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Thursday, February 12, 2009
Asian Markets Remains Subdued
Nikkei Recoup Holiday Losses While Sydney, Shanghai, Sensex Falter Further
Stock market in Asian region continued to trade lower on Thursday 12 February 2009, as investors remained doubtful about the US economic stimulus plan. A rate cut from Bank of Korea and crude oil sliding below 4 week low failed to cheer the sentiments in the regional investors.
Wall Street managed a modest and decent end on Wednesday after Tuesday’s huge sell-off that rattled investors. As per latest reports in the market, the stimulus plan now totals $789.5 billion, and is on track for vote later this week. The impression that the Senate and House have agreed on the terms of a $789.5 billion economic stimulus bill spurred stocks higher.
After opening 74 points higher earlier in the day, The Dow Jones Industrial Average ended higher by 50 points at 7,939, the Nasdaq closed higher by 6 points at 1,30 and the S&P 500 closed higher by 6.5 points at 833.
In the commodity market, crude oil was breached its four week low by trading below $36 a barrel as a U.S. government report showed a bigger-than-expected increase in inventories.
Crude oil for March delivery was at $35.72 a barrel, fell 0.22 cents, at 9:40 a.m. London time on the New York Mercantile Exchange. Yesterday, oil fell $1.61, or 4.3%, to $35.94 a barrel in New York, the lowest settlement since 15 January 2009.
Brent crude oil for March settlement was at $44.93a barrel, up 65 cents, on London’s ICE Futures Europe exchange at 9:40 a.m. London. The contract expires today. The more-active April future was at $46.05 a barrel, up 73 cents, at 1:22 p.m. Singapore time.
Gold prices eased $6.10 an ounce, or 0.65%, to $938.40 in Asian electronic trading on Thursday after gold for February delivery ended up $30.10, or 3.3%, at $943.80 an ounce on the Comex division of the New York Mercantile Exchange, the loftiest closing level for a front-month gold future since July. Trading more actively, the April contract rose 3.3% to $944.50 an ounce.
In the currency market, the U.S. dollar weakened against the Japanese yen, Hong Kong Dollar while it strengthened against New Taiwan Dollar, the Australian dollar, New Zealand dollar, Singapore dollar, Indonesian Rupaih, Indian Rupee and Chinese Yuan, Philippines peso, Malaysian Ringgit and South Korean won.
In late Tokyo trades, the Japanese yen strengthened against the dollar. The Japanese yen was quoted at 89.9350 against the US dollar, down from yesterday’s quote of 90.4156 yen.
The Hong Kong dollar was trading at HK$ 7.7516 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.
In Sydney trades, the Australian dollar was closed at US$0.6472 down from yesterday's close of US$0.6562.
In Wellington trades, the NZ dollar ended the day at US52.58c from US52.37c yesterday.
The South Korean won was closed at 1,403.50 won to the U.S. dollar, up from yesterday's close of 1,391.30 won.
The U.S. dollar was higher against the New Taiwan dollar in Taipei today. The greenback was trading at NT$34.02, up NT$0.03 from Wednesday's closing of NT$ 34.05.
The Philippines peso weakened against the greenback. The dollar peso pair is currently trading at 47.1700 compared to Wednesday's closing value of 47.06.
Coming back in Asian equities, the stock markets in Japan, China, Taiwan, South Korea, Hong Kong, Thailand, Singapore, Malaysia and India closed the day on a lower note while Australia, New Zealand, Indonesia, and Philippines closed the day on a higher note.
In Japan, stock market finished the session sharply lower, on broad based losses across the major sectors after a public holiday, on the back of a stronger yen against greenback and on disappointment over a U.S. bank rescue plan. The Nikkei 225 Stock Average index tumbled 240.58 points, or 3%, to 7,705.36, while the broader Topix eased 17.81 points, or 2.3%, to 760.
On the economic front, the Bank of Japan said prices for domestic corporate goods eased 0.2% on year in January, following the 1.1% on year gain in December. On a monthly basis, wholesale prices fell 1.0% after the 1.2% contraction in December.
In Mainland China, the stock index finished the session bluer, extending losses for the second day in row, with decline in the shares of energy, non-ferrous, steelmakers, and other metal issues after commodity prices plummeted on yesterday. Banks and financials tumbled on disappointment over the economic stimulus and financial bailout rescue plans in the United States. Shipping closed higher after receiving a government stimulus measures. The benchmark Shanghai Composite Index tumbled 12.72 points, or 0.6%, to 2,248.09.
On the economic front, the National Development and Reform Commission said Chinese urban property prices fell by 0.9% in January from a year earlier. On month-on-month basis, the decline was 0.2% in January, softer than the 0.5% fall in December. The People’s Bank of China said banks extended 1.62 trillion yuan ($237 billion) of new local-currency loans in January and M2, the broadest measure of money supply, climbed 18.8% from a year earlier.
In Hong Kong, the markets followed the Chinese indices extending losses for second day in row, with steep declines in banks and financials and property developers on disappointment over economic stimulus and financial bailout rescue plans in the United States. The Hang Seng Index plummeted 305.89 points, or 2.3%, to 13,228.30, while the Hang Seng China Enterprise Index tumbled 232.01 points, or 3.05% to 7,367.56.
In Australia, the stock market finished the choppy session with a gain, supported by broad based advance from most of the major sectors on a stronger-than-expected jobs report, firm lead from Wall Street, and the expected Senate vote on the government’s second stimulus package. The benchmark S&P/ASX200 climbed up 39.90 points, or 1.15%, to 3,514.30, while the broader All Ordinaries added 40.40 points, or 1.18%, to 3,458.50.
On the economic front, the Australian Bureau of Statistics said in a statement that the jobless rate soared to 4.8% in January, up from 4.5% in December. Business confidence in Australia sank 24 points to post a score of -31 in the fourth quarter of 2008, according to a survey released Thursday by the National Australia Bank.
In New Zealand, shares gained slightly following the overnight gain on Wall Street, after dipping for three sessions in a row. The benchmark NZX50 inched up 0.73% or 19.921 points to close at 2750.146. However, the NZX 15 was up 0.90% or 45.349 points to 5095.063.
Stock market in South Korea extended falls despite for the third session, despite of the South Korean central bank cutting interest rates to a new record low, as investors became more worried about the deepening economic slowdown. The Korea Composite Stock Price Index fell 10.34 points or 0.87% closing the day at 1,19790.84.
On the economic front, the Monetary Policy Committee (MPC) of the Bank of Korea decided today to lower the Base Rate by 50 basis points from 2.50% to 2.00% - the sixth cut in four months. The committee also lowered the interest rate on Aggregate Credit Ceiling Loans by 25 basis points from 1.50% to 1.25%.
In the accompanying statement the committee discussed the fact surrounding the decision. “The pace of the domestic economic slowdown has accelerated. Domestic consumption and investment have slackened off further and exports have decreased rapidly. There is considered to be a greatly deepened downside risk to economic growth, which has been heightened by the worsening worldwide slump and the likelihood of the credit crunch persisting,” the statement discussed.
In Singapore, the stock finished the session lower, with steep declines in banks and financials, properties, and manufacturing issues on disappointment over economic stimulus and financial bailout rescue plans in the United States. Investors’ sentiments remain fragile on concerns about its economy outlook after domestic players posted huge losses in their profits during the fourth quarter of 2008. The benchmark Straits Times Index dropped 30.74 points, or 1.79%, to 1,691.23.
On the economic front, the International Enterprise (IE) Singapore announced a S$4.2-billion ($2.78 billion) financing scheme that is projected to generate S$14.4 billion worth of trade and S$1.6 billion worth of overseas investments this year.
The stock market in Taiwan snapped its four days of winning streak, as leading DRAM makers fell despite government announcement of plans to consolidate the sector. The main Taiex share index slumped 109.53 points or 2.39% at 4,466.42, the lowest closing since 5 February 2009.
On the economic front, tax revenue received by the government amounted to NT$74.7 billion i.e.US$2.2 billion in January 2009, a decrease of 40.1% from January 2008. According to statistics released by the Ministry of Finance the fall, the largest monthly decline since March 2007 was mainly the result of the economic downturn and a decrease in workdays because of the Lunar New Year holiday, said Lin Li-chen, chief of the ministry's Department of Statistics.
