Happiness is not the absence of problems but the ability to deal with them.
Problems are aplenty and Barack Obama has his task cut out, as he takes charge as the 44th US President - the first African-American to do so - on Tuesday. He has promised change for the US, and a second ‘New Deal’ to lift the world’s largest economy out of the financial abyss. The immediate priority will be to push through his version of the economic stimulus (worth US$825bn). But, the trillion-dollar question is how effective will it be? Recent history suggests that the previous stimulus plans and a slew of other steps haven’t quite been able to deliver the desired results.
Talking of stimulus, the UK has launched another rescue plan for its banks. There is talk of Japan announcing a new one anytime soon. In India too, the Government seems to be contemplating some more measures to stem the rot. But, the market appears to be going nowhere. Traded volume and turnover were abysmal to say the least.
Today, we expect the market to weaken amid sharp falls across Asian markets. European stocks too turned lower after a strong opening amid concerns about banks. The undertone may remain jittery ahead of a few key results such as Reliance Industries, which will be announced on Thursday.
FIIs were net sellers in the cash segment on Monday at Rs3.63bn (provisional) while the local institutions pumped in Rs2.76bn. In the F&O segment, the foreign funds were net sellers at Rs4.56bn. On Friday, they were net sellers of Rs5.63bn while Mutual Funds were net buyers of Rs2.85bn.
Key Results Today: AIA Engineering, Alstom Projects, Dr. Reddy's, Fortis Healthcare, Gati, Hero Honda, Hikal, HT Media, ICI India, KS Oils, Kirloskar Bros., LIC Housing Finance, Mahindra Lifespaces, MRPL, Nagarjuna Fertilizers, NIIT, Polaris, Reliance Capital, Shyam Telecom, Stone India, Tata Coffee, UB and Wipro.
Markets in the US were closed on Monday for Martin Luther King Jr. Day. US shares closed higher on Friday. A deluge of what are expected to be mostly bad corporate results and fresh reports on the state of the housing market will keep US market on tenterhooks. Earnings at S&P 500 companies are now expected to have tumbled 20.2% in the fourth quarter of last year from the year-ago period, according to Thomson Financial.
Last week, the Dow Jones Industrial Average slumped 3.7%, while the broader S&P 500 index fell 4.7%, and the tech-heavy Nasdaq Composite index lost 2.7%.
Across the Atlantic, weakness in the banking space led a slump in European stock benchmarks on Monday, as investors feared that the latest moves to support the financial sector won't be enough to get banks lending again. The pan-European Dow Jones Stoxx 600 index fell 1.7% to 189.62.
The banking sector initially traded higher after the UK government moved to support the British financial sector and Barclays reassured on profit trends late on Friday, shares turned sharply lower as the session went on.
Royal Bank of Scotland (RBS) shares sank nearly 67% in London with investors stunned by news that the lender could be on track to produce the biggest annual loss in UK corporate history. RBS said it could report a loss of up to 28 billion pounds ($41.6 billion) for the year.
In tandem with the RBS announcement, the UK government said it will restructure its recent rescue package for the lender as part of a wider package of measures designed to help the financial sector.
The UK's FTSE 100 index closed down 0.9% at 4,108.47, while Germany's DAX 30 index declined 1.2% to 4,316.14 and the French CAC-40 index index fell 0.9% to 2,989.69.
Shares of other European banks also fell sharply. Lloyds Banking Group declined 33.9% on the first day of trading after the merger of Lloyds TSB and HBOS. Credit Suisse shares dropped 6.7% and HSBC shares fell 6.5%. Barclays, which had a bright start to the session, fell 10.2%. Deutsche Bank shares fell 10.6%. BNP Paribas shares dropped 5.7%.Societe Generale shares declined 10.3%.
Meanwhile, the Bank of Japan is likely to announce new measures on Tuesday to prop up the world's second-largest economy. The Japanese central bank's monthly policy meeting comes after the bank on Friday lowered its assessment for the nation for a second consecutive quarter following its finding that conditions in all nine of economic regions have worsened.
Asian stocks slumped on Tuesday, led by commodity producers and banks, after Royal Bank of Scotland's forecast of the biggest loss in UK corporate history heightened concern the global recession is deepening.
