Wednesday, January 21, 2009
Nifty January 2009 futures at discount
Turnover surges
Nifty January 2009 futures were at 2677.75, at a discount of 28.40 points as compared to the spot closing of 2706.15. Turnover in NSE's futures & options (F&O) segment surged to Rs 43,026.95 crore from Rs 35,511.58 crore on Tuesday, 20 January 2009.
Reliance Industries January 2009 futures were at discount at 1113 compared to the spot closing of 1119.85.
Educomp Solutions January 2009 futures were at discount at 1522.05 compared to the spot closing of 1526.85.
Housing Development Finance Corporation January 2009 futures were at discount at 1360 compared to the spot closing of 1373.55.
In the cash market, the S&P CNX Nifty lost 90.45 points or 3.23% at 2706.15.
BSE Bulk Deals to Watch - Jan 21 2009
Date Scrip Code Company Client Name Deal Type * Quantity Price **
21/1/2009 524412 AAREY DRUGS SHAH JIPAL PINESHKUMAR S 26602 16.44
21/1/2009 505036 AUTOMO COR G ZA CAPITAL LLP AC ZAIMF MAURITIUS LIMITED S 68122 100.98
21/1/2009 505036 AUTOMO COR G BARCLAYS CAPITAL MAURITIUS LIMITED S 85986 100.25
21/1/2009 526556 AVERY INDIA PAT FINANCIAL CONSULTANTS B 141942 78.18
21/1/2009 533026 CHEMCEL AMAR PREMCHAND WALMIKI B 501013 6.18
21/1/2009 533026 CHEMCEL AMAR PREMCHAND WALMIKI S 160522 6.23
21/1/2009 532696 EDUCOMP SOLN OPG SECURITIES P LTD B 121390 1637.25
21/1/2009 532696 EDUCOMP SOLN H.J. SECURITIES PVT. LTD. B 115766 1615.00
21/1/2009 532696 EDUCOMP SOLN OPG SECURITIES P LTD S 121390 1640.05
21/1/2009 532696 EDUCOMP SOLN H.J. SECURITIES PVT. LTD. S 115766 1622.78
21/1/2009 523475 LOTUS CHOC C ADITYA PAI B 160232 17.38
21/1/2009 523475 LOTUS CHOC C AMAN PAI B 160000 17.28
21/1/2009 523475 LOTUS CHOC C ASHWINI PAI B 160000 17.06
21/1/2009 523475 LOTUS CHOC C ABHIJEET PAI B 160000 17.05
21/1/2009 523475 LOTUS CHOC C V SHIVARAM KAMATH S 258065 17.14
21/1/2009 523475 LOTUS CHOC C V SHASHIDHAR KAMATH S 365253 17.22
21/1/2009 532793 SHREE ASHTA AVR OVERSEAS PRIVATE LTD B 59114 499.96
21/1/2009 508905 SMIFS CAP MA SUDHA COMMERCIAL CO. LTD. B 140500 26.00
21/1/2009 501756 THANA ELE SU NIKESH B MEHTA B 15000 12.00
21/1/2009 501756 THANA ELE SU ANSUYABEN N SHETH S 15000 12.00
21/1/2009 531249 WELL PACK PA AMAR PREMCHAND WALMIKI B 130602 46.74
21/1/2009 531249 WELL PACK PA AMAR PREMCHAND WALMIKI S 130602 47.47
NSE Bulk Deal Watch - Jan 21 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
21-JAN-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,BUY,159702,1702.71,-
21-JAN-2009,EDUCOMP,Educomp Solutions Limited,GENUINE STOCK BROKERS PVT LTD,BUY,88239,1704.67,-
21-JAN-2009,EDUCOMP,Educomp Solutions Limited,MARWADI SHARES AND FINANCE LIMITED,BUY,113631,1704.65,-
21-JAN-2009,EDUCOMP,Educomp Solutions Limited,P R B SECURITIES PRIVATE LTD,BUY,125650,1605.80,-
21-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,ADROIT FINANCIAL SERVICES PVT LTD,BUY,4576982,28.37,-
21-JAN-2009,SHREEASHTA,Shree Ashtavinayak Cine V,AVR OVERSEAS PVT LTD,BUY,1476,498.71,-
21-JAN-2009,TIDEWATER,Tide Water Oil Co. (India,MADANLAL LIMITED,BUY,7000,3000.00,-
21-JAN-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,SELL,159702,1704.21,-
21-JAN-2009,EDUCOMP,Educomp Solutions Limited,GENUINE STOCK BROKERS PVT LTD,SELL,88239,1703.76,-
21-JAN-2009,EDUCOMP,Educomp Solutions Limited,MARWADI SHARES AND FINANCE LIMITED,SELL,113631,1695.82,-
21-JAN-2009,EDUCOMP,Educomp Solutions Limited,P R B SECURITIES PRIVATE LTD,SELL,125650,1604.72,-
21-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,ADROIT FINANCIAL SERVICES PVT LTD,SELL,4579202,28.36,-
21-JAN-2009,SHREEASHTA,Shree Ashtavinayak Cine V,AVR OVERSEAS PVT LTD,SELL,60000,499.82,-
21-JAN-2009,TIDEWATER,Tide Water Oil Co. (India,ARION COMMERCIAL PVT LTD,SELL,7163,3000.17,-
Post Session Commentary - Jan 21 2009
The Indian market ended the day with huge losses as investors’ confidence was smashed on concerns that the global economic crisis may last longer than expected. The fresh selling by the foreign institutional investors also weighted on sentiments. Market reported losses second day in line led by sign of crises in the financials overseas.
The domestic market today opened sharply lower for the second straight day on the back of negative cues from the global markets. Further, market had shown some recovery on few bouts of buying. However, benchmark indices were not able to carry the momentum and constantly followed the southward journey. Market continued to trade in deep red and slipped sharply during final trading hours on renewed selling led by worries over weaker financial results from corporate and growing recession pressure. Sell-off in European markets also fueled to negative sentiment. The BSE Sensex ended below 8,800 mark and NSE Nifty ended around 2,700 level. From the sectoral front, most of the indices ended in red. Among those, Power, Bank, Oil & Gas, Metal, Teck, Capital Goods and Reality stocks took huge beating on the bourses. Midcap and Smallcap stocks also remained under pressure. However, FMCG stocks witnesses buying from its basket.
Among the Sensex pack 28 stocks ended in red territory and 2 in green. The market breadth remained in favor of declines as 1669 stocks closed in red while 720 stocks closed in green and 104 stocks remained unchanged in BSE.
The BSE Sensex closed lower by 321.38 points at 8,779.17 and NSE Nifty ended down by 90.45 points at 2,706.15. The BSE Mid Caps and Small Caps ended with losses of 59.50 points and 66.44 points at 2,956.51 and 3,372.65 respectively. The BSE Sensex touched intraday high of 9,051.31 and intraday low of 8,734.93.
Losers from the BSE Sensex pack are Sterlite Industries (7.97%), HDFC (7.49%), Tata Power (7.32%), ICICI Bank (7.12%), Grasim Industries (5.96%), Reliance Infra (5.72%), Reliance (5.33%), Bharti Airtel (5.16%), Ranbaxy Lab (4.73%), DLF Ltd (4.44%), Tata Motors (3.91%) and RCom (3.57%).
Only two gainers from the BSE Sensex pack are HUL (3.39%) and ITC Ltd (0.15%).
