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Monday, January 19, 2009

BSE Bulk Deals to Watch - Jan 19 2009

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
19/1/2009 519485 ASIA IND NET ATUL NAGINBHAI CHAUHAN B 21682 6.76
19/1/2009 523207 CAMLIN LIMIT MERIDIAN INVESTMENTS S 349170 9.70
19/1/2009 533026 CHEMCEL NAINESH HIMAT JATANIA S 200000 5.18
19/1/2009 532326 INTENS TECH VACUF LIMITED S 102567 8.56
19/1/2009 511728 KZLEASING PRAKASH D. MORI B 20000 33.75
19/1/2009 531312 SANRAA LOKESH INDER KAPOOR S 240000 4.99
19/1/2009 530735 SUPER BAKE I MANINDRA NATH TIWARI S 23700 5.00
19/1/2009 526139 TRANSGENE BI CARWIN MERCANTILES PVT LTD B 92949 18.47
19/1/2009 531917 TWINSTA SO E JUHI DINESHCHANDRA RASTOGI B 200000 2.35
19/1/2009 531917 TWINSTA SO E NAMITA STOCKTRADE.PVT.LTD S 200000 2.35
19/1/2009 507878 UNITECH LTD SICOM LTD S 12200000 26.72
19/1/2009 531249 WELL PACK PA SUNIL BHANDARI B 65627 43.20
19/1/2009 531249 WELL PACK PA REKHA BHANDARI B 105000 43.20
19/1/2009 514470 WINSOME TEXT SANJAY SHAH B 30000 32.90

NSE Bulk Deal Watch - Jan 19 2009

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
19-JAN-2009,BAJAJHLDNG,Bajaj Holdings & Invs Ltd,ICICI PRUDENTIAL LIFE INSURANCE CO LTD,BUY,1911004,225.00,-
19-JAN-2009,HANUNG,Hanung Toys and Textiles,DSP MERILL LYNCH MUTUAL FUND,SELL,139900,28.78,-
19-JAN-2009,UNITECH,Unitech Ltd,SICOM,SELL,8120000,27.24,-

Post Session Commentary - Jan 19 2009

The Indian market ended just above the dotted line after hovering in narrow range between positive and negative zones for through out of session as investors preferred to wait before Barrack Obama’s swears in as the next US president. The market was volatile as investors were not persuaded about a recovery, along with concerns about slowing earnings growth and rising foreign fund outflows dominating attitude. However, firm global markets supported the domestic bourses at lower level.

The domestic market today opened flat and turned choppy soon after start amid mixed cues from Asian markets. The investors were cautious ahead of Barrack Obama’s swearing in as US president. Obama is set to take office on Tuesday following a US national holiday on Monday. Global market is likely to find a clear way from the inaugural speech by the new president. Further, benchmark indices continued to trade with instability as swung between red and green territory. Finally, market ended slightly above the dotted line on support of some buying interest in index heavyweights. From the sectoral front, Reality, Metal, Oil & Gas, Capital Goods and PSU stocks supported the market with buying interest. Midcap and Smallcap stocks also joined the buyers’ radar. However, Bank, IT, Pharma, Auto and FMCG stocks witnessed most of the selling from these baskets.

Among the Sensex pack 17 stocks ended in red territory and 13 in green. The market breadth remained positive as 1353 stocks closed in green while 1024 stocks closed in red and 95 stocks remained unchanged in BSE.

The BSE Sensex closed slightly up by 5.98 points at 9,329.57 and NSE Nifty ended higher by 17.75 points at 2,846.20. The BSE Mid Caps and Small Caps ended with gains of 16.70 points and 38.69 points at 3,043.53 and 3,451.46 respectively. The BSE Sensex touched intraday high of 9,409.51 and intraday low of 9,273.41.

Gainers from the BSE Sensex pack are JP Associates (4.69%), Sterlite Indus (4.02%), ONGC Ltd (3.45%), Bharti Airtel (2.23%), Tata Steel (1.98%), Hindalco (1.50%), L&T Ltd (1.45%), RCom (1.29%) and BHEL (1.07%).

Losers from the BSE Sensex pack are M&M Ltd (4.58%), Grasin Industries (2.71%), ICICI Bank (2.57%), Wipro Ltd (2.44%), Tata Motors (2.12%), MAruti Suzuki (1.78%), SBI (1.55%), Taa Power (1.47%), HDFC (1.21%), Reliance Infra (1.13%) and ITC Ltd (0.99%).

On the global markets front, the Asian Markets ended firm as Hang Seng index closed higher by 84.78 points at 13,339.99. Along with this, Nikkei, Straits Times and Seoul Composite index ended up by 26.69, 16.54 and 15.45 points at 8,256.85, 1,746.99 and 1,150.65 respectively.