In Philippines, the stock market reversed its two days of losses, closing the day higher, as investor sentiments were supported by gains on the Wall Street overnight, which in turn led to buying of key heavyweight stocks. The benchmark index PSEi augmented 1.38% or 26.35 points to 1,924.10, while the All Shares index rose 1.47% or 18.14% to 1,245.09.
In India, Sustained selling in index pivotal throughout the day kept key benchmark indices depressed throughout the day. The BSE 30-share Sensex provisionally lost 152.71 points, or 1.59% closing the day at 9456.83. The S&P CNX Nifty lost 32.65 points, or 1.12%, to 2,893.05 as per provisional closing
On the economic front, India’s industrial production contracted 2% in December 2008 as compared to 8.6% growth a year earlier. The fall was led by a led by a 2.5% contraction in the manufacturing output. The mining output for the month was up 1% as compared with 5% a year earlier.
In other release, inflation based on the whole sale price index rose 4.39% the year through 31 January 2009, much lower than previous week's annual rise of 5.07%, government data released at noon today showed.
Elsewhere, Malaysia's Kula Lumpur Composite index was down 0.28% or 2.47 points to 894.60, while Indonesia’s Jakarta composite increased by 0.60 points or 0.05% to 1,325.42. In Thailand, the Thai Stock exchange fell 3.47 points or 0.78% to 440.63.
In other regional market, European shares fell Thursday for the third session in a row, with oil producers lower on a slumping oil price and companies such as BT Group and EdF falling after reporting lower profits. On a national level, the French CAC-40 index declined 1.4% to 2,984.56, the German DAX 30 index dropped 1.5% to 4,463.83 and the U.K. FTSE 100 index fell 1.3% to 4,180.71.
BSE Bulk Deals to Watch - Feb 12 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
12/2/2009 524804 AUROBINDO PH TOP CLASS EDUCATION FACILITIES AND SERVICES PVT LTD B 489000 140.00
12/2/2009 526550 COUNTRY CLUB ABN AMRO BANK N.V LONDON S 387177 10.48
12/2/2009 532312 GEOMETRIC L HDFC MIDCAP OPPURTUNITY FUND S 675000 18.61
12/2/2009 509567 GOA CARBON L VALLERINEANTHONYDMELLO B 83000 60.50
12/2/2009 509567 GOA CARBON L SMITAJOHNDMELLO S 83000 60.50
12/2/2009 532129 HEXAWARE LTD OPG SECURITIES P LTD B 1093553 35.31
12/2/2009 532129 HEXAWARE LTD OPG SECURITIES P LTD S 1093553 35.39
12/2/2009 500214 ION EXCHANGE NANDURY FINANCE AND INVESTMENT PVT LTD B 79900 78.00
12/2/2009 500214 ION EXCHANGE TEJASWY NANDURY S 79900 78.00
12/2/2009 532494 MICRO TECHN GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD S 54330 70.40
12/2/2009 512047 NATRAJ FIN SANJAY KUMAR B 65251 32.03
12/2/2009 500304 NIIT LTD FNIL AC COPTHALL MAURITIUS INVESTMENT LIMITED S 954000 22.50
12/2/2009 512048 SPLASH MEDIA TAPAN GANGWAL B 25000 51.98
12/2/2009 532432 UNITD SPR OPG SECURITIES P LTD B 531646 689.99
12/2/2009 532432 UNITD SPR OPG SECURITIES P LTD S 531646 690.26
12/2/2009 514470 WINSOME TEXT KUMKUM STOCK BROKER PVT LTD S 31440 33.00
NSE Bulk Deals to Watch - Feb 12 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
12-FEB-2009,AUROPHARMA,Aurobindo Pharma Ltd.,TOP CLASS EDUCATION FACILITIES & SERVICES PVT LTD,BUY,394894,140.00,-
12-FEB-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,BUY,105208,1909.83,-
12-FEB-2009,EDUCOMP,Educomp Solutions Limited,DEUTSCHE SECURITIES MAURITIUS LIMITED,BUY,138000,1870.71,-
12-FEB-2009,HELIOSMATH,Helios And Matheson Infor,BP FINTRADE PRIVATE LIMITED,BUY,144437,27.29,-
12-FEB-2009,HEXAWARE,Hexaware Technologies Lim,OM INVESTMENTS,BUY,807051,34.01,-
12-FEB-2009,RICOAUTO,Rico Auto Industries Ltd,NEO SECURITIES LTD.,BUY,700000,9.00,-
12-FEB-2009,RICOAUTO,Rico Auto Industries Ltd,SWARN K. KHOSLA,BUY,700000,9.00,-
12-FEB-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,SELL,105208,1910.89,-
12-FEB-2009,GEOMETRIC,Geometric Limited,HDFC MIDCAP OPPURTUNITY FUND,SELL,809000,18.30,-
12-FEB-2009,HELIOSMATH,Helios And Matheson Infor,BP FINTRADE PRIVATE LIMITED,SELL,143401,27.10,-
12-FEB-2009,HEXAWARE,Hexaware Technologies Lim,CITIGROUP GLOBAL MKTS MAURITIUS PVT LTD- SELL CODE,SELL,1090000,33.86,-
12-FEB-2009,HEXAWARE,Hexaware Technologies Lim,OM INVESTMENTS,SELL,807051,34.06,-
12-FEB-2009,NIITLTD,NIIT Limited,FNIL A/C. COPTHALL MAURITIUS INVESTMENT LTD.,SELL,1462000,22.41,-
12-FEB-2009,RICOAUTO,Rico Auto Industries Ltd,NEO SECURITIES LTD.,SELL,700000,9.00,-
12-FEB-2009,RICOAUTO,Rico Auto Industries Ltd,SWARN K. KHOSLA,SELL,700000,9.00,-
Post Session Commentary - Feb 12 2009
Sustained selling across the sectors pulled the market to close in red zone for the second successive day tracking the weak cues from the global markets. Weak Asian markets along with poor start of the European markets and lower US index futures weighed on the sentiments. Besides this, the sharp fall in IIP data also added to the sentiments. The industrial output for the month of December 2008 fell 2% as compared to a rise of 8% (YoY). However, the sharp fall in inflation number to 4.39% for the week ended 31st Jan 2009 from 5.07% failed to bring any respite today.
The Indian market today opened lower tracking weak Asian stocks. Further benchmark indices continued to trade in red terrain without any sign of recovery. Investors were cautious ahead of IIP data and inflation number. Stocks tried to recover during mid session. However, market was not able to extend the momentum and lost further ground despite ease in inflation number. During the second half of trading session equities slipped sharply lower to extend their losses on the back of strong selling pressure. BSE Sensex ended below 9,500 mark and NSE Nifty closed below 2,900 level. On the sectoral front, IT, Teck, Oil & Gas, Capital Goods, Bank and FMCG stocks witnessed most of the selling from these baskets. However, Midcap and Smallcap stocks were able gain favour from the market. along with this Reality and Auto stocks also remained supportive as observed most of the buying from these baskets.
Among the Sensex pack 22 stocks ended in red territory and 8 in green. The market breadth indicating the overall health of the market remained strong as 1309 stocks closed in green while 1090 stocks closed in red and 113 stocks remained unchanged in BSE.
The BSE Sensex closed lower by 152.71 points at 9,465.83 and NSE Nifty ended down by 32.65 points at 2,893.05. Broader market indices were in green as BSE Mid Caps and Small Caps ended with gains of 2.97 points and 23.82 points at 2,968.11 and 3,374.79 respectively. The BSE Sensex touched intraday high of 9,580.13 and intraday low of 9,445.54.
Losers from the BSE Sensex are JP Associates (4.76%), Ranbaxy Lab (3.82%), Bharti Airtel (3.52%), Infosys Tech (3.39%), ICICI Bank (3.24%), Maruti Suzuki (2.99%), Tata Steel (2.55%) and BHEL (2.51%).
Gainers from the BSE Sensex pack are M&M Ltd (6.86%), DLF Ltd (3.58%), Reliance Infra (1.57%), Sun Pharma (0.84%) and Hindalco (0.33%).
The inflation for the week ended January 31, 2009 slipped to 4.39% from 5.07% of the previous week. This is the lowest rise since January 12 last year, when inflation was at 4.36%. The WPI numbers for all commodities are down 0.7% at 228.4 (WoW) except for the fuel products group, which is down 3.1% (WoW). The annual Inflation rate was 4.74 per cent during the corresponding week of the previous year.
