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Wednesday, January 28, 2009
Nifty January 2009 futures at discount
Turnover decreases
Nifty January 2009 futures were at 2846.50, at a discount of 3 points as compared to the spot closing of 2849.50. Turnover in NSE's futures & options (F&O) segment was Rs 40,894.23 crore lower than Rs 42,867.49 crore on Tuesday, 27 January 2009. The near month January 2009 derivatives contract will expire tomorrow, 29 January 2009.
Reliance Industries January 2009 futures were at discount at 1269.50 compared to the spot closing of 1274.
NTPC January 2009 futures were at discount at 189.10 compared to the spot closing of 191.25.
State Bank of India January 2009 futures were near sport price at 1112.05 compared to the spot closing of 1112.45.
In the cash market, the S&P CNX Nifty gained 78.15 points or 2.82% at 2849.50.
Warren Buffet Interview
Below is a short interview with Warren Buffett who was featured on the the PBS Nightly Business Report tonight.
PBS Nightly Business Report & Warren Buffett
Full Transcript of NBR Anchor Susie Gharibs interview with Warren Bufffett
Airs January 22, 2009, Nightly Business Reports 30th Anniversary
SUSIE GHARIB, ANCHOR, NIGHTLY BUSINESS REPORT: Are we overly optimistic about what President Obama can do?
WARREN BUFFETT, CHAIRMAN, BERKSHIRE HATHAWAY: Well I think if you think that he can turn things around in a month or three months or six months and theres going to be some magical transformation since he took office on the 20th that cant happen and wouldnt happen. So you dont want to get into Superman-type expectations. On the other hand, I dont think theres anybody better than you could have had; have in the presidency than Barack Obama at this time. He understands economics. Hes a very smart guy. Hes a cool rational-type thinker. He will work with the right kind of people. So youve got the right person in the operating room, but it doesnt mean the patient is going to leave the hospital tomorrow.
SG: Mr. Buffett, I know that youre close to President Obama, what are you advising him?
WB: Well Im not advising him really, but if I were I wouldnt be able to talk about it. I am available any time. But hes got all kinds of talent right back there with him in Washington. Plus hes a talent himself so if I never contributed anything for him, fine.
SG: But I know that during the election that you were one of his economic advisors, what were you telling him?
WB: I was telling him business was going to be awful during the election period and that we were coming up in November to a terrible economic scene which would be even worse probably when he got inaugurated. So far Ive been either lucky or right on that. But hes got the right ideas. He believes in the same things I believe in. Americas best days are ahead and that weve got a great economic machine, its sputtering now. And he believes there could be a more equitable job done in distributing the rewards of this great machine. But he doesnt need my advice on anything.
SG: How often do you talk to him?
WB: Not often, not often... no no and it will be less often now that hes in the office. Hes got a lot of talent around him.
SG: Whats the most important thing you think he needs to fix?
WB: Well the most important thing to fix right now is the economy. We have a business slowdown particularly after October 1st it was sort of on a glide path downward up til roughly October 1st and then it went into a real nosedive. In fact in September I said we were in an economic Pearl Harbor and Ive never used that phrase before. So he really has a tough economic situation and thats his number one job. Now his number one job always is to keep America safe that goes without saying.
SG: But when you look at the economy, what do you think is the most important thing he needs to fix in the economy?
WB: Well weve had to get the credit system partially fixed in order for the economy to have a chance of starting to turn around. But theres no magic bullet on this. Theyre going to throw everything from the government they can in. As I said, the Treasury is going all in, the Fed and they have to and that isnt necessarily going to produce anything dramatic in the short term at all. Over time the American economy is going to work fine.
SG: There is considerable debate as you know about whether President Obama is taking the right steps so we dont get in this kind of economic mess again, where do you stand on that debate?
WB: Well I dont think the worry right now should be about the next one, the worry should be about the present one. Lets get this fire out and then well figure out fire prevention for the future. But really the important thing to do now is to figure out how we get the American economy restarted and thats not going to be easy and its not going to be soon, but its going to get done.
SG: But there is debate about whether there should be fiscal stimulus, whether tax cuts work or not. There is all of this academic debate among economists. What do you think? Is that the right way to go with stimulus and tax cuts?
WB: The answer is nobody knows. The economists dont know. All you know is you throw everything at it and whether its more effective if youre fighting a fire to be concentrating the water flow on this part or that part. Youre going to use every weapon you have in fighting it. And people, they do not know exactly what the effects are. Economists like to talk about it, but in the end theyve been very, very wrong and most of them in recent years on this. We dont know the perfect answers on it. What we do know is to stand by and do nothing is a terrible mistake or to follow Hoover-like policies would be a mistake and we dont know how effective in the short run we dont know how effective this will be and how quickly things will right themselves. We do know over time the American machine works wonderfully and it will work wonderfully again.
SG: But are we creating new problems?
WB: Always
SG: How worried are you about these multi-trillion dollar deficits?
WB: You cant just do one thing in economics. Anytime somebody says theyre going to do this and then what? And there is no free lunch so if you pour money at this problem you do have after effects. You create certain problems. I mean you are giving a medicine dosage to the patient on a scale that we havent seen in this country. And there will be after effects and they cant be predicted exactly. But certainly the potential is there for inflationary consequences that would be significant.
SG: We all know that in the long run everything is going to work out, but as you analyze President Obamas economic plan, what do you think are the trade-offs? What are the consequences?
WB: Well the trade-off the trade-off basically is that you risk setting in motion forces that will be very hard to stop in terms of inflation down the road and you are creating an imbalance between revenues and expenses in the government that is a lot easier to create than it will be to correct later on, but those are problems worth taking on, but you dont get a free lunch.
SG: What about the regulatory system, is it a matter of making new rules or simply doing a better job at enforcing the rules we already have?
WB: Well there are probably some new rules needed, but the regulatory system I dont think could have stopped this. Once you get the bubble going... once the American public, the U.S. Congress, all the commentators, the media, everybody else started thinking house prices could go nothing up, you were creating a bubble that would have huge consequences because the asset class was so big. I mean you had 22 trillion dollars probably worth of homes. It was the biggest asset of most American families and you let them borrow 100% in many cases of the price of those and you let them refi up to where they kept taking out more and more and treating it as an ATM machine.. the bubble was going to happen.
SG: But everybody is saying we need more rules, we have to enforce them, we need to go after every institution, every financial market. Do you think that new rules will do the trick or do we have enough rules that we just need to enforce them?
WB: Well you can have a rule for example to prevent another real estate bubble; you just require that anybody bought a house to put 20% down and make sure that the payments were not more than a third of their income. Now we would not have a big bust ever in real estate again, but we would also have people screaming that youre denying home ownership to all these people that you got a home yourself and now youre saying a guy with a 5% down payment shouldnt get one. So I think its very tough to put rules out... I mean I can design rules that will prevent it but it will have other consequences. Its like I say in economics you cant just do one thing and where the balance is struck on that will be a political question. My guess is that it wont be struck particularly well, but thats just the nature of politics.
SG: Youve said that were in an economic Pearl Harbor, so how bad are things really?
WB: Theyre bad, theyre bad. The credit situation is getting a little better now. Things have loosened up from a month ago in the corporate debt market. But the rate of business descent is at a pretty alarming pace, I mean there is no question things have really slowed down.
Peoples buying habits have changed. Fear has taken over and fear is a tough thing to fight because you cant go on television and say dont be afraid, that doesnt work. People will get over it, they got greedy and they got over being greedy. But it took a while to get over being greedy and now the pendulum has swung way over to the fear side. Theyll get over that and we just hope that they dont go too far back to the greed side.
SG: Whats your view on the recession? How much longer is it going to last?
WB: I dont know. I dont know. I dont know the answer to these things. The only thing is I know that I dont know. Maybe other people think they know, but I have no idea.
SG: The last time we talked, you said back in the Spring, you said the recession is not going to be a short-haul thing. What is your feel for it right now?
WB: It isnt going to be short, but I just dont know Susie. Theres no way of knowing.
SG: Berkshire Hathaway is in a lot of businesses that are economically sensitive, like furniture, paint, bricks. Do you see any signs of a pick up?
WB: No. No. The businesses that are either construction or housing related, or that are just plain consumer businesses, theyre doing very, very poorly. The American consumer has stepped back big time and its contagious and theres a feedback mechanism because once you hear about this then you get fearful and then dont do things at all. And that will end at a point, but it hasnt ended at this point. Now fortunately our two biggest businesses are not really tied that way- in insurance and in our utility business we dont feel that, but everything thats consumer related feels it big time.
