Wednesday, February 18, 2009
BSE Bulk Deals to Watch - Feb 18 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
18/2/2009 532853 ASAHI SONG RELIANCE CAPITAL ASSET MGT LTD ACC PMS S 102000 12.00
18/2/2009 504000 ELPRO INTERN LOTUS GLOBAL INVESTMENTS LTD S 60000 270.00
18/2/2009 530407 EPIC ENERGY JAGDISH KUMAR BANGA B 33890 37.15
18/2/2009 530407 EPIC ENERGY GANESH BARTER PVT LTD S 34852 37.15
18/2/2009 532835 ICRA FRANKLIN TEMPLETON MUTUAL FUND B 275000 415.02
18/2/2009 532835 ICRA INDIABULLS CAPITAL SERVICES LIMITED S 174201 415.00
18/2/2009 532835 ICRA INDIABULLS INSURANCE ADVISORS LTD. S 180799 415.02
18/2/2009 508954 SANJAY LEAS KAILASH M BAFNA B 7500 32.17
18/2/2009 512048 SPLASH MEDIA ASHISH SHAH B 10000 62.50
18/2/2009 512048 SPLASH MEDIA REKHA BHANDARI B 7000 62.50
18/2/2009 532531 STRIDES ARCO IDFC MUTUAL FUND B 200600 63.01
18/2/2009 532531 STRIDES ARCO GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD S 399741 63.00
18/2/2009 532311 TUTIS TECH CHIRAG D PAREKH S 96054 13.50
18/2/2009 531249 WELL PACK PA VISHESH.SHAHRA B 50000 65.03
NSE Bulk Deals To Watch - Feb 18 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
18-FEB-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,BUY,186797,2065.69,-
18-FEB-2009,ITI,ITI Ltd.,BP FINTRADE PRIVATE LIMITED,BUY,83512,17.05,-
18-FEB-2009,KOHINOOR,Kohinoor Foods Limited,GREAT RATE STOCKS & WEALTH MGT PVT LTD,BUY,100000,49.99,-
18-FEB-2009,STAR,Strides Arcolab Limited,IDFC MUTUAL FUND,BUY,238000,63.05,-
18-FEB-2009,SUBHASPROJ,Subhash Proj & Mkt Ltd.,RELIANCE CAPITAL MUTUAL FUND,BUY,479000,40.00,-
18-FEB-2009,TULSI,Tulsi Extrusions Limited,DB (INTERNATIONAL) STOCK BROKERS LIMITED,BUY,75617,15.96,-
18-FEB-2009,VARUN,Varun Industries Limited,KUNVARJI FINSTOCK PVT LTD,BUY,500000,29.39,-
18-FEB-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,SELL,186797,2066.54,-
18-FEB-2009,ITI,ITI Ltd.,BP FINTRADE PRIVATE LIMITED,SELL,123229,17.05,-
18-FEB-2009,KOHINOOR,Kohinoor Foods Limited,GREAT RATE STOCKS & WEALTH MGT PVT LTD,SELL,214000,46.04,-
18-FEB-2009,PRETAILDVR,Class B shares (Series 1),FID FUNDS (MAURITIUS) LTD,SELL,254216,100.00,-
18-FEB-2009,STAR,Strides Arcolab Limited,GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD,SELL,431000,63.00,-
18-FEB-2009,SUBHASPROJ,Subhash Proj & Mkt Ltd.,INDEA ABSOLUTE RETURN FUND,SELL,500000,40.11,-
18-FEB-2009,TULSI,Tulsi Extrusions Limited,DB (INTERNATIONAL) STOCK BROKERS LIMITED,SELL,75617,16.04,-
18-FEB-2009,VARUN,Varun Industries Limited,AMI PATEL,SELL,571995,29.16,-
Sensex holds 9,000 level in volatile trade
Key benchmark indices saw divergent trend in what was a highly volatile trading session. While the 30-share BSE Sensex fell, the broader based S&P CNX Nifty rose. Trend in global markets influenced trade on the domestic bourses. The Sensex fell 19.82 points, or 0.22%, up 85.56 points from the day's low but off 97.81 points from the day's high. The barometer index managed to settle above the psychologically important 9,000 mark.
As per the provisional data released by the stock exchanges after trading hours, foreign funds today, 18 February 2009, sold stocks worth a net Rs 288.45 crore. Domestic funds bought shares worth a net Rs 102.34 crore.
The market was volatile. It tumbled in opening trade mirroring a fall in global stocks caused by worsening world economic situation and worries about the global banking system. Volatility was high with the market alternatively moving between positive and negative zone. But the market soon cut losses as investors chased bargains in the battered market that had dropped 6.2% in the previous two sessions on disappointment from Monday's (16 February 2009) interim general budget and on weak global stocks. It weakened again later on weakness in global stocks.
The market cut losses in early afternoon trade on higher US index futures. The market moved into positive zone after the Reserve Bank of India (RBI) governor D Subbarao said the impact of the global recession on India was sharper than expected. His comments stoked speculation of more interest rates cuts to shield the domestic economy from the global financial sector crisis and recession in key global economies.
After hitting the day's high in mid-afternoon trade, the market weakened again later as European markets moved into the red from green and as US index futures pared gains.
Market men see a bigger role for RBI to shield the domestic economy from the global financial sector crisis and recession in key global economies in the coming months as election code will be in force by the end of the month which means that there cannon be any policy action from the government. Once the model code of conduct comes into force after the announcement of poll dates, any announcement by the government will be subject to Election Commission's (EC) scrutiny.
The EC is likely to announce the poll date for the parliamentary elections by the end of this month. The elections are likely to be held in April-May 2009
Meanwhile, the Centre today sought parliament's approval for Rs 10765 crore in extra spending for this fiscal year. In its interim budget the government said the fiscal deficit is seen at 6% of GDP at end 2008-09, far higher than the initial target of 2.5% set for the current year.
But the deteriorating fiscal position of the government has raised fears of downgrade of India's sovereign rating by international ratings agencies. Both Standard & Poor's and Fitch Ratings have already indicated that they are likely to lower the country's credit rating. India's fiscal deficit is one of the highest in the world and the two stimulus packages announced in recent months to shore up sagging growth have put pressure on finances, while tax collections have slowed sharply.
Standard and Poor's currently rates India's local currency rating at BBB- (minus), the lowest investment-grade level, with a stable outlook. Fitch has a similar rating but with a negative outlook, while Moody's pegs it at one notch lower at speculative grade.
If India's sovereign rating is downgraded, it will significantly raise the cost of borrowing of Indian firms in global markets - something the government had banked on to ease the domestic credit crunch. The financial meltdown had already reduced these inflows; a rating downgrade will put an end to them altogether.
European shares turned negative as banks gave up early gains and stocks trading without rights to dividend weighed on a key benchmark. Key benchmark indices in UK, Germany and France were down by between 0.54% and 0.95%.
Some Asian indices moved into green from red. Hang Seng rose 0.55%, Straits Times advanced 0.80% and Taiwan Weighted index gained 0.15%. But Key benchmark indices in Japan, South Korea, and China were down by between 1.24% and 4.72%. Earlier in the day, there was an across-the-board decline in Asian markets on deepening economic gloom and on fears about the global finance sector.
Trading in US index futures indicated the Dow could rise 21 points, cutting sharp gains at the opening bell on Wednesday, 18 February 2009
US markets tumbled on Tuesday, 17 February 2009 with the S&P 500 and the Dow industrials closing at near three-month lows, as regional manufacturing data signaled the recession is worsening while fresh worries about European banks underscored the global nature of the downturn.