Higher prospects for hopes about the steps that new US administration would follow to deal with the growing banking crisis and faltering economy were dampened after the inauguration speech by Barack Obama concluded with little new information to digest. On Jan 20, US President Barack Obama riding to power with a message of hope and promise of change said that the nation is in the middle of a crisis and there are serious challenges, which will be met.
On the global markets front, the Asian Markets ended lower on Wednesday, led by banks, after U.S. stocks closed sharply lower overnight on renewed concerns about the financial sector. Along with this, mining stocks slipped after miners announced plans to cut jobs as well as production, indicating a deepening recession. Global miner BHP Billiton is expected to slash 6,000 jobs and close its giant mine in Australia. Hang Seng index closed lower by 376.14 points at 12,583.63. Along with this, Nikkei, Straits Times and Seoul Composite index ended down by 164.15, 18.85 and 23.20 points at 7,901.65, 1,704.52 and 1,103.61respectively.
The European Markets are trading down tracking Wall Street losses over night, where investor murkiness about the financial sector''s prospects remained persistent. The DAX is down by 86 points at 4,153.85 and FTSE 100 is lower 83.44 points at 4,007.96.
The BSE Metal stocks declined on worries that weakening domestic and global economy has hit the demand and ended lower by (4.07%) or 199.29 points at 4,697.50. Main losers are Sterlite Industries (7.97%), Steel Authority (6.54%), Hindustan Zinc (4.97%), Gujarat NRE C (4.83%), Sesa Goa Ltd (4.59%) and Welspan Gujarat SR (3.93%).
The BSE Power index that witnessed most of the buying yesterday, but underperformed the benchmark indices today as ended with deep cut of (3.91%) or 70.56 points to close at 41,732.53 as Neyveli LIG (9.36%), Torrent Power (7.56%), Tata Power (7.32%), Power Grid (6.46%), Suzlon Energy (4.32%) and Siemens Ltd (4.22%) ended in red.
The BSE Bank index tumbled (3.91%) or 188.87points to close at 4,644.94 tracking rickety cues from global financial sector crisis. ICICI Bank (7.12%), Yes Bank (4.76%), Bank of India (4.38%), Indus Ind Bank (4.31%) and Federal Bank (4.11%) ended in negative territory.
The BSE Oil & Gas index hammered continuously for second day and ended lower by (3.78%) or 221.56 points at 5,642.03. Losers are Reliance Natural Resources (5.65%), Reliance (5.33%), Aban Offshore (3.62%), HPCL (2.08%), Reliance Pet (2.07%) and IOC Ltd (1.78%).
The BSE Reality index also followed the southward journey on reports that falling interest rates have failed to revive housing demand and ended down by (3.61%) or 61.42 points at 1,641.35. Major losers are Mahindra Life (6.22%), Indiabull Real (5.93%), Housing Development (4.94%), Parsvnath (4.61%), DLF Ltd (4.44%) and Unitech Ltd (3.93%).
The BSE FMCG index was in limelight as buying was seen from this basket and ended higher by (0.84%) or 16.49 points at 1,979.56. Scrips that gained are HUL (3.39%), Colgate Palm (1.85%), Nestle Ltd (0.31%), United Spr (0.27%) and ITC Ltd (0.15%).
Wipro Ltd ended lower by (3.55%). The tech giant has announced the Audited Consolidated results for the quarter ended December 31, 2008. It reported 3.51% rise in net profit to Rs.1,003.90 crore for the Oct-Dec quarter compared with Rs.969.80 crore in the previous quarter. However the net profit rose 18% on a year-on-year basis.
Market slumps on global cues
Sensex plunged in early trades on weak global markets. The sell-off saw Sensex close at 8,779, down 321 points. The market remained range-bound with a negative bias in the afternoon, while a few cement stocks stayed in the positive territory on moderate buying support. The key Asian benchmark index--Nikkei--closed with losses of 2.04%. The Hang Sang, the Straits Times and the Jakarta indices closed with losses of 2-3% each. This had a negative impact on the domestic market. Sensex finally ended the session at 8779, down 321 points, while Nifty shed 90 points to close at 2706.
All the sectoral indices were hammered on relentless selling pressure except the FMCG Index. BSE Metal dropped 4.07%, BSE Power lost 3.91% and BSE Bankex shed 3.91%. Other sectoral indices shed around 1-3% each.
The broader market was extremely weak. Of the 2,493 stocks traded on BSE, 1,669 stocks declined, 720 stocks advanced and 104 stocks ended unchanged. Except Satyam Computer Services, Hindustan Unilever and ITC all the stocks in Sensex basket ended in the red. Among major losers, Tata Power tanked 8.45% at Rs704.90, ICICI Bank tumbled 7.75% at Rs366.50, Sterlite Industries plunged 7.31% at Rs238.95, HDFC slumped 6.97% at Rs1379.95, Bharti Airtel fell 6.33% at Rs576.40, Reliance Energy shed 6.16% at Rs518, Ranbaxy Laboratories dropped 6.02% at Rs201.50, Reliance Industries slipped 5.87% at Rs1,113 and Grasim Industries was down 5.25% at Rs1,150. The other front-line stocks were down 2-4% each.
Satyam Computer Services witnessed volumes of over 3.86 crore shares on the BSE followed by Unitech (1.48 crore shares), Reliance Natural Resources (99 lakh shares), Suzlon Energy (97 lakh shares) and Cals Refineries (89 lakh shares).
Sensex down 3.5% on weak global cues
A sell-off in late trade pulled Key benchmark indices to day's low in what was a global equities rout. Fresh worries the global banking crisis may last longer than expected rattled bourses across the globe. US president Barrack Obama's inaugural speech overnight failed to lift sentiments as investors appetite for risky equities waned. The BSE 30-share Sensex was down 321.38 points, or 3.53%, after staying in the red throughout the day in highly volatile trade.
Negative global cues had triggered a lower start as investors confidence waned on renewed worries the global economic crisis may last longer than expected. However market cut sharp losses in mid-morning trade before slipping once again in early afternoon trade on fresh selling in index pivotals. The market extended losses in afternoon trade. Fall in European indices in opening trade kept key benchmark indices depressed in midafternoon trade. The market slumped to the day's low in late trade.
Recent selling by foreign institutional investor (FIIs) also weighed on the market. FII outflow in January 2009 totaled Rs 2644.40 crore (till 19 January 2009).
European shares slipped today, 21 January 2009, led by energy and banking stocks as fears about the health of the global economy and the financial industry deepened. The key benchmark indices in France, Germany and UK were down by between 0.61% to 1.57%.
Financial companies and metals producers, dragged Asian stocks today, 22 January 2009, on concerns mounting bank losses worldwide will intensify the global recession and squeeze demand for the region`s commodities. Key benchmark indices in Hong Kong, South Korea, Singapore, China were down by between 0.46% to 2.9%. While, Taiwan's Taiwan Weighted rose 0.13%.
Japan's Nikkei average slipped 2.04% today, 21 January 2009 after sliding to a 2-month low in intra-day trade as Honda Motor Co and other exporters fell on a stronger yen and growing worry about global financial woes.
In a historic presidential inaugural at the US Capital on Tuesday, 20 January 2009, Barack Hussein Obama was sworn in as the 44th and the first black president at a $150 million show watched by around two million people.
US stocks ended sharply lower on Tuesday, 20 January 2009, as rising concerns about the financial health of the banks and financial system weakened the feel-good factor inspired by the inauguration of Barack Obama.
