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Friday, January 23, 2009
BSE Bulk Deals to Watch - Jan 23 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
23/1/2009 530407 EPIC ENERGY ASHOK KUMAR B 50000 114.98
23/1/2009 522195 FRONTIER SPR CAMEL FOODS PVT LTD B 26688 17.90
23/1/2009 522195 FRONTIER SPR GEOMETRIC SEC AND ADVISORY P LTD S 20488 17.90
23/1/2009 522217 GUJ APO IND APOLLO INFRATECH PRIVATE LIMITED B 847896 52.45
23/1/2009 522217 GUJ APO IND PATEL AJITKUMAR TRIBHOVANDAS HUF S 450000 52.50
23/1/2009 522217 GUJ APO IND SWATI AJITKUMAR PATEL S 200000 52.25
23/1/2009 522217 GUJ APO IND MITUL A PATEL S 200000 52.55
23/1/2009 507649 RASOI LTD TEJASWI VINIMAY PVT LTD B 10000 342.50
23/1/2009 500368 RUCHI SOYA LOTUS GLOBAL INVESTMENTS LIMITED B 2920000 19.49
23/1/2009 500368 RUCHI SOYA DHANAAJAYA MONEY MANAGEMENT SER P LTD S 2916636 19.50
23/1/2009 500376 SATYAM COMP LARSEN AND TOUBRO LIMITED B 11889010 35.07
23/1/2009 500376 SATYAM COMP OPG SECURITIES P LTD B 5913155 36.05
23/1/2009 500376 SATYAM COMP OPG SECURITIES P LTD S 5893155 36.07
23/1/2009 517451 TUDOR INDIA GLOBE CAPITAL MARKET LIMITED B 125000 63.99
23/1/2009 531249 WELL PACK PA AMAR PREMCHAND WALMIKI B 22995 51.39
NSE Bulk Deals to Watch - Jan 23 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
23-JAN-2009,GUJAPOLLO,Gujarat Apollo Equip Ltd.,APOLLO INFRATECH PRIVATE LIMITED,BUY,315679,50.48,-
23-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,ADROIT FINANCIAL SERVICES PVT LTD,BUY,6947960,35.21,-
23-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,GENUINE STOCK BROKERS PVT LTD,BUY,3480944,36.06,-
23-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,KAUSHIK SHAH SHARES & SECURITIES PVT LTD,BUY,6430458,35.94,-
23-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,LARSEN & TOUBRO LIMITED,BUY,39030954,34.52,-
23-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,P R B SECURITIES PRIVATE LTD,BUY,6457783,36.35,-
23-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,PRASHANT JAYANTILAL PATEL,BUY,3902920,37.16,-
23-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,TRANSGLOBAL SECURITIES LTD.,BUY,6195013,35.69,-
23-JAN-2009,SHLAKSHMI,Shri Lakshmi Cotsyn Limit,TARUNKUMAR GURUCHARAN BRAHMBHATT,BUY,79951,22.90,-
23-JAN-2009,EDUCOMP,Educomp Solutions Limited,FIDELITY MANAGEMENT AND RESEARCH COMPANY,SELL,146500,1744.73,-
23-JAN-2009,GUJAPOLLO,Gujarat Apollo Equip Ltd.,AJITKUMAR TRIBHOVANDAS PATEL,SELL,313523,50.35,-
23-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,ADROIT FINANCIAL SERVICES PVT LTD,SELL,6973560,35.04,-
23-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,DEUTSCHE SECURITIES MAURITIUS LIMITED,SELL,3384918,30.25,-
23-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,GENUINE STOCK BROKERS PVT LTD,SELL,3610492,35.45,-
23-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,KAUSHIK SHAH SHARES & SECURITIES PVT LTD,SELL,6454458,35.68,-
23-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,P R B SECURITIES PRIVATE LTD,SELL,6485983,36.30,-
23-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,PRASHANT JAYANTILAL PATEL,SELL,4358920,37.00,-
23-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,TRANSGLOBAL SECURITIES LTD.,SELL,6249613,35.55,-
Asian Markets retracts sharply
Disappointing corporate earnings and dismal economic data weighs regional indices lower
Stock markets in the Asian region retracted sharply by closing last day of the week on lower side aggregating the weekly losses. Markets across the region were haunted by the negative cues overnight from Wall Street accompanied by the disappointing corporate earnings results and dismal economic data that pointed to a deepening global recession dragged stocks lower.
On the Wall Street, the Dow Jones Industrial Average ended lower by 106 points at 8,122, the Nasdaq closed lower by 42 points at 1,465 and the S&P 500 closed lower by 13 points at 827.5 on Thursday, 22 January 2009.
In the commodity market, crude oil fell after U.S. stockpiles rose more than four times forecast last week, raising concern of an oversupply as the global recession deepened. Supplies of crude oil in the U.S. rose 6.1 million barrels to 332.7 million last weeks, the highest since August 2007, the Energy Department said yesterday.
Crude oil for March delivery fell as much as $1.28, or 2.9%, to $42.39 a barrel in electronic trading on the New York Mercantile Exchange. It was at $42.56 a barrel at 4:24 a.m. eastern time.
Brent crude oil for March settlement fell as much as 95 cents, or 2.1%, to $44.44 a barrel on London's ICE Futures Europe exchange. The contract rose 37 cents, or 0.8%, to settle at $45.39 a barrel yesterday.
Gold prices fell $2.30 an ounce, or 0.27%, to $852.5 in Asian electronic trading on Friday after finishing higher on Thursday as traders flocked to the precious metal as a hedge amid economic turmoil. Gold for February delivery ended the session at $858.80 an ounce, up $8.70 for the session. Earlier in the day, the precious metal hit as low as $844.40.
In the currency market, the U.S. dollar strengthened against the Australian dollar, New Zealand dollar, South Korean won, the Singapore dollar while it weakened against the Japanese yen.
In late Tokyo trades, the Japanese yen continued to showed strength against the major currencies on Friday. The Japanese yen was quoted at 88.2190 against the US dollar, down from Thursday's quote of 88.93 yen.
The Hong Kong dollar was trading at HK$ 7.7575 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.
In late Sydney trades, the Australian dollar was trading at US$0.6440 up from Thursday's close of US$0.6554.
In late Wellington trades, the New Zealand dollar was buying US$0.5204, down compared to US$0.5265 at close on Thursday.
In late Seoul trades, the South Korean won was trading at 1,394.50 won to the U.S. dollar, down by 14.4750 won from Thursday's close of 1,380.025 won.
In Taipei, the Taiwan dollar strengthened against the US dollar as it was trading at NT$ 33.56 in the afternoon trade against the Thursday closing of NT$ 33.58.
The Singapore dollar finished at 1.5070 against the previous close of 1.4978 while the Malaysian Ringgit closed Friday's deals at 3.6248.
In Manila, the Philippines peso strengthened against the dollar. Currently, the dollar-peso pair is worth 47.4050, compared to 46.55 hit in the early trade.
Coming back in equities, the Japanese stock markets reversed yesterday's gains to finish the session lower hitting two months low on concerns over corporate earning and global economic outlook. The losses consolidated after the exporters and technology shares weighed the index down after Sony Corporation forecast an annual operating loss and firmer yen against major currencies. Banks and financials tanked following a fall in U.S. shares overnight.
The Nikkei 225 Stock Average index tumbled 306.49 points, or 3.8%, to 7,745.25, while the broader Topix fell 22.36 points, or 2.8%, to 774. In a week, the Nikkei 225 stock average lost 484.9 points, or 5.89%, while the broader Topix erased 44 points, or 5.38%.
On the economic front, the Ministry of Economy, Trade and Industry said an index measuring all industrial activity in Japan was down 2.3% in November compared to the previous month. The Bank of Japan said economic conditions have been deteriorating significantly in Japan and expects exports to decrease on slowing overseas economies and the appreciation of the yen. Production is forecast to fall due to the growing adjustment pressures on inventories and weakening demand.
In Mainland China, the Shanghai stock index finished the session lower on worries over negative earnings announcements. Investors also booked profit over the uncertainty of the overseas markets and its impact the local bourses after they are reopened in early February after the Chinese New Year holiday.