The industrial output for the month of December 2008 fell 2% as compared to a rise of 8% (YoY). The sharp decline in the IIP number was mainly due to the fall in the manufacturing output as it registered a negative growth of 2.5% against a rise of 8.6% YoY and consumer durables that fell as much as 12.8% against a rise of 2.8% YoY.
On the global markets front, the Asian markets ended lower as investors remained dubious about the U.S. economic stimulus plan. Shanghai Composite index, Hang Seng, Nikkei 225, Straight Times index and Seoul Composite index ended down by 12.73, 310.91, 240.58, 37.01 and 10.34 points at 2,248.9, 13,228.3, 7,705.33, 1,684.96 and 1,179.84 respectively. Bank of Korea cut interest rate to a record-low 2%.
European markets which opened after the Indian market are trading in negative. In London FTSE 100 is trading lower by 48.44 points at 4,185.82 and in Frankfurt the DAX index is trading down by 90.91 points at 4,439.18.
The BSE IT index closed with losses of (2.46%) or 54.77 points at 2,170.96 on weak sentiments. Scrips that lost are Infosys Tech (3.39%), Patni Computer (2.88%), Oracle Fin (1.84%), Rolta Ind (1.46%) and TCS Ltd (0.94%).
The BSE Teck index ended down by (2.27%) or 41.85 points to close at 1,805.40. Dish TV (3.73%), Bharti Airtel (3.52%), Balaji Tele (3.40%), Infosys Tech (3.39%) and Patni Comp (2.88%) ended in negative territory.
The BSE Oil & Gas index also ended down by (1.85%) or 120.88 points at 6,409.93. Losers are Reliance (2.34%), ONGC Ltd (1.73%), Gail India (1.65%), Cairn Ind (1.36%) and Rel Pet (1.04%).
The BSE Capital Goods stocks as ended lower by (1.30%) or 84 points at 6,388.95. Scrips that lost are Bharat Elect (3.76%), Alstom Proje (2.80%), Everest Kant (2.53%), BHEL (2.51%) and Praj Industries (2.41%)
The BSE Bank index plunged by (1.15%) or 57.34 points at 4,916.55. Main losers are ICICI Bank (3.24%), IDBI Bank (2.30%), Yes Bank (1.49%), PNB (1.03%) and Kotak Bank (0.85%).
The BSE Reality index advanced by (1.30%) or 20.4 points to close at 1,556.69 on hopes the forthcoming interim budget may include sops to the housing sector. Anant Raj (4.99%), Akruti City (4.51%), DLF Ltd (3.58%), Ansal Infra (2.91%) and Orbit Co (2.50%) ended in green.
Tata Communication ended lower by 1.54% after announcing a $430 million strategic investment plan in Asia Pacific region. The investments include developing Tata Communications Exchange, a new Internet Data Center and completion of the main segment of its TGN-Intra Asia Cable System. These investments are being made in line with the company''s $2 billion expansion plan over three years to enhance its global infrastructure.
ONGC Ltd fell 1.73% as the company has reportedly cuts its crude oil price projection and forecast that its net profit in the year ending March 2010 will fall by 35% due to the drop in international prices of oil.
Cairn India declined 1.36%, as crude oil prices plunged over 4% on the New York Mercantile Exchange on Wednesday, 11 February 2009.
Siemens rose 2.21%, on bagging an order worth Rs. 212 crore. Siemens'' Industrial Solutions (IS) division, part of its Industry Sector, has bagged a turnkey order worth Rs. 2116 million (212 crore) from Steel Authority of India Ltd (SAIL) for Rourkela Steel Plant (RSP).
Global woes offset budget hopes as Sensex sheds 1.6%
Sustained selling in index pivotals kept the market depressed, with key benchmark indices trading in the negative zone throughout the day. The BSE 30-share Sensex lost 152.71 points, or 1.59%. Lingering worries about the slowing economy, weak European markets, lower Asian markets and US index futures data which indicated the Dow could fall 81 points at the opening bell, weighed on the domestic bourses. Nevertheless, the market breadth, indicating the overall health of the market, was positive.
Volatility was high. After a weak opening, the market had lost further ground in morning trade on weak Asian stocks. It had cut losses in mid-morning trade ahead of the released of the key economic data. A sudden sell-off was witnessed at about 12:00 IST when the dismal industrial production data for December 2008 added to economic worries.
The market bounced back shortly as the dismal industrial production data reinforced expectations of another government stimulus package for the economy and as sharp fall in inflation raised hopes of rate cuts. But the intraday recovery proved short-lived and the market weakened in afternoon trade.
Industrial production contracted 2% in December 2008 as compared to 8.6% growth a year earlier, government data released at noon today showed. The fall was led by a led by a 2.5% contraction in the manufacturing output. The mining output for the month was up 1% as compared with 5% a year earlier.
The market is agog with talks that the forthcoming interim budget may offer tax sops and sector-specific stimulus package. The government has so far announced two stimulus packages including tax cuts and the capital injections for banks. The Central Statistical Organisation (CSO) on Monday, 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 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, today, 12 February 2009, said there is a need to sustain India's foreign trade, revive foreign investment and generate domestic demand. Mukherjee said during trading hours today that a strong economic growth is essential for the uplift of the multitudes below the poverty line.
Inflation based on the whole sale price index rose 4.39% the year through 31 January 2009, much lower than previous week's annual rise of 5.07%, government data released at noon today showed.
Though the key benchmark indices were in the red, the market breadth, indicating the overall health of the market, was strong.
Banking and oil stocks led European markets lower as fresh signs of deepening economic misery overshadowed a compromise deal on a $789 billion US stimulus plan. Key benchmark indices in UK, Germany and France were down by between 1.35% and 2.25%.
Asian stocks fell for a fourth day, led by financial and consumer-related companies, on concern US measures to alleviate the financial crisis won't be enough to revive the world's largest economy. Key benchmark indices in Hong Kong, South Korea, Singapore, Taiwan and China were down by between 0.87% and 2.39%.
Japanese stocks slumped 3.03% sending the benchmark Nikkei index to its lowest in nearly three months, as wholesale prices dropped in the year to January 2009, the first such drop in five years, bringing the world's second-largest economy closer to its second bout of deflation in a decade as the economy slips deeper into recession.
US Treasury Secretary Timothy Geithner on Tuesday, 10 February 2009 announced a financial rescue plan that included as much as $2 trillion in funding for programs aimed at spurring new lending and addressing banks' illiquid assets.
Geithner said the plan to get trillions of dollars in financing flowing through the world's largest economy was urgently needed as part of the government's effort to stave off "catastrophic failure" of institutions. A key plank involves the government teaming with the private sector to buy up to $1 trillion in souring assets from financial firms. A separate lending program would be expanded to as much as $1 trillion from $200 billion for consumers and businesses.
The US government was going to proceed carefully on the proposal, Geithner told the US Congress on Wednesday.
US stocks gained on Wednesday, 11 February 2009 in a choppy session as lawmakers said Congress will reach an agreement on a $789 billion plan to revive the economy. The Dow Jones Industrial Average rose 50.65 points, or 0.6% to 7,939.53. The S&P 500 added 6.58 points or 0.8% to 833.74 and the Nasdaq Composite index gained 5.77 points or 0.38% to 1,530.50.
US Senate majority leader Harry Reid said differences have been bridged between the two versions of the package that had been passed by the House of Representatives and the Senate, and that votes on the final bill could come as early as Thursday.
US weekly jobless claims and January 2009 retail sales data due later in the day, which will give a clearer indication of how the US economy is faring, will be closely watched.
The BSE 30-share Sensex lost 152.71 points or 1.59%, to 9,465.83. The Sensex opened 59.51 points lower at 9,559.03. At the day's low of 9,445.54, the Sensex lost 173 points in late trade. The Sensex lost 39.55 points at the day's high of 9,578.99 hit in early afternoon trade.
The S&P CNX Nifty shed 32.65 points or 1.12% to 2,893.05. Nifty February 2009 futures were at 2885.95, at a discount of 7.10 points as compared to the spot closing.
The Sensex had lost 0.30% on Wednesday, 11 February 2009, after a solid 6.12% surge in the preceding three trading sessions triggered by expectations the forthcoming interim budget will contain fiscal incentives to revive sagging growth. Buying by foreign funds aided the surge. Foreign funds bought shares worth a net Rs 816.70 crore in four trading sessions between 5 and 10 February 2009.