High expectations for details on how the new US administration would address the growing banking crisis and faltering economy were dampened after the inauguration speech by Barack Obama concluded with little new information to digest.
The Dow Jones industrial average dropped 332.13 points, or 4.01%, to end at 7,949.09. The Standard & Poor`s 500 index went down 44.90 points, 5.28%, to settle at 805.22. The Nasdaq Composite index declined 88.47 points, or 5.78%, to close at 1,440.86.
The BSE 30-share Sensex was down 321.38 points, or 3.53%, to 8,779.17. The Sensex fell 49.24 points at the day's high of 9,051.31 in early trade. The Sensex lost 365.62 points at the day's low of 8,734.93 in late trade.
The S&P CNX Nifty fell 90.45 points, or 3.23%, to 2,706.15.
The market breadth, indicating the overall health of the market, was weak. The breadth had turned even in mid-morning trade after weak breadth in early trade. 737 shares advanced as compared with 1,691 that declined. 40 shares remained unchanged.
All the shares from the 30-share Sensex pack fell. Ranbaxy Laboratories, Bharti Airtel, Grasim Industries, Tata Power Company, Reliance Infrastructure, fell by between 4.73% to 7.32%.
Nifty January 2009 futures were at 2677.75, at a discount of 28.40 points as compared to the spot closing of 2706.15. Turnover in NSE's futures & options (F&O) segment surged to Rs 43,026.95 crore from Rs 35,511.58 crore on Tuesday, 20 January 2009.
The BSE Metal index (down 4.07%), the BSE Power index (down 3.91%), the BSE Bankex (down 3.91%), the BSE Oil & Gas index (down 3.78%), the BSE Realty index (down 3.61%) underperformed the Sensex.
The BSE FMCG index (up 0.84%), the BSE Auto index (down 1.34%), the BSE Consumer Durables index (down 1.42%), the BSE IT index (down 1.92%), the BSE HealthCare index (down 2.6%), the BSE PSU index (down 2.66%), the BSE Capital Goods index (down 3.05%), the BSE Teck index (down 3.11%), outperformed the Sensex.
The BSE Sensex has lost 868.14 points or 8.99% 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
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 5.33% to Rs 1,119.40 on worries recent fall in crude oil prices will hit refining margins of the company.
PSU OMCs fell on rise in crude oil prices. BPCL, HPCL and Indian Oil Corporation fell by between 1.63% to 2.08%. 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.
Crude oil rose more than $2 a barrel in New York, the most in more than two weeks, as traders purchased futures for February delivery before the contract expired today.
FMCG stocks rose on defensive buying. ITC, Hindustan Unilever, United Spirits rose by between 0.15% to 3.39%.
Capital goods stocks fell on worries a slowing economy will crimp orders. Larsen & Toubro, ABB, AIA Engineering, Thermax fell by between 0.59% to 8.78%.
India's largest electric equipment maker by sales Bharat Heavy Electricals fell 3.39% ahead of its Q3 December 2008 result today.
Auto stocks fell on worries high interest rates and sluggish consumer spending have dented demand for automobiles, including for trucks, motorcycles and scooters. Mahindra & Mahindra Maruti Suzuki India and Tata Motors fell by between 1.4% to 3.91%.
India's largest motorbike maker by sales Hero Honda Motors rose 0.64% as its net profit rose 9.24% to Rs 300.42 crore in Q3 December 2008 over Q3 December 2007.
Rate sensitive realty stocks fell on reports falling interest rates have failed to revive housing demand. DLF, Unitech, Indiabulls Real Estate and Housing Development & Infrastructure fell by between 3.93% to 5.93%.
Metal stocks declined on worries a weakening domestic and global economy has hit demand. Hindalco Industries, Hindustan Zinc, Steel Authority of India, Sterlite Industries fell by between 2.67% to 7.97%. While, National Aluminum Company rose 1.3%.
India's largest steel maker by sales Tata Steel fell 3.26% after its Thailand-based unit reported its biggest quarterly loss since 2003.
Banking stocks slipped on fears of rising defaults in a slowing economy. India's largest bank in terms of assets and branch network State Bank of India fell 2.73%. India's second largest private sector bank by net profit HDFC Bank slipped 2.53%. Its American depository receipt (ADR) fell 11.14% on Tuesday, 20 January 2009. India's largest private sector bank by net profit ICICI Bank dipped 7.12%. Its ADR fell 13.05 % overnight.
India's largest dedicated housing finance company by total income HDFC fell 7.49% after its net profit fell 15.73% to Rs 546.83 crore in Q3 December 2008 over Q3 December 2007.
UCO Bank surged 2.67% after the bank reported 107.33% surge in net profit to Rs 171.63 crore in Q3 December 2008 over Q3 December 2007.
Outsourcing focussed IT firms fell as fears a weak global economy would cut the amount firms spent on technology. India's third largest software services exporter, Wipro fell 3.35% after the company forecast a 7% fall in revenue for Q4 March 2009 on global economic downturn and pricing pressure from western clients.
In its results declared before market hours today, 21 January 2009, Wipro indicated revenue in Q4 March 2009 from information technology services, including revenue from its acquisition of Citi Technology Services, will fall 7% to $1045 million from $1126 million in Q3 December 2008. Weak forecast was due to the global economic downturn and growing pressure from western clients to cut its fees.
Wipro reported a 14.01% decline in net profit to Rs 733 crore on a 0.14% fall in sales to Rs 5397 crore in Q3 December 2008 over Q2 September 2008.
Wipro's mark-to-market loss on forex derivatives was at Rs 1,575 crore as on 31 December 2008. On a consolidated basis, Wipro's net profit grew 2.39% to Rs 1003.9 on a 1.46% increase in total income to Rs 6773 crore in Q3 December 2008 over Q2 September 2008.
India's second largest software services exporter Infosys Technologies fell 2.1% as its ADR fell 5.52% overnight. While, India's fifth largest IT exporter by sales HCL Technologies rose 3.14%.
TCS, India's largest software services exporter by sales fell 1.06% to Rs 485. The stock had touched a high of Rs 501 company said on Tuesday, 20 January 2009 had signed a multi-million dollar, multi-year deal with Ducati Motor Holding to deliver technology-based services to the Italian bikemaker and its subsidiaries in Europe. TCS 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.
India's fourth largest software services exporter Satyam Computer Services rose 3.35% on reports including Larsen & Tobro, which holds a 4% stake many other firms, has evinced interest to acquire the fraud hit firm. Satyam's ADR fell 8.18% overnight.
Educomp Solutions tanked 22.06% to Rs 1534.90 on BSE amid rising speculation the company might have fabricated its accounts overstating its turnover and profits to boost share prices
Kilburn Engineering rose 6.23% after it received an order worth Rs 11.1 crore from Tata Chemicals.
Deepak Fertilisers and Petrochemicals fell 3.48% after it reported a 9 % drop in net profit to Rs 22.38 crore in Q3 December 2008 over Q3 December 2007.
Kirloskar Oil Engines fell 3.84% after its net profit fell 54% to Rs 9.99 crore in Q3 December 2008 over Q3 December 2007.
Satyam Computer Services clocked the highest volume of 3.86 crore shares on BSE. Unitech (1.44 crore shares), Reliance Natural Resources (99.97 lakh shares), Suzlon Energy (97.29 lakh shares) and Cals Refineries (89.12 lakh shares) were the other volume toppers in that order.
