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Friday, January 30, 2009
Chola reports loss
Chennai-based Cholamandalam DBS Finance Ltd has reported a net loss of Rs 50 crore during the third quarter ended December 31, 2008 as compared to profit of Rs 18 crore during the same period last year. The decline primarily due to disbursements of vehicle finance and home equity business were lower due to the liquidity crunch as well as the slow-down in auto market. Cost of funds on fresh borrowings was also higher, according to company sources.
Company's total from operations dropped by 4 per cent to Rs 241crore from Rs 252 crore, a year ago, while expenditure increased by 16 per cent to Rs 160 crore as compared to Rs 137 crore, during the same period last year.
Meanwhile, the company had raised Rs 135 crore in September 2008 by way of conversion of warrants into equity shares. To further improve the capital adequacy and to meet the operating requirements, the Board of Directors approved a proposal to raise further capital aggregating up to Rs 500 crore in October 2008. Out of this, the Murugappa Group and DBS Bank Limited are bringing a capital of Rs 300 crores in the form of fully convertible cumulative preference shares and this is expected to be infused before end March 2009.
As a part of the overall restructuring plans, company's board of directors in their meeting held on January 30, 2009, approved a capital restructuring proposal including creation of special standard assets provision of Rs 200 crore to address the possible higher delinquencies, in the context of the overall economic slow down. Setting off Loan losses / write offs to the extent of Rs 100 crore.
Adjustment of impairment loss in investment in one of the subsidiaries of the company, DBS Cholamandalam Distribution Ltd for an amount not exceeding Rs.23.53 crores.
BSE Bulk deals to Watch - Jan 30 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
30/1/2009 531878 ANJANI FINL RAMESH G GOKANI B 122600 13.44
30/1/2009 531878 ANJANI FINL AMI STOCK SHARE BROKERS PLTD S 122000 13.45
30/1/2009 533026 CHEMCEL RAMESH G GOKANI B 378000 4.63
30/1/2009 533026 CHEMCEL AMI STOCK SHARE BROKERS PLTD S 370875 4.63
30/1/2009 513059 G.S. AUTO SPJSTOCK B 25500 8.75
30/1/2009 513059 G.S. AUTO SHARDA C PUJARA B 25000 8.75
30/1/2009 513059 G.S. AUTO HARDIK M MITHANI S 28381 8.75
30/1/2009 513059 G.S. AUTO HARDIK M. MITHANI S 22514 8.78
30/1/2009 532342 IT PEOPLE EIN FRATECH SYSTEMS INDIA PVT. LTD. S 700561 6.40
30/1/2009 512267 MEDIA MATRIX VIMOCHAN PICTURES LIMITED B 1110000 3.65
30/1/2009 512267 MEDIA MATRIX RDB INDUSTRIES LIMITED S 1110000 3.65
30/1/2009 504864 ORISA SP IRS BEK TRADING COMPANY B 522900 123.30
30/1/2009 531215 RTS POWER CO RAMESHBHAI V PARMAR B 45501 280.10
30/1/2009 531215 RTS POWER CO RAMESHBHAI V PARMAR S 45424 280.87
30/1/2009 524703 SANDU PHARMA RAMESH G GOKANI B 45000 8.40
30/1/2009 524703 SANDU PHARMA AMI STOCK SHARE BROKERS PLTD S 45000 8.40
30/1/2009 511431 VAKRAN SOFTW GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD S 782772 22.03
30/1/2009 530459 VALSON IND RAMESH G GOKANI B 35800 27.90
30/1/2009 530459 VALSON IND AMI STOCK SHARE BROKERS PLTD S 35800 27.90
30/1/2009 531950 VERTEX SECUR RAMESH G GOKANI B 55000 8.35
30/1/2009 531950 VERTEX SECUR AMI STOCK SHARE BROKERS PLTD S 55000 8.35
30/1/2009 531249 WELL PACK PA NAINESH HIMAT JATANIA B 25000 51.37
NSE Bulk Deal Watch - Jan 30 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
30-JAN-2009,BINDALAGRO,Oswal Chem & Fert Ltd.,OSWAL AGRO MILLS LIMITED,BUY,1618126,10.68,-
30-JAN-2009,EVINIX,Evinix Accessories Limite,RAKESH GUPTA,BUY,669000,3.00,-
30-JAN-2009,PSTL,Pyramid Saimira Theatre L,BP FINTRADE PRIVATE LIMITED,BUY,198399,25.52,-
30-JAN-2009,PSTL,Pyramid Saimira Theatre L,KSHITIJ-PORTFOLIO-PVT.-LTD.,BUY,101626,25.63,-
30-JAN-2009,SATYAMCOMP,Satyam Computers Ltd,FIDELITY,BUY,5866704,50.90,-
30-JAN-2009,VAKRANSOFT,Vakrangee Softwares Limit,BP FINTRADE PRIVATE LIMITED,BUY,83924,22.44,-
30-JAN-2009,BINDALAGRO,Oswal Chem & Fert Ltd.,OSWAL AGRO MILLS LIMITED,SELL,42406,10.71,-
30-JAN-2009,BINDALAGRO,Oswal Chem & Fert Ltd.,P M AIR PRODUCTS PRIVATE LIMITED,SELL,1575020,10.66,-
30-JAN-2009,EVINIX,Evinix Accessories Limite,SUPREME FINVEST (P) LTD.,SELL,670000,3.00,-
30-JAN-2009,PSTL,Pyramid Saimira Theatre L,BP FINTRADE PRIVATE LIMITED,SELL,188102,25.53,-
30-JAN-2009,PSTL,Pyramid Saimira Theatre L,KSHITIJ-PORTFOLIO-PVT.-LTD.,SELL,181626,25.68,-
30-JAN-2009,VAKRANSOFT,Vakrangee Softwares Limit,BP FINTRADE PRIVATE LIMITED,SELL,122477,22.36,-
Post Session Commentary - Jan 30 2009
The Indian market recovered from its earlier losses and closed with smart gains on sustained buying momentum across the sectors. Firm European markets boosted the sentiments and contributed to the sharp rebound. During initial trading, market had shown nervousness on weak global markets led by poor economic data. New-home sales in US tumbled 14.7% and initial jobless claims rose by 3000 to 5.88 lakh.
The domestic market today triggered a subdued start tracking weak cues from the markets all over the world. Most of the Asian markets were down due to a record crash in Japanese production and lower profit forecasts. Selling by foreign institutional investors also fueled anxiety among investors. Further, market started recovering since mid session as benchmark indices staged a rebound to the green zone from early low. Stocks continued to gain momentum and observed sharp rally till end on the back of intense buying seen in key stocks ahead of US GDP data. BSE Sensex ended crossed 9,400 level and NSE Nifty ended above 2,850 mark. From the sectoral front, most of the indices ended in green and among those most of the buying was seen in Reality, Metal, Oil & Gas, Bank, FMCG, Consumer Durables and Capital Goods stocks. Midcap and Smallcap stocks also followed the same trend. However, Pharma stocks remained under pressure as most of the selling was witnessed from its’ basket.
