Wednesday, January 14, 2009
Nifty January 2009 futures were at 2812, at a discount of 23.30 points as compared to the spot closing of 2835.30. Turnover in NSE's futures & options (F&O) segment was Rs 36,766.76 crore, lower than Rs 38,378.33 crore on Tuesday, 13 January 2009.
HDFC Bank January 2009 futures were at discount at 976.60 compared to the spot closing of 977.55.
State Bank of India January 2009 futures were near spot price at 1197 compared to the spot closing of 1196.90.
Reliance Industries January 2009 futures were at discount at 1174 compared to the spot closing of 1179.75.
In the cash market, the S&P CNX Nifty surged 90.35 points or 3.29% at 2835.30.
Sensex, Shanghai registers gains while Indonesia and Philippines registers losses
Stock markets in the Asian region closed higher on Wednesday 14 January 2009, despite the mixed cues overnight from Wall Street. On Wall Street, the Dow fell for the fifth straight day as investors fretted over what many expect will be a gloomy earnings season, overshadowing a boost in financials on bets US authorities will take toxic assets off banks' balance sheets.
The Dow Jones industrial average was down 25.41 points, or 0.30 percent, at 8,448.56. The Standard & Poor's 500 Index rose 1.53 points, or 0.18 percent, to 871.79. The Nasdaq Composite Index was up 7.67 points, or 0.50 percent, at 1,546.46.
However, investors remained cautious as the corporate earnings season gets underway this week.
The Japanese market broke its three-day losing streak by ending the session higher, while the Taiwan market pared early gains and closed lower. The markets in Hong Kong, Singapore and Australia recouped yesterday losses, while the markets in Philippines and Indonesia closed lower.
In the commodity market, crude oil rose for a second day in New York after OPEC leaders said they might deepen output cuts to bolster prices. Oil ministers from the Organization of Petroleum Exporting Countries agreed in Oran, Algeria, to cut supply by 9% to 24.845 million barrels a day starting 1 January 2009. Crude oil for February delivery rose as much as $1.41, or 3.73%, to $39.19 at 8:55 a.m. London time. Yesterday, futures rose 0.5%, recovering from a five-day 23% decline.
Brent crude oil for February settlement gained as much as 34 cents, or 0.76%, to $45.17 a barrel on London's ICE Futures Europe exchange. It rose 4.5% to settle at $44.83 a barrel yesterday. The contract expires tomorrow. The more active March future was at $47.50 a barrel, up 6 cents, at 12:15 p.m. Singapore time.
In the currency market, the Japanese yen was quoted at 88.26 against the US dollar today, up from Tuesday's close of 89.37-38 yen in Tokyo.
The Hong Kong dollar was trading at HK$ 7.7559 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.
The Australian dollar edged down against its US counterpart. The Aussie reached 0.6734 against the US dollar, compared to 0.6644 hit in the early morning trade.
The New Zealand dollar was trading at US55.95c down from US55.30c as registered yesterday.
The South Korean won was trading at 1,347.40 won to the U.S. dollar on Wednesday, down by 5.60 won from Tuesday's close of 1,353 won.
The Taiwan dollar strengthened against the US dollar as it was trading at NT$ 33.229 in the afternoon trade against the Tuesday closing of NT$ 33.161
The Singapore dollar finished at 1.4872 against the previous close of 1.4880 while the Malaysian Ringgit closed Wednesday's deals at 3.5725.
The Philippines peso strengthened against the dollar touching two day high. Currently, the dollar-peso pair is worth 47.47, compared to 47.11 hit in the early trade.
Coming back in equities, the Japanese market snapped three days of losing streak to finish the session higher, with gains in banks and financials, exporters and technology after a sharp sell-off the previous day and the yen leveled off after recent steep gains against the dollar. The Nikkei 225 Stock Average index gained 24.54 points, or 0.29%, to 8,438.45 while the broader Topix index of all First Section issues was up 5.27 points, or 0.7%, to 819.
On economic front, the Finance Ministry said in a report that the nonresident investors turned into net sellers of Japanese equities by unloading a net 7.38 trillion yen in 2008.
In Mainland China, the stock markets clawed back from yesterday's fall to finish the session sharply higher, with gain in banks and financials, properties, and metal and resources after a sharp sell-off the previous day and rebound in commodity prices. The benchmark Shanghai Composite Index surged 65.50 points, or 3.5%, to 1,928.69.
On the economic front, China revised its gross-domestic- product-growth rate upward for 2007 to 13%, indicating it may have overtaken Germany as the world's third-largest economy.
In Hong Kong, the benchmark index registered its first close in positive territory in seven sessions. The Hang Seng index closed up 36.56 points or 0.27% at 13,704.61. The Hang Seng China Enterprises index jumped 138.51 points or 1.96% at 7,219.04.
The Australian stock market snapped two days of losing streak to finish the session higher in choppy trade following mixed signals from Wall Street overnight, with the information technology and energy sectors led the market. The benchmark S&P/ASX200 added 32.4 points, or 0.89%, to 3,687, while the broader All Ordinaries rose by 30.4 points, or 0.85%, to 3,624.3.
On the economic front, the Australian Bureau of Statistics reported Wednesday that the number of housing loans approved in November increased a seasonally adjusted 1.3 % compared to October.
In New Zealand, the share market rose marginally ahead of corporate reporting season. The benchmark NZX-50 index closed up 12.14 points, or 0.44 at 2786.784.
Stock markets in South Korea gained for the second consecutive day, as some banks and exporters advanced while a stronger South Korean Won profited airline and tourism stocks. The Korea Composite Stock Price Index ended up by 14.97 points or 1.28% at 1,182.68 points, down from the session high of 1,184.52.
In Philippines, the stock market bucking the regional indices as investors were cashed in on recent gains. The benchmark index PSEi tumbled 0.55% or 11.12 points to 1,984.92, while the All-share index lost 0.54% or 6.84 points to 1,255.59. The mining & oil index tumbled 3.43%.
Stock markets in Taiwan ended lower, as financial and semiconductor sector led the sectoral losses accompanied by consecutive fall in industry heavyweights like Taiwan Semiconductor Manufacturing Company and United Microelectronics weighted the benchmark index down. The main TAIEX share index ended down 10.89 points or 0.24% at 4,521.47.
On the economic front, the Legislative Yuan ratified the "Special Statute for Stimulating Economy via Expanding Infrastructural Investment", aiming to bolster the slumping economy with the infusion of NT$500 billion for investment in infrastructural projects in a four-year period starting this year. The CEPD forecasts that the infusion of NT$500 billion for public investments will create 168,000 job vacancies during the four-year period of 2009-2012.
In Thailand, the Thai Stock exchange gained 5.70 points or 1.31% to 439.31 as its central bank slashed the key interest rates taking it to the lowest level since 2004. The Monetary Policy Committee of Bank of Thailand has announced today to lower the policy interest rate by 0.75% i.e., from 2.75 p% to 2.00 %, effective immediately.
In the accompanying statement the central bank discussed impact of current slowdown on the domestic economy, which had a marked impact on exports of regional economies and led to a contraction in Thai exports. In addition, domestic demand continued to soften, both in consumption and investment, partly as a result of fragile sentiment.
In Singapore, share market snapped five days of losing streak to finish the session marginal higher, as investors chased bargains in recently battered stocks after the market plunged for five consecutive days. The benchmark Straits Times Index jumped 2.9 points, or 0.16%, to 1,764.72.
In India, frenzied buying in index heavyweight Reliance Industries propelled key benchmark indices to day's high in fag end of the day's trade. The BSE 30-share Sensex jumped points, or 1.89% as per provisional closing.