The European Markets are trading in positive as United Kingdom government has unveiled second bank bailout plan. The DAX is up by 72.08 points at 4,438.36 and FTSE 100 is higher 85.18 points at 4,232.28. Government proposed to extend drawdown window for new debt and will also extend the maturity date for BoE''s discount window facility. It will establish a new BoE facility for purchasing high quality assets. The government is going to offer capital and asset protection for banks and to clarify the regulatory approach to capital requirements.

The BSE Reality index outperformed the benchmark indices as ended up by (2.17%) or 37.32 points at 1,761.08. Major gainers are Akruti City (12.24%), Housing Development (8.33%), Unitech Ltd (5.98%), Ansal Infra (5.96%), Penland Ltd (5.39%) and Parsvnath (5.10%).

The BSE Metal stocks extended gains on higher metal prices on the London Metal Exchange and ended higher by (1.85%) or 92.61 points at 5,088.04. Main gainers are Steel Authority (4.55%), Sterlite Indus (4.02%), Hindustan Zinc (3.81%), Tata Steel (1.98%), Welspan Gujarat Sr (1.72%) and Hindalco (1.50%).

The BSE Oil & Gas index also supported the buying sentiment and advanced by (1.46%) or 86.71 points at 6,020.40. Gainers are ONGC Ltd (3.45%), Gail India (2.65%), Reliance Pet (2.26%), HPCL (2.12%), Cairn Ind (0.93%) and Reliance (0.92%).

The BSE Bank index tumbled (0.97%) or 48.72 points to close at 4,989.12 as concerns of rising defaults in a weakening economy offset hopes of further relief in interest rates. ICICI Bank (2.57%), Indus Ind Bank (1.71%), SBI (1.55%), Kotak Bank (1.33%) and Indian Overseas Bank (0.45%) ended in negative territory.

The BSE IT index fell as fears a weak global economy would cut the amount firms spent on technology and closed with decrease of (0.75%) or 16.41 points at 2,168.57. Scrips that lost are Moser Bayer (3.56%), Wipro Ltd (2.44%), Oracle Fin (1.90%), HCL Tech (1.57%), Infosys Tech (0.69%) and TCS Ltd (0.45%).

The BSE Pharma index also remained out of favour as dropped by (0.48%) or 13.79 points to close at 2,838.65 as Tanla (8.11%), HCL Tech (7.45%), Tata Communications (6.14%), Reliance Communication Ltd (6.01%), Idea Cell (5.93%), TCS Ltd (5.28%) and NIIT Ltd (5.00%) ended in red.

Auto, banking shares drop in volatile market

Volatility in index heavyweights Reliance Industries (RIL), Larsen & Toubro (L&T), Infosys and banking stocks caused volatility in the key benchmark indices. The BSE 30-share Sensex rose 5.98 points, or 0.06%, shedding close to 80 points from the day's high and up about 55 points from the day's low.

After opening on positive note on firm Asian stocks, the Indian market gyrated between the positive and negative zone. The market firmed up in late trade tracking firm European stocks before witnessing a sell-off.

European stocks rose on Monday as recently-hammered banks such as Barclays bounced back, buoyed by news of a fresh UK rescue plan for the ailing sector, while higher metal prices helped lift mining shares. Key benchmark indices in France, Germany and UK were up by between 1.1% to 1.64%.

The UK government will allow banks to insure against steep losses and guarantee their debt to stop the credit crunch pushing the economy into a deep slump. The plan raises the government's stake in Royal Bank of Scotland which said it lost over 20 billion pounds last year, and also lays the framework for the Bank of England to boost money supply.

Asian stocks rose as investors looked for US President-elect Barack Obama to quickly roll out hefty economic stimulus spending and a revived plan to buy bad bank assets. Key benchmark indices in China, Singapore, Hong Kong, Taiwan, and South Korea rose by between 0.02% to 1.65%.

Japan's Nikkei 225 index rose 0.32%. The Japanese industrial output plunged a record 8.5% in November 2008 from the previous month, the Japanese government said today, 19 January 2009. An initial estimate released last month had been for a drop of 8.1%. It is the biggest fall since comparable records began in 1953.

Obama is set to take office on Tuesday following a US national holiday on Monday, and many investors have hoped for weeks that he will act aggressively to try to pull the economy out of its deep, year-long recession.

US stocks rose on Friday, 16 January 2009, after Bank of America received a new capital injection of $20 billion in exchange for stocks and a $118-billion asset guarantee from the Federal government. The Dow Jones industrial average advanced 68.73 points, or 0.84%, to 8,281.22. The Standard & Poor`s 500 index added 6.38 points, or 0.76%, to 850.12. The Nasdaq composite rose 17.49 points, or 1.16%, to 1,529.33.

The BSE 30-share Sensex was up 5.98 points, or 0.06%, to 9,329.57. The Sensex gained 85.92 points at day's high of 9,409.51 in late trade. The Sensex lost 50.12 points at the day's low of 9,273.47 in early trade.

