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Monday, February 09, 2009
Kavveri Telecom promoters pledge shares
The promoters of Bangalore-headquartered Kavveri Telecom have pledged 500,000 shares of the company with the State Bank of India. The shares have been pledged with the bank as collateral security for the credit limits sanctioned by the bank to the company, according to an official statement.
The company said SBI Bangalore had sanctioned a credit limit of Rs 60 crore in the fiscal 2007-08. The company had approached the bank for the credit limits to meet their working capital requirements. The company had to disclose the pledging of share by the promoters as per the recent Sebi guidelines.
Market regulator Sebi has asked the promoters to disclose details of pledged shares if the same exceeds 25,000 shares in a quarter or one per cent of the total shareholding or voting rights of the company, whichever is lower.
The promoters group led by Kavveri Telecom's Managing Director C Shivkumar Reddy holds nearly 15 per cent in the compa
Subex CEO pledges shares
Subex LTd, Chairman, MD and CEO, Subash Menon pledged 9.8 lakh shares with State Bank of India in April 2008 as collateral for a corporate loan issued.
Compared to 25 lakh shares held by Menon in total, the stake as pledge comes out to be more than 30 percent of his personal stake in the company.
Another company, Kivar Holdings P Ltd which has 15.2 lakh shares in Subex also pledged shares in March 2008, for corporate loan issued to the company.
Maytas Infra promoters pledge entire stake
Maytas Infra`s three promoters, including Ramalinga Raju and Rama Raju today have pledged their entire holding of 15.14% in the company, to lenders.
Ramalinga Raju has pledged his entire holding, representing 8.25% of the paid up capital of the company.
B Rama Raju has pledged his 2.52% stake in the Hyderabad-based firm.
Further, B Nandini Raju, another promoter of the company, has pledged his 4.37% holding in the troubled infrastructure firm.
Shares of the company declined Rs 2.85, or 4.97%, to settle at Rs 54.50. The total volume of shares traded was 35,282 at the BSE (Monday).
Jain Irrigation Systems pledge shares
Diverisified Jain Irrigation Systems Ltd said on Monday its promoters have pledged 3.72 million shares, or 5.1 percent of the company's equity.
It did not disclose with whom the shares had been pledged and the reasons for it.
Promoters held 23.5 million shares, or 32.4 percent of equity as of end-December, according to data on the BSE website.
Shares were up 3.27 percent at 325 rupees in a firm Mumbai market.
Resurgere Mines & Minerals Promoters pledge 12.26% stake
Resurgere Mines & Minerals India Ltd has received disclosures on pledge of shares of the Company from Promoters and Promoters Group Company. The Promoter Mr. Subhash Sharma has pledged 1,000,000 equity shares (% of Total Paid up Capital : 3.50%) with Union Bank of India, Mumbai for Credit Facility & Terms Loan.
The Promoter Mr. Subhash Sharma has pledged 600,000 equity shares (% of Total Paid up Capital : 2.10%) with ICICI Bank Ltd, Mumbai for Credit Facility & Terms Loan.
The Promoter Mrs. Neelam Sharma has Pledged 400,000 equity shares (% of Total Paid up Capital : 1.40%) with ICICI Bank Ltd, Mumbai for Credit Facility & Terms Loan.
The Promoter Group Runwell Mining Pvt Ltd has Pledged 1,500,000 equity shares (% of Total Paid up Capital : 5.26%) with Pam Glatt Pharma Tech P Ltd for Secured Loan.
The stock closed the day at Rs.54.50, up by Rs.2.55 or 4.91%. The stock hit an intraday high of Rs.54.50 and low of Rs.51.25.
The total traded quantity was 14081 compared to 2 week average of 12406.
Shasun Chemicals promoters pledge 3.23 pc stake
Pharmaceutical firm Shasun Chemicals & Drugs on Monday said its promoters have pledged 3.23 per cent stake of the company for an
undisclosed amount.
In a filing to the Bombay Stock Exchange
, the company said promoters have pledged 1,560,000 shares, representing 3.23 per cent stake, of the company.
Abhaya Kumar has pledged 9,10,000 shares, or 1.88 per cent stake, and Shusan Leasing and Finance has pledged 0.21 per cent that is 1,00,000 shares of the company.
Further, A Usha, A Mayur and A Deepak have pledged 0.23 per cent stake each or 3,30,000 shares, it added.
Similarly, Taru Mayur and S Vimal Kumar have pledged in total 2,20,000 shares, representing, 0.23 per cent stake each in the company, it said.
Cranes Software promoters pledge 27% stake
Cranes Software International today said five of its promoters have pledged 27 per cent stake in the company with lenders.
In a disclosure to the Bombay Stock Exchange, the software solutions provider said one of its promoters, Asif Khader, has pledged 1.04 crore shares and another promoter Mukkaram Jan has pledged 75.50 lakh shares of the company.
Besides, K&J Holdings, Sea Equity Enterprises and Jensons Telecom have pledged 44.30 lakh, 65 lakh and 30 lakh shares, respectively in the Bangalore-based software firm.
The company said that of the entire stake pledged, 25 per cent is for obtaining credit facilities.
"The aforesaid shares, except two per cent are pledged as collateral security for credit facilities obtained by Cranes Software, to fund its acquisitions in line with its business model," it said.
As of December quarter, eight promoters held a combined 37.67 per cent stake in Cranes Software.
The disclosure follows market regulator Sebi's mandate that listed companies should disclose information about shares pledged by the promoter group.
Sebi has mandated the disclosure of the pledged share as part of their quarterly earnings from March quarter onwards.
Kamat Hotels promoters pledge 47.09% stake
Hospitality major Kamat Hotels India today said its promoters have pledged 47.09 per cent stake of the company for an undisclosed amount.
In a disclosure to the Bombay Stock Exchange, the company said that promoters have pledged 6,214,750 shares representing 47.09 per cent stake of the company.
Kamat Holdings has pledged 13,62,000 shares, representing 10.32 per cent, Indira Investments has pledged 406,250 shares, or 3.08 per cent stake, the filing added.
Further, Plaza Hotels has pledged 27,19,500 shares, representing 20.61 per cent stake, and Kamat Development has pledged 8,00,000 shares, or 6.06 per cent stake, it added.
Similarly, Venketesh Hotels has pledged 6,77,000 shares, representing 5.13 per cent, and Vithal V Kamat and Vidya V Kamat have pledged 1.89 per cent stake that is 2,50,000 shares of the company, it added.
Gujarat NRE promoters pledge 15.96 pc stake
Coking coal manufacturer Gujarat NRE Coke on Monday said five of its promoters have pledged 15.96 stake of the company for an undisclosed amount.
Five of the company's promoters have pledged 75,309,956 shares representing 15.96 per cent stake, Gujarat NRE Coke said in a filing to the National Stock Exchange.
Mangaldeep Tradelink has pledged 11,900,000 shares representing 2.52 per cent stake for security against borrowing of Gujarat NRE Coke, Marley Foods has pledged 23,069,956 shares that is 4.89 per cent stake and Prince Dealcom has pledged 1.06 per cent stake or 14,000,000 shares of the company, the filing added.
Further, Arun Kumar Jagatramka has pledged 50,00,000 shares representing 1.06 per cent stake and Vartika Traders has pledged 4.54 per cent stake or 2.13 crore shares for securing the borrowings of Vartika Traders, it added.