The BSE 30-share Sensex surged 331.97 points, or 3.66%, to 9,403.33, as per provisional closing. The Sensex opened 151.80 points higher at 9,223.16. The S&P CNX Nifty gained 107.70 points, or 3.92%, to 2,852.65
Elsewhere, Malaysia's Kula Lumpur Composite index was down 0.03% or 0.24 points to 913.46, while Indonesia's Jakarta composite decreased by 12.83 points or 0.92% to 1386.91.
In the other regional markets, European shares edged lower, putting it on course for a sixth drop in a row, with worries about the health of the banking sector weighing for a second day after Morgan Stanley said banking giant HSBC Holdings needs to raise capital and slash its dividend. On a national level, the U.K. FTSE 100 index fell 0.9% to 4,357.65. The German DAX 30 index traded flat at 4,639.21, while the French CAC-40 index advanced 0.1% to 3,199.69.
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
14/1/2009 526033 CRYSTAL SOFT CHIRAGPURI KAILASHPURI GOSWAMI S 25000 5.44
14/1/2009 513059 G.S. AUTO RAJU GHANSHYAMDAS SHAH B 91073 13.37
14/1/2009 524194 ROCK HARD PE NEIL FINSTOCK PVT. LTD S 50001 3.94
14/1/2009 521206 SAMTEX FASHI RAJASTHAN GLOBAL SECURITIES LTD B 43694 8.61
14/1/2009 531898 SANGUINE MD SUKUSAMA TRADING AND INVESTMENTS PVT LTD S 87092 7.29
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
14-JAN-2009,HCIL,HIMADRI CHEMICALS AND IND,HIMADRI DYES & INTERMEDIATES LTD,BUY,400000,96.80,-
14-JAN-2009,IBREALEST,Indiabulls Real Estate Li,CITIGROUP GLOBAL MARKETS MAURITIUS PVT LTD,BUY,1875000,117.63,-
14-JAN-2009,VALECHAENG,Valecha Engineering Limit,VINCENT COMMERCIAL CO. LTD.,BUY,123000,34.50,-
14-JAN-2009,ZICOM,Zicom Electronic Security,KANODIA STOCK BROKING,BUY,64000,93.25,-
14-JAN-2009,HCIL,HIMADRI CHEMICALS AND IND,VIJAY KUMAR CHOUDHARY,SELL,400000,96.80,-
14-JAN-2009,VALECHAENG,Valecha Engineering Limit,PINNACLE TRADES & INVESTMENTS LIMITED,SELL,115500,34.50,-
14-JAN-2009,ZICOM,Zicom Electronic Security,KANODIA STOCK BROKING,SELL,2500,93.50,-
• Even the well–established CBDs markets are likely to face vacancies in 2009, as the first impact of the global recessionary economy is being felt by the financial and other fore-runner organizations. The vacancy may be further fuelled in CBD areas by the consolidation moves of many organizations.
• We will also see a reversal of the trend witnessed over the last two expansionary decades where large organizations moved from owned to leased assets. Given the drop in prices and availability of choice properties, this will be a good time for surviving organizations to announce their new leadership positions through trophy purchases. Jones Lang LaSalle Meghraj is currently transacting in many such mandates.
• This CBD vacancy rate, if triggered, can add significant pressure to the upcoming/newly developed premises in upcoming front-office districts such as Lower Parel in Mumbai and Nehru Place in Delhi.
• While the sentiment in the US and Europe towards outsourcing is positive in the long term, as the corporations there realize its need more than before, the active decision-taking for expansion by BPOs is totally suspended for the moment. We do not expect this to change in the 2009. Hence, the pressure on upcoming and announced projects –especially SEZs – will continue in 2009.
• In 2009, IT SEZs will also experience further pressure from the fact that the STPI concessions may be extended for another couple of years. While these concessions are important for IT companies' survival during the recession, they will adversely impact SEZ developments.
• In 2009, the peripheral areas of metros as well as the Tier II/III cities will need to compete with the central or secondary business districts for the same set of talents, thus dissolving the clear segmentation which was emerging and separating various micro-markets over the last couple of expansionary years. Newly developed or announced projects are especially going to suffer and may see continued vacancy in 2009.
• However, 2009 will also see practices in the real estate business become more organized and professional, as they did in the late '90s and early 2000s with the introduction of FIs, foreign money and the creation of Government-supported large development formats. This time around, a similar professional approach may reach warehousing land acquisitions.
Asset Class: Retail
• 2009 is expected to be a year of consolidation for Indian retail sector. As a result of adoption of best practices and restructuring of business models by the retailers, organized retail is expected to realign itself to the market conditions and create new areas of growth in 2009.
• Given the market malady being faced by developers and retailers alike, it is possible that partnership models of growth through mechanisms such as revenue sharing would become more prominent.
• More deals are going to get renegotiated as priced drop in over-priced locations. The process of rationalization should reach its peak by March, 2009.
• In 2009, it is anticipated that the supply pipeline may witness further stalling
• Most players' expansion plans for 2009 will slow down considerably. However, Projects that are planned well (incorporating approaches like proper zoning, optimal tenant mix strategies), implemented with high quality standards and incorporating appropriate mall management practices are anticipated to be successful
• In 2009, premier brands will look at Tier II cities, but certainly not Tier III. Luxury brands will stick to metros.
• Pan India mall developers will look at more practical rentals in 2009.High streets may see consolidation with a high possibility of a revenue-sharing model in terms of the overall cost-to-retailer on many high streets.
• For 2009, Jones Lang LaSalle Meghraj has seen a decisive upscale in transactions in the hypermarket category. However, the demand is clearly higher for stand-alone high street locations rather than mall-based locations.
Asset Class: Residential
• Much of the previously anticipated demand for 2009 will not see the light of day due to a confluence of various factors. Developers have only now begun to come down on their rates, and a lot depends on whether how many of them will follow suit in the coming year. The much-awaited drop in interest rates for home loans has happened, but not at a level sufficient to boost the residential sector out of the doldrums entirely.
• In response to the considerable demand for such formats, we anticipate more national players to launch affordable housing projects in 2009. However, since different cities will have different costs for land and construction of such homes, developers will have to define 'affordable housing' on a city level.
• We expect that at least 20% of the current players in residential real estate will begin to think on a portfolio rather than project level. So far, developers have been pricing their projects according to their expected profit margins vis-à-vis the cost of land in different locations. Buyers, however, are now not prepared to consider the initial and appreciated cost of land as a valid component of the buying price. When we speak of 'portfolio level', we mean that at least one fifth of these developers will now cross subsidize their construction costs internally and sell their project at prevailing selling rate.
• In terms of sales volumes and market recovery for 2009, there are two distinct and equally possible scenarios:
a) Buyers who were waiting for rates to drop to levels they could afford will make their moves when rates fall into their budget range. If this happens, developers will be able to move on to more projects and pull the market out of stagnation.
b) Buyers will continue to wait for the period in time that delivers the best rates – a point that may come and go without them being aware of it. They would, in other words, act more in the capacity of investors rather than end users. The fact that the purchased properties will appreciate over time in any case would be ignored in such a scenario. If this happens, market recovery for residential real estate would be further delayed.
• If rates drop by between 20-25% in the mid-level and high-end home segments, we will see a return of the previous effervescence. If they do not, developers will put on hold their expansion plans. This would lead to a clear shortage over 2-3 years, which would not be addressed, since there would be neither buyers nor sellers. In such a scenario, we will see complete stagnation in residential real estate.
• For 2009, Homebay Residential agency (a wholly owned subsidiary of Jones Lang LaSalle Meghraj) has registered deals in the luxury housing segment, but the overall demand remains muted. There is a significant NRI component to the overall buyer corpus, but the watch-and-wait stance is still evident. A certain number of transactions in the luxury segment that have remained on hold due to conflicting rumors concerning the optimum time to buy may crystallize in 2009.