The S&P CNX Nifty rose 17.75 points, or 0.63%, to 2,846.20.

The market breadth, indicating the overall health of the market, was positive on BSE with 1377 shares advancing as compared with 1,047 that declined. 40 shares remained unchanged.

Among the 30-member Sensex pack, 13 advanced while the rest declined.

The BSE clocked a turnover of Rs 2603 crore today 19 January 2009 lower than Rs 2,943.30 crore on Friday, 16 January 2009.

Nifty January 2009 futures were at 2833, at a discount of 13.20 points as compared to the spot closing of 2846.20. Turnover in NSE's futures & options (F&O) segment was Rs 26,461.81 crore, much lower than Rs 32,716.71 crore on Friday, 16 January 2009.

The BSE Realty index (up 2.17%), the BSE Metal index (up 1.85%), the BSE Oil & Gas index (up 1.46%), the BSE Capital Goods index (up 1.32%), the BSE PSU index (up 0.79%), the BSE Power index (up 0.57%), the BSE Teck index (up 0.47%), the BSE Consumer Durables index (up 0.12%) outperformed the Sensex.

The BSE Bankex (down 0.97%), the BSE IT index (down 0.75%), the BSE HealthCare index (down 0.48%), the BSE Auto index (down 0.38%), the BSE FMCG index (down 0.23%), underperformed the Sensex.

The BSE Sensex has lost 317.74 points or 3.29% so far in 2009 from its close of 9647.31 on 31 December 2008. The barometer index had lost 10639.68 points or 52.44% in the calendar year 2008

As per the provisional data on BSE, the foreign institutional investors (FIIs) sold shares worth Rs 363.37 crore today, 19 January 2009 and domestic funds bought shres worth Rs 275.97 crore.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 0.92% to Rs 1,229.65, extending a 6.56% surge on Friday, 16 January 2009. But the stock was volatile. It moved between a high Rs 1,249.50 and a low of Rs 1,208.30.

The company during market hours on Thursday, 15 January 2009 said its unit Reliance Petroleum (RPL) will start fuel exports from its new refinery this month. RPL, last month, commissioned its 5,80,000-barrels-per-day only for exports refinery at Jamnagar in Gujarat.

PSU OMCs rose on a sharp slide in crude oil prices. HPCL and Indian Oil Corporation rose by between 0.98% to 2.12%. But BPCL fell 0.09%. Lower oil prices will reduce losses of the state-run oil firms on domestic sale of LPG and kerosene at a controlled price. The oil marketing firms are making profit on sale of petrol and diesel thanks to a sharp slide in oil prices from a record high of $147 a barrel struck in July 2008.

Indias largest engineering and construction firm by sales Larsen & Toubro (L&T) rose 1.45% to Rs 728 off the day's high of Rs 735.80 on reports the company continues to be interested in acquiring Satyam Computer Services. L&T holds 4% stake in fraud-hit Satyam.

Metal stocks rose on higher metal prices on the London Metal Exchange. Tata Steel, National Aluminum Company, Hindalco Industries, Steel Authority of India, Sterlite Industries, rose by between 0.55% to 4.55%.

Rate sensitive real estate shares rose on hopes lower rates will spur housing demand. Akruti City, Puravankara Projects, Housing Development a & Infrastructure and Indiabulls Real Estate rose by between 1.24% to 12.24%.

Unitech rose 5.98% to Rs 31.90 on 10.8 crore shares after it witnessed multiple block deals in morning trade. More than 50 lakh shares changed hands at average Rs 27 per share. The company's board, at the Extra Ordinary General Meeting held today, 19 January 2009 approved raising of additional long-term funds upto Rs 5,000 crore in other currencies, through issuance of further securities in the company. The stock had plunged to Rs 25.75 earlier in the day.

Outsourcing focussed IT firms fell as fears a weak global economy would cut the amount firms spent on technology and on a stronger rupee. India's third largest software services exporter, Wipro fell 2.44%. The company will announce is Q3 December 2008 earnings on 21 January 2009.

India's second largest software services exporter Infosys Technologies fell 0.69% to Rs 1,259.55 off the day's high of Rs 1,280 even as its American depository receipt (ADR) rose 2.03% on Friday, 16 January 2008.

TCS, India's largest software services exporter by sales fell 0.45% to Rs 500.70 off the day's high of Rs 509.50. The company had reported a lower-than-expected rise in net profit in Q3 December 2008 with the management cautioning about the tough business environment at the time of declaring results after market hours on Thursday, 15 January 2008.

Shares of fraud-hit software firm Satyam Computer Services rose 4.09% after the newly-appointed board of the company met on 17 January 2009 and said that customers have expressed continued support and none of the deliveries have been affected. On liquidity, the board said it is in discussions with banks and financial institutions. Among other things, the board decided to meet on a weekly basis till the time the search for a CEO and CFO continues. Further, till such appointments, one of the board members would chair the meeting by rotation. Satyam's ex CEO Ramalinga Raju had resigned on 7 January 2009 after admission of accounting fraud in the company.