Reliance Industries clocked the highest turnover of Rs 254.43 crore on BSE. Educomp Solutions (Rs 232.92 crore), Reliance Capital (Rs 152.57 crore), Reliance Infrastructure (Rs 123.49 crore) and ICICI Bank (Rs 119.61 crore) were the other turnover toppers in that order.
In the backdrop of Satyam debacle raising many burning issues for listed entities, the market regulator Sebi has scheduled a board meet later today, 21 January 2009 to discuss matters like more disclosure norms for pledging of shares by promoters and peer review of audit of large companies.
Meanwhile, in an another move likely to boost stock markets, the Sebi is likely to make it easier for more companies to raise money from the stock market, as it looks to relax eligibility rules to help them speedily raise funds from existing shareholders. Currently, only companies, which have had a market capitalisation of more than Rs 10,000 crore in the past one year, are eligible for this route. Sebi plans to lower this threshold. This has been necessitated by the steep fall in market value of companies across the board because of the bearish grip on the stock market. Sebi is also looking at reducing the issue period for rights issues to 15 days from 30 days now.
Pre Session Commentary - Jan 21 2009
Today the markets are likely to open negative as the US markets closed in deep red after the inauguration ceremony of newly elected president Barack Obama and the Asian markets have also opened with blood bath. The sentiments across Asia don’t look strong and the European markets have also exuded their grim after the announcement of RBS’s losses of $41 billion. The volumes of trade across BSE and NSE have been weak and the selling pressures are prevalent across broader markets. The quarterly results of various companies are not that appreciating though not below expectations.
On Tuesday, the markets traded with a negative gap and closed in red. The sentiments across the Asian markets looked fragile since the opening bell. The global factors hooked the market sentiments, as Royal Bank of Scotland reported the mammoth loss of $41 billion, largest in the UK’s corporate history. This news jolted the markets with fears of more financial crisis to come in future. The Indian corporate results had little to guide the domestic market sentiments as investors were obsessed with the ongoing financial crisis in the world. All the markets in Asia except the Shanghai Composite closed in red. European markets closed mixed after huge losses conceded in the previous day. On the domestic front sectors like Metal, Realty, Bankex, Oil & Gas and Auto closed with losses of 3.76%, 3.31%, 3.11% and 2.60% respectively. On the other hand Power and PSU were the only two sectors to close with marginal gains of 1.44% and 0.33% respectively. Sensex and Nifty lost 2.45% and 1.74% respectively. Mid caps and Small caps also shed 0.90% and 0.36% respectively. During the session we expect the markets to trade with deep cut.
The BSE Sensex closed lower by 229.02 points at 9,100.55 and NSE Nifty lost 49.60 points at 2,796.60. The BSE Mid Caps and Small Caps ended with losses of 27.52 points and 12.37 points at 3,016.01 and 3,439.09 respectively. The BSE Sensex touched intraday high of 9,159.76 and intraday low of 9,033.55.
The US markets on Tuesday closed in deep red after the inaugural ceremony of new elected president Barack Obama. There has been enough pain in the US markets and especially the financial sector which lost 16.70% on Tuesday’s trade. Barclays fell more than 40% this session as investors remain concerned that Britain''s government will take a stake in the outfit. There are also reports that the US government is planning for a second phase of aid for the banking system.
The Dow Jones Industrial Average (DJIA) dropped by 332.13 points to close at 7,949.09. The NASDAQ Composite (RIXF) index decreased by 88.47 points to close at 1,440.86 and the S&P 500 (SPX) fell 44.90 points to close at 805.22.
Indian ADRs ended down. In technology sector, Satyam ended lower by 8.18% and Infosys lost 5.52%. Further Patni Computers ended with decrease of 1.25% and Wipro closed down by 5.71%. In banking sector ICICI Bank and HDFC Bank dropped by 13.05% and 11.14% respectively. In telecommunication sector, Tata Communication and MTNL lost 7.45% and 5.98% respectively. Sterlite Industries decreased by 8.46%.
Today major stock markets in Asia have opened with a blood bath. The Shanghai Composite is trading high by 1.15 points at 1,995.27 while Hang Seng is low by 223.40 points at 12,736.37. Further Japan''s Nikkei is trading low by 65.76 points at 8,000.03. South Korea’s Seoul Composite is low by 158.31 points at 1,111.50 and Singapore’s Strait Times is also low by 26.46 points at 1,696.91.
The FIIs on Tuesday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 777.50 Crore and gross debt purchased stood at Rs 350.30 Crore, while the gross equity sold stood at Rs 1,217.20 Crore and gross debt sold stood at Rs 560.90 Crore. Therefore, the net investment of equity and debt reported were Rs (439.70) Crore and Rs (210.70) Crore respectively.
On Tuesday, Indian Rupee closed at 49.20/22 per dollar, 1% stronger than Monday’s close of 48.70/71. The fall in share markets triggered the fresh foreign money withdrawal and aroused doubts of foreign capital inflow.
On BSE, total number of shares traded were 29.02 Crore and total turnover stood at Rs 2,758.55 Crore. On NSE, total number of shares traded were 56.22 Crore and total turnover was Rs 7081.40 Crore.
Top traded volumes on NSE Nifty – Unitech with 71910115 shares, Suzlon Energy with 21199978 shares, NTPC with 13283145 shares, SAIL with total volume traded 10773766 shares followed by Power Grid Corp with 10744724 shares.
On NSE Future and Options, total number of contracts traded in index futures was 822691 with a total turnover of Rs 10,622.33 Crore. Along with this total number of contracts traded in stock futures were 949790 with a total turnover of Rs 9,246.81 Crore. Total numbers of contracts for index options were 1040105 with a total turnover of Rs 14,798.98 Crore and total numbers of contracts for stock options were 72985 and notional turnover was Rs 843.45 Crore.
Today, Nifty would have a support at 2,738 and resistance at 2,852 and BSE Sensex has support at 8,910 and resistance at 9,259.
Slide may continue
Market may slide further on account of weak Asian markets in morning trades and overnight fall in the US markets. Continued selling pressure may also drag the domestic indices further down. The FIIs remained net sellers in equities may also weigh on the investors' sentiment. Key indices, the Nifty may get support at 2750 level and on the upside it could test higher levels at 2850. The Sensex has a likely support at 8,950 and may face resistance at 9,250.
US indices slumped to two-month lows Tuesday as investors looked beyond President Barack Obama's historic inauguration to the battered economy he inherits. While the Dow Jones slipped 332 points at 7949, while the Nasdaq lost 88 points to close at 1441.
All the Indian ADRs fell in tune with the broader market. ICICI Bank led the slump and tumbled 13.05% followed by HDFC Bank down by 11.14%, Satyam, VSNL,Dr Reddy, Wipro and MTNL slipped over 5-8% each. Infosys, Tata Motors, Rediff and Patni Computer dropped over 1-4% each.
Crude oil prices gained, with the Nymex light crude oil for February delivery moved up by $2.23 to close at $38.74 a barrel. In the commodity space, the Comex gold for February series gained $15.30 to settle at $855.20 a troy ounce.
Market seen opening weak on global cues
Key benchmark indices are headed for a weak start on dismal global cues on fresh worries the global banking crisis may last longer than expected.
In a historic presidential inaugural at the US Capitol on Tuesday, 20 January 2009, Barack Hussein Obama was sworn in as the 44th and the first black president at a $150 million show watched by around two million people.
US stocks ended lower on Tuesday, 20 January 2009, as rising concerns about the financial health of the banks and financial system weakened the feel-good factor inspired by the inauguration of Barack Obama.