The disclosure of pledged shares by Gujarat NRE follows market regulator Sebi asking promoters of the listed companies to disclose the amount of shares pledged with lenders.
The regulator's announcement comes in the wake of the Satyam scam, wherein promoter Ramalinga Raju had pledged nearly all his shares -- whose prices he had inflated by falsifying profits.
Kirloskar Oil Engines promoters pledge shares
Diesel engines manufacturer Kirloskar Oil Engines today said one of its promoter Kirloskar Systems has pledged 4.55 per cent stake for an undisclosed amount.
The company informed the Bombay Stock Exchange that Kirloskar Systems has pledged 88,30,000 shares representing 4.55 per cent on the company.
Shares of Kirloskar Oil Engines closed at Rs 35.30, up 0.86 per cent on the BSE.
Tata Steel promoters pledge shares
Tata Steel today said two of its promoters -- Tata Sons and Tata Investment Corporation -- have pledged 9.89 crore shares, representing 13.53 per cent stake in the company, with lenders.
In a disclosure to the Bombay Stock Exchange, Tata Steel said its holding company Tata Sons has pledged 9.64 crore shares, representing 13.19 per cent stake, with lenders.
Besides, Tata Investment Corporation (TICL) has pledged 25 lakh shares, or 0.34 per cent, it added.
Tata Investment has pledged the shares as security for the Zero Coupon Convertible Bonds (ZCCBs) issued, which are fully convertible into equity shares of TICL.
Hence, the pledge cannot be invoked as no payment obligations arise from the issue of the ZCCBs, it added.
For the quarter ended December 2008, Tata Sons held 29.27 per cent stake in Tata Steel, while TICL held 0.43 per cent.
The total promoter holding in Tata Steel was close to 34 per cent at the end of December quarter, according to shareholder information available on BSE.
The disclosure follows market regulator Sebi's mandate that listed companies should disclose information about shares pledged by the promoter group.
Shares of Tata Steel closed at Rs 199.55, up 7.20 per cent on the BSE.
BSE Bulk Deals to Watch - Feb 9 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
9/2/2009 512253 BIO GREEN I ANIL J BHAYANI B 50000 28.75
9/2/2009 512253 BIO GREEN I NITIN DOSHI HUF S 50000 28.75
9/2/2009 533026 CHEMCEL GANDHI MANISHA NAVNEETLAL B 130000 4.50
9/2/2009 513059 G.S. AUTO SPJSTOCK S 21965 8.67
9/2/2009 530255 KAY POW PAP BAMPSL SECURITIES LTD. B 66652 6.49
9/2/2009 511728 KZLEASING PARESHBHAI MANHARBHAI ZATAKIA B 16709 34.43
9/2/2009 511688 MATHEW EASOW MATHEW EASOW FISCAL SERVICES LIMITED B 16524 5.42
9/2/2009 532837 ORBITCO OPG SECURITIES P LTD B 424201 57.41
9/2/2009 532837 ORBITCO OPG SECURITIES P LTD S 424201 57.45
9/2/2009 526588 PHOTOQUIP IN TARA J.SONI B 40000 9.89
9/2/2009 526588 PHOTOQUIP IN PIRI SYSTEM PVT.LTD. B 80000 9.90
9/2/2009 526588 PHOTOQUIP IN FOZIYAH A.CONTRACTOR S 118000 9.90
9/2/2009 517522 RAJ GLO WIR RAJRATAN INVESTMENT LTD. B 80683 34.79
9/2/2009 517522 RAJ GLO WIR SWASTIKA FIN LEASE LTD S 85683 34.69
9/2/2009 524703 SANDU PHARMA AMI STOCK SHARE BROKERS PLTD B 45000 7.95
9/2/2009 512048 SPLASH MEDIA DAZZEL CONFIDIVE LTD. B 14300 48.83
9/2/2009 532432 UNITD SPR OPG SECURITIES P LTD B 606580 673.80
9/2/2009 532432 UNITD SPR OPG SECURITIES P LTD S 606580 674.12
9/2/2009 511431 VAKRAN SOFTW MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. S.V. S 333360 22.68
9/2/2009 531950 VERTEX SECUR AMI STOCK SHARE BROKERS PLTD B 30000 8.67
9/2/2009 531249 WELL PACK PA USHADEVI SHAHRA S 150010 62.94
9/2/2009 531249 WELL PACK PA SANTOSH SHAHRA S 49990 63.93
9/2/2009 514470 WINSOME TEXT SHAILESH SOMABHAI PATEL B 33500 35.88
9/2/2009 532795 WIRE& WIRLES OPG SECURITIES P LTD B 1408464 16.34
9/2/2009 532795 WIRE& WIRLES OPG SECURITIES P LTD S 1408464 16.35
9/2/2009 522108 YUKEN INDIA POOJAMEHTANEY B 65508 40.00
9/2/2009 522108 YUKEN INDIA MATTERHORN DYNAMIC EQUITY FUND S 67868 40.11
NSE Bulk Deals to Watch - Feb 9 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
09-FEB-2009,COREPROTEC,Core Projects and Technol,SHARAD SHAH,BUY,831137,61.60,-
09-FEB-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,BUY,94600,1556.55,-
09-FEB-2009,EDUCOMP,Educomp Solutions Limited,MORGAN STANLEY MAURITIUS COMPANY LTD,BUY,89100,1533.52,-
09-FEB-2009,ORBITCORP,Orbit Corporation Limited,ASIATIC PORTFOLIO LIMITED,BUY,227434,56.74,-
09-FEB-2009,ORBITCORP,Orbit Corporation Limited,GENUINE STOCK BROKERS PVT LTD,BUY,282850,57.22,-
09-FEB-2009,ORBITCORP,Orbit Corporation Limited,R APPALA RAJU,BUY,220000,56.97,-
09-FEB-2009,WWIL,Wire and Wireless (India),AMBIT SECURITIES BROKING PVT. LTD.,BUY,1446872,16.20,-
09-FEB-2009,WWIL,Wire and Wireless (India),C D INTEGRATED SERVICES LTD,BUY,1382745,16.15,-
09-FEB-2009,COREPROTEC,Core Projects and Technol,SHARAD SHAH,SELL,3087,56.30,-
09-FEB-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,SELL,94600,1557.19,-
09-FEB-2009,EDUCOMP,Educomp Solutions Limited,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,150,1565.17,-
09-FEB-2009,ORBITCORP,Orbit Corporation Limited,ASIATIC PORTFOLIO LIMITED,SELL,227434,56.83,-
09-FEB-2009,ORBITCORP,Orbit Corporation Limited,GENUINE STOCK BROKERS PVT LTD,SELL,283111,57.25,-
09-FEB-2009,ORBITCORP,Orbit Corporation Limited,R APPALA RAJU,SELL,220000,57.19,-
09-FEB-2009,VAKRANSOFT,Vakrangee Softwares Limit,MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. SVB,SELL,204639,22.94,-
09-FEB-2009,WWIL,Wire and Wireless (India),AMBIT SECURITIES BROKING PVT. LTD.,SELL,1430366,16.23,-
09-FEB-2009,WWIL,Wire and Wireless (India),C D INTEGRATED SERVICES LTD,SELL,1382745,16.14,-
Post Session Commentary - Feb 9 2009
The Indian market today rallied sharply to close on firm note on sustained buying over the ground. Expectation from interim budget to be announced on 16th Feb, with initiatives to revive the drooping growth, supported the domestic bourses after official estimates showed that India’s economic growth is expected to slip to 6 year lower at 7.1% in fiscal 2008/09. However, some Asian markets slipped into negative on growing worries about a US rescue bank plan after its announcement was postponed.