The Indian rupee rose today, 19 January 2009 propped up by firmer Asian stock markets but gains may be limited by importer dollar buying. The partially convertible rupee was at 48.6 per dollar, above Friday's close of 48.78/80. A stronger rupee affects operating margins of IT firms negatively as they earn most of their revenues from exports.

Banking stocks were choppy caught between fears of rising defaults in a weakening economy offset and hopes that a further fall in interest rates may boost lending growth. India's largest bank in terms of assets and branch network State Bank of India fell 1.55% to Rs 1,147.40, off the day's high of Rs 1,184.95.

India's largest private sector bank by net profit ICICI Bank fell 2.57% to Rs 413.05, off the day's high of Rs 429.25 even as its ADR rose 2.24% on Friday 16 January 2009.

India's second largest private sector bank by net profit HDFC Bank rose 0.36% to Rs 939.95 off the day's high of Rs 955 as its ADR rose 1.24% on Friday.

India's largest dedicated housing finance company HDFC fell 1.24% to Rs 1,546.50 off the day's high of Rs 1,585 after it has slashed its home loan rates by as much as 150 basis points. With this cut, the floating rate loans would be available at 9.75%.

Allahabad Bank rose 4.73% as its net profit rose 1.21% to Rs 369.46 crore on 17.89% rise in total income to Rs 2,306.44 crore in Q3 December 2008 over Q3 December 2007.

Auto stocks fell as high interest rates and sluggish consumer spending have dented demand for automobiles, including for trucks, motorcycles and scooters. Mahindra & Mahindra, Hero Honda Motors, Tata Motors and Maruti Suzuki India fell by between 0.4% to 4.58%.

Select FMCG stocks rose on defensive buying. Tata Tea, Dabur India, Hindustan Unilever, Britannia Industries were up by between 0.05% to 1.14%.

Select healthcare stocks, too, rose on defensive buying. Wockhardt, Dr. Reddy's Laboratories, Novrtis India, Pfizer gained by between 0.57% to 4.27%.

India's largest telecom services provider by sales Bharti Airtel rose 2.23% to Rs 646.95 off the day's high of Rs 652 after it launched Internet Protocol Television Services (IPTV) in India today, 19 January 2009.

India's second largest telecom services provider by sales Reliance Communications rose 1.29% to Rs 184.95 off the day's high of Rs 188.50 on reports of close to signing a deal with UAE-based telecom company Emirates Telecommunications Corporation (Etisalat) to share passive infrastructure.

Jaiprakash Associates gained 4,69% as its net profit rose 6.23% to Rs 165.51 crore on a 44.48% increase in total income to Rs 1447.12 crore in Q3 December 2008 over Q3 December 2007.

India's largest cigarette maker by sales ITC fell 0.99% on reporting a lower-than-expected rise in net profit in Q3 December 2008. The company announced the results during the mid-afternoon trade today.

Graphite India fell 3.18% after it said may have to cut output across facilities to align with slowing demand. It may also cut jobs in coming months, it added.

MRO TEK declined 2.22% after the company posted a net loss of Rs 1.27 crore in Q3 December 2008 as compared to net profit of Rs 3.72 crore in Q3 December 2007.

Unitech clocked the highest volume of 1.08 crore shares on BSE. Satyam Computer Services (21.32 lakh shares), Reliance Natural Resources (1.17 crore shares), Suzlon Energy (1.17 crore shares) and Karuturi Global (78.85 lakh shares) were the other volume toppers in that order.

Unitech clocked the highest turnover of Rs 314.40 crore on BSE .Reliance Industries (Rs 175.41 crore) ,Reliance Capital (Rs 120.99 crore), State Bank of India (Rs 117.80 crore) and Educomp Solutions (Rs 109.60 crore) were the other turnover toppers in that order.

Financial sector weighs on Wall Street

Gains at the end of the week fail to negate market's weekly loss

Though stocks at wall Street managed to eke out some gains during the last couple of day during the week which ended on Friday, 16 January, 2008, indices suffered quite heavy losses for the week. The financial sector led by Citigroup and Bank of America were the main culprits for the weakness in the market. Bothe the companies disclosed about their losses in the latest quarter. More companies, meanwhile, announced job cuts.

There was a lot of economic news of note once again this week. The market reacted to each one of them in an expected negative manner. The earning season also kicked off this week with Alcoa being the first to report its expected disappointing earnings.

The Dow Jones Industrial Average lost a huge 317.96 points (3.7%) for the week to end at 8,281.22. Tech - heavy Nasdaq lost 42.26 points (2.7%) to end at 1,529.33. S&P 500 lost 40.23 points (4.5%) to end at 850.12.

