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Monday, January 12, 2009
BSE Bulk Deals to Watch - Jan 12 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
12/1/2009 523207 CAMLIN LIMIT PRAKASH KUMAR SARAOGI B 725000 9.24
12/1/2009 523207 CAMLIN LIMIT MERIDIAN INVESTMENTS S 1000000 9.24
12/1/2009 533026 CHEMCEL AMI STOCK SHARE BROKERS PLTD S 280000 3.78
12/1/2009 526027 CUBEX TUBING MANISHRATILALSHAH B 48000 10.80
12/1/2009 526027 CUBEX TUBING MANISHRATILALSHAH S 48000 10.90
12/1/2009 531646 RFL INTERNAT AVANI NIRAV PARIKH B 35349 1.01
12/1/2009 531646 RFL INTERNAT ISHITA MOHATTA S 59222 1.00
12/1/2009 531646 RFL INTERNAT STUTIBHAGERIA S 91250 1.01
12/1/2009 531646 RFL INTERNAT SHEFALI BHAGERIA S 50000 1.01
12/1/2009 531646 RFL INTERNAT KETAN PRABHASHANKAR JOSHI S 35350 1.01
12/1/2009 531952 RIBA TEXTILE ASSOCIATED CAPSULES PVT LTD S 100000 23.22
12/1/2009 531898 SANGUINE MD KHAITAN WEAVING MILLS LTD S 115380 7.35
NSE Bulk Deals to Watch - Jan 12 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
12-JAN-2009,HCIL,HIMADRI CHEMICALS AND IND,HIMADRI DYES & INTERMEDIATES LTD,BUY,349500,98.00,-
12-JAN-2009,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,BUY,1819866,102.51,-
12-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,GENUINE STOCK BROKERS PVT LTD,BUY,5225124,35.61,-
12-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,P R B SECURITIES PRIVATE LTD,BUY,4071251,35.84,-
12-JAN-2009,HCIL,HIMADRI CHEMICALS AND IND,DAMODAR PRASAD CHOUDHARY,SELL,224500,98.00,-
12-JAN-2009,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,SELL,1819866,102.58,-
12-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,GENUINE STOCK BROKERS PVT LTD,SELL,5225124,35.63,-
12-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,P R B SECURITIES PRIVATE LTD,SELL,4156751,35.89,-
Free fall continues
Nervousness gripped the market for the third consecutive day, as selling pressure since early trades saw the index remain weak all through the trading session. Though the Sensex resumed at 9,316, around 90 points below its previous close and moved up to touch an early high of 9,331 on selective buying, the market soon snapped gains due to selling pressure. As correction continued unabated, the index tumbled below the 9,100 mark to touch an intra-day low of 9,024 by the end of day. While the market languished in the negative territory all through the noon trades, Sensex signed off the session 296 points lower at 9,110. Nifty also ended 2,773, about 100 points lower.
Market breadth was weak. Of the 2,522 stocks traded on BSE, 1,613 stocks declined, whereas 824 stocks advanced. Eighty-five stocks ended unchanged. All sectoral indices ended lower. BSE Metal fell 5.62%, BSE Realty dipped 4.87%, BSE IT shed 3.80% and BSE Power was down 3.67%.
Among draggers, Wipro dropped 10.63% at Rs224, Reliance Infrastructure shed 6.94% at Rs480.45, Tata Steel tumbled 6.62% at Rs200.30, Ranbaxy Laboratories declined 5.46% at Rs206.95 and DLF was down 5.45% at Rs205.75. Bharat Heavy Electricals Ltd at Rs1,344.15, State Bank of India at Rs1156.85, Sterlite Industries at Rs260, Hindalco Industries at Rs50.15 were down around 4-5% each. However only Sun Pharmaceutical Industries and JP Associates managed to close with a gain of 1-2% each.
Metal stocks came under sharp hammering. Jindal Steel slumped 10.46% at Rs822.90, SAIL lost 8.08% at Rs72.80, Tata Steel declined 6.62% at Rs200.30 and Gujarat NRE was down 6.36% at Rs28.70. Sesa Goa, Hindustan Zinc, Sterlite Industries, Hindalco Industries, Jai Corp and JSW Steel dipped 3-5% each.
Over 5.31 crore shares Satyam Computer Services changed hands on the BSE followed by Reliance Natural Resources (1.83 crore shares), Unitech (1.73 crore shares), Suzlon Energy (1.40 crore shares) and DLF (0.78 crore shares).
Market extends losses fall for the third day as heavyweights slide; Satyam recovers
Key benchmark indices, remained in negative zone throughout the day, extending losses for the third straight day on sustained selling in index pivotals. The BSE 30-share Sensex lost 296.42 points or 3.15% to 9,110.05. Concerns about corporate governance standards at Indian firms and weak global markets dampened investor sentiment offset an improved industrial production data.
Worries over the corporate governance standards at Indian firms continued to weigh on the market sentiment after last week' shocking accounting scam at IT major Satyam Computer Services. Satyam's promoter and chairman B Ramalinga Raju resigned on 7 January 2009 saying that he had fudged accounts of the firm. The accounting scandal at Satyam is estimated at over Rs 7,000 crore
Concerns that the Satyam scandal could trigger tighter regulations, also weighed on the market. In a significant decision, the Securities and Exchange Board of India (Sebi) has decided to set up a panel to review all records maintained by auditors on the quarterly results of companies which are a part of the 30-Sensex and the 50-share S&P CNX Nifty. The review will be taken up after the third quarter results (to be announced shortly) and the audited results for the year ended March 2008. The review will also cover some other companies outside the Sensex and Nifty list.
The auditor's main job is to check whether detailed processes have been followed by the company concerned and whether they are fair and accurate. Auditors maintain these papers as a matter of record. Also, if they have reservations about the truth of the numbers, they write to the audit committee and the board before they are carried in the annual reports. The Sebi panel will review all these papers.
