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Friday, February 27, 2009
BSE Bulk Deals to Watch -Feb 27 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
27/2/2009 531025 INCA FINLEAS HEERAL KIRTI SHAH S 15000 152.05
27/2/2009 511728 KZLEASING DIVYA STOCK BROKING LTD B 31183 55.07
27/2/2009 511728 KZLEASING JYOTIKABEN MAHESHBHAI HADVANI B 24000 54.56
27/2/2009 511728 KZLEASING HARDIK M. MITHANI B 18500 53.67
27/2/2009 511728 KZLEASING DIVYA STOCK BROKING LTD S 29399 53.78
27/2/2009 511728 KZLEASING ASHISH PITAMBERDAS DANGI S 16587 54.94
27/2/2009 508989 NAVNEET PUBLICATIONS (I) LTD. INTERACTIVE TECHNOLOGIES PVT L B 764000 39.75
27/2/2009 508989 NAVNEET PUBLICATIONS (I) LTD. ANJALEE EXIM PRIVATE LIMITED S 764000 39.75
27/2/2009 512487 RAJENDRA ELE VAISHRAVAN TRADING LTD B 75000 21.60
27/2/2009 512487 RAJENDRA ELE LAKSHMINARAYAN REALTIES AND SERVICES LTD B 75000 21.60
27/2/2009 512487 RAJENDRA ELE R T EXPORTS LTD S 149700 21.60
27/2/2009 502445 ROHIT PULP P SONIA GULATI B 25488 11.26
27/2/2009 502445 ROHIT PULP P JITESH KATEWA S 25488 11.26
27/2/2009 532478 UNITED BREW INDEA ABSOLUTE RETURN FUND B 1300000 75.00
27/2/2009 532478 UNITED BREW RELIALNCE CAPITAL MUTUAL FUND B 1500000 75.00
27/2/2009 532478 UNITED BREW DERIVE TRADING PRIVATE LIMITED B 5250000 75.00
27/2/2009 532478 UNITED BREW CROWN CAPITAL LIMITED S 10000000 75.00
27/2/2009 531390 UPSURGE INVS BHANUMATIDHARAMRAJGIRI B 130000 10.65
27/2/2009 531390 UPSURGE INVS ATUL BHANSALI S 83000 10.65
27/2/2009 532389 VALECHA ENGI VALECHA INVESTMENTS PVT. LTD. B 235860 26.07
27/2/2009 532389 VALECHA ENGI ADMIRE CONSULTANTS PVT. LTD. S 209708 26.31
NSE Bulk Deals to Watch - Feb 27 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
27-FEB-2009,ASIANELEC,Asian Electronics Ltd,ARUN BABULAL SHAH,BUY,400000,20.35,-
27-FEB-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,BUY,277509,1619.76,-
27-FEB-2009,KARURVYSYA,Karur Vysya Bank Ltd,FRONTPOINT FINANCIAL SERVICES FUND LP,BUY,618159,199.70,-
27-FEB-2009,SATYAMCOMP,Satyam Computers Ltd,FIDELITY,BUY,3670040,42.27,-
27-FEB-2009,SREINTFIN,SREI Infrastructure Finan,FRONTPOINT FINANCIAL SERVICES FUND LP,BUY,4240662,29.65,-
27-FEB-2009,UNIONBANK,Union Bank of India,ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD,BUY,6820616,123.00,-
27-FEB-2009,VENUSREM,Venus Remedies Limited,KOTAK MAH (UK) LTD-KOTAK INDIA FOCUS FUND,BUY,47930,175.00,-
27-FEB-2009,ABAN,Aban Offshore Ltd.,NOMURA INDIA INVESTMENT FUND MOTHER FUND,SELL,330000,324.99,-
27-FEB-2009,ASIANELEC,Asian Electronics Ltd,U S INSTRUMENTS PVT LTD,SELL,400000,20.35,-
27-FEB-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,SELL,277509,1621.12,-
27-FEB-2009,KARURVYSYA,Karur Vysya Bank Ltd,GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD,SELL,618159,199.70,-
27-FEB-2009,SREINTFIN,SREI Infrastructure Finan,GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD,SELL,4756154,29.65,-
27-FEB-2009,UNIONBANK,Union Bank of India,TCI CYPRUS HOLDING LTD,SELL,9224616,123.00,-
27-FEB-2009,VENUSREM,Venus Remedies Limited,KACHOLIA ASHISH,SELL,47000,175.01,-
Post Session Commentary - Feb 27 2009
Indian market ended below the dotted line despite minimizing its losses during final trading hours. Upturn in key stocks mainly contributed to the recovery in the domestic bourses. Previously, benchmark indices tumbled during the session on disappointing Q3 2008 gross domestic product growth of 5.3%, which stood at slowest in five years. Weak global economic data also weighed on the sentiments as US jobless claims hit a 26-year high.
The market had gap down opening today on the back of weak cues from the markets all over the world. The US stocks on Thursday ended on downbeat note for the second day on the back of the President Obama’s budget plan. Jobless claims in US continued to rise beyond expectations. Initial claims climbed 36,000 to 667,000 from the prior week. Sentiments in domestic ground exhibited instability ahead of the release of Q3 GDP data by the government. Along with this, benchmark indices continued to hold sluggish movement on intense selling pressure over the counters. Further, lower December 2008, quarter GDP number that stood at 5.3% as against 8.9% on Year-on-Year basis and 7.6% on Quarter-on-Quarter basis also fueled the negative attitude. Finally, market pared its losses during last trading to lessen the negative gap on hopes of rate cut. BSE Sensex ended below 8,900 mark and NSE Nifty closed below 2,750 level. From the sectoral front, Reality, Oil & Gas, Teck, Consumer Durables, IT and Auto stocks remained under pressure. BSE Mid Cap and Small Cap stocks also followed the same trend. However, Bank, FMCG and Metal stocks were in limelight as witnessed most of the buying from these baskets.
Among the Sensex pack 22 stocks ended in red territory, 7 in green and 1 remained unchanged. The market breadth indicating the overall health of the market remained negative as 1320 stocks closed in green while 1043 stocks closed in red and 103 stocks remained unchanged in BSE.
The BSE Sensex closed lower by 63.25 points at 8,891.61 and NSE Nifty ended down by 22 points at 2,763.65. BSE Mid Caps and BSE Small Caps ended with losses of 1.17 points and 6.76 points at 2,758.29 and 3,106.01 respectively. The BSE Sensex touched intraday high of 8,944.11 and intraday low of 8,728.66.
Losers from the BSE Sensex pack are Grasim Indus (5.99%), Ranbaxy Lab (4.80%), Wipro Ltd (3.98%), Reliance Infra (3.71%), ACC Ltd (3.55%), ACC Ltd (3.38%) and ONGC Ltd (3.37%).
Gainers from the BSE Sensex pack are Tata Steel (5.61%), HDFC (4.75%), HDFC Bank (1.35%), ICICI Bank (1.03%), HUL (0.30%) and SBI (0.29%).