High expectations for details on how the new US administration would address the growing banking crisis and faltering economy were dampened after the inauguration speech by Barack Obama concluded with little new information to digest.
The Dow Jones industrial average dropped 332.13 points, or 4.01%, to end at 7,949.09. The Standard & Poor`s 500 index went down 44.90 points, 5.28%, to settle at 805.22. The Nasdaq Composite index declined 88.47 points, or 5.78%, to close at 1,440.86.
Asian stocks declined today, 22 January 2009, led by financial companies and metals producers, on concern mounting bank losses worldwide will intensify the global recession and squeeze demand for the region`s commodities.
Japanese benchmark index Nikkei fell 177.69 points, or 2.20%, to trade at 7,888.10, Hong Kong`s Hang Seng index declined 425.17 points, or 3.28%, to trade at 12,534.60, China`s Shanghai Composite decreased 22.87 points, or 1.15%, to trade at 1,971.24, Taiwan`s Taiex index slipped 2.10 points, or 0.05%, to trade at 4,240.51, South Korea`s Kospi index slid 24.59 points, or 2.18%, to trade at 1,102.22 and Singapore`s Straits Times dropped 39.67 points, or 2.30%, to trade at 1,683.70.
Crude futures for March 2009 declined on Tuesday, 20 January 2009, over fears of weak global energy demand. Trading in the final day of contract, Light, sweet crude for February delivery rose $2.23 to settle at $38.74 a barrel on the New York Mercantile Exchange (NYMEX). The March 2009 contract, where the vast majority of trading took place, fell $1.53 to settle at $40.68.
Back home, India's largest dedicated housing finance company by total income HDFC will declare its Q3 December 2008 results today, 21 January 2009. Meanwhile, aggregate results of 267 companies showed 0.30% fall in net profit on a 26.20% increase in net sales in Q3 December 2008 over Q3 December 2007.
Fears that the global financial sector crisis would trigger more foreign fund outflows and record loses at British bank Royal Bank of Scotland pulled the market lower on Tuesday, 20 January 2009. The BSE 30-share Sensex lost 229.02 points or 2.45%, to 9,100.55 and the S&P CNX Nifty fell 49.60 points, or 1.74%, to 2,796.60.
Foreign institutional investors (FIIs) are in selling mode after an inflow of Rs 1319.10 crore in December 2008. Their outflow in January 2009 totaled Rs 2,644.40 crore (till 19 January 2009).
According to provisional data on NSE, FIIs were net sellers worth Rs 308.15 crore while mutual funds bought shares worth Rs 185.05 crore on Tuesday, 20 January 2009,
A lousy welcome for new President from Wall Street
Financial sector plays the spoilsport
Stocks at Wall Street showed absolutely no signs of improvement on Tuesday, 20 January, 2008 as USA welcomed its 44th President Barack Obama amid cheers and tears. The financial sector played the absolute spoilsport in today's historic day and stocks lingered in the red for the entire day. Some of the financial Dow components marked record lows.
The Dow Jones Industrial Average ended lower by 332 points at 7,949, the Nasdaq closed lower by 89 points at 1,440 and the S&P 500 closed lower by 45 points at 805.
All the thirty Dow components ended in the red. Shares of Bank of America and Citigroup plunged by 29% and 20% respectively.
The former President, George Bush, thrusted a huge deal of responsibility on Obama who is working hard to get going with a stimulus plan of $800 billion to boost the US economy.
All the ten sectors ended in the red today led by the financial sector. The global financial system once again raised questions after Royal Bank of Scotland announced it might face a record loss valued at more than $40 billion for 2008.
Cisco systems and Microsoft are weighing on the tech heavy Nasdaq today.
Earning cautions continued even today as Johnson & Johnson issued a lower than expected earnings for 2009. Johnson & Johnson's outlook reflects the prospect for lower sales amid generic competition and stiff currency headwinds. But the company surpassed market's expectations in its latest quarter earning report.
After the close, IBM posted fourth quarter earnings which checked in better than expectations. IBM's revenue fell roughly 6% year-over-year to $27 billion. The consensus forecast called for $28.2 billion. IBM issued upside guidance for fiscal 2009. IBM is one of the few companies to step out and issue upside guidance this earnings season.
Crude oil prices pared their earlier losses and ended higher today. Prices rose due to the impending stimulus package that is expected to be announced by new President Barack Obama soon. Prices were also volatile as traders moved their positions to cover the March positions as the February expired today. On Tuesday, crude-oil futures for light sweet crude for February delivery closed at $38.74/barrel (higher by $2.23 or 6.1%) on the New York Mercantile Exchange. Earlier it dropped to a low of $32.5. March crude, the new front-month contract, fell $1.73 to end at $40.84 a barrel on Nymex. Last week, crude prices shed 10.6%.
At the currency market on Tuesday, the U.S. dollar rose against its major rivals. Worries about the U.K. banking sector sent the British pound to a six-year low versus the U.S. dollar and an all-time low versus the Japanese yen.
Tomorrow, there will be no economic reports on the dock. Few companies are expected to declare their earning reports.
PFC
We recommend a buy in Power Finance Corporation from a short-term trading perspective. It is evident from the charts of this stock that it has been on an intermediate-term uptrend from its October low of Rs 86. This was also a 52-week low. Since then, the stock has been shaping higher peaks and higher troughs. On January 20, the stock resumed its intermediate-term uptrend from the twin support around Rs 130 (200-day moving average and up-trend line). The stock gained 3.5 per cent, accompanied with above average volume on that session. The daily relative strength index (RSI) is on the brink of re-entering the bullish zone from the neutral region and weekly RSI is steadily raising towards the bullish zone. Taking into account that the intermediate-term up-trend line continues to be intact, we are positive on the stock from a short-term perspective. We expect it to rally until it hits our price target of Rs 149. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 128.