SG: Do you think that the psyche of the American consumer has changed, becoming more savers than spenders?
WB: Well it certainly has at this point and my guess is that continues for quite a while. What it will be five years from now, I have no idea. I mean the American consumer when theyre confident they spend and theyre not confident now and theyve cut it back but who knows whether.. I doubt that thats a permanent reset of behavior, but I think its more than a one day or one week or one month wonder in that case.
SG: Is that a bad thing?
WB: Well it just depends who the consumer is. I mean consumer debt within reason makes sense. It makes sense to take out a mortgage on a home particularly if you arent buying during a bubble. You are normally going to see house price appreciation if you dont buy during a time when people are all excited about it. So I dont have any moral feelings about debt as to how people should.. I think people should only take on what they can handle though and that gets to their income level
SG: Let me ask it this way, with Americans saving more may be good for consumers, but is that bad for business?
WB: Well its certainly bad for business in the short term. Now whether its better for business over a 10 or 20 year period... if the American public gets itself in better shape financially that presumably is good for business down the road, but while theyre getting themselves in better shape, its not much fun for the merchant on Main street.
SG: One thing that Americans arent buying these days is stocks. Should they be buying?
WB: Well just as many people buy a stock everyday as sell one so there are people buying stocks everyday and were buying stocks as we go along. If theyre buying into a business that they understand at a sensible price they should be buying them. Thats true at any time. There are a lot more things selling at sensible prices now than they were two years ago. So clearly its a better time to buying stocks than a couple of years ago. Is it better than tomorrow? I have no idea.
SG: This financial crisis has been extraordinary in so many ways, how has it changed your approach to investing?
WB: Doesnt change my approach at all. My approach to investing I learned in 1949 or 50 from a book by Ben Graham and its never changed.
SG: So many people I have talked to this past year say this was unprecedented the unthinkable happened. And that hasnt at all impacted your philosophy on this?
WB: No and if I were buying a farm, I wouldnt change my ideas about how to buy a farm or an apartment house or a business and thats all a stock is. Its part of a business so if I were going to buy stock in a private business here in Omaha, Id look at it just like I would have looked at it two years ago and Ill look at it the same way two years from now. I look at how much I am getting for my money, how good the management is, how the competitive position of that business compares to others, how durable it is and just fundamental questions. The stock market is... you can forget about that. Any stock I buy I will be happy owning it if they close the stock market for five years tomorrow. In other words I am buying a business. Im not buying a stock. Im buying a little piece of a business, just like I buy a farm. And that doesnt change. And all the newspapers headlines of the world dont change that. It doesnt mean you cant buy it cheaper tomorrow. It may turn out that way. But the real question is did I get my moneys worth when I bought it?
SG: One of your famous investing principals is, be fearful when others are greedy and greedy when others are fearful. So is this the time to be greedy, right?
WB: Yeah. My greed quotient has risen as stocks have gone down. Theres no question about that. The cheaper something gets that youre going to buy, the happier you feel, right? Youre going to buy groceries the rest of your life; you want grocery prices to go up or down? You want them to go down. And if they go down you dont think gee I got all those groceries sitting in my cabinet at home and Ive lost money on those. You think I am buying my groceries cheaper, I am going to keep buying groceries. Now if youre a seller, obviously prices are higher. But most people listening to this program, certainly I, myself, and Berkshire Hathaway, were going to be buying businesses over time. We like the idea of businesses getting cheaper.
SG: So where do you see the opportunities in the stock market right now?
WB: That one I wouldnt tell you about.
SG: Let me throw out some sectors and you just tell me quickly how you feel about these sectors.
WB: Susie, I am not going to recommend anything
SG: Even in general, for example a lot of people now are looking at infrastructure companies, is that a sector that you find attractive?
WB: I wouldnt have any comment. What they ought to do is look at businesses they understand. Theyd be happy owning for years if there was never a quote on the stock. Just like they buy in privately into a business in their hometown... They ought to forget all about what somebody says is going to be hot next year or the year after, whatever because whats going to be hot you may be paying twice as much for as something thats not going to be hot. You dont want to think in terms of whats going to be good next year, you want to think of whats a good business to be in and then buy it at an attractive price. And then you cant lose.
SG: Do you see more opportunities in the U.S. compared to overseas?
WB: Well I am more familiar with the U.S. We have such a big market. I see lots of opportunities here and I see lots of opportunities around the world.
SG: Investor confidence was so shattered last year, what do you think its going to take to restore confidence?
WB: If people were dependent on the stock market going up to be confident theyre in the wrong business. They ought to be confident because they look at a business and think I got my moneys worth. They ought to be confident if they buy a farm, not on whether they get a quote the next day on the farm, but they ought to look at what the farm produces, how many bushels an acre do they get out of their corn or soybeans and what prices do they bring. So they ought to look to-the business as to whether to be confident compared to the price that they paid and they ought to forget about what anybody is saying, including me on television, or what theyre reading in the paper. Thats got nothing to do with whether they made a good decision or not. Whats got to do with whether they made a good decision, what kind of business they bought and what they paid for it.
SG: People are reeling from this whole Bernie Madoff scandal. What would you say to people who have lost trust in the financial system?
WB: They shouldnt have lost... you dont need to lose trust in the American system. If you decide to buy a farm and you pay the right price for it, you dont need to lose faith in American agriculture you know because the prices of farms go down
SG: But you know what Im saying. People lost money last year in companies that they thought were rock solid. As I said the unthinkable happened and then on top of it, this whole Bernie Madoff scandal. It has undermined peoples sense of well being about our system. So what do you say to people who have lost trust?
WB: Well they may be better off not being in equities. If theyre really depending on somebody else and they dont know anything about the somebody else, theyve got a problem. They shouldnt do that. I mean there are going to be crooks out there and this guy was a crook on a scale that weve never seen before. But you ought to know who youre dealing with. But if youre going to buy a stock in some business thats been around for a 100 years and will be around for 100 more years and its not a leveraged company and it sells some important product and its got a strong competitive position and you buy it at a reasonable multiple of earnings, you dont have to worry about crooks, youre going to do fine.
SG: Is there any take away lessons from the Bernie Madoff story?
WB: Well he was a special case. I mean here is a guy who had a good reputation for 30 years or something, and the trust of a lot of people around him. So its very easy to draw assurances from the fact that if fifty other people that are prominent and intelligent trust the guy, that maybe you should trust him too. But I wouldnt put my trust in a single individual like that. I would put my trust in a very good business. I would want a business that was so good that if a social guy was running it, it would still certainly do well and there are plenty of businesses that are like that.
SG: So are you saying that investing has gotten so complicated that investors should stick to what they know? Is that the take-away lesson?
WB: You should always stick to what you know. I say the know-nothing investor and theres nothing wrong with being a know-nothing investor. I spend 60 hours a week, thinking about investments and most people have got jobs and other things to do. They can buy index funds. And theyre not going to do better then an index fund if they go around and trust some guy whos promising them very high returns. If you buy a cross section of American business and you dont buy it during a period when everybody is all enthused about stock, youre going to do fine over 10 or 20 years. If you buy something with the idea that youre going to do fine over 10 months, you may or may not. I do not know what stock is going be up 10 months from now, and I never will.
SG: What about Berkshire Hathaway stock? Were you surprised that it took such a hit last year, given that Berkshire shareholders are such buy and hold investors?
WB: Well most of them are. But in the end our price is figured relative to everything else so the whole stock market goes down 50 percent we ought to go down a lot because you can buy other things cheaper. Ive had three times in my lifetime since I took over Berkshire when Berkshire stocks gone down 50 percent. In 1974 it went from $90 to $40. Did I feel badly? No I loved it! I bought more stock. So I dont judge how Berkshire is doing by its market price, I judge it by how our businesses are doing.
SG: Is there a price at which you would buy back shares of Berkshire? $85,000? $80,000?
WB: I wouldnt name a number. If I ever name a number Ill name it publicly. I mean if we ever get to the point where were contemplating doing it, I would make a public announcement.
SG: But would you ever be interested in buying back shares?
WB: I think if your stock is undervalued, significantly undervalued, management should look at that as an alternative to every other activity. That used to be the way people bought back stocks, but in recent years, companies have bought back stocks at high prices. Theyve done it because they like supporting the stock
SG: What are your feelings with Berkshire. The stock is down a lot. It was up to $147 thousand last year. Would you ever be opposed to buying back stock?