The government today released the third-quarter (October to December) GDP numbers that came in below expectations. The economy of India grew 5.3% for the quarter ended December from a year earlier, slowing from 7.6% in the previous quarter. The annual growth of India''s fiscal third quarter was lower than upwardly revised 8.9% annual expansion in the same quarter a year ago. The farm output in the December quarter fell an annual 2.2% as compared to a rise of 2.7% in September quarter. The manufacturing slipped an annual 0.2% in December quarter as against a growth of 5% in the September quarter. The construction grew 6.7% in December quarter as compared to 9.7% September quarter. The trade, hotels, transport and communication advanced 6.8% in December quarter vs 10.7% in September. The financing, insurance, real estate and business services gained 9.5% in Oct-Dec vs 9.2% in July-September.
On the global markets front the Asian markets which opened before the Indian market, ended mixed. Investors were worried about worsening economic and corporate profit prospects. Japan’s industrial output in January fell 10% from the preceding month, marking the fourth straight month of declines. Further the shipments are down 11.4%, the biggest on-month falls on record and the household-spending fell 5.9% year-on-year in January, marking its biggest decline in about two years. These data confirmed the bleak outlook for the world''s second biggest economy. Shanghai Composite, Hang Seng and Straits Times index ended lower 38.40, 83.37 and 22.57 points at 2,082.85, 12,811.57 and 1,594.87 respectively. However, Nikkei 225 and Seoul Composite closed up by 110.49 and 8.24 point at 7,568.42 and 1,063.03.
European markets which opened after the Indian market are trading down. In London FTSE 100 is trading lower by 70.68 points at 3,844.96 and in Frankfurt the DAX index is trading down by 83.55 points at 3,859.07.
The BSE Reality index ended down by (2.29%) or 33.09 points at 1,413.09. Losers are Akruti City (5.08%), Penland Ltd (3.78%), Mahindra Life (3.45%), Housing Dev (3.10%) and Unitech Ltd (2.59%).
The BSE Oil & Gas index closed with decrease of (1.64%) or 101.22 points at 6,064.11. Scrips that lost are Aban Offshore (9.42%), ONGC Ltd (3.37%), Reliance Nat Res (2.72%) and Reliance (1.97%).
The BSE Teck index also tumbled (1.40%) or 24.58 points to close at 1,736.47. Zee Ent (5.27%), IBN18 (4.30%), Wipro Ltd (3.98%), Idea Cell (3.89%) and Tech Mahindra (3.79%) ended in red.
The BSE Consumer Durables stocks lost (0.80%) or 12.45 points to close at 1,542.67. Main losers are Videocon Ind (1.48%), Titan Ind (1.28%), Blue star L (1%) and Gitanjali GE (0.91%).
The BSE IT index ended lower by (0.69%) or 14.52 points to close at 2,096.17 on fears that a weak global economy would cut the amount firm spent ton technology. Wipro Ltd (3.98%), Tech Mahindra (3.79%), Aptech Ltd (2.83%), Patni Computer (2.30%) and Mphasis Ltd (1.98%) ended in negative territory.
The BSE Bank index gained (1.31%) or 54.95 points at 4,240.10. Main gainers are Union Bank (4.90%), Oriental Bank (4.30%), Punjab National Bank (4.12%), Bank of Baroda (3.84%) and Canara Bank (2.64%).
Ranbaxy Labs extended its losses and ended lower by 4.80% as USFDA on 25 February 2009, said Ranbaxy falsified data of over two dozen drugs made in Poanta Sahib plant in India and it will halt approval of pending and new drugs from the plant.. Daiichi Sankyo said that it had formed a team with Ranbaxy Laboratories, to deal with the charges of data ''falsification'' levied by the US Food and Drug Administration (USFDA). Daiichi Sankyo said in a statement that the company takes the issue very seriously. "Both Daiichi and Ranbaxy have already formed a team to solve the issue".
Gujarat NRE Coke fell 1.45% despite it decided to issue 40,00,000 Convertible Warrants to non-promoter entity subject to the approval of the shareholders and in accordance with the provisions of Chapter XIII to SEBI Guidelines, 2000.
Cairn India rose 3.12%, as crude oil prices surged over 6% on the New York Mercantile Exchange on Thursday, 26 February 2009.
Market to take cues from global equities
The domestic bourses are likely to track global markets in the near term. Fears of more bad news from the US financial sector is likely to keep sentiments subdued. Yet, stock-specific buying on a likely interest rate cuts could restrict losses.
Global investors are offloading India stocks. Foreign institutional investors (FIIs) outflow in February 2009 totaled Rs 2436.60 crore (till 26 February 2009). FIIs had pulled out a massive Rs 52,998.70 crore in calendar year 2008, as against an inflow of a huge Rs 71,486.50 crore in calendar year 2007.
Inflation fell to 3.36% for the year through 14 February 2009 and is reported to be on course to turn negative by first week of April 2009 as falling commodity prices and shrinking demand build up downward pressure. Falling inflation has provided room for the Reserve Bank of India (RBI) to cut interest rates further to shield the domestic economy from the impact of the global financial sector crisis and recession in key global economies.
Expectations of rate cuts have increased after the RBI governor D Subbarao's comments in a conference held earlier this month in Tokyo that there is more room for slashing benchmark interest rates. Marketmen are expecting at least a 50 basis point (bps) cut in the repo and reverse repo rates each.
Meanwhile, Standard & Poor's (S&P) Ratings Services on 24 February 2009, warned it may cut India's credit rating to junk, saying the nation's fiscal position may be unsustainable in the medium term.
The warning followed government's forecast that fiscal deficit for current fiscal year ending 31 March 2009 will balloon to 6% of gross domestic product from the initial target of 2.5%. For the next fiscal year, it expects the fiscal deficit at 5.5% of gross domestic product (GDP).
Meanwhile, gloomy US unemployment data reinforced fears the world's largest economy is in a severe slump. For the week ended 21 February 2009, a total of 6,67,000 Americans filed initial claims for unemployment insurance, up 36,000 from a revised 631,000 the previous week, according to a Labour Department report released Thursday, 26 February 2009.
Key indices end marginally higher
Gains in select stocks
helped the key benchmark indices edged higher in a truncated week. Still, the upside was capped as a disappointing quarterly GDP growth data announced on Friday, 27 February 2009, indicated the global financial crisis could have a greater impact on the domestic economy than initially expected. The market was closed on Monday, 23 February 2009, on account of Mahashivratri.
The gross domestic product (GDP) grew a slower than expected 5.3% in Q3 December 2008 over Q3 December 2007. The figure is sharply lower from 7.6% in Q2 September 2008 as the global economic crisis cut demand and exports. India has estimated the economy to grow 7.1% in 2008/09, slowing from the 9% in the previous year.