Real Estate Capital Markets
• Judging from the mandates chalked up for execution, 2009 will see a good number of capital markets transactions. Then period from March 2009 to December will be a decisive time. All business sectors have been hit by the economic meltdown, and many will generate liquidity by divesting non core assets such as real estate.
• Type of enquiries are likely to be in the higher risk adjusted return segment with Greenfield opportunities seeing limited interest as most investors will be investing in Asia with chasing liquidity and not higher return. Residential projects in the middle income segment are likely to see renewed interest with interest rates declining in 2009.
• In 2009, we will also see the decisive arrival of sale-and-lease-back deals, in which owners currently occupying their properties will sell them and continue as lease tenants. Corporates have to address liquidity issues in their core businesses and are now eager to unlock the value of their non-core assets.
• In 2009, the biggest buyers would be FDI-compliant India-dedicated funds, domestic funds, high networth individuals and cash-rich corporate houses.
Projects & Development Services
2009 will be guided by dynamics of two contradictory forces:
1. Recession trend guided by capital market slow down, decrease in demand, caution in cost and spending.
2. Governmental and social efforts to regain growth momentum.
We feel that for first 3 to 6 months the impact of point 1 will be more significant while in the later half of 2009 the impetus and support to growth from government and global community will be more visible. Also it has been observed that a fall in economy is followed by increase in construction activity.
• The life cycle of projects normally last from 6 to 36 months and the revenue flow for projects are in general predictable. The finances and end use for most big projects are well planned and hence, significant proportion of ongoing projects of 2008 will go on in 2009 and construction at site will continue.
• While there has been slow down in new projects, the requirements for special use like consolidating operations of different offices of a company into one office, re-stacking and optimizing use of existing facilities, low cost housing etc will increase
• A segment of clients also feel that this period is apt for construction with lowering of prices for construction items and consultants fees and will look forward to use this lean period for construction and be ready for launch when the cycle again peaks.
• Individual office buildings as company's corporate office use will increase due to reduction in the cost of acquisition.
• There will be more focus on seeking expert advice for risk analysis, cost control and efficient project management services. The demand for development advisory services like feasibility study, pre-investment due diligence, procurement strategy, value engineering etc should increase.
• Sectors like Infrastructure, Industrial, Health care, Life sciences, Logistics, R&D, Educational centers should get more attention in 2009
• Innovative and new methods of construction will be sought to reduce time and cost & increase quality of projects.
by JONES LANG LASALLE MEGHRAJ
The Indian market closed with decent gains on buying across the board at lower level. The benchmark indices reported smart come back today after snapping down trend of last four days. Investors were optimistic that rate cuts across the globe would lift the demand in next few months. Up trend in other Asian markets also supported our markets.
The domestic market broke its four days losing streak and opened significantly higher on firm global cues and strong third quarter results announced on 13 January 2009, during trading hours by IT bellwether Infosys. However, US markets ended mixed on Tuesday due to the fear for slowing economy along with corporate earning concern. Further, market continued its northward journey on account of fresh buying from foreign funds. Though, stocks hold on gains during afternoon session on early drop in European shares, but again regained earlier position. During last trading hours huge buying momentum powered market to close the day with handsome gains. BSE Sensex ended above 9,350 mark and NSE Nifty above 2,800 level. From the sectoral front, investors on-loaded positions across the sectors along with Oil & Gas and IT stocks out performed the other sectoral indices as ended with gains of more than 5% each. Besides, upsurge was seen in Teck, Metal, Reality, Power, Pharma and Consumer Durable stocks. Midcap and Smallcap stocks followed the same trend.
Among the Sensex pack 26 stocks ended in green territory and 4 in red. The market breadth remained positive as 1402 stocks closed in green while 982 stocks closed in red and 105 stocks remained unchanged in BSE.
The BSE Sensex closed higher by 299.13 points at 9,370.49 and NSE Nifty ended up by 90.35 points at 2,835.30. The BSE Mid Caps and Small Caps ended with gains of 57.07 points and 43.34 points at 3,063.48 and 3,485.69 respectively. The BSE Sensex touched intraday high of 9,412.97 and intraday low of 9,202.57.
Gainers from the BSE Sensex pack are Reliance Communication Ltd (10.36%), Reliance Infra (9.70%), Reliance (9.00%), Infosys Tech (6.07%), M&M Ltd (5.39%), Tata Steel (5.23%), JP Associates (5.08%), Hindalco (4.12%), Sterlite Industries (3.94%), ICICI Bank (3.48%) and DLF Ltd (3.24%).
Losers from the BSE Sensex pack are Grasim Indus (3.55%), Sun Pharma (1.26%), HDFC Bank Ltd (1.17%) and HUL (0.35%).
The BSE Oil & Gas index gained (5.85%) or 321.17 points to close at 5,809.81 as Reliance Natural Resources (12.67%), Reliance (9.00%), Essar Oil Ltd (6.17%), Reliance Petroleum (5.05%), ONGC Ltd (2.33%) and Cairn Ind (1.90%) ended in positive territory.
The BSE IT index closed with increase of (5.02%) or 107.73 points at 2,255.42. Scrips that gained are HCL Tech (8.70%), Aptech Ltd (6.73%), Infosys Tech (6.07%), NIIT Ltd (3.67%), TCS Ltd (2.99%) and Mphasis Ltd (2.07%).
The BSE Teck index advanced by (4.57%) or 80.42 points to close at 1,839.62 as Reliance Communication Ltd (10.36%), Tel Eighteen (9.41%), HCL Tech (8.70%), Aptech Ltd (6.73%), Infosys Tech (6.07%) and IOL Netcom (4.95%) ended in green.
The BSE Reality index closed up by (4.38%) or 77.38 points at 1,853.49. Major gainers are Indiabull Real (11.64%), Housing Dev (5.20%), Orbit Co (5.06%), Penland Ltd (4.90%), Pheonix Mill (4.34%) and Ansal Infra (3.72%).
The BSE Metal index ended higher by (4.18%) or 203.00 points at 5,057.89. Main gainers are Hindustan Zinc (8.12%), Steel Authority (5.30%), Tata Steel (5.23%), Sesa Goa Ltd (4.61%), Gujarat NRE C (4.60%) and Hindalco (4.12%).
The BSE Power index inclined (2.97%) or 50.38 points at 1,746.74. Gainers are Reliance Infra (9.70%), GMR Infra (8.37%), Siemens Ltd (7.25%), Suzlon Energy (5.15%), Reliance Power (4.99%) and Neyveli LIG (4.41%).
After crashing over 1,200 points in the last four sessions, the market witnessed a strong relief rally on across-the-board buying throughout the day. Strong optimism in key indices triggered a steep rally and the oil index managed to register over 4% gains.
Sensex opened on a strong note with a positive gap of 137 points at 9,208, but quickly tumbled. Anyway, it remained upbeat all through the session on sustained buying support. The rally gathered steam towards the close and Sensex touched an intra-day high of 9,413 before ending the session at 9,370, up 299 points. Nifty also bounced back sharply and advanced 90 points to close at 2,835.
Market breadth was absolutely positive. Of the 2,482 stocks traded on BSE, 1,402 stocks advanced whereas 977 stocks declined. Hundred and three stocks ended unchanged. All sectoral indices closed with significant gains. BSE Oil was the major gainer and soared 5.85% followed by BSE IT (up 5.02%), BSE Teck (up 4.57%), BSE Realty (up 4.38%) and BSE Metal (up 4.18%).