WB: Im not opposed to buying back stock.
SG: Everyone wants to know your plans. What youre going to do with all of Berkshire Hathaways cash, some 30 billion dollars? Is this now the right time to do a big acquisition?
WB: Well weve spent a lot of money in the last 4 months. We spent $5 billion on Goldman Sachs, $3 billion on GE, $6.6 billion on Wrigley, weve got $3 billion committed on Dow. Weve spent a lot of money. Weve got money left, but I love spending money. Cash makes me very unhappy. I like to always have enough and never way more than enough, but I always want to have enough. So we would never go below $10 billion of cash at Berkshire. Were in the insurance business - we got a lot of things. Were never going to depend on the kindness of strangers. But anything excess in that, I love the idea of buying things and the cheaper they get the better I like it.
SG: Youve been talking about doing a big acquisition for a while now, what are you waiting for?
WB: Well weve spent $20 billion dollars... that might not be.
SG: I mean in terms of a company
WB: Well well wait for the right deal. We had a deal to buy Constellation for roughly $5 billion and then events with the French coming in meant we didnt do it. But I was delighted to commit to that $5 billion dollars for Constellation Energy. And it could happen tomorrow. That one happened on a Tuesday afternoon I mean it happened like that. Constellation was in big trouble and we flew back that day, talked to the people at MidAmerican that Tuesday and made them an offer that night.
SG: It seems that youre pretty optimistic about the long term future of the American economy and stock market, but a little pessimistic about the short term... is that a fair assessment of where your head is right now?
WB: I am unquestionably optimistic about the long term. Im more than a little pessimistic about the short term, but that doesnt mean I am pessimistic about the stock market. We bought stocks today. If you tell me the economy is going to be terrible for 12 months, pick a number, and then if I find something that is attractive today, I am going to buy it today. I am not going to wait and hope that it sells cheaper 6 months from now. Because who knows when stocks will hit a low or a high? Nobody knows that. All you know is whether youre getting enough for your money or not.
SG: As you know its the 30th anniversary of Nightly Business Report. As you look back on the past three decades, what would you say is the most important lesson that youve learned about investing?
WB: Well Ive learned my lessons before that. I read a book what is it, almost 60 years ago roughly, called The Intelligent Investor and I really learned all I needed to know about investing from that book, in particular chapters 8 and 20 so I havent changed anything since.
SG: Graham and Dodd?
WB: Well that was Ben Grahams book The Intelligent Investor. Graham and Dodd goes back even before that which was important, very important. But you know you dont change your philosophy assuming you think have a sound one and I picked up I didnt figure it out myself, I learned it from Ben Graham, but I got a framework for investing that I put in place back in 1950 roughly and that framework is the framework I use now. I see different ways to apply it from time to time but that is the framework.
SG: Can you describe what it is? I mean what is your most important investment lesson?
WB: The most important investment lesson is to look at a stock as a piece of business not just some thing that jiggles up and down or that people recommend or people talk about earnings being up next quarter, something like that, but to look at it as a business and evaluate it as a business. If you dont know enough to evaluate it as a business you dont know enough to buy it. And if you do know enough to evaluate it as a business and its selling cheap, you buy it and dont worry about what its doing next week, next month or next year.
SG: So if we asked for your investment advice back in 1979 back when Nightly Business Report first got started, would it be any different than what you would say today?
WB: Not at all. If youd ask the same questions, youve gotten the same answers.
SG: Thank you so much Mr. Buffett Thank you so much, always a pleasure talking to you.
WB: Thank you, been a real pleasure.
BSE Bulk Deals to Watch - Jan 28 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
28/1/2009 530407 EPIC ENERGY BLUEBERRY TRADING COMPANY PVT LTD S 89381 84.00
28/1/2009 516078 JUMBO BAG LT PRASHANT MAHADEV KAMBLE S 89000 25.41
28/1/2009 532045 NEXXOFT INFO MUKESH HIRALAL DOCTARIA S 25667 13.33
28/1/2009 531092 OM MET INFRA T.C. KOTHARI AND SONS FAMILY TRUST B 1000000 6.00
28/1/2009 531092 OM MET INFRA TREE LINE ASIA MASTER FUND SINGAPORE PTE LIMITED S 1050199 6.02
28/1/2009 531952 RIBA TEXTILE SHAILESH SOMABHAI PATEL B 34739 35.63
28/1/2009 531952 RIBA TEXTILE NITABEN SHAILESHBHAI PATEL S 62000 34.10
28/1/2009 500376 SATYAM COMP OPG SECURITIES P LTD B 4130316 52.85
28/1/2009 500376 SATYAM COMP H.J. SECURITIES PVT. LTD. B 4881701 52.99
28/1/2009 500376 SATYAM COMP OPG SECURITIES P LTD S 4130316 52.88
28/1/2009 500376 SATYAM COMP H.J. SECURITIES PVT. LTD. S 4881701 53.06
28/1/2009 512048 SPLASH MEDIA IVORY CONSULTANTS PVT LTD. B 7000 45.00
28/1/2009 512048 SPLASH MEDIA IVORY CONSULTANTS PVT LTD. S 7000 46.45
28/1/2009 512527 SUPER SAL IN PRUTHVI BROKERS AND SHARE HOLDING PVT LTD B 20959 31.74
28/1/2009 512527 SUPER SAL IN PRUTHVI BROKERS AND SHARE HOLDING PVT LTD S 20959 31.77
28/1/2009 531249 WELL PACK PA GANDHI MANISHA NAVNEETLAL B 27550 49.04
28/1/2009 531249 WELL PACK PA RAMESHBHAI V PARMAR B 27020 48.31
28/1/2009 531249 WELL PACK PA VISHESHSHAHRA S 30000 49.00
28/1/2009 514470 WINSOME TEXT NITABEN SHAILESHBHAI PATEL S 46347 35.25
NSE Bulk Deals to Watch - Jan 28 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
28-JAN-2009,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,BUY,1411243,91.56,-
28-JAN-2009,MCDOWELL-N,United Spirits Limited,HSBC GLOBAL INVESTMENT FUNDS MAURITIUS LTD,BUY,554785,561.53,-
28-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,FID FDS MAURITIUS LTD,BUY,9243601,54.47,-
28-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,FIDELITY,BUY,7886394,52.18,-
28-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,GENUINE STOCK BROKERS PVT LTD,BUY,4439150,52.47,-
28-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,KAUSHIK SHAH SHARES & SECURITIES PVT LTD,BUY,3584881,52.61,-
28-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,KRISH CAPITAL SERVICES,BUY,3800917,52.63,-
28-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,LATIN MANHARLAL SECURITIES PVT. LTD.,BUY,4035504,53.35,-
28-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,P R B SECURITIES PRIVATE LTD,BUY,4593527,52.85,-
28-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,TRANSGLOBAL SECURITIES LTD.,BUY,3659136,53.50,-
28-JAN-2009,HANUNG,Hanung Toys and Textiles,HECTOR ENTERPRISES PVT LTD,SELL,134723,34.70,-
28-JAN-2009,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,SELL,1411244,91.60,-
28-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,GENUINE STOCK BROKERS PVT LTD,SELL,4519782,52.08,-
28-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,KAUSHIK SHAH SHARES & SECURITIES PVT LTD,SELL,3896481,52.70,-
28-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,KRISH CAPITAL SERVICES,SELL,3800917,52.66,-
28-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,LATIN MANHARLAL SECURITIES PVT. LTD.,SELL,4053504,53.37,-
28-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,P R B SECURITIES PRIVATE LTD,SELL,4614227,52.88,-
28-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,TRANSGLOBAL SECURITIES LTD.,SELL,3713086,53.58,-
Post Session Commentary - Jan 28 2009
The Indian market ended higher ahead of the expiry of monthly derivatives contracts on Thursday, 29th Jan 2009. Firm Asian markets along with U.S. stock futures that rose on news that a key U.S. Senate panel expanded an economic stimulus package also strengthened the market.