Inflation fell to 3.36% for the year through 14 February 2009 and is reported to be on course to turn negative by first week of April 2009 as falling commodity prices and shrinking demand build up downward pressure.
The 30-share BSE Sensex rose 48.40 points or 0.55% to 8,891.61 in the week ended 27 February 2009. The 50-unit S&P Nifty rose 27.2 points or 1% to 2763.65 in the week.
The BSE Mid-Cap index declined 1.20% to 2,758.29, while the BSE Small-Cap index fell 1.73% to 3,106.01. Both the indices underperformed the Sensex.
Key benchmark indices pared losses and settled with minor losses on 24 February 2009, after the Indian government cut excise duties and service tax rates. The move is aimed at protecting the economy from the impact of the global economic crisis. On that day, the BSE 30-share Sensex fell 21.15 points, or 0.24%, to 8,822.06. The S&P CNX Nifty fell 2.55 points, or 0.09%, to 2,733.90.
Key benchmark indices rose the next day on firm global markets. The BSE 30-share Sensex rose 80.50 points, or 0.91%, to 8,902.56. The S&P CNX Nifty rose 28.60 points, or 1.05%, to 2,762.50.
Key benchmark indices gained for the second straight day on 26 February 2009, led by buying in auto, IT and FMCG stocks. Hopes of a further cut in policy rates by the Reserve Bank of India aided the rally. The BSE 30-share Sensex rose 52.30 points, or 0.59%, to 8,954.86. The S&P CNX Nifty rose 23.15 points, or 0.84%, to 2,785.65.
Although the market managed to crawl back from the day's lows, it ended on a weak note on Friday, 27 February 2009. Realty, oil & gas and technology stocks were the biggest losers on that day. The BSE 30-share Sensex fell 63.25 points, or 0.71%, to 8,891.61. The S&P CNX Nifty declined 22 points, or 0.79%, to 2763.65.
Finance Minister Pranab Mukherjee, on 24 February 2009, announced a surprise cut indirect tax levies. Service tax has been cut to 10% from 12%. Excise duty on bulk cement has been reduced to 8% from 10%.
Mukherjee also announced that goods that attract 10% excise duty will now be charged at 8%. However, excise rates on items that attract 8% and 4% excise duty will not be changed. A previously announced 4% across-the-board cut in excise duty will continue beyond 31 March 2009, Mukherjee said in his reply to a debate on the interim budget for 2009-2010 in parliament.
With regard to cement, the rate of central excise on bulk cement has been cut from 10% or Rs 290 per metric tonne (PMT) whichever is higher to 8% or Rs 230 PMT whichever is higher. All changes in the indirect taxes are effective from 24 February 2009.
Oil exploration and production firms rose as they stand to benefit from lower service tax on exploration & production activities. India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 0.90% in the week. The company after market hours on Friday, 27 February 2009, said its board will meet on 2 March 2009 to consider amalgamation of Reliance Petroleum with the company
Reliance Petroleum, meanwhile, declined 2.56% in the week.
Among other oil & gas stocks, ONGC rose 2.74%, Cairn India gained 9.83% and GAIL India rose 1.57%. US light, sweet crude for April 2009 delivery surged $2.72 or 6.40% to $44.57 a barrel at New York Mercantile Exchange on Thursday, 26 February 2009 on signals that Organizations of Petroleum Exporting Countries (OPEC) may cut supplies further when it meets next month.
The world's sixth largest steel maker by sales Tata Steel rose 2.56%. On Friday, the company announced forecast-bearing consolidated results. On a consolidated basis, the company's net profit fell 44.18% to Rs 732.21 crore on 3.57% rise in total income to Rs 33,222.59 crore in Q3 December 2008 over Q3 December 2007. The market was expecting a loss.
India's largest drugmaker by sales Ranbaxy Laboratories fell 21.72% after an investigation by the US Food and Drug Administration (FDA) found that Ranbaxy had falsified data and test results of medicines manufactured at its Himachal Pradesh (HP) facility to obtain marketing approval in the United States. The stock was the major loser from the Sensex pack.
Drugmaker Piramal Healthcare rose 19.95% on reports French drug maker Sanofi-Aventis has emerged as the front-runner to buy a substantial stake in the Indian firm.
Drug maker Wockhardt fell 8.89%. The company got US Food and Drug Administration approval to sell an alcohol-free syrup of ranitidine hydrochloride, used to treat ulcers and hyper-acidity.
Banking stocks were mixed caught between fears of rising defaults in a weakening economy and hopes a further fall in interest rates may boost lending growth. State Bank of India (down 1.86%), and ICICI Bank (down 2.34%), fell. However, HDFC Bank (up 2.06%), and Kotak Mahindra bank (up 5.67%), rose.
Realty shares slipped after realtors cut prices on increasing risks of tight liquidity and slowing sales. DLF (down 2.16%), Housing Development & Infrastructure (down 5.17%), Omaxe (down 0.90%), fell.
However, Unitech rose 0.53%. The company is reported to have sold its Courtyard by Marriott hotel in Gurgaon, near New Delhi, to local businessman Roop Madan. The developer sold the hotel for about Rs 230 crore, reports added.
World's fifth largest wind turbine maker Suzlon Energy fell 1.93% on reports revenues from its US operations is likely to fall as the wind power growth in the country was likely to decline.
Construction company KNR Constructions jumped 8.35% after the company's joint venture with GVR Infra Projects won an order worth Rs 576 crore.
The Union Cabinet, on 26 February 2009, raised the dearness allowance (DA) paid to government employees to 22% of basic salary, from an earlier 16%. The hike will cost Rs 3514 crore to the government, Home Minister P Chidambaram said.
The decision to hike the DA is clearly aimed at wooing voters. The Election Commission is likely to shortly announce the dates for Lok Sabha elections which are likely to he held in April-May 2009. In another decision, the Cabinet allowed state government to run up higher fiscal deficits.
Meanwhile, Standard & Poor's (S&P) Ratings Services on 24 February 2009, warned it may cut India's credit rating to junk, saying the nation's fiscal position may be unsustainable in the medium term.
The warning followed a government forecast that fiscal deficit for current fiscal year ending 31 March 2009 will balloon to 6% of gross domestic product from the initial target of 2.5%. For the next fiscal year, it expects the fiscal deficit at 5.5% of gross dmestic product (GDP).
Tata Steel surges in choppy market
Key benchmark indices recovered sharply in intraday trade as banking stocks reversed losses and IT stocks recovered. India's largest steel maker by sales Tata Steel spurted after announcing better-than-expected Q3 December 2008 consolidated results in late trade. The BSE 30-share Sensex settled down 63.25 points, or 0.71%, off close to 160 points from the day's low.
Comments by Economic Affairs Secretary Ashok Chawla that Q4 March 2009 will show robust economic growth helped soothe investor nerves after the latest data showed the GDP recording a lower-than-expected 5.3% growth in Q3 December 2008. The BSE Sensex had tumbled 2.45% in mid-morning trade hit by the data. Weak rupee and dismal global economic data also affected the sentiment.