The domestic market today opened on pleasant note backed by positive global cues as US markets ended higher on previous session and Asian markets were opened mixed. The US stock market on Friday surged on optimism over the government fiscal stimulus plan, which surpassed the worst January nonfarm payrolls data. However, investors were little cautious ahead of estimation of FY09 GDP data today. Further, benchmark indices managed to gather the momentum after a bout of profit booking and continued to gain ground on hopes from interim budget though, India’s expected economic slips to 6 year lower at 7.1%. Finally, market ended with sharp gains on huge buying during final trading hours. BSE Sensex breached 9,500 mark and NSE Nifty closed above 2,900 level. From the sectoral front, investors on-loaded their positions across the indices. Among those, Metal, Consumer Durable, Capital Goods, Oil & Gas, Bank, Power, PSU and Reality stocks witnessed most of the buying from these baskets. Midcap and Smallcap stocks also gained ground during the trading session.
Among the Sensex pack 29 stocks ended in green territory and 1 in red. The market breadth indicating the overall health of the market remained strong as 1562 stocks closed in green while 910 stocks closed in red and 83 stocks remained unchanged in BSE.
The BSE Sensex closed higher by 283.03 points at 9,583.89 and NSE Nifty ended up by 76.8 points at 2,919.9. Broader market indices were strong as BSE Mid Caps and Small Caps ended with gains of 49.15 points and 53.47 points at 2,931.95 and 3,332.71 respectively. The BSE Sensex touched intraday high of 9,601.56 and intraday low of 9,329.23.
Gainers from the BSE Sensex pack are JP Associates (8.48%), Tata steel (7.20%), Reliance Infra (6.81%), Sterlite Industries (6.21%), ONGC Ltd (5.95%), ONGC Ltd (5.59%), HDFC (5.55%), ICICI Bank (5.17%) and Hindalco (3.97%).
Only loser from the BSE Sensex is HUL (0.27%).
The Congress led union government will reveal an interim railway budget on 13th February 2009 followed by a mini general budget on 16th February 2009, ahead of national elections due by May 2009. A full budget for 2009-2010 will come only after a new government takes over. Foreign Minister Pranab Mukherjee, who is also responsible for finance and will present the mini budget, said on Friday, the government would take measures to boost growth, especially in sectors where jobs are at stake.
The Central Statistical Organization (CSO) on 9 February 2009 said that the India''s projected GDP growth for the year ending March 2009 observed at 7.1%, the slowest in six years and below the previous year''s 9%. The CSO said manufacturing output growth was estimated at an annual 4.1%, half of the expansion in 2007/08 while farm output is seen at annual 2.6%, much lower than 14.9% growth in last year. Along with this, the construction growth seen at 6.5% as against 10.1% of previous year and mining growth at 4.7% as against 3.3% a year ago.
On the global markets front, the Asian markets ended mixed and most markets in Asia gave up some of their gains by the afternoon after the postponement of a US bank rescue plan offset optimism spurred by a massive US stimulus package to bolster the economy. Shanghai Composite index Hang Seng closed higher by 43.48 and 114.02 points at 2,224.71 and 13,769.06 respectively. However, Nikkei 225, Straits Times and Seoul Composite index ended down by 107.59, 33.01 and 7.57 points at 7,969.03, 1,682.34 and 1,202.69 respectively.
European markets which opened after the Indian market are trading mixed as investors are waiting the approval of Washington''s massive stimulus plan and bank rescue package. FTSE 100 is trading higher by 37.18 points at 4,266.11 and the DAX index is trading down by 11.37 points at 4,633.26.
The BSE Metal stocks out performed the benchmark indices as ended up by (4.41%) or 225.41 points at 5,327.88 as copper surged more than 8% on the London Metal Exchange on 6th January 2009 on hopes for an economic recovery in China. Scrips that gained are NMDC Ltd (8.14%), Welspan Gujarat SR (7.33%), Tata Steel (7.20%), Gujarat NRE C (6.83%), JSW Steel (6.60%) and Sterlite Industries (6.21%).
The BSE Consumer Durables index ended higher by (3.69%) or 59.70 points to close at 1,679.49. Gitanjali GE (11.45%), Titan Ind (5.40%), Rajesh Export (3.53%), Videocon Ind (0.81%) and Blue Star L (0.41%) ended in positive territory.
The BSE Capital Goods index closed with increase of (3.59%) or 217.58 points at 6,286.98. Scrips that gained are Alstom Proje (12.83%), BEML Ltd (7.82%), Punj Lloyd (6.81%), L&T Ltd (5.59%), Praj Indus (4.58%) and Cromton Greaves (3.34%).
The BSE Oil & Gas index ended higher by (3.37%) or 213.61 points at 6,547.47. Main gainers are ONGC Ltd (5.95%), Reliance Pet (3.59%), Aban offshore (3.41%), Aban Offshore (3.39%) and Reliance Natural Resources (2.92%).
The BSE Bank index also ended higher by (3.19%) or 151.81 points at 4,915.51 on hopes from interim budget and also on firm bond prices. Gainers are ICICI Bank (5.17%), Axis Bank (4.72%), Indus Ind Bank (3.16%), Kotak Bank (2.75%) and SBI (2.61%).
The BSE Power index advanced by (2.85%) or 50.84 points to close at 1,806.68. GMR Infra (11.39%), GVK Power (11.08%), Reliance Infra (6.82%), Lanco Infra (5.82%), Tata Power (3.43%) and Cromton Greaves (3.34%) ended in green.
BEML ended higher by 7.82%. The company has bagged prestigious order from Bangalore Metro Rail Corporation Ltd for the supply of 150 metro coaches valued around Rs.1672.50 crore. Its is also likely to get an additional order for 63 Metro Coaches for further expansion and extension of proposed metro lines in Bangalore. The first set of coaches will be delivered by October 2010 for test purposes. The metro coahes will be manufactured at its Bangalore complex.
Gujarat NRE Coke ended up by 6.83%. The company has decided to raise funds by issue of Non-Convertible Debentures with Warrants upto Rs10bn through the Qualified Institutional Placement.
Reliance Industries Ltd rose 3.39% on reports the petroleum ministry is seeking re-introduction of the seven-year income-tax holiday for natural gas producers in an attempt to make the next round of NELP (New Exploration and Licensing Policy) bidding attractive.
BHEL advanced by 2% after the company has bagged orders worth Rs.70bn from NTPC, NCL and Mahagenco.
Sensex up 5.42% in two trading sessions on hopes for more measures in interim budget
Bulls were in command on expectations the forthcoming interim budget will contain fiscal incentives to revive sagging growth after official estimates showed the economy expanding at its slowest pace in six years. Buying by foreign funds and gains in some other emerging markets such as China and Taiwan, reflecting a gradual return of investor risk appetite also helped gains on the domestic bourses. News during trading hours of the global rating agency Fitch keeping India's rating unchanged also bolstered stocks at a time when there have been fears of a rating downgrade of India due to surging fiscal deficit.