Among the Sensex pack 25 stocks ended in green territory and 5 in red. The market breadth indicating the overall health of the market, remained positive as 1377 stocks closed in green while 1015 stocks closed in red and 113 stocks remained unchanged in BSE.
The BSE Sensex closed higher by 187.96 points at 9,424.24 and NSE Nifty ended up by 50.85 points at 2,874.80. Broader market indices were also in green as BSE Mid Caps and Small Caps ended with gains of 38.03 points and 35.64 points at 2,941.47 and 3,339.05 respectively. The BSE Sensex touched intraday high of 9,438.31 and intraday low of 9,087.36.
Gainers from the BSE Sensex pack are JP Associates (6.93%), DLF Ltd (7.39%), Hindalco (6.51%), SBI (5.05%), RCom (5.03%), Reliance Infra (4.85%), Maruti Suzuki (4.81%), Reliance (4.51%), L&T Ltd (4.38%) and Sterlite Industries (3.31%).
Losers from the BSE Sensex pack are Sun Pharma (6.10%), BHEL (2.60%), Tata Motors (0.60%), Infosys Tech (0.32%) and NTPC Ltd (0.24%).
On the global markets front, the Asian Markets ended mixed as Hong Kong’s Hang Seng closed higher by 123.78 points at 13,278.21 whereas, Nikkei 225, Straits Times and Seoul Composite ended down by 257.19, 20.25 and 4.45 points at 7,994.05, 1,746.48 and 1,162.11 respectively. Japan reported a record slump in its production and lower profit forecasts has increased worries among investors that the global recession is expanding. However the Shanghai and Taiwan markets remained shut today. Industrial output in Japan plunged at a seasonally adjusted 9.6% in December compared to November, breaking the previous month’s record decline of 8.5% and the economist’s expectations of a drop of 9%. However, Japan''s industrial production for the full year was down 3.4%.
The European Markets recovered its earlier losses and are trading firm as the DAX is up by 6.50 points at 4,434.58and FTSE 100 is higher 19.69 points at 4,2409.80.
The BSE Reality index rose after the weak start on hopes lower rates will spur housing demand as ended up by (4.32%) or 69.09 points at 1,668.08. Major gainers are Ansal Infra (14.59%), DLF Ltd (7.39%), Pheonix Mill (6.00%), Penland Ltd (5.56%), Indiabull Real (5.10%) and Orbit Co (4.72%).
The BSE Metal index supported the buying sentiment and ended higher by (4.05%) or 198.65 points at 5,110.14. Main gainers are Jindal Steel (13.71%), Hindalco (6.51%), Jai Corp Ltd (4.96%), Sesa Goa Ltd (4.57%), Steel Authority (3.95%) and Sterlite Industries (3.31%).
The BSE Oil & Gas index gained favour and closed with increase of (3.58%) or 215.83 points at 6,252.46. Scrips that gained are Aban Offshore (6.50%), Reliance Natural Recourses (4.58%), Reliance (4.51%), Reliance Pet (3.29%), ONGC Ltd (2.98%) and Indian Oil Corporation (2.43%).
The BSE FMCG index gained (2.04%) or 40.65 points to close at 2,032.69 on defensive buying despite worries that slowing economy would eat up the prospective orders as United Spr (12.62%), Dabur India (3.17%), Britania In (2.59%), ITC Ltd (2.36%) and HUL (1.81%) ended in green.
The BSE Bank index ended higher by (1.99%) or 95.59 points to close at 4,900.06 as fears of rising defaults in a weakening economy offset hopes of further fall in interest rates may boost lending growth. Oriental Bank (5.27%), SBI (5.05%), Bank of India (3.53%), Punjab National Bank (2.59%) and Federal Bank (2.34%) ended in positive territory.
The BSE Pharma index ended with losses as dropped by (0.50%) or 13.64 points at 2,713.84. Losers are Aurobindo Pharma (6.24%), Sun Pharma (6.10%), Orchid Chem (1.43%), Pfizer Ltd (1.15%) and Sunpha Adv (0.83%).
HCL Technologies ended higher by (5.41%). The company has bagged a multi-million dollar contract spread over five years from Nokia and involving providing global helpdesk as well as desktop management services through HCL’s delivery centres in Finland, Poland, China, the US and India.
Cairn India advanced by (2.36%). The company has posted a net profit of Rs. 451.2mn for the fiscal third quarter as against a net loss of Rs.543.1mn in the quarter ended December, 2007. On a consolidated basis, the company reported a net profit of Rs2.36bn for the third quarter compared to a net loss Rs139.1mn for the quarter ended December 2007.
Indian Oil Corporation gained (2.43%). The Company has posted a net profit of Rs 29585.90 million for the quarter ended December 31, 2008 as compared to Rs 20906.90 million for the quarter ended December 31, 2007. Total Income has increased from Rs 654048.40 million for the quarter ended December 31, 2007 to Rs 723517.50 million for the quarter ended December 31, 2008.
India''s Spice Group is ready to invest about Rs. 20 billion (USD408 million) in Satyam Computer Services and wants to buy a 51% stake in scam-hit Satyam Computer. The company has already submitted on Thursday its proposal to the government-appointed new board of Satyam.
Volatile but buoyant
The market wiped out losses of over 149 points incurred in the first half after a strong bout of buying led by JP Associates, Hindalco Industries and DLF triggered a wide-spread buying. In a highly volatile trading session, Sensex resumed 125 points lower at 9,111 following weakness in Asian indices and crashed to the day's low of 9,087 on relentless selling. While the market was on a recovery path thereafter, Sensex witnessed a sharp turnaround in afternoon, as gains in heavyweights, realty, metal and oil stocks propelled it to an intra-day high of 9,438. After gyrating 351 points during intra-day trades, Sensex gained 188 points to close at 9,424, while Nifty ended 51 points higher at 2,875.
The market breadth was positive. Of the 2,500 stocks traded on BSE, 1,391 stocks advanced, 1009 stocks declined and 100 stocks ended unchanged. BSE Realty led the pack and gained 4.32% followed by BSE Metal (up 4.05%) and BSE Oil (up 3.58%).
JP Associates was the star performer among the heavyweights and the stock soared 9.63% at Rs76.25. Among other major gainers, DLF advanced 7.39% at Rs177.20, Hindalco Industries jumped 6.51% at Rs49.05, State Bank of India rose 5.05% at Rs1152.20, Reliance Communications moved up by 5.03% at Rs170.20, Reliance Infrastructure advanced 4.85% at Rs582.30, Maruti Suzuki India gained 4.81% at Rs571 and Reliance Industries added 4.51% at Rs1325.20. However, Sun Pharmaceutical Industries, Bharat Heavy Electricals Ltd, Tata Motors and Infosys inched lower.