The Dow Jones Industrial Average slumped 297.81 points, or 3.79% to 7,552.60. The Nasdaq Composite index fell 63.70 points, or 4.15%, to close at 1,470.66 and the S&P 500 fell 37.67 points, or 4.6%, to 789.17.
A report showing that manufacturing production in New York state fell to a record low in February stirred worries about the deepening recession and added to fears that the new US economic stimulus package won't be a quick fix.
US President Barack Obama signed the $787 billion economic stimulus bill into law on Tuesday, but investors are fearful that the plan will not blunt the impact of the recession soon enough. The White House hopes the package will save or create 3.5 million jobs.
Obama is likely outline today, 18 February 2009, another big piece of his recovery effort later - a $50 billion plan to help stem foreclosures in Arizona, one of the states hardest hit by the mortgage defaults that are at the center of the nation's economic woes.
Meanwhile the US auto industry needs even more help from the government to survive than originally thought. General Motors on Tuesday said it could need up to $30 billion from the Treasury Department to keep operating. Included in that amount is $13.4 billion the company has already received. Previously, GM had said it could need as much as $18 billion. General Motors Corp. and Chrysler LLC said Tuesday they will need billions more in government loans than they predicted just two months ago.
Stocks fell across Europe on Tuesday, 17 February 2009 on deepening financial crisis in eastern Europe as fears escalate that troubles in former communist countries could wallop western Europe's already-stressed banking system. Moody's Investors Services on Tuesday warned that banks in Eastern Europe with large loan books faced downgrades and their parent banks' ratings could also weaken.
Closer home, Commerce minister Kamal Nath is likely to announce an export booster package later this month which would address some of the crucial concerns of the exporters. The sops under consideration include simplification of rules for service tax refund, extension of time given to exporters to meet export obligation and an increase in rates of input duty reimbursement schemes like drawback and DEPB for some sectors.
The BSE 30-share Sensex was down 19.82 points or 0.22%, to 9,015.18. The Sensex opened points 95.62 lower at 8,939.38. At the day's low of 8,929.62, the Sensex lost 105.38 points in early trade. At the day's high of 9,112.99, the Sensex rose 77.99 points in mid-afternoon trade.
While the Sensex fell, the broader based S&P CNX Nifty rose albeit marginally. It rose 5.65 points or 0.20% at 2776.15.
Gains in some stocks which are part of the Nifty but are not in Sensex, helped Nifty score gains even when Sensex fell. Power Grid Corporation rose 2.75%, Unitech gained 2.83%, and BPCL surged 5.18%. Power Grid Corporation holds a 2.14% weight in Nifty and Unitech and BPCL enjoy 0.87% and 0.27% weightage respectively.
The barometer index BSE Sensex is down 632.13 points or 6.55% in calendar 2009 from its close of 9,647.31 on 31 December 2008.
The market breadth, indicating the overall health of the market, was negative on BSE with 1377 shares declining as compared with 994 that advanced. A total of 117 shares remained unchanged.
BSE clocked a turnover of Rs 2791 crore as compared to Rs 2,392.06 crore on Tuesday, 17 February 2009. Turnover in NSE's futures & options (F&O) segment rose to Rs 41,094.83 crore from Rs 38,956.24 crore on Tuesday, 17 February 2009.
The BSE Healthcare index (down 0.37%), BSE Consumer Durables index (down 1.70%), the BSE Bankex (down 0.37%), underperfomed the Sensex.
The BSE Metal index (up 0.18%), the BSE IT index (down 0.14%), and BSE Oil & Gas index (up 1.39%). BSE Realty index (up 3.18%), BSE Power index (up 0.51%), the BSE PSU index (up 0.39%), the BSE Capital Goods index (down 0.05%), the BSE Auto index (up 0.27%), and the FMCG index (down 0.07%), outperformed the Sensex.
Among the 30-member Sensex pack, 16 declined while the rest gained.
Rate sensitive realty shares reversed early losses on hopes lower interest rates will spur housing demand mostly driven by finance.
India's largest real estate firm by market capitalisation DLF jumped 9.57% to Rs 162 on high volumes of 87.92 lakh shares, rebounding from day's low of Rs 142.10. It was the top gainer from the Sensex pack. As per reports a consortium of private equity funds, including UAE's leading financial institution Taib Bank, the Blackstone group and JP Morgan, are in advanced negotiations with promoters of the DLF to pick up a majority stake worth around $400-450 million in affiliate company DLF Assets.
Unitech (up 2.83%), HDIL (up 2.06%), Indiabulls Real Estate (up 3.09%), rose.
India's largest small-car maker by sales Maruti Suzuki India advanced 4.39% to Rs 624.80 on reports it expects sales growth for the ongoing month to be around 5-7%. The company achieved total sales of 7,64,842 units for the 2007-2008 fiscal. It sold 71,779 vehicles in January 2009, its highest-ever monthly sales.
India's top truck maker by sales Tata Motors rose 1.75% to Rs 133.80 after its ADR rose 1.8% on the NSE on Tuesday, 17 February 2009.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) gained 1.88% to Rs 1291.45, off day's high of Rs 1316. Earlier the stock rebounded sharply from day's low of Rs 1248. RIL may reportedly restart crude oil production from its predominantly gas-rich KG-D6 fields next month. The field in KG-D6 had commenced crude oil production in September 2008 and had produced over 790,000 barrels up to 9 December 2008, when output ceased due to equipment failure.
State-run oil marketing companies (OMCs) surged after US light, sweet crude for March 2009 delivery fell $2.58 or 6.88% to $34.93 a barrel on Tuesday, 17 February 2009 on New York Mercantile Exchange (NYMEX) as grim economic indicators battered markets and raised concerns about slumping demand.
HPCL (up 4.25%), BPCL (up 5.53%), and IOC (up 2.92%), edged higher.
The fall in crude oil prices will reduce under-recoveries for the PSU OMCs for selling fuel at controlled prices. PSU OMCs are currently making profit on sale of petrol and diesel. But they continue to make losses on the sale of kerosene and liquefied petroleum gas.
Cement companies gained on hopes of higher demand after the interim budget 2009-10 presented in parliament on Monday, 16 February 2009 allocated Rs 40,900 crore to the the Bharat Nirman scheme, a time-bound plan for building rural infrastructure.
ACC (up 4.12%), India Cement (up 3.05%), UltraTech Cement (up 2.89%), and Shree Cement (up 4.27%), and gained on from the cement pack.
However most banking and financial shares remained subdued on worries about the global banking system. India's largest dedicated housing finance company by total income Housing Development Finance Corporation (HDFC) slumped 4.36% to Rs 1370.
India's largest private sector bank by net profit ICICI Bank lost 3.99% to Rs 370.50 on a 13.63% slide in its ADR on Wednesday, 17 February 2009. India's largest bank in terms of assets and branch network State Bank of India slipped 2.72% to Rs 1069.80.
India's second largest private sector bank by net profit HDFC Bank rose 0.43% to Rs 884 despite its ADR sliding 7.72% on Tuesday, 17 February 2009.
Moody's Investors Services on Tuesday threatened to downgrade euro zone banks with significant exposure to the weakening economies in Eastern and Central Europe, and Standard & Poor's said it may review emerging Europe bank ratings.
India's second largest private sector power generation firm by market capitalisation Reliance Infrastructure slumped 4.34% to Rs 496.40 on reports the company violated external commercial borrowings (ECB) rules and invested $300 million in debt mutual fund.
IT pivotals were mixed as fears a weak global economy would cut the amount firms spent on technology offset weak rupee.