The benchmark Shanghai Composite Index erased 14.29 points, or 0.7%, to 1,990.657. The benchmark Shanghai Composite Index has gained 36.22 points, or 1.85%, in a week, while in January 2009 the index added 169.85 points, or 9.33%.
In Hong Kong, the markets finished the session lower in thin trade ahead of a five-day break for Chinese new year and on worries over negative earnings announcements, with gains in heavyweight HSBC and mainland banks helping the main index come off early lows following Wall Street's overnight slump.
The Hang Seng Index fell 79.39 points, or 0.6%, to 12,578.6. The Hang Seng index lost 676.91 points, or 5.11% in a week. In January 2009, the index tumbled 1,808.88 points, or 12.57%.
In Australia, stock market reversed yesterday's gain to finish the session to a near five-year low, as index was dragged down by miners, materials and resources, industrials, and energy on pullback in base and industrial metal prices following concerns about weaker demand for metals from China, Japan, and South Korea, while financials and properties plummeted on negative lead from Wall Street and concerns about the health of global financials and economic outlook.
The benchmark S&P/ASX200 plummeted 144.1 points, or 4.13%, to 3,342.7, while the broader All Ordinaries slipped 131.60 points, or 3.83%, to 3,300.30. In a week, the S&P/ASX200 has lost 208.20 points, or 5.86%, while All Ordinaries erased 194.6 points, or 5.38%.
Equities on the New Zealand stock market ended the last trading session of the week on Friday in the negative region. The NZ share market slipped during early trade as the benchmark index was down 18.06 points to 2716.35 after rising almost 29.4 points yesterday. The NZX50 recovered yesterday to end its three-day losing streak.
The benchmark NZX50 dropped down 1.07% or 29.325 points to close at 2705.086. While 7 stocks rose, 25 stocks dropped and 18 remained unchanged. The NZX 15 slipped 0.81% or 40.425 points to 4956.505.
On the economic front, as per Bank of New Zealand-Business NZ, the manufacturing index for the month of December was (42.5), increasing 7.3 points from November. The figure, however, was still the second lowest recorded value since the survey began in 2002. It was also the lowest December results recorded, with value below the 2005 result. The final results for 2008 showed that 9 of the 12 months showed contraction in manufacturing, with eight consecutive values below 50.
In South Korea, stock markets fell following the overnight losses from Wall Street. Disappointing corporate earning report added more gloom in the sentiments as Samsung Electronics, the largest stock by market cap, dropping after reporting weak quarterly results, while LG Electronics fell for a fourth straight session on outlook fears. The Korea Composite Stock Price Index closed down 22.83 points or 2.05% closing the day at 1,093.40. For the week the index lost 3.68% or 41.8 points.
In Singapore also markets reversed yesterday's gains to finish the session lower on following the negative lead from Wall Street and over the health of domestic economy after Singapore's government sharply reduced its economic outlook for 2009. Manufacturing and multi industry were leading the decliners. The benchmark Straits Times Index lost 23.54 points, or 1.38%, to 1,685.23. The index has lost 45.22 points, or 2.61%, in a week.
In Philippines, the stock market reversed yesterday's gains, closing the week marginally lower, weighed down by the losses in index-linked counters as investors became anxious by the overnight losses on Wall Street. Financial, mining & oil and holding firms indices lost the most, yanking the composite index lower. However, a strong show of strength by the industrial and the property indices gave some support to the benchmark index. The benchmark index PSEi tumbled 0.33% or 6.18 points to 1,857.34, while the All Share index lost 0.49% or 6 points to 1,202.41.
In India, key benchmark indices faltered to day's low in mid afternoon trade as European indices saw a subdued start tracking global cues. Realty, metal and banking stocks extended losses. As per the provisional figures, the BSE 30-share Sensex was down 139.49 points, or 1.58%, to 8,674.35. The S&P CNX Nifty fell 1.30%, to 2,678.55 as per the provisional figures.
Elsewhere, Malaysia's Kula Lumpur Composite index was down 0.72% or 6.33 points to 872.69, while Indonesia's Jakarta composite decreased by 11.74 points or 0.88% closing the day at 1,315.58. In Thailand, the Thai Stock exchange fell 4.75 points or 1.05% to 433.52. Stock markets in Taiwan were closed for holiday.
In other regional market, European shares declined on Friday, with losses for oil producers and financials offsetting gains in the pharmaceutical sector. On a national level, the U.K. FTSE 100 index declined 0.5% to 4,033.53 and the French CAC-40 index fell 0.5% to 2,856.17. The German DAX 30 index lost 1% to 4,176.36.
Satyam gallops as 47% equity stake change hands
Satyam Computer Services galloped 31.25% to Rs 38.85 on massive total of volumes of 31.40 crore shares on the BSE and the NSE, buoyed by reports the company is looking at roping in a strategic investor and iGate eyeing part stake.
Meanwhile, the BSE Sensex was down 139.49 points, or 1.58%, to 8,674.35
The Satyam counter has average daily volume of 1.22 crore shares in the past one quarter.
The stock hit a high of Rs 39.30 and a low of Rs 28.50 during the day. The stock had a 52-week high of Rs 544 on 30 May 2008 and a 52-week low of Rs 11.50 on 9 January 2009.
The stock had underperformed the market over the past one month till 22 January 2009, falling 81.77% as compared to the Sensex's 11.23% fall. It had also underperformed the market in the past one quarter, falling 90.39% as compared to the Sensex's fall of 13.33%.
The mid-cap software exporter has an equity capital of Rs 134.77 crore. Face value per share is Rs 2.
Reports of software firm iGate interested in acquiring parts of fraud hit IT firm whose board has been approached by domestic and foreign companies for a possible merger or sale, buoyed the counter. iGate is interested in a dialogue with Satyam and currently are quiet keen and comfortable to acquire selective portions of the business, reports quoting iGate's CEO Phaneesh Murthy revealed.
Meanwhile, other set of reports indicated Sataym is looking at roping in a strategic investor. Goldman Sachs has emerged as the front-runner in the race for an investment banker for Satyam Computer as the new board gears Satyam office up to rope in a strategic investor to value and script a revival strategy for the beleaguered software firm.
The six-member Satyam board, which met on Thursday (22 January 2009), discussed the appointment of a new CEO and CFO, and looked at funding options to tide over the grave liquidity crisis. Search firm Egon Zehnder has been appointed to help identify a CEO for the firm.
Reports further added that L&T's IT arm, L&T Infotech and Tech Mahindra have already expressed their interest in Satyam. L&T, which currently owns 4% equity shareholding in Satyam, is keen on raising its shareholding.
It is reported that most companies that are looking at buying Satyam would want to see the re-stated accounts before they take a final call. People familiar with the development say this could take some time as re-statement of accounts over the last couple of years is likely to take up to a couple of quarters.
Also, there has been interest from private equity investors such as the Texas Pacific Group and General Atlantic for Satyam. In most of these cases, these PE investors are likely to tie up with an Indian company for a bid on Satyam.
L&T is also understood to be preparing a blueprint for the revival of the company. It is working closely with KPMG, which has been asked to do advisory work for Satyam.
The software company's board had mandated both KPMG and Deloitte to restate the accounts of the company, after chairman B Ramalinga Raju admitted he had doctored accounts.
Meanwhile, Raju, the founder of Satyam, is reported to have padded employee numbers to siphon off cash and forged documents to support fake bank deposits.
Satyam had about Rs 3300 crore of 'fictitious and non-existent' accounts, public prosecutor K Ajay Kumar told a hearing for the company's arrested founder Ramalinga Raju on 22 January 2009. The Hyderabad-based company had 40,000 employees, short of the 53,000 claimed by Satyam, he added.
The falsified employee data was used to siphon off Rs 20 crore every month and one fixed deposit receipt from HDFC Bank was forged, the prosecutor told the 6th Additional Chief Metropolitan Magistrate's court in Hyderabad.
The accounting fraud has hit Satyam's business prospects and has triggered worries some clients may cancel contracts.
Raju admitted that Satyam's balance sheet as on 30 September 2008 had inflated cash and bank balances of Rs 5040 crore, inflated debtors of Rs 490 crore and non-existent accrued interest of Rs 376 crore. Against this the liability was understated by Rs 1230 crore.