Shares of Wipro, India's third largest software services exporter in terms of sales, tumbled 10.63% after the company said it was barred from bidding for contracts from the World Bank until 2011 after it offered employees of the institution shares in its initial public offering. The company made the announcement during trading hours today, 12 January 2009
The broad market was volatile. After an initial 3.29% slide triggered by weak global stocks, the market staged a strong recovery in early afternoon trade. The recovery gathered steam on a better-than-expected industrial production data which hit the market at about 12:00 IST. The recovery proved short-lived and the market weakened again. The market extended losses in mid-afternoon trade on weakness in banking shares and on lower European markets. After a steep slide, the market came off lower level in late trade.
European markets were mostly in the red today, 12 January 2009 amid growing economic concerns in the wake of bleak US jobs data that triggered a sell-off on Wall Street on Friday, 9 January 2009. Key benchmark indices in Germany and France were down by 0.24% and 0.18% respectively. However UK's FTSE 100 rose 0.21%.
Asian markets were weak today, 12 January 2009 as a relentless global economic slowdown renewed investor caution about taking on risk. Key benchmark indices in Taiwan, Hong Kong, China, Singapore, South Korea were down by between 0.24% and 2.83%. Japan's markets were closed for a public holiday.
US stocks fell on Friday, 9 January 2009, after government data showed the labor market deteriorated further in December 2008, raising investor concerns about the outlook for profits, spending and a deepening recession. The Dow Jones industrial average lost 143.28 points or 1.64% to 8,599.18. The Standard & Poor's 500 Index slid 19.38 points or 2.13% to 890.35. The Nasdaq Composite Index fell 45.42 points or 2.81% to 1,571.59.
US payrolls report for December 2008 showed more than half a million jobs were lost in the world's biggest economy. The data also showed unemployment rate in the US was highest since 1993.
The BSE 30-share Sensex lost 296.42 points or 3.15% to 9,110.05. The Sensex opened 99.73 points lower at 9,306.74. The Sensex lost 382.02 points at day's low of 9,024.45 in mid-afternoon trade. At the day's high of 9,327.30, the Sensex fell 79.17 points in early trade.
The S&P CNX Nifty lost 99.90 points or 3.48% at 2,773.10. Nifty January 2009 futures were at 2748.15, at a discount of 24.95 points as compared to the spot closing.
The BSE Sensex has lost 1225.88 points or 11.86% in the last three trading sessions hit by the Satyam scandal. Before the sharp slide, the Sensex had risen 1,007.01 points or 10.79% to 10,335.93 on 6 January 2009 from a recent low of 9,328.92 on 26 December 2008.
The market breadth, indicating the overall health of the market, was weak on BSE with 1612 shares declining as compared with 834 that advanced. 89 shares remained unchanged.
The BSE Mid-Cap index slipped 2.27% at 3,050.01 and the BSE Small-Cap index fell 1.7% at 3,495.25. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 3,203 crore as compared to Rs 4,207.30 crore on Friday, 9 January 2009. Turnover in NSE's futures & options (F&O) segment was Rs 44,953.49 crore, lower than Rs 47,709.01 crore on Friday, 9 January 2009.
All BSE sectoral indices edged lower. The BSE Metal index (down 5.62%), the BSE Realty index (down 4.87%), the BSE Capital Goods index (down 3.63%), the BSE IT index (down 3.80%), the BSE Oil & Gas index (down 3.28%), %), the BSE PSU index (down 3.50%), the BSE Power index (down 3.67%), the BSE Bankex (down 3.62%), underperformed the Sensex.
The BSE Consumer Durables index (down 1.18%), the BSE FMCG index (up 1.32%), the BSE Auto index (up 1%), the BSE HealthCare index (down 1.01), the BSE Teck index (down 3.09%) outperformed the Sensex.
Among the 30-member Sensex pack, 28 declined while only 2 of them managed to post gains.
India's fourth largest IT exporter by sales Satyam Computer Services galloped 44.66% to Rs 34.55 on hopes a newly constituted three-member board, appointed by the government, would help salvage the company's clients and staff. The centre on Sunday, 11 January 2009, appointed a three-man board in a bid to restore confidence in the outsourcing company rocked by the India's biggest corporate scandal.
The newly constituted three-member board began a meeting on Monday in Hyderabad to lay out a roadmap for clients and staff. The three members appointed on the Satyam's board are Deepak Parekh, chairman of Housing Development Finance Corporation, Kiran Karnik, former president of the National Association of Software and Service Companies, a technology lobbying group, and C Achutan, a former official at the Securities and Exchange Board of India (Sebi).
The Satyam stock had lost 86.68% in two trading sessions to Rs 23.85 on 9 January 2009 from Rs 179.10 on 6 January 2009 after Raju admitted of committing an accounting fraud during market hours on Wednesday, 7 January 2009.
Meanwhile, the National Stock Exchange (NSE) today said the Satyam Computer Services will be removed from the futures & options segment once all existing contracts expire on 29 January 2009. All existing contracts with expiry dates 29 January 2009, 26 February 2009 and 26 March 2009 will expire on 29 January 2009, the NSE said.
India's third largest IT exporter by sales Wipro tumbled 10.63% to Rs 224 after the company said it was barred from bidding for contracts from the World Bank until 2011 after it offered employees of the institution shares in its initial public offering (IPO). It was the top loser from the Sensex pack.
The company in a release to exchanges said it had offered a commonly utilised and Securities and Exchange Commission (SEC)-approved direct share programme (DSP) in 2000 that allowed employees and clients to purchase American Depository Shares at the IPO market price. Under the programme, Wipro representatives offered the World Bank, through its chief information officer and a senior staff, participation in the programme and they directed this offer to members of their family and friends, Wipro said. The aggregate number of shares purchased by them was 1,750 for approximately $72,000 at the IPO price, it said. All participants in the programme signed a conflict of interest statement that their purchase did not violate any ethics or conflict of interest of their company.