The domestic market today extended its yesterday’s gains and opened on positive note on positive global markets along with short covering ahead of F&O contracts expiry on 29th Jan 2009. But suddenly the markets turned choppy. Further market remained range bound till mid session but continued to trade positive on the back of strong support from its global counterparts. Firm European markets led by banks and energy stocks also added to the sentiments. Stocks touched to the day''s high during last trading hours as huge buying emerged across the board. BSE Sensex ended above 9,250 level along with NSE Nifty ended around 2,850 mark. From the sectoral front, all indices ended in green and among those Reality stocks outperformed the benchmark indices as ended with positive gap of more than 6%. Besides, Metal, Bank, Oil & Gas, Bank, PSU, Capital Goods, Consumer Durables and FMCG stocks observed most of the buying from these baskets. Midcap and Smallcap stocks also followed the same trend.
Among the Sensex pack 27 stocks ended in green territory and 3 in red. The market breadth remained positive as 1403 stocks closed in green while 1025 stocks closed in red and 102 stocks remained unchanged in BSE.
The BSE Sensex closed higher by 253.39 points at 9,257.47 and NSE Nifty ended up by 78.15 points at 2,849.50. The BSE Mid Caps and Small Caps ended with gains of 46.93 points and 38.44 points at 2,914.80 and 3,304.98 respectively. The BSE Sensex touched intraday high of 9,270.75 and intraday low of 9,053.80.
Gainers from the BSE Sensex pack are Ranbaxy Lab (7.56%), ICICI Bank (7.08%), DLF Ltd (6.63%), L&T Ltd (5.20%), Tata Motors (4.60%), M&M Ltd (4.28%), HDFC (4.02%), Reliance (3.76%), Wipro (3.63%), ONGC LTD (3.42%) and Reliance Infra (3.14%).
Only three losers from the BSE Sensex pack Maruti Suzuki (3.15%), RCom (3.03%) and Sterlite Industries (0.41%).
The Election Commissioner S Y Quraishi informed today, 28 January 2009, that the Lok Sabha elections will be held between 8 April and 15 May 2009.
On the global markets front, the Asian Markets ended higher following overnight gains in Wall Street as Nikkei 225, Straits Times and Seoul Composite index ended up by 45.22, 80.85 and 64.58 points at 8,106.29, 1,766.08 and 1,157.98 respectively. However the Shanghai, Hang Seng and Taiwan markets are shut today for the Lunar New Year holidays. Investors await the outcome of the two-day Federal Reserve meeting, which concludes later today. The US central bank has previously cut interest rates to nearly zero and is now looking for new means to pull the world''s largest economy out of a deepening recession.
The European Markets are trading firm as the DAX is up by 110.50 points at 4,433.92 and FTSE 100 is higher 66.91 points at 4,261.32. The European markets opened with strong gains ahead of US FOMC meet. The UK government had earlier announced an aid package for the struggling UK auto industry. As per a UK government release, the U.K. government said it would offer carmakers 2.3bn pounds of loan guarantees to help them cope with the recession.
The BSE Reality index rose on hopes lower rates will spur housing demand as ended up by (6.32%) or 97.77 points at 1,644.48. Major gainers are Unitech Ltd (13.21%), Indiabull Real (9.39%), DLF Ltd (6.63%), Housing Development (6.06%), Orbit Co (5.26%) and Parsnath (4.95%).
The BSE Metal index supported the buying sentiment and ended higher by (4.44%) or 207.33 points at 4,879.97. Main gainers are NMDC Ltd (16.21%), Welspan Gujarat SR (10.88%), Sesa Goa Ltd (10.80%), Steel Authority (9.69%), Jindal Steel (5.64%) and JSW Steel (5.44%).
The BSE Bank index ended higher by (3.79%) or 174.71 points to close at 4,789.93 after the Reserve Bank of India kept its key rates unchanged in its credit policy on Tuesday, 27 January 2009. Axis Bank (7.25%), ICICI Bank (7.08%), Kotak Bank (5.90%), Bank of India (3.27%) and Karnataka Bank (3.19%) ended in positive territory.
The BSE Oil & Gas index ended with handsome gains as advanced by (3.76%) or 220.56 points at 6,289.46. Gainers are Reliance Pet (7.94%), Cairn Ind (7.02%), Gail India (6.63%), Essar Oil Ltd (5.65%), Reliance (3.76%) and Reliance Natural Resources (3.50%).
The BSE PSU index was able to gain market favor and gained (3.12%) or 154.20 points to close at 5,096.29 as NMDC Ltd (16.21%), Steel Authority (9.69%), Gail India (6.63%), MMTC Ltd (5.00%), State Trad Corp (4.14%) and Contain Corp (4.03%) ended in green.
The BSE Capital Goods index also remained in limelight and closed with increase of (3.04%) or 184.94 points at 6,274.01. Scrips that gained are Bharat Bijli (6.66%), L&T Ltd (5.20%), Havells India (4.56%), Areva (3.83%), Everest Kanto (3.80%) and Bharat Elect (3.63%).
NMDC Ltd ended up by 16.21%. The company posted a net profit of Rs 14249.50 million for the quarter ended December 31, 2008 as compared to Rs 9682.20 million for the quarter ended December 31, 2007. Total Income has increased from Rs 17981.20 million for the quarter ended December 31, 2007 to Rs 25666.80 million for the quarter ended December 31, 2008.
ICICI Bank ended higher by 7.08% as its ADR rose 3.62% overnight. Net profit of ICICI Bank rose 3.41% to Rs 1272.15 crore on 0.1% rise in total operating income to Rs 10,350.62 crore in Q3 December 2008 over Q3 December 2007.
Tata Motors gained 4.60% after the U.K. government offered carmakers loan guarantees to help them cope with the recession. The U.K. government will offer carmakers 2.3 billion pounds ($3.2 billion) of loan guarantees to help the ailing auto firms in the UK, which includes Jaguar Land Rover. The manufacturers will be allowed to tap 1.3 billion pounds of financing the European Investment Bank made available to U.K. companies last year and another 1 billion pounds of backing from the Treasury.
Unabated rally
The market displayed tremendous strength on firming global cues. Sensex went into a major recovery mode after last week’s fall and surged by over 250 points during intra-day trades. Rally in Asian markets cheered investors and Sensex had a gap-up opening at 9078, up 74 points. Realty, metal and banking stocks led the rally and the respective indices posted over 3-6% gains on BSE. Firm open in major European indices and positive close in European markets also helped the sentiment remain bullish, with Sensex crossing 9200-mark by afternoon and maintaining upwards bias thereafter. Sustained buying in frontline stocks saw Sensex surge past 9250 mark to touch the day's high of 9271 towards close. Sensex ended the session by gaining 253 points or 2.81% up at 9257, while the Nifty added 78 points 2850.
The breadth of the market was positive. Of the 2,529 stocks traded on the BSE 1,406 stocks advanced, 1,023 stocks declined and 100 stocks ended unchanged. Among sectoral indices BSE Realty flared up by 6.32%, BSE Metal rose 4.44% and BSE Bankex moved up by 3.79%. Other indices also ended with gains over 1-3% each.
All Sensex stocks except a few ended at higher levels. Ranbaxy Laboratories flared up 7.56% at Rs213.50, ICICI Bank shot up by 7.08% at Rs408.35, DLF zoomed 6.63% at Rs177.70, Tata Motors moved up by 4.60% at Rs146.75, Mahindra & Mahindra scaled up 4.28% at Rs283.85, HDFC surged by 4.02% at Rs1,504.60, Reliance Industries jumped by 3.76% at Rs1273.15 and Wipro gained 3.63% at Rs234.35. While Maruti Suzuki India lost 3.15% at Rs520.50, Reliance Communications slipped 3.03% at Rs166.40 and Sterlite Industries moved down 0.41% at Rs266.70.
Over 8.19 crore shares of Satyam Computer Services changed hands on the BSE followed by Unitech (2.54 crore shares), Suzlon Energy (1.16 crore shares), HDIL (92 lakh shares) and Reliance Natural Resources (81 lakh shares).
Short covering, strong global cues trigger an over 250-point Sensex rally
Buying frenzy in late trade coupled with short covering of open positions ahead of January 2009 derivative contracts expiry tomorrow, 29 January 2009 triggered a solid rally in key benchmark indices, for the second straight day. Strong global cues also cheered the sentiment. Index heavyweights Reliance Industries, ONGC and ICICI Bank were in forefront of the rally. The BSE 30-share Sensex jumped 253.39 points, or 2.81%.
As per reports, Lok Sabha elections will be held between 8 April and 15 May 2009, the Election Commissioner S Y Quraishi informed today, 28 January 2009. General election in India is the largest electoral exercise in the world involving 671 million voters.