Raju said the Q2 September 2008 results had overstated operating revenues by Rs 588 crore, thereby overstating the operating profits and cash to that extent.
The gap in the balance sheet had arisen purely on account of inflated profits over the period of last several years, Raju confessed adding that every attempt made to eliminate the gap failed. As the promoters held a small percentage of equity, the concern was the poor performance would result in a takeover, thereby exposing the gap, Raju said.
Raju said in the last 2 years a net amount of Rs 1230 crore was arranged to keep operations going. He said this was done by pledging all the promoter shares and raising funds from known sources by giving all kinds of assurances. Significant dividend payments, acquisitions, capital expenditure to provide for growth did not help matters. Every attempt was made to keep the wheel moving. The last straw was the selling of most of the pledged share by the lenders on account of margin triggers, Raju said.
The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones, Raju said. Maytas's investors were convinced that this is a good divestment opportunity and a strategic fit, he said.
Both BSE and NSE have excluded Satyam Computer from their respective key benchmark indices with effect from, 12 January 2009. Sun Pharmaceuticals Industries has replaced Satyam on the Sensex, while Reliance Capital has replaced Satyam on the Nifty.
Satyam Computer Services is a global business and information technology services company. It delivers consulting, systems integration and outsourcing solutions to clients.
Market slides for third straight week on global cues
Key benchmark indices finished lower for the third straight week on negative global cues and subdued Q3 corporate earnings. Market slipped in three out of five trading sessions. Despite the fall, the BSE Mid-Cap and Small-Cap indices outperformed the Sensex.
Turnover was muted as investors were reluctant to build positions in a truncated week. Market will remain closed on Monday (26 January 2009) for Republic Day holiday. The mood was cautious ahead of the Reserve Bank of India policy review on Tuesday (27 January 2009) and expiry of monthly derivatives contracts next week.
Results from India Inc were mixed in nature. As the undertone remained negative, even some strong results failed to trigger any significant buying during the week. So far, aggregate results of 497 companies showed a 24.1% decline in net profit on a 19.6% increase in net sales in Q3 December 2008 over Q3 December 2007.
A marginal rise in inflation also weakened hopes for further rate cuts by the central bank. Wholesale price index rose 5.6% in the 12 months to 10 January 2009, above the previous week's annual rise of 5.24%, government data released on 22 January 2009, showed . The inflation rate was 4.36% during the corresponding week the previous year.
FII outflow in January 2009 totaled Rs 3710.50 crore (till 21 January 2009). FIIs had pulled out a massive Rs 52,998.70 crore in calendar year 2008, as against an inflow of a huge Rs 71,486.50 crore in calendar year 2007.
The BSE 30-share Sensex fell 649.24 points or 6.96% to 8,674.35 in the week ended 19 January 2009. The S&P CNX Nifty fell 149.9 points or 5.29% at 2678.55in the week.
The BSE Mid-Cap index fell 176.64 points or 5.84% to 2,850.19 and the BSE Small-Cap index fell 157.23 points or 4.61% to 3,255.54 in the week.
The barometer index BSE Sensex is 12532.42 points or 59.09% below its all-time high of 21,206.77 struck on 10 January 2008.
After opening on positive note on firm Asian stocks, the Indian market gyrated between the positive and negative zone on 19 January 2009. On that day, The BSE 30-share Sensex was up 5.98 points, or 0.06%, to 9,329.57. The S&P CNX Nifty rose 17.75 points, or 0.63%, to 2,846.20.
Fears that the global financial sector crisis would trigger more foreign fund outflows pulled the market lower on 20 January 2009. Record loses at British bank Royal Bank of Scotland helped revive concerns about the global banking sector. The BSE 30-share Sensex was down 229.02 points, or 2.45%, to 9,100.55. The S&P CNX Nifty fell 49.60 points, or 1.74%, to 2,796.60.
A sell-off in late trade pulled key benchmark indices to day's low in what was a global equities rout on 21 January 2009. 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%, to 8,779.17. The S&P CNX Nifty fell 90.45 points, or 3.23%, to 2,706.15.
Key benchmark indices logged small gains on positive global cues in what was a highly choppy trading session. Stocks oscillated wildly reacting to inflation data, corporate results and global cues on 22 January 2009. The BSE 30-share Sensex rose 34.67 points, or 0.39%, to 8,813.84. The S&P CNX Nifty rose 7.65 points, or 0.28%, to 2,713.80.
Equities ended sharply lower on 23 January 2009 weighed by dismal global cues with European shares sliding to a six-year low, subdued Asian equities and an overnight decline in US indices. Economic news from the UK were also disappointing. UK's 2008 GDP growth has been 0.7%, lowest since 1992, confirming the country is in recession. The 30-share BSE Sensex closed down 139.49 points or 1.58% at 8,674.35, down. The 50-unit S&P Nifty ended at 2678.55, down 35.25 points or 1.30.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) slipped 5.36% in the week. The company after market hours on Thursday, 22 January 2009 announced a lesser than expected 8.8% fall in net profit to Rs 3501.crore in Q3 December 2008 over Q3 December 2007. RIL's net profit dipped for the first time in three years, but beat forecasts as refining margins did not fall as much as expected.
RIL earned $10 on every barrel of crude oil processed at its 660,000 barrel-a-day plant at Jamnagar in Gujarat, higher than other refineries in South Asia.
India's largest dedicated housing finance company by total income HDFC fell 11.31%. HDFC, during market hours on 21 January 2009 said its net profit fell 15.73% to Rs 546.83 crore in Q3 December 2008 over Q3 December 2007.
India's largest private sector bank by net profit ICICI Bank lost 14.07% to Rs 364.30. The BSE Bankex fell 10.98% in the week.
Realty stocks fell on reports falling interest rates have failed to revive housing demand. DLF (down 17.52%), Indiabulls Real Estate (down 16.12%), Omaxe (down 3.53%), slipped.
India's second largest realtor by market capitalisation Unitech fell 10.47% on reports it will postpone the sale of its Gurgaon-based hotel, The Courtyard, as the real estate firm had received undervalued quotations from various suitors.
TCS, India's largest software services exporter by sales fell 3.43% on reports it expects to slow its rate of hiring new staff this year, as a broad economic downturn affects its global clientele. 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 fraud-scarred outsourcing firm Satyam Computer Services surged 58.90% this week on reports the company is looking at roping in a strategic investor and iGate was eyeing part stake.
India's largest drugmaker by sales Ranbaxy Laboratories fell 13.83%. The company, after the market hours on 22 January 2009, reported a net loss of Rs 806.55 crore in Q4 December 2008 compared to a net profit of Rs 48.4 crore in Q4 December 2007. The net loss was for the second consecutive quarter and also for 2008, hit by forex and hedging losses, and problems in the US market.
The Planning Commission told industry not to expect any more stimulus packages from government during this financial year, ending March 2009. Enough has been done for the industry, the Planning Commission deputy chairman, Mr Montek Singh Ahluwalia said on 21 January 2009.
The government has already announced two stimulus packages to give a boost to the economy, reeling under the impact of the global slowdown. The government and the Reserve Bank were working in close coordination on steps to stimulate the economy, he noted.
RBI's monetary policy, corporate results to set the tone
The Reserve Bank of India's (RBI) quarterly review of the monetary policy on 27 January 2009 and results from index pivotals will be dictate trend. Global cues will also be closely watched. Volatility may rise, in truncated week, as futures & options contracts for January 2009 series expire on Thursday, 29 January 2009. Market will remain shut on Monday, 26 January 2009 on account of Republic Day.
The street expects the RBI to signal a softer interest rate stance in its meet on 27 January 2009, although the key rates are expected to stay on hold. Economic research firm Moody's Economy.com predicts the central bank may take a relatively smaller step, following a series of aggressive interest rate cuts from October 2008. It forecasts a 50-basis point reduction in the repo rate, to 5%. Meanwhile, the cash reserve ratio and the reverse repo rate are likely to be kept unchanged, as their current settings leave little room for further cuts.
Since October 2008, the RBI has released over Rs 3,20,000 crore into the banking system to usher in a low-interest regime in the economy, as prices of fuel, agricultural commodities and metals plunged, easing inflationary pressure.