Over 3.73 crore shares of Satyam Computer Services changed hands on BSE followed by Unitech (2.24 crore shares), Suzlon Energy (1.83 crore shares), Reliance Natural Resources (1.38 crore shares) and JP Associates (1.11 crore shares)
Sensex jumps over 8%
The market ended the truncated week with smart gains. Buying frenzy in index pivotals, coupled with short covering of open positions ahead of January 2009 derivative contracts on Thursday (29 January 2009) triggered a solid rally in key benchmark indices in the first two session of the week. The market was shut on Monday (26 January 2009) on account of the Republic Day holiday.
Positive tidings from global markets also boosted sentiments. The US House of Representatives passed a $825 billion stimulus plan in President Barack Obama's first legislative achievement since taking office last week, with the debate now shifting to the Senate.
Inflation inched up this week, but that did not hurt investor sentiments. India's wholesale price index rose 5.64% in the 12 months to 17 January 2009, slightly above the previous week's annual rise of 5.6%, government data showed on 29 January 2009. The annual inflation rate was 4.45 % during the corresponding week of the previous year.
The BSE 30-share Sensex rose 749.89 points or 8.64% to 9,424.24 in the week ended 30 January 2009. The S&P CNX Nifty fell 103.45 points or 3.73% at 2874.80 in the week.
The BSE Mid-Cap index rose 91.28 points or 3.20% to 2,941.47 and the BSE Small-Cap index fell 83.51 points or 2.57% to 3,339.05 in the week.
The barometer index BSE Sensex is 11,782.53 points or 55.56% below its all-time high of 21,206.77 struck on 10 January 2008.
Frenzied buying in index pivotals, bouts of short covering ahead of the expiry of January 2009 series derivatives contracts on Thursday, 29 January 2009 and positive global cues powered a solid rally on the bourses on 27 January 2009. On that day, the BSE 30-share Sensex was up 329.73 points, or 3.8%, to 9,004.08. The 50-share S&P CNX Nifty rose 92.8 points or 3.46% to 2771.35.
Relentless buying in late trade coupled with short covering of open positions ahead of January 2009 derivative contracts expiry on 29 January 2009 triggered a solid rally in key benchmark indices, for the second straight day on 28 January 2009. The BSE 30-share Sensex was up 253.39 points, or 2.81%, to 9,257.47. The S&P CNX Nifty rose 78.15 points, or 2.82%, to 2,849.50.
Key benchmark indices ended slightly lower, snapping two-day gains, in what was a highly volatile trade on 29 January 2009. Subdued European indices and negative Dow futures played the spoilsport in second half of the day's trading session after logging steady gains in first half. On that day, the BSE 30-share Sensex was down 21.19 points, or 0.23%, to 9,236.28. The S&P CNX Nifty fell 25.55 points, or 0.9%, to 2,823.95.
Some heavy buying in frontline stocks on 30 January 2009 helped benchmarks close to day's high. Rally was led by metals, realty and oil & gas stocks, while pharma stocks had a subdued session. On that day, the BSE 30-share Sensex rose 187.96 points or 2.04% at 9,424.24. The S&P CNX Nifty rose 50.85 points or 1.80% at 2874.80.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 14.92% in the week, boosted by reports the Bombay High Court has in its interim order lifted stay on sale of RIL gas till the final order.
India's largest oil exploration firm by revenue ONGC rose 1.92% The board of the company approved the second phase of Mumbai High North (MHN) redevelopment project, which will yield an incremental crude oil production of 17.354 million metric tonne (MMT) and natural gas 2.987 billion cubic metres (BCM), aggregating to 20.34 million tonnes of oil equivalent, by March 2030.
Private sector oil explorer Cairn India rose 8.61%. The company reported a net profit of Rs 45.12 crore in Q4 December 2008 as compared to net loss of Rs 54.31 crore in Q4 December 2007. Sales surged to Rs 0.99 crore in Q4 December 2008 as against Rs 0.13 crore in Q4 December 2007. The company announced the results after market hours on Thursday, 29 January 2009. The net profit included one-time reversal of deferred tax liability amounting to Rs 123.60 crore, the company said in a statement.
India's largest engineering and construction firm, Larsen & Toubro rose 7.54% after its quarterly net profit more than trebled, boosted by a one-time gain. The profit included an extraordinary gain of Rs 916 crore from sale ready-mix concrete business.
India's largest electric equipment maker by sales Bharat Heavy Electricals was unchanged this week. the company missed estimates by reporting a marginal rise of 2.4% in net profit to Rs 790.56 crore on a 21.3% increase in sales to Rs 6022.25 crore in Q3 December 2008 over Q3 December 2007. The marginal rise in bottomline was due to increased raw material costs and higher wage revision.
India's largest pharma company by market capitalization Sun Pharmaceuticals Industries fell 0.22% in the week. The stock plunged on Friday (30 January 2009) after its US-based associate reported a 35.6% drop in net profit and cut its revenue forecast for fiscal 2009. Caraco Pharmaceutical Laboratories Inc., Sun's 70.21% owned US unit, reported a 35.6% decline in net profit to Rs $6.5 million on a 32% decline in sales to $55.7 million in Q3 December 2008 over Q3 December 2008. Caraco also cut its guidance for the fiscal year ended 2009 revenue from 25% growth to zero growth.
Software outsourcer Satyam Computer Services soared 39.12%. Some media reports suggested that seven companies have shown interest in a complete takeover of company. Suitors, include global and Indian IT firms, besides private equity funds.
Interest rate sensitive stocks rose on hopes of a further reduction in interest rates by the central bank. ICICI Bank (up 14.27%), State Bank of India (up 10.60%), and HDFC Bank (up 5.99%), were the gainers from the banking sector.
Gainers from the realty sector are, DLF (up 10.06%), Indiabulls Real Estate (up 22.86%), Housing Development & Infrastructure (up 7.40%) and Unitech (up 19.29%).
Auto sector pivotals that gained this week are, Maruti Suzuki (up 10.80%), Mahindra & Mahindra (up 13.56%), and Tata Motors (up 10.77%).
The Q3 December 2008 result season has come to an end. So far, aggregate results of 1548 companies showed a 22% decline in net profit on a 14.3% increase in net sales in the quarter ended December 2008 over the quarter ended December 2007.
FII outflow in January 2009 totaled Rs 4245.30 crore (till 29 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.
Sensex settles above 9,400 level; Spice Communications spurts
Fresh build-up of derivative positions on day one of February 2009 series propelled key benchmark indices after a shaky start. Derivative contracts for January 2009 series expired yesterday, 29 January 2009 with healthy rollovers. Shares from oil & gas, metal and realty sectors were in forefront of the rally. The BSE 30-share Sensex surged 187.96 points, or 2.04%. Spice Communications was the start of the day's trading session, galloping over 80% on high volumes.