The market was volatile. After a sharp slide in mid-morning trade hit by disappointing Q3 GDP data, an intermittant recovery was witnessed on a number of occasions.
Chawla said a stronger growth Q4 March 2009 will help push India's full fiscal year economic expansion close to 7%. Historically, the fourth-quarter contribution to GDP growth is better, he said.
India's economy grew at its slowest annual pace in almost six years by 5.3% in Q3 December 2008 as the global economic crisis cut demand and exports. The figure is sharply lower from 7.6% in Q2 September 2008. The manufacturing sector fell 0.2% in in Q3 December 2008 from a year earlier, while the farm sector contracted an annual 2.2%, government data showed on Friday, 27 February 2009. India's economy grew 7.6% in the September 2008 quarter and 7.9% in the June 2008 quarter. India has estimated the economy to grow 7.1% in 2008/09, slowing from the 9% in the previous year.
Meanwhile, a sharp slide in rupee which hit a record low against the dollar heightened worries that some foreign funds may refrain from buying stocks. A fall in rupee reduces the valuation of the portfolio of foreign funds to that extent. The impact can be mitigated by hedging. Currently, foreign funds are dependent on the relatively less transparent over-the-counter markets for hedging. Foreign funds are not allowed to trade in currency futures market in India.
In fact, foreign funds are in selling mode in Indian stocks, having dumped shares worth Rs 6670.60 crore (till 26 February 2009). As per the provisional figures on BSE, foreign institutional investors (FIIs) sold shares worth Rs 463.03 crore while domestic funds bought shares worth Rs 649.26 crore today, 27 February 2009.
Fears of rising borrowing costs for Indian corporates linger in the minds of investors as fears of a downgrade of India's sovereign rating by global rating agencies loom large. Rating agency S&P on Tuesday, 24 February 2009, cut its outlook on India's long-term sovereign credit rating to negative from stable citing worsening government finances, which could raise Indian firms' overseas borrowing costs and weaken the rupee. Moody's Economy.com on Wednesday, 25 February 2009, said India's wider fiscal deficit will boost funding costs and weaken investor confidence.
Further, a downgrade will mean that some foreign funds, which have mandates to park their money only in investment-grade paper, could well withdraw money, leading to further pressure on the stock markets. It could also affect the prospect of new inflows from foreign funds.
Meanwhile, global economic data continued to paint a worsening picture of the global economy. Data on Thursday showed US jobless claims hit a 26-year high, while Japanese data early Friday confirmed the bleak outlook for the world's second biggest economy, with industrial output falling 10.0% in January 2009 and shipments down 11.4%, the biggest on-month falls on record.
European stocks slipped in early trade on Friday, wiping out nearly all the previous session's gains, with pharma shares falling on fears the US budget proposal could curb profits. Key benchmark indices in France, Germany and UK were down by between 1.66% to 2.18%.
Asian markets were trading mixed today, 27 February 2009, as technology companies gained on brokerage upgrades and commodity shares advanced on higher metal prices. Key benchmark indices in Taiwan, Singapore, and Japan were up by between 0.78% and 1.48%. Indices in Hong Kong, China and South Korea were down by between 0.65% and 1.81%.
US markets ended lower on Thursday, 26 February 2009, in volatile trade as a spate of sour economic data and worries that President Obama's budget proposal will strangle profits forced investors to sell off stocks across the board. The Obama administration sees the FY09 deficit at $1.75 trillion.
The Dow Jones industrial average declined 88.81 points, or 1.2%, to 7,182.08. The S&P 500 index slipped 12.07 points, or 1.6%, to 752.83 and the Nasdaq Composite index lost 33.96 points, or 2.4%, to 1,391.47.
Obama proposed almost $1 trillion in higher taxes over the next decade on the highest-earning Americans, Wall Street financiers, US-based multinational corporations and oil companies to pay for permanent tax breaks for lower earners.
The BSE 30-share Sensex was down 63.25 points, or 0.71%, to 8,891.61. At the day's low of 8,728.66 the Sensex lost 226.20 points in afternoon trade. At the day's high of 8,944.11 Sensex fell 10.75 points in early trade.
The S&P CNX Nifty was down 22 points, or 0.79%, to 2,763.65.
The barometer index BSE Sensex had gained 132.80 points or 1.5% in last two trading sessions. But the Sensex is down 755.70 points or 7.83% in calendar 2009 from its close of 9,647.31 on 31 December 2008.
The BSE clocked a turnover of Rs 3,045 crore, higher than Rs 2,696.32 crore on Thursday, 26 February 2009.
Nifty March 2009 futures were at 2730, at a discount of 33.65 points as compared to the spot closing of 2763.65. Turnover in NSE's futures & options (F&O) segment was Rs 39204.47 crore much lower than Rs 50142.32 crore on Thursday, 26 February 2009.
The market breadth, indicating the overall health of the market, turned weak on BSE with 1,054 shares advancing as compared with 1,336 that declined. A total of 66 shares remained unchanged. The breadth was positive in early trade before the GDP data.
The BSE Bankex (up 1.31%), the BSE FMCG index (up 0.34%), the BSE Metal index (up 0.22%), the BSE PSU index (down 0.09%), the BSE Power index (down 0.24%), the BSE Healthcare index (down 0.39%), the BSE Capital Goods index (down 0.43%), the BSE Auto index (down 0.44%), the BSE IT index (down 0.69%) outperformed the Sensex.
The BSE Realty index (down 2.29%), the BSE Oil & Gas index (down 1.64%), the BSE TECk index (down 1.4%) and the BSE Consumer Durables index (down 0.8%) underperfomed the Sensex.
From the 30 share Sensex pack, 22 stocks fell while the rest rose.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 1.97% to Rs 1,265.05 on fears a worsening global economy will hit demand for petrochemicals. Nevertheless, the stock came off the day's lows of Rs 1,248.
The world's sixth largest steel maker by sales Tata Steel surged 5.61% to Rs 172.35 after announcing forecast-bearing consolidated results. On a consolidated basis, the company's net profit fell 44.18% to Rs 732.21 crore on 3.57% rise in total income to Rs 33,222.59 crore in Q3 December 2008 over Q3 December 2007. The market was expecting a loss.
But other metal stocks, Hindalco Industries, Steel Authority of India and Sterlite Industries, fell by between 0.52% to 3.16%.
Auto stocks fell as high interest rates and sluggish consumer spending have dented demand for cars, trucks, motorcycles and scooters. Tata Motors, Mahindra & Mahindra, Maruti Suzuki India fell by between 0.37% to 3.38%.
Banking stocks reversed losses in late trade as bond prices rose for the second day in a row on speculation the central bank will cut policy rates to support faltering growth. India's largest private sector bank by net profit ICICI Bank rose 1.03% to Rs 328.10. The stock came off the day's low of Rs 311.25. Its American Depository Receipts (ADR) slipped 5.17% on Thursday, 26 February 2009. Recently, Life Insurance Corporation of India hiked its stake in ICICI Bank by 2.04% to 9.38%.