The inflow followed heavy sales last month. The cumulative outflow of foreign funds in calendar year 2009 totaled Rs 3756.80 crore, till 11 February 2009. The barometer index BSE Sensex is down 181.48 points or 1.59% in the calendar 2009 from its close of 9,647.31 on 31 December 2008.
Even as the key benchmark indices were in the red, the market breadth, indicating the overall health of the market, was positive. On BSE, 1307 shares advanced as compared with 1108 that declined. The breadth was much stronger earlier in the day. A total of 106 shares remained unchanged.
The BSE Mid-Cap index rose 0.10% at 2,968.11 and the BSE Small-Cap index gained 0.71% to 3,374.79. Both these indices outperformed the Sensex.
BSE clocked a turnover of Rs 3199 crore as compared to Rs 3,280.70 crore on Wednesday, 11 February 2009. Turnover in NSE's futures & options (F&O) segment was Rs 31,424.42 crore lower than Rs 32,988.37 crore on Wednesday, 11 February 2009.
Sectoral indices on BSE displayed mixed trend. The BSE IT index (down 2.46%), BSE Oil & Gas index (down 1.85%), and BSE Teck index (down 2.27%), underperformed the Sensex.
The BSE Metal index (down 0.97%), BSE Bankex (down 1.15%), BSE Realty index (up 1.30%), BSE Capital Goods index (down 1.30%), the BSE Auto index (up 0.94%), BSE Consumer Durables index (down 0.08%), the BSE FMCG index (down 0.88%), the BSE PSU index (down 0.09%), the BSE Power index (down 0.47%), outperformed the Sensex.
Among the 30-member Sensex pack, 21 slipped while the rest gained. Jaiprakash Associates (down 4.82%), Bharti Airtel (down 4.21%), and Bhel (down 3.22%), edged lower from the Sensex pack.
Reliance Infrastructure (up 1.29%), Sun Pharma (up 0.53%), and Hindalco (up 0.11%), edged higher from the Sensex pack.
Auto shares advanced on hopes of the government could announce some tax sops for the automobile sector. India's top tractor maker by sales Mahindra & Mahindra jumped 6.99% to Rs 300.20 and was the top gainer from the Sensex pack.
India's largest truck maker by sales Tata Motors rose 0.81% to Rs 137.05, off the day's low of Rs 132.50. Hindustan Motors (up 3.24%), Hero Honda (up 1.57%), Bajaj Auto (up 4.60%), also gained.
Reports indicated that excise duty on big cars with engine capacities of 1200 cc or more in petrol may be reduced to 16% from the existing 20%, post an across-the-board 4% cut in excise in December 2008.
Realty shares advanced on hopes the forthcoming interim budget may include sops to the housing sector. India's largest real estate firm by market capitalisation DLF advanced 2.49% to Rs 154.60 on recent reports the company has secured long-term loans of about Rs 2000 crore.
Anant Raj Industries (up 4.99%), Akruti City (up 4.89%), and Ansal Infrastructure (up 2.91%), advanced.
As per reports, the government may announce tax sops aimed at boosting the housing sector, which has been identified as a potential driver for the economy and job creation during a slowdown. As things stand, taxpayers are allowed to deduct up to Rs 1.5 lakh of interest paid on home loans from their taxable income. This limit could be raised to Rs 2 lakh. This, if it happens, will enable those who have bought a house for self-use to save up to Rs 68,000 in tax. At present, the maximum anyone can save through this deduction is Rs 51,000.
Another possible sop for the housing sector could be reintroduction of Sec 80IA, under which corporates building dwelling units of less than 1,000 square feet area were exempted from tax on the profits from these units. This move may prompt developers towards constructing smaller houses, making houses more affordable for the lower segment of the market.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 2.64% to Rs 1347.50, on profit booking. The stock moved in a range of Rs 1345.60 and Rs 1376 in the day. The stock had advanced 20.24% to Rs 1384.05 in a month to 11 February 2009.
India's largest state-run oil exploration firm by market capitalisation ONGC fell 1.97% to Rs 693.10 on reports the company has revised downwards its profit estimates for the year ending March 2010 by 35% due to the drop in international prices of oil.
State run oil-marketing companies though in the red, outperformed the Sensex, on slide in crude oil prices overnight. HPCL was down 0.52%, BPCL shed 0.89% and IOC lost 0.78%. Lower crude oil prices will reduce under-recoveries of state run firms on sale of fuel at controlled prices. They are currently making profit on sale of petrol and diesel, but continue to make losses on sale of kerosene and liquefied petroleum gas.
Shares of private sector banks slipped on fears of rising defaults in a weakening economy offset an overnight rise in American Depository Receipts (ADRs). India's second largest private sector bank by net profit HDFC Bank lost 0.26% to Rs 931 even as its ADR rose 3.78% on Wednesday, 11 February 2009. India's largest private sector bank by net profit ICICI Bank slipped 3.42% to Rs 420.50 despite 3.92% gain in its ADR on Wednesday, 11February 2009.
IT pivotals declined as investors feared the new bank rescue plan announced by the US government may not be enough to revive the economy from a deepening recession and also on weak ADRs. TCS, India's largest software services exporter by sales slipped 1.18% to Rs 508. Tata Consultancy Services today said its promoter Tata Sons has pledged 10.89 crore shares representing 11.14% stake in the company with lenders. As at end December 2008, Tata Sons held 73.75% stake in TCS.
India's second largest software services exporter Infosys Technologies shed 3.30% to Rs 1259.60 as its ADR declined 0.44% on Wednesday, 11February 2009. India's fifth largest IT exporter by sales HCL Technologies fell 0.91% to Rs. 114.20
However India's third largest software services exporter, Wipro rose 0.38% to Rs 222.80. IT firms derive a lion's share of revenue from export to the US.
Some small-cap IT shares surged on a weaker rupee. Hexaware Technologies jumped 58.46% to Rs 31.85 on buzz a large Indian IT company is eyeing acquisition of the firm. The stock surged as much as 109% to hit day's high of Rs 42. Hexaware Executive Chairman Atul Nishar, however, told a television channel that the company is not in a dialog for a sale. He told another television channel that neither the promoters nor large shareholders had sold any stake.
HOV Services (up 5.16% to Rs 29.55), Helios & Matheson (up 19.87% to Rs 27.15), KPIT Cummins (up 6.39% to Rs 21.65), Aztec Software (up 5.56% to Rs 31.30), Jetking Infotrain (up 6.92% to Rs 112), Sonata Software (up 9.82% to Rs 17.90), surged.
The Indian rupee was fell against the dollar on decline in Asian stock markets. The partially convertible rupee was at 48.77/78 per dollar, marginally weaker than Wednesday's close of 48.69/70. A weak rupee boosts operating margins of IT firms.
India's largest pharma company by sales Ranbaxy Laboratories lost 3.93% to Rs 212.50 after domestic brokerage house Reliance Money recommended a sell rating on the stock, with price target of Rs 189.
India's largest power generation firm by market capitalisation Tata Power Company fell 1.79% to Rs 793.50. Reportedly the company is scouting for other sources to import about 7 million tonnes of coal for its proposed power plants.
India's second largest cellular services provider by net profit Reliance Communications slipped 0.95% to Rs 171.65 despite reports the company is in talks with seven global strategic investors for offloading 5% stake in its tower arm Reliance Infratel for about $500 million.
Airline stocks slipped on profit booking after Civil Aviation Minister Praful Patel warned airline firms against cartelisation in the industry, forcing Jet Airways to rollback prices. Jet Airways (down 4.25%), Kingfisher Airlines (down 4.08%) and SpiceJet (down 5.63%), slipped.
Jet Airways had risen 1.15%, Kingfisher Airlines gained 3.67% and SpiceJet had surged 3.11% on Wednesday, 11 February 2009 following hike in airfares by almost all the airlines.
Consumer durable stocks rose on hopes of tax sops in the interim budget. Lloyd Electric (up 4.19%), Blue Star Industries (up 1.73%), Videocon Industries (up 0.90%), Titan Industries (up 0.34%), gained.
Spice Communications jumped 47.10% to Rs 77.30 on high volumes of 1.68 crore shares.