Among 30 Sensex stocks, 26 ended in the green. Attracting strong buying support Reliance Communications surged 10.36% at Rs185.40, Reliance Infrastructure soared 9.70% at Rs522.35, Reliance Industries jumped 9% at Rs1178.15, Mahindra & Mahindra advanced 6.07% at Rs319.95, Tata Steel added 5.23% at Rs213.45, JP Associates zoomed 5.08% at Rs70.35, Hindalco Industries gained 4.12% at Rs50.60, Sterlite Industries vaulted 3.84% at Rs273.10 and ICICI Bank was up 3.48% at Rs441.10. Other frontline stocks also moved up by 1-3% each.
Oil stocks witnessed sustained buying support. Reliance Natural Resources Ltd (RNRL) surged 12.67% at Rs54.25, Essar Oil jumped 9% at Rs79.15, Reliance Petroleum added 6.17% at Rs80.10, ONGC advanced 5.05% at Rs645 and Cairn India gained 1.90% at Rs155.85.
Over 2.66 crore shares of Satyam Computer Services changed hands on BSE followed by Reliance Natural Resources (2 crore shares), Rolta India (1.53 crore shares), Unitech (1.53 crore shares) and Suzlon Energy (1.36 crore shares).
Key benchmark indices snapped four-day declining trend on frenzied buying in index heavyweight Reliance Industries (RIL) and IT pivotals. Strong buying momentum was seen in stocks of Anil Dhirubhai Ambani Group (ADAG) and Mukesh Ambani group in late trade on speculation the two warring Ambani brothers will reach out-of-court settlement over supply of gas from Reliance Industries (RIL)'s KG basin. However, a television channel reported after trading hours that RIL has denied rumours of out-of-court settlement.
The BSE 30-share Sensex surged 299.13 points or 3.30% at 9370.49. The market remained in green throughout the trading session. However, the turnover was low.
Volatility was high. The market extended gains in morning trade after opening with an upward gap on the back of gains in Asian stocks and on strong Q3 December 2008 results announced by IT bellwether Infosys Technologies before trading hours on Tuesday, 13 January 2009. It later cut gains. The market surged again to gain as much as 3.49% in mid-morning trade. The market pared gains after the steep surge.
The market firmed up again in afternoon trade. But it came sharply off the higher level in mid-afternoon trade on subdued European markets. Rally in RIL and ADAG stocks took the market sharply higher in late trade.
Infosys Technologies, India's second largest software services exporter jumped 6.49% to Rs 1310, extending yesterday's 5.90% surge. Infosys' American depository receipt advanced 5.87% on Tuesday, 13 January 2009.
European shares slipped today, 14 January 2009 as banks and mining stocks dragged the index lower, overshadowing gains in the energy sector. Key benchmark indices in UK, France and Germany were down by 0.70% to 0.99%. HSBC dragged the banking sector lower after Morgan Stanley said Europe's biggest bank may have to raise as much as $30 billion in capital and halve its dividend as earnings were likely to deteriorate more than expected.
Most Asian markets advanced today, 14 January 2009, as technology companies gained on assumption consolidation will strengthen profits and as a jump back in oil boosted energy producers. Key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea were up by between 0.16% and 3.52%. However Taiwan's Taiwan Weighted index fell 0.24%
US markets ended mixed on Tuesday, 13 January 2009, as investors continued to show concerns over the slowing economy, ahead of the corporate earnings season. The Dow Jones industrial average slipped 25.41 points, or 0.30%, to 8,448.56. However the S&P 500 index rose 1.53 points, or 0.18%, to 871.79 and the Nasdaq composite index gained 7.67 points, or 0.50%, to 1,546.46. On the economic front, US trade deficit shrank nearly 29% in November 2008, the biggest contraction in 12 years.
The BSE 30-share Sensex surged 299.13 points or 3.30% at 9370.49. The Sensex opened 151.80 points higher at 9,223.16. The Sensex jumped 341.61 points at day's high of 9,412.97 in late trade. At the day's low of 9,202.57, the Sensex rose 131.21 points in mid-afternoon trade.
The S&P CNX Nifty gained 90.35 points or 3.29% at 2835.30. Nifty January 2009 futures were at 2812, at a discount of 23.30 points as compared to the spot closing of 2835.30.
As per the provisional data released by the stock exchanges after trading hours, foreign funds today, 14 January 2009, bought shares worth a net Rs 91.44 crore and domestic funds bought stocks worth a net Rs 10.98 crore.
The BSE Sensex had lost 1264.57 points or 12.24% in the four trading sessions from 10,335.93 on 6 January 2009 to 9,071.36 on 13 January 2009, hit by accounting scandal at IT major Satyam Computer and on weak global markets. 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 strong on BSE with 1402 shares advancing as compared with 992 that declined. 104 shares remained unchanged.
The BSE Mid-Cap index slipped 1.43% at 3,006.41 and the BSE Small-Cap index fell 1.51% at 3,442.35. Both these indices underperformed the Sensex.
But the rally was accompanied by low volumes. The total turnover on BSE amounted to Rs 2,811 crore compared to Rs 3,476.99 crore on Tuesday, 13 January 2009. Turnover in NSE's futures & options (F&O) segment also slipped to Rs 36,766.76 crore from Rs 38,378.33 crore on Tuesday, 13 January 2009.
All BSE sectoral indices logged gains. The BSE Metal index (up 4.18%), the BSE Oil & Gas index (up 5.85%), the BSE Teck index (up 4.57%), BSE IT index (up 5.02%), BSE Realty index (up 4.38%), outperformed the Sensex.
The BSE HealthCare index (up 1.99%), the BSE PSU index (up 1.73%), the BSE Power index (up 2.97%), the BSE Bankex (up 1.74%), BSE Capital Goods index (up 1.78%), BSE Consumer Durables index (up 1.80%), the BSE FMCG index (up 0.54%), the BSE Auto index (up 2.24%), underperformed the Sensex.
Among the 30-member Sensex pack, 25 gained while the rest slipped.
Jaiprakash Associates (up 5.97%), Mahindra & Mahindra (up 4.41%), and Tata Steel (up 5.74%), edged higher from the Sensex pack.
Grasim (down 3.21%), Hindustan Unilever (down 0.37%) and Maruti Suzuki India (down 0.64%), edged lower from the Sensex pack.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) galloped 11.35% to Rs 1203.55 on 24.94 lakh shares. As per reports RIL would re-enter the retail fuel business when government deregulates fuel prices and allows the market-determined prices to prevail, boosted on the counter. RIL had had to close down its 1,433 retail outlets in May 2008 as it was unable to compete with the state-run oil marketing firms that were given subsidies by the government to sell the fuels. The company had captured a market share of 14.3% in diesel and 7.3% in gasoline before it closed down its operations.
As per reports, the government will soon allow state-run oil firms to set prices on retail sales of petrol and diesel. Currently, government announces prices changes on petrol and diesel.
Meanwhile, the memorandum of understanding (MoU) on settlement of dispute between the two Ambani brothers Anil and Mukesh was opened in court for the first time ever today, 14 January 2009, according to media reports. The document was submitted by the ADAG group. RIL maintains that it is not party to it and not bound by it. The MoU was signed by the two Ambani brothers and their mother Kokilaben prior to the split of the Reliance group into two.
Harish Salve, RIL counsel, has asked for the document to be kept in a sealed cover, and that it should not be allowed to be published verbatim by making it available to a third party. He claims it may lead to shareholders claiming that the deal was against the shareholders interest.
The Bombay High Court's interim order in May 2007 had directed RIL not to create third party interest for the disputed volume of 40 million standard cubic metres per day (mscmd) of gas from the K-G basin.
