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Thursday, February 19, 2009
Market ends slightly higher
Despite mixed signals from Asian markets, Sensex was 20 points up at 9035 at opening bell. While the mood remained upbeat on strong buying in information technology, teck and consumer durable stocks, the rally gathered more steam in afternoon trades as Sensex touched the high of 9112. However the market witnessed a steady decline towards the close to slip below 9000 mark to touch an intra-day low of 8978. Sensex finally closed the day with marginal gains of 27 points at 9043, while Nifty was 13 points up at 2789 on close.
The market breadth was negative. Of the 2,476 stocks traded on the BSE 1,073 stocks advanced, whereas 1,299 stocks declined. Hundred and four stocks ended unchanged. Among sectoral indices, BSE IT was the major gainer rising by 2.45% for the day followed by BSE Teck that added 1.71% and BSE CD that advanced 1.12%. BSE CG lost 0.93%, BSE Realty slipped 0.63% and BSE Bankex shed 0.56%.
Among major gainers, Wipro flared up 5.41% at Rs220.35, Infosys added 2.50% at Rs1208.20, Grasim Industries shot up by 2.43% at Rs1,373.75, Maruti Suzuki India flared up 2.37% at Rs631.90, HDFC moved up 2.08% at Rs1392.65, Mahindra & Mahindra advanced 1.97% at Rs290.15, Tata Consultancy Services scaled up 1.91% at Rs1,489.75 and Ranbaxy Laboratories surged 1.49% at Rs207.80. However, Hindalco Industries dropped 3.49% at Rs40.10, ACC slipped 2.43% at Rs549.20 and ICICI Bank shed 2.13% at Rs361.50.
Over 2.19 crore shares of Wire & Wireless India changed hands on BSE followed by Cals Refineries (99 lakh shares), Spice Telecommunications (86 lakh shares), Suzlon Energy (80 lakh shares) and Satyam Computer Services (79 lakh shares).
Asian markets closes mostly higher
Nikkei, Shanghai put up good gains while Seoul, New Zealand ends lower
Stock market in Asian region closed mostly higher on Thursday, 19 February 2009, as recent selling pressure eased and safe-haven buying of the dollar and gold subsided, but reminders of the global economic gloom and financial sector woes kept investors cautious.
On Wall Street, stocks ended almost flat, after oscillating between red and green for the entire day. President Barack Obama unveiled his administration's plans to reduce the number of foreclosures. The plan would reduce housing payments for some families to make them affordable, with the government and the lender subsidizing the difference. The Dow Jones Industrial Average ended higher by 3 points at 7,555, the Nasdaq closed lower by 2.6 points at 1,467 and the S&P 500 closed lower by 0.75 points at 788.
In the commodity market, crude oil traded below $35 a barrel in New York after an industry-funded report showed that U.S. stockpiles climbed amid falling fuel demand.
The American Petroleum Institute said yesterday that inventories rose 1.6 million barrels last week to 345.8 million barrels. Traders await the official release of the Energy Information Administration's weekly data, delayed by a day, which is expected to show another build in inventories.
Oil closed down $0.31 at $34.62 a barrel on the New York Mercantile Exchange on Wednesday, after hitting an intraday low of $34.13 and a high of $36.22. In the Asian session Thursday, crude was steady and unchanged at $35.99 in electronic trading at 05:38 a.m. ET.
Brent crude oil for April settlement was at $40.59 a barrel, up $ 1.04, on London’s ICE Futures Europe exchange at 5:59 a.m. E.T. It yesterday declined $1.48, or 3.6%, to $39.55 a barrel, the lowest close since 26 December 2008.
Gold prices remained well supported by the safe haven buying, which kept Gold on seven-week high levels. Gold for February delivery ended up $10.70, or 1.1%, at $977.70 an ounce on the Comex division of the New York Mercantile Exchange, the highest closing level for a front-month contract since 15 July 2008, when gold closed at the same price. In the Asian session Thursday, gold was little down at $975.30 in electronic trading at 5:39 a.m. ET.
In the currency market, the Japanese yen was quoted at 93.39 against the US dollar, easing a bit from Monday's 19-year high mark.
The Hong Kong dollar was trading at HK$ 7.7548 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 pulled away from recent two-week lows, drawing support from higher regional stock markets, although worries about problems facing the global banking sector capped gains. The Aussie closed at US$0.6331, up from Wednesday's close of US$0.6392.
In Wellington trades, the New Zealand dollar ended the day at US50.96c from its previous closing at US50.69c yesterday.
The Taiwan dollar continued to hover around the 51/2 year low level as the U.S. dollar strengthened for the 11th straight session The greenback closed the day at NT$ 34.675, after dropping to NT$34.699, the weakest level since June 2003.
The South Korea's currency declined to a three-month low against the U.S. dollar on Thursday as market jitters escalated over local banks' dollar liquidity conditions, dealers said. The local currency closed at 1,481 won to the greenback, down 13 won, or 0.88%, from the previous session's close, marking the eighth straight day of decline. The Korean currency reached its lowest level since 25 November 2008.
Coming back in equities, in Japan, the stock market traded slightly higher, in line with most of the Asian markets after a flat finish on the Wall Street. The Nikkei 225 Stock Average index increased 23.21 points, or 0.31%, to 7,557.65, while the broader Topix gained 2.33 points, or 0.31%, to 751.59.
On the economic front, Bank of Japan, at the Monetary Policy Meeting held today, decided by a unanimous vote to let the uncollateralized overnight call rate to remain at around 0.1%. Further, as expansion of the measures to facilitate corporate financing, the bank would facilitate special funds-supplying operations to facilitate corporate financing to ensure stable provision of funds with longer duration of 3 months at low interest rates. Outright purchases of CP will be conducted for an extended period and the duration of expansion in the range of corporate debt eligible as collateral was extended.
The bank says there is a possibility that the inflation rate will decline further if a downside risk to economic activity materialises or commodity prices fall. In this case, the risk of a decline in the medium- to long-term inflation expectations of firms and households warrants attention.
In Mainland China, the equities held steady throughout the session today, gaining after steep losses for the last two sessions as the recent government's industry stimulus measures were instrumental in propping up decent buying interest in market heavy weights.
The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, added 0.78% or 17.27 points to 2,227.13 points after hitting a high of 2,247.62. The Shenzhen Component Index on the smaller Shenzhen Stock Exchange went up 1.61% or 130.40 points to 8,213.90 points.
In Hong Kong, stock market close slightly higher, as a good close on the Chinese stock market encouraged late buying in select Chinese counters, but losses in blue chips held the domestic index backward. The Hang Seng Index ended slightly higher 7.36 points, or 0.06%, to 13,023.36, while the Hang Seng China Enterprise Index, which tracks H shares of Chinese companies, increased by 53.70 points, or 0.74% to 7,266.24.
In Australia, the stock market posted its first gain of the week, led by banking and insurance stocks, but supported by the good gains in the retail and energy sectors. The benchmark S&P/ASX200 added 35.70 points, or 1%, to 3,448.90, while the broader All Ordinaries increased 31.10 points, or 0.90%, to 3,398
On the economic front, Australian Bureau of Statistics report showed that sales of new motor vehicle in Australia fell 1.1% to 76,224 vehicles in January from last month. In trend terms, sales fell 0.8% on the previous month. Sales were down 16.9% over the previous year.