The programme's objective was to involve employees and customers with the public offering to expand the company's recognition and brand, Wipro said
Wipro said its revenues from World Bank were insignificant and the decision would not affect its business and results. It said the announcement was being made now under revised disclosure policies.
India's second largest software exporter by sales Infosys Technologies fell 3.36% to Rs 1155 on caution ahead of its Q3 December 2008 earnings on Tuesday, 13 January 2009. A section of the market expects Infosys to lower its revenue guidance in dollar terms for the year ending March 2009 due to cross currency headwinds.
India's largest IT exporter by sales Tata Consultancy Services shed 5.70% to Rs 505.10 as fears a weak global economy would cut the amount firms spent on technology offset a weaker rupee.
The Indian rupee fell to 48.74/75 a dollar from 48.28/29 on Friday, 9 January 2009 on weak Asian markets. A weak rupee benefits IT firms as the sector earns most of its revenues from exports.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) slumped 4.52% to Rs 1099, on worries the recent steep fall in crude oil prices would dent refining margins of the firm.
India's largest oil exploration firm by market capitalisation Oil & Natural Gas Corporation (ONGC) slipped 3.06% to Rs 650, on further fall in global crude oil prices. US light crude for February 2009 delivery fell 32 cents to $40.51 as a big increase in US unemployment renewed worries about energy demand in the world's largest consumer. The price has declined sharply from a record high of $147 a barrel in mid-2008.
State run oil marketing companies fell after Petroleum Minister Murli Deora had said in Mumbai on Saturday, 10 January 2009 that petrol, diesel and LPG (cooking gas) prices could be reduced by Rs 5 a litre, Rs 3 a litre and Rs 25 a cylinder, respectively. HPCL (down 3.37%), BPCL (down 5.46%), and IOC (down 3.75%) declined.
Banking stocks extended early losses on worries of rising bad loans in a slowing economy. India's largest private sector bank by net profit ICICI Bank fell 2.69% to Rs 442.60. India's second largest private sector bank by net profit HDFC Bank declined 0.69% to Rs 1005.30.
India's biggest bank in terms of total assets and branch network, State Bank of India slipped 4.15% to Rs 1165.40. after its chairman O.P. Bhatt today said the bank has an exposure of about Rs 500 crore to firms with the Maytas tag. Maytas Infra and Maytas Properties are owned by the family of Satyam's Raju.
Bhatt said that the exposure was fully collateralised with no problem as of now. He said the bank was reviewing the exposure.
Metal shares slipped on fall in commodity prices on the London Metal Exchange. India's top copper producer by sales Sterlite Industries slipped 4.43% to Rs 261 after its ADR plunged 8.11% on Friday, 9 January 2009.
Tata Steel (down 6.95% to Rs 199.60), and Hindalco Industries (down 4.94% to Rs 50), edged lower
India's largest engineering & construction company by sales Larsen & Toubro was down 3.24% to Rs 696.75, extending a sharp fall in the previous two trading sessions, as it will make huge losses on shares of Satyam it bought before the scandal. L&T had bought shares in Satyam earlier this month and holds 3.95% stake in the company, L&T chairman A M Naik said in a television interview on Friday, 9 January 2009. The company, which has a small outsourcing unit, had made the investment in Satyam in the hope of forming a strategic alliance, he said.
India's top pharma company by market capitalisation Sun Pharmaceuticals Industries rose 2.20% to Rs 1125 as index fund portfolio managers shuffled their positions after it replaced Satyam Computer Services in the 30-member Sensex pack from today, 12 January 2009. It was the top gainer from the Sensex pack.
The Satyam accounting scandal continued to weigh on realty and infrastructure shares on market perception that a number of realty and infrastructure firms do not strictly follow good corporate governance practices. Reliance Infrastructure (down 7.35%) and GVK Power Infrastructure (down 6.62%), IVRCL Infrastructure (down 2.82%) declined.
Among realty firms, DLF (down 4.64%), Housing Development & Infrastructure (down 4.53%), Indiabulls Real Estate (down 9.18%), and Unitech (down 6.13%), edged lower.
India`s biggest small carmaker by sales Maruti Suzuki India fell 1.45% to Rs 575.50, off day's high of Rs 594.70. The company reportedly said it had no plans to cut production and would continue with its expansion plans despite of slowing economy and adverse market conditions. The company had earlier announced plans to expand its production capacity of its Manesar plant in Haryana to 3 lakh units by end-January 2009.
India's top truck maker by sales Tata Motors fell 0.46% to Rs 162.50, off day's high of Rs 167.70, on reports, the company is seeking about 1 billion pound help from the British government to overcome a financial crunch facing the prized acquisitions Jaguar and Land Rover.
Telecom stocks slipped on concerns of tighter profit margins due to stronger competition following a nationwide rollover of the GSM-based cellular services by Reliance Communication (RCom), India's second largest telecom services provider by sales, recently. RCom fell 3.83% to Rs 179.50. India's largest telecom services provider by sales Bharti Airtel slipped 2.22% to Rs 623.
Reliance Industries was the top traded counter on BSE with turnover of Rs 238.50 crore followed by State Bank of India (Rs 211.50 crore), Satyam Computer Services (Rs 191 crore), Reliance Capital (Rs 173.70 crore) and DLF (Rs 163 crore).
Satyam Computer Services led the volume toppers on BSE with volumes of 5.30 crore shares followed by Reliance Natural Resources (1.85 crore), Unitech (1.74 crore), Suzlon Energy (1.40 crore) and DLF (78.70 lakh).
Pre Session Commentary - Jan 12 2009
Today the markets are likely to negative, as majority of Asian markets have opened with a blood bath and the US markets on Friday closed in red. The weak sentiments across the domestic markets have been well exuded in the previous trading sessions. There is no good news that could help the markets to bounce back and the sense of cautiousness still prevails across broader markets. In today’s session one could see volatility embedded with selling pressures.