RIL and Anil Dhirubhai Ambani group firm Reliance Natural Resources (RNRL) had agreed on a price of $2.34 per million British thermal units (mBtu) in July 2006, but RIL wanted to charge more after gas prices rose and costs climbed. The government in September 2007 set the price of gas from the K-G field for potential buyers at $4.2 per million mBtu. The price was linked to crude oil equal to or more than $60 a barrel.
Other Mukesh Ambani group stocks, Reliance Petroleum (up 6.69%) and Reliance Industrial Infrastructure (up 4.96%), also surged.
Stocks of ADAG group soared. India's largest cellular services provider by sales Reliance Communcations spurted 14.23% to Rs 191.90 after declining 32.49% in one week to 13 January 2009. It was the top gainer from the Sensex pack.
Other ADAG stocks Reliance Infrastructure (up 12.99%), Reliance Natural Resources (up 14.95%), Reliance Capital (up 7.55%), jumped.
India's largest cellular services provider by sales Bharti Airtel gained 2.62% to Rs 623, after falling 7.57% in one week to 13 January 2009.
India's largest state run oil exploration firm by market capitalisation Oil & Natural Gas Corporation (ONGC) gained 2.16% to Rs 643.90 and India's largest private sector oil exploration firm by market capitalisation Cairn India rose 0.93% to Rs 153.65 on rise in crude oil.
However state run oil marketing firms HPCL (down 1.03%), BPCL (down 0.52%), and IOC (down 1.11%) slipped on recent reports the government will on Thursday, 15 January 2009, reduce petrol, diesel and LPG (cooking gas) prices by Rs 5 a litre, Rs 3 a litre and Rs 25 a cylinder, respectively.
Petronet LNG jumped 9.29% to Rs 37.65 after the world's largest liquefied natural gas exporter Qatar said it will sell additional LNG cargoes to the company
Most Auto shares rose on hopes lower interest rates and fuel prices would spur demand for vehicles which is mainly driven by finance. Tata Motors (up 0.97% to Rs 156.75), Mahindra & Mahindra (up 4.41% to Rs 317), and Hero Honda (up 3.74% to Rs 829.90) rose. However India's top small car maker by sales Maruti Suzuki India slipped 0.65% to Rs 584.50 on profit booking after striking day's high of Rs 607.
US light crude for February 2009 delivery rose $1.21 to $38.99 a barrel today, 14 January 2009 as organisation of petroleum exporting countries (Opec) kept up its talk of production cuts and a cold snap in the United States boosted heating oil demand. The prices have fallen from a record high of $147 a barrel struck in July 2008.
Strong Infosys results helped IT stocks shrug off a firm rupee. India's largest software services exporter by sales TCS advanced 2.33% to Rs 535 on reports it has got a significant portion of World Bank contracts that were previously serviced by Satyam Computer Services. The stock retraced from day's high of Rs 556.90. TCS unveils its Q3 December 2008 results on 15 January 2009.
India's third largest software services exporter in terms of sales, Wipro rose 0.83% to Rs 243.10, off day's high of Rs 253.40. Wipro's American depository receipt jumped 6.67% on Tuesday, 13 January 2009. Wipro unveils its Q3 December 2008 earnings on 21 January 2009.
But Satyam Computer Services fell 4.65% to Rs 29.80, off day's high of Rs 34 on reports the government is finding it difficult to move ahead with Satyam's rescue plan. The government has ascertained that Satyam immediately requires Rs 1,000 crore to pay rents in the US and salaries. However, the government is unlikely to provide any funds because of a report from the Registrar of Companies that the documents accessed from the company are a pack of lies. Satyam's American depository receipt slumped 9.59% on Tuesday, 13 January 2009.
Meanwhile, special economic zones (SEZs) set up by IT majors like Infosys, Wipro and TCS under the parent companies will soon be able to enjoy 100% tax exemption on profits on par with SEZs set up as separate entities as the government has reportedly decided to amend the income tax law relating to tax exemption for units operating out of special economic zones.
Rupee was higher at 48.80/82 per dollar, from its previous close of 49.11/12, on expectations of capital inflows into local shares. A firm rupee negatively impacts operating margins of IT firms as the sector derives a lion's share from exports.
India's largest power generation company in terms of sales NTPC rose 3.45% to Rs 174.55. The company's board of directors at its meet held on 13 January 2009 approved investment of Rs 6,037 crore in super thermal power projects in Madhya Pradesh, Uttar Pradesh and Chattisgarh.
India's largest real estate firm by market capitalisation DLF advanced 3.24% to Rs 211.75 on bargain hunting after sliding 26.70% in one week to 13 January 2009.
India's largest private sector bank by net profit ICICI Bank rose 3.70% to Rs 442 after its ADR gained 1.90% on Tuesday, 13 January 2009.
India's biggest bank in terms of total assets and branch network, State Bank of India rose 1.94% to Rs 1200. The bank has entered into an agreement with the state government of Gujarat to create a Rs 5,000 crore fund for investing in infrastructure projects.
India's second largest private sector bank by net profit, HDFC Bank eased from day's high of Rs 1023.80 and settled 1.61% lower at Rs 973 after the gross net performing assets (NPA) rose 120.47% to Rs 1911.41 crore as at 31 December 2008 from Rs 866.97 crore as on 31 December 2007. The ratio of gross NPA to gross advances rose to 1.9% to 1.2% and the ratio of net NPA to net advances rose to 0.6% from 0.4% as on 31 December 2007, the private sector bank said at the time of announcing Q3 results during trading hours today, 14 January 2009. The bank said the ratio of net NPA to net advances remained unchanged compared to that on 30 September 2008 (at 0.6%).
The bank posted 44.77% rise in net profit to Rs 621.74 crore on 58.78% rise in total income to Rs 5,407.89 crore in Q3 December 2008 over Q3 December 2007.
India's largest pharma company by market capitalisation Sun Pharma lost 0.83% to Rs 1125.35 on profit booking after a 8.96% rise in a week to 13 January 2009.
The stock entered the BSE Sensex from the beginning of this week replacing Satyam Computer. The stock exchanges removed Satyam from the key indices after Satyam's founder and former chairman B Ramalinga Raju on Wednesday, 7 January 2009, admitted of a nearly Rs 7000-crore financial fraud.
Metal shares surged on firm commodity prices on the London Metal Exchange (LME). Tata Steel (up 5.74% to Rs 214.50), Hindalco Indusitries (up 4.84% to Rs 50.95), and Sterlite Industries (up 4.28% to Rs 274), jumped.
Airline stocks Jet Airways (up 8.53%), Kingfisher Airlines (up 5.82%), and SpiceJet (up 6.46%), rose on reports the government may allow foreign airlines to pick up a minority stake in domestic airlines.
At present, foreign airlines are debarred from holding a direct or indirect stake in domestic carriers. The ability for foreign airlines to invest may provide a much-needed lifeline for an airline industry that desperately needs cash reports added. The Indian airline industry is estimated to lose close to Rs 10,000 crore in the year ended 31 March 2009.
Reliance Industries was the turnover topper on the BSE with turnover of Rs 286.35 crore followed by Rolta (Rs 132.57 crore), Reliance Capital (Rs 132.20 crore), Reliance Communications (Rs 125.30 crore) and Infosys (Rs 107.25 crore).
Satyam Computer Services led the volume chart on BSE clocking volume of 2.67 crore shares followed by Reliance Natural Resources (2 crore shares), Rolta (1.53 crore shares), Unitech (1.36 crore shares) and Suzlon Energy (86.50 lakh shares).
Sugar shares surged after Indian sugar futures edged up today, 14 January 2009, on the commodities markets on speculation of a sharp fall in the output in the current sugar season. Shree Rennuka Sugars (up 3.28%), Bajaj Hindusthan (up 8.38%), and Balrampur Chini Mills (up 8.36%), gained.