Weak global cues on the back of poor global economic economic data and recent selling by the foreign institutional investors had triggered a subdued start. Indices recovered thereafter as index pivotals staged a rebound to the positive zone in early afternoon trade. Firm European indices and data showing the Dow could rise 35 points at the opening bell triggered a solid rally in late trade.
Futures & options contracts for January 2009 series expired on Thursday, 29 January 2009. Rollover of positions was more or less in line with that in the previous series. As per reports, rollover of Nifty positions from January 2009 series to February 2009 series was 66%, from 66.50% during previous series. Marketwide rollover of positions was 75%, from 76% earlier.
European shares led by pharma stocks, and ahead of unemployment figures out of Europe and GDP data from the United States. Key benchmark indices in France, UK and Germany were up by between 0.51% to 0.69%.
Asian markets though in the red, recovered from early lows, today 30 January 2009. Record crash in Japanese production and lower profit forecasts fueled anxiety among investors that the global recession is expanding in early trade. Key benchmark indices in Japan, Singapore and South Korea fell by between 0.38% to 3.12%. However, Hong Kong's Hang Seng rose 0.94%.
US stocks slumped on Thursday, 29 January 2009, after weaker than expected jobless claims, new home sales and manufactured goods` orders and amid concerns over company earnings. The Dow Jones industrial average declined 226.44 points, or 2.70%, to end at 8,149.01. The Standard & Poor`s 500 index slipped 28.95 points, or 3.31%, to settle at 845. The Nasdaq Composite index fell 50.50 points, or 3.24%, to 1,507.84.
US initial jobless claims surged to a record, rising by 3,000 last week to 588,000. Also the US Durable-goods orders edged lower for the fifth consecutive month; declining 2.6% in December 2008. US new-home sales fell to an all-time low; tumbling 14.7% to 331,000 annual rate, the slowest pace on record. Japan's factory output slumped 9.6% in December 2009.
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 4508.80 crore (till 28 January 2009).
The BSE 30-share Sensex was up 187.96 points, or 2.04%, to 9,424.24. At the day's high of 9,438.31 the Sensex gained 202.03 points in late trade. The Sensex fell 148.92 points at the day's low of 9,087.36 in early trade.
The S&P CNX Nifty rose 50.85 points, or 1.8%, to 2,874.80.
The BSE clocked a turnover of Rs 3,589 crore today lower compared to a turnover of Rs 3,825 crore on Thursday, 29 January 2009.
Nifty February 2009 futures were at 2871, at a discount of 3.80 points as compared to the spot closing of 2874.80. Turnover in NSE's futures & options (F&O) segment was Rs 34,242.93 crore much lower than Rs 51,659.61 crore on Thursday, 29 January 2009.
Sectoral indices on BSE displayed mixed trend. The BSE Realty index (up 4.32%), the BSE Metal index (up 4.05%), the BSE Oil & Gas index (up 3.58%), outperformed the Sensex.
The BSE FMCG index (up 2.04%) matched the performance of Sensex.
The BSE HealthCare index (down 0.5%), the BSE Power index (up 0.22%), the BSE IT index (up 0.34%), the BSE Teck index (up 0.92%), the BSE Consumer Durables index (up 0.96%), the BSE Auto index (up 1.09%), the BSE PSU index (up 1.27%), the BSE Capital Goods index (up 1.76%), the BSE Bankex (up 1.99%), underperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive on BSE with 1,382 shares advancing as compared with 1,029 that declined. 64 shares remained unchanged. The breadth was weak in early trade.
Among the 30-share Sensex pack, 25 advanced while the rest slipped.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 4.51% to Rs 1,325.20 boosted by reports the Bombay High Court has in its interim order lifted stay on sale of RIL gas till the final order. Further the High Court added the gas has be sold at $4.2 mmbtu as per government utilisation, triggering a solid spurt in the stock from early low of Rs 1242.05.
Shares of other two firms involved in the gas tussle saw mixed trend. RNRL rose 4.58% whereas NTPC slipped 0.24%
India's largest oil exploration firm by revenue ONGC jumped 2.98%.
Oil was steady under $42 a barrel on Friday, after falling nearly 2% overnight, weighed down by another round of grim U.S. economic data reflecting faltering demand in the world's top energy consumer. U.S. crude was up 27 cents a barrel at $41.71, off an intraday low of $41.31 today.
FMCG stocks, rose on defensive buying. Nestle India, Britannia Industries, Hindustan Unilever, ITC, Dabur India, United Spirits rose by between 1.81% to 12.62%.
Rate sensitive realty stocks rose on hopes lower rates will spur housing demand. DLF, Indiabulls Real Estate, HDIL, Unitech fell by between 3.04% to 7.39%.
Metal stocks rose. Jindal Steel, Tata Steel, SAIL, Hindusten Zinc and Sterlite Industries rose by between 0.74% to 6.51%. Hindalco Industries rose 6.51% after its net profit remained flat in Q3 December 2008 over Q3 December 2007.
Banking stocks rose as fears of rising defaults in a weakening economy and on fall in American Depository Receipts (ADRs) offset hopes a further fall in interest rates may boost lending growth. India's second largest private sector bank by net profit HDFC Bank rose 0.31% even as its American depository receipt (ADR) fell 6.15% on Thursday, 29 January 2009.
India's largest bank in terms of assets and branch network State Bank of India rose 5.05%. 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 1.93% even as its ADR fell 6.3% 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 0.46%.
Punjab National Bank rose 2.59% after its net profit nearly doubled in Q3 December 2008.
IT stocks rose. India's third largest software services exporter, Wipro rose 2.01% even as its American depository receipt (ADR) fell 4.37% on Thursday, 29 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 slipped 0.32% as its ADR fell 2.07% overnight.
While, India's fifth largest IT exporter by sales HCL Technologies rose 5.41% .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 0.58%.
India's largest engineering and construction firm, Larsen & Toubro rose 4.38% after its quarterly net profit more than trebled, boosted by a one-time gain. The profit included an extraordinary gain of Rs 916 crore from sale ready-mix concrete business.
India's largest electric equipment maker by sales Bharat Heavy Electricals slumped 2.6%. Its net profit rose 2.4% to Rs 790.56 crore on a 21.3% increase in sales to Rs 6022.25 crore in Q3 December 2008 over Q3 December 2007.The company announced the result after the market hours on yesterday.
Auto shares were mixed on hopes lower interest rates and fall in fuel prices would spur demand for vehicles which is mainly driven by finance. Maruti Suzuki India and M&M rose by between 1.61% to 4.81%.
India's largest commercial vehicle maker by sales Tata Motors fell 0.6% ahead of its Q3 December 2008 result today.
India's largest pharma company by market capitalization Sun Pharmaceuticals Industries slumped 6.1% ahead of its Q3 December 2008 result today.