India's second largest private sector bank by operating income HDFC Bank rose 1.35% to Rs 884.85 off the day's low of Rs 843.20.
India's largest bank in terms of assets and branch network State Bank of India rose 0.29% to Rs 1,027.10. The stock came off the day's low of Rs 1008.30. The Indian government on Tuesday 24 February 2009 introduced a bill in Parliament which will enable it to increase the capital base of State Bank of India's subsidiaries and issue preference and bonus shares of these entities.
Treasury gains had helped many banks report strong Q3 December 2008 results.
As per the latest data by the Reserve Bank of India, the banking sector lent over Rs 10000 crore in the fortnight ended 13 February 2009. Food credit rose Rs 547.82 crore, while non-food credit rose went up by Rs 9124.95 crore. This is the highest fortnightly growth in bank loans since November 2007.
Despite a steep cut in policy rates in India since October 2008, there has not been a commensurate reduction in lending rates by banks as fears of rising bad loans have made banks cautious in increasing advances.
India's largest mortgage lender by operating income Housing Development Finance Corporation rose 4.75% after a block deal of 14.02 lakh shares was executed on BSE at Rs 1215 per share.
Some of the FMCG stocks rose on defensive buying. Nestle India, Tata Tea, United Spirits, Marico rose by between 0.38% to 3.44%.
India's largest FMCG major by sales Hindustan Unilever rose 0.3% to Rs 253.80 off the day's low of Rs 248.50.
Capital goods stocks fell on worries a slowing economy will crimp orders. Bharat Heavy Electricals, Punj Lloyd, ABB and Crompton Greaves fell by between 0.53% to 4.87%.
Rate sensitive realty stocks extended fall on recent reports falling interest rates have failed to revive housing demand. DLF, Unitech and Indiabulls Real Estate, Akruti City fell by between 2.16% to 5.08%. Most of the realty deals including sale of commercial property and housing sales are driven by finance.
Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) on Thursday, 26 February 2009, approved a scheme to encourage states to increase the supply of land and construct 10 lakh affordable houses. The Centre will provide finance assistance of Rs 5000 crore over the next four years for the affordable housing projects.
Construction and development is envisaged in public-private partnership (PPP) mode. Private Sector developers and builders as well as state housing boards are expected to be partners to the government and construct and develop projects with funding from institutional sources. Real estate developers looking to affordable housing during the downturn will now have an opportunity to take up projects where demand for housing is still high, a release by the government after the CCEA meeting said. The urban housing shortage is estimated at 24.7 million, largely for the weaker and low income households.
Outsourcing focussed IT firms fell on fears a weak global economy would cut the amount firms spent on technology and on fall in ADRs overnight. India's third largest software services exporter, Wipro fell 3.98% as its ADR fell 1.82% overnight. India's second largest software services exporter Infosys Technologies slipped 0.41% to Rs 1,231.30 off the day's low of Rs 1,202.35. Its ADR fell 1.71% overnight. India's largest software services exporter by sales TCS fell 0.25% to Rs 480.60 off the day's low of Rs 456.
IT firms derive a lion's share of revenue from exports to US. There have been concerns of cut back in technology spend by global firms amid a recession in the US economy and due to the global financial sector crisis.
Infosys Technologies expects slowdown in IT services business in the foreseeable future as clients delay technology spending amid the global economic crisis, its chief executive said on Friday, 27 February 2009.
IT stocks fell despite rupee hitting a record low against the dollar. The partially convertible rupee was at 51.13 and weaker than its Thursday's close of 50.45/47. A weak rupee boosts revenues of IT firms in rupee terms as IT companies earn a lion's share of revenue from exports.
India's largest drugmaker by sales Ranbaxy Laboratories fell 4.8% extending fall after the US Food and Drug Administration (US FDA) on Wednesday, 25 February 2009, said Ranbaxy falsified data of over two dozen drugs made in Poanta Sahib plant in India and it will halt approval of pending and new drugs from the plant. The allegation sent the Ranbaxy stock tumbling 18% in a single trading session on Thursday.
Meanwhile, Daiichi Sankyo, the new owner of India's largest drugmaker Ranbaxy Laboratories, said it has formed a team to solve the ongoing issues with the US drug regulator.
Other healthcare stocks, Dr. Reddy's Laboratories, Ranbaxy Laboratories, Cipla and Sun Pharmaceutical Industries, fell by between 0.48% to 4.8%.
Textile exporters rose after the government announced a plan to extend a Rs 325 crore duty refund scheme for exporters to December 2009 to help textiles and leather firms. Bombay Dyeing and Zodiac Clothing rose 1.78% and 2.47% respectively.
Provogue India fell 2.32% on reports it has deferred plans to expand to Singapore, Thailand and Dubai until September this year due to the global economic turmoil.
Torrent Power rose 1.95% on securing a power distribution contract for a period of 20 years.
Satyam Computer Services clocked the highest volume of 1.32 crore shares on BSE. GVK Power & Infrastructure (1.14 crore shares), United Breweries (1.07 crore shares), Cals Refineries (85.39 lakh shares) and Tata Steel (73.35 lakh shares) were the other turnover toppers in that order.
HDFC clocked the highest turnover of Rs 232.07 crore on BSE. Educomp Solutions (Rs 199.43 crore), ICICI Bank (Rs 179.45 crore), Reliance Industries (Rs 176.20 crore) and United Spirits (Rs 125.60 crore) were he other turnover toppers in that order.
Pre Session Commentary - Feb 27 2009
Today domestic markets are likely to open positive as major Asian markets like Nikkei and Hang Seng are trading positive. The United Kingdom has planned to protect assets of European banks that helped European markets gain momentum on yesterday’s trade. The interim trade policy announced yesterday has provided certain relief to garments and jewllery industry. The government further aims to achieve a export target of $200 billion. On the other hand the declining inflation numbers which recorded at 3.36% gives ample space for RBI to reduce its key rates. Investors could anticipate major cut in the key rates that could support the demand levels.
On Thursday, the markets opened shy and dived southwards. Across broader markets the selling pressure was witnessed due to lack good economic news. Ranbaxy was the biggest loser of the day as the stock plummeted 18% to Rs 169.95 on BSE. The stock was under pressure due to the news that US FDA has falsified data and test results in its drug applications. However, during the later trading session the markets recovered to close in green on the back of short covering positions, US Futures trading up and European markets moving southwards. Inflation fell at 3.36% as against 3.92% in the previous week. Sectors like Auto, Oil & Gas and IT gained by 2.74%, 1.28% and 1.14% respectively. However Bankex, CD and Realty fell by 2.15%, 1.33% and 0.07% respectively. During the session we expect the markets to be trading positive with volatility creeping in the early trading session.
