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Friday, January 02, 2009
Govt announces second stimulus
Seeking to reverse the recessionary trend, the government today gave the economy a second stimulus by enabling the industry to borrow more from abroad and FIIs to invest more in the country, besides stepping up public spending.
The package, the last for the current financial year and announced in tandem with rate cuts by RBI, aims at providing much higher and cheaper funds in the economy along with additional expenditure by the Centre and the State to push demand in the country.
While allowing states to access market for borrowing about Rs 30,000 crore to meet additional expenditure, the package provides for liberalisation of External Commercial Borrowing norms and raising FII investment limit in rupee-denominated instruments to $15 billion from $6 billion now.
Focusing on countering the recessionary trends, the package also withdrew exemptions on countervailing duties on cement, TMT bars and structurals that were originally given to contain inflation.
Announcing the package, Deputy Chairman of Planning Commission Montek Singh Ahluwalia said special attention was being paid to housing sector, macro and micro industries and infrastructure sectors through a series of measures, including provision for higher credit and greater liquidity for the non-banking financial companies
Sensex jumps nearly 7%
Expectations of a second government stimulus package for the economy, hopes of further rate cuts by the central bank and buying by the foreign institutional investors, helped the market reverse losses of the preceding week. The market gained in four out of the five trading sessions of the week ended 2 January 2009.
The BSE 30-share Sensex rose 629.30 points or 6.75% to 9,958.22 in the week. The S&P CNX Nifty rose 189.50 points or 6.63% to 3,046.75 in the week.
The BSE Mid-Cap index gained 284.50 points or 9.16% to 3,391.18 and the BSE Small-Cap index jumped 321.91 points or 9.07% to 3,870.45 in the week. Both these indices outperformed the market.
The barometer index BSE Sensex is down 11,248.55 points or 53.04% from its all-time high of 21,206.77 struck on 10 January 2008.
The BSE Bankex (up 8.88% to 5,674.31), the BSE Power index (up 9.23% to 1,908.15), the BSE Capital Goods index (up 10.4% to 7,286.83), the BSE Metal index (up 12.34% to 5,561.24), the BSE Realty index (up 12.34% to 2,472.51) outperformed the Sensex in the week.
The BSE IT index (up 6.27% to 2,284.20) and the BSE Auto index (up 6.65% to 2,521.09) underperformed the Sensex in the week.
FII inflow in December 2008 totaled Rs 1319.10 crore. FIIs pulled out a massive Rs 52,998.70 crore in calendar year 2008, as against an inflow of a huge Rs 71,486.50 crore in calendar year 2007.
Expectations of a second stimulus package, recovery in Asian markets from early fall, firm European markets and higher US index futures boosted the the market on Monday, 29 December 2008. The BSE 30-share Sensex gained 204.60 points or 2.19% at 9533.52.
Interest rate sensitive sectors led the rally on the bourses 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.
Profit booking after two-day gains pulled key benchmark indices lower on the last trading day of 2008. The BSE 30-share Sensex lost 68.85 points or 0.71%, at 9647.31 on Wednesday, 31 December 2008.
Buying in blue-chip shares in the interest rate sensitive banking, auto and realty sectors propelled the key benchmark indices higher on the first day of the new calendar year 2009. The BSE 30-share Sensex advanced 256.15 points, or 2.66% on Thursday, 1 January 2009
Profit booking in IT pivotals capped gains on the bourses in what was a choppy trading session on 2 January 2009. Media reports that the government will announce a second stimulus package at about 18:00 IST to help shore up an economy, and firm global markets supported the domestic bourses. The BSE 30-share Sensex gained 54.76 points or 0.55% to 9,958.22.
India's largest private sector firm by market capitalization and oil refiner Reliance Industries gained 5.93% to Rs 1,283.90 after its unit Reliance Petroleum started processing crude at its 5.80 lakh barrels per day refinery
India's largest private sector bank by net profit ICICI Bank rose 12.74% to Rs 471.20. The bank, on 31 December 2008, cut the benchmark advance rate, or the rate that it charges its top customers, to 16.75% from 17.25% previously. It also cut rates for home loans by 50 basis points. The rates on term deposits have been slashed between 50 to 75 basis points for various maturities.
India's fourth largest IT firm by sales Satyam Computer Service rose 31.2% to Rs 177.55 on buzz of a likely change in management after a recent aborted to bid buy stake in firms in which the management held stake.