India's third largest software services exporter, Wipro fell 0.52% on a 6.65% fall in ADR on Tuesday, 17 February 2009. India's largest software services exporter by sales TCS slipped 1.21% while India's fifth largest IT exporter by sales HCL Technologies rose 0.27%.
India's second largest software exporter by sales, Infosys Technologies rose 0.33%. The company reportedly sees a 5% cut in IT budgets of its clients in Europe this year
The rupee tumbled to 50.01/02 against the dollar from its close of 49.70/72 on Tuesday, 17 February 2009 on concerns of capital outflows from stock market following weakness in global markets. A weaker rupee boosts operating margins of IT firms as the sector earn most of its revenue from exports.
India's largest private sector aluminium maker by sales Hindalco Industries shed 1.90% to Rs 41.40. After market hours on 16 February 2009, the company announced its board had approved the proposal to use $1.8 billion in its reserve to write-off costs relating to its foreign acquisition and domestic expansion.
India's largest cigarette maker by sales ITC fell 1.08% to Rs 178.60. Reports the Supreme Court has restrained the customs department from taking any action against the company which has been held responsible for importing around 1,000 tonnes of 'hazardous municipal waste', had pulled stock to day's high of Rs 182.50 in intra-day trade.
Reliance Industries topped the turnover chart on BSE with a turnover of Rs 250.80 crore followed by Educomp Solutions (Rs 232.50 crore), Reliance Infrastructure (Rs 188.90 crore), United Spirits (Rs 138.70 crore) and DLF (Rs 134.50 crore).
Unitech led the volume chart on BSE clocking volumes of 1.26 crore shares followed by Cals Refineries (93.30 lakh), Satyam Computer Services (89.20 lakh), DLF (88 lakh) and Suzlon Energy (69.75 lakh).
Maytas Infra was locked at upper limit of 5% at Rs 56.85 after the government approached the Company Law Board to supersede the boards of Maytas Infra and Maytas Property.
SREI Infrastructure Finance galloped 12.46% to Rs 36.55 after a consortium of the company secured a contract worth Rs 6000 crore. The company announced the new order win during trading hours today, 18 February 2009.
KEC International rose 0.33% to Rs 138 on bagging orders aggregating to Rs 365 crore. The company announced the new orders during trading hours today, 18 February 2009.
Post Session Commentary - Feb 18 2009
Indian market closed the day on flat note after exhibiting volatility during the trading session. Today investors showed some interest to book further positions after remaining in the sellers front for the past two trading sessions. After an initial fall, the market bounced back on selective buying across the sectoral indices.
The domestic market tumbled in opening bell mirroring fall in markets all over the world led by worsening global economic situation. US stock markets on Tuesday plunged with the S&P 500 index falling below 800 for the first time in nearly three months on the back of renewed financial and economic concerns that prompted an unrelenting selling effort. Further, benchmark indices managed to gain ground on recovery in some Asian stocks along with firm US index futures. Positive opening of European markets also contributed to lift the sentiments. Along with retract from yesterdays fall, volatility was high during the trading session on the back of continuous bouts of buying and selling. BSE Sensex ended below 9,050 mark and NSE Nifty closed below 2,800 level. From the sectoral front, Reality, Oil & Gas, Power, PSU and Auto stocks were able to gain the market favour. However, most of the selling was observed in Bank, Consumer Durables, Pharma and IT stocks. Midcap and Smallcap stocks also witnessed selling pressure during the trading session.
Among the Sensex pack 15 stocks ended in green territory and 15 in red. The market breadth indicating the overall health of the market remained in favour of decliners as 1381 stocks closed in red while 1006 stocks closed in green and 107 stocks remained unchanged in BSE.
The BSE Sensex closed marginally lower by 19.82 points at 9,015.18 whereas NSE Nifty ended slightly up by 5.65 points at 2,776.15. Broader market indices were in red as BSE Mid Caps and Small Caps ended with losses of 12.82 points and 19.93 points at 2,844.30 and 3,226.06 respectively. The BSE Sensex touched intraday high of 9,113.92 and intraday low of 8,922.31.
Losers from the BSE Sensex pack are HDFC (4.76%), M&M Ltd (4.74%), ICICI Bank (4.29%), Reliance Infra (3.41%), SBI (2.69%), Hindalco (1.54%), TCS Ltd (1.10%) and Sun Pharma (0.88%).
Gainers from the BSE Sensex pack are DLF Ltd (7.34%), Maruti Suzuki (4.39%), ACC Ltd (3.19%), Reliance (2.14%), NTPC Ltd (1.38%), RBharti Airtel (1.34%), Tata Motors (1.33%) and JP Associates (1.25%).
On the global markets front, the Asian markets, which opened before Indian market, ended mixed following a sell-off on Wall Street overnight and fears about the health of the global financial sector. Shanghai Composite, Nikkei 225 and Seoul Composite index ended down by 109.58, 111.07 and 14 points at 2,209.86, 7,534.44 and 1,113.19 respectively. However Hang Seng and Straits Times ended up by 70.6 and 13.14 points at 13,016 and 1,651.06 respectively.
European markets which opened after the Indian market, opened mostly in green are now trading in red. In London FTSE 100 is trading lower by 57.83 points at 3,976.3 and in Frankfurt the DAX index is trading down by 54.68 points at 4,161.92.
The BSE Reality index reversed early losses on hopes that lower interest rates will encourage housing demand mostly driven by finance and ended higher by (3.18%) or 45.99 points to close at 1,491.66. DLF Ltd (7.34%), Unitech Ltd (2.83%), Indiabull Real (2.82%), Housing Dev (2.19%) and Penland Ltd (1.54%) ended in positive territory.
The BSE Oil & Gas index advanced by (1.39%) or 84.72 points to close at 6,162.68. BPCL (5.46%), HPCL (3.92%), IOC Ltd (2.62%) and Reliance (2.14%) ended in positive.
The BSE Power stocks ended up by (0.51%) or 8.91 points at 1,743.09. Main gainers are Power Grid (2.99%), GMR Infra (1.64%), NTPC Ltd (1.38%), BHEL (1.04%) and Tata Power (0.81%).
The BSE Bank index remained subdued on worries about the global banking system and ended down by (2.27%) or 103.88 points at 4,479.49 on weak sentiment for financial sector globally. Main losers are Indian Overseas Bank (4.75%), Oriental Bank (4.32%), ICICI Bank (4.29%), Allahabad Bank (3.12%), SBI (2.69%) and IDBI Bank (1.36%).
The BSE Consumer Durables index closed with decrease of (1.70%) or 27.07 points at 1,563.88 after the interim budget did not announce any sops for the sector. Scrips that lost are Gitanjali GE (4.98%), Titna Ind (3.48%), Rajesh Export (0.41%) and Videocon Ind (0.46%).
The BSE Pharma index also lost ground and ended down by (0.37%) or 9.81 points at 2,625.80. Lossers are Piramal Health (4.06%), Bil Care (3.52%), Divis Lab (2.55%) and Sunpha Adv (1.90%).
Areva T&D ended higher by 2.49%. The company has been chosen as the preferred partner by BGR Energy for 420 KV and 230 KV Gas Insulated Substation package for Mettur Thermal Power Project Stage III of Tamil Nadu Electricity Board. The order comprises of Design, Engineering, Manufacturing, Supply and other associated activities of 15 bays of 420 KV and 8 bays of 230 KV gas Insulated Substation and 2 km of Gas Insulated Lines. The equipment against this order worth approximately 1010 MINR is to be delivered in Q4 of 2008.