In New Zealand, equities continued to decline for the fourth time in a row. The benchmark NZX50 edged down 0.16% or 4.079 points to close at 2616.926. The NZX 15 fell 0.14% or 6.664 points to 4845.855.
In South Korea, stock market fell for the fourth straight session, as investors confidence remained dented by persistent economic worries that sent exporters lower, while some banks turned negative despite government corporate restructuring plans. The Korea Composite Stock Price Index fell 6.09 points or 0.55% closing the day at 1,107.10 – another lowest finish since 23 January 2009 when market closed at 1,093.40 points.
On the economic front, Korea plans to set up a corporate restructuring fund to buy bad assets from local financial institutions and companies, which are straining under the weight of a global recession and a deepening financial crisis, officials said yesterday. The state-run debt clearer Korea Asset Management Corp. will form the envisioned fund, according to the government's plan aimed at facilitating corporate-sector restructuring.
In Philippines, equities ended marginally higher as the Asian markets clawed back amid lackluster cues from the overnight US markets. The 30-company Philippine Stock Exchange index rose 7.57 points or 0.40% to 1,899.80, while the All-shares index jumped 5.85 points or 0.4761% to 1,234.51.
On the economic front, the near-term outlook for the South east Asian country is decisively grim as the International Monetary Fund stated that the country’s economic growth is set to slow sharply this year as the economy faces “strong head winds” from falling global demand and a drop in remittances from Filipinos working abroad.
In Taiwan, stock markets gained for the second straight session, as investors shrugged off economic woes a rising from the recent drop in gross domestic product supported by the weaker Taiwan dollar. The main Taiex share index ended higher by 30.50 points or 0.68% at 4,528.87.
On the economic front, Taiwan economy hit a recession, as expected, shrinking by almost 3% this year after plunging by a record 8.36% in the December quarter of 2008. The 8.36% contraction for the previous quarter was the biggest fall ever recorded since statistics started in 1952.
Taiwan officially entered its first recession since the 2001 collapse of the technology boom, with the economy contracting during two consecutive quarters, the government said. Gross Domestic Product shrank by 1.05% in the third quarter.
A forecast made last year put economic growth for 2009 at 2.12%, but yesterday, the new prediction was cut to - 2.97%, the Directorate General of Budget, Accounting and Statistics said. In 2001, Taiwan's economy shrank by 2.17%. The 8.36% fall dragged growth for the whole of 2008 down to a barely positive 0.12%, the Directorate General of Budget, Accounting and Statistics announced, expecting signs of a recovery not to appear until the end of 2009.
The governor of the Central Bank of the Republic of China warned that Taiwan could face a deflation crisis in the wake of a government forecast that the consumer price index would move down by 0.82% this year. Directorate General of Budget, Accounting and Statistics chief Shih Su-mei said the current recession was far worse than the 1997 Asian financial crisis and the 2001 dotcom bubble. "Returning to stable growth will take up considerable time," she said.
In an attempt to revive the economy, the central bank said it was cutting key interest rates by 0.25% to a record low level of 1.25%. The latest cut was the seventh since last September. The government has already announced plans for stimulus spending of NT$858.5 billion over four years, equivalent to about 6% of GDP, on infrastructure projects, consumer handouts and tax cuts. It distributed NT$82.9 billion worth of shopping vouchers in January 2009.
In India, key benchmark indices ended slightly higher in what was a lackluster trading session in sync with range-bound activity around global indices. The BSE 30-share Sensex rose 27.45 points, or 0.30%, to 9,042.63. The S&P CNX Nifty rose 13.20 points, or 0.48%, to 2,793.35.
Elsewhere, Malaysia's Kula Lumpur Composite index was up 0.49% or 4.36 points to 899.59, while Indonesia’s Jakarta composite decreased by 6.91 points or 0.52% to 1,323.70. In Thailand, the Thai Stock exchange added 2.02 points or 0.46% to 441.62.
In other regional market, European shares gained on Thursday, on track to close higher for the first time this week, as investors welcomed earnings from Nestle and other major firms. Overall, the French CAC-40 index rose 0.6% to 2,889.94, the German DAX 30 index climbed 0.4% to 4,220.04 while the U.K. FTSE 100 index advanced 0.1% to 4,011.76.
BSE Bulk Deals to Watch - Feb 19 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
19/2/2009 532853 ASAHI SONG RELIANCE CAPITAL ASSET MGT LTD ACCOUNT PMS S 110000 12.00
19/2/2009 532385 AZTECSOFT L NALANDA INDIA FUND LIMITED B 1076915 35.24
19/2/2009 532385 AZTECSOFT L ICICI PRUDENTIAL LIFE INSURANCE COMPANY LIMITED S 1063843 35.25
19/2/2009 512253 BIO GREEN I SUDHA R SHETH B 125000 19.25
19/2/2009 531784 KADAMB CONST ALLIANCE INTERMEDIATERIES AND NETWORK PVT LTD S 30000 35.75
19/2/2009 505196 TIL LIMITED AVIJIT MAZUMDAR B 65000 94.97
NSE Bulk Deals to Watch - Feb 19 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
19-FEB-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,BUY,200150,2081.68,-
19-FEB-2009,ONMOBILE,OnMobile Global Limited,DEUTSCHE SECURITIES MAURITIUS LIMITED,BUY,818994,232.25,-
19-FEB-2009,TIL,TIL Ltd,AVIJIT MAZUMDAR,BUY,65000,94.88,-
19-FEB-2009,VARUN,Varun Industries Limited,KUNVARJI FINSTOCK PVT LTD,BUY,150000,31.47,-
19-FEB-2009,VARUN,Varun Industries Limited,NIMBUS INDIA LTD,BUY,200000,30.80,-
19-FEB-2009,WWIL,Wire and Wireless (India),ADROIT SHARE & STOCK BROKER PVT. LTD.,BUY,1175719,15.89,-
19-FEB-2009,WWIL,Wire and Wireless (India),AMBIT SECURITIES BROKING PVT. LTD.,BUY,2898037,15.80,-
19-FEB-2009,WWIL,Wire and Wireless (India),PRASHANT JAYANTILAL PATEL,BUY,1587808,15.91,-
19-FEB-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,SELL,200150,2082.53,-
19-FEB-2009,GTNTEX,GTN Textiles Limited,AJAY KUMAR AGRAWAL,SELL,71919,5.64,-
19-FEB-2009,ITI,ITI Ltd.,PLUS BUSINESS MACHINES LTD,SELL,126136,17.23,-
19-FEB-2009,ONMOBILE,OnMobile Global Limited,KINGS ROAD INVESTMENTS MAURITIUS LIMITED,SELL,818994,232.25,-
19-FEB-2009,PRETAILDVR,Class B shares (Series 1),DEUTSCHE SECURITIES MAURITIUS LIMITED,SELL,114760,101.22,-
19-FEB-2009,VARUN,Varun Industries Limited,UNITED CREDIT SECURITIES LTD,SELL,411948,31.18,-
19-FEB-2009,WWIL,Wire and Wireless (India),ADROIT SHARE & STOCK BROKER PVT. LTD.,SELL,1175719,15.86,-
19-FEB-2009,WWIL,Wire and Wireless (India),AMBIT SECURITIES BROKING PVT. LTD.,SELL,2858537,15.81,-
19-FEB-2009,WWIL,Wire and Wireless (India),PRASHANT JAYANTILAL PATEL,SELL,1584658,15.97,-
Poll - Who will win the General Elections 2009
The Poll has been running for a few days now and results are quite interesting!