The market had opened on a firm note, extending yesterday's surge, on positive global cues and short covering ahead of futures & options (F&O) contracts expiry tomorrow, 29 January 2009. The market however retraced from the day's high in midmorning trade. Volatility rose as market oscillated in a narrow band in first half of the day. However strong buying demand in index pivotals propelled bourses to day's high in late trade.
Volatility was high ahead of the outcome of the two-day Federal Reserve meeting, which concludes today. The US central bank has already cut interest rates to nearly zero and is searching for other tools to pull the world's largest economy out of a deepening year long recession.
Expiry of futures & options contracts for January 2009 series on Thursday, 29 January 2009, also triggered volatility. As per reports, rollover of Nifty positions from January 2009 series to February 2009 series was 47% while marketwide rollover of positions stood at 44%, as on Tuesday, 27 January 2009.
Strong global cues lifted sentiment today. Trading in US index futures showing the Dow could rally 144 points at the opening bell. European shares gained in early trade on Wednesday led by banks and energy stocks. The key benchmark indices in France, Germany and UK were up by between 1.76% to 2.68%.
Asian stocks advanced today, 28 January 2009 helped by gains on Wall Street, but Japan lagged as exporters such as Honda Motor Co lost ground on news that US consumer confidence has slumped to record lows. The key benchmark indices in Japan, South Korea and Singapore rose by between 0.56% to 5.91%.
Hong Kong, China and Taiwan`s stocks are not trading today. The markets will remain closed from Monday to Wednesday for the Lunar New Year holidays and will reopen on Thursday, 29 January 2009.
The BSE 30-share Sensex was up 253.39 points, or 2.81%, to 9,257.47. The Sensex rose 266.67 points at the day's high of 9,270.75 in late trade. The Sensex rose 49.72 points at the day's low of 9,053.80 in mid-morning trade.
From the recent low of 8,674.35 on 23 January 2009 the Sensex rose 583.12 points or 6.72%.
The S&P CNX Nifty rose 78.15 points, or 2.82%, to 2,849.50.
BSE clocked a turnover of Rs 3,593 crore today higher compared to a turnover of Rs 3,083.50 crore on Tuesday, 27 January 2009.
Nifty January 2009 futures were at 2846.50, at a discount of 3 points as compared to the spot closing of 2849.50. Turnover in NSE's futures & options (F&O) segment was Rs 40,894.23 crore lower than Rs 42,867.49 crore on Tuesday, 27 January 2009. The near month January 2009 derivatives contract will expire tomorrow, 29 January 2009.
The BSE Sensex has lost 389.84 points or 4.04% so far in 2009 from its close of 9,647.31 on 31 December 2008. The barometer index had lost 10,639.68 points or 52.44% in the calendar year 2008.
Sectoral indices on BSE displayed mixed trend. the BSE Realty index (up 6.32%), the BSE Metal index (up 4.44%), the BSE Bankex (up 3.79%), the BSE Oil & Gas index (up 3.76%), the BSE PSU index (up 3.12%), the BSE Capital Goods index (up 3.04%) outperformed the Sensex.
The BSE HealthCare index (up 0.09%), the BSE Auto index (up 1.21%), the BSE Power index (up 1.48%), the BSE Teck index (up 1.8%), the BSE FMCG index (up 2.36%), the BSE IT index (up 4.05%), the BSE Consumer Durables index (up 2.74%), underperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive on BSE with 1,412 shares advancing as compared with 1,048 that declined. 64 shares remained unchanged. The breadth was positive in early trade.
Among the 30-share Sensex pack, 27 advanced while the rest slipped.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) gained 3.76% to Rs 1,273.15.
Meanwhile, oil rebounded above $42 a barrel today, 28 January 2009 from a 9% fall a day ago, as worries over demand due to the faltering global economy eased. U.S. crude rose 67 cents a barrel to $42.25.
India's largest oil exploration firm by revenue Oil and Natural Gas Corporation rose 3.42% ahead of its Q3 December 2008 result today.
FMCG stocks rose on defensive buying. United Spirtis, Hindustan Unilever, ITC, rose by between 2.33% to 15.17%.
Shares from Auto pack, too, rose on hopes lower interest rates and fall in fuel prices would spur demand for vehicles which is mainly driven by finance. Hero Honda Motors and M& M rose by between 1.63% to 4.28%.
India's largest car maker by sales Maruti Suzuki India fell 3.15% after it raised prices by Rs 5000-10000 across models.
India's largest commercial vehicle maker by sales Tata Motors rose 4.6% after the British government guaranteed up to 2.3 billion pounds of loans to help the ailing auto firms in the UK, which includes Jaguar Land Rover.
Rate sensitive real estate shares rose on hopes lower rates will spur housing demand. Indiabulls Real Estate, DLF, Unitech, Omaxe rose by between 1.86% to 13.21%.
Metal stocks spurted. World's sixth largest steel maker by sales Tata Steel rose 2.64%.The company during market hours today announced 56.36% fall I net profit to Rs 466.24 crore on 4.18% fall in total income to Rs 4,810.63 crore in Q3 December 2008 over Q3 December 2007.
Hindalco Industries, Steel Authority of India, Jindal Steel, Bhushan Steel rose by between 0.68% to 9.69%.
Banking stocks rose after the Reserve Bank of India kept its key rates unchanged in its credit policy on Tuesday, 27 January 2009. India's second largest private sector bank by net profit HDFC Bank gained 2.63% as its American depository receipt (ADR) rose 1.48% on Tuesday, 27 January 2009.
India's largest bank in terms of assets and branch network State Bank of India rose 2.01% after its net profit rose 37.03% to Rs 2478.42 crore on 38.3% rise in total operating income to Rs 21,255.90 crore in Q3 December 2008 over Q3 December 2007. The bank announced the result on 24 January 2008.
India's largest private sector bank by net profit ICICI Bank rose 7.08% as its ADR rose 3.62% overnight. Net profit of ICICI Bank rose 3.41% to Rs 1272.15 crore on 0.1% rise in total operating income to Rs 10,350.62 crore in Q3 December 2008 over Q3 December 2007. The unexpected rise in net profit was because earnings from fees and bond trading offset slowing credit growth and rise in bad loans. The bank announced the result on Saturday, 24 January 2008.
India's largest dedicated housing finance company by total income HDFC rose 4.02%.
IT firms rose on firm ADRs overnight. India's third largest software services exporter, Wipro rose 3.63% as its American depository receipt (ADR) rose 3.26% on Tuesday, 27 January 2009. 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 gained 2.67% as its ADR rose 1.54% overnight. While, India's fifth largest IT exporter by sales HCL Technologies rose 1.2% after its net profit rose 56.82% to Rs 398.01 crore on 10.97% rise in sales to Rs 1,304.85 crore in Q2 December 2008 over Q1 September 2008.
TCS, India's largest software services exporter by sales rose 1.38%. Satyam Computer Services rose 16.01% on reports the firm appointed Boston Consulting Group as Management Advisors and that the firm will take measures to invite open bids.
Satyam Computer Services clocked the highest volume of 8.19 crore shares on BSE. Unitech (2.54 crore shares), Suzlon Energy (1.16 crore shares), HDIL (92.49 lakh shares) and Reliance Natural Resources (81 lakh shares) were the other volume toppers in that order.
Satyam Computer Services clocked the highest turnover of Rs 434.85 crore on BSE. United Spirits (Rs 284.46 crore), Reliance Industries (Rs 187.52 crore), State Bank of India (Rs 146.91 crore) and ICICI Bank (Rs 137.65 crore) were the other turnover toppers in that order.
Hanung Toys & Textiles soared 19.34%, extending gains for the second session in a row after the government banned import of cheap toys from China.
Jagran Prakashan fell 1.9% after its net profit declined 40% in Q3 December 2008 over Q3 December 2007.
United Phosphorous rose 3.5% after its consolidated net profit rose 33% in Q3 December 2008 over Q3 December 2007.
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 4,294.30 crore (till 23 January 2009).
The Fed in its two-day meet concluding today, 28 January 2009, could unveil fresh steps to ease the global credit crunch when it concludes a two-day policy meeting later in the day, and traders will be scouring its statement for any clues on whether it will buy US government bonds, which could help check longer term borrowing rates.
On Tuesday, 27 January 2009, the Fed took a step toward easing mortgage foreclosures threatening millions of Americans, announcing that it would write down troubled mortgages to keep people in their homes.