On Friday, the markets traded in the southward with extreme volatility. The sentiments were weak and once again the investors traded with low excitement due to the Satyam issue. The carnage was seen in the sectors like Metal, Realty, CG and Oil & Gasas they lost by 7.16%, 5.15%, 4.70% and 2.81% respectively. Sensex and Nifty lost by 1.88% and 1.62% respectively. On the other hand sectors like FMCG, Auto and IT closed with gains of 1.22%, 1.01%, and 0.18% respectively. Mid caps and Small caps were also thrashed as they lost 2.41% and 2.92% respectively. During the session we expect the markets to be trading volatile.
The BSE Sensex closed lower by 180.41 points at 9,406.47 and NSE Nifty ended lower by 47.40 points at 2873.00. The BSE Mid Caps and Small Caps ended with losses of 77.12 points and 106.92 points at 3,120.79 and 3,555.60 respectively. The BSE Sensex touched intraday high of 9,630.40 and intraday low of 9,250.82.
On Friday, the US markets ended in red. The non-farm payrolls for the month of December fell by 5,24,000 parallel to the expected fall of 5,25,000. December unemployment is at a multiyear high of 7.2%, while total job losses for 2008 were the most since 1974, and are further expected to increase. The investors carried the fear about the dour economy. Companies like Boeing have announced to cut jobs in its commercial plane business so as to reduce the cost. Crude oil futures for the month of February delivery fell $0.87 to $40.83 per barrel on New York Mercantile Exchange. The US payrolls cut pulled the sentiments of investors for oil as well.
The Dow Jones Industrial Average (DJIA) closed lower by 143.28 points at 8,599.18 NASDAQ index lost 45.42 points at 1,571.59 and the S&P 500 (SPX) also closed lower by 19.38 points to close at 890.35.
Indian ADRs ended mixed. In technology sector, Infosys lost 0.64% while Satyam remained unchanged. Further Patni Computers ended with decrease of 4.14% and Wipro closed up by 1.86%. In banking sector ICICI Bank dropped by 0.85% whereas HDFC Bank gained 0.99%. In telecommunication sector, Tata Communication lost 1.06% and MTNL declined by 3.37%. Sterlite Industries decreased by 8.11%.
Today the major stock markets in Asia have opened negative. The Shanghai Composite is trading high by 4.62 points at 1,909.48 while Hang Seng is low by 252.91 points at 14,125.86. Further Japan''s Nikkei is closed. South Korea’s Seoul Composite is low by 22.31 points at 1,158.97 and Singapore’s Strait Times is low by 19.02 points at 1,787.00.
The FIIs on Friday stood as net sellers in equity and net buyers in debt. Gross equity purchased stood at Rs 2409.20 Crore and gross debt purchased stood at Rs 305.80 Crore, while the gross equity sold stood at Rs 3467.60 Crore and gross debt sold stood at Rs 0.00 Crore. Therefore, the net investment of equity and debt reported were Rs (1058.40) Crore and Rs 305.80 Crore respectively.
On Friday, Indian Rupee closed at 48.28/29 per dollar, 52 paise stronger than Wednesday’s close of 48.80/81. The rupee gained strength as banks sold the green back amidst reports that the foreign investments may not be affected due to the country’s biggest scam.
On BSE, total number of shares traded were 43.43 Crore and total turnover stood at Rs 4,207.30 Crore. On NSE, total number of shares traded were 103.18 Crore and total turnover was Rs 12,988.34 Crore.
Top traded volumes on NSE Nifty – Satyam with 215560932 shares, Unitech with 108388589 shares, DLF with total volume traded 42575927 shares, Suzlon Energy with 33939371 shares followed by SAIL with 20866245 shares.
On NSE Future and Options, total number of contracts traded in index futures was 1095117 with a total turnover of Rs 14,592.10 Crore. Along with this total number of contracts traded in stock futures were 1484272 with a total turnover of Rs 12,498.73 Crore. Total numbers of contracts for index options were 1309665 with a total turnover of Rs 19,544.91 Crore and total numbers of contracts for stock options were 101498 and notional turnover was Rs 1073.27 Crore.
Today, Nifty would have a support at 2,808 and resistance at 2,953 and BSE Sensex has support at 9,189 and resistance at 9,540.
Daily call - Jan 12 2009
Indices closed last week on decisively bearish note. The Nifty has now closed below the trend line support at 3000. The bearish story for the Nifty, however, gets re-confirmed only if it breaks the 2812 low formed on 29th December.
Dissolution of the old board and the appointment of three new directors augur well for the Satyam stock. Expect stock to fire-up in the opening session. Watch out for Industrial Production numbers to be announced today, and if it is data is decisively higher or lower than expectation of a decline of 0.8%, expect the broader markets to follow in that direction. Technology bell weather Infosys will announce the Quarterly results tomorrow and this result will determine the future direction of IT sector. Reliance brothers are going to hog the limelight in near future, as the issues bothering the warring siblings' needs to be resolved soon one way or other. Play the news flow in any stock related to late Dhirubhai with Options.
Bias may remain negative
The market is expected to remain negative with a sideways movement during intra-day trades. While the Asian indices are exhibiting a weak trend in the ongoing trades, the US markets on Friday struggled amid worries about global growth. Among the key domestic indices, the Nifty is likely to test 2840 on the downside and has a resistance at 2910. The Sensex has a likely support at 9250 and may face resistance at 9550.
US indices, closed in negative territory on Friday, While the Dow Jones lost 143 points at 8599, the Nasdaq was down 45 points at 1572.
Indian floats, barring Wipro, Dr Reddy and HDFC Bank fell sharply on US bourses. Tata Motors was the worst performer and tumbled 5.18% while Patni Computers dropped 4.14%. VSNL, Rediff, ICICI Bank and Infosys were down around 1% each. Among the gainers Wipro jumped over 1.86%, HDFC Bank was up 0.99% and Dr Reddy gained 0.52%.
