Market snaps six-day winning streak on weak global stocks

The key benchmark indices snapped last six days' gains as world stocks fell on the eve of the first anniversary of the collapse of US investment back Lehman Brothers. Index heavyweight Reliance Industries (RIL) edged higher in volatile trade. The BSE 30-share Sensex fell 50.11 points or 0.31%, up close to 95 points from the day's low and off 40 points from the day's high. Auto and banking stocks were in demand. PSU OMCs also edged higher as crude oil prices fell. But realty stocks fell. The market breadth, indicating the overall health of the market was positive.

As per provisional data, foreign funds today, 14 September 2009, sold shares worth a net Rs 44.40 crore. Domestic funds sold stocks worth a net Rs 6.11 crore

After a weak opening triggered by lower Asian stocks, the market cut losses shortly. But the intraday recovery was short-lived with the Sensex hitting a fresh intraday low soon. The market once again cut losses after hitting a fresh intraday low in morning trade. After a range bound movement for a while, the market extended intraday recovery in early afternoon trade. Alternate bouts of buying and selling was witnessed in mid-afternoon trade even as the Sensex's movement was confined to a relatively narrow band. The intraday day recovery gathered further strength in late trade.

Companies' advance tax numbers and the second quarter September 2009 results next month would be key triggers for the market in the near term. Indian firms have to pay 30% of the estimated tax liability for the year by the second installment of advance tax which falls due on 15 September. Higher advance tax payment will mean their profits may be higher in Q2 September 2009 over Q2 September 2008 and vice versa.

The market slipped today after a sharp rally in the past six days. The Sensex had jumped 865.97 points or 5.62% in six trading days to 16,264.30 on 11 September 2009 from a recent low of 15,398.33 on 3 September 2009 as a revival of monsoon rains, strong response to the initial public offer of Oil India and firm global stocks boosted sentiments.

India's economy will stabilise in the next six months and loan growth is showing signs of improvement, plan panel deputy chairman Montek Singh Ahluwalia said on Monday.

The weather office said on Thursday, 10 September 2009 rainfall was 21% above average in the week to 9 September 2009 continuing the upturn since mid-August but total seasonal rainfall was a fifth short of normal since the season began with the driest June in eight decades. More than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains. Higher rainfall in the past week has helped India's 81 biggest reservoirs fill up much faster than normal for this time of year. Reservoirs are important for hydropower, which accounts for a quarter of India's generation capacity. They also provide water to irrigate winter crops.

However, India's drought has spread to nearly half its more than 600 districts, particularly in sugar-producing areas, but the government said its grain stocks were bigger than last year and sugarcane output would not fall. Finance Minister Pranab Mukherjee said the country had enough grains to face the drought but there was a shortfall in lentils and edible oils.

India's industrial output rose a decent 6.8% in July 2009 though the growth was lower than a 6.9% rise in the same month last year data showed on Friday 11 September 2009. The industrial output for the month of June 2009 was revised upwards to a solid 8.2%.

But analysts are concerned that a sharp surge in food prices in the past few days due to scanty rains may stoke inflationary pressures in the economy. Interest rates could rise on higher inflation which in turn may impact a nascent economic recovery and corporate profits.

The wholesale price index (WPI) fell 0.12% in the year through 29 August 2009, lower than an annual decline of 0.21% in the previous week, data released by the government showed on Thursday, 10 September 2009. The food article index surged 14.8%.

European shares fell on Monday, breaking a six-session winning streak and pulling back from 11-month highs, with banks and commodity stocks leading the losers. The key benchmark indices in France, Germany and UK were down by between 0.71% to 1.07%.

Asian stocks fell today after the dollar fell to a fresh seven-month low against the yen helped by talk of Japanese fund repatriation and the view that it is replacing the yen as the funding currency for carry trades. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 1.02% to 2.32%. But, China's Shanghai Composite rose 1.24%.

Escalating tensions about bilateral trade between between China and the US also weighed on sentiment. On Sunday, Beijing singled out US automotive and poultry product imports for investigation after the Obama administration decided to put steep import duties on Chinese tires.

Chinese stocks were led higher by gains for companies with stakes in firms that could potentially list on the Growth Enterprise Market (GEM) after China's securities regulator yesterday said it will start reviewing applications from companies seeking to list on the GEM.

Trading in US index futures indicated Dow could fall 65 points at the opening bell on Monday, 14 September 2009.

A year ago, it seemed as if the financial world was coming to an end when Lehman, a 158-year-old US investment bank, filed for bankruptcy on 15 September 2008, setting off a scramble by authorities to avert global financial meltdown.

US markets snapped a five-day winning streak on Friday 11 September 2009 as profit-taking offset data showing an improvement in consumer confidence. The Dow Jones Industrial Average was down 22.07 points, or 0.2%, to 9,605.41. The S&P 500 index fell 1.41 points, or 0.1%, to 1,042.73, and the Nasdaq Composite Index fell 3.12 points, or 0.2%, to 2,080.90.