During the week, Bank of America said it lost $1.79 billion in the fourth quarter, excluding the $15 billion loss at Merrill Lynch. The company also reinforced the need for additional governmental aid to the tune of $20 billion for the acquisition of Merrill Lynch. Citigroup also reported a huge $8.3 billion fourth quarter loss and also announced that it would be splitting into two units as it attempts to downsize its operations. Top of it came worse than expected earning report from JP Morgan Chase.

All these factors once again reinforced the concerns about deteriorating credit quality and the seemingly unending need by the banks to raise capital to plug the gaping holes created by losses and write downs on bad investments.

Economic news that checked in added more salt to the already injured Wall Street. December retail sales declined 2.7% and fell for the sixth straight month. Industrial production in the fourth quarter declined at an 11.5% annual rate. The trade deficit narrowed sharply to $40.4 billion with a $25 bln drop in imports and an $8.7 bln drop in exports reflecting a sharp contraction in overall global trade.

The last week also witnessed weekly initial claims jumping 54,000 to 524,000. Although there was a 115,000 drop in continued claims, that improvement was quickly attributed to people having exhausted their jobless benefits.

Both the PPI and CPI reports checked in a bit better than expected. But once again, reports on the earnings front continued to disappoint. Alcoa came up short of lowered estimates and Intel reported a 90% drop in fourth quarter net income. Others like NVIDIA, Motorola and Genentech issued sales and/or earnings warnings.

On Friday, 16 January, 2009, after being 45 points lower earlier in the day, The Dow Jones Industrial Average ended higher by 68.7 points at 8,281.22, the Nasdaq closed higher by 17.5 points at 1,529.33 and the S&P 500 closed higher by 6.4 points at 850.12.

Bank of America axed its dividend and posted its first loss since 1991 after the government said it would invest an additional $20 billion in the company taking help from Federal Reserve for its acquisition of Merrill Lynch.

On Friday, crude-oil futures for light sweet crude for February delivery closed at $36.51/barrel (higher by $1.11 or 3.1%) on the New York Mercantile Exchange. Earlier it dropped to a low of $34.18. For the week, crude prices shed 10.6%.

Executive Summary

For the week, indices registered good losses at Wall Street. The financial sector led by Citigroup and Bank of America were the main culprits for the weakness in the market. Bothe the companies disclosed about their losses in the latest quarter. More companies, meanwhile, announced job cuts.

In percentage terms, Dow lost 3.7, Nasdaq lost 2.7% and S&P 500 lost 4.5% during the week.

For the year 2009, Dow, Nasdaq and S&P 500 are down by 5.6%, 3% and 5.9% respectively.

Pre Session Commentary - Jan 19 2009

Today the markets are likely to open positive as the Asian markets have opened in green. There is not enough news and therefore a trend in the domestic markets is unlikely. The markets make follow the trend happening in the Asian Markets and later in the European markets. The inflation numbers are softening and there is no bad news to deteriorate the market sentiments. However in the lack of any news during today’s trading session volatility is likely to creep in.

On Friday, the markets closed in green. The markets have sprung back on the back of congenial positive sentiments prevailing across the markets in the US, Asia and Europe. Asian markets showed enough strength with firmness and consequently boosted the morale of investors in the domestic markets as well. Frontline stocks like Reliance, Reliance Infra, NTPC and Bharati Airtel were the forerunners in BSE. Sectors like Oil & Gas, Power, Metal, PSU and Bankex kept the shine as they gained 5.09%, 4.29%, 3.45%, 3.36% and 2.42% respectively. All the sectors closed in green except the Realty that shed 2.39%. Sensex and Nifty gained 3.06% and 3.35% respectively. Mid caps and Small caps gained by 0.53% and 0.07% respectively. During the session we expect the markets to be trading volatile.

The BSE Sensex closed higher by 276.85 points at 9,323.59 and NSE Nifty gained by 91.75 points at 2,828.45. The BSE Mid Caps and Small Caps ended with gains of 16.02 points and 2.29 points at 3,026.83 and 3,412.77 respectively. The BSE Sensex touched intraday high of 9,342.47 and intraday low of 9,125.65.

On Friday, the US markets closed in green. The Citigroup and Bank of America reported worst than expected results. Citigroup lost $1.72 per share whereas; Bank of America lost $0.48 per share. The markets mainly picked up on the back of news that American lawmakers have authorized a second $350 billion from the government''s emergency bailout funds as speculation mounted those debt-laden banks would need even more rescue money. Shortly after the approval, Bank of America reached an agreement for an additional $20 billion in fresh capital from the government''s rescue fund, plus guarantees against losses on up to $118 billion in troubled assets. The bank is likely to use the aid to help it absorb losses from its acquisition of Merrill Lynch. Crude oil futures for the month of February delivery grew by $1.11 to $36.51 per barrel on New York Mercantile Exchange. The crude futures fell to a low to $34.18 per barrel during the intraday. However the crude prices managed to recover from the earlier losses and ended with sharp gains as traders short-selling February oil bought the contract to cover their positions. February crude futures contracts expire next Tuesday. The crude futures have lost 10.6% in the week.