Bartronics India surged 3.07% on bagging an overseas order. The company announced the order win during trading hours today, 12 February 2009.
United Spirits topped the turnover chart on BSE with a turnover of Rs 251 crore followed by Reliance Industries (Rs 187.70 crore), Educomp Solutions (Rs 153.70 crore), Reliance Infrastructure (Rs 132 crore) and Reliance Capital (Rs 130.50 crore).
Cals Refineries led the volume chart on BSE with volume of 2.09 crore shares followed by Unitech (1.80 crore), Spice Telecom (1.68 crore), Satyam Computer Services (1.53 crore) and Hexaware Technologies (1.31 crore)
Ansal Properties promoters pledge shares
Ansal Properties & Infrastructure Ltd has informed BSE the details of the total no of shares of the Company pledged by the Promoter / Person forming part of Promoter Group with the Bank(s) and Financial Institution(s) on the date of the notification i.e. on January 28, 2009. These shares were pledged to secure the borrowings made by the Company.
(i) the Promoter/s / Person/s forming part of Promoter Group have pledged 1,82,45,000 Equity Shares of the Company with IL & FS to secure borrowings made by the Company constituting 16.07% of total Paid-up Equity Shares of the Company.
(ii) the Promoter/s / Person/s forming part of Promoter Group have pledged 1,43,00,000 Equity Shares of the Company with HDFC Ltd to secure borrowings made by the company, constituting 12.60% of total Paid-up Equity Shares of the Company.
(iii) the Promoter/s / Person/s forming part of Promoter Group have pledged 5,00,000 Equity Shares of the Company with India Bulls Financial Services Ltd to secure borrowings made by the company, constituting 0.44% of total Paid-up Equity Shares of the Company.
(iv) The aggregate of (i), (ii) & (iii) above constitutes 3,30,45,000 Equity Shares pledged by the Promoter/s / Person/s forming part of Promoters Group of the Company as on January 28, 2009. This constitutes 29.114% of total Paid-up Equity Shares of the Company.
(v) The Company has received declarations from all the Promoter/s / Person/s forming part of Promoter Group within 7 working days of date of the referred Notification of SEBI.
Note: As on date the total No. of Equity Shares of the Company is 11,35,01,100 [Fully Paid-up of Rs. 5/-each]
1. Name of the promoter/ person forming part of promoter group - Mrs. Sheetal Ansal
As on the date of notification i.e. on January 28, 2009 the total no of shares pledged - 3,926,000
% of shares pledged (% to the total no of paid up equity share capital i.e. 11,35,01,100) - 3.45%
Bank / Financial Institution with whom these shares were pledged - HDFC Ltd
2. Name of the promoter/ person forming part of promoter group - Mr. Pranav Ansal
As on the date of notification i.e. on January 28, 2009 the total no of shares pledged - 2,000,000
% of shares pledged (% to the total no of paid up equity share capital i.e. 11,35,01,100) - 1.76%
Bank / Financial Institution with whom these shares were pledged - IL & FS
3. Name of the promoter/ person forming part of promoter group - Dr. (Mrs.) Kusum Ansal
As on the date of notification i.e. on January 28, 2009 the total no of shares pledged - 10,55,900
% of shares pledged (% to the total no of paid up equity share capital i.e. 11,35,01,100) - 0.93%
Bank / Financial Institution with whom these shares were pledged - IL & FS
As on the date of notification i.e. on January 28, 2009 the total no of shares pledged - 64,74,000
% of shares pledged (% to the total no of paid up equity share capital i.e. 11,35,01,100) - 5.703%
Bank / Financial Institution with whom these shares were pledged - HDFC Ltd
4. Name of the promoter/ person forming part of promoter group - Apna Ghar Properties Pvt Ltd
As on the date of notification i.e. on January 28, 2009 the total no of shares pledged - 3,800,000
% of shares pledged (% to the total no of paid up equity share capital i.e. 11,35,01,100) - 3.35%
Bank / Financial Institution with whom these shares were pledged - IL & FS
As on the date of notification i.e. on January 28, 2009 the total no of shares pledged - 1,700,000
% of shares pledged (% to the total no of paid up equity share capital i.e. 11,35,01,100) - 1.50%
Bank / Financial Institution with whom these shares were pledged - HDFC Ltd
As on the date of notification i.e. on January 28, 2009 the total no of shares pledged - 5,00,000
% of shares pledged (% to the total no of paid up equity share capital i.e. 11,35,01,100) - 0.44%
Bank / Financial Institution with whom these shares were pledged - Indiabulls Financial Services Ltd
5. Name of the promoter/ person forming part of promoter group - Amba Bhawani Properties Pvt Ltd
As on the date of notification i.e. on January 28, 2009 the total no of shares pledged - 15,75,000
% of shares pledged (% to the total no of paid up equity share capital i.e. 11,35,01,100) - 1.39%
Bank / Financial Institution with whom these shares were pledged - IL & FS
As on the date of notification i.e. on January 28, 2009 the total no of shares pledged - 22,00,000
% of shares pledged (% to the total no of paid up equity share capital i.e. 11,35,01,100) - 1.94%
Bank / Financial Institution with whom these shares were pledged - HDFC Ltd
6. Name of the promoter/ person forming part of promoter group - Prime Maxi Mall Management Pvt Ltd
As on the date of notification i.e. on January 28, 2009 the total no of shares pledged - 1,622,800
% of shares pledged (% to the total no of paid up equity share capital i.e. 11,35,01,100) - 1.421%
Bank / Financial Institution with whom these shares were pledged - IL & FS
7. Name of the promoter/ person forming part of promoter group - Chiranjiv Investments Ltd
As on the date of notification i.e. on January 28, 2009 the total no of shares pledged - 5,500,000
% of shares pledged (% to the total no of paid up equity share capital i.e. 11,35,01,100) - 4.84%
Bank / Financial Institution with whom these shares were pledged - IL & FS
8. Name of the promoter/ person forming part of promoter group - Sithir Housing & Constructions Pvt Ltd
As on the date of notification i.e. on January 28, 2009 the total no of shares pledged - 1,693,200
% of shares pledged (% to the total no of paid up equity share capital i.e. 11,35,01,100) - 1.491%
Bank / Financial Institution with whom these shares were pledged - IL & FS
9. Name of the promoter/ person forming part of promoter group - New Line Properties & Consultants Pvt Ltd
As on the date of notification i.e. on January 28, 2009 the total no of shares pledged - 905,800
% of shares pledged (% to the total no of paid up equity share capital i.e. 11,35,01,100) - 0.799%
Bank / Financial Institution with whom these shares were pledged - IL & FS
10. Name of the promoter/ person forming part of promoter group - Delhi Tower & Estates Pvt Ltd
As on the date of notification i.e. on January 28, 2009 the total no of shares pledged - 92,300
% of shares pledged (% to the total no of paid up equity share capital i.e. 11,35,01,100) - 0.082%
Bank / Financial Institution with whom these shares were pledged - IL & FS
Pyramid Saimira - Kotecha doesn't hold any shares
"We are getting queries from investors regarding current position of Mr. Nirmal Kotecha in the Company.
We want to clarify the investor community that as per his latest disclosure received by the company and intimated to the stock exchanges, presently Mr. Nirmal Kotecha is not holding any share in the company and he has resigned from the board of directors with effect from November 17, 2008.
Hence he is no more a person belonging to promoters group or a Person Acting in Concert."
Tata Communications to invest in Asia Pacific region
Tata Communications will invest in Asia Pacific region to the tune of $430 million
Will develop a Tata Communications Exchange - a IDC - Internet Data Center
and completion of its TGN-Intra Asia Cable System
Pre Session Commentary - Feb 12 2009
Today domestic markets are likely to open negative as all the Asian markets have opened with blood bath. Yesterday the US markets closed in green after the announcement of a bail out package of $ 789 billion. However the Asian markets could not take the US bail out plan in a positive spirit. The sentiments are still weak as there is no specific news for the support. The domestic markets have shown a good comeback on yesterday’s trade after an early downfall thus giving cues of a strong support level despite the lack of economic news. One could anticipate a range bound trade today until the IIP and Inflation numbers is declared, which may swing the markets in either ways. There are anticipations of better number for the IIP and Inflation and therefore one could expect some trend after the post mid session.