Spice Communications surged 81.21% to Rs 47.74 on high volumes of 90.23 lakh shares.
Balrampur Chini rose 9.02% after it reported a net profit of Rs 51.29 crore in Q1 December 2008 compared to a net loss of Rs 0.06 crore in Q1 December 2007.
Adani Enterprises fell 1.56% after its net profit fell 54% in Q3 December 2008 over Q3 December 2007.
Ceat rose 2.83% on reports it will post a profit in the Jan-March 2009 period after three consecutive quarters of losses as input prices soften.
Satyam Computer Services clocked the highest volume of 3.73 crore shares on BSE. Unitech (2.24 crore shares), Suzlon Energy (1.83 crore shares), Reliance Natural Resources (1.39 crore shares) and Jaiprakash Associates (1.11 crore shares) were the other volume toppers in that order.
Reliance Industries clocked the highest turnover of Rs 290.75 crore on BSE. United Spirits (Rs 193.49 crore), Satyam Computer Services (Rs 192.41 crore), Reliance Infrastructure (Rs 144.99 crore) and State Bank of India (Rs 130.91 crore) were the other turnover toppers in that order.
Pre Session Commentary - Jan 30 2009
Today domestic markets are likely to open negative as the US markets closed in negative yesterday and the Asian markets have also opened with a blood bath. The inflation numbers were worse than expected as it recorded at 5.64%. The government on the other hand has softened the FDI ceilings to encourage more foreign capital inflow. However apart from also such news, the markets sentiments are weak and therefore one could see extreme volatility in the today’s trade.
On Thursday, the markets ended negative after a choppy trade. Despite the other Asian markets closing at green, the domestic markets could not sustain the firmness and selling pressure emanated after the inflation numbers for the week ended Jan 17 grew up to 5.64% as against 5.60% in the week earlier. The markets pared off the early gains of the morning session and stocks at broader were thrashed. Sectors like Realty, CG and Power closed with losses of 2.77%, 2.01% and 1.27% respectively. Sectors like Auto, IT, Metal and Bankex sustained their firmness and managed to close up by 1.34%, 1.04%, 0.44% and 0.30% respectively. Mid caps and Small caps also fell by 0.39% and 0.05% respectively. During the session we expect the markets to be trading volatile with negative bias.
The BSE Sensex closed low by 21.19 points at 9,236.28 and NSE Nifty lost by 25.55 points at 2,823.95 The BSE Mid Caps and Small Caps ended with losses of 11.36 points and 1.57 points at 2,903.44 and 3,303.41 respectively. The BSE Sensex touched intraday high of 9,379.68 and intraday low of 9,164.96.
The US markets on Thursday closed in red after four days of gain as US new-home sales fell to all-time low. There was mixed earning announcements from the corporate houses and the investors booked profits to escape any uncertainty. New-home sales tumbled 14.7% and initial jobless claims rose by 3000 to 5.88 lakh. Further many investors would be waiting for tomorrow estimate about the prospects of fourth Quarter GDP. There are estimates that the annual decline in GDP numbers would be a drastic 5.5%. Crude oil futures for the month of Mach delivery fell $0.72 to $41.44 per barrel on New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed lower by 226 points at 8,149. NASDAQ index lost 50.50 points at 1,508 and the S&P 500 (SPX) tumbled 29 points at 845.
Indian ADRs ended down. In technology sector, Satyam ended down by 9.57% along with Wipro by 4.37%. Further Patni Computers ended with decrease of 2.49% and Infosys closed lower by 2.07%. In banking sector ICICI Bank and HDFC Bank dropped by 6.30% and 6.15% respectively. In telecommunication sector, Tata Communication and MTNL lost 3.51% and 2.03% respectively. Sterlite Industries decreased by 4.41%.
Today major stock markets in Asia have opened negative. Japan''s Nikkei slipped 276.19 points at 7,975.05 along with Hong Kong''s Hang Seng that plunged 157.71 points at 12,996.72.. South Korea''s Seoul Composite is down by 5.99 points at 1,160.57 and Singapore''s Strait Times dropped by 21.99 at 1,160.57.
The FIIs on Thursday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 1,588.80 Crore and gross debt purchased stood at Rs 652.50 Crore, while the gross equity sold stood at Rs 1,563.60 Crore and gross debt sold stood at Rs 650.50 Crore. Therefore, the net investment of equity and debt reported were Rs 25.20 Crore and Rs 2.10 Crore respectively.
On Thursday, Indian Rupee closed at 48.98/99 per dollar, 0.1% weaker as compared to Wednesday’s close at 48.93/94. The rupee fell as domestic stocks market tumbled thus raising concerns of foreign capital outflow.
On BSE, total number of shares traded were 38.49 Crore and total turnover stood at Rs 3,825.19 Crore. On NSE, total number of shares traded were 90.82 Crore and total turnover was Rs 11,620.64 Crore.
Top traded volumes on NSE Nifty – Unitech with 106472291 shares, Suzlon Energy with 42165980 shares, DLF with 15631527 shares, SAIL with total volume traded 13335215 shares followed by NTPC with 12174912 shares.
On NSE Future and Options, total number of contracts traded in index futures was 1044891 with a total turnover of Rs 13,935.58 Crore. Along with this total number of contracts traded in stock futures were 1758450 with a total turnover of Rs 16,609.28 Crore. Total numbers of contracts for index options were 1384858 with a total turnover of Rs 19,866.25 Crore and total numbers of contracts for stock options were 147315 and notional turnover was Rs 1,248.50 Crore.
Today, Nifty would have a support at 2,755 and resistance at 2,838 and BSE Sensex has support at 9,029 and resistance at 9,278.
Market seen opening lower on global cues
Weak global markets on the back of poor economic data may take its toll on key benchmark indices in opening trade. High volatility may not be ruled out either. However buying from domestic institutional investors may cushion sharp fall.
Asian markets were trading
lower today, 30 January 2009 as a record crash in Japanese production and lower profit forecasts fueled anxiety among investors that the global recession is expanding. Hong Kong's Hang Seng plunged 1.20% or 157.71 points at 12,996.72, Japan's Nikkei slipped 3.35% or 276.19 points at 7,975.05, Singapore's Straits Times declined 1.24% or 21.99 points at 1,744.73 and South Korea's Seoul Composite was down 0.51% or 5.99 points at 1,160.57.
US stocks slumped on Thursday, 29 January 2009, after weaker than expected jobless claims, new home sales and manufactured goods` orders and amid concerns over company earnings. The Dow Jones industrial average declined 226.44 points, or 2.70%, to end at 8,149.01. The Standard & Poor`s 500 index slipped 28.95 points, or 3.31%, to settle at 845. The Nasdaq Composite index fell 50.50 points, or 3.24%, to 1,507.84.