The university of Michigan-Reuters gauge of consumer sentiment jumped higher than expected to 70.2 in a mid-September reading against a final reading of 65.7 in August 2009. Their outlook for the next year was the highest since September 2007.

Among other economic data, wholesale inventories fell 1.4% to their lowest level in nearly three years in July 2009 and import prices spiked 2% last month.

The BSE 30-share Sensex fell 50.11 points or 0.31% to 16,214.19. The barometer index fell 144.35 points at the day's low of 16,119.95 in morning trade. The Sensex fell 12.12 points the day's high of 16,252.18 in late trade.

The S&P CNX Nifty fell 20.95 points or 0.43% to 4808.60. Nifty September 2009 futures were at 4837, a premium of 28.4 points as compared to the spot closing of 4808.60. Turnover on NSE's futures & options (F&O) segment declined to Rs 58031.55 crore from Rs 61648.13 crore on 11 September 2009.

BSE clocked a turnover of Rs 5099 crore, lower than Rs 5710.05 crore on Friday, 11 September 2009.

The market breadth indicating the overall health of the market, turned positive from negative breadth earlier in the day. On BSE, 1467 shares rose as compared with 1310 that declined. A total of 72 shares remained unchanged.

Among the 30-member Sensex pack, 16 fell while the rest gained.

Stocks have risen sharply this year on increased global risk appetite triggered by hopes of a recovery in the global economy after a setback from a financial sector crisis. The Sensex is up 6566.88 points or 68.06% in calendar year 2009 as on 14 September 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 8053.79 points or 98.69% as on 14 September 2009. FII inflow in calendar 2009 totaled Rs 42700.60 crore (till 11 September 2009).

Coming back to today's trade, the BSE Mid-Cap index rose 0.15% and the BSE Small-Cap index rose 0.46%. Both the indices outperformed Sensex.

The BSE Auto index (up 1.04%), the BSE PSU index (up 0.93%), the BSE Bankex (up 0.49%), the BSE Oil & Gas index (up 0.24%), the BSE Healthcare index (down 0.08%), the BSE Metal index (down 0.14%), the BSE Power index (down 0.21%), the BSE FMCG index (down 0.24%), outperformed the Sensex.

The BSE Consumer Durables index (down 1.06%), the BSE Realty index (down 0.79%), the BSE Teck index (down 0.55%), the BSE Capital Goods index (down 0.55%), the BSE IT index (down 0.33%), underperformed the Sensex.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 0.28% to Rs 2146.95. The stock hit a high of Rs 2159.90 and a low of Rs 2113. The company said today The Bombay high court has sanctioned a scheme of amalgamation of Reliance Petroleum (RPL) with Reliance Industries and consequently RPL stands dissolved without winding-up.

RIL executive director P.M.S. Prasad today said the company's new 5,80,000 barrel-per-day (bpd) refinery in Gujarat is operating at close to full capacity.

Meanwhile, in the latest war of words, Anil Ambani group firm Reliance Natural Resources (RNRL) on Sunday 13 September 2009 alleged that Reliance Industries (RIL) is charging unauthorised marketing margins of 13.5 cents (Rs 6.6) per million metric British thermal unit (mmBtu) on the sale of gas from its KG basin D-6 fields. This means a potential loss of Rs 10,000 crore to the government in the form of subsidies to power and fertiliser firms, it claimed.

RNRL last week told the Supreme Court that the government has no role to play either in the utilisation or the fixation of gas price as per its contract with Mukesh-led RIL. The two sides - RIL and RNRL had approached Supreme Court challenging a decision by the Bombay High Court on 15 June 2009, which said RIL should provide 28 million cubic metres of gas per day to RNRL at $ 2.34 per mmBtu and both the parties should sign a necessary agreement for the same within a month. RIL, however, is pleading that it was only a contractor for the gas from the Krishna-Godavari basin's D6 block and did not have the power to fix the price, while the government has also moved a special leave petition in the case asserting its right on pricing and distribution of natural gas. The apex court has decided to commence hearing on this matter on 20 October 2009.

Oil exploration stocks fell on fall in crude oil. India's biggest state-run oil exploration firm by revenue Oil & Natural Gas Corporation (ONGC) fell 1.26%. Cairn India fell 1.09%. Fall in crude oil prices would result in lower realizations from crude sales for oil exploration firms.

Crude oil futures prices fell on Friday, posting the biggest single-day loss in two weeks, on worries of near-term supplies outpacing demand. Light, sweet crude oil for October delivery on the New York Mercantile Exchange settled 3.7% lower at $69.29 a barrel.

