it crashing back from a mid-year record high. US crude was down 74 cents to $38.29 a barrel. Fresh sets of dismal data from the United States on Tuesday, 30 December 2008, added pessimism that oil demand in 2009 will suffer further, countering any support from Middle East tensions and hopes for another Saudi output cut.
Daily Call - Dec 31 2008
The markets are likely to open higher but their ability to hold on to their morning gains remains suspect. The rise in the morning will come on the back of a last minute losing of altitude by the indices on Tuesday. This may indeed lead to some short covering. Being the last trading day of the month, quarter and the year, fund managers may resort to some window dressing.
Calls have been written at the 3100 and 3200 levels and Puts at the 2900 level. That sums up the range of immediate interest. The sharp surrendering of gains by reliance towards the fag end Tuesday was a surprise. So keep a watch on the counter, as any downward move after a rise may be initiated by this heavy weight. Small caps will do better today.
Market seen upbeat, domestic institutional activity may rise
Key benchmark indices are likely to extend two day gains on positive global cues. Domestic institutions may turn active today to boost yearly net asset values.
However trading may turn remain lacklustre with high volatility amid the ongoing holiday season and festivities across the world, which is likely to impact trading volumes at the bourses. Mutual funds bought shares worth Rs 375.65 crore while foreign institutional investors (FIIs) were net buyers worth Rs 214.95 crore on Tuesday, 30 December 2008, according to provisional data on NSE.
Interest rate sensitive sectors led the rally on the bourses for the second running day on Tuesday, 30 December 2008 on hopes of further cut in interest rates by the central bank and on a likely second government stimulus package for the economy. The BSE 30-share Sensex advanced 182.64 points or 1.92% at 9716.16 and the S&P CNX Nifty advanced 57.30 points or 1.96% at 2979.50.
Most Asian markets were trading higher today, 31 December 2008 as higher metals prices boosted commodities' companies. Hong Kong's Hang Seng rose 0.84% or 19.97 points at 14,355.47, Singapore's Straits Times was up 0.21% or 3.66 points at 1,774.31, and Taiwan's Taiwan Weighted advanced 0.14% or 6.33 points at 4,595.37. However, China's Shanghai Composite was down 0.85% or 15.60 points at 1,817.31.
US stocks ended higher on Tuesday, 30 December 2008 after the government expanded its bailout of the auto industry, bolstering hopes that lawmakers would continue to take steps to minimise the severity of the year-long recession. The Dow Jones Industrial Average rose 184.46 points, or 2.17%, at 8,668.39. The Standard & Poor's 500 Index gained 21.22 points, or 2.44%, at 890.64 and the Nasdaq Composite Index advanced 40.38 points, or 2.67%, at 1,550.70.
US crude fell 28 cents to $38.75 a barrel, while London Brent dropped 20 cents to $39.95 today, 31 December 2008 with a rapid reversal in the economic outlook having brought it crashing back from a mid-year record high.
Pre Session Commentary - Dec 31 2008
Today the markets are likely to open positive. The markets sentiments look positive on the back of anticipations there might be some stimulus package coming from the government in the week. Besides that there are also expectations that the RBI may further soften its rates to help improve the lackluster sectors. The US markets have ended positive and the other Asian markets have also opened with green numbers. Sentiments are good and therefore we expect a firm trend today.
On Tuesday, the markets opened with positive gap but sooner dived into red. The volatility continued until the mid session, but on the expectations of another stimulus package from the government, the markets gained remarkably and maintained its strength throughout the day. Robust buying was witnessed in Realty, Auto, IT and Banking stocks. Further there are also expectations that the RBI may further cut rates to help the economy. Sensex and Nifty gained 1.92% and 2.27%. Realty, Auto, CG, Teck and IT gained 3.48%, 3.09%, 2.92% and 2.73% respectively. During the session we expect the markets to be trading in a positive trend accompanied mild volatility.
The BSE Sensex closed higher by 182.64 points at 9,716.16 and NSE Nifty ended up by 57.30 points at 2,979.50. The BSE Mid Caps and Small Caps ended with gains of 68.46 points and 63.97 points at 3,216.00 and 3,635.48 respectively. The BSE Sensex touched intraday high of 9,785.04 and intraday low of 9,494.70.