India's second largest telecom services provider by sales Reliance Communication rose 22.12% to Rs 250.35 after the company announced a nationwide rollout of GSM-based cellular services.
India's largest electric equipment maker by sales Bharat Heavy Electricals rose 8.31% to Rs 1,408.25 on a recent large order win.
India's largest motorbike maker by sales Hero Honda Motors fell 0.19% to Rs 792.75 on posting a 10% fall in sales in December 2008 over December 2007.
Infosys (up 1.93% to Rs 1,130.95), HDFC Bank (up 4.44% to Rs 1,015.80), Tata Consultancy Services (up 5.34% to Rs 497.30), Wipro (up 6.98% to Rs 242.90), State Bank of India (up 6.89% to Rs 1,330) rose in the week.
India's exports declined by 9.9% in November 2008, posting negative growth for the second month running due to a slowdown in major global markets. Exports dropped to $11.5 billion in November this fiscal, from $12.7 billion a year ago while imports grew by 6.1% to $21.5 billion.
Inflation based on the wholesale price index (WPI) rose 6.38% in the year through 20 December 2008, lower than previous week's 6.61% rise, data released by the government on 1 January 2009, showed.
Rate sensitive stocks lead gains ahead of the RBI's rate cut
Buying demand in interest rate sensitive banking, realty and auto stocks led gains following reports the government will announce a second stimulus package at about 18:00 IST today, 2 January 2009 to help shore up the economy. Firm markets also supported the sentiment. However the barometer index BSE Sensex which breached the psychological 10,000 mark in mid-afternoon trade, later fell below that level on profit booking in IT pivotals in what was a choppy trading session. The Sensex rose 54.76 points or 0.55% at 9,958.22.
After opening on a firm note tracking gains in Asian stocks, the market soon slipped in red before bouncing back in mid-morning trade. The market weakened again as the Sensex slipped into the red in early afternoon trade. The market strengthened later in choppy trade. The BSE Sensex surged past the psychological 10,000 mark in mid-afternoon trade led by gains in interest rate sensitive stocks. Market pared gains in late trade on fall in IT pivotals, with the Sensex falling below 10,000 level.
After trading hours today, 2 January 2009, the Reserve Bank of India (RBI), slashed interest rates. The RBI cut the repo rate and the reverse repo rate by 100 basis points each. It cut the cash reserve ratio (CRR) by 50 basis points. Repo rate is the rate at which RBI lends to commercial banks and reverse repo rate is the rate at which RBI accepts deposits from banks. CRR is the amount of mandatory funds that commercial banks have to keep with RBI.
Meanwhile, as per reports, the government will today, 2 January 2009, unveil a second stimulus package to give the economy traction through measures aimed at aiding specific sectors, including auto, realty and small and medium enterprises. It had on 7 December 2008 announced a multi-billion package to prop up demand in all these segments, besides giving a push to infrastructure financing.
The government is also reportedly targeting an investment of Rs 1 lakh crore in the infrastructure sector over the next two years. With private sector investments drying up due to tight monetary condition the demand for massive government-backed spending on infrastructure has gained momentum. Such spending raises the demand for steel, cement and capital equipment, which, in turn, has a cascading effect on the other segments of the economy.
A survey on Friday, 2 January 2009, showed Indian manufacturing activity contracted in December 2008 to its lowest in more than 3-1/2 years as the impact of the global slowdown on Asia's third-largest economy deepened. The ABN AMRO Bank purchasing managers' index (PMI), based on a survey of 500 companies, fell to a seasonally adjusted 44.4 in December, falling for the fourth consecutive month to its lowest since the survey began in April 2005 and below November's 45.8. A reading above 50 signals economic expansion while a figure below 50 suggests contraction.
European markets gained after energy firms in Germany, France, Poland, Romania, Austria and Italy said on Thursday, 1 January 2009 they had not yet seen any drop in supply. Key benchmark indices in UK, Germany and France were up by between 1.16% and 2.59%.
Asian markets were trading firm today, 2 January 2009 amid speculation government policies will help shelter the region from the global recession. Key benchmark indices in Hong Kong, Singapore, and South Korea were up by between 0.05% and 4.55%. Stocks markets in Japan, China, Taiwan are closed on account of New Year holiday. US markets also remained shut on Thursday, 1 January 2009, on account of New Year holiday.
The BSE 30-share Sensex gained 54.76 points or 0.55% to 9,958.22. The Sensex opened 88.37 points higher at 9,991.83. At the day's high of 10,070.28, the Sensex 160.82 gained points in mid-afternoon trade. The Sensex lost 39.60 points at the day's low of 9,863.86 in early trade.
