Tata Steel tumbles 4%

The key benchmark indices lost ground in choppy trade as weak global stocks weighed on investor sentiment. The BSE Sensex fell 102.46 points or 0.59%, off close to 100 points from the day's high and up close to 70 points from the day's low. Metal and banking stocks led the decline. Index heavyweight Reliance Industries (RIL) came off the day's low. IT stocks rose.

Intraday volatility was high. The market recovered soon after an initial slide caused by weak Asian stocks. It came off the higher level soon. The recovery resumed once again in mid-morning trade with the Sensex hitting positive zone for a brief period tracking higher US index futures. The market weakened once again later. The market came off the lower level after hitting a fresh intraday low in early afternoon trade. The market weakened again in late trade before cutting losses.

India VIX, a volatility index based on the S&P CNX Nifty index option prices, rose 2% to 26.99. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days.

Meanwhile, Mumbai based realty firm Godrej Properties' initial public offering (IPO) of was subscribed 1.23 times by 16:00 IST on the first day of the issue today, 9 December 2009. The price band is at Rs 490-530 per share. The issue will close on 11 December 2009.

The initial public offer (IPO) of JSW Energy, a part of Sajjan Jindal-led JSW Group, was subscribed 1.65 times by 16:00 IST on the last day of issue today, 9 December 2009. The price band for the IPO is Rs 100 to Rs 115.

The government does not need to borrow more than planned to fund its additional proposed expenditure, Finance Minister Pranab Mukherjee said on Tuesday. The government said on Tuesday it will seek parliamentary approval to spend an extra Rs 25725-crore ($5.5 billion) for the fiscal year to end-March 2010.

The gross additional expenditure would be Rs 30943 crore, of which 5217 crore would be met through savings, the government said. The government will spend an extra Rs 3000 crore on fertiliser subsidies and Rs 3460 crore on food subsidies. The government would also spend Rs 800 crore on an equity infusion in state-run carrier Air India.

Capital inflows into India reflect investor confidence in the economy, the Reserve Bank of India (RBI) governor D Subbarao said on Monday 7 December 2009 at a televised panel discussion, although measures to control them could not be ruled out in case there was a surge in foreign funds that needed to be contained. "Going ahead should there be a surge of capital flows, I think we cannot rule out active capital management," Subbarao said. The RBI governor said he is not willing to debate at this time on the instruments or timing, as this will depend on how the situation evolves.

"In the medium term, task is to improve absorptive capacity of the economy. But going forward calibrating reserves roughly corresponding to current account deficit is the task," Subbarao said. C. Rangarajan, chairman of the Prime Minister's Economic Advisory Council, said in the discussion that inflows in the current year would be manageable. Rangarajan had said late last month that India could absorb as much as $100 billion of capital flows in 2009/10, well above a projected $57-$60 billion.

The Reserve Bank of India (RBI) may reportedly ask banks to impose a ceiling on their investments in mutual funds and also prescribe norms for such investments, as it attempts to tighten rising exposure and rein in deployment of banking funds indirectly in sectors or companies to which banks could not lend directly due to exposure limits.

European shares were lower on Wednesday, paced by falls in energy stocks and drugmakers as investors awaited fresh direction, possibly from the UK pre-budget report. The key benchmark indices in France, UK and Germany fell by between 0.16% to 0.35%.

There was plenty for investors to worry about, after Tuesday's ratings downgrade for Greece and a raft of Dubai government-controlled companies.

UK banks HSBC Holdings, Standard Chartered, Lloyds Banking Group and Royal Bank of Scotland have reportedly agreed to reschedule Dubai World's debt. The four banks have asked for more information from Dubai World about interest on the planned delayed payments and will hold a meeting later this month as they await a response, Dubai's Al Bayan newspaper said. It added that Dubai World is seeking to restructure around $26 billion of debt.

Meanwhile, Greek Finance Minister George Papaconstantinou said in a television interview on Wednesday that there is no risk Greece will default on its debt. Fitch Ratings on Tuesday downgraded Greece's sovereign debt rating to BBB+ from A-, making the nation the first in the euro zone to be rated less than single A.

Asian shares were lower Wednesday as renewed risk aversion gripped markets after Wall Street's sharp decline on Tuesday, while weaker-than-expected economic growth data in Japan hurt stocks there. The key benchmark indices in China, Hong Kong, Japan, Singapore and Indonesia fell by between 0.3% to 1.73%. But the key benchmark indices in South Korea and Taiwan rose by between 0.37% to 0.39%.