Congress seems to be back with a bang!. See the results of the last poll - Congress was getting vanquished then!
Please do note that most of our visitors come from Mumbai, Bangalore, Delhi, Chennai and other major cities of India.
Who are you voting for ? Vote now! Lets get a pulse now!
Post Session Commentary - Feb 19 2009
Indian market managed to end above the dotted line after swinging between positive and negative territory. Positive European markets along with firm US Index futures contributed to gain the sentiments. During the trading indices dropped on bleak domestic and global outlook. Ease in inflation number for the week ended 7th Feb that stood at 3.92% against 4.39% the week earlier was not able to bring any respite.
The domestic market opened marginally up on mixed cues from the markets all over the world. US stock markets on Wednesday ended on flat note on the back of a government plan to stem foreclosures and a restructuring plan from General Motors. Benchmark indices continued northward journey till mid session on buying sentiment. Though, investors were not able to hold the same momentum and market slipped to trade below dotted line. Further, market managed to recover but remained volatile on continuous bouts of buying and selling.
The rate sensitive sectors remained in the limelight during the early trading session on the rate cut hopes. The rate sensitive stocks got a boost today, on expectation of an interest rate cut by the Reserve Bank of India latter in the week. There are rumor in the markets that the RBI will announce a 50 basis points cut in lending rates. The RBI governor D Subbarao said that there is certain room to cut interest rates as the impact of global recession was much sharper than expected. During the trading, BSE Sensex slipped below 9,000 mark and finally ended around 9,050 level. Along with this, NSE Nifty closed above 2,750 level. From the sectoral front, significant buying was seen among IT, Teck, Consumer Durable, Auto Power and PSU stocks. However, Capital Goods, Reality, Bank, Metal, FMCG and Oil & Gas stocks remained out of favour. Midcap and Smallcap stocks also remained weak during the trading session.
Among the Sensex pack 18 stocks ended in green territory and 12 in red. The market breadth indicating the overall health of the market remained in favour of decliners as 1299 stocks closed in red while 1073 stocks closed in green and 104 stocks remained unchanged in BSE.
The BSE Sensex closed higher by 27.45 points at 9,042.63 and NSE Nifty ended slightly up by 13.2 points at 2,789.35. Broader market indices were in red as BSE Mid Caps and Small Caps ended with losses of 5.90 points and 11.96 points at 2,838.4 and 3,214.1 respectively. The BSE Sensex touched intraday high of 9,111.95 and intraday low of 8,977.96.
The government has sought the approval from the parliament to spend an extra Rs 10,765 crore during the current fiscal. This amount would be used to fund the additional spending due to raised wages of government staff and also to make payments to the funding institutions in the farm sector. The government would spend the net cash for meeting extra requirement of various government arms to implement the sixth pay commission recommendation on wage raise of government staff, compensation to state governments to introduce value added tax, administrative expenses and compensation to riot victims.
Inflation for the week ended 7th February 2009, fell to more than 13 months low of 3.92% against 4.39% the week earlier. The inflation was lower than 4.01% as expected by economists. The WPI for all commodities are down by 0.2% at 228(WoW).
Gainers from the BSE Sensex pack are Wipro Ltd (5.41%), Infosys Tech (2.50%), ACC Grasim Indus (2.43%), Maruti Suzuki (2.37%), HDFC (2.08%), M&M Ltd (1.97%), Tata TCS Ltd (1.91%) and JP Ranbaxy Lab (1.49%).
Losers from the BSE Sensex pack are Hindalco (3.49%), ACC Ltd (2.43%), ICICI Bank (2.13%), L&T Ltd (2.05%), HUL (1.66%), DLF Ltd (1.48%) and SBI (1.05%).
On the global markets front, the Asian markets, which opened before Indian market, ended mixed. The Bank of Japan said it will buy 1 trillion yen ($10.7 billion) in corporate bonds from financial institutions and extend lending programs to prevent a shortage of credit from deepening the recession. Shanghai Composite, Hang Seng and Nikkei 225 ended up by 17.26, 7.36 and 23.21 points at 2,227.12, 13,023.36 and 7,557.65 respectively. However Seoul Composite index and Straits Times ended down by 6.09 and 21.71 points at 1,107.1 and 1,629.35 respectively.
European markets which opened after the Indian market are trading in green. In London FTSE 100 is trading higher by 16.14 points at 4,022.97 and in Frankfurt the DAX index is trading up by 17.91 points at 4,222.87.
The BSE IT index advanced by (2.45%) or 50.17 points to close at 2,094.83 as Indian Rupee touched two months low during the trading. Tech Mahindra (12.34%), Wipro Ltd (5.41%), Infosys Tech (2.50%), TCS Ltd (1.91%) and Aptech Ltd (1.68%) ended in positive.
The BSE Teck stocks ended up by (1.71%) or 29.62 points at 1,757.01. Main gainers are Tech Mahindra (12.34%), Wire& Wirles (12.21%), Wipro Ltd (5.41%), IOL Net Com (4.80%) and Idea Cell (4.10%).
The BSE Consumer Durables index closed with increase of (1.12%) or 17.52 points at 1,581.4. Scrips that gained are Blue star L (4.84%), Videocon Ind (0.56%), Titan Ind (0.54%) and Gitanjali GE (0.22%).
The BSE Auto index advanced by (0.96%) or 24.37 points at 2,572.96 on hopes that lower interest rates will boost sales which are largely driven by finance. Main gainers are Amtek Auto (5.71%), Maruti Suzuki (2.37%), M&M Ltd (1.97%), Tata Motors (1.01%) and Ashok Leyland (0.92%).
The BSE Capital Goods index also lost ground and ended down by (0.93%) or 57.2 points at 6,071.56. Losers are Everest Kanto (4.79%), Bharat Bijli (3.88%), Elecon Eng C (2.83%), ABB Ltd (2.56%) and L&T Ltd (2.05%).
The BSE Reality index ended lower by (0.63%) or 9.33 points to close at 1,482.33. Mahindra Life (2.33%), Anant Raj (2.09%), Unitech Ltd (1.72%), Penland Ltd (1.52%) and DLF Ltd (1.48%) ended in negative territory.
Gayatri Projects Ltd ended with handsome gains of 9.99%. The Company has secured two new orders along with Ratna Infrastructure Projects Pvt. Ltd under Joint Venture namely (GAYATRI - RATNA JOINT VENTURE) with a total projects cost of Rs 2,131.62 crores. M/s. Gayatri Projects Ltd share is 80% and Ratna Infrastructure Projects Pvt. Ltd share is 20%. The entire works has to be executed with in a period of 54 months.
Suzlon Energy advanced 3% after its German unit REpower Systems AG bagged an order worth nearly 2 billion euro from RWE Innogy GmbH for supplying 250 offshore wind turbines.
Patni Computer Systems closed higher by 1.50%. The company announced an extended suite of services being offered by its Global Asset Management Practice in response to a radically changing financial services landscape. Patni''s solutions and services will aid financial services organizations and asset management institutions with containing costs, improving efficiencies and reducing risks during mergers and acquisitions, divestitures and conversions of internal IT systems that directly impact the overall technology infrast.
IT shares help Sensex hold 9,000 level
Key benchmark indices ended slightly higher in what was a lackluster trading session, in sync with range-bound activity in global markets. Volumes were low. The BSE 30-share Sensex rose 27.45 points, or 0.30%, up 64.83 points from the day's low, but off 68.64 points from the day's high. The BSE Sensex settled above the psychologically important 9,000 mark after alternatively moving above and below that level in intraday trade.