The Nymex light crude oil for February delivery dropping by $0.62 to close at $41.08 a barrel. In the commodity space, the Comex gold for February series gained by 10 cents to settle at $854.60 a troy ounce.
Market likely to open firm
Key benchmark indices are likely to open firm following as the sentiment may be boosted after the government on Sunday, 11 January 2009 constituted a three-member board for the ailing Satyam Computer Services. However global cues were weak.
Asian markets were trading lower. China's Shanghai Composite fell 0.25% or 4.76 points at 1,900.09, Hong Kong's Hang Seng slipped 1.15% or 165.71 points at 14,211.73, Singapore's Straits Times was down 1.29% or 23.24 points at 1,782.78, South Korea's Seoul Composite declined 1.12% or 13.25 points at 1,167.71. However, Taiwan's Taiwan Weighted rose 0.65% or 29.04 points at 4,496.57.
US stocks fell on Friday after government data showed the labor market deteriorated further in December 2008, raising investor concerns about the outlook for profits, spending and a deepening recession. The Dow Jones industrial average ended down 143.28 points, or 1.64 per cent, to 8,599.18. The Standard & Poor's 500 Index slid 19.38 points, or 2.13 per cent, to 890.35. The Nasdaq Composite Index fell 45.42 points, or 2.81 per cent, to 1,571.59.
Back home, foreign institutional investors (FIIs) were net sellers worth Rs 350.55 crore while mutual funds sold shares worth Rs 13.26 crore on Friday, 9 January 2009, according to provisional data on NSE.
US stocks stumble on job report
Unemployment surges to sixteen year high
Sadness continued to grip Wall Street since the start of FY 2009 and stocks registered good losses during the first week that ended on Friday, 09 January, 2009. While the unemployment rate in US surged to a 16 year high during December, 2008, several major companies continued to issue earnings warnings. Trading volumes during the week remained quite low due the start of the week but picked up later.
There was a lot of economic news of note this week. The market reacted to each one of them in an expected negative manner.
The Dow Jones Industrial Average lost a huge 435.51 points (4.8%) for the week to end at 8,599.18. Tech - heavy Nasdaq lost 60.62 points (3.7%) to end at 1,571.59. S&P 500 lost 41.45 points (4.4%) to end at 890.35.
The Labor Department reported on Friday, 09 January, 2008 that the U.S. economy lost 524,000 jobs in December, closing out the worst year of job losses since World War II. The unemployment rate rose to 7.2%, the highest in 16 years. Nearly 2.6 million jobs were lost in 2008, with 1.9 million destroyed in just the past four months.
The 1.5 million jobs lost in the fourth quarter were the most in any three-month period since 1945.As a percentage of employment, job losses in 2008 totaled 1.8%, the worst since 1982 and the third-largest since the war.
The report also detailed that in 2008, the unemployment rate rose by 2.3 percentage points and unemployment increased by 3.6 million. Another 3.4 million workers were forced into part-time work during the year.
On that day, the Dow Jones industrial average ended lower by 143 points at 8,599, the Nasdaq closed lower by 45 points at 1,571 and the S&P 500 closed lower by 19 points at 890.
Several Dow components continued to come up with negative news during the week. In response to weak demand due to the slowing global economy, Alcoa said that it is cutting its workforce by more than 13,500 employees, or 13% of its worldwide workforce by the end of 2009. Also, Boeing announced that it will cut employment at its commercial airplanes business unit by 4,500 positions due to the weakening global economy. The job cuts will bring the unit's employment to roughly 63,500, which is in-line with the level at the start of 2008. Boeing had roughly 160,000 employees as of 2007.
During the week, minutes from the 16 December, 2008 Federal Open Market Committee (FOMC) meeting were released. The same indicated there was significant contraction in economic activity during the fourth quarter, and downside risk to growth remains. Unemployment is expected to rise significantly into 2010.
Also, during the week, Intel said its fourth quarter revenue will be lower than previous expectations, citing further weakness in end demand and inventory reductions by its customers.
Among other disappointing reports, most of the retailers reported dismal December same-store sales results. Many retailers lowered their earnings outlooks in response to the uncertain economic environment. Wal-Mart announced disappointing December comparables and lowered its profit outlook. Leading electronics retailer Best Buy reported a 6.5% drop in December same-store sales as strong TV sales were offset by weakness in digital cameras, video games, movies and music.
On Friday, crude-oil futures for light sweet crude for February delivery closed at $40.83/barrel (lower by $0.87 or 2.1%) on the New York Mercantile Exchange. Earlier during the day, prices fell to a low of $39.98. For the week, crude prices shed 12%.
Executive Summary
For the week, indices registered good losses at Wall Street. The weak job market report from the Labor Department showed that US registered highest number of layoffs in 2008 since the Second World War. Dow components continued to announce job cuts and earning warnings.
In percentage terms, Dow lost 4.8%, Nasdaq lost 3.7% and S&P 500 lost 4.4%.
For the year 2009, Dow, Nasdaq and S&P 500 are down by 2%, 0.3% and 1.4% respectively.