Japan's Gross domestic product rose at an annual 1.3% pace in September quarter, slower than the 4.8% reported in preliminary figures last month, the Cabinet Office said today in Tokyo.

Shares in China were being led lower by banks on concerns of capital raising leading to massive stock supply. Industrial Bank Co. said its shareholders had approved its plan to raise CNY18 billion in a rights issue to boost the lender's capital adequacy ratio and support rapid lending growth in the next few years.

China is experiencing a clear V-shaped economic recovery, Zhu Min, vice-governor of the People's Bank of China, was cited as saying on Tuesday.

Trading in US index futures indicated Dow could rise 26 points at the opening bell on Wednesday, 9 December 2009.

US stocks fell on Tuesday as 3M Co's disappointing outlook and a weak sales report from McDonald's Corp compounded investors' concerns about the outlook for a global recovery. The Dow Jones industrial average was down 104.14 points, or 1%, at 10,285.97. The Standard & Poor's 500 Index was down 11.31 points, or 1.03 % at 1,091.94. The Nasdaq Composite Index was down 16.62 points, or 0.76% at 2,172.99.

The BSE Sensex fell 102.46 points or 0.59% to 17,125.22. The Sensex rose 0.28 points at the day's high of 17227.96 in mid-morning trade. The Sensex fell 170.31 points at the day's low of 17057.37 in early afternoon trade.

The S&P CNX Nifty fell 35.95 points or 0.7% to 5112. Nifty December 2009 futures were at 5,126.25, at a premium of 14.25 points as compared to the spot closing of 5,112. Turnover in NSE's futures & options (F&O) segment was Rs 61,314.31 crore, lower than Rs 69,428.98 crore on Tuesday, 8 December 2009.

BSE clocked a higher turnover of Rs 5099 crore, higher than Rs 4968.65 crore on Tuesday, 8 December 2009.

The market breadth, indicating the overall health of the market was positive. On BSE, 1500 shares advanced as compared with 1312 that declined. A total of 76 shares remained unchanged.

Among the 30-member Sensex pack, 17 fell while the rest rose.

A deluge of global liquidity has boosted stocks across the globe this year. Governments and central banks around the world have injected trillions of dollars in the past one year to pull the world out of a most severe recession since the 1930s Great Depression. The Sensex is up 7477.91 points or 77.51% in calendar year 2009, as on 9 December 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 8964.82 points or 109.85% as on 9 December 2009.

Coming back to today's trade, the BSE Mid-Cap index fell 0.58%. The BSE Small-cap index rose 0.36%. Both the indices outperformed the Sensex.

The sectoral indices on BSE showed a mixed trend. The BSE IT index (up 0.81%), the BSE Teck index (up 0.74%), the BSE Auto index (up 0.69%), the BSE PSU index (was flat), the BSE Consumer Durables index (was flat), the BSE Capital Goods index (down 0.19%), the BSE Healthcare index (down 0.29%), the BSE FMCG index (down 0.43%), the BSE Realty index (down 0.5%), the BSE Oil & Gas index (down 0.55%), the BSE Power index (down 0.58%) outperformed the Sensex.

The BSE Metal index (down 2.09%), the BSE Bankex (down 1.58%) underperformed the Sensex

India's largest private sector firm by market capitalisation Reliance Industries (RIL) fell 0.76% to Rs 1072.05 on profit taking. Nevertheless, the stock came off the day's low of Rs 1063 after the company said it has no plans to buy any debt of LyondellBasell. A newspaper had reported on Wednesday that RIL is likely to buy out some of the bankrupt petrochemical company's debt.

The RIL stock had risen 2.33% on Tuesday on reports the company is in talks with more than a dozen banks to ready a $8-10 billion war chest for the acquisition of LyondellBasell, the world's third-largest petrochemical company that has filed for bankruptcy in the US.

Earlier, the RIL stock had tumbled 3.07% on Monday, 7 December 2009, after bonus shares issued by the company were admitted to trading. The company has issued one fully paid bonus equity share for every one existing fully paid equity share of Rs 10 each.

Banking shares fell on profit taking. India's largest private sector bank by net profit ICICI Bank fell 1.92%. ICICI Bank has launched a home-loan scheme under which 8.25% interest rate will be fixed for the first two years. The floating rates will apply after 2 years. These rates will be applicable to loans sanctioned between December 2009 and January 2010. Its ADR rose 0.33% on Tuesday, 8 December 2009.

Kotak Mahindra Bank also announced its new home loan scheme. It has 8.49% fixed rate on home loans for 30 months from the date of the payout of the loan. The stock fell 1.91%.