via BL
Trading Calls - Jan 21 2009
Nifty (2797) Sup 2720 Res 2835
Sell ACC (485) SL 490
Target 477, 473
Sell Sterlite Ind (258) SL 263
Target 250, 248
Sell ABB (443) SL 448
Target 435, 432
Sell Tata Steel (195) SL 199
Target 188, 186
Sell Bank of India (251) SL 256
Target 243, 240
Daily News Roundup - Jan 21 2009
TCS has won a multi-year contract from Ducati to deploy ERP solutions for the Italian super bike maker in Europe (BL)
L&T is emerging as a strong contender for acquiring Satyam. (ET)
Tata Motors cash flow may fall by Rs5bn in FY09 (BS)
M&M has forayed into the retail sector with launch Mom & Me stores. (ET)
ITC plans to introduce organic spices in the overseas market and to garner Rs3bn revenues in the next two years from the division. (FE)
RPL to start exports of petroleum products by January-end (BS)
DLF plans to restructure its business verticals through a major human resource redeployment to boost efficiency and productivity (BS)
SBI crosses priority sector lending target (BS)
M&M plans to launch fuel-efficient hybrid and electric vehicles in the near future. (ET)
Satyam’s ERP consultants are learnt to be exploring options of breaking away with the company and servicing existing clients. (ET)
Videocon expects growth to slow down (BS)
Vedanta Resources Plc is planning to buyback the remaining 20% stake held by the public in Madras Aluminium Ltd. (FE)SBI is likely to witness fall in credit off-take by 15-20% in Q3 FY09. (FE)
HCC in JV with John Laing Investment and Sadbhav Engineering has bagged NHAI project to construct the 96.5km highway from Maharashtra-Madhya Pradesh border to Dhule on NH-3 BOT basis. (FE)
Kirloskar Brothers to spin off its investments operations into a new company (BS)
LIC increases stake in IOB to more than 5% (BS)
Sasken Communications to continue to do business with Nortel Networks in the near-term (BL)
Dish TV is in talks with the Indian Railways to launch the live television services in trains. (FE)
UCO Bank to disburse Rs70-80bn during January-March 2009. (ET)
Catholic Syrian Bank’s employees oppose merger with Federal Bank. (ET)
The Central Electricity Regulatory Commission has issued new tariff regulations for next five years under which the base rate for return on equity has been raised from 14% to 15.5%. (ET)
The third stimulus package to not include tax cuts to boost demand, says Mr.Montek Singh (BS)
RBI has directed banks not to ask for collateral security for new loans up to Rs0.5mn from micro and small enterprises. (ET)
The Government has told public sector banks to extend credit to fund starved Indian industry, especially exporters and small and medium sector enterprises. (ET)
The coal ministry has indicated that the standing linkage committee is likely to restrict coal allocation within overall approved ceiling of 299mn tons during 2008-09. (FE)
Government mulls ‘golden share’ concepts in infrastructure projects built under PPP models (BS)
The Government has scrapped its export ban on basmati rice and cut the floor price for overseas shipments. (ET)
India’s sugar production may fall by over 30% to 18mn tons in the current season. (ET)
SEBI may ease norms to speed up fund raising. (ET)
Service tax collections from Mumbai have increased by 26% yoy to Rs135.78bn during Apr-Dec’08. (ET)
Market lacks vigor
The method of the enterprising is to plan with audacity and execute with vigor.
The audacity of hope as shown by Obama has resulted in history being made in the US, with the first African-American taking charge as its new president. The US and the world had pinned lot of hopes on him even before his momentous inauguration. Now that he has formally taken the reigns at the White House, the world is watching with bated breath what change he brings, and perhaps more importantly, how fast he does it?
But, leaving aside the rhetoric and the euphoria surrounding Obama, one should focus more on the immediate issues plaguing the global economy. That’s what Wall Street seemed to have done, with the key indices down 4-6%. Bank stocks led another fall in Europe as well. Asian markets too are down 1-2%.
There is no dearth of bad news, both on corporate as well as economic front. Wipro numbers are out, and they don’t seem to be too encouraging. The December rally had raised hopes of an intermediate uptrend. However, the new year has been anything but happy so far. The last few days have proved that not all the bad news has been discounted. Today, we expect another weak day. Possibility of a pull-back appears to be slim given the grim global cues. But it can always happen.
US stocks slumped to two-month lows on Tuesday as investors looked beyond President Barack Obama's historic inauguration to the battered economy. Financial stocks plunged, falling almost 17% to match their biggest percentage decline ever.
The Dow Jones Industrial Average tumbled 4%, closing at the lowest point since Nov. 21. The Standard & Poor's 500 index plummeted 5.3% and the Nasdaq Composite index slumped 5.8%. The Dow had its worst Inauguration Day decline.
The S&P 500 Financials Index fell 17% to below its lowest closing level since March 1995 as concerns about the health of the European banks weighed on the group. Both the Dow and S&P 500 retreated to two-month lows.
The S&P 500 is off to its worst start to a year, shattering the biggest rally since World War II, as analysts cut earnings estimates by a record 83% and companies signal worse to come.
The S&P 500 is down 11% in the first 12 trading days of 2009, exceeding last year’s 9.2% drop. The decline helped erase more than two-thirds of a 24% rally since Nov. 20 as optimism that government spending would revive the economy evaporated.
In his inaugural address, Obama said: "The state of the economy calls for action, bold and swift. And we will act, not only to create new jobs but to lay a new foundation for growth."
Although Obama is a positive for the markets, his inauguration does not change the underlying issues, according to one analyst. Fourth-quarter earnings are going to be disastrous, and the company management is providing conservative or negative guidance.
Optimism about what changes the new administration will bring could fuel some stock gains over the next few weeks. However, the underlying issues remained in focus.
US earnings are currently on track to have fallen 20.2% in the fourth quarter from a year earlier, according to the latest Thomson Reuters figures.
Dow component IBM was likely to be active on Wednesday. The tech leader reported quarterly earnings late on Tuesday that rose from a year ago and topped estimates, on revenue that fell from a year ago and missed estimates. IBM shares gained 3.5% in extended-hours trading.
Intel Corp., the world’s largest chipmaker, raised the possibility of reporting a loss this quarter, ending its more than 21-year run of profitability.
On Monday, Royal Bank of Scotland (RBS) warned that it may report a loss of $41.3bn - the biggest loss in British corporate history. The news rattled investors, even as Britain announced a second bank rescue plan. Royal Bank's US shares plunged 69% on Tuesday.
A number of US companies issued weak earnings and dour forecasts.
US bank State Street warned on Tuesday that fourth-quarter earnings toppled 71% and said it could face billions of dollars in new credit losses. The company also warned that 2009 revenue and earnings will likely be flat with the previous year, missing forecasts for growth. State Street shares fell 59%.
TD Ameritrade said its first-quarter profit fell 23% and cut its outlook for the year. Shares fell 10.3%.
Dow component Johnson & Johnson reported higher quarterly earnings that beat forecasts on weaker revenue that missed forecasts. The company also forecast 2009 earnings that are short of forecasts. JNJ shares ended 1% lower.
New York Times shares fell 8% after it agreed to take an expensive $250 million loan from Mexican billionaire Carlos Slim that it will use to repay debt.
Italy's Fiat said it was taking a 35% stake in U.S. car-maker Chrysler.
Treasury prices tumbled, raising the yield on the benchmark 10-year note to 2.37% from 2.20% on Friday. Treasury prices and yields move in opposite directions. Yields on the 2-year, 10-year and 30-year Treasurys all hit record lows last month.
Lending rates loosened. The 3-month Libor rate fell to 1.12% from 1.13% on Monday. Overnight Libor held steady at 0.12%. Libor is a bank-to-bank lending rate.
The dollar gained against the euro and fell against the yen. COMEX gold for February delivery rose $15.30 to settle at $855.20 an ounce.
US light crude oil for February delivery rose $2.23 to settle at $38.74 a barrel on the New York Mercantile Exchange. Gasoline prices rose one-tenth of a cent to a national average of $1.843 a gallon.
Fellow Dow component United Technologies reports quarterly results Wednesday morning, while Apple reports after the close. Also, Treasury Secretary nominee Timothy Geithner's confirmation hearing in the Senate.
Banks dropped again in Europe on Tuesday, weighing on the broader market. The pan-European Dow Jones Stoxx 600 index declined 2.1% to 185.70, as the banking sector tanked 7.3%.
The French CAC-40 index declined 2.2% to 2,925.28, while Germany's DAX 30 index fell 1.8% to 4,239.85 and the UK's FTSE 100 index closed down 0.4% to 4,091.40.
Indian market witnessed a sharp cut on Tuesday as the NSE Nifty index closed below the 2,800 mark. Key indices started off with a negative gap amid sharp falls across Asian markets. Bears continued to tighten their grip over the bourses as the day progressed.
However, a sharp bounce back was witnessed as traders covered their shorts after CERC announced that it had hiked return on equity for power units from 15.5% to 14%, which would be applicable from 2009 to 2014.