On Wednesday, the markets opened with a negative gap but later managed to pare off its losses. The trauma across the world markets due to lackluster US markets caused early havoc in the domestic sentiments as well, however some buying on the frontline stocks helped the benchmark indices to pare off its early losses. The cues from other Asian and European markets were also discouraging as they were trading in deep red. The US bail out package details could not pacify the anxiety of investors across the globe. To some extent domestic markets however showed their relative strength and therefore investors exuded a lot of confidence on topline and second rung bourses. Sectors like Auto, CD, Power and FMCG managed to close in green by 0.80%, 0.25%, 0.20% and 0.17% respectively. Mid caps and Small caps also gained 0.37% and 0.25% respectively. During the session we expect the markets to be trading positive despite a negative opening.
The BSE Sensex closed low by 28.93 points at 9,618.54 and NSE Nifty ended with a marginal loss of 8.80 points at 2,925.70. The BSE Mid Caps and Small Caps ended with gains of 10.89 points and 8.45 points at 2,965.14 and 3,350.97 respectively. The BSE Sensex touched intraday high of 9,648.39 and intraday low of 9,459.59.
The US markets on Wednesday closed in green. The US senate and House of Representatives have agreed on a bail out package of $ 789.5 billion that finally lifted the morale of investors. The further sign of improvement on initiatives to stimulate the economy prompted Short sellers to cover up their positions. The financial stocks we in the lime light as the sector gained the highest 5.2%. Energy stocks were the poorest performers as the crude prices were hammered badly. The sector fell by 1.3% during the day’s trade. US light crude oil for March delivery fell by $1.75 to settle at $35.80 a barrel on the New York Mercantile Exchange. Crude prices were shattered by a larger-than-expected inventory build and a reduced forecast for global oil demand from the IEA. While crude oil prices dropped, Gold registered impressive gains for the second straight session and closed at $944.50 per ounce, up by 3% to its highest level in more than six months.
The Dow Jones Industrial Average (DJIA) closed up by 50.65 points at 7,939.53. NASDAQ index gained 5.77 points at 1,530.50 and the S&P 500 (SPX) gained 6.58 points at 833.74.
Indian ADRs ended in mixed. In technology sector, Infosys ended lower by 0.44% along with Wipro by 1.48%. Further, Satyam ended with increase of 16.23% while Patni Computers closed down by 3.33%. In banking sector ICICI Bank and HDFC Bank gained 3.92% and 3.78% respectively. In telecommunication sector, MTNL dropped by 4.07% while Tata Communication plunged 0.17%. Sterlite Industries decreased by 0.18%.
Today major stock markets in Asia have opened negative. Shanghai composite is down by 39.80 points to 2,221.02, Japan''s Nikkei is also low by 186.27 points at 7,759.67. Hang Seng fell 283.73 points at 13255.48, South Korea''s Seoul Composite is low by 20.83 points at 1,169.35 and Singapore''s Strait Times is low by 16.72 points to 1,705.25.
The FIIs on Wednesday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 1,695.20 Crore and gross debt purchased stood at Rs 117.50 Crore, while the gross equity sold stood at Rs 1,279.00 Crore and gross debt sold stood at Rs 117.00 Crore. Therefore, the net investment of equity and debt reported were Rs 416.10 Crore and Rs 0.40 Crore respectively.
On Wednesday, the Indian rupee closed at 48.69/70, 0.03 paise stronger than its previous close of 48.72/73. The waning importer’s demand for dollar and the end session recovery of stock markets helped rupee gain strength.
On BSE, total number of shares traded were 33.23 Crore and total turnover stood at Rs 3,280.70 Crore. On NSE, total number of shares traded were 70.47 Crore and total turnover was Rs 83.40 Crore.
Top traded volumes on NSE Nifty – Unitech with 76696683 shares, Suzlon Energy with 18964912 shares, DLF with 14985947 shares, SAIL with total volume traded 14396217 shares followed by Reliance Comm with 12171052 shares.
On NSE Future and Options, total number of contracts traded in index futures was 736295 with a total turnover of Rs 9,881.97 Crore. Along with this total number of contracts traded in stock futures were 915096 with a total turnover of Rs 8,514.02 Crore. Total numbers of contracts for index options were 941961 with a total turnover of Rs. 13,732.74 Crore and total numbers of contracts for stock options were 73227 and notional turnover was Rs 859.65 Crore.
Today, Nifty would have a support at 2,891 and resistance at 2,987 and BSE Sensex has support at 9,552 and resistance at 9,709.
Modest gains at Wall Street
Senate and House reach an agreement over stimulus plan boosting stocks
Stocks at Wall Street managed a modest and decent end on Wednesday, 11 February, 2009 after yesterday's huge sell-off rattled investors yesterday. Reports indicating that a tentative agreement has been reached regarding the stimulus plan gave investors some relief today and the indices ended the day with modest gains.
Market started the day in the green and except for Nasdaq which slipped in the red for a very brief period, the indices managed to end in the green. Chairmen of various banks which have already received the first installment if TARP funding and is also on the way to receive the next slot testified today in front of the Congress. The economic and earning reports that checked in today remained mixed in nature.
After opening 74 points higher earlier in the day, The Dow Jones Industrial Average ended higher by 50 points at 7,939, the Nasdaq closed higher by 6 points at 1,30 and the S&P 500 closed higher by 6.5 points at 833.
As per latest reports in the market, the stimulus plan now totals $789.5 billion, and is on track for vote later this week. The impression that the Senate and House have agreed on the terms of a $789.5 billion economic stimulus bill spurred stocks higher.
The financial sector tried to support the market today. Citigroup and Bank of America were trying to hold the forte and are the most actively trading stocks.
Among major economic news today, the December Trade Balance showed a deficit of $39.9 billion. That is actually up from the prior reading, reflecting a drop in imports, which was partly offset by a drop in exports.
In the earnings side, Research In Motion stated this morning it expects fourth quarter earnings to be at the low end of its previous forecasts.
On Wednesday, crude-oil futures for light sweet crude for March delivery closed at $35.94/barrel (lower by $1.61 or 4.3%) on the New York Mercantile Exchange. Earlier during the day, it went up by 1%. Prices gave up gains as Energy Department reported larger than expected build up in crude inventories for the last week. The strong dollar also impacted crude prices today.
EIA reported today that crude inventories excluding those in the Strategic Petroleum Reserve gained 4.7 million barrels to 350.8 million barrels in the week ended 6 February, 2009. Inventories at Cushing, Oklahoma, the delivery point for futures traded on the New York Mercantile Exchange, rose to 34.9 million, the highest level on record.
Other than a few earning reports, the economic calendar is light tomorrow. January retail sales data and weekly jobless claims are both due early tomorrow morning followed by the business inventory data for December.
Market seen opening firm; IIP, inflation data eyed
Key benchmark indices are likely to see a firm start on hopes the interim budget for 2009-10 on 16 February 2009 may offer tax sops and sector-specific stimulus package. Also further rate cut from central bank post inflation at one-year low may also boost sentiment. The SGX Nifty futures for February 2009 series rose 9 points in Singapore.
Inflation data for the 12 month period to 31 January 2009 will be released today, 12 February 2009. Also the index of industrial production (IIP) data for December 2008 will be released today, 12 February 2009. The IIP for the November 2008 stood at 2.4%, compared to contraction of 0.4% in October 2008.
Global cues were mixed. Asian markets slipped as weak trade data from China and an overnight slide in crude oil prices
outweighed a compromise deal on the massive US stimulus plan. Japan's Nikkei 225 fell 2.34% or 186 points at 7759.67, Hong Kong's Hang Seng lost 1.20% or 163 points at 13,376, South Korea's Seoul Composite fell 1.22% or 14.49 points at 1175.69, Singapore's Straits Times tumbled 1.01% or 17.36 points at 1704.61, Taiwan's Taiwan Weighted was down by 0.50% or 22.74 points at 4553.21 and China's Shanghai Composite fell 0.36% or 8.22 points at 2252.60.
US stocks gained on Wednesday, 11 February 2009 as lawmakers said Congress will reach an agreement on a $789 billion plan to revive the economy and investors snapped up bank shares trading near the lowest valuation on record. The Dow Jones Industrial Average rose 50.65 points, or 0.6% to 7,939.53. The S&P 500 added 6.58 points or 0.8% to 833.74 and the Nasdaq Composite index gained 5.77 points or 0.38% to 1,530.50.