Poor economic data took its toll on global markets. US initial jobless claims surged to a record, rising by 3,000 last week to 588,000. Also the US Durable-goods orders edged lower for the fifth consecutive month; declining 2.6% in December 2008. US new-home sales fell to an all-time low; tumbling 14.7% to 331,000 annual rate, the slowest pace on record. Japan's factory output slumped 9.6% in December 2009.
Back home, Sun Pharmaceuticals, Titan Industries, Mundra Port & Special Economic Zone, Colgate Palmolive India among others will declare their December 2008 quarterly results today, 30 January 2009. Meanwhile, aggregate results of 1415 companies showed 26.90% fall in net profit on 14.60% increase in sales in Q3 December 2008 over Q3 December 2007. 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.
Volatility was high as futures & options contracts for January 2009 series expired on Thursday, 29 January 2009. Rollover of positions was more or less in line with that in the previous series. As per reports, rollover of Nifty positions from January 2009 series to February 2009 series was 66%, from 66.50% during previous series. Marketwide rollover of positions was 75%, from 76% earlier.
Key benchmark indices ended slightly lower on Thursday, 29 January 2009 snapping two-day gains, in what was a highly volatile trade. The BSE 30-share Sensex was down 21.19 points, or 0.23%, to 9,236.28 and the S&P CNX Nifty fell 25.55 points, or 0.9%, to 2,823.95, on that day.
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 4508.80 crore (till 28 January 2009).
According to provisional data on NSE, FIIs were net sellers worth Rs 84.64 crore while mutual funds bought shares worth Rs 580.11 crore on Thursday, 29 January 2009.
Market may open negative
The market is likely to remain under pressure after a sharp fall in the US market and weakness among major Asian indices in the ongoing trades. However, FIIs remaining net sellers in equities for last couple of sessions may drag the Sensex negative. Among the domestic indices, the Nifty could test higher levels of 2860 and may dip to 2790 - 2760 levels on the downside. The Sensex has a likely support at 9050 and may face resistance at 9350.
US indices fell sharply on Thursday, with the Dow Jones lost nearly 226 points on the back of dire news on earnings, housing and employment. The Dow tumbled 226 points to close at 8149, the Nasdaq also ended weak with a loss of 51 points at 1508.
All the Indian ADRs had a weak outing on Thursday. Satyam was the major loser amongst the ADRs and declined 9.57% followed by ICICI Bank & HDFC Bank which tumbled over 6% each, while Tata Motors, Wipro, Patni Computer, Dr Reddy, Infosys, MTNL and VSNL shed around 2-4% each.
Crude oil prices moved down, while the Nymex light crude oil for March series went down by 72 cents at $41.44 a barrel. In the commodity segment, the Comex gold shot up by $16.50 to settle at $906.50 an ounce.
Bullion metals shine
Weak economic reports act as the catalyst
Dour and weak economic reports pushed gold prices higher on Thursday, 29 January, 2009. Gold prices also rose as it increased the appeal of the metal as a safe haven against alternate investment. Gold rose despite the strong dollar.
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 Thursday, Comex Gold for February delivery rose $16.9 (1.9%) to close at $905.1 an ounce on the New York Mercantile Exchange. Last week, gold prices ended higher by 6.7%. This year gold has gained 3.1% till date. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (14%) since then.
On Thursday, Comex silver futures for March delivery rose 38.2 cents (1.5%) to end at $12.145 an ounce. For 2008, silver had lost 24%.
At the currency market on Wednesday, the dollar index, which tracks the dollar against a trade-weighted basket of six major currencies, continued to rise. The dollar index rose 0.3% today.
Among major economic reports for the day, there were quite a few of them. The durable goods order, initial jobless claims data and December new home sales data – all checked in below expectation.
Initial jobless claims for the week ended Jan. 24 increased modestly to 588,000, which is a bit above the consensus estimate of 575,000 claims. Continuing claims climbed to 4.78 million. That is the highest level of continuing claims dating back to four decades.
December durable goods orders declined 2.6%. That was the fifth straight monthly decline reflecting an ongoing pullback in business investment. The drop was more than expected. Excluding transportation, orders were down 3.6%.
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 252 (1.8%) at Rs 14,146 per 10 grams. Prices rose to a high of Rs 14,172 per 10 grams and fell to a low of Rs 13,753 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 238 (1.2%) higher at Rs 19,508/Kg. Prices opened at Rs 19,182/kg and rose to a high of Rs 19,580/Kg during the day's trading.
Crude drops
Demand concerns weigh on crude prices
Crude prices ended lower on Thursday, 29 January, 2009 as a set of weak economic data hinted towards lower energy demand in the coming months. Prices also went lower after yesterday's weekly inventory report showed build up in crude inventories for fifth straight week.
On Thursday, crude-oil futures for light sweet crude for March delivery closed at $43.6/barrel (lower by $0.72 or 1.7%) on the New York Mercantile Exchange. Last week, crude prices ended higher by 9%. Prices had reached a low of $40.18 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 15.7%. On a yearly basis, crude prices are lower by 55%.
Among major economic reports for the day, there were quite a few of them. The durable goods order, initial jobless claims data and December new home sales data – all checked in below expectation.
Initial jobless claims for the week ended Jan. 24 increased modestly to 588,000, which is a bit above the consensus estimate of 575,000 claims. Continuing claims climbed to 4.78 million. That is the highest level of continuing claims dating back to four decades.
December durable goods orders declined 2.6%. That was the fifth straight monthly decline reflecting an ongoing pullback in business investment. The drop was more than expected. Excluding transportation, orders were down 3.6%.
The Energy department had reported yesterday that U.S. crude stockpiles jumped 6.2 million barrels last week to reach 338.9 million barrels. That's the highest level the EIA has reported since August 2007. U.S. refineries operated at 82.5% of their operable capacity last week, down from the 83.3% a week ago. EIA had also reported that gasoline inventories fell 100,000 barrels, and distillate fuel stockpiles, which include heating oil and diesel, dropped 1 million barrels last week.
Against this background, March reformulated gasoline rose 4% to $1.2309 a gallon, and March heating oil rose 0.5% to $1.4283 a gallon.
March natural gas rose 3.5% to $4.576 per million British thermal units. EIA reported today that U.S. natural-gas inventories fell 186 billion cubic feet in the week ended 23 January, 2009. Gas in storage was higher by 34 billion cubic feet than at this time last year and by 29 billion cubic feet compared to the five-year average.
At the MCX, crude oil for February delivery closed at Rs 2,034/barrel, lower by Rs 16 (0.8%) against previous day's close. Natural gas for February delivery closed at Rs 218.6/mmbtu, higher by Rs 2.4/mmbtu (1.1%).