The S&P CNX Nifty rose 13.30 points or 0.44% at 3046.75. Nifty January 2009 futures were at 3055.35, at a premium of 8.60 points as compared to the spot closing.
The BSE Sensex has risen 629.30 points or 6.74% from its recent low of 9328.92 on 26 December 2008. The barometer index lost 10639.68 points or 52.44% in the calendar year 2008, on global financial crisis. Nifty lost 3179.45 points or 51.79% in 2008.
The BSE Sensex had seen a sustained bull run during five years from 2002 to 2007, 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 1700 shares advancing as compared with 835 that declined. 83 shares remained unchanged.
The BSE Mid-cap index gained 72.08 points or 2.17% at 3,391.18 and the BSE Small-Cap index rose 60.04 points or 1.58%, to settle at 3,870.45, outperforming the Sensex.
The total turnover on the BSE amounted to Rs 4259 crore as compared to Rs 3089 crore on Thursday, 1 January 2009. Turnover in NSE's futures & options (F&O) segment surged to Rs 31,631.68 crore, from Rs 22,397.66 crore on Thursday, 1 January 2009.
The BSE Realty index (up 2.07%), the BSE Capital Goods index (up 0.67%), the BSE Power index (up 1.33%), the BSE Consumer Durables index (up 2.44%), the BSE PSU index (up 0.59%), Bankex (up 1.60%), and BSE Oil & Gas index (up 1.32%), the BSE FMCG index (up 0.73%), the BSE Metal index (up 0.59%), outperformed the Sensex.
The BSE Auto index (up 0.01%), BSE Teck index (down 0.96%), the BSE IT index (down 1.25%), the BSE HealthCare index (up 0.11%), underperformed the Sensex.
Among the 30-member Sensex pack, 16 advanced and the rest slipped.
Infrastructure stocks on reports that the government is targeting an investment of Rs 1,00,000 crore in the infrastructure sector within the next two years. India's largest private sector power generation firm by sales Reliance Infrastructure jumped 4.21% to Rs 638.20 and was the top gainer from the Sensex pack.
GVK Power & Infrastructure surged 4.24% to Rs 24.60 after a block deal of 6.78 lakh shares was executed on BSE at Rs 25.50 a share. The block deal constituted 0.05% of the company's equity.
Era Infra Engineering jumped 9.90% to Rs 79.20 at on bagging orders totaling Rs 294.15 crore. The company announced the order win during trading hours today, 2 January 2009.
IVRCL Infrastructure (up 7.15% to Rs 161), GMR Infrastructure (up 9.8% to Rs 85.90), and (up 3.30% to Rs 36), rose
Metal stocks gained on hopes global metal prices will recover due to production cuts resorted by many firms globally. Hindalco Industries (up 3.60% to Rs 56.15), Steel Authority of India (up 1.51% to Rs 84), National Aluminium Company (up 3.54% to Rs 205), also logged gains.
India's largest private sector steel maker by sales Tata Steel gained 0.63% to Rs 230.20. As per reports, Tata Steel's first priority is to complete the current expansion work at its Jamshedpur plant as soon as possible and would take up work on its planned greenfield projects, including that in Jharkhand, in phases.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) advanced 2.89% to Rs 1289.80 after its unit Reliance Petroleum (RPL) started processing crude at its 5,80,000 barrels per day refinery last week. The stock recovered from an early low of Rs 1252. Meanwhile, RIL has denied media reports of it reaching an out-of-court settlement with Anil Ambani's Reliance Natural Resources (RNRL) over the KG basin gas dispute.
Realty shares rose on hopes of further sops in the second government stimulus package to boost the ailing sector. DLF (up 3.79% to Rs 302.80), Housing Development & Infrastructure (up 1.71% to Rs 143), and Unitech (up 5.06% to Rs 46.75), edged higher.
Banking shares advanced on speculation falling bond yields and lower rates would accelerate loan growth and profitability. India's largest private sector bank by net profit ICICI Bank gained 1.50% to Rs 471 after it cut its main lending rates by 50 basis points from Wednesday, 31 December 2008
India's second largest private sector bank by net profit HDFC Bank rose 0.35% to Rs 1016. India's biggest bank in terms of total assets and branch network, State Bank of India, vaulted 1.09% to Rs 1330.10.