But, PSU OMCs rose as the fall in crude oil prices will result in lower under-recoveries for the PSU OMCs on domestic sale of petrol, diesel, kerosene and LPG at controlled prices. BPCL and HPCL rose by between 1.18% to 1.39%.

Indian Oil Corporation rose 3.17% after company's board approved a liberal 1:1 bonus issue.

Housing Development & Infrastructure (HDIL) fell 3.57% after company said that the Income tax Department had conducted a raid on the company's office premises and promoters' residences on 10 and 11 September 2009. During the course of raid, HDIL has agreed to offer close to Rs 350 crore as income to be booked in remaining quarters of financial year ending March 2010.

Further, the company also clarified that, there is no undisclosed income, tax evasion, levy of penalty for any previous years or current year as reported in various newspaper and media. There will not be any substantial change to tax liability or revision in income booked of earlier accounting years, the company said.

Among other realty stocks, DLF, Ackruti City, Omaxe and Unitech, fell by between 1.06% to 2.22%.

Auto stocks rose on hopes of strong sales in the upcoming festive season. India's largest tractor maker by sales Mahindra & Mahindra rose 1.44%. The president of company's two-wheeler business Anoop Mathur said on Thursday, 10 September 2009, at the launch of two new scooters that Mahindra & Mahindra (M&M) expects to sell 100,000 two-wheelers in the next 18 months. M&M entered the two-wheeler segment with the acquisition of Kinetic Motor last year.

Two-wheeler makers were mixed. India's largest bike maker by sales Hero Honda Motors fell 0.17%. India's second largest bike maker by sales Bajaj Auto rose 0.95%.

India's largest truck maker by sales Tata Motors rose 1.97% to Rs 561.80 reversing early losses on reports the company plans to raise about $412 million soon through a sale of global depositary receipts to reduce its debt. The stock came off the day's low of Rs 539.25. The burgeoning debt has been largely related to the purchase of Ford Motor's marquee brands Jaguar Land Rover last year, for which it took a loan of $3.2 billion and other debt to keep the loss-making unit running.

India's top small car maker by sales Maruti Suzuki rose 0.56% on hopes of robust sales in the upcoming festival season.

Car sales rose 26% to 120,669 units in August 2009 over August 2008 boosted by new launches and availability of cheaper loans, data released by the industry body Society of Indian Automobile Manufacturers on 8 September 2009, showed. Sales of trucks and buses rose 18.5% to 40,624 units and motorcycle sales rose 26% to 611,173 units.

Auto component makers rose on expectations of a double digit growth owing to huge orders from Europe and other nations and strong domestic demand. Banco products India, Amtek Auto, Exide Industries rose by between 1.43% to 1.99%.

Banking shares rose on hopes a recovery in the economy will boost lending growth. India's largest bank by net profit and branch network State Bank of India rose 1.95%. Chairman O.P. Bhatt on 8 September 2009 said the bank's earnings are likely to grow 30-35% in Q2 September 2009 over Q2 September 2008. SBI's retail loan growth is likely to be twice of what it was in the year-ago quarter, he said.

Among other PSU banks, Bank of India, Punjab National Bank, Bank of Baroda, rose by between 2.65% to 4.56%.

India's second largest private sector bank by net profit HDFC Bank rose 0.23%. Its ADR rose 0.37% on Friday.

But, India's largest private sector bank by net profit ICICI Bank fell 1.21% even as its ADR rose 1.6% on Friday. The bank's managing director Chanda Kochhar said on 8 September 2009 credit growth in India is likely to pick up in the second half of this year.

Metal stocks fell as LMEX, a gauge of six metals traded on the London Metal Exchnage fell 3.54% on Friday, 11 September 2009.

India's largest copper maker by sales Sterlite Industries fell 3.55% extending Friday's 2.87% fall. The company on Friday said it had raised its open offer price for bankrupt US copper miner Asarco by a fifth to $2.565 billion. Sterlite, a unit of India-focused mining company Vedanta Resources, has been facing off with Mexican miner Grupo Mexico for the assets of Asarco, which has been under bankruptcy protection since 2005.

Among other metal stocks, Hindalco Industries, National Aluminum Company, Hindustan Zinc, Steel Authority of India, fell by between 1.11% to 2.46%.

But India's largest steel maker by sales Tata Steel rose 2.12% extending recent gains after Steel Minister Virbhadra Singh on 10 September 2009 said domestic consumption of steel could rise 6% this quarter.

Domestic steel makers raised prices of flat steel products such as plates and sheets, mainly used in manufacturing automobiles, refrigerators and washing machines, by about 3-5% from Tuesday, 1 September 2009, in line with international prices.

Tata's steel sales from Indian operations rose 25% to 4,92,000 tonnes in August 2009 over August 2008. The local operations contribute about a quarter of the group's total annual global capacity of 30 million tonnes, which includes Corus, Europe's second-largest steelmaker.