Tata Motors ended up by 1.33% as the company has entered into tie up with Central Bank of India for financing its range of passenger vehicles. This facility will be available at all the 3,500 branches of the bank as well as the 329 touch points of Tata Motors. The Central Bank''s auto loans are for up to 85% of the on road price for 7 years while 10.5% per annum for a period of 36 months and 11.5% for more than 36 months.
KEC International Ltd ended up by 0.58%. The company has bagged new orders in both rural electrification and transmissions Yojana. The company bagged the order from West Bengal State Electricity Distribution Company Ltd covering electrification in 3340 villages including providing Below Poverty Line service connections and new substations. The projects are scheduled to be completed by July 2010.
M&M Ltd tumbled 4.74%. The company is planning to enter into the leisure boating segment through Mahindra Ocean Blue, which is a joint undertaking with Mumbai-based marina operator Ocean Blue. The Mahindra group will manufacture the power boats, cabin cruisers and catamarans at its existing factories.
Housing Development Finance Corporation slumped 4.76% on fears that a cut in lending rates would impact margins if Reserve Bank of India take more steps to bring down lending rates in the market.
JSW Steel ended down by 2.29%. JSW Steel is geared up to become the country''s largest private sector steel producer with the commissioning of a 3 MTPA extended production line at its Vijaynagar facility. The company is commissioning the three million tonnes per annum additional production line at Vijaynagar plant on February 18, taking its total capacity to 6.8 MTPA. With this expansion, the overall production capacity of the company would reach 7.8 mn tonnes from 4.8 mn tones currently
Pre Session Commentary - Feb 18 2009
Today domestic markets are once again likely to open negative as the major Asian markets have also opened with blood bath. The US markets followed the fall of other markets and today once again the bearish trend has prevailed across Asian markets. The US, Europe and Japan seems to have fallen into a synchronized recession, causing further concerns for emerging markets like India and China. The sentiments are weak across the globe and the domestic markets are likely to follow the trend of other markets. Therefore today one could witness the markets moving into the southward once again.
On Tuesday, the markets opened with brutal losses. The sentiments were weak as investors were carrying resentment of yesterday’s poor interim budget presentation. Besides, the blood bath opening of Asian markets also added fuel to the fire of bearishness. European markets like DAX, FTSE and CAC were also trading in deep red. The bears are have clawed the markets across the world and there is no sign of recovery in the present scenario. In the domestic arena, heavy selling was witnessed across broader markets as the benchmark indices kept plunging in deep red. Sectors like Realty, CD, Bandex, Metal and IT as they fell drastically by 4.85%, 4.80%, 4.41%, 3.98% and 3.24% respectively. Mid caps and Small caps fell 2.31% and 2.35% respectively. During the session we expect the markets to be trading negative.
The BSE Sensex closed low by 270.45 points at 9,035 and NSE Nifty ended with a loss of 78 points at 2,770.50. The BSE Mid Caps and Small Caps ended with losses of 67.63 points and 78.15 points at 2,857.12 and 3,245.99 respectively. The BSE Sensex touched intraday high of 9,213.40 and intraday low of 8,994.34.
On Tuesday, the US stock markets ended in deep red. The weakness observed across all the other markets in Asia and Europe brought down the sentiments of investors in US as well. Financials were hit hard as the sector closed 9.8% lower with weakness in consumer finance (-11.9%), diversified financial companies (-12.2%), and diversified banks (-13.1%). The sector also registered a new 52-week intraday low and a new 52-week closing low. Another sector that is into deep worry is the Auto sector. The Auto sales have also fallen drastically by nearly half and therefore the lamenting sector seeks a bailout package from the US government. Crude oil for March delivery fell by a drastic 7% to close at $ 34.95 a barrel on the New York Mercantile Exchange. The price of Crude oil has plummeted on concerns of economic slowdown and hence repercussion in demand of oil. On the other hand, Gold inclined by 3.2% to close at $ 971.30 per ounce.
The Dow Jones Industrial Average (DJIA) dropped by 297.81 points to close at 7,552.60 The NASDAQ Composite (RIXF) index fell by 63.70 points to close at 1,470.66 and the S&P 500 (SPX) lost by 37.67 points to close at 789.17.
Indian ADRs ended down. In technology sector, Satyam ended lower by 6.81%. Further, Wipro ended with decrease of 6.65%. Further, Infosys lost 4.89% and Patni Computers closed down by 8.75%. In banking sector ICICI HDFC Bank and HDFC Bank lost 13.63% and 7.72% respectively. In telecommunication sector, MTNL and Tata Communication dropped by 7.41% and 11.13% respectively. Sterlite Industries decreased by 10.91%.
Today major stock markets in Asia are trading negative. Shanghai composite is lower by 63.23 points to 2,256.21, Japan''s Nikkei is low by 96.38 points at 7,549.13. Hang Seng lost 200.42 points at 12,744.98, South Korea''s Seoul Composite is low by 14.66 points at 1,112.53 and Singapore''s Strait Times is lower by 0.14 points to 1,637.78.
The FIIs on Tuesday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 685.70 Crore and gross debt purchased stood at Rs 304.20 Crore, while the gross equity sold stood at Rs 969.10 Crore and gross debt sold stood at Rs 652.90 Crore. Therefore, the net investment of equity and debt reported were Rs (283.40) Crore and Rs (348.80) Crore respectively.
On Tuesday, the Indian rupee closed at 49.72/73, 1.84% weaker than its previous close of 48.82/83. The rupee fell sharply as the domestic stock markets fell drastically for the second consecutive day.
On BSE, total number of shares traded were 21.44 Crore and total turnover stood at Rs 2,392.06 Crore. On NSE, total number of shares traded were 61.75 Crore and total turnover was Rs 8,019.41 Crore.
Top traded volumes on NSE Nifty – Unitech with 43932074 shares, Suzlon with 25222958 shares, DLF with 12442617 shares, ICICI Bank with total volume traded 11229079 shares followed by SAIL with 8263039 shares.
On NSE Future and Options, total number of contracts traded in index futures was 741013 with a total turnover of Rs 9,561.36 Crore. Along with this total number of contracts traded in stock futures were 874476 with a total turnover of Rs 9,066.44 Crore. Total numbers of contracts for index options were 1369939 with a total turnover of Rs. 19,356.97 Crore and total numbers of contracts for stock options were 87907 and notional turnover was Rs 971.46 Crore.
Today, Nifty would have a support at 2,685 and resistance at 2,752 and BSE Sensex has support at 8,819 and resistance at 8,945.
Slide may continue
The south-bound trend in the market is likely to continue on the back of a weak global indices. Intra-day volatility and further slump in FIIs may also weigh on the sentiment. Among the key domestic indices, the Nifty may test 2730 on the downside while on the upside the index could test higher levels of 2800, while the Sensex could test higher levels of 9200 and has a likely support at 8900.
US indices faltered at 3-month lows, with Wall Street sliding even as President Obama signed into law the $787 billion economic stimulus plan. While the Dow Jones dropped 298 points to close at 7553, the Nasdaq ended 64 points lower at 1471.
Barring Tata Motors, the remaining ADRs ended with losses on the US bourses. ICICI Bank and VSNL dropped over 11-13% each while Patni Computer, MTNL, HDFC Bank, Wipro, Satyam, Infosys, Dr Reddy and Rediff were down around 2-8% each.
Crude oil prices inched lower, with the Nymex light crude oil for March delivery slipping by $2.58 at $34.93 a barrel and in the commodity segment, the Comex gold for April 09 series slumped $25.30 to settle at $967.50 an ounce.