Rate cut hopes and higher US index futures support the domestic bourses. Trading in US index futures should the Dow could rise 73 points at the opening bell on Thursday, 19 February 2009
Inflation rose at the lowest level in 13-months at 3.92% in the year through 7 February 2009, much lower than previous week's annual rise of 4.39%, data released by the government today, 19 February 2009, showed.
Falling inflation has provided room for the Reserve Bank of India (RBI) to cut interest rates further to shield the domestic economy from the global financial sector crisis and recession in key global economies. Just yesterday, 18 February 2009, the Reserve Bank of India Governor D Subbarao said that there is room to cut interest rates further. The statement comes at a time when the market is expecting further action from the central bank.
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.
Meanwhile, 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.
European markets rose with food producers adding most points to the index after Nestle posted 2008 results and beat sales forecasts. Key benchmark indices in UK, Germany and France were up by between 0.03% and 0.38%.
Asian shares were mixed today, 19 February 2009. Key benchmark indices in China, Japan, China and Taiwan were up by between 0.06% and 0.78%. However indices in South Korea and Singapore fell 0.55% and 1.31% respectively.
The Bank of Japan said it will buy 1 trillion yen ($10.7 billion) in corporate bonds from financial institutions and extend lending programs to prevent a shortage of credit from deepening the recession. Governor Masaaki Shirakawa and his colleagues said the bank will buy bonds rated A or higher from 4 March to 30 September 2009. The board kept the overnight lending rate at unchanged at 0.1% in a unanimous vote.
US markets ended mixed on Wednesday, 18 February 2009 as gloomy outlook from Fed and dismal housing data overshadowed government's Housing Relief Plan. The Dow Jones industrial average was up 3.03 points, or 0.04%, to 7,555.63 while the Standard & Poor's 500 Index was down 0.75 points, or 0.10%, to 788.42. The Nasdaq Composite Index slipped 2.69 points, or 0.18%, to 1,467.97.
The US Federal Reserve cut its outlook for the performance of the battered US economy on Wednesday, 18 February 2009 saying it now expects a contraction of between 0.5 and 1.3% this year. Back in mid-November 2008, the Fed projected that 2009 could see anything from a contraction of 0.2% up to expansion of 1.1%. The US central bank also offered a bleaker picture for the employment situation. It said the jobless rate in the US is now expected to reach between 8.5 and 8.8% this year. That is up from the previous forecast of between 7.1 and 7.6%. The US unemployment rate currently sits at 7.6%
Housing starts slumped by a worse than expected 16.8% in January 2009 to 4,66,000 units, the lowest since the Commerce Department started keeping records in 1959. Meanwhile, the number of permits issued for new buildings also fell to an all-time low, down 4.8% to 521,000 units.
President Barack Obama unveiled a $75-billion mortgage relief plan on Tuesday, which would provide incentives to mortgage lenders to help borrowers reduce their payments. In a bid to help restore confidence, the US Treasury Department will also double the size of current financial support to Fannie Mae and Freddie Mac.
The BSE 30-share Sensex rose 27.45 points, or 0.30%, to 9,042.63. The Sensex opened 19.72 points higher at 9,034.90. At the day's high of 9,111.27, the Sensex gained 96.09 points in early trade. At the day's low of 8,977.80, the Sensex lost 37.38 points in afternoon trade.
The S&P CNX Nifty rose 13.20 points or 0.48% to 2789.35. Nifty February 2009 futures were at 2785.90, at a discount of 3.45 points as compared to the spot closing.
The barometer index BSE Sensex is down 604.68 points or 6.26% in calendar 2009 from its close of 9,647.31 on 31 December 2008. The Sensex currently trades at a PE multiple of 10.4 based on projected earnings per share (EPS) of about Rs 867 for the 30-Sensex firms in the year ending March 2010.
The market breadth, indicating the overall health of the market, was negative, on BSE with 1290 shares declining as compared with 1091 that advanced. A total of 104 shares remained unchanged. The breadth was strong earlier in the day.
BSE clocked a turnover of Rs 2422 crore, much lower than Rs 2,883.85 crore yesterday, 18 February 2009. Turnover in NSE's futures & options (F&O) segment dropped to Rs 30,637.67 crore from Rs 41,094.83 crore on Wednesday, 18 February 2009.
The BSE Power index (up 0.34%), the BSE Auto index (up 0.96%), the BSE PSU index (up 0.31%), BSE IT index (up 2.45%), BSE Consumer Durables index (up 1.12%), outperfomed the Sensex.
The BSE Bankex (down 0.56%), BSE Healthcare index (down 0.01%), BSE Metal index (down 0.36%), BSE Oil & Gas index (down 0.09%), BSE Realty index (down 0.36%), the BSE Capital Goods index (down 0.93%), and the FMCG index (down 0.19%), underperformed the Sensex.
Among the 30-member Sensex pack, 18 gained while the rest slipped. Grasim (up 2.52%), Reliance Infrastructure (up 2.10%), and HDFC (up 1.96%), edged higher from the Sensex pack.
ACC (down 2.29%), Hindustan Unilever (down 1.20%), and Jaiprakash Associates (down 0.29%), edged lower from the Sensex pack.
IT stocks gained on a sharp fall in rupee this week. India's third largest software services exporter, Wipro jumped 5.24% to Rs 220 despite a 1.11% fall in ADR on Wednesday, 18 February 2009. It was the top gainer from the Sensex pack.
India's second largest software services exporter Infosys Technologies rose 2.40% as its ADR gained 0.24% on Wednesday, 18 February 2009. India's largest software services exporter by sales TCS rose 1.57% and India's fifth largest IT exporter by sales HCL Technologies rose 0.32%.
However Satyam Computer Services slumped 5.25% to Rs 46 on reports the restatement of accounts of the software developer may take more than six months as it includes auditing accounts of the past three-to-four years and involves complicated transactions.
The partially convertible rupee was at 49.66 per dollar, stronger than Wednesday's close of 49.92/93. Today's recovery in rupee followed a sharp fall in the past two days that had pulled it to a two-month low. A weaker rupee boosts operating margins of IT firms which earn a lion's share of revenue from exports.
India's largest private sector power generation firm by sales Reliance Infrastructure rose 2.10% to Rs 511.75. The finance ministry has told Parliament that companies Reliance Infrastructure and Reliance Petroleum were being investigated for alleged violation of norms governing insider trading and overseas borrowings, respectively. Reliance Petroleum fell 1.54% to Rs 79.90
Auto shares rose on hopes lower interest rates will boost sales which are largely driven by finance. Mahindra & Mahindra (up 1.92%), Maruti Suzuki India (up 2.27%), and Tata Motors (up 0.60%), edged higher from the auto pack.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 0.13% to Rs 1293.10. The stock moved in a band of Rs 1281.90-Rs 1309.90 in the day. Reports on Wednesday, 18 February 2009 RIL may restart crude oil production from its predominantly gas-rich KG-D6 fields next month aided early gains which fizzled out later on profit booking. 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.
Banking shares turned mixed after a firm start despite latest data showing fall in inflation which raised hopes of an interest rate cut. India's second largest private sector bank by net profit HDFC Bank was up 0.96% to Rs 885 even as its ADR slipped 2.72% on Wednesday, 18 February 2009. The stock eased from day's high of Rs 892.70.