The BSE Sensex closed high by 52.30 points at 8,954.86 and NSE Nifty ended high by 23.15 points at 2,785.65. The BSE Mid Caps closed flat at 2,759.46 whereas Small Caps ended low by 21.92 points at 3,112.77. The BSE Sensex touched intraday high of 8,998.31 and intraday low of 8,788.32.
On Thursday, the US stock markets closed in red due to weak macro economic data. The consumer durable goods orders fell more than expected 5.2%. Further January new home sales fell more than expected to an annualized rate of 3,09,000 units. Jobless claims continue to rise beyond expectations. Initial claims climbed 36,000 to 667,000 from the prior week. Continuing claims came in just below 5.03 million, up from nearly 5.00 million in the prior reading. Besides, FDIC reported that at the end of the fourth quarter its list of troubled institutions grew to 252 from 171 at the end of the third quarter. US light crude oil for April delivery grew by USD2.72 to settle at USD45.22 a barrel on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) declined by 88.81 points to close at 7,182.08. The NASDAQ Composite (RIXF) index fell by 33.96 points to close at 1,391.47 and the S&P 500 (SPX) fell by 12.07 points to close at 752.83.
Today major stock markets in Asia are trading mixed. Shanghai composite is down by 40.65 points to 2,080.60, Japan''s Nikkei is high by 61.59 points at 7,519.52. Hang Seng is up by 31.45 points at 12,926.39, South Korea''s Seoul Composite is up by 12.92 points at 1,067.71 and Singapore''s Strait Times is low by 10.63 points to 1,606.81.
Indian ADRs closed lower. In technology sector, Infosys ended down by 1.71% along with Satyam by 5.29%. Further, Wipro ended with decrease of 1.82% and Patni Computers closed down by 3.59%. In banking sector ICICI Bank and HDFC Bank lost 5.17% and 1.93% respectively. In telecommunication sector, MTNL and Tata Communication plunged 3% and 0.19% respectively. However, Sterlite Industries increased by 1.06%.
The FIIs on Thursday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 811.30 Crore and gross debt purchased stood at Rs. 276.40 Crore, while the gross equity sold stood at Rs 1,264.50 Crore and gross debt sold stood at Rs. 934.50 Crore. Therefore, the net investment of equity and debt reported were Rs (453.20) Crore and Rs (658.10) Crore respectively.
On Thursday, the Indian rupee closed at 50.45/47, 1% weaker than its previous close of 49.95/96. The rupee slipped further for the fourth consecutive day as importers bought dollars to settle the month end bills.
On BSE, total number of shares traded were 20.30 Crore and total turnover stood at Rs 2,696.32 Crore. On NSE, total number of shares traded were 58.50 Crore and total turnover was Rs 9,617.26 Crore.
Top traded volumes on NSE Nifty – Unitech with 35467404 shares, Suzlon Energy with 22088885 shares, DLF with 21105345 shares, ICICI Bank with total volume traded 17237136 shares followed by Ranbaxy Labs with 9495158 shares.
On NSE Future and Options, total number of contracts traded in index futures was 1011550 with a total turnover of Rs 13,217.59 Crore. Along with this total number of contracts traded in stock futures were 1177288 with a total turnover of Rs 16,725.23 Crore. Total numbers of contracts for index options were 1371910 with a total turnover of Rs 19,016.57 Crore and total numbers of contracts for stock options were 72281 and notional turnover was Rs 1,182.92 Crore.
Today, Nifty would have a support at 2,742 and resistance at 2,835 and BSE Sensex has support at 8,886 and resistance at 9,179.
Market seen range-bound on mixed global cues
Key benchmark indices are likely to open lower as the SGX Nifty futures for February 2009 series was down 17 points in Singapore. GDP data for the third quarter ended December 2008, to be released by noon, will be closely watched. Global cues were mixed.
Economic rose at a pace of 7.6% in the September 2008 quarter and 7.9% in the June 2008 quarter.
Volatility was high on Thursday, 26 February 2009 as February series F&O expired. As per reports, rollover of Nifty positions from February 2009 series to March 2009 series stood at 76% while marketwide rollover of positions was 75%.
Inflation dropped to a 14-month low of 3.36% in the week ended 14 February 2009, government data released on Thursday, 26 February 2009 showed. There are expectations that the Reserve Bank of India (RBI) will cut interest rates further to support faltering growth. A sharp fall in inflation to 14-month low in the week ended 14 February 2009, raised speculation of the central bank having more room to cut rates.
Asian markets were trading mixed today, 27 February 2009, as technology companies gained on brokerage upgrades and commodity shares advanced on higher metal prices. Key benchmark indices in Hong Kong, Taiwan, Singapore, and Japan were up by between 0.47% and 1.11%. Indices in China and South Korea were down 1.92% and 0.37%.
US markets ended lower on Thursday, 26 February 2009, in volatile trade as a spate of sour economic data and worries that President Obama's budget proposal will strangle profits forced investors to sell off stocks across the board. The Obama administration sees the FY09 deficit at $1.75 trillion.
The Dow Jones industrial average declined 88.81 points, or 1.2%, to 7,182.08. The S&P 500 index slipped 12.07 points, or 1.6%, to 752.83 and the Nasdaq Composite index lost 33.96 points, or 2.4%, to 1,391.47.
Obama proposed almost $1 trillion in higher taxes over the next decade on the highest-earning Americans, Wall Street financiers, US-based multinational corporations and oil companies to pay for permanent tax breaks for lower earners.
According to provisional data on NSE, FIIs were net sellers worth Rs 384.37 crore while mutual funds bought shares worth Rs 367.84 crore on Wednesday, 25 February 2009.
Bullion metals gather more rust
Gold and silver prices continue to drop as dollar firms up
Bullion metal prices ended lower for fourth straight day on Thursday, 26 February, 2009. Prices fell as traders anticipated that economy will recover in the coming months and this decreased the appeal of the precious metals. Deep recession fears have been increasing the appeal of the precious metals as a safe haven against alternatives since past few days. The stronger dollar also weighed on the metal today.
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 Thursday, Comex Gold for April delivery fell $23.6 (2.4%) to close at $942.6 an ounce on the New York Mercantile Exchange. It fell to a low of $932.2. Last week, gold ended roughly higher by 5.5%. For January, 2009, gold had gained 3.9%. Year to date, gold prices are higher by 8.6%.
On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (8%) since then.
On Thursday Comex silver futures for March delivery fell 96 cents (6.7%) to end at $12.95 an ounce. Year to date, silver has climbed 17.5% this year. For 2008, silver had lost 24%.
In the currency market today, the dollar index, which tracks the value of the greenback against its major rivals, rose by 0.5% earlier during the day but then gave up some of its gains.
The World Gold Council reported last week 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 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 lower by Rs 246 (1.6%) at Rs 15,248 per 10 grams. Prices rose to a high of Rs 15,458 per 10 grams and fell to a low of Rs 15,093 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 1,224 (5.32%) lower at Rs 21,538/Kg. Prices opened at Rs 22,620/kg and fell to a low of Rs 21,455/Kg during the day's trading.