Daily Trading Calls - Jan 30 2009
Nifty (2824) Sup 2780 Res 2870
Sell BHEL (1358) SL 1375
Target 1330, 1320
Sell Ranbaxy (211) SL 216
Target 203, 200
Buy ACC (501-505) SL 496
Target 513, 517
Sell Reliance Capital (399) SL 405 Target 390, 388
Sell DLF (164) SL 168
Target 156, 153
Daily News Roundup - Jan 30 2009
Spice Group keen to acquire 51% stake in Satyam (BL)
L&T has appointed Mr Jagjeet Bindra, President of Chevron Global Manufacturing, on its Board as independent non-executive director (BL)
TCS is leading the race for Sony’s US$100mn outsourcing deal. (ET)
Tata Steel has signed a deal with Marcegaglia and South Korea’s Dongkuk to sell majority stake in Teesside Casts Products business. (ET)
Crisil downgrades its ratings on DLF’s debt and bank facilities to negative. (FE)
Tata Motors has won a Rs22bn order from Delhi Transport Corporation. (ET)
HCL Tech enters into multi-year, multi-regional, end-to-end global helpdesk and desktop management outsourcing services agreement with Nokia (BL)
GAIL to raise US$134mn from US agency next fiscal to part its capex of Rs55bn. (ET)
An acute shortage of coal may force NTPC to shut down some units temporarily. (ET)
Satyam Computer is likely to get a new owner in 2 months. (ET)
Unitech Wireless is all set to sign the infrastructure sharing agreement with Tata Teleservices’ tower arm WTTIL. (FE)
L&T seeks management control of Satyam (BS)
Aditya Birla Telecom Ltd, a wholly owned subsidiary of Idea Cellular has scaled down its US$640mn deal with US-based private equity major, Providence Equity Partners. (BS)
Israel’s Supreme Court directs Sun Pharma and Taro Pharma to renegotiate takeover dispute between the two companies. (BS)
The fuel price revision is likely to wipe out the Rs11bn net revenue earned by IOC, BPCL and HPCL in the last one month. (BS)
MTNL to offer 3G services from February 5th, 2009 (BL)
Non fuel on credit for Kingfisher Airlines from oil companies (BL)
Bharat Forge and Areva sign an MoU to build a manufacturing facility for heavy forgings in India (BL)
CavinKare ties-up with Coty to market Adidas range of personal care products (BL)
Bharati Shipyard’s promoters had placed around 5.45% stake in the company as collateral with SBI against the working capital requirements of the company. (BS)
Shoppers Stop exits catalogue retailing through Argos (BL)
Kalpataru Power wins an order worth US$250mn for building transmission lines in Kuwait. (ET)
Dena Bank seeks Rs5bn from the government to bolster its capital base. (BS)
Fortis Healthcare buys 29% stake in Mauritian hospital for US$3.5mn. (ET)
Inflation for week-ended January 17th rises marginally to 5.64% against 5.6% in the preceding week (BL)
Moody’s has changed the fundamental credit outlook for the Indian banking system to negative from stable. (FE)
The government has proposed to do away with the ceiling on portfolio investments by FII and instead prescribe a composite foreign investment cap. (ET)
Rail freight on foodgrains to increase by 8% (BL)
Wheat support price hiked to Rs1080/quintal (BL)
NCAER cuts GDP forecast to 6.7% for the current fiscal, down from 7.6% estimated earlier. (ET)
Government defers decision to change sugar import norms. (ET)
Government clears infra projects worth Rs340bn. (BS)
CCEA gave its nod for the upwards revised cost and concession periods of nine stretches of national highways (BL)
Economy to grow at 7% in 2008-09, says Mr.Pranab Mukherjee, Union External Affairs Minister (BL)
Centre relaxes fiscal deficit target and borrowing ceilings for states (BL)
The pull remains!
Beware the pull on your heartstrings -- it's often the purse strings that are actually being reached for.
Don’t push in your money as yet. A month has already passed in 2009 and the key indices are down 3.5% in the Jan series. The Feb. futures are trading at a steep discount. F&O data confirms the widely held view that the two-day rally was led by short-covering. Though local funds are trying their best to lend their hand in keeping sentiment better, lack of buying from FIIs continues to play spoilsport. For FIIs to make a beeline for Indian stocks again, risk aversion needs to subside. This can only happen when the global economy bounces back from the current slump. When this will happen is anybody’s guess. But nobody’s guessing as yet.
In a nutshell, there are still a lot of uncertainties for the market to start rising on a sustainable basis. The latest earnings season, both locally and globally, has been bad, and things could get uglier going forward. Though short-term bear market spurts are not completely ruled out, trade carefully, as these are choppy times. Today, we see the market extending Thursday’s fall at start. Thereafter, the key indices may turn rangebound and sideways.
Key Results Today: Aban Offshore, Adani Enterprises, Adlabs, Alok Industries, Amtek Auto, Amtek India, Ansal Infra, Apollo Hospitals, Asian Hotels, Aurobindo Pharma, Balrampur Chini, BEML, BF Utilities, Bharati Shipyard, Bombay Dyeing, CEAT, Colgate Palmolive, Deccan Chronicle, Dredging Corp., DS Kulkarni, Essar Shipping, Finolex Industries, GHCL, Gillette India, GNFC, Gujarat Industries Power, Hindalco, IFCI, Indiabulls Real Estate, IOC, IOB, Indraprastha Gas, IVRCL Infra, Jain Irrigation, Kalpataru Power, KEC International, Lanco Infra, L&T, MTNL, Maharashtra Seamless, Moser Baer, Mundra Port, National Fertilizers, OBC, Patel Engineering, Pfizer India, PNB, PVR, Renuka Sugars, Siemens, SRF, Sun Pharma, Tata Motors, Tata Tea, Titan, Trent and Welspun Gujarat.
FIIs were net sellers in the cash segment on Thursday at Rs846.4mn (provisional) while the local institutions pumped in Rs5.8bn. In the F&O segment, the foreign funds were net buyers at Rs10.69bn. On Wednesday, FIIs were net buyers at Rs252mn in the cash segment.
US stocks tumbled on Thursday, with the Nasdaq and S&P 500 snapping a four-day winning streak, following more dire news on earnings, housing and employment.
Friday's big news of note is the advanced reading on fourth-quarter GDP, which is expected to have plunged 5.4% from a year ago, making the quarter the worst in over 26 years.
In addition to GDP, Friday brings a report on manufacturing in the Midwest region along with the University of Michigan's consumer sentiment index. Both are expected to roughly hold steady from the previous month.
Dow components Honeywell and P&G are expected to report higher quarterly earnings Friday morning. Oil companies Chevron and Exxon Mobil, a Dow component, are both expected to report weaker quarterly earnings Friday morning.
The Dow Jones Industrial Average slid 226 points, or 2.7%, to end at 8,149.01. The Standard & Poor's 500 index lost 29 points, or 3.3%, to 845.14. The Nasdaq Composite index shed 50 points or 3.2%, to 1,507.84.
US stocks had rallied through the first week of the year, plunged 14% through late last week and then managed to bounce back for a few sessions.