However India's largest private sector bank by net profit ICICI Bank fell 2.21% to Rs 361.20 on a 2.52% slide in its ADR on Wednesday, 18 February 2009. The stock had hit a day's high of Rs 378.75 in early trade. India's largest bank in terms of assets and branch network State Bank of India lost 1.27% to Rs 1057.15, after striking high of Rs 1093.45 in intra-day trade.
Metal stocks declined on worries a weakening domestic and global economy will hit demand for metals. Sail (down 0.90%), Sesa Goa (down 1.34%), Nalco (down 1.34%), and Jindal Steel & Power (down 0.29%), declined. However India's largest private sector steel maker by sales Tata Steel rose 0.88% to Rs 172.55
India's largest private sector aluminium maker by sales Hindalco Industries fell 2.89% to Rs 40.35. The company reportedly plans to raise Rs 25000 crore pledging assets and future earnings of its units.
However India's largest copper maker by sales Sterlite Industries India rose 1.02% to Rs 257 after copper edged higher in the commodities market today, 19 February 2009.
JSW Steel gained 0.41% to Rs 209.50 after the company said it commissioned the country's largest blast furnace at Vijayanagar in Karnataka. The company made this announcement after trading hours on Wednesday, 18 February 2009.
Realty shares declined as margins of realty firms are under pressure due to falling property prices. India's largest realty developer by market capitalisation DLF fell 1.89% to Rs 155.70, off day's high of Rs 162.95. Foreign brokerage Goldman Sachs in its latest research report lowered DLF's 12-month target price to Rs 124 post weak Q3 December 2008 results.
Unitech (down 1.37%), Omaxe (down 1.81%), HDIL (down 0.19%), and parsvnath Developers (down 0.80%), fell.
Capital goods pivotals fell on worries a slowing economy will crimp orders. India's largest power equipment maker by sales Bhel fell 1.23% to Rs 1378.35. India's largest engineering and construction Larsen & Toubro shed 2.16% to Rs 639.95.
But Suzlon Energy spurted 3.12% to Rs 42.95 after its German unit REpower Systems AG bagged an order worth nearly 2 billion euro from RWE Innogy GmbH for supplying 250 offshore wind turbines.
Gayatri Projects jumped 10% to Rs 74.30 after a consortium of the company bagged two orders aggregating Rs 2131.62 crore. The company made announcement of the order win during trading hours today, 19 February 2009.
Educomp Solutions was the top traded counter on BSE turnover of Rs 235.30 crore followed by Reliance Industries (Rs 148.85 crore), Reliance Infrastructure (Rs 139.60 crore), United Spirits (Rs 124.60 crore) and ICICI Bank (Rs 120 crore).
Wire & Wireless India was the volume topper on BSE clocking volume of 2.20 crore shares followed by Cals Refineries (99.26 lakh), Spice Communications (86.10 lakh), Suzlon Energy (80.90 lakh) and Satyam Computer Services (79.32 lakh).
TRF surged 2.16% to Rs 236.05 on bagging an order worth Rs 99.75 crore. The company announced the new order win before trading hours today, 19 February 2009.
Tulip Telecom surged 2.34% to Rs 328.40 after the company said it has repurchased foreign currency convertible bonds aggregating $30.50 million. The company made this announcement during trading hours today, 19 February 2009.
Foreign funds continue to dump Indian stocks. As per the provisional data released by the stock exchanges after trading hours, foreign funds today, 19 February 2009, sold shares worth a net Rs 363.48 crore. Domestic funds bought shares worth a net Rs 108.44 crore.
Market seen range-bound on mixed global cues; inflation data eyed
Market is expected to remain range-bound on mixed global cues from global shores. However high intra-day volatility may not be ruled out as inflation data for the year through 7 February 2009 will be announced during the day. The SGX Nifty futures for February 2009 series was down 3 points in Singapore.
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 on 12 February had showed.
On Wednesday, 18 February 2009, 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.
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.
Asian markets were trading mixed today, 19 February 2009, as investors remained wary due to deepening recession worries in the United States and Japan. China's Shanghai Composite gained 0.51% or 11.16 points at 2,221.03 and Japan's Nikkei rose 0.50% or 37.93 points at 7,572.37. Hong Kong's Hang Seng declined 0.82% or 106.89 points at 12,909.11, Singapore's Straits Times fell 1.23% or 20.38 points at 1,630.68, South Korea's Seoul Composite slipped 0.76% or 8.48 pointgs at 1,104.71 and Taiwan's Taiwan Weighted was down 0.53% or 24.04 points at 4,474.33.
The S&P 500 and Nasdaq edged lower on Wednesday, 18 February 2009 after bleak housing data overwhelmed President Barack Obama's $275 billion plan to prop up the housing market. The Dow eked out a slight gain.
Adding to the somber mood, the Federal Reserve slashed its economic forecast for 2009, and several companies, including Deere & Co, posted dismal results. The Dow Jones industrial average was up 3.03 points, or 0.04%, to 7,555.63 while the Standard & Poor's 500 Index was down 0.75 points, or 0.10%, to 788.42 and the Nasdaq Composite Index slipped 2.69 points, or 0.18%, to 1,467.97.
Back home, key benchmark indices saw divergent trend in what was a highly volatile trading session, influenced by trend in global markets. While the 30-share BSE Sensex fell, the broader based S&P CNX Nifty rose powered by gains in non-Sensex stocks. The BSE 30-share Sensex fell 19.82 points or 0.22%, to 9,015.18 and the broader based S&P CNX Nifty rose 5.65 points or 0.20% at 2776.15.
According to provisional data on NSE, FIIs were net sellers worth Rs 288.45 crore while mutual funds bought shares worth Rs 102.34 crore on Wednesday, 18 February 2009.
Pre Session Commentary - Feb 19 2009
Today domestic markets are likely to open positive as investors had shown some buying interest on yesterday’s trade and major Asian markets like Shanghai Composite and Nikkei have opened in green. In the US, the government has given a bailout package of $275 billion for the housing sector and companies like Fannie Mae and Freddie Mac would get $100 billion for disbursal of fresh housing loans. The US markets also closed in mixed like our domestic markets. The influence of movements and cues of Asian and European markets are likely to tamper the domestic movements as well. Further, due to lack of any domestic news would make today’s trading session volatile.
On Wednesday, the markets opened negative amidst weak global cues, however it managed to recover its early losses and closed flat. The sentiments prevailing across the globe had little to influence the domestic sentiments, as phenomenal buying was witnessed across frontline stocks. These stocks had faced brutal thrash on the previous two days’ trade. Short covering also helped the markets bounce back a little. Sectors like Realty, Oil & Gas, Power, PSU and Auto witnessed buying as therefore gained by 3.18%, 1.39%, 0.51%, 0.39% and 0.27% respectively. On the other hand Banking and Consumer Durable sectors witnessed huge selling pressures as they lost 2.27% and 1.70% respectively. Mid caps and Small caps fell by 12.82% and 19.93% respectively. During the session we expect the markets to be trading volatile.
The BSE Sensex closed low by 19.82 points at 9,015.18 and NSE Nifty ended with a marginal gain of 5.65 points at 2,776.15. The 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.