India's second largest private sector bank by net profit HDFC Bank fell 1.37%. Its ADR fell 0.11% on Tuesday.

India's largest bank by net profit and branch network State Bank of India fell 0.56%. The UPA government last week cleared the introduction of State Bank of India (Amendment) Bill in the current session of Parliament. The Bill seeks to bring the government's holding in the country's largest public sector bank on a par with other public sector banks at 51 %. Currently, the Union government holds 59% stake in SBI. At present, the stake of the promoter, that is Government of India, cannot fall below 55 %.

India's largest mortgage lender by total income Housing Development Finance Corporation (HDFC) fell 2.3%, extending recent losses triggered by investor worry a dual interest rate scheme on home loans introduced by the company would hit margins.

HDFC, last week, announced a dual-rate loan scheme under which a borrower will be charged a fixed rate up to March 2012 and a floating rate thereafter. For a 20-year loan of Rs 30 lakh, a borrower will pay a fixed rate of 8.25% up to March 2012 and then a floating rate that's 500 basis points below the prime lending rate (PLR) - the institution's benchmark rate. Currently, the PLR is 13.75%.

Metal stocks fell after copper fell to its lowest in more than a week on Wednesday, 9 December 2009, as investors trimmed positions in riskier assets following weak economic data and growing sovereign debt troubles. Hindalco Industries fell 3.04%. The company hiked product prices by Rs 3000 a tonnes, with effective from 1 December 2009. Steel Authority of India, National Aluminum Company, Sterlite Industries and Hindustan Zinc fell by between 1.99% to 2.98%.

Tata Steel, the world's eighth-largest steelmaker by sales, fell 4.17%. The company said on Monday its sales rose 34.5% to 498,000 tonnes, in November 2009 over November 2008.

The company on 4 December 2009 announced a partial closure of Corus' Teesside Cast Product (TCP) plant in north England, after four companies stopped buying metal from it. Operations will be suspended at the end of January 2010 forcing the loss of 1,700 jobs around 600 fewer than envisaged earlier, Tata Steel said in a statement.

IT stocks rose on a weaker rupee. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. India's third largest software services exporter Wipro rose 1.19% even as its ADR fell 0.39% On Tuesday. India's largest software services exporter Tata Consultancy Services (TCS) rose 1.2%.

India's second largest software services exporter Infosys Technologies rose 0.66%. Its ADR rose 0.21% on Tuesday. Infosys Technologies is reportedly partnering the Council of Scientific and Industrial Research for its open source drug discovery project that focuses on an efficient way to look for tuberculosis drugs.

The Indian rupee recovered against the dollar after tumbling to its lowest level in almost two weeks. Dollar's slide against the yen and the euro, aided recovery of the Indian unit against the greenback. The partially convertible rupee was at 46.54/55 per dollar, higher than Tuesday close of 46.68/69.

Auto stocks rose on the back of robust sales figures for November 2009. India's second largest bike maker by sales Bajaj Auto rose 1.84%. Bajaj Auto on Wednesday launched a 135 cc Pulsar, pushing the Pulsar brand into the mass segment. Bajaj expects a sell a minimum 30,000 units per month of the new Pulsar model. The automaker had recently refreshed the entire Pulsar lineup and expects total Pulsar sales to cross 80,000 units per month.

The company's total vehicle sales rose 73% to 2.76 lakh units in November 2009 over November 2008. Motorcycles sales jumped 84% to 2.42 lakh units.

India's largest small car maker by sales Maruti Suzuki India rose 2.54% after Japan's Suzuki Motor said on Wednesday it will sell a 19.9% stake to Volkswagen (VW) for $2.5 billion and use half the proceeds to buy shares in the German automaker, as the two firms form a formidable force in the auto industry. Japan's Suzuki has a 54.2% stake in Maruti Suzuki India

Suzuki's chief told the media on Wednesday that the company will cooperate with VW in India by sharing common components. VW's chief Winterkorn said the firm will pursue synergies in India between Suzuki, Volkswagen, Skoda brands.

Maruti's total vehicle sales spurted 66.60% to 87,807 units in November 2009 over November 2008. Domestic sales spurted 60.10% to 76,359 units, while exports surged 128.60% to 11,448 units in November 2009 over November 2008.

India's largest motorcycle maker by sales Hero Honda Motors rose 1.74%. The company's total vehicle sales jumped 32% to 3.81 lakh units in November 2009 over November 2008.