The Dow Jones Industrial Average (DJIA) closed higher by 68.73 points at 8,281.22 NASDAQ index rose by 17.49 points at 1,529.33 and the S&P 500 (SPX) also closed higher by 6.38 points at 850.12.

Indian ADRs ended higher. In technology sector, Satyam ended up by 12.24% and Infosys gained 2.03%. Further Patni Computers ended with increase of 1.05% while Wipro closed down by 0.14%. In banking sector ICICI advanced 2.24% along with HDFC Bank ended up by 2.24%. In telecommunication sector, Tata Communication and MTNL gained 3.92% and 1.69% respectively. Sterlite Industries increased by 3.42%.

Today major stock markets in Asia have opened with gains. The Shanghai Composite is trading high by 45 points at 1,999.45 while Hang Seng is high by 99.90 points at 13,355.41. Further Japan''s Nikkei is trading high by 22.51 points at 8,252.66. South Korea’s Seoul Composite is high by 16.11 points at 1,151.31 and Singapore’s Strait Times is also high by 9.25 points at 1,739.70.

The FIIs on Friday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 1337.30 Crore and gross debt purchased stood at Rs 315.30 Crore, while the gross equity sold stood at Rs 1816.20 Crore and gross debt sold stood at Rs 320.30 Crore. Therefore, the net investment of equity and debt reported were Rs (478.90) Crore and Rs (5.10) Crore respectively.

On Friday, Indian Rupee closed at 48.78/80 per dollar, 0.5% stronger than Thursday’s close of 49.03/04. The rupee gained strength as stock markets were trading in green and concerning expectations of foreign capital inflow.

On BSE, total number of shares traded were 29.91 Crore and total turnover stood at Rs 2,943.30 Crore. On NSE, total number of shares traded were 60.90 Crore and total turnover was Rs 7,268.79 Crore.

Top traded volumes on NSE Nifty – Unitech with 80919941 shares, Suzlon Energy with 14926088 shares, DLF with 12505284 shares, Reliance Comm with total volume traded 11916828 shares followed by SAIL with 11289799 shares.

On NSE Future and Options, total number of contracts traded in index futures was 980691 with a total turnover of Rs 12,321.88 Crore. Along with this total number of contracts traded in stock futures were 926736 with a total turnover of Rs 8,775.73 Crore. Total numbers of contracts for index options were 1280468 with a total turnover of Rs 18,288.86 Crore and total numbers of contracts for stock options were 75042 and notional turnover was Rs 831.97 Crore.

Today, Nifty would have a support at 2,755 and resistance at 2,890 and BSE Sensex has support at 9,145 and resistance at 9,550.

Daily Call - Jan 19 2009

The US markets are closed today for Martin Luther King holiday and Obama gets sworn in Tuesday, when a rally in the US markets is generally expected. With this development in mind and looking at the Friday close of the Indices, expect the Indian stocks to open higher today and generally bask in the mild winter sun.

It is difficult to visualize how the homecoming of a prodigal brother will help the stocks of various companies involved. The best way to make the most of these rumours is to take the options route, which is fairly well trodden in some of the stocks concerned. We could see the market breadth improve today. Mr P C Gupta’s assertion that money may have been diverted from Satyam, should improve the case for the company.

Morning Note - Jan 19 2009

Morning Note - Jan 19 2009

Technical Trends - Jan 19 2009

Technical Trends - Jan 19 2009

Firm global cues may trigger positive start

Key benchmark indices are headed for a firm start today, 19 January 2009 tracking positive global cues. However high volatility may not be ruled out.

India's largest cigarette maker by sales ITC will declare its Q3 December 2008 results today, 19 January 2009. Meanwhile, aggregate results of 123 companies showed 7.60% rise in net profit on a 36.40% increase in net sales in Q3 December 2008 over Q3 December 2007.

Asian markets were trading higher today, 19 January 2009 led by higher commodity prices, US proposals to shore up the world`s largest economy. China's Shanghai Composite surged 2.19% or 42.84 points at 1,997.28, Hong Kong's Hang Seng rose 1.11% or 146.76 points at 13,402.27, Japan's Nikkei gained 0.76% or 62.92 points at 8,293.07, Singapore's Straits Times added 0.91% or 15.67 points at 1,746.12, South Korea's Seoul Composite was up 1.79% or 20.3 points at 1,155.5 and Taiwan's Taiwan Weighted rose 0.73% or 31.87 points at 4,397.97.