The BSE 30-share Sensex jumped 283.03 points, or 3.04%. The barometer index moved past the 9,500 mark. The Sensex had last hit 9,500 in intraday trade on 9 January 2009. The last time it had settled above that mark was on 7 January 2009. Buying was witnessed in metal, banking, capital goods and IT stocks. Index heavyweight Reliance Industries (RIL) spurted.
The market had opened firm tracking firm Asia but it had pared gains later as key Asian stocks reversed gains on growing worries about a US rescue bank plan after its announcement was postponed. After a bout of profit taking, the market surged later after Fitch affirmed India's ratings.
The Congress party-led coalition government will unveil an interim railway budget on Friday, 13 February 2009 followed by a mini general budget on 16 February 2009, ahead of national elections due by May 2009. A full budget for 2009-2010 will come only after a new government takes over. Foreign Minister Pranab Mukherjee, who is also responsible for finance and will present the mini budget, said on Friday, the government would take measures to boost growth, especially in sectors where jobs are at stake.
The government has so far announced two stimulus packages including tax cuts and the capital injections for banks. However, there is uncertainty on the earnings outlook for Indian companies for the year ending March 2010 amid the global financial sector crisis, recession in global economies and slowdown in the Indian economy.
The Central Statistical Organisation (CSO) today, 9 February 2009, pegged India's projected GDP growth for the year ending March 2009 at 7.1%, the slowest in six years and below the previous year's 9%. The CSO said manufacturing output growth was estimated at an annual 4.1%, half of the expansion in 2007/08 while farm output is seen at annual 2.6%, much lower than 1 4.9% growth in last year.
Stocks in some emerging markets rose today after data from EPFR Global showed long-only dedicated emerging market equity funds had net inflows of $432.97 million in the week ended 4 February 2009, breaking a two-week losing streak.
Closer home foreign funds bought shares worth a net Rs 60.30 crore on Friday, 6 February 2009, data released by the stock market regulator Securities & Exchange Board of India after trading hours showed. Foreign funds had bought stocks worth a net Rs 51.20 crore on Thursday, 5 February 2009. There has been substantial selling by foreign funds from the beginning of the calendar year 2009, with net outflow totaling Rs 4,336.40 crore, till 6 February 2009.
Fitch Ratings affirmed India's ratings on Monday but kept its negative outlook on the local currency rating, saying public finances will deteriorate due to a weakening economy and government stimulus measures. Fitch also affirmed India's foreign currency issuer default ratings at BBB-minus, or the lowest investment-grade level, with a stable outlook.
European markets which opened after the Indian market, dropped as investors awaited the approval of Washington's massive stimulus plan and bank rescue package. The key benchmark indices in France and Germany fell by between 0.13% to 0.17%. But UK's FTSE 100 rose 1.17%.
Japan's Nikkei 225 Average lost 1.33% reversing earlier gains after the postponement of a US bank rescue plan offset optimism spurred by a massive US stimulus package to bolster the economy. Key benchmark indices in Singapore and South Korea were down by between 0.63% to 1.33%. Stocks moved between green and red in Hong Kong. Key benchmark indices in Hong Kong, China and Taiwan were up by between 0.52% to 1.99%.
Hopes of a recovery in Chinese economy had supported Asian stocks in the last few days. Data during trading hours in Asia on 4 February 2009, showed China's official purchasing managers' index rose, even though it remained below a reading of 50 that divides expansion from contraction. The index rose to 45.3 for January 2009, up from 41.2 in December 2008 and a record low of 38.8 plumbed in November 2008. China unveiled an eye-popping $585 billion spending plan in November 2008, and central bank governor Zhou Xiaochuan said that the pump-priming had a positive impact.
Wall Street rallied broadly on Friday after figures showing US job losses in January 2009 were the worst in 34 years, sparking hopes that Congress will act quickly to pass a stimulus package to help the economy. But the US administration pushed back the announcement of a keenly awaited bank rescue plan until Tuesday, 10 February 2009 from Monday as it pressed lawmakers to settle their differences over the huge stimulus plan.
Squabbling over the US rescue plan is set to continue on Monday, when the Democratic-led Senate votes to end debate on an $827 billion rescue package so it can be passed on Tuesday. US President Barack Omaba has demanded that the bill be on his desk for signing into law by next Monday.
US Treasury Secretary Timothy Geithner will outline the Obama administration's financial stability plan in speech on Tuesday, the Treasury Department said. The keenly awaited bank rescue plan and economic stimulus package are key parts of Obama's strategy for tackling the country's deepest financial crisis since the Great Depression.
The BSE 30-share Sensex jumped 283.03 points, or 3.04%, to 9,583.89. The Sensex rose 300.70 points at the day's high of 9,601.56 in late trade. The Sensex rose 28.37 points at the day's low of 9,329.23 in early trade.
The S&P CNX Nifty was up 76.80 points, or 2.7%, to 2,919.90.
The BSE clocked a turnover of Rs 2,824 crore, higher than Rs 2,742.59 crore on Friday, 6 February 2009.
Nifty February 2009 futures were at 2905, at a discount of 14.90 points as compared to the spot closing of 2919.90. Turnover in NSE's futures & options (F&O) segment increased to Rs 36,041.93 crore from Rs 30,053.25 crore on Friday, 6 February 2009.
The market breadth, indicating the overall health of the market, was strong on BSE with 1,578 shares advancing as compared with 935 that declined. A total of 61 shares remained unchanged.
The BSE Metal index (up 4.41%), the BSE Consumer Durables index (up 3.69%), the BSE Capital Goods index (up 3.59%), The BSE Oil & Gas index (up 3.37%), the BSE Bankex (up 3.19%), outperformed the Sensex.
The BSE FMCG index (up 0.57%), the BSE Auto index (up 1.57%), the BSE IT index (up 1.62%), the BSE Healthcare index (up 1.67%), the BSE Realty index (up 1.67%), the BSE Teck index (up 2.06%), the BSE PSU index (up 2.77%), the BSE Power index (up 2.85%), underperformed the Sensex.
The barometer index BSE Sensex has risen 493.01 points or 5.42% in last two trading sessions. The Sensex is down 63.42 points or 0.65% so far in 2009 from its close of 9647.31 on 31 December 2008. The barometer index had lost 10,639.68 points or 52.44% in the calendar year 2008
Among the 30-share Sensex pack, 29 rose while the rest fell. Jaiprakash Associates, ONGC, Reliance Infrastructure, Tata Power Company rose by between 3.43% to 8.48%.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 3.39% to Rs 1,389.05 on reports the petroleum ministry is seeking re-introduction of the seven-year income-tax holiday for natural gas producers in an attempt to make the next round of Nelp (New Exploration and Licensing Policy) bidding attractive. The finance ministry had withdrawn the tax holiday last year.
Meanwhile, RIL will soon initiate discussions with buyers for its Krishna Godavari Basin field (D6 block) gas, reports suggest. Subsequent to the interim order of the Mumbai High Court that allowed RIL to sell gas at $4.20/million British thermal units, the company plans to start signing term sheets with the customers in the next few weeks. RIL is looking at starting trial gas production by the end of this month.