But, India's top tractor marker by sales Mahindra & Mahindra (M&M) fell 0.31%. Mahindra & Mahindra will reportedly launch its first truck under a joint venture (JV) with Navistar, North America's largest commercial truckmaker, next month. The company's domestic auto sales soared 105.1% to 21,387 units in November 2009 over November 2008. M&M sold a total of 22,587 vehicles (domestic plus exports) in November 2009 as against 11,515 vehicles sold in November 2008.

India's top truck maker by sales Tata Motors fell 0.56%. The company's total sales zoomed 65.49% to 54,108 units in November 2009 over November 2008.

Tata Motors' total passenger vehicle sales in the domestic market grew by 44.52% at 20,706 units last month, against 14,327 units in the same month last year. Exports jumped by 86.64% at 3,994 units, compared with 2,140 units in the same month last year, it added.

Car sales in India rose an annual 61% to 1,33,687 in November 2009 over November 2008, boosted by improved consumer sentiment, easier availability of loans and a low sales base a year earlier, an industry body said on Tuesday. Sales of trucks and buses, a gauge of economic activity, doubled to 40,847 units in November from 20,631 a year earlier, data from the Society of Indian Automobile Manufacturers showed.

Auto ancilliary stocks rose on surge in auto sales over the past few months. Banco Products, Gabriel India, Amtek Auto and Exide Industries rose by between 1.18% to 10%.

India's largest engineering and construction firm by sales Larsen & Toubro fell 0.13%. The company said on Tuesday that it got orders worth Rs 844 crore. Among other capital goods stocks, Siemens, ABB, BEML and Punj Lloyd fell by between 0.05% to 1.14%.

Realty shares fell on profit taking. Omaxe, Indiabulls Real Estate, Unitech fell by between 0.45% to 1.65%.

FMCG shares fell on profit taking. ITC, Tata Tea, Marico, United Spirits fell by between 0.43% to 1.91%.

Cement stocks rose on bargain hunting after recent losses. Recent reports suggested a second wave of cement price hike is on the cards. After prices were up by Rs 5-10 for a 50 kg bag in the last week of November in western and southern India, prices rose by Rs 8-11 a bag in the Mumbai region on 2 December 2009. The next set of price rises would happen in the north which is enjoying comparatively stable prices till now vis-a-vis the south and the west, reports suggest.

India's largest cement producer by capacity ACC rose 0.75%. The company's cement shipments fell 4.04% to 1.66 million tonnes in November 2009 from 1.73 tonnes in November 2008.

Aditya Birla Group's cement shipments rose 15.3% to 2.93 million tonnes in November 2009 over November 2008. Aditya Birla Group last month said it was combining its cement operations under group firm UltraTech Cement to make India's largest cement firm. UltraTech Cement rose 0.8%.

But, India's largest dam builder Jaiprakash Associates fell 1.02% The company posted 48.77% jump in its cement sales to 1.03 million tonnes in November 2008 over November 2008.

India's largest thermal power generator by sales NTPC fell 0.95% The government is planning a 5% stake sale in the firm by March 2010. Among other power stocks, CESC, Tata Power Company, Reliance Infrastructure, Torrent Power fell by between 0.53% to 1.34%.

Telecom stocks rose on reports successful bidders of third-generation (3G) spectrum in the upcoming auctions, scheduled to begin on 14 January 2010, may have to pay only 25% of the bid amount initially and can pay the remaining in the next financial year when they receive the airwaves. India's largest mobile services provider by sales Bharti Airtel rose 0.55%, extending recent gains. Bharti Airtel sees revenue pressured in the short term amid an intense price war in the country's wireless sector, director Akhil Gupta said on Monday.

India's second largest mobile services provider by sales Reliance Communications rose 1.08%. Reliance Communications under-reported its revenue to the telecoms regulator during 2006/07 and 2007/08, the communications minister A Raja said on Monday.

Mobile operators including Bharti Airtel, Vodafone Essar and Reliance Communications are locked in a tariff war, raising concerns about telecom firms' profitability. The price war is aimed at grabbing new users as new firms enter the market.

Cals Refineries clocked highest volume of 3.93 crore shares on BSE. Unitech (1.57 crore shares), Suzlon Energy (1.41 crore shares), IFCI (.15 crore shares) and Radhe Developers (0.82 crore shares) were the other volume toppers in that order.

Tata Steel clocked highest turnover of Rs 175.40 crore on BSE. Unitech (Rs 140.84 crore), DLF (Rs 127.55 crore), Suzlon Energy (Rs 119.43 crore) and Bharti Airtel (Rs 118.98 crore) were the other turnover toppers in that order.