The research firm added that in the present economic environment, the RBI is expected to focus on the growth rate and credit market stability when reviewing monetary policy and so the monetary easing cycle will continue through the first half of 2009.
After declining for 10 consecutive weeks, inflation, based on wholesale prices, rose by 0.36 percentage points to 5.6% for the week-ended 10 January 2009, from 5.24% for 3 January 2009. The PM's economic advisory panel member Mr Saumitra Chaudhuri expects inflation to come down to 3 to 4% by the end of this fiscal.
Earlier, inflation has more than halved from a 16-year high of 12.91% in August 2008 as a global economic slump drives down prices of oil and other commodities.
On the flip side, the Prime Minister's Economic Advisory Council on Friday, 22 January 2009 lowered India's growth forecast for the current fiscal to 7.1%, against its earlier prediction of 7.7%, on account of the impact of the global meltdown. The council, headed by economist Suresh Tendulkar, expects the country's gross domestic product (GDP) to expand by 7-7.5% during the next fiscal.
ONGC, Bhel, Maruti Suzuki India, Mahindra & Mahindra, Cairn India, BPCL, Titan, Mundra Port, Tata Power, HPCL, Gail India, Century Textiles, NMDC, Nalco, will declare their December 2008 quarterly results in the forthcoming week.
The street was anticipating poor Q3 December 2008 earnings from Indian Inc on high input costs, the credit crunch and high interest rates, coupled with the burden of piled-up inventories. Aggregate results of 486 companies showed 24.80% fall in net profit on a 19.40% increase in net sales in Q3 December 2008 over Q3 December 2007.
Foreign brokerage Morgan Stanley in its research report dated 5 January 2009 said earnings of 30 BSE Sensex firms are set for their first quarterly drop in Q3 December 2008, since the data was first made available in 1999. It estimates the BSE Sensex earnings to drop 0.2% year-on-year basis compared with a growth of 5.5% and 20% in the September 2008 and June 2008 quarters, respectively.
Nifty slips below 2,700 mark; metal, banking shares slump
Key benchmark indices faltered in volatile trade weighed by dismal global cues with European shares sliding to a six-year low, subdued Asian equities and an overnight decline in US indices. Trading in US index futures showing the Dow could fall 152 points at the opening bell, triggered further unwinding in late trade. The BSE Sensex lost 139.49 points, or 1.58%, to 8,674.35. Realty, metal and banking stocks were the chief casualties. However gains in index heavyweight Reliance Industries capped sharp losses.
The market began on a dull note turned positive in early trade powered by better than expected results from index heavyweight Reliance Industries. However it slipped once again in red later as IT pivotals extended early losses. Recovery from early lows in early afternoon trade was derailed by fresh selling in pivotals. The market extended the fall later. Weak global cues and recent selling by the foreign institutional investors weighed on sentiment.
European shares fell to a six-year low early as investors worried about further losses in the financial sector and data showed the British economy went into recession at the end of last year. Key benchmark indices in France, Germany and UK were down by between 1.55% to 2.12%.
Asian stocks fell today, 23 January 2009, led by technology companies and commodity producers, after Sony Corp forecast its first annual loss in 14 years and economists predicted China's economy will slow further. The key benchmark indices in Hong Kong, Japan, Singapore, China and South Korea fell by between 0.63% to 3.81%.
US stocks fell on Thursday, 22 January 2009, weighed down by Microsoft's proposed job cuts and disappointing earnings, while economic data showed further deterioration in the labor and housing markets.
The Dow Jones industrial average dropped 105.30 points, or 1.28%, to end at 8,122.80. The Standard & Poor`s 500 index slipped 12.74 points, or 1.52%, to settle at 827.50. The Nasdaq composite index decreased 41.58 points, or 2.76%, to close at 1,465.49.
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 3698.90 crore (till 21 January 2009).
The BSE 30-share Sensex was down 139.49 points, or 1.58%, to 8,674.35. The Sensex rose 45 points at the day's high of 8,858.84 in early trade. The Sensex fell 180.07 points at the day's low of 8,631.60 in mid-afternoon trade.
The S&P CNX Nifty fell 35.25 points, or 1.3%, to 2,678.55. Nifty January 2009 futures were at 2665, at a discount of 13.55 points as compared to the spot closing.
The market breadth, indicating the overall health of the market, was weak on BSE with 813 shares advancing as compared with 1,633 that declined. 41 shares remained unchanged. The breadth was positive in early trade.
The BSE clocked a turnover of Rs 3,313 crore today lower than Rs 3,184.98 crore on 22 January 2009.Turnover in NSE's futures & options (F&O) segment was Rs 36,809.97 crore, lower than Rs 38,676.85 crore on Thursday, 22 January 2009.
Sectoral indices on BSE displayed mixed trend. the BSE Bankex (down 4.16%), the BSE Metal index (down 3.35%), the BSE Capital Goods index (down 2.87%), the BSE Realty index (down 2.45%), the BSE IT index (down 2.04%), the BSE PSU index (down 1.96%), the BSE Teck index (down 1.76%) underperformed the Sensex.
The BSE HealthCare index (up 0.49%), the BSE Oil & Gas index (up 0.26%), the BSE Consumer Durables index (up 0.08%), the BSE FMCG index (down 1.22%), the BSE Power index (down 1.32%), the BSE Auto index (down 1.42%), outperformed the Sensex.
The BSE Sensex has lost 972.96 points or 10.08% 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
Among the 30-share Sensex pack, 26 fell while the rest rose. Jaiprakash Associates, Hindustan Unilever, ACC, Grasim Industries fell by between 2.55% to 6.95%.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) advanced 1.75% to Rs 1,153.15 off the day's high of Rs 1,174.35. The company after market hours on Thursday, 22 January 2009 announced a lesser than expected 8.8% fall in net profit to Rs 3501.crore in Q3 December 2008 over Q3 December 2007. RIL's net profit dipped for the first time in three years, but beat forecasts as refining margins did not fall as much as expected.
RIL earned $10 on every barrel of crude oil processed at its 660,000 barrel-a-day plant at Jamnagar in Gujarat, higher than other refineries in South Asia. The stock rose 1.21% ahead of the result yesterday.
India's largest oil exploration firm by revenue Oil & Natural Gas Corporation fell 0.52% to Rs 645.80 off the day's high of Rs 662 even on reports company will be signing an agreement with Kazakhstan for a share in Satpayev oil field in the Caspian Sea on 24 January 2009.
Bank stocks fell after moving between the positive and negative zones earlier as investors speculated falling bond yields and lower rates would accelerate loan growth and profitability. India's largest bank in terms of assets and branch network State Bank of India fell 4.34%. India's second largest private sector bank by net profit HDFC Bank fell 1.32% as its American depository receipt (ADR) fell 2.2% on Thursday, 22 January 2009. India's largest private sector bank by net profit ICICI Bank fell 3.71% as its ADR fell 3.72% overnight.
India's largest dedicated housing finance company by total income HDFC fell 0.84% to Rs 1,388.40 off the day's high of Rs 1,423.90. HDFC, during market hours on 21 January 2009 said its net profit fell 15.73% to Rs 546.83 crore in Q3 December 2008 over Q3 December 2007.
Metal stocks declined on worries a weakening domestic and global economy has hit demand. Steel Authority of India, Hindalco Industries, Hindustan Zinc, Tata Steel, National Aluminum Company and Sterlite Industries fell by between 0.57% to 7.17%.
Capital goods stocks fell on worries a slowing economy will crimp orders. Larsen & Toubro, ABB, BHEL, Thermax, BEML, Crompton Greaves fell by between 0.86% to 5.25%.
Realty stocks fell on reports falling interest rates have failed to revive housing demand .Meanwhile reportedly government is mulling a second stimulus package to the beleagured sector to revive housing demand. DLF, Indiabulls Real Estate, Omaxe fell by between 1.86% to 2.82%.
Unitech fell 4.77% on reports it will postpone the sale of its Gurgaon-based hotel, The Courtyard, as the real estate firm had received undervalued quotations from various suitors.
India's largest telecom services provider by sales Bharti Airtel fell 0.65% on profit booking. The stock gained 6.19% yesterday after the company before market hours on 22 January 2009 reported a 25% rise in net profit in Q3 December 2008 over Q3 December 2007.