On Tuesday, the US markets closed in green. The US markets have showed firmness without any economic data to inspire the sentiments. There were reports about the weak housing data, and the consumer confidence fell to record lows. As per the U.S. Conference Board plummeting home prices and broader economic headwinds are taking their toll on consumer confidence. Crude oil futures for the month of February delivery fell $0.99 to $39.03 per barrel on New York Mercantile Exchange. The contract hit an intraday high of $40.39 a barrel in electronic trading. The crude futures managed to end below the $40 mark on the back of record-low U.S. consumer confidence as well as plunging housing prices overshadowed concerns about possible Middle East supply disruptions as a result of Israel''s air strikes in the Gaza Strip.
The Dow Jones Industrial Average (DJIA) closed high with 184.46 points at 8,668.39 NASDAQ index gained 40.38 points at 1,550.70 and the S&P 500 (SPX) also closed higher by 21.22 points to close at 890.64 points.
Indian ADRs ended mixed. In technology sector, Infosys gained by 2.17% and Wipro fell by 2.62%, further Satyam ended with a gain of 4.04% and Patni Computers closed high by 1.84%. In banking sector ICICI Bank gained 0.89%, HDFC Bank grew by 1.52%. In telecommunication sector, Tata Communication fell by 1.13%, while MTNL inclined by 1.46%.
Today the major stock markets in Asia opened positive. The Shanghai Composite is trading high by 2.49 points at 1,835.40 Hang Seng is high by 233.48 points at 14,468.98. Further Japan''s Nikkei and Korea’s Seoul Composite are closed till Jan 5th 2009. Taiwan weighted is low by 1.53 points 4,587.51 and Singapore’s Strait Times is low by 1.61 points at 1,769.04.
The FIIs on Tuesday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 830.20 Crore and gross debt purchased stood at Rs 96.80 Crore, while the gross equity sold stood at Rs 840.50 Crore and gross debt sold stood at Rs 184.70 Crore. Therefore, the net investment of equity and debt reported were Rs (10.30) Crore and Rs (87.90) Crore respectively.
On BSE, total number of shares traded were 35.35 Crore and total turnover stood at Rs 3,984.49 Crore. On NSE, total number of shares traded were 64.80 Crore and total turnover was Rs 9,005.09 Crore.
Top traded volumes on NSE Nifty – Unitech with 75453510 shares, Suzlon Energy with total volume traded 43942089 shares, Satyam with 42542379 shares, followed by Reliance Petro 16737978 shares and SAIL with 13516643 shares.
On NSE Future and Options, total number of contracts traded in index futures was 843523 with a total turnover of Rs 11,519.36 Crore. Along with this total number of contracts traded in stock futures were 862268 with a total turnover of Rs 9,050.66 Crore. Total numbers of contracts for index options were 836738 with a total turnover of Rs 12,705.63 Crore and total numbers of contracts for stock options were 60744 and notional turnover was Rs 713.22 Crore.
Today, Nifty would have a support at 2,932 and resistance at 3,055 and BSE Sensex has support at 9,543 and resistance at 9,916.
Market may remain steady with upward bias
A positive opening in most of the Asian indices in ongoing trades and prevailing strong bullish sentiment may help the local market advance further. However, market may witness some volatility in later part of the session due to further selling in FIIs. Among the local indices, the Nifty could test 3,030 on the upside and may slip to 2,930 on the downside. The Sensex has a likely support at 9,500 and may face resistance at 9,850.
Us indices closed positive on Tuesday, as investors scooped up a variety of shares hit hard in the 2008 stock market battering. While the Dow Jones gained 184 points at 8668, and the Nasdaq gained by 40 points at 1551.
Indian floats trading on the US bourses fared better on Tuesday, the gainers were, Satyam registering the highest gains over 4.04% while Infosys, Dr Reddy's, HDFC Bank, MTNL, Patni Computers and and ICICI Bank gained around 1-2% each. Wipro, Tata Motors, VSNL and Rediff, however, dropped around 1% each.