Pre Session Commentary - Jan 28 2009
Today the markets are likely to open positive. The sentiments are strong and there has been good rally today morning in other major Asian markets like Nikkei, Strait Times and Seoul Composite. Though the RBI has left the key rates unchanged, which was rather anticipated had little impact on the market sentiments yesterday. And therefore one could further anticipate trend prevailing in today’s market with an essence of mild volatility. After continuous fall in the last week, this week had begun with phenomenal buying on broader level.
On Tuesday, the markets ended with phenomenal gains. The rally was supported by the recovery made by Nikkei and also the US markets closing with gains for second consecutive trading session. As expected the RBI kept its key rates unchanged, however it had no impact on the market sentiments. Sectors like Metal, Power, Teck, IT and Oil & Gas closed with phenomenal gains of 5.55%, 4.66%, 4.39%, 4.05% and 3.35% respectively. The rally was witnessed on a broader level and sustained the sentiments till the end. Sensex managed to close above the 9000 mark. Mid caps and Small caps gained 0.62% and 0.34% respectively. During the session we expect the markets to be trading positive with mild volatility.
The BSE Sensex closed up by 329.73 points at 9,004.08 and NSE Nifty gained by 92.80 points at 2771.35. The BSE Mid Caps and Small Caps ended with gains of 17.68 points and 11 points at 2,867.87 and 3,266.54 respectively. The BSE Sensex touched intraday high of 9,021.97 and intraday low of 8,789.06.
The US markets on Tuesday closed in green. After a choppy trade the US markets were able to close on higher level for the third consecutive trading day. Financial stocks were the best performers. American Express was the out performer as the investors were expecting a lower than expected results and further there were no horrifying news of financial turbulence in the company. Steel stocks were also good performers as the industry gave better than expected results. On the other hand, more than 35 companies will declare their results before the opening bell of tomorrow’s trading session. Crude oil futures for the month of Mach delivery fell by $4.15 to $41.58 per barrel on New York Mercantile Exchange. The crude prices continue to fell for the second session as fresh economic worries that led to the believe that economic weakness will spell further erosion in energy demand.
The Dow Jones Industrial Average (DJIA) closed higher by 58.70 points at 8,174.73 NASDAQ index gained by 15.44 points at 1,504.90 and the S&P 500 (SPX) also closed higher by 9.14 points at 845.71.
Indian ADRs ended higher. In technology sector, Wipro ended up by 3.26% along with Patni Computers by 2.67%. Further Infosys ended with increase of 1.54% and Satyam closed up by 0.53%. In banking sector ICICI Bank and HDFC Bank advanced by 3.62% and 1.48% respectively. In telecommunication sector, MTNL lost 1.03% while Tata Communication gained 2.56%. Sterlite Industries increased by 9.61%.
Today major stock markets in Asia have opened positive. The Shanghai Composite and Hang Seng are closed due to New Year celebration. However Japan''s Nikkei is trading high by 29.35 points at 8,090.42. South Korea’s Seoul Composite is high by 55.36 points at 1,148.76 and Singapore’s Strait Times is also high by 55.69 points at 1,740.92.
The FIIs on Tuesday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 994.50 Crore and gross debt purchased stood at Rs 179.80 Crore, while the gross equity sold stood at Rs 1,338.60 Crore and gross debt sold stood at Rs 509.90 Crore. Therefore, the net investment of equity and debt reported were Rs (344.10) Crore and Rs (330.10) Crore respectively.
On Tuesday, Indian Rupee closed at 48.94/95 per dollar, 0.7% stronger than Friday’s close of 49.27/29. The rupee gained strength on the back rally in stock market and expectations of foreign capital inflow.
On BSE, total number of shares traded were 25.82 Crore and total turnover stood at Rs 3,083.58 Crore. On NSE, total number of shares traded were 57.59 Crore and total turnover was Rs 8,296.71 Crore.
Top traded volumes on NSE Nifty – Unitech with 48122111 shares, Suzlon Energy with 15755688 shares, SAIL with 13720775 shares, Reliance Comm with total volume traded 11608929 shares followed by ICICI Bank with 9849131 shares.
On NSE Future and Options, total number of contracts traded in index futures was 959939 with a total turnover of Rs 12,382.61 Crore. Along with this total number of contracts traded in stock futures were 1341814 with a total turnover of Rs 12,766.05 Crore. Total numbers of contracts for index options were 1194394 with a total turnover of Rs 16,631.96 Crore and total numbers of contracts for stock options were 97314 and notional turnover was Rs 1,086.87 Crore.
Today, Nifty would have a support at 2,752 and resistance at 2,841 and BSE Sensex has support at 8,920 and resistance at 9,225.
Market may add gains
A recovery in most of the Asian indices in ongoing trades and prevailing strong bullish sentiment may help the local market advance further. However, bouts of strong intra-day volatile moves may weigh on the sentiment. Among the key indices, the Nifty has a resistance at 2800 and has a key support at 2730 in the near-term. The Sensex has a likely support at 8850 and may face resistance at 9150.
US indices gained further on Tuesday, rising for the third-straight session, as investors breathed a sigh of relief that some of the quarterly earnings were less terrible than had been expected. While the Dow Jones gained over 59 points at 8175, the Nasdaq moved up by 15 points at 1505.
The Indian ADRs also claosed with solid gains on the US bourses. ICICI Bank jumped 3.62% followed by Wipro adding 3.23% and Dr reddy gained 3.11%, while Patni Company, VSNL, Infosys, Tata Motors, HDFC Bank and Satyam were up over 0.50-2% each. However, MTNL slipped 1.03% and Rediff lost 0.52%.
Crude oil prices moved down, while the Nymex light crude oil for March delivery slipped by $4.15 to close at $41.58 a barrel. In the commodity segment, the Comex gold for April series moved down by $9.30 to settle at $901.40 an ounce.
Daily trend of FII/MF investment in equities
On Jan 28 2009, FIIs were net sellers of stocks to the tune of Rs344 crore (purchases worth Rs995 crore and sales of Rs1339 crore) while domestic mutual funds were net sellers of stocks to the tune of Rs205 crore (purchases worth Rs467 crore and sales of Rs672 crore).
Market seen range-bound in volatile trade
Key benchmark indices are likely to trade in a narrow range on mixed global cues with stock specific activity ruling the roost. Volatility may rise ahead of the outcome of the two-day Federal Reserve meeting, which concludes today. The US central bank has already cut interest rates to nearly zero and is searching for other tools to pull the world's largest economy out of a deepening year long recession.
The Fed could unveil fresh steps to ease the global credit crunch when it concludes a two-day policy meeting later in the day, and traders will be scouring its statement for any clues on whether it will buy US government bonds, which could help check longer term borrowing rates.
On Tuesday, 27 January 2009, the Fed took a step toward easing mortgage foreclosures threatening millions of Americans, announcing that it would write down troubled mortgages to keep people in their homes.
Volatility may also rise as futures & options contracts for January 2009 series expire on Thursday, 29 January 2009. As per reports, rollover of Nifty positions from January 2009 series to February 2009 series was 47% while marketwide rollover of positions stood at 44%, as on Tuesday, 27 January 2009.
ONGC, HPCL, Gail India, NMDC, among others will declare their December 2008 quarterly results today, 28 January 2009. The street was already 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 830 companies showed 23% fall in net profit on 17.40% 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.
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 4,294.30 crore (till 23 January 2009).
According to provisional data on NSE, FIIs were net sellers worth Rs 228.56 crore while mutual funds bought shares worth Rs 139.64 crore on Tuesday, 27 January 2009.
Asian stocks open mixed today, 28 January 2009 helped by gains on Wall Street, but Japan lagged as exporters such as Honda Motor Co lost ground on news that US consumer confidence has slumped to record lows.
Japanese benchmark index Nikkei fell 56.10 points, or 0.70%, to trade at 8,004.97. However South Korea`s Kospi index gained 47.51 points, or 4.35%, to trade at 1,140.91 and Singapore`s Straits Times advanced 40.12 points, or 2.38%, to trade at 1,725.35.
Hong Kong, China and Taiwan`s stocks are not trading today. The markets will remain closed from Monday to Wednesday for the Lunar New Year holidays and will reopen on Thursday, 29 January 2009.
US stocks ended higher on Tuesday, 27 January 2009, as better corporate earnings news helped offset depressing reports on consumer confidence and housing prices.
The Dow Jones industrial average increased 58.70 points, or 0.72%, to end at 8,174.73. The Standard & Poor`s 500 index climbed 9.14 points, or 1.09%, to settle at 845.71. The Nasdaq composite index increased 15.44 points, or 1.04%, to close at 1,504.90.