Crude witnesses another big rise
Prices cross the $45 mark almost after a month
Oil prices shot up once again on Thursday, 26 February, 2009. Prices continued to rise after energy department reported yesterday in its weekly inventory report that gasoline inventories dropped during last week. Prices also rose after OPEC spoke about another production cut in coming months earlier during the week.
On Thursday, crude-oil futures for light sweet crude for April delivery closed at $45.22/barrel (higher by $2.72 or 6.4%) on the New York Mercantile Exchange. Last week, crude ended higher by 3.8%.
Prices reached a high of $147 on 11 July, 2008 but have dropped almost 69% since then. Year to date, in 2009, crude prices are higher by 5%. On a yearly basis, crude prices are lower by 60%.
EIA had reported yesterday that U.S. gasoline consumption during the past four weeks rose 1.7% from a year ago. Gasoline inventories fell by 3.4 million barrels.
EIA had also reported yesterday that crude inventories rose by 700,000 barrels to 351.3 million during last week. Market had expected a rise of more than 2 million barrels. Total products supplied over the past four weeks, including gasoline, diesel and jet fuel, averaged 19.7 million barrels per day, down 0.8% from a year ago. Excluding jet fuel, total products supplied rose slightly.
Prices had been sliding since past couple of months after fear gripped the US economy that US banks might be nationalized.
OPEC has been trying to cut production consistently in order to step up prices from their current low levels. As per reports during the last weekend, Algerian Energy Minister Chakib Khelil said that OPEC is likely to reduce output in March, 2009. OPEC has already agreed to cut cartel quotas by 4.2 million barrels a day since September, equivalent to about 5% of global oil demand. The cartel is supposed to meet on 15 March at Vienna.
Against this background, March reformulated gasoline surged 11% to $1.3004 a gallon. Also in energy trading, March heating oil rose 4.6% to $1.2941 a gallon. Both contracts will expire at the end of trading on Friday.
Natural gas for April delivery added 1.2% to $4.077 per million British thermal units. EIA reported today that supply of U.S. natural gas in storage fell by 101 billion cubic feet in the week ended 20 February, 2009, less than expected. At a total of 1.895 trillion cubic feet, gas in storage stood higher by 233 billion cubic feet than at the same time last year and by 199 billion cubic feet above the five-year average.
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.
At the MCX, crude oil for March delivery closed at Rs 2,232/barrel, higher by Rs 121 (5.7%) against previous day's close. Natural gas for February delivery closed at Rs 206.9/mmbtu, higher by Rs 3.5/mmbtu (1.9%).
Daily News Roundup - Feb 27 2009
Satyam’s Board may allow non-IT players to bid for the company (ET)
Tata Motors’ Nano to roll-out on March 23rd 2009 (ET)
Crisil downgrades long-term debt ratings of Hindalco, Sterlite and Vedanta Aluminium (ET)
L&T bags an order worth Rs11.6bn (ET)
Tata Motors unveils Xenon XT, India’s first lifestyle pick-up vehicle (ET)
ONGC has shut a platform in the Bombay High offshore field reducing gas output by 40% (FE)
DLF raises Rs20bn from PNB, LIC, SBI and BOI to repay short-term loans (ET)
TCS puts on notice 130 staff in UK (BL)
Singapore airlines extends TCS contracts for three years (BL)
SBI to lower credit targets for SMEs (ET)
GAIL to buy LNG from Shell (FE)
Reliance Infra seeks 17% hike in Mumbai power tariffs (FE)
GAIL to supply natural gas to UVL and NFL plants (FE)
TCS mulls cutting variable pay (FE)
Vedanta to buy 20% stake in Malco (FE)
GE Shipping to trim its US$600mn order book to overcome the downturn in the freight rate for dry bulk carriers and tankers (BS)
Anant Raj Industries is planning to set-up an education city at Mehsana in Gujarat for a total investments of Rs40bn (BS)
Areva T&D to partner BGR Energy to supply gas insulated sub-station package (FE)
KEC International has secured two orders worth Rs2.3bn from PGCIL (FE)
Moser Baer buy backs US$3.6mn FCCBs (BS)
Inflation for the second week of February at 3.36% (BS)
Government has raised DA for central government employees and pensioners to 22% from 16% (ET)
Rupee falls to below Rs50 mark against the US dollar (ET)
Government announces special booster package for exporters (ET)
Sugar prices likely to fall further on account of stock limits imposition by Government on meals for four months (ET)
Power Ministry has forwarded its recommendation to Petroleum Ministry for an allocation of 18mmscmd gas from RIL’s KG-D6 (FE)
Cabinet okays Rs95bn road projects in Kerala and Tamil Nadu (BL)
The DA Win-ci Code!
It's easier to resist at the beginning than at the end.- Leonardo da Vinci.
The slight recovery on Thursday may make one forget that the Sensex and Nifty are down about 2-3% each this month. Some news the market and the industry will hope to hold on dear to is the heftier packets by way of an additional 6% dearness allowance from next month for government employees. Consumption and savings could see improvement. How the rising fiscal deficit would be contained remains a mystery. Today, we expect another cautious start and a lackluster day due to mixed global cues.
The government will release Q3 GDP data today, and consensus forecast is that growth will slip below 7%. Among the other news to watch out for is Tata Steel’s consolidated results. Meanwhile, the Rupee has slipped to a low of 50.69 versus the US dollar.
Though India’s performance in February is better than some other global indices, economic and business conditions continue to be highly challenging. Trading this month was quite choppy with the Nifty gyrating in a range of 300 points. The trend may remain the same in March as well. The bias is likely to remain on the downside, considering the strong headwinds. The jury’s still out on whether the key indices will make new lows or not.
Top companies like GM and RBS have announced massive losses. Economic reports from across the globe too reveal further pain. And, India is no exception, though it may still manage a moderately better performance.
US stocks fell for a second day, erasing early gains, as investors focused on the healthcare and banking initiatives in President Obama's federal budget amid continued worries about the state of the world's largest economy.
Concerns that healthcare companies' profits will be hurt by a White House overhaul of the medical system offset a rally in banks spurred by the administration’s request for more financial-rescue funds.
The Dow Jones Industrial Average lost 89 points, or 1.2%, to 7,182.08. The S&P 500 index lost 12 points or 1.6%, to 752.83. The Nasdaq Composite index slid 34 points, or 2.4%, to 1,391.47.
A bank sector rally propelled the market through the late morning. But the advance lost steam as the session wore on and stocks closed in the red.
Banking stocks held on to gains on hopes for the government's various rescue plans. But technology, transportation, retail and healthcare stocks declined.
The markets have been disappointed by what the Obama regime has been coming up with in terms of solutions for the housing collapse and bank crisis. Until investors have some confidence in the various plans, the downturn will continue.