Market seen extending two-day losses as recession worsens
Key benchmark indices are seen opening sharply lower, extending two-day losses, in a global backlash following renewed global economic worries. The SGX Nifty futures for February 2009 series dropped 33 points in Singapore.
Deepening economic gloom and fears about the health of the global finance sector pushed Asian shares to their lowest level this month and Japan's Topix index toward the lowest close in 25 years. China's Shanghai Composite was down 1.95% or 45.17 points at 2,274.26, Hong Kong's Hang Seng fell 0.82% or 105.67 points at 12,839.73, Japan's Nikkei declined 1.19% or 90.86 points at 7,554.65, Singapore's Straits Times was down 0.11% or 1.78 points at 1,636.14, South Korea's Seoul Composite plunged 1.07% or 12.02 points at 1,115.17 and Taiwan's Taiwan Weighted shed 0.37% or 16.55 points at 4,475.23.
US markets tumbled on Tuesday, 17 February 2009 with the S&P 500 and the Dow industrials closing at near three-month lows, as regional manufacturing data signaled the recession is worsening while fresh worries about European banks underscored the global nature of the downturn.
The Dow Jones Industrial Average slumped 297.81 points, or 3.79% to 7,552.60. The Nasdaq Composite index fell 63.70 points, or 4.15%, to close at 1,470.66 and the S&P 500 fell 37.67 points, or 4.6%, to 789.17.
US President Barack Obama signed a $787 billion economic stimulus bill into law on Tuesday, 17 February 2009 predicting the package of spending and tax cuts. Obama said the stimulus package - one of the most costly pieces of legislation in US history - cleared the way for Americans to begin 'laying claim to a destiny of our own making.'.
Today evening Obama will outline another big piece of his recovery effort - a $50 billion plan to help stem foreclosures in Arizona, one of the states hardest hit by the mortgage defaults that are at the center of the nation's economic woes.
Meanwhile the US auto industry needs even more help from the government to survive than originally thought. General Motors on Tuesday said it could need up to $30 billion from the Treasury Department to keep operating. Included in that amount is $13.4 billion the company has already received. Previously, GM had said it could need as much as $18 billion. General Motors Corp. and Chrysler LLC said Tuesday they will need billions more in government loans than they predicted just two months ago.
Stocks fell across Europe overnight on deepening financial crisis in eastern Europe as fears escalate that troubles in former communist countries could wallop western Europe's already-stressed banking system..
Back home, a broad-based sell-off spilled over to the second session in a row on Tuesday, 17 February 2009 after interim budget presented on Monday, 16 February 2009, turned out to be a non-event. Weakness in global markets also dampened sentiments. The BSE 30-share Sensex fell 270.45 points, or 2.91%, to 9,035, and the S&P CNX Nifty dropped 78 points, or 2.74%, to 2770.50. In the last two trading session, the barometer index has lost 6.2%.
According to provisional data on NSE, FIIs were net sellers worth Rs 462.21 crore while mutual funds bought shares worth Rs 278.42 crore on Tuesday, 17 February 2009.
US stocks slump despite President signing stimulus deal
Ongoing economic concerns hammer US stocks
Stocks at Wall Street ended almost at their session lows on Tuesday, 17 February, 2009. Market started the day deep in the red on Tuesday. Despite President Barak Obama signing the stimulus package to jumpstart the economy, indices showed no signs of improvement. Bogged down by the financial sector, stocks lingered in the red despite a somewhat encouraging report from the housing sector. Market even ignored quite a few good earning reports.
The Dow Jones Industrial Average ended lower by 297 points at 7,552, the Nasdaq closed lower by 64 points at 1,470 and the S&P 500 closed lower by 38 points at 789.
All ten sectors ended in the red today led by consumer staples and financial sectors. Twenty-eight out of thirty stocks ended in the red today. Wal-Mart was one of the two winners.
Wal-Mart today reported better-than-expected earnings this morning. However, profits were down from the prior year. Still, Wal-Mart posted top line growth. The company also issued an in-line earnings outlook for the year.
The financial sector acted as the laggard in the market today. Investors seem to remain largely unimpressed by the $789.5 billion economic stimulus bill, which was signed by the President today. The bill aims to spur long-term growth instead of giving the economy a sudden short term push.
Yesterday, a better than expected housing report had hit the wires. But it had no positive impact on the market. The National Association of Home Builders reported yesterday that the home builders' sentiment index improved for the first time since September, rising one point to 9 from a historic low of 8 in January. The builders said the index was "virtually unchanged" in February. At a level of 9, the housing market index shows that fewer than one in 10 builders thinks business is good. The index was at 20 a year ago, and peaked at 72 in the summer of 2005, 44 months ago. Readings over 50 indicate that more builders think business is good than think it's bad.
Bank stocks garnered maximum attention today as Citigroup, Bank of America and JP Morgan Chase witnessed huge volumes. Reports indicated that regulators may begin stress-testing banks this week. The move comes as part of Treasury Secretary Geithner's plan to help restore the health of banks, and would aim to mesh private and public funds.
Wal-Mart was the only Dow component to trade with a gain today. The company reported better-than-expected earnings this morning. However, profits were down from the prior year. Still, Wal-Mart posted top line growth. The company also issued an in-line earnings outlook for the year.
A strong dollar led to mixed commodity prices today. While gold glittered, oil glided down.
On Tuesday, crude-oil futures for light sweet crude for March delivery closed at $34.93/barrel (lower by $2.53 or 7%) on the New York Mercantile Exchange. During the day, it fell to a low of $34.45. Last week, crude ended lower by 6.6%.
Other than a few earning reports, there are a few economic data scheduled for tomorrow. Wednesday's economic calendar features the January housing starts and building permits data, as well as import and export prices data before market opens. January industrial production and capacity utilization are also both due tomorrow. In the afternoon, the minutes from the 28 January FOMC meeting will hit the wires.
Bullion metals add more luster
Gold all set to touch its all time high set at March 2008
Bullion metal prices rose to their highest levels in seven months on Tuesday, 17 February, 2009. Prices rose despite the strong dollar and also as deep recession fears increased the appeal of the precious metals 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.
On Tuesday, Comex Gold for February delivery rose $25.5 (2.7%) to close at $967 an ounce on the New York Mercantile Exchange. During the day, it rose to a high of $973.8. Last week, gold prices ended up by 3%. For January, 2009, gold had gained 3.9%. Year to date, gold prices are higher by 9.1%.
On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (13%) since then.
On Tuesday, Comex silver futures for March delivery rose 38.5 cents (2.8%) to end at $14.01 an ounce. Year to date, silver has climbed 22.7% this year. For 2008, silver had lost 24%.
In the currency market on Friday, the dollar index ended higher by 0.6%.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
Last year, the weakening dollar and higher global demand for raw materials had led to records for commodities including gold. Gold reached a record in March 2008 as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. In the last move, the Federal Reserve has cuts its target bank lending rate to 0.25% from 5.25% in September, 2007. The Fed did it in nine steps.
Prior to 2008, gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.
At the MCX, gold prices for April delivery closed higher by Rs 784 (5.3%) at Rs 15,491 per 10 grams. Prices rose to a high of Rs 15,563 per 10 grams and fell to a low of Rs 14,738 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 1356 (6.3%) higher at Rs 22,784/Kg. Prices opened at Rs 21,496/kg and rose to a high of Rs 22,992/Kg during the day's trading.
Crude goes down
Prices end substantially lower on recession concerns
Oil prices ended substantially lower on Tuesday, 17 February, 2009. Prices slumped due to the ongoing recession concerns gripping the overall US economy and also many parts of the world.