Oil rebounded above $42 a barrel today, 28 January 2009 from a 9% fall a day ago, as worries over demand due to the faltering global economy eased. U.S. crude rose 67 cents a barrel to $42.25
Idea Cellular
Investors with short-term trading perspective can buy Idea Cellular. This stock is reversing after recording a 52-week low of Rs 34 in late October. Since November, the stock has been consolidating sideways in a broad range between Rs 41 and Rs 55. It recently found support at the lower boundary of the sideways range at Rs 41 and began to move up.
On January 27, the stock gained 3.7, reinforcing bullish momentum. We notice that there is an increase in volume over the past three trading sessions. The daily relative strength index has entered the neutral region from the bearish zone.
Our short-term forecast is bullish for the stock. We expect the stock’s up move to continue until it hits our price target of Rs 49. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 42.5.
Daily News Roundup - Jan 28 2009
Infosys Technologies has placed 5% of its global workforce under the scanner. (BS)
Bajaj Auto plans to launch gearless scooter by next year. (BL)
L&T is in race to gain control of Satyam. (Mint)
ITC and Hindustan Unilever may be forced to cut their expansion plans in Uttarakhand due to scarcity of land. (BS)
Satyam Computer appointed Goldman Sachs and Avendus Capital as its investment bankers. (BL)
HCC’s Lavasa Corporation entered into an agreement with Space Investment Co to build and manage Space World, a hi-tech centre for space ‘edutainment’. (BL)
Telenor scraps rights issue plan for Unitech Wireless acquisition. (ET)
Maharashtra government has decided to cancel contracts worth Rs5bn awarded to Maytas Infra by three state power companies. (BL)
Southern Railways do not plan to cancel its Rs2.5bn contract awarded to Maytas Infra. (ET)
LIC, IDBI, Bank of Baroda agree to lend Rs9bn to Satyam. (ET)
Maruti hikes prices by upto Rs10,000. (ET)
Wipro Consumer Care and Lighting plans to expand its skincare portfolio over the next six months. (ET)
RNRL has pleaded the Bombay High Court to award it KG gas at US$2.34 per mmbtu. (FE)
United Breweries is in final stages of talks with Diageo for 14.9% stake sale in group company United Spirits. (FE)
Essar’s Aegis BPO may buy assets in South Africa. (FE)
NDTV curbs its capex plans to launch new channels, buy new equipment etc as the economy slows. (Mint)
GE Shipping’s offshore unit wins rig contract. (Mint)
MMTC and STC to import 22,000 tons of raw sugar. (ET)
Future Group is in advanced talks with Europe’s largest retailer, Carrefour, for a JV to set up outlets in India. (ET)
Coal India rejected Rio Tinto’s offer on coal mines. (ET)
BSNL plans to invest Rs9bn in Rajasthan. (FE)
IndBank Merchant Banking Services Limited, the merchant banking subsidiary of Indian Bank, plans to open 30 branches and 200 terminals over the next 15 to 24 months. (BS)
RBI keeps key rates unchanged, forecasts GDP growth at 7%. (ET)
Government has ruled out any major cut in retail fuel prices. (ET)
Tax collection from MNC’s and other foreign entities operating in India is likely to fall short by 20%. (ET)
Financial bids for 4,000MW Tilaiya Ultra Mega Power Project are expected to be opened today. (BS)
Government notified a reduction in minimum export price to US1,100/ton for Basmati rice. (ET)
NPPA revises prices for 174 durgs. (ET)
Fuel consumption is up by 4.4% in December. (FE)
Government plans to sell bonds worth Rs100bn. (FE)
Forward Market Commission said that the spot and future markets in power trading can have two regulators. (Mint)
Orissa government cleared projects worth Rs380bn in the power and steel sector. (BS)
Trading Calls - Jan 28 2009
Nifty (2771) Sup 2720 Res 2810
Sell Lupin (568) SL 573 Tgt 558, 554
Sell Cent Text (156) SL 160 Tgt 149, 147
Sell GAIL (189) SL 193 Tgt 183, 180
Buy Reliance Capital (398) SL 393 Tgt 408, 410
Sell ONGC (621) SL 629 Tgt 608, 604
A walk in the cloud!
When there's snow on the ground, I like to pretend I'm walking on clouds.
Despite the RBI’s inaction on interest rates, the market managed to post solid gains. This was largely due to firm trend across global markets. The snow may start melting though as Tuesday’s momentum may not continue today. The key indices could turn choppy after a slightly positive start. Volatility could be higher ahead of F&O expiry. Stock specific and sector centric action remains the order of the day. Satyam will remain in the limelight as the new board has appointed advisors in its desperate search for a strategic suitor. There is also the possibility that the final bidder could get waiver from SEBI on mandatory open offer.
On the global front, the Federal Reserve will make an announcement later today after its two-day meeting. There is not much it can do as interest rates have already been reduced to zero. But, what the FOMC says will be keenly followed. Meanwhile, the UK government has thrown in a lifeline for its ailing auto sector. In the US, the Obama regime is pulling out all stops to push through its ambitious stimulus package. Its clearance may provide some fillip, though it may not have a lasting impact on the markets.
Among the top companies announcing results today, ONGC will post 13.5% drop in sales and 5.7% in PAT. Gail India will announce 35.8% rise in topline and 78.8% jump in the bottomline.
Key Results: Abbott India, ABG Shipyard, Ansal Infra, Asahi India, Ashok Leyland, Avaya Global, Balaji Tele, Bank of Maharashtra, BGR Energy, Bharat Bijli, Blue Dart, CESC, Chambal Fertilizers, Dabur India, EID Parry, Escorts, Gail India, Gammon India, Hindustan Motors, HPCL, HDIL, IBN 18, India Cements, Indo Rama, Ispat Industries, J&K Bank, JSW Steel, LMW, Matrix Labs, Max India, NALCO, NMDC, ONGC, Orchid Corp, Power Grid Corp, Shree Cement, Tata Chemicals, Tata Communications, Tata Steel, Thermax, Torrent Pharma and United Phosphorus.
US stocks ended higher on Tuesday, with the Nasdaq and the S&P 500 index rising for the third-straight session, as some of the quarterly earnings did not turn out to be as terrible as many had expected. The latest stock gains occurred despite gloomy economic reports on home prices, employment and consumer confidence - and a slew of disappointing earnings. But, Monday's surprisingly positive data on existing home sales continued to provide some relief.
On Tuesday, major stock indexes kept moving in and out of positive territory before closing with modest gains. Health care, financials and IT paced the gains, while telecom services and consumer discretionary shares lagged. The S&P 500 and the Nasdaq had closed higher on Friday, while the Dow closed off its lows.
Investors seemed to welcome results that were not as weak as expected from American Express, Texas Instruments and others. And, Timothy Geithner's approval as Treasury Secretary seemed to boost confidence that the Obama administration's $825bn stimulus package could get passed soon.
The Fed will end its two-day policy-setting meeting with an announcement expected on Wednesday afternoon. The central bank is expected to keep short-term interest rates near zero, where it set them at its last meeting. However, as always, the statement that accompanies the decision will be closely scrutinized.
The negative news on the employment front continued on Tuesday, as companies across the economic spectrum announced more than 10,000 job cuts. On Monday, all three major gauges managed to close higher, despite companies announcing more than 71,000 job cuts.
Dow component American Express reported lower sales and earnings late on Monday that narrowly missed expectations. However, the so-called "whisper" number was much worse and investors seemed relieved that AmEx's results were not weaker. Shares gained 9.7%.
Texas Instruments reported a smaller-than-expected drop in quarterly profit after the close on Monday and also said it was cutting 3,400 jobs. Its shares gained 3.7% on Tuesday.
A number of steel companies reported results as well. US Steel reported higher fourth-quarter earnings and warned that first-quarter revenue would miss forecasts. But investors focused on the earnings and shares rose almost 7%.
Steel Dynamics reported better-than-expected fourth-quarter results and said most of its divisions should see profits in 2009, thanks partly to the proposed economic stimulus plan. Shares jumped 15%.
DuPont reported a wider quarterly loss that was worse than expected and also cut its 2009 earnings forecast. Shares ended little changed.
Verizon Communications reported higher quarterly sales and earnings, but said that growth in its mobile phone business slowed and traditional land line customers continued to drop out. Verizon also warned that pension and other retirement costs would hurt earnings in 2009. Shares fell 3.3%.