Metal stocks rose as copper surged more than 8% on the London Metal Exchange on Friday 6 January 2009 on hopes for an economic recovery in China. Steel Authority of India, Hindustan Zinc, Sterlite Industries National Aluminum Company and Hindalco Industries rose by between 2.2% to 6.21%. China is the world's largest consumer of industrial metals.
India's largest steel maker by sales Tata Steel rose 7.2% as domestic sales rose 26% to 5,11,000 tonnes in January 2009 over January 2008, boosted by hot metal and crude steel.
Bank stocks rose on buzz that the interim budget will provide Rs 2,000 crore for bank recapitalization and also on firm bond prices. India's largest bank in terms of assets and branch network State Bank of India rose 2.61%. State Bank of India will lower its home loan rates to 8% for new customers over the coming year, the second time it has reduced mortgage rates in as many months as the economy slows. The new rate will be offered between 2 February and 30 April 2009. SBI had previously charged 9.75% on a floating basis for home loans, and 11.25-12.25% on a fixed basis.
India's second largest private sector bank by net profit HDFC Bank rose 2.29% as its American depository receipt (ADR) rose 5.2% on Friday, 6 February 2009. India's largest private sector bank by net profit ICICI Bank jumped 5.17% as its ADR gained 8.07% on Friday.
India's largest dedicated housing finance company by total income HDFC rose 5.55%.
Indian bond prices held near one week high on Monday, 9 February 2009, as the lower official GDP growth projection for 2008-09 reinforced expectations the Reserve Bank of India (RBI) would cut rates. Higher bond price could boost treasury income for banks.
IT pivotals spurted on hopes for US stimulus measures to take shape sooner rather than later. TCS, India's largest software services exporter by sales rose 2.66%. India's third largest software services exporter, Wipro rose 1% as its ADR gained 6.9% on Friday. India's second largest software services exporter Infosys Technologies rose 1.76% as its ADR rose 8.17% on Friday. But, India's fifth largest IT exporter by sales HCL Technologies fell 4.33%.
Satyam Computer Services fell 2.74% on reports insurance major Assurant and the world's largest credit card network Visa Inc had ended contracts with the firm. Satyam has been battling for its survival after founder and former chairman Ramalinga Raju disclosed last month that profits had been overstated for years.
IT firms derive a lion's share of revenue from export to the US. IT stocks rose despite a firm rupee. The Indian rupee rose to three week high as stocks surged and prompted some banks to sell their dollar holdings, while a marginally weaker dollar overseas also helped. The partially convertible rupee closed at 48.57/58 per dollar, 0.2% stronger than its previous close of 48.67/68. It touched 48.56 during the session, the rupee's strongest since 19 January 2009. A stronger rupee affects operating margin of IT firms negatively.
Rate sensitive real estate shares rose on hopes lower rates will spur housing demand. DLF, Indiabulls Real Estate and Unitech rose by between 1.23% to 3.19%. Most of the realty deals including sale of commercial property and housing sales is driven by finance.
Some healthcare stocks rose on defensive buying. Biocon, Ranbaxy Laboratories, Sun Pharmaceutical Industries, Cipla, Dr. Reddy's Laboratories, Cadila HealthCare rose by between 0.21% to 4.2%.
India's largest electric equipment maker by sales Bharat Heavy Electricals rose 2% after it won four contracts worth Rs 7,000 crore ($1.4 billion) to supply and set up electrical equipment for thermal power projects. Other capital goods stocks Larsen & Toubro, Praj Industries, ABB, Crompton Greaves rose by between 1.68% to 5.59%.
BEML galloped 7.82% on bagging an order worth to Rs 1672.50 crore for supply of metro rail coaches.
Some of the FMCG stocks rose on defensive buying. ITC, Marico, Nestle India, United Spirits rose by between 0.22% to 13.92%.
India's largest cement maker by sales ACC rose 0.33% on reports cement makers across the country are expected to hike prices by Rs 5 per 50 kg bag in a couple of weeks. The price rise will help cement makers improve margins.
Cals Refineries clocked the highest volume of 2.53 crore shares on BSE. Wire & Wireless (1.44 crore shares), GVK Power & Infrastructure (1.27 crore shares), Satyam Computer Services (1.08 crore shares) and Unitech (87.25 lakh shares) were the other volume toppers in that order.
United Spirits clocked the highest turnover of Rs 235.18 crore on BSE. Reliance Industries (Rs 233.78 crore), Educomp Solutions (Rs 135.95 crore), Reliance Infrastructure (Rs 120.68 crore) and Reliance Capital (Rs 88.74 crore) were the other turnover toppers in that order.
Market may extend gains
Expectations an interim budget will contain fiscal incentives to revive sagging growth will help market extend Friday (6 February 2009)'s gains. Gains in Asian stocks may also support bourses. Media reports that the forthcoming interim budget may offer tax sops and sector-specific stimulus package boosted the domestic bourses today, 6 February 2009. The BSE 30-share Sensex jumped 209.98 points or 2.31% to 9,300.86
The Congress party-led coalition government will unveil an interim railway budget on Friday, 13 February 2009 followed by a mini general budget on 16 February 2009, ahead of national elections due by May 2009. A full budget for 2009-2010 will come only after a new government takes over. Foreign Minister Pranab Mukherjee, who is also responsible for finance and will present the mini budget, said on Friday, the government would take measures to boost growth, especially in sectors where jobs are at stake.
The government has so far announced two stimulus packages including tax cuts and the capital injections for banks. But poor corporate earnings and concerns of economic slowdown continues to weigh on the market sentiment.
Asian stocks rose on Monday, 9 February 2009, amid hopes that a massive US stimulus package would bolster the economy. Key benchmark indices in Hong Kong, Japan, China, 0.45% to 1.6%. Hopes of a recovery in Chinese economy supported Asian stocks in the last few days.
Data during trading hours in Asia on 4 February 2009, showed China's official purchasing managers' index rose, even though it remained below a reading of 50 that divides expansion from contraction. The index rose to 45.3 for January 2009, up from 41.2 in December 2008 and a record low of 38.8 plumbed in November 2008. China unveiled an eye-popping $585 billion spending plan in November 2008, and central bank governor Zhou Xiaochuan said that the pump-priming had a positive impact.
Wall Street rallied broadly on Friday after figures showing US job losses in January 2009 were the worst in 34 years, sparking hopes that Congress will act quickly to pass a stimulus package to help the economy. But the US administration pushed back the announcement of a keenly awaited bank rescue plan until Tuesday, 10 February 2009 from Monday as it pressed lawmakers to settle their differences over the huge stimulus plan.
Squabbling over the US rescue plan is set to continue on Monday, when the Democratic-led Senate votes to end debate on an $827 billion rescue package so it can be passed on Tuesday. US President Barack Omaba has demanded that the bill be on his desk for signing into law by next Monday.
US markets gain despite jobs data
Nasdaq manages to creep in the green for the first time on a year to date basis
The last day of the week brought strong gains for Wall Street for the week that ended on Friday, 06 February, 2009. Despite a weak job market report from the Labor Department, US stocks showed that they were very much prepared for the report and they rallied right out of the gate since morning hours on Friday. Investors were waiting with a bated breath for Congress to go ahead with the stimulus plan proposed by Barack Obama's government. Traders anticipate that Treasure Secretary Geithner will present a draft of the proposal as early as Monday, 09 February, 2009.