Daily Trading Calls - Jan 12 2009
Nifty (2873) SUP 2810 RES 2915
Buy Maruti (584) SL 578
Target 594, 599
Sell Axis Bank (486) SL 492
Target 475, 470
Buy ONGC (671) SL 664
Target 683, 688
Sell Kotak Bank (345) SL 350 Target 335, 332
Sell Jindal Steel (919) SL 929 Target 900, 895
Daily News Roundup - Jan 12 2009
Government to take over management control of Satyam Computers.(BL)
ONGC borrows Rs52.5bn to help finance its take over of UK-based Imperial Energy.(BS)
Essar Oil is likely to ink four major MoUs with the state government with proposed investment of Rs210bn in Gujarat.(ET)
Tata Motors cancels plans to go for a block-closure of its Jamshedpur plant for six days from January 12.(BS)
Axis Bank is likely to cut its prime lending rate by 0.5-0.75%.(ET)
Government extends deadline for Maytas projects despite the Satyam crisis.(BS)
L&T, which has around 4% stake in Satyam Computers, is keeping its options open regarding any possible strategic alliance with the company.(BL)
Maruti Suzuki has no plans to cut production and would go ahead with its expansion plans in the months ahead.(FE)
HPCL likely to make profits on fuel sales in Jan-March quarter.(DNA)
SEBI to appoint independent auditors to review Satyam Computers’ books.(BS)
Central Bank of India cut its lending rates by 0.75% effective from Monday. (ET)
Deepak Parekh, Kiran Karnik and C. Achutan appointed to Satyam Computers’ board by government.(BL)
Reliance Industries’ says ready to start gas output from KG-D6 fields by February.(Mint)
Bosch decides to suspend some of the manufacturing operations at a few of its plants across the country for a limited period of time.(BL)
Simplex Projects to bid for overseas projects in West Asia and Holland.(BS)
Reliance Industries, RNRL not to settle issue outside court.(BS)
Aditya Birla Nuvo shuts its fertilizer unit in Uttar Pradesh due to unavailability of gas.(ET)
Maruti Suzuki resumes small car exports to Europe after 4 years. (ET)
Binani Cement plans to invest Rs9bn on expansion.(Mint)
Renault decides to freeze its Chennai plan.(BL)
Bharat Forge to call off its issuance of non-convertible debentures worth Rs4bn due to the weak market conditions.(BS)
Government tells Delhi HC Tata Power concealed facts in challenging the decision to allow diversion of coal from Sasan project by Reliance Power.(BS)
Bajaj Auto set to launch six new bikes in 2009.(ET)
Jindal group to set up 2,000MW power plant near Simar port.(ET)
ONGC to tie up with Schlumberger for exploring shale gas potential. (ET)
DLF expects to resume construction work at Infopark by the end of this month.(BS)
Taro Pharmaceutical asks Sun Pharma to pay US$15 per share for merger, while rejecting the US$9.5 per share offer proposed by latter.(FE)
UB Group set to expand business portfolio, to enter in to fertilizer, engineering and construction.(BS)
Forex reserves rose US$627mn to US$255bn in the week ended January 2.(BL)
Government clears Rs250bn support for NBFCs.(BS)
Annual WPI-based inflation rose 5.91% during the week ended December 27, slower than the previous week’s annual rise of 6.38%.(BL)
Government is considering another round of fuel price cut in the next few days.(BS)
The revised timeline for auction of 3G spectrum has been thrown out of gear as Union Cabinet did not take up the matter in its meeting on Friday.(DNA)
Government has cleared 34 FDI proposals worth about Rs16bn.(FE)
Seventeen projects amounting to an investment of US$31b have been received under the Semiconductor Policy, according to Union Minister of Communications and IT.(BL)
Stainless steel imports dipped by 70% to 6,000 tonnes in December. (BS)
Petroleum secretary may announce the next round of NELP in February.(DNA)
India's tourism sector has grown by 6% with 5.3mn arrivals in 2008.(FE)
Fear gains power!
Whatever you fear most has no power - it is your fear that has the power.
The market is all set to drift further down in the wake of renewed weakness in global markets. US stocks fell on Friday after a government report painted a grim picture for the labour market there. Asian markets have opened lower this morning. Overall trend is likely to be choppy amid anxiety about corporate earnings and fragile state of the global economy. A key event to watch today will be the IIP numbers for November. The data is expected to reveal slight improvement over October, when the key industry barometer had shrunk by 0.4%.
Tuesday of course will be a big day, as IT giant Infosys comes out with its Q3 results. Market expectations remain muted due to the global economic downturn, especially in the US. Infy may have to cut its full-year guidance again. Overall, the IT sector continues to be out of favour with most investors. The ECB will meet on Thursday to review its monetary policy.
Satyam will continue to hog the limelight, as the government and regulators seem to be working on a war-footing to mitigate the fallout from the Satyam scam. So, another cautious opening is on the cards followed by rangebound trade with negative bias.
Key Results Today: Exide Industries, Fertilizers & Chemicals, Jay Bharat Maruti, RS Software, Sical Logistics and South Indian Bank.
FIIs were net sellers in the cash segment on Friday at Rs3.5bn (provisional) while the local institutions pulled out Rs132.6mn. In the F&O segment, FIIs were net buyers of Rs3.09bn. Foreign funds were net sellers of Rs10.58bn in the cash segment on Wednesday.
US stocks slid on Friday after a government report showed another half-a-million drop in payrolls in December, making 2008 as the worst year for the labour market since the end of the World War II in 1945.
The Dow Jones Industrial Average lost 143.28 points, or 1.6%, to end at 8599.18, while the S&P index shed 19.38 points, or 2.1% to 890.35, while the Nasdaq Composite index fell 45.42 points, or 2.8% to 1571.59.
Stocks tumbled through the morning, briefly trimmed losses in the early afternoon and then tumbled anew in the last hour.
The key indices extended the worst weekly slump since November on concern that an increase in the unemployment rate to an almost 16-year high signals that the global recession is worsening.
The blue-chip Dow lost 4.8% on the week, while the S&P 500 declined 4.5% and the Nasdaq dropped 3.7%. The S&P 500’s drop this week was its worst performance since it sank to an 11-year low in November.
Market breadth was negative. On the New York Stock Exchange, losers beat winners seven to three on volume of 1.16 billion shares. On the Nasdaq, decliners topped advancers by almost three to one on volume of 1.94 billion shares.
Employers cut 524,000 jobs from their payrolls last month after cutting a revised 584,000 in November. That brought last year's total job losses to nearly 2.6mn, the worst year for workers since 1945.