On Wednesday, the US stock markets ended mixed after a choppy trading session. The news of some bail out package for the housing sector also helped the investor sentiments for a pull back. To bring back some charm on the mortgage market, the government is increasing funding to Fannie Mae and Freddie Mac by expanding the allowable size of the GSEs'' retained mortgage portfolios to $900 billion from $850 billion, while also purchasing Fannie Mae and Freddie Mac mortgage-backed securities. Fannie Mae and Freddie Mac will receive increased preferred stock purchase agreements from the Treasury as well. The company is likely to get $100 billion for fresh lending in the housing sector. On the other hand the Fed sees more contraction in the US economy and therefore calls for more stimulus packages. The General motor is planning for huge layoffs besides seeking for $30 billion from the government, including the $13.4 billion the company has already received. US light crude oil for March delivery fell by $0.31 to settle at $34.62 a barrel on the New York Mercantile Exchange. The March contract, which will expire on Friday, during the intraday traded in a range between $34.13 and $36.22.
The Dow Jones Industrial Average (DJIA) grew by 3.03 points to close at 7,555.63 The NASDAQ Composite (RIXF) index fell by 2.69 points to close at 1,467.97 and the S&P 500 (SPX) lost 0.75 points to close at 788.42.
Today major stock markets in Asia are trading mixed. Shanghai composite is up by 18.82 points to 2,228.68, Japan''s Nikkei is high by 37.93 points at 7,572.37. Hang Seng lost 26.24 points at 12,989.76, South Korea''s Seoul Composite is low by 3.54 points at 1,109.65 and Singapore''s Strait Times is lower by 15 points to 1,636.06.
Indian ADRs ended mixed. In technology sector, Satyam ended higher by 2.81%. Further, Wipro ended with decrease of 1.11%, while Infosys gained 0.24% and Patni Computers closed up by 3.12%. In banking sector HDFC Bank and ICICI Bank lost 2.72% and 2.52% respectively. In telecommunication sector, MTNL and Tata Communication dropped by 3.64% and 3.16% respectively. However, Sterlite Industries increased by 2.04%.
The FIIs on Wednesday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 1,132.60 Crore and gross debt purchased stood at Rs. 316.40 Crore, while the gross equity sold stood at Rs. 1,618.80 Crore and gross debt sold stood at Rs. 436.50 Crore. Therefore, the net investment of equity and debt reported were Rs (486.20) Crore and Rs (120.10) Crore respectively.
On Wednesday, the Indian rupee closed at 49.92/93, 0.5% weaker than its previous close of 49.67/68. The rupee has fallen drastically for the third consecutive day as the Asian markets’ currencies have weakened against the dollar due to economic worries and plummeting stock markets.
On BSE, total number of shares traded were 22.61 Crore and total turnover stood at Rs 2,883.85 Crore. On NSE, total number of shares traded were 51.02 Crore and total turnover was Rs 7,742.77 Crore.
Top traded volumes on NSE Nifty – Unitech with 47718080 shares, DLF with 21886033 shares, Suzlon with 15771497 shares, ICICI Bank with total volume traded 13254008 shares followed by Reliance Petro with 12688599 shares.
On NSE Future and Options, total number of contracts traded in index futures was 898947 with a total turnover of Rs 11,596.63 Crore. Along with this total number of contracts traded in stock futures were 1005124 with a total turnover of Rs 10,646.87 Crore. Total numbers of contracts for index options were 1261885 with a total turnover of Rs 17,769.45 Crore and total numbers of contracts for stock options were 96294 and notional turnover was Rs 1,081.88 Crore.
Today, Nifty would have a support at 2,724 and resistance at 2,812 and BSE Sensex has support at 8,836 and resistance at 9,075.
RPL under the scanner
The Securities and Exchange Board of India (Sebi) has received complaints of insider trading by Mukesh Ambani-owned Reliance Petroleum (RPL) and 18 other companies in the last three years, Finance Minister Pranab Mukherjee told the Lok Sabha today.
Sebi got complaints against nine companies in 2006, Mukherjee said. Complaints against six companies were made in 2007, three in 2008 and one in January this year, the minister said without naming them.
RPL, a unit of Reliance Industries, did not reply to an email query.
A background on the RPL case prepared by Sebi said on November 6, 2007, the derivatives contracts of the RPL scrip reached 95 per cent of the market-wide position limit, thereby inviting upon it a restriction of no further increase in the open interest (OI) position as per the extant rules pertaining to trading in the derivative segment.
Thereafter, from November 7, 2007, further increase in the OI positions was banned and brokers/clients were permitted to trade only by offsetting their existing positions till the OI came down to 80 per cent of the market-wide position limit.
The price of the scrip fell sharply to Rs 220.35 on November 6 from the previous day close of Rs 267.55 on the Bombay Stock Exchange.
On November 23, RPL informed the exchanges that the promoters, RIL, had sold 180 million shares (4.01 per cent of RPL’s equity) during November 6 to November 23.
In view of the volatility observed in the scrip, Sebi examined the transactions in the cash as well as derivatives segment and also asked the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) to examine the trading of RPL for the period November 1 to 29, 2007.
Sebi didn’t respond to queries on the issue.
NSE’s observations said RIL, trading through five members – Enam Securities, JM Financial Services, Shriyam Broking Intermediary, Sonal Share & Stock Brokers, SSM Securities – was observed to be selling in the scrip from November 6, 2007.
Between November 1 and November 23, RIL was observed to have sold 118.2 million shares in 10 trading days at an average sale price of Rs 223.16. On November 29, RIL was the top client on net sale basis in the cash market during the last half hour of trading with net sale of 19.5 million shares.
The top clients on net short basis were observed to have created large net short positions between November 1 and November 6. These entities held a net short position of 79.7 million shares on November 29, 2007, accounting for 93.63 per cent of the open interest. Further, there was no rollover of positions by any of these entities to December expiry, the NSE observation said.
via BS
Market may remain volatile
The market may witness cautious trend as US indices ended on a flat note yesterday and Asian indices are exhibiting mixed trends in the morning trades. Although the bias remains negative, investors should maintain caution as profit taking at higher levels may pull down the market. Among the local indices the Nifty could test 2750 and 2700 on the downside while on the upper side it may move up to 2800. The Sensex has a likely support at 8900 and may face resistance at 9200.
US indices finished on a flat note on Wednesday, hovering near three-month lows, as investors considered the Federal Reserve's dour economic forecast and President Obama's home rescue plan. While the Dow Jones ended in a positive at 7556 advanced by 3 points, the Nasdaq down by 3 points at 1468.
Most of the Indian ADR's fell on the US bourses. Tata Motors & Rediff were the biggest loser and dropped over 10% followed MTNL & VSNL declined 3%, while ICICI Bank, HDFC Bank and Wipro were down around 1-2% each. However, Patni Computer soared over 3.13% while Satyam, Dr Reddy and Infosys gained around 0.24-2% each.
Crude oil prices inched lower in the US market, with the Nymex light crude oil for March delivery down by 31 cents to close at $34.62 a barrel. In the commodity space, the Comex gold for April series raised $10.70 to settle at $978.20.
Bajaj Auto
We recommend a buy in Bajaj Auto with a short-term trading horizon. It is evident from the charts of Bajaj Auto that it has been on an intermediate-term uptrend from its all-time low of Rs 294, recorded in early December. Since then, the stock has been forming higher peaks and higher troughs. While trending up, the stock breached its 50-day moving average in early January. On January 16, the stock conclusively broke through a key resistance level at Rs 450 by gaining 6 per cent. This resistance level is currently acting as a significant support level. Moreover, the stock recently took support from this level and resumed its uptrend. Reinforcing the uptrend, the stock jumped by almost 5 per cent on above average volume on February 18. The daily relative strength index (RSI) has entered the bullish zone and the weekly RSI is rising in this neutral region towards this zone. Our short-term outlook is bullish on the stock. We expect it to move up until it hits our price target of Rs 550. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 471.