The Dow Jones Industrial Average gained 279.73 points (3.5%) for the week to end at 8,280.59. Tech - heavy Nasdaq gained 115.29 (7.8%) to end at 1,591.71. S&P 500 gained 42.72 (5.2%) to end at 868.6. This week's gain has helped Nasdaq inch up in the green on a year to date basis.
Disappointing earnings news and guidance came from some major companies like Disney, Kraft, Costco and Cisco.
While the earning reports during the week were mainly disappointing in nature, the economic reports were mainly a mixed bag.
Both the manufacturing and services surveys completed by the ISM topped expectations. Other than that, pending home sales in December increased 6.3%. Fourth quarter productivity was up 3.2% and brought the year-over-year productivity gain to 2.7%, which was a bit above the long-term trend.
During the week, other reports focused that personal spending dropped 1% in December and personal income dipped 0.2%, reflecting the decline in employment levels. Vehicle sales that checked in were atrocious, slipping to an annualized rate of 9.6 million units in January, which was 7% below the December level and 40% below on a yearly level.
In the US market on Friday, 06 February, 2009, stocks ended substantially higher. The Dow Jones Industrial Average ended higher by 217 points at 8,280, the Nasdaq closed higher by 45 points at 1,591 and the S&P 500 closed higher by 23 points at 868.
Among major economic reports of the day, the Labor Department reported on Friday, 06 February, 2009 that the fury of the recession intensified in January, as the nation's unemployment rate jumped to 7.6% and nonfarm payrolls fell by the largest amount in 34 years. Nonfarm payrolls fell by a seasonally adjusted 598,000 in January, on the heels of a revised loss of 577,000 in December, 2008. Payrolls fell by 597,000 in November, 2008. January marked the largest payroll loss since December 1974.
Job losses were widespread across industries. The goods-producing industries lost 319,000 jobs, the most since 1975. Manufacturing payrolls fell by 207,000, the most since 1982. Manufacturing employment has fallen by 1.1 million since the recession began in December 2007. Of 83 manufacturing industries, just 8% were hiring in January, the lowest percentage on record dating back to 1991. Total hours worked in manufacturing fell 2.1% in January.
The financial sector led Friday's rally. Since the bank bailout plan is likely to provide the most immediate impact on the financial system and the broader economy, the sector posted good gains. There were also reports in the market that indicated that the economic stimulus plan is approaching completion, but there are still concerns that it may not secure adequate support.
For the year 2009, Dow and S&P 500 are down by 5.6% and 3.8% respectively. Nasdaq is marginally up by 0.9%.
Pre Session Commentary - Feb 9 2009
Today domestic markets are likely to open positive. The US markets closed in green on expectations of a economic stimulus package. The Chinese markets have also opened with green numbers as China has shown better economic indicators. The domestic markets had gained on Friday’s trade therefore some profit booking is likely to bring volatility in the markets today. The move of the markets might be influenced by the GDP forecast to be released today. On the macro economic level the CII favours a rate cut to stimulate the domestic demand as manufacturing sector is turning to be lackluster. There are also expectations of rate cut bill to be accepted by the government before the budget.
On Thursday, the markets opened with a positive gap and sustained its northward movement till the end. The global support helped the domestic markets to gain phenomenal numbers on the last day of the week. Sectors like Oil & Gas, Metal, CD and Bankex witnessed phenomenal gains of 3.27%, 3.04%, 2.52% and 2.49% respectively. Mid caps and Small caps also gained 1.43% and 1.05% respectively. During the session we expect the markets to be trading positive with mild volatility.
The BSE Sensex closed up by 209.98 points at 9,300.86 and NSE Nifty ended with gains of 63.05 points at 2,843.10. The BSE Mid Caps and Small Caps ended with gains of 40.70 points and 33.94 points at 2,882.80 and 3,279.24 respectively. The BSE Sensex touched intraday high of 9,321.38 and intraday low of 9,158.59.
The US markets on Friday closed in green. The markets gained as investors remained focused on the government''s plan to help rejuvenate banks and the broader financial system. Treasury Secretary Geithner will unveil the plan today, but many expect the plan to expand existing government lending facilities and deploy capital injections. The financial stocks rallied on the expectations of another stimulus package. On the dark side the non-farm jobs lost during January was 5,98,000 which was worst than expected since 1975. US light crude oil for March delivery fell by $1 to settle at $40.17 a barrel on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed up by 217.52 points at 8,280.59. NASDAQ index gained 45.47 points at 1,591.71 and the S&P 500 (SPX) gained 22.75 points at 868.60.
Indian ADRs ended up. In technology sector, Infosys ended higher by 8.17 % along with Wipro by 6.90%. Further, Satyam ended with increase of 3.31% and Patni Computers closed up by 1.58%. In banking sector ICICI Bank and HDFC Bank gained 8.07% and 5.20% respectively. In telecommunication sector, Tata Communication and MTNL advanced by 2.41% and 0.35 respectively. Sterlite Industries increased by 6.86%.
Today major stock markets in Asia have opened mixed. Shanghai composite is up by 34.91 points to 2,216.15, Japan''s Nikkei is also up by 8.37 points at 8,084.99. Hang Seng surged 77.21 points at 13,732.25. South Korea''s Seoul Composite is low by 3.65 points at 1,206.61 and Singapore''s Strait Times is also low by 20.02 points to 1,695.33.
The FIIs on Friday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 1,291.20 Crore and gross debt purchased stood at Rs 24.70 Crore, while the gross equity sold stood at Rs 1,240.00 Crore and gross debt sold stood at Rs 159.20 Crore. Therefore, the net investment of equity and debt reported were Rs 51.20 Crore and Rs (134.50) Crore respectively.
On Friday, The Indian rupee strengthened on Friday tracking stock market gains. Rupee settled at 48.67/68 up from Thursday''s close of 48.77/78 to post its strongest close since Jan 9, 2009.
On BSE, total number of shares traded were 30.76 Crore and total turnover stood at Rs 2,742.59 Crore. On NSE, total number of shares traded were 62.45 Crore and total turnover was Rs 70.10 Crore.
Top traded volumes on NSE Nifty – Unitech with 50472669 shares, Suzlon Energy with 17322393 shares, SAIL with 16213241 shares, DLF with total volume traded 15814795 shares followed by Reliance Petro with 6838930 shares.
On NSE Future and Options, total number of contracts traded in index futures was 706085 with a total turnover of Rs 9191.83 Crore. Along with this total number of contracts traded in stock futures were 768446 with a total turnover of Rs 7,085.05 Crore. Total numbers of contracts for index options were 916965 with a total turnover of Rs. 13,130.67 Crore and total numbers of contracts for stock options were 65790 and notional turnover was Rs 645.71 Crore.
Today, Nifty would have a support at 2,822 and resistance at 2,926 and BSE Sensex has support at 9,240 and resistance at 9,489.
