Our greatest glory is not in never failing, but in rising up every time we fail.
The promise of more glory for the bulls post 4700 levels on the Nifty has failed for now. The sell-off was mostly led by a slide in global markets. The China factor too continues to play spoilsport, though that market is bucking the global freefall today. Other Asian markets are in the red, taking their cues from overnight losses on Wall Street and Europe.
Our market too is set to open lower, keeping in sync with the world. Tuesday saw a turnaround and then a tumble, which came on higher volumes. The usual rumors of basket selling and some fund going bust did the rounds as the selling intensified.
We also had disappointing reports on manufacturing PMI and exports. Monsoon has been weak and could have an adverse fallout on the overall economic activity. The Government is trying it best to keep the mood of the nation upbeat by projecting a rebound from the fourth quarter. The fact is growth is set to be lower than last fiscal, and a turnaround will be painfully slow. The market could turnaround faster!
FIIs were net sellers at Rs6.36bn in the cash segment on Tuesday on a provisional basis while the local funds pumped in Rs3.67bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers at Rs11.37bn. On Monday, FIIs were net sellers at Rs862mn in the cash segment.
US stocks tumbled on Tuesday, as concern that banks will post more losses overshadowed positive reports on manufacturing and housing that topped economist estimates. Investors pulled back from the recent advance at the start of what is typically a rough month for equities on Wall Street, betting that the six-month rally has raced ahead of economic and corporate fundamentals.
One market observer said that he wouldn't be surprised if the S&P 500 moved back to the 880 level before a fresh move back up. A drop to the 880 level would constitute a slide of about 12% from the current levels.
The Dow Jones Industrial Average lost 186 points, or almost 2%, to 9,310.60. The S&P 500 index fell 23 points, or 2.2%, to 998.04. The Nasdaq Composite index fell 40 points, or 2%, to 1,968.89.
The Chicago Board Options Exchange Volatility Index or VIX closed at the highest level since July 9. The benchmark index for US stock options increased 12% to 29.15. The gauge, which measures the cost of using options as insurance against declines in the S&P 500, reached a record of 80.86 in November. The index is sill above the average over its 19-year history of 20.
September is typically the biggest percentage loser of the month for the Dow, S&P 500 and Nasdaq, according to the "Stock Trader's Almanac.
Stocks have essentially been on the rise since March. The major gauges ended last week at the highest levels in 9 to 10 months. Financial shares took a beating on Tuesday after enjoying a nice ride through the late summer.
The Institute for Supply Management's (ISM) manufacturing index for August showed growth in the sector for the first time since January 2008. The index rose to 52.9 from 48.9 previously. Economists thought it would rise to 50.5.
Pending home sales rose for the sixth straight month, jumping 3.2% in July, to the highest point in nearly two years, according to a report from the National Association of Realtors. The index rose 3.6% in June. Economists thought sales would rise 1.5% in July.
Construction spending fell 0.2% in July versus forecasts for an unchanged reading. Spending rose a revised 0.1% in June.
Many of the summer's big bank sector winners led the declines Tuesday. The KBW Bank index fell 5.8% after rising 20% over the summer.
US light crude oil for October delivery fell $1.91 to settle at $68.05 a barrel on the New York Mercantile Exchange. Oil prices have been slipping since hitting a ten-month high just below $75 a barrel late last month. The decline in oil prices dragged on heavily-weighted energy stocks.
The government's popular Cash for Clunkers program gave a boost to sales in August, major automakers said. Although a plunge in sales in the last week of the month, following the program's end, suggests the impact will not be far reaching.
In August, Ford Motor reported that sales jumped 17% versus a year ago, its best monthly gain in 4 years. However, the advance was short of expectations for a rise of 22%, according to analysts.
Toyota, which had the most Clunker sales of any automaker, said August sales rose 6%, its first year-over-year gain in 16 months. General Motors (GM) and Chrysler both reported year-over-year declines in August on sales that improved from July.
eBay said it will sell a large stake in its Skype Internet phone business to a group of investors for $2.75 billion.
Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.37% from 3.40% late on Monday.
COMEX gold for December delivery rose $3.50 to settle at $957 an ounce.
In currency trading, the dollar gained versus the euro and the Japanese yen.
Two readings on the labor market are due Wednesday in the lead up to Friday's big August jobs report.
A July reading on factory orders is also due in the morning from the Commerce Department. Other reports include the minutes from the last Federal Reserve policy meeting, the weekly crude oil inventories report and the July reading on factory orders.
European shares declined with banks and metal stocks among the losers as investors picked up on some disappointing economic news.
After rising nearly 5% in August, the pan-European Dow Jones Stoxx 600 index pared some of those gains, falling 1.8% to 231.82 on Tuesday.
At the regional level, Germany's DAX index lost 2.5% to 5,327.29, the UK's FTSE 100 index fell 1.8% to 4,819.70 and the French CAC-40 index sank 1.9% to 3,583.44.
It was the second straight trading session where bears had an upper hand. In the early morning trades it looked like the bulls were back with a vengeance and a turnaround was on the cards as the NSE Nifty surged past the 4730 levels. However, as strong as before, the crucial technical level again played a spoil sport. From there on, the market succumbed to the selling pressure and nose-dived in the second half led by heavy offloading seen in the Realty, Metals and Power stocks. However, better than expected monthly sales numbers kept the Auto stocks in demand accompanied with some buying in the IT stocks. Mondays sell-off was led more by the foreign institutions and was restricted to the large caps. The broader market managed to hold its own yesterday. However, today even the small- and mid-cap stocks were under the bear attack. The BSE Sensex lost by 115 points or 0.8% at 15,551 after touching a high of 15,923 and a low of 15,475. The index opened at 15,691 against the previous close of 15,666. The NSE Nifty fell by 36 points to shut shop at 4,625. In Asia, the Nikkei in Japan gained by 0.4% at 10,530 while Australia's S&P/ASX ended higher by 0.8% at 4,514. The Hang Seng index in Hong Kong was up 0.8% at 19,872. Shanghai index in China was up 0.6% at 2,683. In Europe, stocks were trading in the red. The FTSE in the UK was down 1.1%. The DAX in Germany was down 1.5% and the CAC 40 index in France was down 0.8%. Coming back to India, among the BSE sectoral indices, the Realty index was the top loser, shedding 3.5%, followed by the Metal index that was down 2.1%. The BSE Capital Goods index down 2% and the BSE Power index was down 1.7%. Even the BSE Mid-Cap index lost 1.5% and the BSE Small-Cap index fell by 1.5%. Among the 30-components of Sensex, 23 stocks ended in the red and 7 ended in the positive terrain. Among the major losers were ACC, Sterlite, HDFC, BHEL, ONGC, JP Associates and DLF. On the other hand, Maruti, Tata Motors, Hero Honda, RCom, Wipro and HUL were among the major gainers. Outside the frontline indices, the big losers in the broader market were GMDC, Indiabulls Real Estate, Godrej Industries, IFCI, Jai Corp and GE Shipping. On the other hand, gainers included P&B, Dabur India, Mphasis, Canara Bank and Renuka Sugar. India's merchandise exports fell 28.4% to US$13.6bn in July and imports declined 37.1% to US$19.6bn, resulting in a trade deficit of US$6bn for the month from US$12.15bn in the same month a year earlier, data released by the Commerce Ministry showed on Tuesday. In Indian Rupee terms, exports in July were down 19% over the year-ago period while imports slid 28.8% in Rupee terms. Shares of NHPC ended at Rs36.75 almost flat. The stock got listed at Rs37 on the NSE as against its issue price of Rs36. The stock hit an intra-day high of Rs42 and a low of Rs36.60. Total traded volumes stood at 19.3mn shares. The company’s IPO was subscribed over 23 times. NHPC raised Rs60bn through its IPO, which closed on August 12. It had come out with 