Bullion metals continue to shine
Gold is just $35 below its all time high set at March 2008
Bullion metal prices rose to their highest levels for in seven months for second straight day on Wednesday, 18 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 Wednesday, Comex Gold for February delivery rose $10.7 (1.1%) to close at $978.2 an ounce on the New York Mercantile Exchange. During the day, it rose to a high of $980.2 and also dropped to a low of $961.6. Last week, gold prices ended up by 3%. For January, 2009, gold had gained 3.9%. Year to date, gold prices are higher by 11%.
On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (11%) since then.
On Wednesday, Comex silver futures for March delivery rose 28 cents (2%) to end at $14.29 an ounce. Year to date, silver has climbed 27% this year. For 2008, silver had lost 24%.
The World Gold Council reported today that demand for gold surpassed $100 billion last year for the first time ever, amid increased industrial and jewelry consumption and investors' purchase of the metal as a safe haven. Gold demand - including jewelry consumption, industrial demand and identifiable investments such as bars, coins and gold exchange-traded funds - hit $102 billion in 2008, up 29% from a year ago. In tonnage terms, gold demand rose 4% to 3,659 tons.
In the currency market on Wednesday, 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 70 (0.45%) at Rs 15,561 per 10 grams. Prices rose to a high of Rs 15,617 per 10 grams and fell to a low of Rs 15,372 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 371 (1.6%) higher at Rs 23,155/Kg. Prices opened at Rs 22,700/kg and rose to a high of Rs 23,392/Kg during the day's trading.
Crude stays steady
Prices continue to slip on recession concerns
Oil prices ended substantially lower once again on Wednesday, 18 February, 2009. Prices slumped due to the ongoing recession concerns gripping the overall US economy and also many parts of the world. Prices also fell after traders anticipated that tomorrow's weekly inventory report by the energy department will show buildup in crude inventories for the nineteenth time in twenty one weeks. The report is coming a day late due to the Presidents Day holiday on Monday.
On Wednesday, crude-oil futures for light sweet crude for March delivery closed at $34.62/barrel (lower by $0.31 or 0.9%) on the New York Mercantile Exchange. During the day, it fell to a low of $34.13 and also rose to a high of $36.22. 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 22%. On a yearly basis, crude prices are lower by 67%.
Market expects tomorrow's report to show a buildup of crude inventories to the tune of 3 million barrels.
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 4.2% to $1.0652 a gallon, and March heating oil dropped 3.3% to $1.1469 a gallon.
Natural gas for March delivery fell 5.6% to $4.203 per million British thermal units.
At the MCX, crude oil for February delivery closed at Rs 1,897/barrel, lower by Rs 62 (3.2%) against previous day's close. Natural gas for February delivery closed at Rs 205.7/mmbtu, lower by Rs 5.3/mmbtu (1.5%).
Daily Trading Calls - Feb 19 2009
Nifty (2776) Sup 2735 Res 2810
Buy Bharti (641) SL 635
Target 654, 658
Sell TCS (481) SL 486
Target 472, 470
Sell Hero Honda (937) SL 945
Target 915, 910
Buy Bombay Dyeing (145) SL 141 Target 151, 154
Sell Grasim (1341) SL 1356
Target 1315, 1305
Daily News Roundup - Feb 19 2009
According to Minister of State for Finance, Reliance Infrastructure has violated overseas borrowing and foreign exchange rules by investing funds raised abroad in the domestic capital market. (BS)
REpower, subsidiary of Suzlon, has bagged an order worth nearly EURO 2bn. (ET)
SEBI has received complaints of insider trading by Reliance Petroleum and 18 other companies in the past three years, Finance Minister Pranab Mukherjee told the Lok Sabha. (BS)
As per oil minister, supply of natural gas from Reliance Industries’ KG-D6 block is expected to start by April. (BL)
Novelis, a subsidiary of Hindalco, reported a net loss of US$1.8bn for the Oct-Dec ’08 quarter. (BL)
Bharti Airtel to add 17,000 rural outlets by March. (ET)
Dena Bank, Bank of Maharashtra and Oriental Bank of Commerce could get capital infusion by the government. (ET)
The government-appointed board of Satyam Computer has proposed raising its authorized share capital by 50% to 1.2bn equity shares. (BS)
The Government-appointed board of Satyam Computer has sought CLB’s nod to induct a strategic investor. (BL)
Maruti Suzuki posted higher sales in India than sales of its parent company Suzuki in Japan in 2008. (BS)
Unitech has dropped plans to develop two of its six information technology parks. (BS)
Jet Airways has cut three of its biggest loss-making international routes and plans to lease four wide-body Boeing 777 aircraft, besides phasing out three Boeing 737 planes. (BS)
Mr Ravi Chaturvedi, Group Chief Executive Officer, Jet Airways, has resigned from the company. (BL)
Tata Motors has entered into an agreement with Central Bank of India for financing its range of passenger vehicles. (BL)
GlaxoSmithKline Pharmaceuticals is scouting for acquisitions in the domestic market to consolidate its Indian business. (BS)
GlaxoSmithKline Pharmaceuticals is set to increase its field-force to support growth in its vaccines, oncology and other speciality segments. (BL)
Low-cost carriers SpiceJet, IndiGo and GoAir have cut fares sharply, just a week after they abruptly raised these following a 20% to 25% per cent slump in sales. (BS)
IFCI Ltd has revoked a guarantee provided by ICICI Bank to recover its dues from Maytas Infra to the tune of Rs950mn. (BS)
Both private and state-owned banks have told the government that TDS certificates issued to Satyam Computer by them between 2001-02 and 2006-07 were genuine. (BS)
A Srei Infrastructure Finance-led consortium has bagged Rs 60bn Light Rail Transit System project in Bengal. (BS)
iGate has opted out of the race to acquire Satyam Computers. (ET)
SpiceJet is open for stake sale to foreign airlines. (ET)
Top fund managers may quit JM Financial. (ET)
Orchid Chemicals plans to raise overseas debt via ECB to buy back FCCBs. (FE)
NMDC to acquire iron ore mines in Africa. (FE)
The rupee on Wednesday breached the crucial level of 50 a dollar in intra-day trade. (BL)
RBI governor hints at further rate cut. (FE)
The Minister for Steel has said that the import duty on steel could still be increased through a notification. (BL)
Indian pharma sector to remain stable, says Fitch. (FE)
TRAI has proposed that the Department of Telecom should carry out special audits of the telecom operator’s account books every 3-5 years. (BL)
Due to a sharp reduction in the crop area, sugar production in Uttar Pradesh has fallen by 50%. (BS)
TRAI has asked the communication ministry to introduce new reporting and accounting system for telecom companies. (ET)
Government may cut licensing fees for DTH players. (ET)
Government seeks nod for Rs110bn additional spend this fiscal. (ET)
The National Highway Authority of India will issue Rs37bn bonds this year. (ET)
The Centre has ruled out power ministry plea for service tax waiver on wheeling and transmission of power. (FE)
Finance ministry not to allow sale of fuel from EOU or SEZ refineries in the domestic market. (FE)
Know your desires!