US stocks rose on Friday, 16 January 2009, after Bank of America received a new capital injection of $20 billion in exchange for stocks and a $118-billion asset guarantee from the Federal government. The Dow Jones industrial average advanced 68.73 points, or 0.84%, to 8,281.22. The Standard & Poor`s 500 index added 6.38 points, or 0.76%, to 850.12. The Nasdaq composite rose 17.49 points, or 1.16%, to 1,529.33.

Back home, key benchmark indices rallied on optimism that the US government will act to prevent the year-long recession from deepening also aided the surge on the domestic bourses and rescue of the largest US bank by assets, Bank of America. The BSE 30-share Sensex gained 276.85 points or 3.06% to 9,323.59 and the S&P CNX Nifty advanced 91.75 points or 3.35% to settle at 2828.45, on that day.

Foreign institutional investors (FIIs) were net sellers worth Rs 585.41 crore while mutual funds bought shares worth Rs 400.73 crore on Friday, 16 January 2009, according to provisional data on NSE.

Market may open positive

Positive close in US markets and firm Asian indices in morning trades may help the market open in the green. However, worries about FIIs remaining net sellers of equities in the domestic market may force the players to remain on the sidelines. The Nifty on the downside may dip to 2800 while on the upside it may test 2870. The Sensex has a likely support at 9150 and may face resistance at 9500.

US indices bounced back on Friday with the Dow Jones advanced by 69 points at 8281, the Nasdaq added 17 points to close at 1529.

Indian floats also gained in the US markets and ended higher. Satyam advanced 12.24%, Tata Motors gained 5.39% and VSNL raised by 3.92%. Infosys, ICICI Bank, HDFC Bank, MTNL, Patni Computer, Rediff and Dr Reddy's Labs closed with marginal gains while only Wipro declined by 0.14%.

Crude oil prices declined with Nymex light crude oil for February delivery lost 26 cents to close at $36.25 a barrel. In the commodity space, the Comex gold for March series rose by $32.60 to settle at $839.90 a troy ounce.

SGX Nifty Live Update - Jan 19 2009

SGX Nifty trading in green at 2,838.0 and is +22.0 points

India Equity Strategy

India Equity Strategy

Precious metals gain on the last day of the week

Despite that prices register loses for the week

After four successive sessions of drop, bullion metals ended higher for the first time in the week on Friday, 16 January, 2009 as the dollar weakened. 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 $32.6 (4.03%) to close at $839.9 an ounce on the New York Mercantile Exchange. For the week, gold prices ended down by 1.8%. This year gold has lost 5.3% till date. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (21%) since then.

On Friday, Comex silver futures for March delivery gained 77.5 cents (7.4%) to end at $11.215 an ounce. For the week, silver has lost 10.5 cents. For 2008, silver had lost 24%.

At the currency market on Friday, the dollar was down against most major counterparts. The U.S. dollar fell due to weak batch of economic reports. The dollar fell on Friday after the Labor Department reported that U.S. consumer prices rose just 0.1% in 2008, the smallest increase in 54 years. The consumer price index fell 0.7% in December, the third decline in a row, led by an 8.3% drop in energy prices and a 0.1% drop in food prices.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year

Crude pares earlier losses

But prices drop by more than 10% this week

Crude oil prices pared their earlier losses and ended higher on Friday, 16 January, 2009. Prices rose due to the weak dollar and also as traders moved their positions to cover the March positions as the February expires this coming Tuesday.

On Friday, crude-oil futures for light sweet crude for February delivery closed at $36.51/barrel (higher by $1.11 or 3.1%) on the New York Mercantile Exchange. Earlier it dropped to a low of $34.18. For the week, crude prices shed 10.6%.

Prices reached a high of $147 on 11 July but have dropped almost 68% since then. Year to date, in 2009, crude prices are lower by 24%.

At the currency market on Friday, the dollar was down against most major counterparts. The U.S. dollar fell due to weak batch of economic reports. The dollar fell on Friday after the Labor Department reported that U.S. consumer prices rose just 0.1% in 2008, the smallest increase in 54 years. The consumer price index fell 0.7% in December, the third decline in a row, led by an 8.3% drop in energy prices and a 0.1% drop in food prices.

Earlier last week, in its monthly report, OPEC announced that oil consumption will drop for the second consecutive year in 2009. As per the report, oil consumption is expected to fall 200,000 barrels a day this year. Consumption declined 100,000 last year, the first year of negative growth since 1983, the cartel, which controls about a third of the world's oil production.

Last week, the Energy Information Administration had reported that at 326.6 million barrels, U.S. crude inventories reached their highest level since August 2007. Total products supplied in the U.S., including gasoline and heating oil, averaged 19.7 million barrels a day over the past four weeks, down 4% compared with the same period last year. U.S. refineries operated at 85.2% of their operable capacity last week, up from the previous week's 84.6%.