The number was roughly in line with the 525,000 forecast by economists. However, many on Wall Street had feared that the number might be even higher, after a report earlier this week showed the private sector lost 693,000 jobs in December.
The unemployment rate, generated by a separate survey, rose to 7.2% from a revised 6.8% in November. Economists had forecast a reading of 7%.
President-elect Barack Obama said rising joblessness is a stark reminder of the need for Congress to act with urgency on his stimulus plan to boost the US economy. Some Democrats have criticized the portion of the plan devoted to tax cuts, while Republicans are concerned about its effect on the deficit.
"Clearly, the situation is dire. It is deteriorating," Obama told a news conference in Washington. "For the sake of our economy and our people, this is the moment to act, and to act without delay."
In a Television interview, outgoing Treasury Secretary Henry Paulson endorsed a robust fiscal stimulus to revive the US economy, and urged his successor to keep deploying the US$700bn financial-rescue fund.
Citi shares slid 5.7% after Former Treasury Secretary Robert Rubin resigned from his position as senior counselor. Rubin, who advised the bank as it lost USUS$20bn in the sub-prime mortgage crisis, also said he won’t stand for re-election to the board.
Separately, media reports suggested that Citi may merge its brokerage unit with the one at Morgan Stanley.
CVS shares suffered their steepest loss since October 2001. Adjusted earnings in 2009 will be US$2.53 per share to US$2.61 a share after a significant number of pharmacy-management program contracts were renegotiated at lower prices, CVS said.
The company's forecast trailed the average analyst estimate of US$2.69 a share.
Boeing said that it is cutting 4,500 jobs, essentially undoing the employment gains it had made in 2008. The company had been one of the few big firms adding employees amid the recession.
No. 1 electronics firm Best Buy narrowed its fiscal 2009 profit forecast, saying it now expects earnings of US$2.50 per share to US$2.70 per share. That sets the midpoint below analysts' current forecast for US$2.61 per share. Shares of Best Buy lost 5%.
Circuit City said it is talking with two companies that could buy it outright or provide it with financing so it can stay afloat. The No. 2 electronics chain filed for bankruptcy protection in November.
Lennar shares plunged as much as 28% after a group accused the No. 2 homebuilder of operating certain joint ventures like a Ponzi scheme. However, shares recovered a bit after the company shot down the accusations.
Treasury prices fell, raising the yield on the benchmark 10-year note to 2.49% from 2.44% on Thursday. Yields on the 2-year, 10-year and 30-year Treasurys all hit record lows last month.
Lending rates improved. The 3-month Libor rate fell to 1.26% from 1.35% on Thursday. Overnight, Libor held steady at 0.10%. Libor is a key bank lending rate.
The dollar tumbled versus the yen and gained versus the euro. COMEX gold for February delivery rose 50 cents to settle at US$855 an ounce.
US light crude oil for February delivery fell 87 cents to settle at US$40.83 a barrel on the New York Mercantile Exchange. Gasoline prices rose 2 cents to a national average of US$1.782 a gallon.
European shares lost ground for the third straight session on Friday. The pan-European Dow Jones Stoxx 600 index fell 0.5% to 207.82, with oil producers and miners some of the worst performers. Germany's DAX 30 index slid 2% to 4,783.89 while the French CAC-40 index declined 0.8% to 3,299.50 and the UK's FTSE 100 index closed down 1.3% to 4,448.54.
Indian markets closed in the negative terrain for second straight trading session as investors and traders opted to offload amid badly hit sentiments following the Satyam scam.
Selling was seen all across the board with the realty, metals’, capital goods and oil & gas stocks among the worst hit sectors.
The BSE benchmark Sensex ended at 9,958 adding 54 points and the NSE Nifty index ended at 3,046 up 13 points.
Shares of Simplex Projects surged by over 5% to Rs55 after the company announced that it won contract worth Rs20bn from the government of Libya, as Public Works Contract, for execution of 2000 (Two Thousands) housing units, service buildings and related infrastructure on turnkey basis in Ghira, Libya. The scrip touched an intra-day high of Rs55.8 and a low of Rs52 and recorded volumes of over 9,000 shares on BSE.
Shares of Punj Lloyd tumbled by over 16% to Rs115 after the Company's wholly-owned UK subsidiary, Simon Carves Ltd ("SCL"), commenced adjudication proceedings against SABIC Petrochemicals UK Ltd ("SABIC").
These proceedings are ultimately aimed at seeking restitution, through the U.K. Courts, of Euro 28.5 million in respect of an advance payment bond and a performance bond called by SABIC following in SCL's view, the wrongful termination by SABIC of the contract between SABIC and SCL.
The scrip touched an intra-day high of Rs140 and a low of Rs106 and recorded volumes of over 70,00,000 shares on BSE.
Ranbaxy slipped by 7% to Rs218. The company announced that it would receive a milestone payment from GSK Pharma and it said that it has initiated phase I studies for GSK Pharma’s respiratory drug. The scrip touched an intra-day high of Rs235 and a low of Rs215 and recorded volumes of over 5,00,000 shares on BSE.
Shares of Bosch slipped by 0.5% to Rs3016 after the company at its meeting proposed to suspend manufacturing of Starters and Generators and related activities at the Naganathapura Plant on various dates from January 10, 2009 to January 31, 2009. The scrip touched an intra-day high of Rs3087 and a low of Rs3000 and recorded volumes of over 3,000 shares on BSE.
Zee Entertainment
We recommend a sell in Zee Entertainment Enterprises from a short-term trading perspective. It is clearly evident from the charts of the stock that after taking support from its significant long-term support level at Rs 100 during mid November 2008, the stock bounced up. The stock’s medium-term uptrend encountered resistance at Rs 155 in early January 2009.
Subsequently, the stock resumed its long-term downtrend that has been in place, forming lower peaks and lower troughs since October 2007 peak of Rs 362. On January 9, the stock tumbled by 10 per cent conclusively penetrating its medium-term uptrendline and 21-day moving average. The daily relative strength index (RSI) is falling in the neutral region towards the bearish zone and the weekly RSI is already featuring in the bearish zone.