IT stocks rose on hopes of faster recovery in US economy. US is the biggest market for Indian IT companies. India's largest software services exporter by sales Tata Consultancy Services rose 0.1%. TCS's Chief Executive S. Ramadorai on 7 September 2009 said TCS is seeing stability on the ground and the company's demand pipeline is good.

India's third largest software services exporter by sales Wipro rose 0.95%. Its ADR rose 0.3% on 11 September 2009.

But, India's second largest software services exporter by sales Infosys fell 0.68% as its ADR fell 0.91% on Friday, 11 September 2009.

India's largest thermal power generator by sales NTPC was flat at Rs 205.20 . The company's chairman said late on Thursday the government may sell up to 5% in power producer NTPC before March 2010.

Among other power stocks, Reliance Infrastructure, Torrent Power, Tata Power Company, Reliance Power fell by between 0.02% to 1.23%.

Cement stocks extended recent losses on reports cement makers have cut prices by Rs 3 per 50 kilogram bag in Mumbai. ACC, Grasim Industries, Ultratech Cement, Ambuja Cements fell by between 0.82% to 2.01%.

FMCG pivotals fell on worries over scanty rains. FMCG firms derive substantial revenue from the rural sector. Marico, Dabur India, Tata Tea, ITC, Hindustan Unilever fell by between 0.63% to 1.1%.

Telecom stocks fell. India's largest mobile telecom player by sales Bharti Airtel fell 0.58% after a South African minister expressed caution over the proposed tie-up between South African MTN and Bharti Airtel, casting doubt over whether the deal will get a nod from the South African government.

Both MTN and Bharti have extended exclusive talks twice and given themselves time until the end of the month of September 2009 to decide whether to join forces.

India's largest mobile telecom player by sales Reliance Communications fell 1.83%.

The government plans to hold a much-awaited auction on 7 December 2009 to sell airwave spectrum bands to the country's mobile operators for use in third-generation wireless services, the Department of Telecommunications said in a notice on its Web site Monday.

The auction for 3G spectrum will allow operators a chance to offer mobile-phone access to high-speed Internet, video downloads and other 3G services in the world's second-largest wireless market by subscribers. The move is also expected to earn the government billions of dollars in revenue in a year when it is expected to borrow a record amount to bridge its fiscal deficit.

The government said it will issue a notice inviting applications from interested bidders on 26 October 2009, with the final date for receiving the applications set for 13 November 2009.

Capital goods stocks fell on profit taking. India's largest engineering and construction firm by sales Larsen & Toubro fell 1.24%. The company on Thursday 10 September 2009 said it got orders worth Rs 405 crore.

Among other capital goods stocks, Praj Industries, Siemens, BEML, Thermax, fell by between 0.25% to 1.71%.

India's largest electric equipment maker by sales Bharat Heavy Electricals was flat at Rs 2256.10. As per reports the company has won an order worth Rs 1300 crore for an upcoming thermal power project at Ennore in Tamil Nadu. The power project is being set up by a joint venture between NTPC and the Tamil Nadu Electricity Board (TNEB).

Jet Airways jumped 2.18% after pilots resumed work on Sunday, 13 September 2009, ending a 5-day stir. The pilots, including the four who were sacked, resumed duties, after an amicable agreement was reached between the management and the striking pilots. All international and domestic flights are expected to resume normal operations from today, 14 September 2009.

Among other airline stocks, KingFisher Airlines and SpiceJet fell by between 0.54% to 4.87%.

Tea stocks fell on profit taking after recent gains triggered by jump in tea auction prices due to fall in production. McLeod Russel, Assam Tea & Exports, Harrison Malayalam, Assam Company fell by between 0.86% to 2.19%.

Tea production in India fell by 3% to 127 million kilogram (kg) in July 2009 over July 2008 on a decline in output mainly in West Bengal, though higher realisation pushed up exports marginally, according to the Tea Board.

Sugar stocks on bargain hunting after a recent slide. Shree Renuka Sugars, Balrampur Chini, Bajaj Hindustan, rose by between 0.32% to 2.63%.

Sugar stocks had declined in the past few days on recent reports the Indian government has asked tax authorities to monitor the release of sugar stocks by mills to ensure steady prices and supplies in the festival season when demand peaks.

Kirloskar Oil Engines clocked the highest volume of 1.46 crore shares on BSE. NHPC (1.4 crore shares), Ispat Industries (1.1 crore shares), Cals Refineries (1.06 crore shares) and IFCI (1.05 crore shares) were the other volume toppers in that order.

Tata Steel clocked the highest turnover of Rs 365.19 crore on BSE. Aban Offshore (Rs 176.84 crore), Kirloskar Oil Engines (Rs 170.26 crore), Reliance Industries (Rs 152.31 crore) and Housing Development & Infrastructure (148.79 crore) were the other turnover toppers in that order.