The recent advance was predicated on optimism about the government's plan to set up a "bad bank" to take toxic assets off bank balance sheets and hopes that President Obama's massive economic stimulus plan would help.
But enthusiasm about the bad bank waned, sending financial stocks tumbling on Thursday. In this economic environment, it is going to be hard to sustain any advance for more than a few days.
Investors put money back into stock mutual funds over the past week, after withdrawing money in the previous week. For the week ended Jan. 28, investors poured $6.5 billion into stock funds, according to investment-research firm Trim Tabs. In the previous week, investors pulled $138 million out of funds.
After the close, online retailer Amazon.com reported quarterly sales and earnings that topped analysts' forecasts. Shares gained 13% in extended-hours trading and were likely to drive technology gains on Friday.
New home sales plunged in December to the lowest level since record-keeping began in 1963. Sales fell to a seasonally adjusted annual unit rate of 331,000 in the month, down 14.7% from November and short of forecasts.
Weekly jobless claims rose to 588,000 last week, the government reported, while the number of Americans drawing benefits for a week or longer rose to the highest level on record.
A third government report showed new orders for durable goods fell 2.6% in December, falling for the fifth straight month.
Ford Motor said it lost $5.9 billion in the fourth quarter and $14.6 billion for the full year. However, the company again said it does not need the federal bailout that's already been taken by rivals General Motors (GM) and Chrysler. Ford's credit unit said it was cutting 1,200 jobs or 20% of its staff.
Employers announced thousands of job cuts each day this week, including potentially more than 13,000 on Thursday. Companies impacted include Eastman Kodak, Charles Schwab and AstraZeneca.
Late on Wednesday, Starbucks reported quarterly sales and earnings that were short of forecasts and said that it could cut up to 6,700 jobs in 2009.
Dow component 3M reported weaker quarterly earnings that nonetheless topped forecasts, and warned that 2009 earnings won't meet its earlier forecast. The stock gained 2%. It was one of only three of the Dow 30 that ended the session higher.
Dow component AT&T stumbled 4.6% one day after it reported lower quarterly earnings and higher revenue, both of which missed forecasts.
Treasury prices tumbled, raising the yield on the benchmark 10-year note to 2.86% from 2.66% 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 held steady. The 3-month Libor rate held steady at 1.17%, unchanged from Wednesday. Overnight Libor was also unchanged at 0.22%. Libor is a bank-to-bank lending rate.
US light crude oil for March delivery fell 72 cents to settle at $41.44 a barrel on the New York Mercantile Exchange. Gasoline prices rose one-tenth of a cent to a national average of $1.843 a gallon.
The dollar gained versus the euro and fell against the yen. COMEX gold for April delivery rose $16.50 to settle at $906.50 an ounce.
European shares fell sharply, breaking a three-session winning streak, with banks and airlines among the heaviest-hit stocks. The pan-European Dow Jones Stoxx 600 index fell 1.8% to 190.79. The Stoxx 600 index had rallied 6.5% over the previous three sessions.
The UK's FTSE 100 index closed down 2.5% at 4,190.11, while the French CAC 40 index fell 2.2% to 3,009.75 and Germany's DAX 30 index lost 2% at 4,428.11.
Markets snapped a two day rally as bulls took a breather on Thursday. After a strong start to the session, key indices were unable to hold on to their gains on the back of a rise in the inflation and weak cues from the European markets. The realty, power and capital goods stocks witnessed offloading. The second rung stocks were also under pressure. The BSE benchmark Sensex marginally slipped 21 points to close at 9,236 and the Nifty slipped 25 points to close at 2,823.
Among the 30-components of Sensex, 14 stocks ended in the green and 16 stocks ended in the negative terrain. Among the major gainers in the Sensex were Infosys, HDFC, Maruti and Tata steel. Bharti, BHEL, L&T and Reliance Industries were among the major laggards.
Shares of surged by over 4.5% to Rs544. The company announced its Q3 results with a 54% drop in its net profit to Rs2.13bn as compared to Rs4.67bn and income from operations at Rs46.26bn.
The scrip touched an intra-day high of Rs553 and a low of Rs521 and has recorded volumes of over 7,00,000 shares on BSE.
Unitech announced that it would raise Rs50.bn via GDR assuming share price of Rs36.78/share,
The stock recovered sharply from its days low and ended at Rs31.2 up by over 1.5%. The had hit an intra-day high of Rs33 and a low of Rs28 and recorded volumes of over 3,00,00,000 shares on BSE.
Suzlon Energy clarified that the company or its subsidiaries had not planned to embark upon any such investment.
The company clarified for the news regarding investment by Suzlon to an extent of Rs500bn in Steel projects. The stock ended down 3% to Rs44.6 hitting an intra-day high of Rs48.3 and a low of Rs43.8 and recorded volumes of over 1,00,00,000 shares on BSE.
Shares of Satyam Computers plunged by over 10% to Rs49.8 after 27mn equity shares of the company changed hands on the NSE. Almost 4% of the company’s equity was traded in a huge block.
Fresh month contracts in Satyam will not be introduced for the expiry month April 2009 on the expiration of January 2009 contracts.
All existing Satyam contracts (with expiry dates Feb 26,'09 and March 26, '09) will expire on January 29, 2009. No F&O contracts will be available in the SATYAMCOMP for trading from January 30, 2009 onwards. The stock will however, continue to trade in the cash segment.
The scrip touched an intra-day high of Rs60 and a low of Rs44 and recorded volumes of over 9,00,00,000 shares on BSE.
Bharat Forge and AREVA signed MoU to set up a Joint Venture to build a manufacturing facility for heavy forgings in India.
Bharat Forge and AREVA are presently evaluating various locations in the Country to set up the new facility. The plant is expected to become operational by 2012. The JV will have a state-of-the-art 14,000 Ton open die forging press with associated equipment and an integrated steel making facility."
Bharat Forge surged by over 7% to close at Rs85. The stock hit an intra-day high of Rs88.3 and a low of Rs80 and recorded volumes of over 2,00,000 shares on BSE.
Biocon
We recommend a ‘sell’ in Biocon for a short-term trading perspective. It is visible from the charts of Biocon that after finding support at its 52-week low of Rs 86 in late November 2008, it began to move up. This up move continued till the stock encountered resistance at around Rs 130 in early January. The stock reversed lower resuming its long-term downtrend. During this decline Biocon breached its 21 and 50-day moving averages and started loosing momentum. On January 27, the stock tumbled 7 per cent, reinforcing the bearish trend. A short-term downtrend is in force since early January. Both the daily and weekly relative strength index (RSI) are featuring in the bearish zone. The daily moving average convergence and divergence (MACD) indicator has entered in to the negative territory. Our short-term outlook is bearish for the stock. We expect it to decline further until it hits our price target of Rs 90. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 105.
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