Although the spike was short lived and another bout of selling dragged the NSE Nifty index to close below the 2,800 mark.
Finally, The BSE benchmark Sensex lost 229 points to close at 9,100 and the NSE Nifty lost 49 points to close at 2,796.
Shares of Educomp nose-dived by over 6% to Rs1969 after reports surfaced that the company may have fabricated its accounts overstating its turnover and profits to boost its shares and the promoters exited when stock prices reached its peak.
According to reports, the promoters made over Rs2.5bn in the open market in trading in their own shares. The promoters held 10.8mn shares as on March 31, 2006.
The holding came down to 9.5mn shares on June 30, 2008, showing that the promoters sold more than 1.3mn shares of their company during the period between March 31, 2006 and June 30, 2008.
However, later on the Managing Director, Shantanu Prakash came out and clarified saying that rumors about directors quitting the company and promoters pledging stake, were baseless.
The promoters of the company have not pledged any share and that just 5% of their stake has been sold over three years for personal needs, added Prakash.
The stock had hit 52-week high of Rs4,799 on January 21, 2008 and a 52-week low of Rs1,515 on October 27, 2008.
Shares of KPIT Cummins surged by over 2% to Rs22.5 after the company announced results for the third quarter ended December 31, 2008.
The total revenue for Q3 FY-09 was at Rs1845.22mn, registering a yoy growth of 22.06% and net profit for Q3 FY-09 has increased by 19.36% to Rs168.66mn over the same period last year. The scrip touched an intra-day high of Rs23.4 and a low of Rs20 and recorded volumes of over 86,000 shares on BSE.
TTML have gained by 2.2% to Rs22.5. The company announced its results with a net loss of Rs (450.664)mn for the quarter ended December 31, 2008 as compared to net loss of Rs (274.255)mn for the quarter ended December 31, 2007.
The total income has increased from Rs4.595bn for the quarter ended December 31, 2007 to Rs5.158bn for the quarter ended December 31, 2008. The scrip touched an intra-day high of Rs22.8 and a low of Rs21.6 and recorded volumes of over 19,00,000 shares on BSE.
Power stocks were in momentum after CERC hiked return on equity for power units from 15.5% to 14%, which would be applicable from 2009 to 2014. NTPC, Power Grid, PTC and Neyveli Lignite were among the major gainers.
Obama - Inaugural speech
Throughout America’s history, there have been some years that simply rolled into the next without much notice or fanfare. Then there are the years that come along once in a generation – the kind that mark a clean break from a troubled past, and set a new course for our nation.
This is one of those years.
We start 2009 in the midst of a crisis unlike any we have seen in our lifetime – a crisis that has only deepened over the last few weeks. Nearly two million jobs have now been lost, and on Friday we are likely to learn that we lost more jobs last year than at any time since World War II. Just in the past year, another 2.8 million Americans who want and need full-time work have had to settle for part-time jobs. Manufacturing has hit a twenty-eight year low. Many businesses cannot borrow or make payroll. Many families cannot pay their bills or their mortgage. Many workers are watching their life savings disappear. And many, many Americans are both anxious and uncertain of what the future will hold.
I don’t believe it’s too late to change course, but it will be if we don’t take dramatic action as soon as possible. If nothing is done, this recession could linger for years. The unemployment rate could reach double digits. Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. We could lose a generation of potential and promise, as more young Americans are forced to forgo dreams of college or the chance to train for the jobs of the future. And our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world.
In short, a bad situation could become dramatically worse.
This crisis did not happen solely by some accident of history or normal turn of the business cycle, and we won’t get out of it by simply waiting for a better day to come, or relying on the worn-out dogmas of the past. We arrived at this point due to an era of profound irresponsibility that stretched from corporate boardrooms to the halls of power in Washington, DC. For years, too many Wall Street executives made imprudent and dangerous decisions, seeking profits with too little regard for risk, too little regulatory scrutiny, and too little accountability. Banks made loans without concern for whether borrowers could repay them, and some borrowers took advantage of cheap credit to take on debt they couldn’t afford. Politicians spent taxpayer money without wisdom or discipline, and too often focused on scoring political points instead of the problems they were sent here to solve. The result has been a devastating loss of trust and confidence in our economy, our financial markets, and our government.
Now, the very fact that this crisis is largely of our own making means that it is not beyond our ability to solve. Our problems are rooted in past mistakes, not our capacity for future greatness. It will take time, perhaps many years, but we can rebuild that lost trust and confidence. We can restore opportunity and prosperity. We should never forget that our workers are still more productive than any on Earth. Our universities are still the envy of the world. We are still home to the most brilliant minds, the most creative entrepreneurs, and the most advanced technology and innovation that history has ever known. And we are still the nation that has overcome great fears and improbable odds. If we act with the urgency and seriousness that this moment requires, I know that we can do it again.
That is why I have moved quickly to work with my economic team and leaders of both parties on an American Recovery and Reinvestment Plan that will immediately jumpstart job creation and long-term growth.
It’s a plan that represents not just new policy, but a whole new approach to meeting our most urgent challenges. For if we hope to end this crisis, we must end the culture of anything goes that helped create it – and this change must begin in Washington. It is time to trade old habits for a new spirit of responsibility. It is time to finally change the ways of Washington so that we can set a new and better course for America.
There is no doubt that the cost of this plan will be considerable. It will certainly add to the budget deficit in the short-term. But equally certain are the consequences of doing too little or nothing at all, for that will lead to an even greater deficit of jobs, incomes, and confidence in our economy. It is true that we cannot depend on government alone to create jobs or long-term growth, but at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe. Only government can break the vicious cycles that are crippling our economy – where a lack of spending leads to lost jobs which leads to even less spending; where an inability to lend and borrow stops growth and leads to even less credit.
That is why we need to act boldly and act now to reverse these cycles. That’s why we need to put money in the pockets of the American people, create new jobs, and invest in our future. That’s why we need to re-start the flow of credit and restore the rules of the road that will ensure a crisis like this never happens again.
That work begins with this plan – a plan I am confident will save or create at least three million jobs over the next few years. It is not just another public works program. It’s a plan that recognizes both the paradox and the promise of this moment – the fact that there are millions of Americans trying to find work, even as, all around the country, there is so much work to be done. That’s why we’ll invest in priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century. That’s why the overwhelming majority of the jobs created will be in the private sector, while our plan will save the public sector jobs of teachers, cops, firefighters and others who provide vital services.
To finally spark the creation of a clean energy economy, we will double the production of alternative energy in the next three years. We will modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills. In the process, we will put Americans to work in new jobs that pay well and can’t be outsourced – jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain.
To improve the quality of our health care while lowering its cost, we will make the immediate investments necessary to ensure that within five years, all of America’s medical records are computerized. This will cut waste, eliminate red tape, and reduce the need to repeat expensive medical tests. But it just won’t save billions of dollars and thousands of jobs – it will save lives by reducing the deadly but preventable medical errors that pervade our health care system.
To give our children the chance to live out their dreams in a world that’s never been more competitive, we will equip tens of thousands of schools, community colleges, and public universities with 21st century classrooms, labs, and libraries. We’ll provide new computers, new technology, and new training for teachers so that students in Chicago and Boston can compete with kids in Beijing for the high-tech, high-wage jobs of the future.