Crude oil prices slipped marginally, while the Nymex light crude oil for February delivery slipped by 99 cents to close at $39.03 a barrel. In the commodity segment, the Comex gold for February series moved down $5.30 to settle at $870 an ounce.
Trading Calls - Dec 31 2008
Nifty (2980) Sup 2870 Res 2975
Buy ONGC (671) SL 665
Target 683, 686
Buy Ranbaxy (242) SL 238
Target 250, 252
Buy Lanco Infra (152) SL 149 Target 158, 160
Buy IVRCL Infra (144) SL 140 Target 152, 154
Sell Infosys (1125) SL 1143
Target 1089, 1079
Bullion metals end mixed
Gold prices go down but silver shines amid thin trading
Bullion metal prices ended mixed on Tuesday, 30 December, 2008 due to the dour economic data that hit the wires today. Gold dropped but silver rose. Prices also fell due to drop in crude price.
On Tuesday, Comex Gold for February delivery fell $5.3 (0.6%) to close at $870 an ounce on the New York Mercantile Exchange amid very thin trading. Last week, gold prices gained 4%. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (15.7%) since then.
This month, gold prices have rose 6.3% till date. 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 are higher by 4%. Futures have averaged $865 in 2008. The dollar index has gained 8% this year. For the third quarter ended September, 2008, gold prices ended lower by 5.1%. It was the first quarterly loss for the yellow metal since the second quarter in FY 2007. Prior to that, the yellow metal ended second quarter with a marginal gain of 0.7%. For first quarter prices gained 10.7%.
On Tuesday, Comex silver futures for March delivery rose 17 cents (1.6%) to $10.98 an ounce. For the month of November, silver prices had gained 5%. Till date, silver has lost 27.3% 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.
Among major economic reports for the day, the Conference Board reported today that worries increased about current labor-market and business conditions took consumer confidence to a record low in December. The December consumer confidence index fell to 38 from a downwardly revised 44.7 in November. Market was expecting a December reading of 45.8.
As per the report, consumers' view of current conditions worsened in December, with those saying business conditions are "bad" rising to 46% from 40.6%, and those saying jobs are "hard to get" rising to 42% from 37.1%.
In a separate report, the Case-Shiller price index reported today that home prices are back to their March 2004 levels, having dropped in 20 major U.S. cities by 2.2% in October and by a record 18% from the previous year.
Crude slips
Crude prices drop marginally
Crude prices fell on Tuesday, 30 December, 2008. Prices fell as dour economic data that hit the wires today.
On Tuesday, crude-oil futures for light sweet crude for February delivery closed at $39.03/barrel (lower by $0.99 or 2.4%) on the New York Mercantile Exchange. During intra day trading, prices touched a high of $40.03. Prices reached a high of $147 on 11 July but have dropped almost 73% since then. Last week, prices ended lower by 11%. For this year in 2008, crude prices have dropped 54%.
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.
Among major economic reports for the day, the Conference Board reported today that worries increased about current labor-market and business conditions took consumer confidence to a record low in December. The December consumer confidence index fell to 38 from a downwardly revised 44.7 in November. Market was expecting a December reading of 45.8.
As per the report, consumers' view of current conditions worsened in December, with those saying business conditions are "bad" rising to 46% from 40.6%, and those saying jobs are "hard to get" rising to 42% from 37.1%.
In a separate report, the Case-Shiller price index reported today that home prices are back to their March 2004 levels, having dropped in 20 major U.S. cities by 2.2% in October and by a record 18% from the previous year.
Against this background, February reformulated gasoline gained 1 cent to end at 93 cents a gallon and February heating oil finished unchanged at $1.31 a gallon.
February natural gas futures fell 22 cents to end at $5.86 per million British thermal units
Good riddance to 2008!
Life can be understood backward but must be lived forward.
Most people have yet to understand what went wrong in 2008. We can be creative enough to write and rewrite history and its impact. The fact remains that the year has come to an end but the worries have not. Thankfully, the year-end rally that seemed to be over last week found a new lease of life. The main indices have gained 4% each in the past two days, buoyed by a firm trend in global markets and expectations surrounding the new stimulus package. Media has been abuzz with speculation of another round of fiscal measures to give further fillip to a slowing economy. And, with inflation cooling off substantially, the RBI too is expected to trim key short-term rates and the CRR. An announcement on fiscal stimulus and rate cuts is expected soon.