The report also detailed that gasoline inventories rose 2.1 million barrels and crude-oil stockpiles gained 1.2 million barrels last week. Distillate fuel inventories, including heating oil and diesel, jumped 6.4 million barrels in the week ended 9 January, 2009.

The Energy Information Administration also said this week 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.

Against this background, February reformulated gasoline fell 0.6% to $1.1672 a gallon, and February heating oil slid 1% to $1.4734 a gallon.

Natural gas for February delivery fell 0.9% to $4.83 per million British thermal units.

Themes for 2009

Themes for 2009

Downtrend may continue

The market found some sort of support on Friday after sliding through most of the week. The Nifty ended down 1.55 per cent at 2,828 after hitting a low of 2,701. The Sensex was down 0.89 per cent at 9,323 points. The Defty lost 1.73 as the rupee lost a little ground.

Smaller stocks did worse than the pivotals in a week where volumes were low and the advance-decline (A/D) ratios were strongly negative. The Junior lost 2.2 per cent and the Midcaps lost 2.1 per cent. The BSE 500 was down 1.7 per cent. Both FIIs and FIs were heavy net sellers through the week.

Outlook: Another decline is on the cards next week. There is some support at 2,700, but that is very likely to be tested and broken. A drop till the 2,550-2,600 levels is likely. On the upside, there is strong resistance above 2,875.

Rationale: The drop below 2,875 in the first week of 2009 triggered off a bearish breakout. That has a target of around 2,550 and given previous trading patterns, the market is likely to test that level. On the upside, a climb above 2,875 would suggest that the breakout was a false signal. In that case, a climb back to 3,100-plus is possible.

Counter-view: The recovery on Friday appeared reasonably strong. If it is sustained for another session, it will push the market back past the 2,875-2,900 zone. However, the continued low volumes, negative institutional attitude and poor A/D ratios make this look unlikely.

Bulls and Bears: The key sector was banking, which tanked in a big way with the BankNifty losing over 6 per cent. The pricelines of both private banks and PSU banks are hovering at key support levels. The direction of the market will probably be set by this sector. Real estate stocks such as DLF and Unitech continued to look weak.

IT remained stable with Infosys and TCS delivering results on the higher side of expectations and the CNXIT was a marginal loser. HCL Tech saw speculative investment that could push it up and the mayhem continued in Satyam, which is a playground for speculators at the moment.

Telecom bounced on the weekend with Reliance Communication and Airtel both rising substantially. Two-wheeler stocks also bounced with Hero Honda and Bajaj Auto running up side-by-side.

Sugar stocks also saw selective investment with Bajaj Hindusthan and Balrampur moving up. Among PSUs, NTPC and Neyveli Lignite are doing well. There is some speculative action visible in PSU oil counters such as HPCL, BPCL and IOC. Market leader, Reliance Industries, also saw some revival on Friday after a bad week.

Federal Bank

Investors can consider fresh investments in the Federal Bank stock in the light of its attractive valuations and strong growth.

An excellent net interest margin (NIM) of 5.03 per cent for Q3FY09, better efficiencies (cost-income ratio 30 per cent), strong capitalisation, a well-diversified loan book and high provision coverage for non-performing assets are the key positives for the bank.

Federal Bank may be also be a key beneficiary from the stimulus measures that allow higher interest rates on NRI deposits. That may enhance remittances, which now constitute 26 per cent of the bank’s total retail deposits.

At current market price, the stock is trading at just 0.6 times its December 31, 2008 book value and five times its trailing one-year earnings. Though it is one of the better performers, its P/BV is at a discount to most of the listed banks.

The bank’s advances growth in the December quarter slowed down to 23 per cent year-on-year from more than 30 per cent over past quarters. However, the profit growth has still been better than expected, at 98 per cent due to higher net interest margins, higher fee and treasury income, provision write-backs and lower operating cost.

The bank’s cost of funds was flat owing to a higher proportion of deposits and inflows in the form of NRI deposits. The yield on assets improved from 9 per cent to 10.1 per cent, boosting the NIM of the bank by more than 180 bps in a year.

Going forward, NIMs may moderate as there may be slowdown in advances and the yield on investments decline, but may still remain healthy.

The bank’s advances are well-diversified with 33 per cent of advances being retail (only 1 per cent is unsecured personal loans). Though slippage in asset quality is a concern, it may be limited as the unsecured portion of advances is small and the most of the advances are investment graded. The net NPA/ advances stood at just 0.33 per cent due to 88 per cent provision coverage. The bank’s capital adequacy ratio of 19.8 per cent is healthy and has been shored up by a Rs 2,150-crore rights issue last January.

In terms of risks, a continuing slowdown in the real economy may lead to further slippage in asset quality. The bank has a concentrated presence in the South, especially Kerala, with almost 60 per cent of the total branches in this State. The possible acquisition of a stake in Catholic Syrian Bank may pose integration issues.