The MSCI Asia Pacific Index dropped 2.5% to 82.89 as of 10:41 a.m. in Tokyo, as 12 of its constituents fell for each one that advanced. Japan’s Nikkei 225 Stock Average lost 3.4% to 7,979.81 while the Hang Seng was down 3.4% to 12,881. All markets open for trading declined except the Philippines.
Mixed cues from the overseas markets coupled with lack of follow up buying on Dalal-Street kept the markets lackluster throughout the trading session. However, in the second half of the day with strong cues from the European markets sentiments were slightly got boosted with the key indices ending on a flat note. The BSE benchmark Sensex ended flat at 9,329 and the NSE Nifty marginally added 17 points to close at 2,846.
Among the BSE Sectoral indices BSE Bankex index was the top loser, the index fell 1.2%. Among the other major losers were, BSE Auto index (down 1%), BSE IT index (down 0.7%) and BSE Pharma index (down 0.7%).
Among the major gainers were, BSE BSE Metal index (up 1.6%), BSE Realty index (up 1.3%), BSE Oil & Gas index (up 1%) and BSE Capital Goods index (up 0.8%).
Even BSE Mid-cap index gained 0.5% and BSE Small-Cap index added 1.2%.
Shares of Punj Lloyd gained by 0.2% to Rs113 after reports stated that the copany along with US-based Thorium Power would invest up to US$1bn in the venture. The scrip touched an intra-day high of Rs115 and a low of Rs111 and recorded volumes of over 1,00,000 shares on BSE.
Shares of Jindal Steel marginally gained by a percent to Rs860 after reports stated that the company would invest US$150mn in four oil blocks in Georgia. The scrip touched an intra-day high of Rs878 and a low of Rs845 and recorded volumes of over 95,000 shares on BSE.
Shares of Tata Metaliks pared gains and slipped by 1% to Rs75. Reports stated that the company received Centre’s approval for a prospecting license of iron ore mines in Maharashtra. The scrip touched an intra-day high of Rs78 and a low of Rs74 and recorded volumes of over 3,000 shares on BSE.
Shares of ONGC advanced by over 3% to Rs670 after reports stated that the company announced that it secured contract for oil exploration in Ganga basin area of Bihar. The scrip touched an intra-day high of Rs675 and a low of Rs642 and recorded volumes of over 2,00,000 shares on BSE.
Shares of Nucleus Software rallied by over 6% to Rs55 after the company announced its Q3 results with consolidated revenue increased by 14% to Rs842.4mn in three months ended December 31, 2008 compared to Rs736.4mn for the corresponding quarter of the previous year.
Total expenses increased by 25%, the consolidated EBITDA declined to Rs152.1mn in comparison to Rs185.1mn for the corresponding quarter of the previous year.
The scrip touched an intra-day high of Rs63.5 and a low of Rs54.5 and recorded volumes of over 4,00,000 shares on BSE.
Shares Ultratech Cement gained by 2% to Rs380 after the company announced its Q3 results which were almost in-line with market expectations. Net profit for the third quarter was at Rs238cr (down 15%) while, net sales was at Rs16.3cr (up 18%). The scrip touched an intra-day high of Rs415 and a low of Rs360 and recorded volumes of over 1,00,000 shares on BSE.
Shares of JP Associates advanced by 4% to Rs69 after the company posted a net profit of Rs1,655mn for the quarter ended December 31, 2008 as compared to Rs1,558mn for the quarter ended December 31, 2007.
The total Income increased from Rs10,015.7mn for the quarter ended December 31, 2007 to Rs14,471mn for the quarter ended December 31, 2008. The scrip touched an intra-day high of Rs71 and a low of Rs67 and recorded volumes of over 6,00,000 shares on BSE.
Shares Gujarat NRE Coke fell over 6% to Rs26.8 after Q3 profit dropped 73%. Also, net income dropped to Rs132.6mn in the three months ended Dec. 31, from Rs499.7mn a year earlier. The scrip touched an intra-day high of Rs28 and a low of Rs26.5 and recorded volumes of over 15,00,000 shares on BSE.