India's second largest telecom services provider by sales Reliance Communications fell 4.5%. The company after market hours today announced 2.7% rise in net profit in Q3 December 2008 over Q3 December 2007, slightly missing expectations, as its network expansion costs weighed
IT stocks fell mirroring weak ADRs overnight. India's third largest software services exporter, Wipro fell 1.72% as its ADR fell 5.93% overnight. The company forecasted a 7% fall in revenue for Q4 March 2009 on global economic downturn and pricing pressure from western clients, at the time of declaring results before market hours on 21 January 2009.
India's second largest software services exporter Infosys Technologies fell 2.08% as its ADR fell 4.53% overnight. While, India's fifth largest IT exporter by sales HCL Technologies fell 4.85%.
TCS, India's largest software services exporter by sales fell 2.12% on reports it expects to slow its rate of hiring new staff this year, as a broad economic downturn affects its global clientele. 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.
However Satyam Computer Services jumped 31.25% to Rs 38.85 on reports India's fraud-scarred outsourcing firm, may name a new leadership team later today, 23 January 2009, after a two-day meeting of the company's new government-appointed board. Meanwhile, potential bidders are reportedly circling the software services exporter, attracted by its large workforce and diversified global clientele that includes Nestle and General Electric.
India's largest commercial vehicle maker by sales Tata Motors rose 1.81% on reports the much delayed and much awaited Tata Nano is ready to hit the dealer networks by February 2009 end. Both the “base” model and the “fully loaded” model will be available at the dealer showrooms mid-to late February. Meanwhile company which bought the luxury brands Jaguar and Land Rover from Ford Motor last year, is in reportedly in talks with the UK government on assistance for the luxury units as sales plummet in their largest markets.
Among other auto stocks, Maruti Suzuki India, M&M and Hero Honda Motors fell by between 0.37% and 7.93%.
India's largest drugmaker by sales Ranbaxy Laboratories rose 0.75% to Rs 187.50 off the day's low of Rs 161.15. The company after the market hours on 22 January 2009 reported a net loss of Rs 806.55 crore in Q4 December 2008 compared to a net profit of Rs 48.4 crore in Q4 December 2007.
Reliance Infrastructure fell 0.55% as its net profit fell 16.71% to Rs 251.19 crore in Q3 December 2008 over Q3 December 2007.
Satyam Computer Services was the top traded counter on BSE with turnover of Rs 396.58 crore on BSE followed by Reliance Industries (Rs 321.36 crore), State Bank of India (Rs 179.66 crore), ICICI Bank (Rs 125.89 crore) and Reliance Infrastructure (Rs 119.46 crore).
Satyam Computer Services clocked the highest volume of 11.14 crore shares on BSE followed by Unitech (1.6 crore shares), Cals Refineries (94.82 lakh shares), Jaiprakash Associates (94.54 lakh shares) and Reliance Natural Resources (66.53 lakh shares)
United Spirits slipped 15.79% extending losses for the second day amid buzz the company has pledged a huge number of shares with financial institutions to avail loans.
Everest Kanto Cylinder fell 9.22% after the company reported 48% slide in net profit to Rs 8.23 in Q3 December 2008 over Q3 December 2007.
MRF fell 5.75% after the tyre maker posted a net loss of Rs 38.3 crore in Q1 December 2008 compared to a net profit of Rs 51.75 crore in Q1 December 2007.
Bharat Electronics rose 0.16% after its net profit rose 9% in Q3 December 2008 over Q3 December 2007.
Greaves Cotton fell 0.52% after its net profit fell 73% in Q2 December 2008 over Q2 December 2007.
Sensex slips amid volatility
The market saw high volatility during the day, as stocks gyrated between the either sides of the zones throughout the session with Sensex witnessing the intra-day swing of 227 points. The market opened lower by overnight loss in US markets, but pared early loss as investor sentiment turned cautious, as Sensex neared its intra-day high of 8,859 points. Thereafter, sustained selling in frontline, banking and metal stocks saw Sensex enter into the negative territory. After displaying some range-bound moves, the market plunged deep into the red on heavy selling towards the close to touch the day's low of 8632. Sensex finally closed the session at 8674, down 139 points. Nifty closed down at 2679, down 35 points.
The breadth of the market was negative. Of the 2,503 stocks traded on BSE 1,609 stocks declined, 795 stocks advanced and 99 stocks ended unchanged. Among sectoral indices, BSE Bankex shed 4.16%, BSE Metal declined 3.35% and BSE CG was down 2.87%. However, BSE HC, BSE CD and BSE Oil & Gas closed in the green.
Selling was evident in select heavyweights. Mahindra & Mahindra dropped 7.93% at Rs264.70, Tata Steel declined 7.17% at Rs166.35, Jaiprakash Associates tumbled 6.95% at Rs61.55, Reliance Communications shed 4.50% at Rs160.15, State Bank of India dipped 4.34% at Rs1041.75, ICICI Bank was down 3.71% at Rs214 and Larsen & Toubro shed 3.47% at Rs640.85.
Selective buying helped the index overcome its losses. Tata Motors gained 1.81% at Rs135.10, Reliance Industries advanced 1.78% at Rs1153.15, Ranbaxy Laboratories gained 0.75% at Rs 187.50 and National Thermal Power Corporation added 0.28% at Rs179.40.
Over 11.14 crore shares of Satyam Computer Services changed hands on the BSE followed by United Spirits (1.60 crore shares), Cals Refineries (94.82 lakh shares), Reliance Natural Resources (66.53 lakh shares) and IFCI (58.85 lakh shares).
Pre Session Commentary - Jan 23 2009
Today the markets are likely to open negative. The inflation recorded at 5.60% for the week ended Jan 10, 2008 as against 5.24% in the previous week. The sentiments are weak as the US markets closed in red and the major Asian markets have also opened with blood bath. The companies that have been reporting better than expected results are giving a back up for the delivery buying sentiments. However amidst the weak economic scenario and its repercussion on the corporate earnings, bearishness would prevail.
On Thursday, the markets managed to close in green after a volatile session towards the end. The opening was grim with enormous fear and cautiousness. Asian markets were not an exception as majority of the markets were trading volatile with marginal oscillation. Buying was less intense and therefore volumes of trade across broader markets were below the average level. After continuous fall of inflation numbers in the past, today the markets were stunned to see a rise in inflation at 5.60% as against 5.24% in the previous weak. Therefore instant sell off trimmed the morning gains and the markets plunged in red. Sectors like Realty, CD, Metal, CG and Auto closed with losses of 5.47%, 2.77%, 2.50%, 1.61% and 1.58% respectively. On the other hand Tech, Bankex, Oil & Gas and IT managed to keep their shine with gains of 1.27%, 0.74%, 0.39%, and 0.36% respectively. Sensex and Nifty gained 0.39% and 0.28% respectively. Mid caps and Small caps shed 2.07% and 2.01% respectively. During the session we expect the markets to be trading negative.
The BSE Sensex closed higher by 34.67 points at 8,813.84 and NSE Nifty gained 7.65 points at 2,713.80. The BSE Mid Caps and Small Caps ended with losses of 61.06 points and 67.70 points at 2,895.45 and 3,304.95 respectively. The BSE Sensex touched intraday high of 8,927.69 and intraday low of 8,699.32.
The US markets on Thursday closed in red. After a phenomenal gain in the previous day the US markets rebound. Microsoft also announced it will eliminate up to 5,000 jobs. The company has posted disappointing quarterly results. On the other hand Bank of America was brutally shattered as it fell by 14%. There were reports that indicated former Merrill Lynch boss John Thain will be leaving Bank of America. The non-farm payrolls initial claims for the week ending Jan. 17 jumped 62,000 to 589,000. The consensus estimate called for 543,000 claims. Continuing claims gained 97,000 to nearly 4.61 million. The December housing starts totaled at 5,50,000 far low as against the estimated 6,05,000. Crude oil futures for the month of February delivery grew by $0.12 to $43.67 per barrel on New York Mercantile Exchange. The crude futures moved up as there was news that White House would soon work on a new stimulus package.