Trading Calls - Feb 9 2009
Nifty (2843) Sup 2795 Res 2900
Buy Axis Bank (403) SL 398
Target 411, 414
Buy GE Ship (209) SL 205
Target 217, 220
Buy PNB (399) SL 395
Target 407, 410
Buy Reliance Capital (376) SL 371 Target 385, 388
Sell Wipro (224) SL 228
Target 217, 215
Daily News Roundup - Feb 9 2009
UTI MF arm best bidder for non-government pension funds.(TOI)
Tata Steel says its hot metal, crude steel and saleable steel production in January 2009 was higher YoY.(BL)
Reliance Industries hires three deep sea drilling rigs for US$2.9bn.(FE)
Price Waterhouse (Bangalore) and over 350 entities linked to Satyam Computers have now come under the scrutiny of Serious Fraud Investigations Office.(BL)
GAIL to mop up Rs8bn via KG-D6 gas transportation.(BS)
Reliance Industries to begin talks with buyers soon for KG gas.(BL)
Coal India shortlists nine firms to mine coal from seven new underground mines across the country.(DNA)
Dr Reddy's Laboratories three promoters pledged 6.19% stake of the company.(BS)
Essar to set up 6-MTPA steel unit for Rs178bn.(BS)
ONGC rules out divesting MRPL stake to HPCL.(BL)
L&T to recruit 10,000 in 3 yrs; to invest Rs45bn in Hazira.(BS)
Adani Power has decided to scale down its production plans from 9,900MW last year to 6,600MW, at least for now.(BL)
Jindal Stainless has deferred its 1.6mn tonne per annum plant in Orissa by a year due to losses in the last two quarters.(DNA)
Piramal Healthcare says talk of sale to GlaxoSmithKline Plc are unfounded'.(BL)
ONGC discovers two new oil wells in Patan district in Gujarat.(ET)
KEC International plans to invest Rs1bn in a transmission tower manufacturing facility in West Asia.(BL)
HPCL to triple crude oil import from Iran while reducing supplies from Iraq next fiscal.(ET)
Satyam Computers’ board to fix bidder criteria in 7-10 days.(TOI)
Kingfisher Airlines is targeting an equity infusion of around Rs20bn through strategic and financial investors and may even monetize aircraft order book over time.(DNA)
ONGC has achieved an all-time high oil and gas production up to December in the current fiscal.(FE)
Essar Exploration expects to complete its 15 well development drilling programme at Ranigunj-East CBM block in West Bengal by March this year.(BL)
The Government challenges Tata Power’s right to question the tendering process of Sasan ultra mega power project.(ET)
United Spirits to add 10 new bottling units in next 12 months.(ET)
Dr Reddy’s, Ranbaxy seek empanelment in a government programme to sell unbranded low-cost drug.(BS)
Marcegaglia, Italy to explore further synergies with Tata Steel after signing MoU for picking up a majority stake in Corus’ Teesside Cast Products.(BS)
Jindal Stainless to invest Rs1bn in logistics arm in next two years.(DNA)
Petroleum and Natural Gas Regulatory Board working on open-access formula to develop city gas distribution network.(FE)
Group of ministers is learnt to have decided on giving 10MHz of spectrum to mobile telecom companies.(DNA)
Finance Ministry rejects DIPP proposal to let foreign companies buy shares of Indian companies from exchange as freely as FIIs.(ET)
Cement companies set to hike price by Rs5 per 50kg bag across the country.(ET)
Government set to announce a stimulus package for the media sector. (BS)
Government may extend interest rate subvention or subsidy available to exporters.(ET)
November 2008 FDI inflow down to US$1bn from close to monthly figure of US$3bn till September 2008.(TOI)
Power generation rose 1.38% YoY in January.(FE)
Maharashtra government’s energy ministry to make it mandatory for independent power producers to sell 50% power within the state.(BS)
Allocation of US$8bn of debt to FIIs will be done by open bidding and not on a first-come first-served basis as it is currently, says SEBI.(BL)
Stricter H-1B hiring norms will not impact India, says Nasscom.(BL)
Mobile companies to pay higher penalty on unverified users.(BL)
New telecom companies ask TRAI to scrap mobile termination charge.(ET)
Bulls get going!
If you wait to do everything until you're sure it's right, you'll probably never do much of anything.”
The bulls would most likely extend Friday’s gains on firm global trend. A positive opening on Monday is more than a welcome sign. The next few days and perhaps weeks will see hectic action. A number of key events are lined up, both locally as well as globally. The Congress and the BJP have kicked off the campaigns for the upcoming Lok Sabha polls. The Government is also busy preparing the vote-on-account, which may include fresh measures to stimulate the economy. According to a business news channel, the Government is set to announce FY09 GDP data today.
The IIP data for December will be out on Thursday. The barometer for the manufacturing sector should stay in the positive zone for the second month after dipping in the red in October.
The US Senate is set to vote on Obama regime’s new stimulus plan on Tuesday. A revamped bank rescue package is also slated for the same day. Global equities could rally if these two events pass off without much trouble. However, one should not get carried away with any big advance. It would be prudent to sell into any rally. The earnings season is yet to wind up in the US and rest of the world. Any negative surprise could spook the sentiment.
Piramal Healthcare could be in focus amid takeover news, though the company had denied a move to sell out. Kingfisher Airlines might also hog the limelight amid news that the company is looking for fund infusion of about Rs20bn through strategic investors. Cement stocks could gain amid news of an impending price hike.
Hopes for a quick passage of president Obama's economic-stimulus plan in the senate coupled with optimism about the new version of the bank bailout plan countered unease following a downbeat jobs report.
The Dow Jones Industrial Average jumped 217.52 points, or 2.7%, to end at 8,280.59, while the S&P 500 index rose 22.75 points, or 2.7%, to close at 868.60. The Nasdaq Composite index added 45.47 points, or 2.9%, to finish at 1,591.71.
All three major gauges ended higher for the week as well, ending a four-session losing streak. The Dow was up 3.5% for the week while the S&P 500 surged 5.2%, and the Nasdaq shot up 7.8%.
Other possible congressional action prompted the Standard & Poor's Index Services to cut its projected dividend rate on the S&P 500 index." Due to recent events, including potential congressional action that might limit dividend payments, we are reducing the indicated dividend rate on the S&P 500," Howard Silverblatt, senior index analyst at S&P was quoted as saying.
Standard & Poor's Index Services said that it expects S&P 500 dividends to decline 13.3% in 2009, the worst yearly drop since 1942, when dividends fell 16.9%. Standard & Poor's now expects USUS$214.66bn in dividend payments for S&P 500 companies in 2009, compared to USUS$247.9bn last year.
If anything, the poor January jobs report - which showed a loss of nearly 600,000 jobs - added to the optimism about the stimulus package, by inciting a sense of urgency in lawmakers and investors.
Investors were relieved that although the employment report was bad, it wasn't as bad as some had been fearing.
The Senate was working to cut down the size of President Obama's US$900bn stimulus package, after a different version of the plan won party-line approval in the House last week. Reports said a vote could happen over the weekend.
Banking shares rallied for the second session as investors looked to Tuesday's announcement on how the government will use the remaining US$350bn of the Treasury's Troubled Asset Relief Program (TARP).
Treasury Secretary Tim Geithner is expected to speak on Tuesday about how the plan to use the rest of the TARP money. Plans in discussion include the creation of a so-called "bad bank" that would let the government take bad assets off bank balance sheets.