Siemens India rose 6.58% to Rs 225 after the board approved transfer of its stake in its software unit, Siemens Information Systems, to a unit of its parent Siemens AG.
Mundra Port & Special Economic Zone surged 9.26% to Rs 386.90 on signing a pact with the state government of Gujarat, involving a total investment of Rs 15000 crore, for expansion and development of new facilities in the state. The company made this announcement after trading hours on Tuesday, 13 January 2009.
Shortly after the Prime Minister Manmohan Singh's review meeting
on Satyam on Tuesday, there was media speculation that government would be considering a financial assistance ranging between Rs 500 crore and Rs 2,000 crore but the PMO office declined to comment on it.
"We have nothing to say on this," a top PMO official said when asked about if the government was considering giving financial aid to Satyam which is confronting a cash crisis.
Meanwhile, official sources indicated that the government appointed Satyam board has written a letter to the finance ministry raising concerns about the liquidity crunch in the troubled company.
Talking to reporters after the first meeting of the new board in Hyderabad, HDFC chairman Deepak Parekh, who is member of the board, had said "working capital issues require immediate attention and we will work with the team to tide over this situation.
Satyam has 53,000 employees and needs over Rs 500 crore a month to meet the staff cost.
Commerce Minister Kamal Nath, who attended PM's review meeting, had said yesterday that the government was open to consider a financial package for Satyam.
Today the markets are likely to open positive. The other major Asian markets have also opened in green and the US markets closed mixed. The markets are likely to bounce back a little today after consecutive negative closing for so many days. In a major bailout the government has announced a package of Rs2,000 crore for Satyam’s revival. This could bring some charm in the market sentiments as well. The over all atmosphere across Asia looks good and therefore in today’s trade we expect the markets to be trading northward with a pinch of volatility.
On Tuesday, the markets traded volatile and closed in red. In the absence of any news, the markets could not move extreme in either direction. The Infosys results could not influence the market sentiments as investors were still carrying skepticism about fundamental growth of the various sectors. Selling pressures were faced by sectors like Oil & Gas, Bankex, Metal and Power that lost 1.78%, 1.17%, 1.15%, and 1.11% respectively. Sensex and Nifty lost by 0.42% and 1.02% respectively. Mid caps and Small caps also felt the burn as they lost 1.43% and 1.51% respectively. During the session we expect the markets to be trading positive with volatility of low intensity.
The BSE Sensex closed lower by 38.69 points at 9,071.36 and NSE Nifty ended lower by 28.15 points at 2,744.95. The BSE Mid Caps and Small Caps ended with losses of 43.60 points and 52.90 points at 3,006.41 and 3,442.35 respectively. The BSE Sensex touched intraday high of 9,261.00 and intraday low of 8,992.92.
On Tuesday, the US markets ended mixed. The markets finished with a choppy trade due to mixed results and sense of uncertainty. Financials were able to register strong gains after receiving some relief this session. The sector advanced 1.4% after finishing lower in each of the four prior sessions. Financials are down 12.6% through the last five sessions, though. Fed Chairman Ben Bernake has stated that more finance has to be injected along with necessary into the system to support the economic activity. Crude oil futures for the month of February delivery grew by $0.19 to $37.78 per barrel on New York Mercantile Exchange. The crude futures surged to a high of $40.55 earlier during the intraday as Saudi Arabia, OPEC''s biggest oil producer, said it will cut production by more than the target. Other OPEC members, such as Iran, Kuwait and the United Arab Emirates, have also notified their clients of cuts in February supplies.
The Dow Jones Industrial Average (DJIA) closed lower by 25.41 points at 8,448.56 NASDAQ index gained 7.67 points at 1,546.46 and the S&P 500 (SPX) also closed higher by 1.53 points to close at 871.79.
Indian ADRs ended mixed. In technology sector, Infosys went up by 5.87% and Wipro gained 6.67%. Further Patni Computers ended with increase of 1.77% while Satyam closed down by 9.59%. In banking sector ICICI gained 1.90% along with HDFC Bank ended down by 2.66%. In telecommunication sector, Tata Communication lost 0.56%, and MTNL tumbled 6.38%. Sterlite Industries increased by 2.42%.
Today the major stock markets in Asia have opened positive. The Shanghai Composite is trading high by 27.06 points at 1,890.42 while Hang Seng is high by 214.56 points at 13,882.61. Further Japan''s Nikkei is trading high by 100.50 points at 8,514.41. South Korea’s Seoul Composite is high by 8.65 points at 1,176.36 and Singapore’s Strait Times is high by 27.47 points at 1,789.29.
The FIIs on Tuesday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 1763.00 Crore and gross debt purchased stood at Rs 202.30 Crore, while the gross equity sold stood at Rs 2404.50 Crore and gross debt sold stood at Rs 240.30 Crore. Therefore, the net investment of equity and debt reported were Rs (641.50) Crore and Rs (38.00) Crore respectively.
On Tuesday, Indian Rupee closed at 49.11/12 per dollar, 0.5% weaker than Friday’s close of 48.84/85. The rupee traded weak due to the weak sentiments in capital markets and the dollar’s recovery against the G7 currencies.
On BSE, total number of shares traded were 30.44 Crore and total turnover stood at Rs 3,476.99 Crore. On NSE, total number of shares traded were 65.90 Crore and total turnover was Rs 9,449.92 Crore.
Top traded volumes on NSE Nifty – Unitech with 49931933 shares, Suzlon Energy with 22902586 shares, Reliance Comm with total volume traded 14781392 shares, DLF with 13809425 shares followed by SAIL with 11707164 shares.
On NSE Future and Options, total number of contracts traded in index futures was 922322 with a total turnover of Rs 11,833.51 Crore. Along with this total number of contracts traded in stock futures were 1031105 with a total turnover of Rs 10,291.37 Crore. Total numbers of contracts for index options were 1046838 with a total turnover of Rs 15,182.13 Crore and total numbers of contracts for stock options were 85096 and notional turnover was Rs 1071.31 Crore.
Today, Nifty would have a support at 2,701 and resistance at 2,839 and BSE Sensex has support at 8,892 and resistance at 9360.
Key benchmark indices are likely to open firm, reversing a four-day falling trend on firm global cues. The SGX Nifty January 2009 futures rose 29 points. However high volatility may be the order of the day. Reports of the government mulling a Rs 2,000 crore bailout package for the crisis-ridden Satyam Computers may lift the setiment.
India's second largest private sector bank by net profit HDFC Bank will declare its Q3 December 2008 results today, 14 January 2009. Aggregate results for 41 companies showed 33.10% rise in net profit on a 38.80% increase in net sales in Q3 December 2008 over Q3 December 2007.
Asian stocks advanced today, 14 January 2009 as technology companies gained on assumption consolidation will strengthen profits and a jump back in oil boosted energy producers, overriding declines among retailers. China's Shanghai Composite gained 0.56% or 10.35 points at 1,873.72, Hong Kong's Hang Seng rose 1.18% or 161.83 points at 13,829.88, Japan's Nikkei advanced 0.81% or 68.11 points at 8,482.02, Singapore's Straits Times surged 1.35% or 23.81 points at 1,785.63, South Korea's Seoul Composite was up 0.14% or 1.66 pointrs at 1,169.37 and Taiwan's Taiwan Weighted added 0.71% or 32.04 points at 4,564.40.
US markets ended mixed on Tuesday, 13 January 2009, as earnings concerns hovered. Exonn Mobil, Chevron and JPMorgan were biggest gainers on Dow Jones while Alcoa, General Electric and Bank of America were the biggest losers. The Dow Jones industriale average slipped 25.41 points, or 0.30%, to 8,448.56. However the S&P 500 index rose 1.53 points, or 0.18%, to 871.79 and the Nasdaq composite index gained 7.67 points, or 0.50%, to 1,546.46. In economic news, trade deficit shrank nearly 29% in November 2008, the biggest contraction in 12 years.