Our short-term forecast is bearish for the stock. We expect the stock’s decline to continue until it hits our price target of Rs 115 in the forthcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 136.
Bullion metals end almost unchanged
Weak employment report increases the appeal of precious metals
Bullion metals ended almost unchanged on Friday, 09 January, 2009 as the dollar strengthened and also due to the weak economic data. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.
On Friday, Comex Gold for February delivery rose $0.50 (0.1%) to close at $855 an ounce on the New York Mercantile Exchange. For the week, gold prices ended down by 2.8%. This year gold has lost 3.8% till date. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (15%) since then.
On Friday, Comex silver futures for March delivery rose by 23 cents to $11.32 an ounce. For the week, silver has gained 13 cents. For 2008, silver lost 24%.
At the currency market on Thursday, the dollar was up against most major counterparts. The dollar index gained 1.4%.
Among the major economic reports for the day, on Friday, 2009, the Labor Department reported the U.S. economy lost 524,000 jobs in December, closing out the worst year of job losses since World War II. The unemployment rate rose to 7.2%, the highest in 16 years. Nearly 2.6 million jobs were lost in 2008, with 1.9 million destroyed in just the past four months.
The 1.5 million jobs lost in the fourth quarter were the most in any three-month period since 1945.As a percentage of employment, job losses in 2008 totaled 1.8%, the worst since 1982 and the third-largest since the war.
The report also detailed that in 2008, the unemployment rate rose by 2.3 percentage points and unemployment increased by 3.6 million. Another 3.4 million workers were forced into part-time work during the year.
In the crude market on Friday, crude prices fell by almost a dollar and closed at $48.8/barrel.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
Crude continues to drop
Prices drop by 12% last week on dour economic data
After rallying for four previous sessions, crude oil prices ended lower for the fourth consecutive day today on Friday, 09 January, 2009. Prices fell due to the dour economic reports that pointed out that job losses in US were highest in US in 2008 since the 2nd world war which in turn questioned the country's energy demand.
On Friday, crude-oil futures for light sweet crude for February delivery closed at $40.83/barrel (lower by $0.87 or 2.1%) on the New York Mercantile Exchange. Earlier during the day, prices fell to a low of $39.98. For the week, crude prices shed 12%.
Prices reached a high of $147 on 11 July but have dropped almost 63% since then. Year to date, in 2009, crude prices are lower by 8.3%.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
Among the major economic reports for the day on Friday, 2009, the Labor Department reported the U.S. economy lost 524,000 jobs in December, closing out the worst year of job losses since World War II. The unemployment rate rose to 7.2%, the highest in 16 years. Nearly 2.6 million jobs were lost in 2008, with 1.9 million destroyed in just the past four months.
The 1.5 million jobs lost in the fourth quarter were the most in any three-month period since 1945.As a percentage of employment, job losses in 2008 totaled 1.8%, the worst since 1982 and the third-largest since the war.
The report also detailed that in 2008, the unemployment rate rose by 2.3 percentage points and unemployment increased by 3.6 million. Another 3.4 million workers were forced into part-time work during the year.
The EIA had reported earlier during the week that U.S crude stockpiles gained 6.7 million barrels to 325.4 million in the week ended 02 January, 2009. Market had expected a buildup of 1.5 million barrels.
Against this background, February reformulated gasoline rose 2.1% to $1.1112 a gallon, while February heating oil lost 2.1% to $1.4877 a gallon.
February natural-gas futures dropped 1.3% to $5.51 per million British thermal units.
Satyam needs loan!
The immediate task of the newly constituted board of the beleaguered Satyam Computer Services Ltd will be to find $120 million (Rs 550 crore) 'bridge finance',a senior company official told DNA Money on the condition of anonymity.
This money, provided either as a credit line by the government or banking institutions at concessional rates, is needed as working capital to run operations for a month.
"If we are provided this money we are confident of turning around the company with billings from customers," the official said.
The payment cycles are usually 30-60 days for the company but given the current market scenario, some clients are asking for a 80-days' credit, he said.
"While the $100-120 million will be just enough for a month, we will be able to tide over the remaining period through financial innovation," he added. A major chunk of this would have to be in dollars to service operations of Satyam abroad.
"Satyam has a running business notwithstanding what our former chairman said about revenues and the wafer thin margins he mentioned," he said.
"This is totally unbelievable as we have been generating business day in and day out that too at considerably high margins," he said, expressing a sense of betrayal by the disgraced former chairman B Ramalinga Raju.
V Balakrishnan, the chief financial officer of Infosys Technologies, India's second-largest software firm, doesn't think foreign funding agencies would come to the rescue at this point.
"It (Satyam) will have to tap traditional avenues such as domestic banks and institutions to finance working capital needs. They (company directors) would have to convince these agencies on the repayment capacity (of the company)," said Balakrishnan.
The finance head of another top IT company, who did not want to be named, said that the new board members face a Herculean task of setting right 'misstatements' (cooked books of accounts).
He said it was important to detect the elements involved in the scam and eliminate them first.
That, the finance chief said, was the first thing that the new directors have to do. "All these things need to be done sequentially and simultaneously," he said.
Ganesh Natarajan, chairman of information technology and IT-enabled services body Nasscom, said the new helmsmen and government backing would make it possible for the software major to raise funds.
Natarajan said liquidity is an issue that needs to be addressed by the reconstituted board immediately.
The Nasscom chief believes that Parekh, who has experience in such matters, will be able to take care of the issue quite competently.
"He (Parekh) will be crucial for tapping funds from private equity, and private and public sector banks for the company," he said.
Natarajan expects Karnik to get Satyam's business back on track and Achuthan to re-establish proper accounting standards in the IT company.
"Karnik would be able to maintain continuity in the company's business by taking care of the customers and employees," he said.
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