On Tuesday, crude-oil futures for light sweet crude for March delivery closed at $34.93/barrel (lower by $2.53 or 7%) on the New York Mercantile Exchange. During the day, it fell to a low of $34.45. Last week, crude ended lower by 6.6%.
Prices reached a high of $147 on 11 July, 2008 but have dropped almost 77% since then. Year to date, in 2009, crude prices are lower by 23%. On a yearly basis, crude prices are lower by 65%.
Us stocks slumped today Wall Street even though President Barack Obama signed the stimulus deal to restore confidence among investors. Also, the New York Federal Reserve Bank said that manufacturing activity in the New York area contracted at a record pace in February. The bank's Empire State Manufacturing index fell to negative 34.7 in February from negative 22.2 in January.
Recently, Paris based, IEA has reported 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 fell 10 cents to end at $1.11 a gallon and March heating oil dropped 11 cents to finish at $1.19 a gallon.
March natural gas futures fell 25 cents to end at $4.20 per million British thermal units.
At the MCX, crude oil for February delivery closed at Rs 1,959/barrel, lower by Rs 65 (3.2%) against previous day's close. Natural gas for February delivery closed at Rs 211/mmbtu, higher by Rs 1.4/mmbtu (0.7%).
Trading Calls - Feb 18 2009
Nifty (2770) Sup 2740 Res 2825
Sell Patel Eng (130) SL 134
Target 120, 115
Sell PNB (369) SL 376
Target 355, 353
Sell Essar Oil (71) SL 74
Target 65, 63
Buy GSPL (32.90) SL 31.95
Target 35, 36
Buy Marico (59) SL 57.7
Target 63, 64
Daily News Roundup - Feb 18 2009
JSW Steel will commission its 3mn ton extended production line at Vijayanagar today, making it the largest single-location steel producer in the country. (FE)
Reliance Industries may restart production from KG-D6 next month but will shut it again in April. (FE)
Hindalco plans to write off Rs70bn from net worth. (BS)
HUL plans to enter into the economy segment in the tea market with Sehatmand tea. (Mint)
DLF lowers prices in Hyderabad and Bangalore. (Mint)
Sterlite to buy Asarco at half the offer rate. (BS)
NTPC is likely to source 30-40mn tons of coal from coal reserves in Indonesia, Mozambique or South Africa. (ET)
SAIL to set up steel processing plant in UP. (FE)
SAIL may be able to buy coking coal from BHP Billiton at US$150 per ton. (BS)
Reliance Power to start construction work at Butibori next week. (BS)
GSPC plans two 1,000 MW power projects. (BS)
Government will consider 16 SEZ proposals including those from DLF, L&T and Navi Mumbai SEZ next week. (FE)
Supreme Court has ordered customs department not to take any action against ITC. (FE)
Maruti Suzuki India expects volumes to grow by 5-7% for the month. (FE)
Reliance Capital set to lend to corporates, with focus on SME’s. (Mint)
Spencer’s Retail plans to focus more on private labels. (Mint)
Private equity firms are in talks with DLF to buy a majority stake in its affiliate company, DLF Assets. (ET)
Jain Irrigation forays into dehydrated vegetables market. (FE)
Government has sought approval from the company law board to appoint one director each on Maytas Infra and Maytas Properties boards. (ET)
Fortis Healthcare has entered into a management contract with Apollo Modi Hospital, Rajasthan. (ET)
Satyam calls back overseas staff as projects shut down. (ET)
Dassault Systemes to tie up with KPIT Cummins Infosystems to develop industry specific solutions. (ET)
DTH license fees may be slashed to 6% of revenues. (FE)
Emami to supply 90 ton bio-diesel per month to CTC. (BS)
Air India pushes for fare hike. (ET)
Premji Invest, Wipro’s investment vehicle, opposed to the reverse merger between Blue Green Construction and Investments and Subhiksha. (ET)
CERC has rejected to hike tariff of Dhabol project. (FE)
Kingfisher, NACIL and Jet Airways owe public sector oil companies Rs22bn as payment for jet fuel. (FE)
Apollo Hospitals’ promoters pledge 18.2% stake. (BL)
Ashok Leyland promoter pledged 17.8% stake. (BL)
JSPL to mine diamonds in Congo. (BL)
3G spectrum auction is likely to be conducted by March end. (ET)
Government may extend the seven year tax holiday to natural gas producers too. (ET)
Government is considering a ban on FDI in manufacture of cigarettes in the country. (ET)
Government may levy upto 35% safeguard duty on certain aluminium products. (ET)
Government will fund only 50% of the expenditure incurred by major automobile companies for R&D. (ET)
Government may allow private companies to set up captive cargo handling berths at the existing 12 major ports. (ET)
Planning commission is mulling the idea of allowing power companies to sell 3% of their generation in the open market. (ET)
Government has not allowed foreign airline companies to pick up stake either directly or indirectly in commercial airline sector. (FE)
Government is likely to announce more sops for export oriented sectors. (FE)
Subscriber base for 2G may face changes soon. (FE)
Media and entertainment industry registered a 12.4% yoy growth. (FE)
Changes in foreign investment norms will affect future ability of some Indian firms to invest in their subsidiaries. (Mint)
India to miss US$200bn trade target this fiscal. (BS)
Struggle and anxiety remain!
Happiness is not a brilliant climax to years of grim struggle and anxiety. It is a long succession of little decisions simply to be happy in the moment.”
Happiness seems to be the resting with the bears for some time. Of course those with handy cash can take little decisions to pick scrips and exit at the first spurt. We hate to start with a grim prediction. The truth is that all signs are pointing to another weak opening and possibly another bad day in office for the bulls.
The US market suffered a big blow overnight amid pessimism about whether the Obama regime will be able to turn things around. Wall Street was shut on Monday when global markets were down. So, we hope that it was just playing catch up.
Markets in Europe and other parts of the world were also down sharply on Tuesday. In commodities, gold hit a seven-month high above $975 an ounce. Crude oil tumbled below $35 per barrel. Other commodities were also hit badly. In Asia, most stock benchmarks have extended recent losses.
It’s a no-brainer that Indian stocks will also fall today. One may think that the current sell-off is overdone, but unless the advanced economies stabilise, a sustained rebound is not possible. It’s going to be a long, hard road ahead.
FIIs were net sellers in the cash segment on Tuesday at Rs4.62bn while the local institutions pumped in Rs2.78bn. In the F&O segment, the foreign funds were net buyers at Rs4.81bn. On Monday, FIIs were net sellers in the cash segment at Rs2.83bn. Mutual Funds were net sellers at Rs2.88bn on the same day.
US stocks tumbled on Tuesday, extending the current bad run in global equities amid mounting concerns that the worldwide recession is spiraling out of control. The S&P 500 Index fell below 800 for the first time in nearly three months.
The sentiment remained weak amid apprehensions that the Obama administration's efforts to combat the recession won't be sufficient even as the US President signed the US$787bn economic stimulus bill into law.
The Dow Jones Industrial Average slid nearly 298 points, or 3.8%, to 7,552.6, ending just above the bear market closing low of 7,552.29 struck on Nov. 20. All but one of the blue-chip index's 30 components - Wal-Mart Stores - posted losses. The Dow fell as low as 7,551.01, above its Nov. 20 intraday low of 7,464.51.
The S&P 500 index plunged 37.67 points, or 4.6%, to finish at 789.17, just above its 752.44 close on Nov. 20, when it ended at its lowest level since November of 2002. The Nasdaq Composite Index shed 63.7 points, or 4.2%, to 1,470.66.