Reports suggest that the Government may lower fuel prices next month before the Model Code of Conduct for the Lok Sabha elections comes into force. What has also spurred the bulls is the lack of bad news on the global front, barring the Israel-Hamas conflict. The toning down of war rhetoric by both India and Pakistan is another plus point.
The market may turn a bit choppy and sideways in the next couple of days as several key global markets will be shut on account of the New Year. Japan and Korea will resume trading only on January 5. Others may not see any meaningful trading till at least Monday. India Inc will start revealing its now much awaited report card in the next few sessions. Though the market has already priced in some bad news on this front, one cannot afford to ignore corporate earnings. Politics too will continue to be one of the dominant themes going ahead.
On the whole, the undertone doesn't appear to be too pessimistic as of now. The recent spurt, which took a bit of a breather last week, is likely to continue for a while unless we get fresh bad news (local or global). Today, we expect the bulls to remain in command, as most global markets are up.
Satyam will continue to hog the limelight as the promoters try to restore confidence and trust among various stakeholders. Its board will meet on January 10 to consider strategic options. Change in top management could be in the offing given the enormity of investor backlash. Meanwhile, reports suggest that another top global IT major is eyeing the software major.
FIIs were net buyers of Rs2.15bn (provisional) in the cash segment on Tuesday while the local institutions poured in Rs3.75bn. In the F&O segment, the foreign funds were net buyers at Rs6.44bn. The foreign funds were net sellers at Rs103mn in the cash segment on Monday while Mutual Funds, on the other hand pumped in Rs1.61bn.
US stocks ended the penultimate trading day of the year on a high, with the key indices notching up gains of over 2% each, as investors snapped up a slew of shares hit hard during this year's market meltdown.
A late rally in financial shares and the Bush government's US$6bn aid to General Motors' financial arm, GMAC, added to the bullish sentiment. Hope for the battered auto industry helped offset morning news that consumer confidence slumped to a record low.
The Dow Jones Industrial Average rose 184 points, or 2.2%, to 8,668, with 28 of its 30 blue-chip components advancing, led by a 5.5% gain in GM and a nearly 10% rise in shares of aluminum giant Alcoa.
The S&P 500 index gained 21 points, or 2.4%, to 890, and the Nasdaq Composite index advanced 40 points, or 2.7%, to 1,550.
All three major gauges jumped in the first few minutes of the session. The advance lost some steam after the release of weak economic reports, but then recharged as the session wore on.
With one session left, Wall Street is currently on track to close out its worst year since the 1930s. Year to date, the Dow industrials have slumped nearly 35%, the S&P 500 has lost 40%, and the Nasdaq Composite is off almost 42%.
Market breadth was positive. Trading volume remained very light, with many traders and investors absent in a holiday-shortened week.
GMAC, the lending arm of GM, said it will restart auto financing for more US customers because it has better access to funding after converting to a bank-holding company.
In addition, GMAC said it was receiving US$5bn from the government in exchange for preferred stock. GM could also get up to another US$1bn from the Treasury Department so it can take part in a deal to help GMAC raise more capital.
The latest round of funding for the stricken auto giant comes on top of the US$17.4bn in assistance the government agreed to provide GM and Chrysler earlier this month.
Shares of smaller rival Ford Motor rose more than 3%. Ford wasn't part of the federal assistance program.
The materials sector was among the leaders of the S&P 500, fueled by a 12% advance in shares of Rohm & Haas. Dow Chemical may be able to use a US$13bn bridge loan to fund its acquisition of Rohm & Haas, according to a report in the Financial Times.
On Monday, shares of both firms slid as the deal seemed in jeopardy after Kuwait pulled out of a joint venture with Dow Chemical. Both Moody's and S&P downgraded their credit ratings on the chemicals giant late on Monday.
In the day's economic reports, consumer confidence hit a record low in December, according to the monthly Conference Board index, as worries deepened about current business and labor-market conditions. The December consumer confidence index fell to 38 from a downwardly revised 44.7 in November. Economists had expected a reading of 45.8.