India's largest truck maker by sales Tata Motors galloped 3.10% to Rs 176.25 on reports it is ready to roll out first batch of the world's cheapest car, Tata Nano, from its manufacturing unit in Pantnagar. It will roll out the car in early 2009 and it is expected that it will start booking for the car by March 2009.
Maruti Suzuki India fell 0.91% to Rs 544 after its sales declined 10% to 56293 units in December 2008 from December 2007. The company announced the monthly sales data during trading hours yesterday, 1 January 2009.
Telecom pivotals were mixed amid reports that the finance ministry has asked the Department of Telecom (DoT) to double the reserve price for pan-India third generation (3G) spectrum to Rs 4,040 crore. India's largest cellular services by sales Bharti Airtel fell 1.89% to Rs 706. India's second largest cellular services by sales Reliance Communications advanced 2.57% to Rs 251.70.
Similarly, the Finance Ministry has also asked to double the reserve price for wireless broadband services, known as WiMAX, to Rs 2,020 crore for pan-India allocation. Early this week, the DoT had issued the revised schedule for auctioning 3G spectrum and as most of the domestic players were getting ready to participate in the bidding process, However, the Finance Ministry's intervention could delay the process. If this recommendation is accepted, it could significantly raise the cost of 3G spectrum for operators and subsequently, the pricing of 3G services could also be unattractive for a significant number of users to adopt these services, which would lead to 3G services not taking off in a big way in the country
Cement shares slipped on reports cement firms may see tougher times this year due to huge capacity additions and due to the slowdown in real estate sector. ACC (down 0.18% to Rs 495), Grasim (down 1.06% to Rs 1213), Ambuja Cement (down 2.26% to Rs 69.15), and UltraTech Cement (down 1.15% to Rs 392), slipped.
Outsourcing focussed IT firms declined as fears a weak global economy would cut the amount firms spent on technology offset a weaker rupee. India's fourth largest IT exporter by sales Satyam Computer Services slumped 2.88% to Rs 177.10 on profit booking after a 35.12% rally in one week to 1 January 2009 on buzz of a likely change in management after a recent aborted to bid buy stake in firms in which the management held stake. It was the top loser from the Sensex pack.
Also concerns about renewal of contracts by the existing prestigious clients across the globe weighed on the stock on reports Forrester Research, a global IT analyst company, has warned its customers to watch Satyam before renewing the contracts or awarding fresh ones.
India's second largest IT exporter by sales Infosys shed 1.70% to Rs 1127.95. Reportedly the company is looking at a closer integration between its technology and BPO businesses to beat the slowdown blues. The move is expected to maximise profits for the tech bellweather at a time when billing rates are under pressure and customers want more value for the same price.
India's third largest IT exporter by sales Wipro slipped 2.40% to Rs 242. But India's largest IT exporter by sales Tata Consultancy Services rose 0.27% to Rs 498 on recent reports the company is likely to win two large BPO contracts estimated at $512 million following its acquisition of Citigroup Global Services in late 2008.
The rupee slipped to 48.89 per dollar from 48.76 on Thursday, 1 January 2009. A weak rupee boost operating margins of IT firms as IT companies derive a lion's share of revenue from exports.
India's largest drugmaker by sales, Ranbaxy Laboratories rose marginally by 0.06% to Rs 250.10. The stock slipped to day's low of Rs 242.60 on reports the company has missed a deadline to launch an anti-migraine drug in the US. Ranbaxy was expecting to earn almost $100 million from the drug, a low-cost version of GlaxoSmithKine-owned Imitrex.
State run oil marketing firms rose after US light, sweet crude fell $1.87 to $42.73 a barrel today, 2 January 2009 on profit booking after 14% surge on Wednesday, 31 December 2008. HPCL (up 0.68%), BPCL (up 1.33%), and IOC (up 0.97%), gained. Lower oil prices will reduce underrecoveries at the state-run oil firms on domestic sale of LPG and kerosene at a controlled price. Oil firms are making profit on sale of petrol and diesel thanks to a sharp fall in crude oil prices over the past few months.
Satyam Computer Services was the top traded counter on BSE with turnover of Rs 268.06 crore followed by Reliance Industries (Rs 263.48 crore), Reliance Natural Resources (Rs 189.26 crore), DLF (Rs 162.74 crore) and HDFC (Rs 160.87 crore).
Unitech led the volume chart on BSE clocking volumes of 3.32 crore shares followed by Reliance Natural Resources (3.02 crore), GVK Power Infrastructure (2.03 crore), Suzlon Energy (1.97 crore) and Satyam Computer Services (1.51 crore).