Market breadth was negative. On the New York Stock Exchange, decliners beat advancers by more than 14 to 1 on volume of 1.6bn shares. On the Nasdaq, losers topped winners by almost 6 to 1 on volume of 2.4bn shares.
Wall Street retreated last week and resumed the sell-off on Tuesday. All financial markets were closed Monday for Presidents Day.
US investors were also concerned about the automakers, as Chrysler and GM were scheduled to announce their plans for becoming viable after receiving US$17.4bn in government aid.
After the market close, Chrysler said it will need at least US$5bn more to turn the company around, and that it will cut 3,000 jobs. GM said it needs an additional US$9.1bn and that if economic conditions deteriorate, it could increase that figure to US$16.6bn. The company also said that it will accelerate 47,000 job cuts.
President Obama signed into law the US$787bn stimulus bill Tuesday afternoon. Both chambers of Congress approved the bill last week, largely along party lines. The package includes at least US$290bn in tax provisions, as well as billions in aid and spending.
The financial sector suffered a big setback last week after Treasury Secretary Tim Geithner's bank bailout plan failed to provide the requisite detail that would have reassured investors. Bank stocks continued to plunge, with the KBW Bank index losing 10%.
Wal-Mart reported lower quarterly earnings that, excluding charges, topped analysts' estimates. However, the world's largest retailer forecast first-quarter earnings that are short of forecasts. Shares gained 3.7%.
Trump Entertainment Resorts filed for Chapter 11 bankruptcy protection, as the recession and weaker gambling revenue took a toll. Shares fell nearly 22%.
The day's one economic report of note was much weaker than expected. The N.Y. Empire State index, a regional manufacturing report, fell to negative 34.65 in February from negative 22.2 in the prior month. Economists expected a smaller decline.
Treasury prices rallied, lowering the yield on the benchmark 10-year note to 2.65% from 2.89% on Friday. Bond markets were closed on Monday. Treasury prices and yields move in opposite directions.
Lending rates inched higher. The 3-month Libor rate was 1.25% on Tuesday, up from 1.24% on Friday. The overnight Libor rate rose to 0.31% from 0.30%. Libor is a bank lending rate.
US light crude oil for March delivery fell US$2.58 to settle at US$34.93 a barrel on the New York Mercantile Exchange. Gasoline prices decreased half a cent to a national average of US$1.96 a gallon.
The dollar gained against the euro and fell against the yen. COMEX gold for April delivery rose US$25.30 to settle at US$967.50 an ounce.
Leading Western European banks were punished over their exposure to Eastern Europe, with losses from the sector helping to drag the broader market to three-week lows. The pan-European Dow Jones Stoxx 600 index traded down 2.5% to 183.98, a level not seen since Jan. 23.
Germany's DAX 30 index slid 3.4% to 4,216.60, while the French CAC-40 index dropped 2.9% to 2,875.23 and the UK's FTSE 100 index fell 2.4% to 4,034.13. In Austria, the Western European economy most geared toward Eastern Europe, the ATX tumbled 7.6% to 1,496.59.
Weak global cues, disappointing interim budget and selling pressure dragged the Indian bourses to fall sharply. It was the third straight trading session where the bears dominated. Heavyweights like Reliance Industries, ICICI Bank, Infosys, HDFC and HDFC Bank were among the major laggards. Finally, the Sensex declined 270 points to close at 9,035 and the Nifty slipped 78 points to close at 2,770.
Among the 30-components of Sensex, 29 stocks ended in the red and only stock bucking the negative trend was ITC. The major losers in the Sensex were Tata Steel, ICICI Bank, DLF, M&M, Hindalco, RCom and HDFC.
Among the major BSE Sectoral indices BSE Realty index was the top loser, the index fell 5%. Among the other major losers were BSE Consumer Durable index (down 5%), BSE Baknex index (down 4.5%) and BSE IT index (down 4%).
Even the BSE Mid-cap and the BSE Small-cap index fell over 2% each.
Shares of Corp Bank slipped by 2% Rs168. The company announced that it has planned raising Rs7bn via bonds. The scrip touched an intra-day high of Rs171 and a low of Rs167 and recorded volumes of over 6,000 shares on BSE.
Shares of Hindalco slipped by 4% to Rs42. According to reports, the company would use its Rs86bn share premium account to write off costs incurred on buying Novelis and to use the fund for its expansion purpose. The scrip touched an intra-day high of Rs44 and a low of Rs41 and recorded volumes of over 18,00,000 shares on BSE.
Jindal Steel & Power announced that the company would start production at its Bolivia mine in 6 months. It also said that, it would invest as much as US$20mn in Congo Diamond mine. The company aims to increase annual steel production to 2.6 million tons in 18 months.
The scrip ended at Rs974 down by 4% after hitting an intra-day high of Rs1015 and a low of Rs915 and recorded volumes of over 1,00,000 shares on BSE.
Shares of Bajaj Auto Finance erased gains and ended flat at Rs57.6. The stock had earlier surged by over 5% after ~537,000 shares of the company were traded in two transactions at an average price of Rs62 per share. The scrip touched an intra-day high of Rs63 and a low of Rs56 and recorded volumes of over 9,00,000 shares on BSE.
Media - a good sector to bet on !
Congress and BJP are expected to end up spending about Rs 200 crore each this time. These expenses will cover the cost of running the propaganda machine as well as lumpsum payments to the candidates. Strong regional parties such as the BSP, BJD, JDU, DMK and NCP that hold power in key states, as well as parties such as the SP and AIADMK and Shiv Sena which have held power earlier and are very much in the reckoning, will also not count their pennies. Put together, they could end up spending another Rs 250 crore, if not more.
But for the economy, it's not what is on paper that matters but the reality on the ground. For providers of vehicles, shamianas, posters, sound systems, and sundry other services there's big money coming their way.
Union Bank of India
We recommend a sell on Union Bank of India stock from a short-term trading perspective. It is apparent from the charts of this stock that it had been on an intermediate-term uptrend from its July low of Rs 96 till it encountered resistance at Rs 173 in late November. However, the stock reversed direction after encountering resistance around Rs 170 in January. Since then, the stock has been on a medium-term down trend. On February 16, the stock tumbled by 5 per cent penetrating its intermediate-term uptrend line. On February 17, it broke through a significant support level of Rs 140 by plummeting 4 per cent accompanied with high volume. The stock is trading well below its 21- and 50-day moving averages. The daily relative strength index is featuring in the bearish zone. Considering the breakthrough, we are bearish on the stock from a short-term perspective. We expect its decline to continue until it hits our price target of Rs 120. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 142.
Market and Stock Analysis
Markets continue to be highly volatile. Stock specific movements have also become like a pendulum. HDIL raced ahead to Rs. 150/- in few days from a low of Rs. 80/- and has fallen back to same levels. DLF also went up again in few days from Rs. 190/- to Rs. 300/- and has already now retraced to Rs. 170/- level. There are many factors for this volatility. Firstly, electronic and print media is mainly dominated by Chartists who are advising about timing entry and exit. For them, share market has become a casino and as per them, stock prices are based upon trading statistics and not fundamentals/economics. Secondly, there is more big element and speculation. Even in cash market, delivery ratio varies from 5% to 40% which proves that day traders buy and sell within the same day. It means, investors are using the market just to punt. Further, even delivery is backed by margin funding. Thus, 70% - 80% trades of the market are not backed by actual wealth of investors/traders. Thirdly, out of the total value of trades done, more than half is in the derivative segment. Within this portion also, Futures trading takes major share. Per se, derivative is a necessary evil in the market but, complete domination of derivatives/intraday trading scares away genuine investors.