Delta Air Lines reported a steeper quarterly loss due to costs associated with its merger with Northwest and bad fuel hedges. But the world's largest air carrier said that lower fuel costs and downsizing would enable it to earn profits in 2009. Shares tumbled 20%.
Home prices in 20 major cities plunged at a record annual pace in November, falling to levels not seen since 2004, according to a report released on Tuesday.
A separate report showed that consumer confidence fell to an all-time low in January. The Conference Board, a research group, said its consumer index fell to 37.7 from a revised 38.6 in December, missing economists' forecasts. It was the lowest level on record since the group began tracking confidence in 1967.
A government report showed that unemployment spiked in all 50 states and the District of Columbia in December, as companies cut thousands of positions in the wake of the recession.
Treasury prices rallied, lowering the yield on the benchmark 10-year note to 2.54% from 2.63% on Monday as investors pulled money out of the safe-haven investment. 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 were mixed. The 3-month Libor rate held steady at 1.18%. Overnight Libor fell to 0.22% from 0.23% on Monday. Libor is a bank-to-bank lending rate.
US light crude oil for March delivery fell $4.15 to settle at $41.58 a barrel on the New York Mercantile Exchange. Gasoline prices fell two-tenths of a cent to a national average of $1.84 a gallon.
The dollar fell versus the euro and yen. COMEX gold for April delivery fell $9.30 to settle at $901.40 an ounce.
After the close, Yahoo reported quarterly sales and earnings that topped estimates. Including charges, the company reported a loss. Shares gained 4% in extended-hours trading.
Earnings are due on Wednesday morning from Dow component AT&T and financial company Wells Fargo. AT&T is expected to have earned 65 cents per share versus 71 cents a year ago. Wells Fargo is expected to report earnings of 33 cents per share, versus 41 cents a year ago.
European shares inched higher in a choppy session on Tuesday. The pan-European Dow Jones Stoxx 600 index gained 0.1% to 188.31, although it was lower for much of the session. Germany's DAX 30 index declined 0.1% to 4,323.42, while the French CAC-40 index finished flat at 2,954.53 and the UK's FTSE 100 index closed down 0.4% at 4,194.41.
Bulls staged a strong comeback on Tuesday after an extended weekend. Firm cues from the overseas markets coupled with buying witnessed in the metals’, power and IT stocks.
However, from thereon it was a see-saw ride key indices witnessed knee jerk reaction and slipped from its day’s high post the RBI’s decision on the monetary policy.
As the day progressed, amid volatile trades markets staged a V-shaped recovery led by all round buying in scrips across the sectors. Finally, the BSE benchmark Sensex advanced 334 points to close at 9,008 and the Nifty gained 92 points to close at 2,771.
Among the 30-components of Sensex, 28 stocks ended in the green and only 2 stocks ended in the negative terrain. Among the major gainers in the Sensex were Reliance Industries, Infosys, Bharti, ICICI Bank and HDFC. ONGC and L&T were among the major laggards.
Shares of Oracle Financial rallied by over 15% to Rs566 after third-quarter group profit rose almost threefold.
Net income for the three months ended Dec. 31 rose to Rs2.64bn from Rs1.07bn a year ago and revenue rose 29% to Rs8.01bn from Rs6.2bn. The scrip touched an intra-day high of Rs596 and a low of Rs468 and recorded volumes of over 2,00,000 shares on BSE.
Shares of Satyam rallied by over 21% to Rs47 after L&T announced that it may lift its holding to 15% in Satyam as it expects the value to increase.
While there could be value erosion in Satyam in the near term, the stock will rise since the government is keen to rescue the company, Chairman A.M. Naik said.
A 15% stake is the threshold set by SEBI for a mandatory offer to buy 20% more from minority holders. L&T had earlier raised its holding in Satyam Computers to 12% from 4%.
Shares of L&T were down by 0.5% to Rs638 after hitting an intra-day high of Rs660 and a low of Rs605 and has recorded volumes of over 12,00,000 shares on NSE.
Petron Engineering edged lower by 0.2% to Rs68 after the company announced that it won order worth Rs97.8mn. The scrip touched an intra-day high of Rs70 and a low of Rs66.
Shares of Glenmark declined by over 7% to Rs188 after the company announced that its Q3 net profit fell 71% to Rs814.3mn and net sales fell 14% to Rs5.81bn. The scrip touched an intra-day high of Rs215 and a low of Rs185 and recorded volumes of over 6,00,000 shares on BSE.
Shares of NTPC advanced by 6% to Rs190 after the company plans to invest Rs62.3bn in a 1,000MW project in northern India.
The board of directors approved the spending for the third phase of the Rihand Super Thermal Power Project in the state of Uttar Pradesh. The scrip touched an intra-day high of Rs191 and a low of Rs179 and recorded volumes of over 2,00,000 shares on BSE.
Shares of UCO Bank gained by 1% to Rs27.8 after reports stated that it plans to cut lending rates by 50bps. The scrip touched an intra-day high of Rs28.6 and a low of Rs27.6 and recorded volumes of over 2,00,000 shares on BSE.
Bulls would wish to carry the momentum to the next trading session. However, trading might turn more volatile ahead of Thursday’s F&O expiry.
Gold slumps as dollar strengthens
Gold prices drop below $900 mark
After rising for three consecutive sessions, gold prices ended lower on Tuesday, 27 January, 2009 as the dollar strengthened. Gold price also fell due to other lower commodity prices, especially crude oil. But silver prices gained
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 fell $9.3 (1%) to close at $899.5 an ounce on the New York Mercantile Exchange. Last week, gold prices ended higher by 6.7%. This year gold has gained 2.5% till date. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (13%) since then.
On Tuesday, Comex silver futures for March delivery gained 6.5 cents (0.5%) to end at $12.175 an ounce. For 2008, silver had lost 24%.
At the currency market on Friday, the dollar index, which tracks the dollar against a trade-weighted basket of six major currencies, continued to rise even as consumer confidence continued to drop in the country.
The monthly Conference Board index reported today that consumer confidence hit a record low in January as worries worsened about future income. As per the report, the January consumer confidence index fell to 37.7 from an upwardly revised 38.6 in December. Market had expected a January reading of 38.
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 23 (0.2%) at Rs 14,095 per 10 grams. Prices rose to a high of Rs 14,214 per 10 grams and fell to a low of Rs 13,956 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 216 (1.1%) higher at Rs 19,476/Kg. Prices opened at Rs 19,339/kg and rose to a high of Rs 19,595/Kg during the day's trading.
Crude plunges
Demand concerns continue to weigh on crude prices
Global economic concerns pushed crude prices lower once again on Tuesday, 27 January, 2009. Prices also went lower after traders anticipated that tomorrow's weekly inventory report will once again show buildup in crude inventories for fifth straight week.
On Tuesday, crude-oil futures for light sweet crude for March delivery closed at $41.58/barrel (lower by $4.15 or 9.1%) on the New York Mercantile Exchange. Last week, crude prices ended higher by 9%. Prices had reached a high of $49 earlier during the day today.
Prices reached a high of $147 on 11 July but have dropped almost 65% since then. Year to date, in 2009, crude prices are lower by 18%. On a yearly basis, crude prices are lower by 53%.
At the currency market on Tuesday, the dollar index, which tracks the dollar against a trade-weighted basket of six major currencies, continued to rise even as consumer confidence continued to drop in the country.
The monthly Conference Board index reported today that consumer confidence hit a record low in January as worries worsened about future income. As per the report, the January consumer confidence index fell to 37.7 from an upwardly revised 38.6 in December. Market had expected a January reading of 38.
Against this background, March reformulated gasoline fell 4.46 cents, or 3.9%, to $1.1085 a gallon and March heating oil dropped 5.25 cents, or 3.7%, to $1.3745 a gallon.
February natural-gas futures rose 2.8 cents, or 0.6%, to $4.49 per million British thermal units.
At the MCX, crude oil for February delivery closed at Rs 2,133/barrel, lower by Rs 105 (4.7%) against previous day's close. Natural gas for February delivery closed at Rs 219.1/mmbtu, lower by Rs 2.2/mmbtu (0.99%).
Calls for Jan 28 2009
Adlabs
Short @ 165.20
Stop @ 169.70
Target@ 158.30
GVK Power
Short @ 17.80
Stop @ 18.50
Target @ 15
by Anuraag Jain
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