Back home, key benchmark indices extended losses for the fourth day in a row on Tuesday, 13 January 2009, in what was a highly volatile trading session. The BSE 30-share Sensex slipped 38.69 points or 0.42% to 9,071.36 and the S&P CNX Nifty fell 28.15 points or 1.02%, at 2744.95
Foreign institutional investors (FIIs) were net sellers worth Rs 345.78 crore while mutual funds bought shares worth Rs 152.58 crore on Tuesday, 13 January 2009, according to provisional data on NSE.
Nifty (2745) Sup 2710 Res 2790
Buy ACC (509) SL 504
Target 519, 521
Sell HDFC Bank (989) SL 1005
Target 970, 965
Sell Tata Comm (474) SL 479 Target 466, 464
Buy GAIL (206) SL 211
Target 199, 197
Buy IOC (437) SL 432
Target 447, 449
Government tells Bombay High Court that NTPC would not be allowed to buy KG-D6 gas at less than US$4.2/mmBtu (BS)
IOC, HPCL and BPCL have put on hold investing US$600mn in sugarcane farms in Brazil for producing ethanol that was to be mixed with petrol for sale domestically (BS)
RIL to keep pumps shut till government grants level-playing field (ET)
ONGC seeks nod to dump methane blocks (ET)
DLF Assets plans to raise US$450mn (FE)
Unitech eyes US$560mn from PE funds (BS)
TCS gets significant portion of World Bank contracts that were previously serviced by Satyam (BS)
Gail India will invest Rs50bn in the next 3-4 years to set up a CNG corridor across the country (ET)
IDFC, BHEL and Gujarat State Energy Company to set up thermal plant at Ahmedabad. (BL)
SEZs set up by IT majors like Infosys, Wipro and TCS will soon be able to enjoy 100% tax exemption on profits (ET)
Tata Communications plans Rs10bn rights issue (BS)
Satyam Computers JV with Cisco Systems may fall through (ET)
NMDC scouts for partner to secure domestic coal assets. (ET)
Bank of Baroda eyes 29% credit growth in 2008-09 (BS)
Jet Airways in talks with foreign carriers for leasing out aircraft (BL)
UB finds Cobra Beer over-valued. (BL)
Jubilant Organosys through its subsidiary has entered into a drug discovery pact with a US-based firm, BioLeap Llc (FE)
Andhra Bank cuts BPLR by 75bps (BS)
Binani Cement inks MoU with Gujarat Government for setting-up a greenfield plant of 2.5mtpa (FE)
HOV services announces Rs50mn buyback (BS)
Government may allow 25% FDI in airlines (BS)
Government likely to cut fuel prices – petrol by Rs5/litre, diesel by Rs2/litre and domestic LPG by Rs25/cylinder (BS)
DoT suggests higher 3G spectrum auction price to cabinet (BS)
Auction of oil and gas blocks under NELP VIII could be delayed (BS)
The bidding process for setting-up city gas distribution networks in 14 identified cities to begin by January-end (BS)
RBI unlikely to cut key policy rates soon, says Mr.O P Bhatt, Chairman of SBI (BS)
The total telecom subscriber base increases 8.6% qoq to 353.7mn in the September-ending quarter (FE)
Mobile number portability launch delayed; services to begin in September 2009 in metros and in January 2010 pan-India (FE)
PSBs to cut interest rates on bulk deposits to a maximum of 7.5% for those with one-year maturity. (ET)
The Prime Minister’s Office tells petroleum ministry to consider linking petrol and diesel prices to the market when it finalizes a cut in pump prices later this week. (ET)
Government is expected to take a decision on raw sugar imports within a fortnight and increase domestic supply manifold. (ET)
DoT and Trai seem to have locked horns over the number of blocks of 3G spectrum to be auctioned. (ET)
Domestic air-traffic down 5% in 2008 (BS)
The optimist pleasantly ponders how high his kite will fly; the pessimist woefully wonders how soon his kite will fall.
Happy Makar Sankranti, Pongal and Lohri. This day the Sun changes its position from one sign of the Zodiac to the other and is considered auspicious as it coincides with the harvest season and marks the end of the winter season. We have gone through many auspicious days only to get rattled later. But the market is likely to see some bounce today given the firm trend across Asian markets amid growing anxiety over corporate governance issues. What remains to be seen is whether the market will be able to sustain the early advance. So, let go of the kites when they are high lest you have to feel the pain of seeing it get cut.
Tuesday saw a few stocks plunge intra-day amid a plethora of market rumours about these companies' financial management. Though some of them have sought to assuage investor concerns about possible financial irregularities, the market will remain jittery about these issues in the wake of the Satyam scandal.
Coming to the broader market, the traded volume and the turnover have taken a hit in the wake of the sordid Satyam episode and lack of clarity on the near-term market direction. With the earnings season just starting to pick up, the mood will remain cautious with alternate bouts of buying and selling. Given this backdrop, one should remain guarded though valuations may well appear mouth-watering. One can still indulge in select stock- specific buying, though. But that should be restricted to quality stocks and only for long-term purpose.
Key Results Today: HDFC Bank, GTL Infra, NIIT Tech and PSI Data Systems.
On the global front, the scenario is unlikely to change rapidly, as the daily dose of bad news continues unabated, from both corporate as well as economic front. Citigroup has announced a merger of its brokerage unit with Morgan Stanley. The ECB is likely to cut key rates on Thursday.
US stocks ended mixed on Tuesday amid growing doubts about Citigroup's future even as aluminium major Alcoa's big quarterly loss exacerbated worries about the weak corporate profit environment.
Stocks swayed on both sides of unchanged through the afternoon, with weakness in banks and Alcoa tempering strength in technology.
Shares of Citigroup turned higher as word circulated that the breakup of the company is likely to go beyond a widely expected brokerage joint venture with Morgan Stanley. After the close, Citi confirmed that it is selling 51% of its Smith Barney unit to Morgan Stanley.
Reports said that Citigroup may sell its CitiFinancial consumer-lending unit and rein in trading with the bank’s own capital after agreeing to cede control of its Smith Barney retail brokerage.
The Dow Jones Industrial Average ended at 8,448.56, losing 25.41 points, or 0.3%, and down for a fifth straight session. Sixteen of the Dow's 30 components finished lower, the declines led by Bank of America off 6.8%. Also weighing, Alcoa shares fell 5.1% after the aluminum major announced weak results.
The S&P 500 index gained 1.53 points, or 0.2%, to 871.79, while the Nasdaq Composite index climbed 7.67 points, or 0.5%, to 1,546.46.
GE shares slumped 5.6% after Barclays said the firm's quarterly results could be at the lower end of estimates and that Moody's could then cut its ratings outlook on GE's debt to negative. Shares of JP Morgan Chase, rose 5.8%. The bank said late on Monday that it plans to report quarterly results on Thursday, almost a week ahead of schedule.
On Wednesday, the government releases its December retail sales report and the November reading on business inventories. The weekly energy supply report is also due in the morning, while the afternoon brings the release of the Fed's semi-annual "beige book" reading on the economy.
Alcoa started off the fourth-quarter reporting period on a downbeat note on Monday. The aluminum maker lost 28 cents per share in the quarter, versus a profit of 36 cents per share a year ago. Analysts expected Alcoa to lose 10 cents per share on average. The company also reported a bigger-than-expected rise in revenue.
Yahoo announced that it has hired Carol Bartz, a longtime technology executive, as its new CEO.
In other corporate news, drugmaker Pfizer said it is cutting up to 800 scientist jobs. Barclays confirmed it was going to lay off some employees, but would not give a number. Earlier reports speculated the bank could cut as many as 2,000 jobs.