Among the small and mid-cap stocks, India Infoline (up 20.69%), Tanla Solutions (up 17.01%), Core Projects (up 14.29%), Nagarjuna Construction (up 14.71%), Entertainment Network (up 13.52%), Thomas Cook (up 13.02%), INOX Leisure (up 19.91%), JBF Industries (up 20%), Walchandnagar (up 15.69%), Nitco Tiles (up 11.97%), Unichem Laboratories (up 11.62%), surged.
Gujarat Alkalies and Chemicals spurted 11.99% to Rs 81.25 on reports its shareholders blocked the state government's demand to contribute a large part of company's profits to various social projects.
Transgene Biotek was locked at 5% upper circuit filter at Rs 20.35 on receiving regulatory nod for manufacturing four drugs. The company made this announcement during trading hours today, 2 January 2009.
Neyveli Lignite Corporation rose 2.38% to Rs 71.45 after the company said its board approved fund raising plan for the projects presently under implementation. This is a positive development as the company's projects will not be put on hold due to cash crunch.
United Phosphorus rose 6.48% to Rs 115.80 on reports the firm is looking at acquisitions in Latin America and East Europe to expand its footprint in the global market.
Closer to 10K
The market showed no signs of cooling off and remained extremely bullish on across-the-board buying support all through the day. Spearheaded by robust gains in several heavyweights, Sensex commenced firm above 9,950 and soon surpassed 10,000. Maintaining its upward bias the 30-stock index notched up gains as buying in consumer durable, realty and banking stocks lifted the index to an intra-day high of 10,070. Sensex finally signed off at 9,958, up 55 points, while Nifty rose 13 points to close at 3,047.
The market breadth was extremely positive. Of 2,600 stocks traded on BSE, 1,702 stocks advanced, whereas 820 stocks declined. Seventy eight stocks ended unchanged. On sectoral front, BSE CD advanced 2.44% followed by BSE Realty (up 2.07%), BSE Bankex (up 1.60%), BSE Power (up 1.33%) and BSE Oil (up 1.32%).
Among gainers, Hindalco Industries surged 3.23% at Rs55.95, DLF soared 3.03% at Rs300.60, Reliance Infrastructure advanced 2.96% at Rs630.50, HDFC jumped 2.67% at Rs1544.95, Tata Motors added 2.57% at Rs175.35, Reliance Industries was up 2.41% at Rs1,283.90 and Reliance Communications added 2.02% at Rs250.35. Mahindra & Mahindra, ITC, ICICI Bank , State Bank of India, National Thermal Power Corporation and Bharat Heavy Electricals Ltd also ended with strong gains. However, Satyam Computer Services, Bharti Airtel, Wipro, Tata Power, Infosys Technologies and Hindustan Unilever crept marginally lower.
Over 3.31 crore shares of Unitech changed hands on BSE followed by Reliance Natural Resources (3.02 crore shares), GVK Power & Infrastructure (2.03 crore shares), Suzlon Energy (1.96 crore shares) and Satyam Computer Services (1.51 crore shares).
BSE Bulk Deals to Watch - Jan 2 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
2/1/2009 532935 ARIES AGRO WF INDIA RECONNAISSANCE FUND LIMITED S 94958 39.48
2/1/2009 505506 AXON INFOTEC BDS SHARE BROKERS PVT LTD B 4415 11.00
2/1/2009 505506 AXON INFOTEC DR. VIVEK ISHWAR HEBBAR B 4241 11.33
2/1/2009 526033 CRYSTAL SOFT MINABEN THAKORLAL MODI B 61000 8.21
2/1/2009 526033 CRYSTAL SOFT KAUSHAL NIRANJAN SHAH S 58808 8.22
2/1/2009 500033 FORCE MOTR SUDHA COMMERCIAL CO. LTD. B 105153 79.50
2/1/2009 500033 FORCE MOTR PINNACLE TRADES INVESTMENTS S 88253 79.50
2/1/2009 530945 GANGOTRI I&S SPJSTOCK B 70000 8.98
2/1/2009 526179 LUDLOW JUTE MEGA RESOURCES LTD S 57905 10.21
2/1/2009 502587 RAMA PUL PAP LOKESWARA REDDY MUTRA B 71300 5.21
2/1/2009 522207 RASAND ENG I PINNACLE TRADES AND INVESTMENTS LTD. B 143500 24.90