Reports also say that the Obama administration could temporarily suspend or alter the "mark-to-market" accounting rule, which would mean the government could buy the assets at a price that is below market rate, but not at fire sale prices.
US companies cut 598,000 jobs in January, as the recession continued to ravage corporate profits and spark massive layoffs. It was the worst month of job losses in 34 years, surpassing the 540,000 job cuts economists were expecting.
The unemployment rate, generated by a separate survey, rose to 7.6% from 7.2% the previous month, topping forecasts for a rise to 7.5%. The unemployment rate is at its highest since September 1992.
The report also showed that 2.6mn people have been out of work for at least six months, the largest number of long-term unemployed since 1983.
Treasury prices slumped, raising the yield on the benchmark 10-year note to 2.98% from 2.89% on Thursday.
Lending rates were mixed. The 3-month Libor rate held steady at 1.24%, unchanged from on Thursday. The overnight Libor rate slipped to 0.31% from 0.32% Thursday. Libor is a bank lending rate.
US light crude oil for March delivery fell US$1 to settle at US$40.17 a barrel on the New York Mercantile Exchange. Gasoline prices rose three-tenths of a cent to a national average of US$1.91 a gallon.
The dollar was mixed, falling against the euro and rising against the yen. COMEX gold for April delivery rose 10 cents to settle at US$914.30 an ounce.
European shares advanced on Friday. The pan-European Dow Jones Stoxx 600 index climbed 2.1% to 198.53, led by banks and oil majors. The UK's FTSE 100 index closed up 1.5% at 4,291.87, while Germany's DAX 30 index climbed 3% to 4,644.63 and the French CAC-40 index advanced 1.8% to 3,122.79.
Markets ended with an upbeat on Friday with the benchmark index closing at 9,300 and the Nifty shutting shop above the 2,800 mark. The rally was mainly on account of firm cues from the overseas equity markets. The oil & gas, metal and banking stocks were in demand also the mid-cap and the small-cap stocks hogged the limelight. Finally, the Sensex surged 209 points to close at 9,300 and the Nifty advanced 63 points to close at 2,843.
Among the 30-components of Sensex, 28 stocks ended in the positive terrain and only 2 stocks ended in the red. The major gainers in the Sensex were Ranbaxy, Grasim, Tata Motors, ICICI Bank, Reliance Industries and TCS.
On the other hand the major laggards were Hindustan Unilever and DLF.
Shares of Tata Motors surged by over 4% to Rs137 after the company said that three quarters of its purchases have been paid immediately through an arrangement with banks. The scrip touched an intra-day high of Rs139 and a low of Rs132 and recorded volumes of over shares 6,00,000 on BSE.
Maytas Infra was locked at 5% lower circuit to Rs57.1. The company announced that it issued a legal notice to Vedanta Aluminum alleging fraudulent and illegal encashment of two bank guarantees valued at Rs640mn. The scrip touched an intra-day high of Rs57.1 and a low of Rs57.1 and recorded volumes of over 6,000 shares on BSE.
Shares of JSW Steel surged by over 7% to Rs210 after the company announced that production of crude steel increased by 41% to 321,000 tons in January. The scrip touched an intra-day high of Rs213 and a low of Rs199 and recorded volumes of over 2,00,000 shares on BSE.
Shares of Satyam Computer surged by over 2% to Rs47 after the board of directors f the company announced that they appointed A S Murty as Chief Executive Officer, effective immediately.
The Board has also appointed Homi Khusrokhan and Partho Datta as Special Advisors, to assist in Management and Finance areas, respectively. The scrip touched an intra-day high of Rs49.5 and a low of Rs46 and recorded volumes of over 16,00,000 shares on BSE.
Shares of Kingfisher Airlines advanced by 1% to Rs32. The company deferred its first delivery of the Airbus SAS A380 double-decker to 2014 from 2012. The scrip touched an intra-day high of Rs34 and a low of Rs32 and recorded volumes of over 81,000 shares on BSE.
Bullion metals end higher
Precious metals ignore economic data
After dropping in the previous two sessions, bullion metal prices went up for third straight day on Friday, 06 February, 2009. Weak economic data pertaining to job losses increased the appeal of the precious metal as a safe haven against alternatives.
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 Friday, Comex Gold for April delivery rose $0.30 (0.03%) to close at $913.9 an ounce on the New York Mercantile Exchange. For the week, gold prices ended down by 1.5%. For January, 2009, gold had gained 3.9%. Year to date, gold prices are higher by 3.4%.
On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (12%) since then.
On Friday, Comex silver futures for March delivery rose 41 cents (3.2%) to end at $13.16 an ounce. Year to date, silver has climbed 16.2% this year. For 2008, silver had lost 24%.
Among major economic reports of the day, he Labor Department reported on Friday, 06 February, 2009 that the fury of the recession intensified in January, as the nation's unemployment rate jumped to 7.6% and nonfarm payrolls fell by the largest amount in 34 years. Nonfarm payrolls fell by a seasonally adjusted 598,000 in January, on the heels of a revised loss of 577,000 in December, 2008. Payrolls fell by 597,000 in November, 2008. January marked the largest payroll loss since December 1974.
Job losses were widespread across industries. The goods-producing industries lost 319,000 jobs, the most since 1975. Manufacturing payrolls fell by 207,000, the most since 1982. Manufacturing employment has fallen by 1.1 million since the recession began in December 2007. Of 83 manufacturing industries, just 8% were hiring in January, the lowest percentage on record dating back to 1991. Total hours worked in manufacturing fell 2.1% in January.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
Crude pares early gains
Weak job report takes crude prices lower
Oil prices ended lower on Friday, 06 February, 2009 as the weak job report disheartened traders regarding energy demand in the coming months. But the weak dollar kept the crude price above $40/barrel. Prices also dropped as this week's inventory report by the Energy department showed that crude inventories rose more than expected in the last week.
On Friday, crude-oil futures for light sweet crude for March delivery closed at $40.17/barrel (lower by $1.00 or 2.4%) on the New York Mercantile Exchange. Earlier during the day, it touched a low of $38.6 but had also reached a high of $42.68 earlier during the day. For the week, crude prices ended lower by 3.6%. In January, 2009, crude shed 14%.
Prices reached a high of $147 on 11 July but have dropped almost 70% since then. Year to date, in 2009, crude prices are lower by 9.9%. On a yearly basis, crude prices are lower by 55%.
Among major economic reports of the day, he Labor Department reported on Friday, 06 February, 2009 that the fury of the recession intensified in January, as the nation's unemployment rate jumped to 7.6% and nonfarm payrolls fell by the largest amount in 34 years. Nonfarm payrolls fell by a seasonally adjusted 598,000 in January, on the heels of a revised loss of 577,000 in December, 2008. Payrolls fell by 597,000 in November, 2008. January marked the largest payroll loss since December 1974.
The EIA had reported earlier during the week that crude inventories rose for a sixth straight week to 346.1 million barrels last week, the highest level since July 2007. Meanwhile, U.S. refineries operated at 83.5% of their operable capacity last week, up from the previous week's 82.5%.
The EIA had also reported gasoline inventories rose by 300,000 barrels while distillate fuel, which includes diesel and heating oil, fell by 1.4 million barrels. The report had also said that demand for fuels during the past four weeks averaged 19.5 million barrels a day, up 0.6% from the average a week before
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
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