To build an economy that can lead this future, we will begin to rebuild America. Yes, we’ll put people to work repairing crumbling roads, bridges, and schools by eliminating the backlog of well-planned, worthy and needed infrastructure projects. But we’ll also do more to retrofit America for a global economy. That means updating the way we get our electricity by starting to build a new smart grid that will save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy to every corner of our nation. It means expanding broadband lines across America, so that a small business in a rural town can connect and compete with their counterparts anywhere in the world. And it means investing in the science, research, and technology that will lead to new medical breakthroughs, new discoveries, and entire new industries.
Finally, this recovery and reinvestment plan will provide immediate relief to states, workers, and families who are bearing the brunt of this recession. To get people spending again, 95% of working families will receive a $1,000 tax cut – the first stage of a middle-class tax cut that I promised during the campaign and will include in our next budget. To help Americans who have lost their jobs and can’t find new ones, we’ll continue the bipartisan extensions of unemployment insurance and health care coverage to help them through this crisis. Government at every level will have to tighten its belt, but we’ll help struggling states avoid harmful budget cuts, as long as they take responsibility and use the money to maintain essential services like police, fire, education, and health care.
I understand that some might be skeptical of this plan. Our government has already spent a good deal of money, but we haven’t yet seen that translate into more jobs or higher incomes or renewed confidence in our economy. That’s why the American Recovery and Reinvestment Plan won’t just throw money at our problems – we’ll invest in what works. The true test of the policies we’ll pursue won’t be whether they’re Democratic or Republican ideas, but whether they create jobs, grow our economy, and put the American Dream within reach of the American people.
Instead of politicians doling out money behind a veil of secrecy, decisions about where we invest will be made transparently, and informed by independent experts wherever possible. Every American will be able to hold Washington accountable for these decisions by going online to see how and where their tax dollars are being spent. And as I announced yesterday, we will launch an unprecedented effort to eliminate unwise and unnecessary spending that has never been more unaffordable for our nation and our children’s future than it is right now.
We have to make tough choices and smart investments today so that as the economy recovers, the deficit starts to come down. We cannot have a solid recovery if our people and our businesses don’t have confidence that we’re getting our fiscal house in order. That’s why our goal is not to create a slew of new government programs, but a foundation for long-term economic growth.
That also means an economic recovery plan that is free from earmarks and pet projects. I understand that every member of Congress has ideas on how to spend money. Many of these projects are worthy, and benefit local communities. But this emergency legislation must not be the vehicle for those aspirations. This must be a time when leaders in both parties put the urgent needs of our nation above our own narrow interests.
Now, this recovery plan alone will not solve all the problems that led us into this crisis. We must also work with the same sense of urgency to stabilize and repair the financial system we all depend on. That means using our full arsenal of tools to get credit flowing again to families and business, while restoring confidence in our markets. It means launching a sweeping effort to address the foreclosure crisis so that we can keep responsible families in their homes. It means preventing the catastrophic failure of financial institutions whose collapse could endanger the entire economy, but only with maximum protections for taxpayers and a clear understanding that government support for any company is an extraordinary action that must come with significant restrictions on the firms that receive support. And it means reforming a weak and outdated regulatory system so that we can better withstand financial shocks and better protect consumers, investors, and businesses from the reckless greed and risk-taking that must never endanger our prosperity again.
No longer can we allow Wall Street wrongdoers to slip through regulatory cracks. No longer can we allow special interests to put their thumbs on the economic scales. No longer can we allow the unscrupulous lending and borrowing that leads only to destructive cycles of bubble and bust.
It is time to set a new course for this economy, and that change must begin now. We should have an open and honest discussion about this recovery plan in the days ahead, but I urge Congress to move as quickly as possible on behalf of the American people. For every day we wait or point fingers or drag our feet, more Americans will lose their jobs. More families will lose their savings. More dreams will be deferred and denied. And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.
That is not the country I know, and it is not a future I will accept as President of the United States. A world that depends on the strength of our economy is now watching and waiting for America to lead once more. And that is what we will do.
It will not come easy or happen overnight, and it is altogether likely that things may get worse before they get better. But that is all the more reason for Congress to act without delay. I know the scale of this plan is unprecedented, but so is the severity of our situation. We have already tried the wait-and-see approach to our problems, and it is the same approach that helped lead us to this day of reckoning.
That is why the time has come to build a 21st century economy in which hard work and responsibility are once again rewarded. That’s why I’m asking Congress to work with me and my team day and night, on weekends if necessary, to get the plan passed in the next few weeks. That’s why I’m calling on all Americans – Democrats and Republicans – to put good ideas ahead of the old ideological battles; a sense of common purpose above the same narrow partisanship; and insist that the first question each of us asks isn’t “What’s good for me?” but “What’s good for the country my children will inherit?”
More than any program or policy, it is this spirit that will enable us to confront this challenge with the same spirit that has led previous generations to face down war, depression, and fear itself. And if we do – if we are able to summon that spirit again; if are able to look out for one another, and listen to one another, and do our part for our nation and for posterity, then I have no doubt that years from now, we will look back on 2009 as one of those years that marked another new and hopeful beginning for the United States of America. Thank you, God Bless You, and may God Bless America.
Precious metals end mixed
Gold rises for second consecutive day
After four successive sessions of drop, gold prices ended higher for the second consecutive day on Tuesday, 20 January, 2009. Prices rose as deep recession fears increased the appeal of the precious metals as a safe haven against alternatives. But a strong dollar limited gold's gains. 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. But silver prices dropped.
On Tuesday, Comex Gold for February delivery rose $15.3 (1.8%) to close at $855.2 an ounce on the New York Mercantile Exchange. Last week, gold prices ended down by 1.8%. This year gold has lost 3.5% till date. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (20%) since then.
On Tuesday, Comex silver futures for March delivery lost gained 4 cents (0.4%) to end at $11.175 an ounce. Last week, silver has lost 10.5 cents. For 2008, silver had lost 24%.
At the currency market on Tuesday, the U.S. dollar rose against its major rivals. Worries about the U.K. banking sector sent the British pound to a six-year low versus the U.S. dollar and an all-time low versus the Japanese yen.
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 higher by Rs 396 (3.02%) at Rs 13,493 per 10 grams. Prices rose to a high of Rs 13,637 per 10 grams and fell to a low of Rs 13,001 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 192 (1.05%) higher at Rs 18,444/Kg. Prices opened at Rs 18,192/kg and rose to a high of Rs 18,675/Kg during the day's trading.
Crude pares earlier losses
Prices rise by more than 6% as February contract expires
Crude oil prices pared their earlier losses and ended higher on Tuesday, 20 January, 2009. Prices rose due to the impending stimulus package that is expected to be announced by new President Barack Obama soon. Prices were also volatile as traders moved their positions to cover the March positions as the February expired today.
On Tuesday, crude-oil futures for light sweet crude for February delivery closed at $38.74/barrel (higher by $2.23 or 6.1%) on the New York Mercantile Exchange. Earlier it dropped to a low of $32.5. March crude, the new front-month contract, fell $1.73 to end at $40.84 a barrel on Nymex. Last 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 18%.
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.
The Energy Information Administration also said last 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, ebruary reformulated gasoline fell 3 cents to $1.14 a gallon and February heating oil dropped 9 cents to $1.38 a gallon.
February natural gas futures fell 16 cents to end at $4.64 per million British thermal units.
At the MCX, crude oil for February delivery closed at Rs 2,032/barrel, higher by Rs 34 (1.7%) against previous day's close. Natural gas for January delivery closed at Rs 231.5/mmbtu, lower by Rs 1.1/mmbtu (0.5%).
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