Back home, despite the sharp intraday recovery key benchmark indices ended slightly lower on Wednesday, 11 February 2009, ending three-day winning streak. The BSE 30-share Sensex fell 28.93 points or 0.3%, to 9,618.54 and the S&P CNX Nifty slipped 8.8 points, or 0.3%, to 2,925.70.
According to provisional data on NSE, FIIs were net sellers worth Rs 34.76 crore while mutual funds sold shares worth Rs 75.27 crore on Wednesday, 11 February 2009.
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.
Trading Calls - Feb 12 2009
Nifty (2926) Sup 2880 Res 2970
Buy RCOM (173) SL 169
Target 180, 182
Buy Hero Honda (902) SL 894
Target 916, 920
Buy Reliance capital (426) SL 420 Target 436, 440
Sell Grasim (1359) SL 1375
Target 1335, 1325
Buy McDowell (732) SL 725
Target 745, 750
Daily News Roundup - Feb 12 2009
DLF stalls two of its biggest mid-income housing projects (BS)
Unitech Wireless signs tower sharing deal with TTSL and Quippo (BS)
Reliance Communications has reduced its GSM tariffs by 50% (BS)
Tata Power to import 7mn ton coal for its proposed power plants (BL)
NTT DoCoMo open offer to acquire upto 20% in TTML to start from February 19th (BS)
Government to infuse about Rs38bn capital in three PSBs – Central Bank, Vijaya Bank and UCO Bank (BS)
Tata Sons pledges 11.32% stake in Tata Tea for ~Rs3.9bn (FE)
Indian Hotels plans to sell its corporate office, Oxford House, in Colaba for an expected consideration of Rs600mn (ET)
PNB in pact with Oriental Insurance Company to sell insurance products (BS)
BEL has signed preliminary collaborative agreement with Astra Microwave of Hyderabad and SELEX Galileo of Italy (BL)
Hindustan Zinc raises silver prices by Rs450/kg (BL)
Nalco invites bids to sell 30,000 tonnes of alumina (BL)
Amara Raja Batteries has entered into pact with Maruti Suzuki to launch co-branded battery for replacement market (BL)
Nifty index to include Axis Bank in place of ZEE Entertainment from March 27th, 2009 (BL)
Patni Computer Systems drops bid to buy Satyam (ET)
ING Vysya, part of the ING Group is set to invest Rs6bn in the next two years in India (ET)
Indian Overseas Bank will sign MoU to acquire the assets and liabilities of Shree Suvarna Sahakari Bank. (ET)
Piramal Healthcare has roped in investment bank Credit Suisse as an advisor for a likely deal (ET)
Kinetic Engineering has announced a VRS for its 496 workers at its Ahmednagar plant in Maharashtra (ET)
Government okays major easing of FDI norms (BS)
Outstanding bank credit shrinks by Rs250bn mom in January 2009 (BS)
Domestic cement dispatches register healthy growth of 7.6% in April-January period (BS)
Government announced custom duty exemptions for the newspaper and magazine publishing industry (BS)
Government to provide sops to fertiliser companies for converting their existing urea plants running on furnace oil into gas-based units (BL)
Finance Ministry is examining whether to go for reduction of central sales tax by 1% from April 1 this year (ET)
Government plans to extend the tax sops for software & technology parks of India and 100% EOUs beyond March 2010 (ET)
Government may announce tax soaps for natural gas companies in the Interim Budget (ET)
Central Electricity Regulatory Commission will come out with new trading regulation for the country next month (FE)
Planning Commission member, Mr.Kirit Parikh, says that country might miss its target of adding 78.7GW power generation capacity in the current plan period (BS)
PNB chief, Mr.K C Chakrabarty has emerged as favourite candidate for RBI Deputy Governor post (BS)
SEBI to consider uniform face value of shares (BS)
Adapt to the change
It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change- Charles Darwin.
The same goes for the market and key indices could be primed for a fresh advance after a slow start. Among the key triggers are likely to be a sharp drop in inflation (thanks to the fuel price cut) and possible improvement in IIP data. Satyam’s government-appointed board will also meet today to consider a road-map for future, including a strategic sale. The winter session of Parliament begins today. Interim Railway Budget will be presented on Friday while the Vote-on-Account will be announced on Monday.
Ideally, we should have begun on a firm note, as US lawmakers have reached an agreement on how to reconcile the $789bn economic stimulus plan. US stocks gained marginally but European indices were slightly down. Asian markets are mostly in the red this morning. As a result, the Indian market too could open a little soft. However, encouraging macro-economic data might lead to a pull-back later in the day.
A lot of stock specific and in some cases, sector-centric action, is expected based on the news-flow. On the whole, the market is precariously poised. There are no decisive clues on market’s direction, either near-term or long-term.
Charles Robert Darwin, who would have been 200-years-old today, had in his lifetime demonstrated that all species of life have evolved over time from common ancestors through the process he called natural selection. Investors too should look for some natural selection of stocks which suit their instincts.
US stocks ended higher on Thursday after a fairly volatile day, as lawmakers announced that the Senate and House had reached a compromise deal on the Obama administration's ambitious economic stimulus package.
A rebound in banking shares, which have been battered out of shape recently, also helped bolster the sentiment on Wall Street. This was a day after stocks plunged on skepticism about the new bank bailout plan.
Bank of America shares jumped 9.2% and that of Citigroup climbed 10% after plunging at least 15% in the previous session. GE and Microsoft shares gained more than 2% as 7 of 10 industries in the S&P 500 index rallied.
The Dow Jones Industrial Average gained 50 points, or 0.6%, to end at 7,939.53. The S&P 500 added 6.5 points, or 0.8%, to close at 833.74. The Nasdaq Composite index rose 6 points, or 0.4%, to finish at 1,530.50.
Stocks struggled through the session as investors awaited more news on the stimulus plan. But the market moved higher after Senate Majority Leader Harry Reid announced that a deal had been reached on a $789bn bill that would combine the Senate's and House's separate, but similar measures.
Both houses are expected to vote on the compromise in the next few days. President Obama has said that he wants the final version of the bill on his desk by next Monday, which is the Presidents Day.
The major US indices all lost at least 4% on Tuesday, with the Dow Jones Industrial Average ending at a three-month low, after the government's bank rescue plan failed to provide the necessary details to reassure investors.
The banking sector and the TARP remained in focus on Wednesday, as Treasury Secretary Timothy Geithner testified about the new plan before the Senate Budget Committee in the morning.
Also, executives at eight of the largest financial institutions appeared before the House Financial Services Committee about how they have used the first half of the TARP money. Bank of America CEO Ken Lewis said the bank is still lending, and lending more than they would have as a result of TARP. Top executives from Citigroup, Wells Fargo, JPMorgan Chase and other firms also testified.
Blackberry-maker Research in Motion (RIM) warned that current-quarter profit would come in at the low end of its forecasts, as a result of slower sales due to the recession. Shares fell 14.5% in active Nasdaq trading.
The gap between US imports and exports narrowed in December to a six-year low. The trade gap also shrank for the second year in a row.
Treasury prices rose, lowering the yield on the benchmark 10-year note to 2.78% from 2.81% on Tuesday.
Lending rates were modestly lower. The 3-month Libor rate rose to 1.23% from 1.22% on Tuesday. The overnight Libor rate held steady at 0.30%. Libor is a bank lending rate.
US light crude oil for March delivery fell $1.61 to settle at $35.94 a barrel on the New York Mercantile Exchange. Prices were volatile after the government's weekly supply report showed a bigger-than-expected build in crude supplies.
Gasoline prices rose 1.2 cents to a national average of $1.94 a gallon.
The dollar gained against the euro and fell against the yen.
Gold futures extended gains, climbing above $940 an ounce to their highest level in nearly seven months, as investors continued to buy the precious metal amid doubts on new economic rescue plans unveiled in the US.
Gold for February delivery ended up $30.10, or 3.3%, at $943.80 an ounce on the Comex division of the New York Mercantile Exchange, the loftiest closing level for a front-month gold future since July. Trading more actively, the April contract rose 3.3% to $944.50 an ounce.
European shares lost ground for the second straight session, as details about a plan to shore up the US banking system remained scarce.
The pan-European Dow Jones Stoxx 600 index declined 0.4% to 193.13, with losses fronted by the banking sector.