The Dow Jones Industrial Average (DJIA) closed lower by 105.30 points at 8122.80 NASDAQ index lost by 41.58 points at 1,465.49 and the S&P 500 (SPX) also closed lower by 12.74 points at 827.50.
Indian ADRs ended lower. In technology sector, Satyam ended down by 2.73% along with Infosys by 4.53%. Further Patni Computers ended with decrease of 3.33% and Wipro closed lower by 5.93%. In banking sector ICICI Bank and HDFC Bank dropped by 3.72% and 2.37% respectively. In telecommunication sector, Tata Communication gained 0.48% while MTNL lost 3.42%. Sterlite Industries decreased by 0.60%.
Today major stock markets in Asia have opened negative. The Shanghai Composite is trading low by 3.98 points at 2,000.97. Hang Seng is up by 46.42 points at 12,704.41. Further Japan''s Nikkei is trading low by 184.43 points at 7,867.31. South Korea’s Seoul Composite is low by 18 points at 1,098.23 and Singapore’s Strait Times is also low by 2.66 points at 1,706.11.
The FIIs on Thursday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 866.40 Crore and gross debt purchased stood at Rs 114.73 Crore, while the gross equity sold stood at Rs 1628.70 Crore and gross debt sold stood at Rs 225.01 Crore. Therefore, the net investment of equity and debt reported were Rs (762.30) Crore and Rs (110.28) Crore respectively.
On Thursday, Indian Rupee closed at 49.13/16 per dollar, marginally weaker than Wednesday’s close of 49.11/13. The rupee weakened as Oil refineries bought huge dollars to pay off their bills.
On BSE, total number of shares traded were 24.22 Crore and total turnover stood at Rs 3,184.98 Crore. On NSE, total number of shares traded were 55.44 Crore and total turnover was Rs 8,552.87 Crore.
Top traded volumes on NSE Nifty – Unitech with 52104932 shares, Suzlon Energy with 15658456 shares, DLF with 14438351 shares, SAIL with total volume traded 11203311 shares followed by Hindalco with 9644449 shares.
On NSE Future and Options, total number of contracts traded in index futures was 892620 with a total turnover of Rs 11,332.01 Crore. Along with this total number of contracts traded in stock futures were 1257192 with a total turnover of Rs 11,293.23 Crore. Total numbers of contracts for index options were 1087805 with a total turnover of Rs 15,213.39 Crore and total numbers of contracts for stock options were 84508 and notional turnover was Rs 838.22 Crore.
Today, Nifty would have a support at 2,642 and resistance at 2,755 and BSE Sensex has support at 8,620 and resistance at 8,895.
Lackluster day at US Markets
Microsoft and weak economic data take stocks lower
Stocks at Wall Street modest losses on Thursday, 22 January, 2009. Microsoft and weak economic data slammed stocks earlier in the day on Wall Street today but stocks managed to pare some of their losses in the post lunch hours. A rebound in the banking stocks helped market find some foothold. But the rebound was too short-lived. Better than expected earnings from Apple after yesterday's close failed to inject any sort of momentum today morning among US stocks as had been in IBM's case.
After being down by more than 250 points earlier during the day, The Dow Jones Industrial Average ended lower by 106 points at 8,122, the Nasdaq closed lower by 42 points at 1,465 and the S&P 500 closed lower by 13 points at 827.5.
Twenty four out of thirty Dow stocks ended in the red today led by Citigroup.
In the earning arena today, Apple tried to provide support to the tech sector. The company reported better-than-expected top and bottom line results for the latest quarter. But Apple issued downside guidance.
On the other hand, tech bellwether Microsoft reported earnings which fell short of consensus earnings and revenue estimates. Microsoft will not offer earnings and revenue guidance for the balance of this fiscal year. The company also announced 5,000 layoffs. Another tech giant Intel also announced layoffs of this extent.
Among major economic reports for the day, the Labor Department reported on Thursday, 22 January, 2009 that initial weekly claims (first-time applications for state unemployment benefits) continued to climb, and rose 62,000 to a seasonally adjusted 589,000 in the week ending 17 January, 2009. Initial claims, which represent job destruction, are up 82% from the same period a year ago. The four-week average of new claims was unchanged at 519,250.
Meanwhile, the number of people collecting benefits in the week ending 10 January rose 97,000 to 4.61 million, a level that is 72% higher than in the prior year. The four-week average of continuing claims, which indicates that it is harder for displaced workers to find new jobs, rose 58,750 to 4.56 million. The insured unemployment rate remained at 3.4%.
In a separate report, the Commerce Department reported today that construction on new fell more than 15% to a seasonally adjusted annual rate of 550,000, the lowest on record. Permits to build single-family homes also fell, dropping 12.3% to 363,000 last month, while total permits including apartments dropped 10.7% to a 549,000 annual rate. The figures represented record lows for both single-family and total permits.
Building permits are considered a reliable guide to the state of the housing market, because they are less affected by weather conditions than the figures on housing starts.
For all of 2008, housing starts fell 33% to 904,000, the lowest pace of new construction since the government began keeping records in 1959. Building permits fell 36% in 2008 to 892,500. Since June, starts have plunged 49%. Since the peak of activity three years ago, starts are down 76%.
On Thursday, crude-oil futures for light sweet crude for March delivery closed at $43.67/barrel (higher by $0.12 or 0.3%) on the New York Mercantile Exchange. Last week, crude prices shed 10.6%.
EIA reported today that U.S. crude supplies rose by 6.1 million barrels to stand at 332.7 million barrels during the week ended 16 January, 2009. Market had expected a buildup of 1.9 million barrels. After the data, March crude futures tumbled $2.62, or 6%, to $40.92 a barrel in electronic trading on Globex. The EIA also reported a rise of 6.5 million barrels in gasoline supplies and a rise of 0.8 million barrels in distillate stocks for the week under review.
Other than few earning reports, there are no economic reports on the dock tomorrow.
Weak global cues may trigger lower start
Key benchmark indices are braced for a subdued start on weak global cues. However losses may be capped on better than expected Q3 results from India's most valuable company Reliance Industries (RIL).
After market hours on Thursday, 22 January 2009, RIL reported a 9.81% fall in net profit to Rs 3501 crore on a 7.47% slide in total income to Rs 32226 crore in Q3 December 2008 over Q3 December 2007.
HCL Technologies, Canara Bank, Punj Lloyd, Concor, will declare their December 2008 quarterly results today, 23 January 2009. Meanwhile, aggregate results of 450 companies showed 28.80% fall in net profit on a 18.60% increase in net sales in Q3 December 2008 over Q3 December 2007.
The street was anticipating poor Q3 December 2008 earnings from Indian Inc on high input costs, the credit crunch and high interest rates, coupled with the burden of piled-up inventories.
Foreign brokerage Morgan Stanley in its research report dated 5 January 2009 said earnings of 30 BSE Sensex firms are set for their first quarterly drop in Q3 December 2008, since the data was first made available in 1999. It estimates the BSE Sensex earnings to drop 0.2% year-on-year basis compared with a growth of 5.5% and 20% in the September 2008 and June 2008 quarters, respectively
Asian stocks fell today, 23 January 2009, led by technology companies and commodity producers, after Sony Corp forecast its first annual loss in 14 years and economists predicted China's economy will slow further. China's Shanghai Composite was down 0.77% or 15.50 points at 1,989.45, Hong Kong's Hang Seng slipped 0.75% or 95.04 points at 12,562.95, Japan's Nikkei plunged 2.84% or 228.40 points at 7,823.34, Singapore's Straits Times fell 0.64% or 10.99 points at 1,697.78 and South Korea's Seoul Composite shed 1.85% or 20.6 points at 1,095.63.
US stocks fell on Thursday, 22january 2009, weighed down by Microsoft's proposed job cuts and disappointing earnings, while economic data showed further deterioration in the labor and housing markets.
The Dow Jones Industrial Average fell 105.30 points, or 1.28 per cent, to end at 8,122.80, the Standard & Poor's 500 Index slid 12.74 points, or 1.52 percent, to finish at 827.50. The Nasdaq Composite Index declined 41.58 points, or2.76 percent, to close unofficially at 1,465.49.
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 3698.90 crore (till 21 January 2009).