1.68bn shares. A third of the NHPC's stake is being held by the Government, which is the sole promoter of the company. NHPC would use the IPO proceeds to part fund investments in 11 projects that are under construction. The new projects are likely to be commissioned by 2012. It plans to add 14,000 MW of power by 2020 for which it has either completed survey of projects or was in the process of surveying several others. NHPC currently has an installed capacity of 4,815 MW. Shares of Maruti Suzuki accelerated by 7.5% at Rs1545 after the company announced that it sold a total of 84, 808 vehicles in August 2009, staging a growth of 41.6% in the month. This includes exports of 14,847 units, the highest ever monthly export in the company's history. The company had sold a total of 59, 908 vehicles in August 2008 Shares of TVS Motors shot up by over 4% to Rs50.25 after the company announced that it posted a 11% growth in August 2009. The company registered total two wheeler sales of 126,842 units against 114,321 units in the corresponding period of the previous year. The company has thus achieved a cumulative sales growth of 5% for the period April to August 2009 with cumulative growth of 10% in domestic sales. Domestic sales of the company clocked 20% growth registering sales of 115,095 units in August 2009 as against 96,238 units in the corresponding month of the previous year, with motorcycles contributing 12% growth and scooters factoring in a growth of 13%. Shares of M&M announced its domestic auto sales for the month of August 2009 stand at 21410 units, as against 18322 units in August 2008, an increase of 16.9%. Total UV sales in August 2009 which includes the Scorpio, the XYLO, the Bolero and Pick-Ups stands at 16631 as against sales of 11731 in August 2008, which is a growth of 41.8%. The stock ended lower by 1.5% to Rs847, it opened at Rs860 and made an intra-day high of Rs905 and a low of Rs824. Total traded volumes stood at 0.45mn shares. Shares of Hero Honda gained 1.5% to end at Rs1534 after the company’s despatch sales for the month of August’09 recording an all-time high of over four lakh units. For the first time ever, the company has recorded more than four lakh despatch sales in a single month, selling 415,137 units of two-wheelers in August’09. The stock opened at Rs1522 and made an intra-day high of Rs1566 and a low of Rs1504. Total traded volumes stood at 0.15mn shares. Shares of Britannia Industries gained 1.5% to Rs1672 after reports stated that the company bought out partners in its west Asian ventures. Britannia acquired 30% stake in Strategic Food International Co LLC, Dubai making it a wholly-owned indirect subsidiary of the company. It has also purchased the residual 34.54% stake in Al Sallan Food Industries, Oman. The stock opened at Rs1690 and made an intra-day high of Rs1764 and a low of Rs1669. Total traded volumes stood at 4,000 shares. Shares of Unity Infraprojects erased early gains and ended down by 1% to Rs368 after the company won a Rs3.25bn order for a pipeline project from the Municipal Corporation of Greater Mumbai. The order is scheduled to be completed in 45 months. The stock opened at Rs383 and made an intra-day high of Rs390 and a low of Rs361. Total traded volumes stood at 0.1mn shares. Shares of Orbit Corp lost ground and slipped by 3% to Rs185. Blackstone Asia Advisors LLC’s India Fund Inc. acquired 0.42mn shares of the company. Blackstone’s acquired ~0.8% of the company’s equity at an average price of Rs188.6 per share on the NSE on Monday. The stock opened at Rs193 and made an intra-day high of Rs196 and a low of Rs183. Total traded volumes stood at 0.57mn shares. Shares of Berger Paints were locked at 20% upper circuit at Rs65.15 as more than 12 times the average daily volume of shares during the past three months changed hands. The stock has witnessed its steepest upsurge since December 2007. More than 2.6mn shares changed hands, compared with the average daily volume of about 208,000 during the past three months.