The desire of gold is not for gold. It is for the means of freedom and benefit.
All that glitters in terms of investment remains Gold, which surged for the third straight day gaining almost 20% (in Mumbai) since Jan 16. As far as the stock market is concerned, we are in for another lackluster day. The change in settlement schedules due to Friday’s strike by RBI employees and Monday’s public holiday could add to meaningless swings. On the global front, Asian markets are mixed and volatile. The US stocks closed nearly unchanged, despite President Obama’s $275bn plan to stem foreclosures. The Federal Reserve however has cut its growth forecast for this year. European shares declined for a third consecutive day.
Given the uncertain backdrop and gloomy macro-economic scenario, we don’t see the Indian market making much headway in the near term. A sideways movement within a range of a few hundred points (on Nifty) appears more likely. There is no clear direction until we get fresh news-flow (bad or good) either locally or globally. Inflation data will be out later today, and a further slide in it is a given. However, it may not have a big impact on sentiment.
FIIs were net sellers in the cash segment on Wednesday at Rs2.88bn while the local institutions pumped in Rs1.02bn. In the F&O segment, the foreign funds were net sellers at Rs3.29bn. On Tuesday, FIIs were net sellers in the cash segment at Rs4.86bn. Mutual Funds were net sellers at Rs4.83bn on the same day.
US stocks finished more or less flat Wednesday, as strength in defensive stocks like Wal-Mart Stores and Procter & Gamble compensated for a slide in distressed stocks like General Motors, Citigroup and Bank of America, which neared their bear-market lows.
The Dow Jones Industrial Average added 3 points, or less than 0.1%, to end at 7,555.63. During the session, the Dow had fallen to the lowest point since Nov. 21, considered by some to be the low of the bear market.
The Standard & Poor's 500 index finished flat at 788.42. During the session, the S&P 500 also fell to its lowest point since Nov. 21. The Nasdaq Composite index lost less than 3 points or 0.2%, to close at 1,467.97.
The Federal Reserve revised lower its economic outlook for the first half of the year, saying it expects the economy to shrink and unemployment to rise. The report was part of the minutes from the last Fed policy meeting in which the bankers held interest rates steady at historic lows.
Obama unveiled a multi-billion dollar plan that is meant to help up to 9 million borrowers who are struggling amid falling home prices and unaffordable mortgage payments. Yet, investors remain worried about the prospects of an economic recovery and the timeline for any turnaround.
The Obama administration released some initial information last week about the multi-billion dollar bank bailout plan. But details were scarce and financial stocks have suffered since then. On Tuesday, President Obama signed into law the $787bn economic stimulus plan. But there are concerns that the plan is too heavy on spending.
January housing starts plummeted 17% from December to an all-time low. Building permits, a sign of builder confidence, fell 4.8% from December to an all-time low. Another report showed production at the nation's factories and mines slumped 1.8% in January, worse than expected.
After the market close on Tuesday, Chrysler and GM unveiled their plans for becoming viable after receiving $17.4bn in government aid late last year. The companies also said they would cut 50,000 jobs worldwide by the end of the year.
Goodyear Tire & Rubber said it will cut 5,000 jobs this year, as slowing auto sales have eaten into demand for its products.
Comcast reported a weaker quarterly profit and said it lost 233,000 subscribers in the fourth quarter of 2008. However, excluding charges, the cable provider's profit was better than what analysts were expecting. Shares fell 4% in active Nasdaq trading.
General Electric (GE) CEO Jeffrey Immelt said he gave up a 2008 bonus and other compensation in the aftermath of GE's weaker earnings and sliding stock price last year.
Treasury prices slipped, raising the yield on the benchmark 10-year note to 2.75% from 2.65% on Monday. Treasury prices and yields move in opposite directions.
Lending rates were little changed. The 3-month Libor rate was 1.25%, unchanged from Tuesday. The overnight Libor rate fell to 0.3% from 0.31% on Tuesday. Libor is a bank lending rate.
US light crude oil for March delivery fell 31 cents to settle at $34.62 a barrel on the New York Mercantile Exchange. Gasoline prices decreased three-tenths of a cent to a national average of $1.957 a gallon.
The dollar gained against the euro and the yen. COMEX gold for April delivery rose $10.70 to settle at $978.20 an ounce.
After the market close, Hewlett-Packard (HP) reported lower fiscal first-quarter earnings that met analysts' estimates on higher revenue that missed estimates. The tech leader also gave a forecast for current-quarter results that is short of expectations. HP shares fell 4% in extended-hours trading.
Thursday brings quarterly earnings from General Motors, the weekly jobless claims report and a reading on wholesale inflation, all before the start of trading. The index of leading economic indicators is due after the start of trading, as is the Philadelphia Fed index - a regional manufacturing survey.
European shares declined for the third straight session, with energy producers pacing the drop as oil prices skidded lower. After a 2.5% drop on Tuesday on the back of Eastern European fears, the pan-European Dow Jones Stoxx 600 index closed 0.3% lower to 183.35.
UK's FTSE 100 index lost 0.7% to 4,006.83, while Germany's DAX 30 index fell 0.3% to 4,204.96 and the French CAC-40 index declined a sliver to 2,874.07.
Indian shares ended on a flat note on Wednesday after a choppy day, as traders took a breather after three straight sessions of heavy losses. Key stock indices remained in a narrow range through out the trading session, swinging between gains and losses. The bulls did manage to pull into in the green in the mid-afternoon session. The indices slipped again towards the end of trade to close barely changed.
Finally, the BSE Sensex declined by 20 points to close at 9,015 and the NSE Nifty finished almost unchanged at 2,776.
Among the 30-components of Sensex, 15 stocks ended in the red and 15 stocks ended in the positive terrain. The major gainers were, Reliance Industries, Bharti, NTPC, DLF and Maruti. On the other hand, the major losers were ICICI Bank, HDFC, SBI, M&M, L&T and Reliance Infra.
Shares of DLF surged by over 7% to Rs158 after reports stated that the government would consider 16 SEZ proposals including those from DLF next week. The scrip touched an intra-day high of Rs162 and a low of Rs142 and recorded volumes of over 87,00,000 shares on BSE.
Shares of Reliance Power slipped 0.4% to Rs100. Reports stated that the company was looking to start construction work at Butibori next week. The scrip touched an intra-day high of Rs102.6 and a low of Rs98 and recorded volumes of over 8,00,000 shares on BSE.
Shares of ITC erased gains and slipped by a percent to Rs179. The stock had earlier surged after reports stated that the Supreme Court ordered customs department not to take any action against the company. The scrip touched an intra-day high of Rs182 and a low of Rs178 and recorded volumes of over 4,00,000 shares on BSE.
Shares of Reliance Industries gained by 2% to Rs1294 after Petroleum Minister Murli Deora said that the company would start supplying natural gas from its eastern offshore KG-D6 fields by April.
The scrip touched an intra-day high of Rs1316 and a low of Rs1248 and recorded volumes of over 19,00,000 shares on BSE.
Maytas Infra surged by over 4% to Rs56.4 after the government sought the removal of the construction company’s directors.
The government asked the company Law Board to remove the directors of Maytas Infra and Maytas Properties Ltd. The scrip touched an intra-day high of Rs56.8 and a low of Rs51.4 and recorded volumes of over 14,00,000 shares on BSE.
Looking at the lackluster movement, markets might struggle to find direction. Again a lot would depend on the global cues.
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