According to provisional data on NSE, FIIs were net sellers worth Rs 304.45 crore while mutual funds bought shares worth Rs 3.96 crore on Thursday, 22 January 2009.
Global cues see markets open low
Weakness in global indices and expiry pressures in the derivate segment may weigh on the sentiment. Action today is likely to be stock-specific. However, the mood of the market is expected to remain positive after yesterday's marginal gains and Reliance Industries quarterly numbers may help the local indices advance further. Among the key indices, the Nifty is likely target 2750 in near term and on breaching this level it is likely to target 2800, while the index has a key support at 2660. The Sensex has a likely support at 8650 and may face resistance at 8950.
Asian Paints, Bharat Electricity, Canara Bank, Crompton Greaves, Edelwiss Capital, HCL Technology, IDBI Bank, Indiabulls, ING Vysya Bank, Karnataka Bank, MRF, Mirc Electro, PTC, Punj lloyd, Reliance Communication, RNRL, Shriram, Syndicate Bank, Tanla, Tech Mahindra, Tv Today, Union Bank and Vijaya Bank are expected to announce their earnings numbers.
Thursday was the tough day for the US markets as a management shakeup at Bank of America and Microsoft's earnings disappointment weighed on investor sentiment. Dow Jones tumbled 105 points at 8123 and the Nasdaq sank about 42 points at 1465.
Fall in US markets weighted heavely on the Indian floats trading on the US bourses. Dr Reddy was the major loser and tanked 7.46% while Wipro, Infosys, ICICI Bank, MTNL and Patni Computer slumped over 3-5% each. Satyam, HDFC Bank and Tata Motors ended with losses of over 1-2% each. While VSNL and Rediff managed to close in positive territory.
Crude oil prices gained marginally, with the Nymex light crude oil for March delivery soared 12 cents to close at $43.67 a barrel. In the commodity segment, the Comex gold for February series moved up by $8.70 to settle at $858.80 an ounce.
Daily trend of FII/MF investment in equities
On January 21 2009, FIIs were net sellers of stocks to the tune of Rs763 crore (purchases worth Rs866 crore and sales of Rs1,629 crore) while domestic mutual funds were net sellers of stocks to the tune of Rs254 crore (purchases worth Rs251 crore and sales of Rs505 crore).
Trading Calls - Jan 23 2009
Nifty (2714) Sup 2650 Res 2750
Sell Titan (894) SL 902
Target 876, 872
Sell Tata Power (713) SL 721
Target 699, 695
Sell Lanco Infra (105) SL 108
Target 99, 98
Sell Bombay Dyeing (144) SL 149 Target 136, 135
Sell BHEL (1367) Sup 1382
Target 1337, 1330
Daily News Roundup - Jan 23 2009
Reliance Petroleum is expected to despatch its first parcel of products from Jamnagar refinery in January. (BL)
L&T inks deal with Atomic Energy Canada to build a 1,000MW nuclear reactor in India. (ET)
Infosys and IBM lead race for Fidelity’s captive BPO. (ET)
GAIL may suppy gas from KG-D6 field to fertilizer companies. (ET)
NALCO to start work on its Orissa aluminium project. (ET)
Suzlon Energy announced its entry into Sri Lankan wind energy market with an order to supply 10 MW of wind turbines. (BL)
Wipro Consumer Care’s Santoor emerged as the second largest soap in South India, edging out Hindustan Unilever’s Lux. (ET)
Government of Maharashtra has cancelled contracts worth Rs4.8bn awarded to Maytas Infrastructure. (ET)
Satyam Computers forged its staff strength by about 10,000. (FE)
BIC, a French pen and stationery manufacturer, picked up 40% stake in Cello Pens for Rs8bn. (ET)
Ashok Leyland signs a Rs12bn deal with Delhi Transport Corporation. (FE)
Voltas Ltd board has approved the transfer of its chemical trading business to DKSH India Pvt Ltd. (FE)
Reliance Communication bought back FCCB worth Rs480m. (FE)
Axis Bank slashes its auto loan rates by 100bps. (FE)
Ansal Properties puts on hold Rs20bn hotel projects. (FE)
iGATE Inc is in the fray to take over parts of the beleaguered Satyam Computer. (BL)
UCO Bank plans to lend Rs50bn for infrastructure projects. (BL)
Satyam board appointed Goldman Sachs as its investment banker at its meeting held on Thursday. (BS)
Government is likely to infuse Rs7bn in UCO Bank and the bank plans to raise another Rs7bn through issue of bonds by March. (BS)
IIFCL (UK) Ltd, a subsidiary of IIFCL will extend a US$500m loan to Reliance Power’s Sasan ultra mega power project. (BS)
Inflation for the week ended January 10, 2009 rose to 5.6%. (ET)
Second relief package to prop up real estate sector. (ET)
Government plans a bailout package for the auto sector which includes excise and sales tax concessions. (ET)
Government clears 3 port projects worth Rs20bn. (ET)
CEA’s report states that power situation remained grim in December. (ET)
Indian Banks’ Association has proposed a 10% wage hike to bank employees. (BS)
Slum-bear on the Street!
Justice does not help those who slumber but helps only those who are vigilant.
The bulls seem to be in slumber even as the rags to riches story of a Mumbai boy (Slumdog Millionaire) received global acclaim with 10 Oscar nominations after winning 4 Golden Globe trophies. Many rags to riches stories have been witnessed in the market but the last year or so has been the other way around.
Thankfully, despite the relentless flow of bad news, US stocks managed to prune their losses. Tech shares weren’t so lucky, though with Microsoft refusing to provide any guidance. The Dow had slumped 270 points in intra-day trading on the back of grim data on initial jobless claims and housing starts. European benchmarks too finished weaker. In Asia, stock indices are in the red, with Japan taking a big hit on dismal earnings from regional electronics giants - Sony, LG and Samsung.
Coming back to India, we expect another choppy day as Reliance Industries’ better-than-expected results will be offset by bleak global cues. RIL has surprised the market by surpassing all optimistic estimates. The index bellwether may see some spark at least in early trades.
Auto and Realty stocks may hog the limelight amid news of fresh relief measures being considered by the Government. Airlines may also gain on news that a cabinet panel may take up the proposal to allow foreign carriers to pick up stake in Indian airlines. Overall, the key indices are likely to open flat, may rebound a bit but are unlikely to sustain any bounce.
Key Results Today: Asian Paints, Bharat Electronics, Canara Bank, Container Corp., Crompton Greaves, Edelweiss, Everest Kanto, Greaves Cotton, Gujarat Flurochemicals, HCL Tech, IDBI Bank, Indiabulls Financial, ING Vysya Bank, Jyothy Labs, Karnataka Bank, KLG Systel, M&M Financial, MRF, Mirc Electronics, PTC India, Punj Lloyd, RCOM, RNRL, Sanghvi Movers, Sriram Transport, Sona Koyo, Syndicate Bank, Tanla, Tech Mahindra, TV Today, Union Bank and Vijaya Bank.
US stocks staged a smart pull-back to end marginally down on Thursday, as a management shakeup at Bank of America and Microsoft's earnings disappointment weighed on investor sentiment.
The S&P 500 index retreated 1.5% or about 13 points to end at 827.5. The Dow Jones Industrial Average lost 105.3 points, or 1.3%, to close at 8,122.8. The Nasdaq composite index slumped 41 points or 2.8% to close at 1,465.49.
The Russell 2000 Index decreased 3.1%. The Dow at one point had been down as much as 270 points.
US stocks slid on Tuesday on banking woes, rallied on Wednesday on IBM's earnings and bouncing bank stocks, and then sold off again for most of Thursday.
Microsoft's earnings decline and job cuts were a big negative for sentiment because it confirms that the recession is hitting a broad range of industries. Ex-Merrill Lynch CEO John Thain's departure from Bank of America added to nervousness about the leadership at the big banks.
After rallying between late November and early January, US stocks have been sliding over the last two weeks. The credit crunch had looked like it was thawing near the end of last year, but now that seems to have slowed down. In such an environment, stocks will have a hard time breaking out of the recent range.
Thain will leave Bank of America amid criticism of his management of Merrill - purchased by BofA a month ago. Bank of America shares lost 14.5%.