2/1/2009 522207 RASAND ENG I VINCENT COMMERCIAL CO LTD S 143500 24.90
2/1/2009 531898 SANGUINE MD COMFORT INTECH LIMITED S 113639 6.50
2/1/2009 531373 SUAVE HOTEL COMMERCIAL CONCEPT PRIVATE LIMITED B 38988 18.40
2/1/2009 531249 WELL PACK PA GANDHI MANISHA NAVNEETLAL B 25000 27.90
2/1/2009 531249 WELL PACK PA SAMIR SURESHCHANDRA SHAH B 40000 27.90
2/1/2009 514470 WINSOME TEXT NITABEN SHAILESHBHAI PATEL B 30647 25.94
NSE Bulk Deals to Watch - Jan 2 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
02-JAN-2009,HCIL,HIMADRI CHEMICALS AND IND,HIMADRI DYES & INTERMEDIATES LTD,BUY,350000,126.64,-
02-JAN-2009,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,BUY,2169650,145.18,-
02-JAN-2009,NITINFIRE,Nitin Fire Protection Ind,AJAY NATVARLAL SHARES & STOCKS PRIVATE LIMITED,BUY,24331,212.39,-
02-JAN-2009,NITINFIRE,Nitin Fire Protection Ind,SUNDARAM MF,BUY,125000,208.00,-
02-JAN-2009,PSTL,Pyramid Saimira Theatre L,NIRMAL NARENDRA KOTECHA,BUY,1449,42.40,-
02-JAN-2009,RAJTV,Raj Television Network Li,YUVAK SHARE TRADING PVT LTD,BUY,69430,56.68,-
02-JAN-2009,HCIL,HIMADRI CHEMICALS AND IND,DAMODAR PRASAD CHOUDHARY,SELL,350000,126.64,-
02-JAN-2009,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,SELL,2164650,145.27,-
02-JAN-2009,NITINFIRE,Nitin Fire Protection Ind,AJAY NATVARLAL SHARES & STOCKS PRIVATE LIMITED,SELL,99469,208.19,-
02-JAN-2009,PSTL,Pyramid Saimira Theatre L,NIRMAL NARENDRA KOTECHA,SELL,141449,42.78,-
02-JAN-2009,PSTL,Pyramid Saimira Theatre L,PUNJAB NATIONAL BANK,SELL,155549,41.80,-
02-JAN-2009,PSTL,Pyramid Saimira Theatre L,PUNJAB NATIONAL BANK,SELL,200000,43.50,-
02-JAN-2009,RAJTV,Raj Television Network Li,YUVAK SHARE TRADING PVT LTD,SELL,71090,56.64,-
02-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,IL AND FS TRUST COMPANY LIMITED,SELL,4427000,176.00,-
Investment Ideas - 2009
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Equities seen firm on muted turnover
Key benchmark indices are likely to open firm tracking gains in Asian indices. However trading volumes may take a hit for the second running day, as most global markets remain shut on account of New Year celebrations.
Asian markets were trading firm today, 2 January 2008 amid speculation government policies will help shelter the region from the global recession. Hong Kong's Hang Seng rose 1.68% or 242.27 points at 14,629.75, Singapore's Straits Times gained 1.60% or 28.16 points at 1,789.72 and South Korea's Seoul Composite was up 0.42% or 4.74 points at 1,129.21. Other key Asian markets including Japan, China, Taiwan are closed today, 2 January 2009 on account of New Year celebrations.
US markets also remained shut on Thursday, 1 January 2008, on account of New Year celebrations.
Back home, mutual funds bought shares worth Rs 160.41 crore while foreign institutional investors (FIIs) were net buyers worth Rs 92.04 crore on Thursday, 1 January 2009, according to provisional data on NSE.
Buying in bluechip shares in the interest rate sensitive banking, auto and realty sectors propelled the key benchmark indices higher on the first day of the new calendar year 2009. The BSE 30-share Sensex advanced 256.15 points, or 2.66%, to 9,903.46 and the S&P CNX Nifty gained 74.30 points, or 2.51%, to 3,033.45 on Monday, 1 January 2009.
Turnover may take a hit for the second running day today, 2 January 2009. The total turnover on the BSE amounted to Rs 3076 crore on 1 January 2009, much lower than Rs 3746 crore on Wednesday, 31 December 2008. Turnover in NSE's futures & options (F&O) segment also dipped to Rs 22,397.66 crore on 1 January 2009, lower than Rs 30,033.26 crore on Wednesday, 31 December 2008.