Market breadth was positive. On the New York Stock Exchange, 1.3 billion shares traded, with advancers outpacing decliners 8 to 7. On the Nasdaq Stock Market, 801 million shares traded and advancers ran ahead of decliners 7 to 6.
In a speech delivered in London, Federal Reserve Chairman Ben Bernanke called the timing and strength of the global economic recovery "highly uncertain," saying President-elect Barack Obama's stimulus plan could boost economic activity, but a recovery won't stick unless other steps are taken to stabilize the financial system.
The next step in the battle against the financial market crisis is to get toxic assets off the balance sheets of financial institutions, Bernanke said, which may require government outlays above the $700 billion fund set up by Congress.
The US federal budget deficit grew by $83.6 billion in December, the government said on Tuesday afternoon, versus forecasts for $83 billion. That brings the total deficit for the first three month of fiscal 2009 to $485.2 billion, more than the deficit for all of 2008.
Treasury prices rose, lowering the yield on the benchmark 10-year note to 2.29% from 2.30% on Monday. 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 1.09% from 1.16% Monday, according to the British Banker's Association. Overnight Libor held steady at 0.10%. Libor is a key bank lending rate.
The dollar gained versus the euro and yen.
US light crude oil for February delivery fell 19 cents to settle at $37.78 a barrel on the New York Mercantile Exchange.
COMEX gold for February delivery down 30 cents to settle at $820.70 an ounce.
Gasoline prices held steady at a national average of $1.79 a gallon.
European shares ended lower for a fifth straight session on Tuesday. The pan-European Dow Jones Stoxx 600 index fell 1.4% to 201.65, pulled down by sharp losses in the banking sector.
On a national level, the French CAC-40 index dropped 1.5% to 3,197.89, Germany's DAX 30 index fell 1.8% to 4,636.94 and the UK's FTSE 100 index dropped 0.6% to 4,399.15.
Indian market extended losses to fourth straight trading session on Tuesday. It was a highly volatile session with the BSE benchmark Sensex gyrating over 200 points between its intra-day high and low.
Weak global cues and selling in the oil & gas, banking and metals’ stocks dragged the Sensex below the 9k mark to hit a low of 8,992.
Although on the other side better-than-expected results from Infosys boosted other IT stocks.
However, mid-cap stocks like Rolta, Polaris plummeted after reports stated that theses companies may also face some issues with accounting and compliance.
Others like Jet Airways, ICSA India, BRFL and Gammon India also were under pressure for the compliance reason. Finally, the BSE benchmark Sensex ended at 9,071 losing 38 points and the NSE Nifty index lost 28 points to close at 2,744.
Shares pf PSTL have locked at 5% lower circuit to Rs33.7 after PS Saminathan, the founder chairman and MD of the company sold over 6% stake through off-market deals. The scrip has touched an intra-day high of Rs33.7 and a low of Rs33.7 and has recorded volumes of over 27,000 shares on NSE.
Shares of Bajaj Auto advances by over 1% to Rs432 after the company announced that it plans to launch six new bikes in 2009 to rev up market share. The scrip has touched an intra-day high of Rs448 and a low of Rs425 and has recorded volumes of over 19,000 shares on NSE.
NMDC has advanced by 3.7% to Rs152 following reports that it was looking for partners to jointly acquire mine coal blocks to secure fuel supplies.
The company has formed a venture with four other state-run companies to acquire coal mines overseas.The scrip has touched an intra-day high of Rs156 and a low of Rs146 and has recorded volumes of over 45,000 shares on NSE.
RCom has slipped by over 7’% to Rs165 after reports stated that the telecom tribunal TDSAT has dismissed the company’s plea for GSM spectrum in six circles. The scrip has touched an intra-day high of Rs186 and a low of Rs165 and has recorded volumes of over 1,00,00,000 shares on NSE.
The aftershocks from the Satyam quake would continue to haunt the Indian market. The unexpected improvement in the industrial production data may not prevent the key indices from slipping further as the economy will take time to pick up momentum again. Corporate earnings will continue to be in focus. Politics may become a key factor next month onwards till the end of Lok Sabha polls.
Strong dollar continue to turn precious metals pale
Bullion metals ended marginally lower on Tuesday, 13 January, 2009 as the dollar strengthened and also due to the weak crude oil price. 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 Tuesday, Comex Gold for February delivery fell $0.30 (0.03%) to close at $820.70 an ounce on the New York Mercantile Exchange. Earlier, prices fell to a low of $814. Last week, gold prices ended down by 2.8%. This year gold has lost 7.7% till date. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (20.5%) since then.
On Tuesday, Comex silver futures for March delivery fell by 7 cents (0.7%) to $10.68 an ounce. Last week, silver has gained 13 cents. For 2008, silver lost 24%.
At the currency market on Tuesday, the dollar was up against most major counterparts. The U.S. dollar rose against the euro on expectations that the European Central Bank will cut its key interest rate later this week. The ECB's key lending rate stands at 2.5%.
In the crude market on Tuesday, crude prices fell earlier in the day but at the end managed to pare its losses and end marginally up by 17 cents at $37.78.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
Last year, the weakening dollar and higher global demand for raw materials had led to records for commodities including gold. Gold reached a record in March 2008 as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. In the last move, the Federal Reserve has cuts its target bank lending rate to 0.25% from 5.25% in September, 2007. The Fed did it in nine steps.
Prior to 2008, gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.
At the MCX, gold prices for February delivery closed lower by Rs 20 (0.15%) at Rs 12,974 per 10 grams. Prices rose to a high of Rs 13,079 per 10 grams and fell to a low of Rs 12,855 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 193 (1.1%) lower at Rs 17,824/Kg. Prices opened at Rs 17,903/kg and fell to a low of Rs 17,548/Kg during the day's trading.
Production cut talks by OPEC boost prices
After dropping in the previous five sessions, crude oil prices ended higher on Tuesday, 13 January, 2009. Prices rose as Saudi Arabia said that OPEC will go for production cuts more than required to boost crude prices.
On Tuesday, crude-oil futures for light sweet crude for February delivery closed at $37.78/barrel (higher by $0.19 or 0.5%) on the New York Mercantile Exchange. Earlier during the day, prices fell to a low of $36.1 and rose to a high of $40.55. Last week, crude prices shed 12%.
Prices reached a high of $147 on 11 July but have dropped almost 65% since then. Year to date, in 2009, crude prices are lower by 16.2%.
In the monthly report, the Energy Information Administration said today that global oil consumption is projected to fall by 800,000 barrels per day in 2009. That's 400,000 barrels more than the previous month's forecast. Half of the consumption reduction in 2009 will come from the U.S., the world's largest oil consumer,
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
OPEC has been trying to cut production consistently in order to step up prices from their current low levels.
Saudi Oil Minister Ali al-Naimi said today that February production will be “lower than the target” set at a 17 December, 2008 OPEC meeting. The country is currently producing 8 million barrels a day, about level with its 8.051 million-barrel-a-day allocation.
Oil ministers from the Organization of Petroleum Exporting Countries agreed in Oran, Algeria, to cut supply by 9% w.e.f 1January, 2009 to 24.845 million barrels a day.
Against this background, February reformulated gasoline rose 6% to $1.1489 a gallon and February heating oil gained 2.8% to $1.5141 a gallon.
February natural-gas futures fell 5.1% to $5.26 per million British thermal units.
At the MCX, crude oil for January delivery closed at Rs 1,850/barrel, lower by Rs 9 (0.5%) against previous day's close. Natural gas for January delivery closed at Rs 259.1/mmbtu, lower by Rs 15.3/mmbtu (5.6%).