Citigroup said late on Wednesday that former Time Warner chairman Richard Parsons has been named its new chairman. Last week, the company announced it was splitting its business in two.
Separately, it was reported that the chief executives of Bank of America and Citigroup bought some company stock last week, according to SEC filings. This failed to reassure investors. Citigroup shares fell 15.3%.
Aflac shares fell after Morgan Stanley raised worries about its exposure to certain securities issued by hard-hit European financial firms, according to reports. Shares of the insurer lost 37%.
Microsoft led the parade of technology companies issuing weak profit reports or big job-cut announcements. Microsoft said it will cut up to 5,000 jobs over the next 18 months due to the impact of the recession. The company also reported lower fiscal second-quarter earnings that missed estimates on higher revenue, that also missed estimates. Shares fell 11.7%.
Nokia posted a bigger-than-expected drop in fourth-quarter sales and earnings, and warned that 2009 is looking tougher than previously thought. Shares fell 10%.
eBay reported a lower fourth-quarter profit that nonetheless topped estimates. The online auctioneer also issued a current-quarter profit forecast that is short of expectations. Shares fell 12%.
Housing starts and building permits both tumbled to record lows in December, the government reported. Permits fell 10.7% from November to an annual rate of 549,000 in December. Starts fell 15.5% from November to an annual rate of 550,000. The declines were worse than expected.
Another report, from the Federal Housing Finance Agency, showed that home prices fell a record 1.8% in November from October levels.
A separate report showed that weekly claims for unemployment rose to a 26-year high last week, rising 62,000 from the previous week to 589,000. That was a bigger rise than what economists were expecting.
Treasury prices slipped, raising the yield on the benchmark 10-year note to 2.59% from 2.52% on Wednesday. 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 tightened. The 3-month Libor rate increased to 1.16% from 1.12% Wednesday. Overnight Libor rose to 0.21% from 0.19% on Wednesday. Libor is a bank-to-bank lending rate.
US light crude oil for March delivery rose 12 cents to settle at $43.67 a barrel on the New York Mercantile Exchange. Gasoline prices rose two-tenths of a cent to a national average of $1.85 a gallon.
The dollar fell versus the euro and gained against the yen. COMEX gold for April delivery rose $8.80 to settle at $860.50 an ounce.
After the close, Google reported higher sales that beat estimates and lower earnings that also topped estimates. Shares gained almost 3% in extended-hours trading. General Electric (GE) is also bound to be active Friday morning, after it reports quarterly results.
After witnessing a sharp cut in the previous trading session, Indian bourses managed to end with marginal gains. Markets ended in the green after three straight days of losses. Markets started off with smart gains following firm cues from the international equity markets. However, were unable to sustain as profit booking and a rise in inflation data slightly dampened the sentiments. Finally, the BSE benchmark Sensex marginally gained 35 points to close at 8,813 and the Nifty added 7 points to close at 2,713.
Among the 30-components of Sensex, 15 stocks ended in the red and 15 stocks ended in the positive terrain. Among the major gainers in Sensex were Reliance Industries, Bharti, ICICI Bank, HDFC and BHEL.
Among the major losers were L&T, Tata Steel, Reliance Infra and DLF.
Shares of Ipca Laboratories slipped by 4% to Rs340 after the company reported results for the third quarter ended 31st December 2008.
The net profit for the third quarter fell by 40% to Rs231.8mn as against profit of Rs383.4mn in the same quarter of previous year.
The net total income rose by 14% to Rs3.13bn as against Rs2.73bn in the same period of previous financial year. The scrip touched an intra-day high of Rs375 and a low of Rs332 and recorded volumes of over 95,000 shares on BSE.
Shares of Praj Industries declined by 5% to Rs51 after the company announced results for the quarter ended December 31, 2008:
The Company posted a net profit of Rs473.10mn for the quarter ended December 31, 2008 as compared to Rs394.5mn for the quarter ended December 31, 2007.
Total Income increased from Rs1,861.5mn for the quarter ended December 31, 2007 to Rs2,199.1mn for the quarter ended December 31, 2008. The scrip touched an intra-day high of Rs56 and a low of Rs50 and recorded volumes of over 1,00,000 shares on BSE.
Shares of Bharti Airtel advanced by over 6% to Rs619 after the company announced its financial results (Indian GAAP) for the fiscal third quarter with a consolidated net profit at Rs19.76bn compared to Rs17.14bn in the previous quarter.
Consolidated revenue for the quarter ended December 31, 2008 stood at Rs96.67bn as against Rs89.23bn in the July-September quarter. The scrip touched an intra-day high of Rs623 and a low of Rs588 and recorded volumes of over 14,00,000 shares on BSE.
Shares of United Spirits plunged by over 23% to Rs567 after the company's Q3 FY09 performance was considerably worse than consensus estimates. While net sales growth of 16% YoY was broadly in-line, net profit crashed by 65% (against consensus expectation of 20% YoY growth) as higher raw material and interest costs played havoc.
Gross margin dropped 9.6ppt YoY, while interest costs rose 61% YoY. Volume growth was robust at 20% YoY, but this did not translate into strong growth, pointing to a potential downtrading. The scrip touched an intra-day high of Rs740 and a low of Rs496 and recorded volumes of over 45,00,000 shares on BSE.
Better than expected quarterly results by index bellwether Reliance Industries may provide the much needed boost. Also if international markets fare well overnight a positive start to Friday’s trading session cannot be ruled out.
Tata Steel
We recommend a sell in Tata Steel from a short-term trading perspective. It is apparent from the charts of Tata Steel that after bottoming in late November 2008 at Rs 146, it rallied up to Rs 260. The stock price has appreciated almost 78 per cent between late November 2008 and early January 2009. However, presence of significant resistance at around Rs 250 triggered the stock’s reversal. Since January 7, the stock has been on a short-term down trend. While declining, the stock breached its 21-day moving average. On January 22, the stock conclusively penetrated its 50-day moving average by plummeting 5 per cent on above average volume. The daily relative strength index (RSI) has entered into the bearish zone from the neutral region and weekly RSI is also featuring in this zone. The moving average convergence and divergence also has entered in to the negative territory. We are bearish on the stock from a short-term perspective. We expect the stock’s current decline to continue until it hits our price target of Rs 160 in the forthcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 188.
via BL
FIIs keep selling
Outflow of Rs 762.30 crore on 21 January 2009
Foreign institutional investors (FIIs) sold shares worth a net Rs 762.30 crore on Wednesday, 21 January 2009, much higher than Rs 292.20 crore on Tuesday, 20 January 2009.
FII outflow of Rs 762.30 crore on 21 January 2009 was a result of gross purchases Rs 866.40 and gross sales Rs 1628.70 crore. The BSE Sensex lost 321.38 points, or 3.53%, to 8,779.17 on that day.
FII outflow in January 2009 totaled Rs 3698.90 crore (till 21 January 2009).
There are a total of 1608 foreign funds registered with the Securities & Exchange Board of India (Sebi).
Crude pare gains
Prices end marginally higher on hopes of new stimulus
Crude oil prices pared all their earlier losses and ultimately ended higher on Thursday, 22 January, 2009. Prices earlier fell as energy department reported more than expected build up in crude inventories. But prices then took a u turn on anticipation that the new administration will take necessary steps soon to boost the US economy.
On Thursday, crude-oil futures for light sweet crude for March delivery closed at $43.67/barrel (higher by $0.12 or 0.3%) on the New York Mercantile Exchange. 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 12.5%. On a yearly basis, crude prices are lower by 52%.
EIA reported today that U.S. crude supplies rose by 6.1 million barrels to stand at 332.7 million barrels during the week ended 16 January, 2009. Market had expected a buildup of 1.9 million barrels. After the data, March crude futures tumbled $2.62, or 6%, to $40.92 a barrel in electronic trading on Globex.
The EIA also reported a rise of 6.5 million barrels in gasoline supplies and a rise of 0.8 million barrels in distillate stocks for the week under review.
Against this background, March reformulated gasoline fell 8 cents to $1.12 a gallon, and March heating oil dropped 3 cents to $1.35 a gallon.
March natural gas futures fell 10 cents to $4.68 per million British thermal units.
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