The French CAC 40 index rose 0.2% to 3,027.72, while the UK's FTSE 100 index added 0.5% to 4,234.26 and Germany's DAX 30 index advanced 0.5% to 4,530.09.
Bulls were unable to carry on the momentum as Indian markets ended in the red for the first time in three days. Overnight losses in the US markets dragged the Nifty index below the 2,900 mark in early trades. However, bulls staged a strong come back in the second half as short covering was witnessed. The rally could also be attributed on hope of further stimulus measures that may be announced in the vote-on-account on Monday.
Finally, the Sensex marginally slipped 28 points to close at 9,618 and the Nifty slipped 9 points to close at 2,925.
Among the 30-components of Sensex, 20 stocks ended in the negative terrain and 10 stocks ended in the green. The major losers in the Sensex were Ranbaxy, Grasim, Reliance Infrastructure, Tata Steel, Tata Motors and Sun Pharma.
Bucking the negative trend were, Maruti, ACC, JP Associates, Bharti Airtel, HDFC and Tata Power.
Shares of Reliance Industries slipped 1.2% to Rs1384. According to reports, the company is planning to sell KG-D6 gas by March end or early April. The scrip touched an intra-day high of Rs1390 and a low of Rs1362 and recorded volumes of over 13,00,000 shares on BSE.
Shares of Reliance Power slipped by 0.5% to Rs102 after reports stated that the company may face delays in building its largest coal-fired plants as the credit crunch has seen its loan approvals held up.
RPower is Rs25bn short of the Rs145bn it requires to borrow for its first 4,000MW plant at Sasan.The scrip touched an intra-day high of Rs103.3 and a low of Rs101 and recorded volumes of over 9,00,000 shares on BSE.
Shares of Wockhardt ended flat at Rs96 .The company announced that its promoters pledge 40% stake in the company to raise around Rs3.5bn. The scrip touched an intra-day high of Rs97 and a low of Rs92 and recorded volumes of over 8,00,000 shares on BSE.
Shares of BEL have gained by 2% to Rs907 after the company announced that it signed a venture agreement with Astra Microwave. The scrip has touched an intra-day high of Rs915 and a low of Rs875 and has recorded volumes of over 3,00,000 shares on NSE.
Astra Microwave have rallied by over 8% to Rs40 hitting an intra-day high of Rs41 and a low of Rs36 and has recorded volumes of over 5,00,000 shares on NSE.
PTC India announced that it plans to foray into PE business with an initial investment of more than Rs5bn, stated reports.
The stock was down by 0.6% to Rs64.4 hitting an intra-day high of Rs64.6 and a low of Rs61.6 and recorded volumes of over 61,000 shares on BSE.
Shares of Zee Limited plunged by over 12% to Rs114 as Axis Bank would replace Zee Limited in NSE Nifty-50 index with effect from March 27.The scrip touched an intra-day high of Rs125 and a low of Rs112 and recorded volumes of over 12,00,000 shares on BSE.
Shares of Maytas Infra witnessed buying interest for the first time in a month after reports stated that Infrastructure Leasing & Financial Services which currently holds 20% of Maytas Infra is looking to acquire complete control of the company.
Infrastructure Leasing is among the 15 lenders to have given a total of Rs50bn to the company.
The stock was constantly hitting lower circuit for 22 straight trading sessions. Finaly, the stock was up by 5% at Rs54.3 touching an intra-day high of Rs54.3 and a low of Rs49.2 and recorded volumes of over 22,00,000 shares on the BSE.
Looking at the strong recovery towards the end, bulls might carry the momentum on Thursday. It’s an eventful day with the IIP data for December to be released is likely to be better than the past couple of months and also inflation may soften a bit further.
Siemens
We recommend a buy in Siemens from a short-term trading perspective. It is clearly visible from the charts that after encountering resistance around Rs 322 in early January, it witnessed a sharp tumble. However, the stock found support at Rs 186 that was also the 52-week low. Since then, the stock has been on a gradual short-term uptrend. On February 11, the stock gained bullish momentum by surging 7 per cent. This gain conclusively penetrated the stock’s 21-day moving average. We notice that there is an increase in volume over the past three trading sessions. The daily relative strength index (RSI) is rising in the neutral region and the weekly RSI is displaying prolonged positive divergence. The price rate of change (ROC) indicator is rising in the positive territory indicating buying interest. We are bullish on the counter from a short-term perspective. We expect the going-up move to continue until it hits our price target of Rs 245. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 209.
Bullion metals glitter
Prices rise to seven month high as traders continue to buy more
Bullion metal prices went up substantially on Wednesday, 11 February, 2009. Anticipation that the bailout plan for banks and stimulus package for overall economy will increase inflation increased the appeal of the precious metals as alternate investment. Prices rose to almost seven month high. Silver prices also gained today. Prices rose despite a 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.
On Wednesday, Comex Gold for February delivery rose $30.1 (3.3%) to close at $943.8 an ounce on the New York Mercantile Exchange. The more active April contract rose to a high of $945 today.Last week, gold prices ended down by 1.5%. For January, 2009, gold had gained 3.9%. Year to date, gold prices are higher by 6.7%.
On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (14%) since then.
On Wednesday, Comex silver futures for March delivery rose 39 cents (3%) to end at $13.52 an ounce. Year to date, silver has climbed 19% this year. For 2008, silver had lost 24%.
At Capitol Hill today, chairmen of various banks which have already received the first installment if TARP funding and is also on the way to receive the next slot are testifying today in front of the Congress.
In the currency market today, the dollar index ended higher by 0.8%.
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 April delivery closed higher by Rs 468 (3.3%) at Rs 14,690 per 10 grams. Prices rose to a high of Rs 14,724 per 10 grams and fell to a low of Rs 14,235 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 638 (3.1%) higher at Rs 21,186/Kg. Prices opened at Rs 20,570/kg and rose to a high of Rs 21,273/Kg during the day's trading.
Crude sheds on inventory report
Prices end more than 4% lower as inventory rises more than expected
Oil prices gave up earlier gains and ended lower on Wednesday, 11 February, 2009. Prices gave up gains as Energy Department reported larger than expected build up in crude inventories for the last week. The strong dollar also impacted crude prices today.
On Wednesday, crude-oil futures for light sweet crude for March delivery closed at $35.94/barrel (lower by $1.61 or 4.3%) on the New York Mercantile Exchange. Earlier during the day, it went up by 1%.
Prices reached a high of $147 on 11 July but have dropped almost 75% since then. Year to date, in 2009, crude prices are lower by 20.8%. On a yearly basis, crude prices are lower by 63%.
EIA reported today that crude inventories excluding those in the Strategic Petroleum Reserve gained 4.7 million barrels to 350.8 million barrels in the week ended 6 February, 2009. Inventories at Cushing, Oklahoma, the delivery point for futures traded on the New York Mercantile Exchange, rose to 34.9 million, the highest level on record.
EIA also reported that Gasoline stockpiles fell by 2.6 million barrels while distillate fuels, which include diesel and heating oil, declined by 1 million barrels.
As per the report, total products supplied over the last four-week period averaged 19.8 million barrels per day, down by 1.3% compared to the similar period last year. Meanwhile, U.S. refineries operated at 81.6% of their operable capacity last week, the lowest in four months.
In the currency market today, the dollar index ended higher by 0.8%.
Paris based, IEA reported today that this year's global oil demand will fall by 1 million barrels a day, or 1.1%, from last year. If realized, it will be the biggest yearly drop since 1982. The IEA cited a worsening economic outlook across all regions as the reason for the weakness in oil demand.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
OPEC has been trying to cut production consistently in order to step up prices from their current low levels. OPEC agreed to reduce production by a record amount of 2.2 million barrels a day, starting from 1 January, 2009 adding to previous cuts of 2 million barrels. Overall, the reduction is equal to about 5% of the world's oil demand.
Against this background, March reformulated gasoline rose 2.1% to $1.2698 a gallon and March heating oil gained 1.2% to $1.3164 a gallon.
Natural gas for March delivery fell 5.5% to $4.543 per million British thermal units.
At the MCX, crude oil for February delivery closed at Rs 1,820/barrel, lower by Rs 89 (4.7%) against previous day's close. Natural gas for February delivery closed at Rs 225.5/mmbtu, lower by Rs 1.2/mmbtu (0.52%).
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