1) Ispat Industries Rs. 10/-: Earlier, this writer had raised strong objections for including this scrip in F&O as credentials of the promoter are suspect and company has disappointed since inception. Promoters have been main beneficiary by inclusion of this company in F&O as they managed to rig up the share price and sell big chunk of their holding at high high price. Now, for Q3, its sales have crashed to 1123 crs. as against 3223 cr. sales in Q2. Net loss is massive 976 crs. Promoters stake has come down by 4.80%. It is high time that stock exchanges decide to remove such a rotten group from F&O.
2) Adlabs Ltd. Rs. 170/-, Rs. 5/- F.V.: Company has made loss of 25 crs. in Q2. Share price is ruling high due to promoter fancy and speculator's favourite counter. Fundamentally, scrip should not be more than Rs. 25-30. If, scrip is removed from 'A' Group, share price will tumble. Sell.
3) After Satyam scan, many other companies which have been busy in bogus figures will be more cautious, and such companies may show declining nos. in coming quarters. Such a trend is already visible.
4) Rajesh Exports Rs. 27/-, Re. 1/- F.V.: For Q3, topline has gone upto 2732 crs. but net profit has crashed to 17 crs. as against 61 crs. Staff cost is just 2.29 crs. which is less than 0.1%. I wonder if, how many companies can achieve such a feat? Even other expenditure is just 6.22 crs. (which normally includes administrative, selling, distribution, petty cash expenses). This again works out to just 0.22% of sales. A miraculous feat!.
Many promoters get their companies listed at stock exchange to make a killing in stock market. Promoters stake in Rajesh Exports has gone down by 7%.
5) Reflex Rs. 24/-: Few months ago, when its share prices had gone upto Rs. 200/-, we had pointed out that promoters were borrowing money from the market to rig up the share price. Now, promoters stake has already come down by 7%. It sums up the whole story. Since promoters devote more time for stock market operations, company suffers. Company has made big loss of 4.56 crs. for Q3. May be, funds given to the borrower siphoned off from the company.
6) BHEL Ltd.: It is a very respected company and a giant in the sector globally. Company has been providing good results. However, this writer, has a point. For Q3, its topline has gone up by nearly 800 crs. But, PAT is up only by 19 crs. Although everyone will blame higher R/M cost but, employee cost has also gone up by 174 crs.
7) From time to time, this column brings to the notice many companies which are suspected of bogus billing and money laundering. Some of these companies do not pay any dividend although, have huge EPS. When this writer asks promoters about it, they give standard excuse that company needs funds for expansion and will also invariably say that even Warren Buffet does not pay dividend. Promoters don't want to pay dividend, but do they forego their hefty salary, business/first class air travel, 5 star hotel comforts and all other vulgar expenses? Mr. Warren Buffet lives in the same old house which he bought in 1961 and still draws the same salary. Such promoters don't deserve to even bring on their lips name of Warren Buffet.
Further, these companies mainly show income from exports but have no losses of forex/derivatives. Strange!.
However, main regret is that, even big analysts and big FIIs do not however bother to think whether such profit figures are possible? Investment banking arms of brokerage houses (in their greed to earn fat fee) push their analysts to release Buy reports on such companies, a pre-cursor to fund raising. This writer has no hesitation in saying that a large portion of investment bankers have no qualms of business integrity and morality.
8) Sunil Hi-tech Rs. 80/-: Despite FII taking stake at Rs. 360/-, share price has crumbled. This writer got money calls that I should buy this scrip. However, looking at declining share price, this writer got suspicious that some bad news is on the way. Now, Q3 results show that company has made a loss of nearly 15 crs. by investing in mutual funds. It is really strange that promoters do not stick to core business and take public money for a ride. It happens when FIIs give money to the rotten promoters which they don't deserve. It is like an infertile woman getting 5 kids.
9) Pyramid Symira Rs. 25/-: One year ago, this writer had recommended to sell at Rs. 300/- when everyone was recommending to buy. Now, one after another, cans of worms keep on opening. Company alleges to have made loss of Rs. 75 crs. in share market. This writer is dumb struck to make any comments about this promoter.
10) Zenotech Laboratories Ltd. (Rs. 98/-): Floated by a former Honcho of a big Hyderabad based pharma company, investors had high hopes from this company that success of that big pharma company will be replicated in Zenotech. Such hopes became more alive when Ranbaxy acquired big stake in the company. However, performance of the company so far has been absolutely abysmal as is evident from trailing 4 quarters:
| Sales (cr.) | 1.53 | 2.77 | 0.67 | 1.55 |
| Loss (cr.) | - 3.47 | - 2.67 | - 6.65 | - 3.77 |
| Equity | 34.42 | - | - | - |
Loss in each Quarter is more than the sales. Turnover in TTM is less than 7 crs. Fundamentally, scrip should be quoting below par. Now, Japanese company is making open offer at Rs. 113/-. However, promoter is crying foul that it should be at Rs. 160/-. He wants highest reward for worst performance of pharma industry! Hats off to his cheek. Stake by a renowned company does not necessarily mean strong fundamentals of the company. Ranbaxy had acquired stake in Krebs and Jupiter Bio and still, performance of both companies is much below expectation and their share pricess are significantly lower than acquisition cost of Ranbaxy. There are companies like; J.B., Unichem, Torrent Pharma which have decades of proven performance and still available at P.E. ratio of 4-5.
11) Shree Ashtvinayak Rs. 500/-: For 07-08, company had reported topline of 94 crs. and PAT of 12.63 crs. EPS worked out to 12.63. Scrip is available at P.E. Ratio of 40/-. In current meltdown, scrip has come down by just 20%. Reportedly, scrip is in the grip of a strong operator as company wants to place shares with some FII at Rs. 550/-. Fundamentally, grossly overpriced.
12) Minda Industries (Rs. 98/-): For 07-08, company had reported PAT of 15.72 crs. on 396 cr. turnover. Equity is Rs. 10.50 crs. Although, company has been maintaining average performance, last year its share price zoomed to Rs. 358/- as a Mumbai based operator was colluding with promoter for placing shares with a leading DI @ Rs. 350/- per share. As per our sources, deal was in the final stages of being struck when company was making presentation to the investment committee of DI, chairman of the committee asked the officer of the company about his holding in the company and the officer replied that he already sold his 15,000 shares @ Rs. 250/-. This innocuous but truthful reply of the officer torpedoed the placement deal and subsequently share price has crashed to its original reasonable levels.
13) Winsome Textiles Rs. 37/-: Despite heavy losses, share price continues to rise. For Q3, losses have increased to 5.35 crs. Quarter 3 EPS is -9.10 (negative). Q3 interest charges are more than 5 crs. For 9 months, EPS is -15.42 (negative). On a small capacity of 63,000 spindles, company has huge debt. In the past, we had pointed out that how some operators take convertible warrants by paying 10% and then rig up the share price. This is what is happening in Winsome Textile. Fundamentally, scrip is worth Rs. 6-7.
14) Geojit Rs. 23, Re. 1/- F.V.: For Q3, company has made a loss of Rs. 1 cr. Short term prospects remain bleak. Scrip is highly overpriced. Sell and buy FDC Ltd. in its place.
15) Religare Enterprise Rs. 340/-: Scrip is trading at 26 x FY08 EPS. Short term prospects of the industry are dismal. Sell and buy Gujarat Gas Ltd. in its place for better appreciation.
16) WWIL Rs. 18, Re. 1/- F.V.: Company has again reported big loss for Q3. Losses for 9 months are 75 crs. on Equity of 22 crs. Still, share price went up by 80% in 2 days. It shows that operators can do what fundamentals cannot.
by HK Gupta
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