Trading Calls - Jan 2 2009
Nifty (3033) Sup 2990 Res 3075
Buy Indian Bank (145) SL 141
Target 151, 154
Buy Lanco Infra (163) SL 159
Target 170, 172
Buy Bank Of India (295) SL 290
Target 303, 307
Buy PNB (532) SL 427
Target 540, 543
Sell Wipro (248) SL 252
Target 240, 237
Daily News Roundup - Jan 2 2009
SBI and Bank of India abandon plans to revive branches in Pakistan. (FE)
Automobile Corporation of Goa, an associate company of Tata Motors, has decided to temporarily shut one of its plants in Goa. (ET)
Jindal Stainless buys chrome ore assets in Middle East and Europe. (ET)
Leela Hotel Group to launch 3 hotels this year. (ET)
Infosys may integrate IT & BPO operations to cut costs and add value. (ET)
Ravi Uppal takes charge as L&T Power MD & CEO. (ET)
13 PSU oil companies officers to go on an indefinite strike from January 7, 2009. (ET)
NABARD cuts refinance rate by 50bps.(FE)
Suryachakra Power Corp’s wholly-owned subsidiary, South Asian Agro Industries Ltd, 10MW biomass power project in Champa, Maharashtra commenced operations. (BL)
Godrej Consumer Products has bought back 2.4m shares for Rs31.1m under its buyback offer. (BS)
Alok Industries has decided to increase its proposed rights issue by 50% to Rs4.5bn from the earlier Rs3bn. (BS)
GAIL India buys LNG from Shell India at $11.7 per mmbtu to fill supply gap. (BS)
Maytas Infrastructure will continue to execute Hyderabad Metro Project. (BS)
GSPC is set to reduce prices of retail gas following sharp reduction in energy prices globally. (BS)
Hudco has approved a Rs1.4bn loan for the upgrade of two Uttar Pradesh thermal power plants. (BS)
Inflation slipped further to 6.38% for week ended December 20. (ET)
Exports fall 10% in November to US$11.5bn. (ET)
Finance ministry has asked the telecom department to double the floor price for 3G and wireless broadband spectrum. (ET)
Indian Paper Manufacturers Association (IPMA) wants 5% hike in basic custom duty on import of paper and paper boards (FE)
I&B Ministry has turned down Trai proposal on monitoring cable service quality (FE)
Ministry of Steel has recommended a countervailing duty of 10% to the Ministry of Finance.
Country’s crude and natural gas production fell 4.3% and 28.6% respectively. (ET)
Government may tighten sugar exports. (ET)
Bank lending surges 76% during April – November. (ET)
Steel makers have decided not to reduce steel prices in January. (FE)
Indian retail industry grew by 10-12% in 3QFY09 compared to 35-38% growth in the corresponding period last year. (FE)
Government targets Rs1trn investment in infrastructure sector within the next two years. (BS)
Funds raised via ECB’s by Indian Corporates dropped by 35%. (BL)
Strong start, remember history!
History is the version of past events that people have decided to agree upon.
The headlines may scream that the bulls made a strong start to the new year after being through horrific times last year. However, the devil is always in the detail. And, it shows that trading volume and turnover fell sharply from Wednesday. What may lure gullible investors is the fact that around 450 shares (mostly small-cap and mid-cap) were locked at upper circuit. One should be extremely careful while buying scrips with questionable background. In any case, there are enough doubts whether the recent spurt in the market can sustain given the uncertain environment and lack of strong FII inflows.
Continuous fall in inflation may bring some cheer, as it heightens expectations of rate cuts. But one cannot overlook other weak data points like the BoP slipping into a deficit and exports falling for a second month. Auto sales remained sluggish in December. Reports say the Government may announce its second stimulus package on Saturday. There is no official confirmation of the same. The RBI may also join the pump-priming effort, but by how much is the moot point. Even if the anticipated events do materialise, they may provide only a temporary fillip. Anxiety over corporate earnings may takeover after a brief rally.
Coming to today's outlook, we expect the market to open on a cautious note after Thursday's sudden spurt. Markets in Hong Kong, Singapore and Seoul are up 1-2% , but they were shut yesterday. Several global markets will continue to observe an extended New Year holiday though the US will resume trading today.
The key indices may turn sideways after what looks like a flat opening. Though the undertone has improved of late, the market lacks vigour and strength to rise too far from here. The upside appears capped as selling may kick in at higher levels. A rangebound pattern is what looks to be the best bet.
Foreign and domestic funds were net buyers on Thursday at Rs920.4mn and Rs1.6bn, respectively, according to provisional data from the NSE.