Separately, the S&P Case-Shiller index showed new home sales plunged 18% in October, a record decline. Prices in top 20 markets it measures have plunged for 27 months in a row.
The Chicago PMI, a regional reading on manufacturing, was little changed in December from November's recessionary levels. PMI rose to 34.1 from 33.8, versus forecasts for it to drop to 33.
The Wall Street Journal reported that home and auto insurer Nationwide Mutual Insurance Co. will close a US$2.48bn deal on Jan. 1 to buy back the 34% of Nationwide Financial Services that it doesn't currently own.
Treasury prices dipped modestly, raising the corresponding yield on the benchmark 10-year note to 2.28% from 2.25% on Monday. Yields on the 2-year, 10-year and 30-year Treasurys all hit record lows last week.
Lending rates were mixed. The 3-month Libor rate slipped to 1.44% from 1.46% on Monday. The overnight Libor rate edged up to 0.14% from 0.12%. Libor is a key bank lending rate.
The dollar fell against the euro and yen. COMEX gold for February delivery fell US$5.30 to settle at US$870 an ounce.
US light crude oil for February delivery fell 99 cents to settle at US$39.03 a barrel on the New York Mercantile Exchange, after gaining 13% over the previous two sessions in the wake of an intense military conflict between Israel and Hamas.
Gasoline prices fell 0.3 cent to a national average of US$1.616 a gallon, according to a survey of credit-card swipes released Tuesday by motorist group AAA.
European shares rose in thin trading on Tuesday. The Dow Jones Stoxx 600 index rose 1.8% to stand at 196.90.
Data showed the German inflation rate dropped to 1.1% in December, the lowest in more than two years, due to the slump in oil prices.
Other European economic data showed house prices fell sharply in Spain in the third quarter, dropping 3% on an annual basis. House prices had fallen just 0.3% in the second quarter.
Germany's DAX 30 closed up 2.2%, adding 105.34 points to reach 4,810.20 in a shortened final session of the year. The rally left the country's benchmark index down 40.4% over the course of the year - its first down year since 2002, when the index plunged around 44%.
The French CAC 40 climbed 2.8% to 3,217.13, while the UK's FTSE 100 index rose 1.7% to 4,392.68. Both markets will close early on Wednesday.
Firm cues from the Asian markets coupled with buying in index heavyweights lifted the markets in the early trades. However, key indices turned flat in the mid afternoon trades as Asian markets slipped in the red. From thereon, buying in scrips across the sectors along with positive cues from the equity markets across Europe lifted the Indian burses.
The interest rate sensitive stocks were in momentum on expectation that the RBI may announce another reduction in interest rates. Also the second rung stocks witnessed buying.
The BSE benchmark Sensex finally ended at 9,716 gaining 182 points and the NSE Nifty index ended at 2,979 advancing 57 points.
All the BSE Sectoral indices ended in the positive terrain with BSE Realty index (up 3.5%), BSE Auto index (up 3%), BSE Capital Goods index (up 3%) and BSE IT index (up 2.5%).
Market breath was positive, 1,644 stocks advanced against 810 declines, while, 82 stocks remained unchanged.
Among the 30-components of Sensex, 29 stocks were in the green and only 1 stock ended in the negative terrain. L&T, ICICI Bank, RCom and Satyam were among the major gainers. While, Grasim was the only loser.
LIC Housing Finance
We recommend a buy in LIC Housing Finance from a short-term trading perspective. It is apparent from the charts of LIC Housing Finance that after encountering significant resistance at Rs 350 in early September, it began to decline and was on an intermediate-term downtrend. This downtrend prolonged till it found support around Rs 150 in early December. The stock, however, subsequently made a remarkable upward bounce from this support level and penetrated its 21-day moving average.
The stock breached its intermediate-term down trendline as well as the 50-day moving average during mid December. Since early December, the stock has been trending upward. Both the daily and weekly relative strength index (RSI) are rising in the neutral region towards the bullish zone. Furthermore, the daily moving average convergence and divergence is featuring in the positive territory.
We are bullish on the stock from a short-term perspective. We anticipate the stock to rally until it hits our price target of Rs 251 in the upcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 215.
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