Most global markets were shut for New Year on Thursday.
In Asia, the Hang Seng in Hong Kong was last up 2% at 14,684 while the Straits Times in Singapore was up 1.7% at 1791. The Kospi in Seoul was last seen up over 1% at 1140.
Important News:
Finance ministry has asked the DoT to double the floor price for 3G and wireless broadband spectrum. (ET)
Steel makers have decided not to reduce steel prices in January. (FE)
Ranbaxy has missed its December 2008 deadline to launch an anti migraine drug as the US regulator has not given its approval. (ET)
Kingfisher Airlines, India's second-largest airline, has slashed 20% cent of its domestic flights and is now operating around 440 flights. (BS)
Shipping Corporation of India (SCI) plans to invest around US$3bn for acquiring 40 ships to double its tonnage capacity to around 10mn dwt by 2015. (BL)
Matrix Labs received final approval from USFDA for its ANDA for stavudine capsules (FE)
Government stake in UCO Bank to decline due to capital restructuring scheme. (FE)
GACL’s shareholders have disapproved governments decision to contribute 30% of pre-tax profits for various social projects. (ET)
Jindal Stainless buys chrome ore assets in Middle East and Europe. (ET)
Hotel Leelaventure plans to launch 3 hotels this year. (ET)
Infosys may integrate IT & BPO operations to cut costs and add value. (ET)
NMDC proposes 10m ton steel plant in Karnataka. (FE)
NPCIL-NTPC to ink JV pact for two nuclear power plants. (FE)
Hindustan Construction advances phase II work of Lavasa project. (FE)
NTPC plans to bid for the upcoming UMPPs. (BL)
Bajaj Auto plans to launch a new motorcycle this month, targeted at the ‘Sports Commuter’ segment. (BL)
Alok Industries has decided to increase its proposed rights issue by 50% to Rs4.5bn from the earlier Rs3bn. (BS)
GAIL India buys LNG from Shell India at $11.7 per mmbtu to fill supply gap. (BS)
Maytas Infrastructure will continue to execute Hyderabad Metro Project. (BS)
GSPC is set to reduce prices of retail gas following sharp reduction in energy prices globally. (BS)
Bulls started off the year 2009 with an upbeat, as Indian benchmark indices ended the first trading session of the year with healthy gains. After a steady start and trading in a range in the first half of the day, markets surged higher surging past the 3,000 mark.
Sentiment got a boost as the country’s inflation fell to a 10-month low in the third week of December due mainly to falling fuel prices, the Government said on Thursday. The annual inflation rate stood at 6.38% in the week ended Dec 20 versus 6.61% in the previous week. It was more or less in line with expectations of 6.35-6.45%.
The late rally was also led by the realty, metals, capital goods and IT stocks. Also the mid-cap and the small-cap stocks were in demand again. Finally, the BSE benchmark Sensex ended at 9,910 adding 263 points and the NSE Nifty index ended at 3,033 advancing 74 points.
All the BSE Sectoral indices ended in the positive terrain with BSE Realty index (up 7.5%), BSE Metal index (up 6%), BSE Capital Goods index (up 5%) and BSE IT index (up 4.1%).
Market breath was positive, 1,992 stocks advanced against 504 declines, while, 63 stocks remained unchanged.
Shares of Omaxe advanced by 3.7% to Rs66 after reports stated that the company received an order worth Rs2bn to build two jails in Punjab. The scrip touched an intra-day high of Rs67 and a low of Rs64 and recorded volumes of over 82,000 shares on NSE.
Shares of PTC India have gained by 1% to Rs69 after reports stated that the company would set up a joint venture with Singapore-based firm Asian Infratech for identifying and acquiring companies overseas. The scrip touched an intra-day high of Rs71 and a low of Rs69 and recorded volumes of over 1,00,000 shares on BSE.
Shares of Alok Industries surged by over 6% to Rs19 after the company announced that it has planned to increase size of proposed rights issue. The company said that, the board of directors of the company would meet on January 3 to discuss over the size of rights issues. The scrip touched an intra-day high of Rs19.4 and a low of Rs18 and recorded volumes of over 5,00,000 shares on NSE.
Gains may continue
The positive open in several Asian indices may help the domestic indices gain further. Among the key indices, the Nifty can see an up- move till 3,080 levels and has a key support at 3,000 levels in the near-term. The Sensex has a likely support at 9,750 and may face resistance at 10,050.
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