Bank stocks have crawled back over the last few sessions on hopes that the government's plans to help the financial sector will work. But those hopes could be dashed if more details don't emerge soon, say some analysts.
President Obama outlined his plans for the federal budget for the next 10 years, with a more detailed account due in April. The plan includes making permanent some tax breaks from the stimulus plan, ending certain tax breaks for the wealthy and moving closer to a universal healthcare system.
The budget includes an additional $250 billion to stabilize the financial system. That would be on top of the $700 billion bank bailout plan already in existence. The plan calls for $3.6 trillion in spending in fiscal 2010, which begins in October.
The government is forecasting a $1.75 trillion deficit for the 2009 fiscal year and a $1.17 trillion deficit for the 2010 fiscal year. Obama has said he plans to cut the deficit inherited from former President George W. Bush in half by 2013.
JPMorgan Chase said it expects steeper home-equity loan losses this year and that it will cut up to 14,000 jobs, more than it said previously. Shares gained 6%, closing off their highs.
Citigroup is close to finalizing a deal for the government to increase its stake in the troubled bank to as much as 40%, according to reports. A deal was expected to be announced shortly. Citi shares tumbled 2.4%, erasing early gains.
Royal Bank of Scotland (RBS) will dump £325 billion ($462.7 billion) in bad debt into the government program. RBS posted an annual loss of £24.14 billion ($34.4 billion), the biggest loss in British corporate history. RBS announced a huge restructuring plan and said it will sell off certain assets. Shares gained 18.8% in US trading.
Swiss bank UBS has named Oswald Gruebel, the former head of Credit Suisse, as its new CEO, replacing its much-criticized CEO Marcel Rohner. Shares gained 10%.
GM reported a massive $9.6 billion quarterly loss in the fourth quarter, in a period in which its sales plunged and it needed a federal bailout to stay afloat. GM shares fell 6.7%.
A variety of healthcare companies slipped in response to the overhaul detailed in President Obama's budget, in particular the smaller Medicare payments to private insurers.
Yahoo shares gained on news that Chief Financial Officer Blake Jorgensen is leaving as part of a broader reorganization initiated by new CEO Carol Bartz.
New home sales plunged to an annual unit rate of 309,000 in January, the worst level since the government began keeping records in 1963. Economists thought sales would fall to 324,000 in the month. Sales stood at a 344,000 annual unit rate in December.
An earlier report showed that weekly jobless claims rose to a fresh 26-year high last week of 667,000 versus forecasts for a drop to 625,000. Claims stood at a revised 631,000 in the prior week.
Durable goods orders fell to a 6-year low in January, declining for the sixth straight month, the government reported. Orders fell 5.2% in January versus forecasts for a drop of 2.5%. Orders dropped a revised 4.6% in December.
Treasury prices tumbled, raising the yield on the benchmark 10-year note to 2.99% from 2.92% on Wednesday. Treasury prices and yields move in opposite directions.
Lending rates were little changed. The 3-month Libor rate was 1.26%, unchanged from Wednesday and the overnight Libor rate rose to 0.28% from 0.27%. Libor is a bank lending rate.
In currency trading, the dollar fell versus the euro and gained against the yen.
US light crude oil for April delivery rose $2.72 to settle at $45.22 a barrel on the New York Mercantile Exchange.
COMEX gold for April delivery fell $23.60 to settle at $942.60 an ounce.
After the close, Dell reported quarterly sales and earnings that missed analysts' forecasts, sending shares 3% lower in extended-hours trading.
Reports on GDP growth and manufacturing are due Friday morning.
European shares closed higher for the first time in five sessions, with banks in the lead as Royal Bank of Scotland and UBS posted strong share price gains after announcing separate restructurings.
The pan-European Dow Jones Stoxx 600 index rose 2.2% to 176.14, with banks at the forefront of those gains.
UK-based FTSE 100 index climbed 1.7% to 3,915.64, while Germany's DAX 30 index advanced 2.5% to 3,942.62 and the French CAC-40 index rose 1.8% to 2,744.84.
A lackluster day ended with modest gains on Thursday. After a weak star, key indices climbed gradually throughout the day aided by falling inflation, firm European markets and buying momentum in the index heavyweights. Finally, the BSE Sensex advanced 52 points to close at 8,954 and the NSE Nifty was up 23 at 2,785.
Among the 30-components of Sensex, 21 stocks ended in positive terrain and 9 stocks ended in the red. Among the major gainers were, Tata Motors, Grasim, Maruti, ONGC, RCom, NTPC and Sterlite.
Among the major laggards were, Ranbaxy, ICICI Bank, HDFC, Hindalco and Tata Power.
Petron Engineering announced that it received two orders worth Rs725.5mn from HPCL - Mittal Energy Ltd (HMEL), Bathinda (Punjab). The stock gained by 0.7% to Rs67 after hitting an intra-day high of Rs70 and a low of Rs67.5.
Shares of KEC International slipped 1.5% to Rs125. The company announced that it won order worth Rs2.27bn from Power Grid Corp. The scrip touched an intra-day high of Rs134 and a low of Rs125 and recorded volumes of over 32,000 shares on BSE.
Shares of GMR Infra gained by 4.5% to Rs78 after the company yesterday announced that GMR Energy, a subsidiary of GMR Infrastructure acquired 100% stake in Barasentosa Lestari PT, an Indonesian coal mining company for US$80mn. The scrip touched an intra-day high of Rs79 and a low of Rs75 and recorded volumes of over 0.9mn shares on BSE.
Shares of RCom advanced by 3% to Rs158 after reports stated that the company would raise Rs130bn debt in the next three months to meet certain capex requirements and scheduled debt repayment obligations. The scrip touched an intra-day high of Rs159 and a low of Rs153 and recorded volumes of over 2.2mn shares on BSE.
Shares of Ranbaxy plunged by over 18% to Rs169 after US regulator said that Ranbaxy won’t be allowed to introduce new generic drugs from one of its factories after it falsified data about products’ shelf life. The scrip touched an intra-day high of Rs204 and a low of Rs168 and recorded volumes of over 6mn shares on BSE.
Shares of Piramal Healthcare rallied by over 17% to Rs208 after reports stated that Sanofi- Aventis has emerged in the lead to buy a substantial stake in the company. The scrip touched an intra-day high of Rs219 and a low of Rs185 and recorded volumes of over 1.3mn shares on BSE.
Shares of DLF erased early losses and manage to end higher by half a percent to Rs155. The stock had dropped to a low of Rs146 after the company announced that the authorities were to carry out an assessment of its accounts. The junior finance minister, S.S. Palanimanickam, told parliament the previous day that the income tax department was auditing the company. The scrip touched an intra-day high of Rs156 and a low of Rs146 and recorded volumes of over 6.4mn shares on BSE.
With F&O expiry out of the way, markets might consolidate further. Government would release quarterly GDP numbers on Friday. Also global cues would direct the markets atleast at open.
Amtek Auto
We recommend a buy in Amtek Auto stock from short and medium-term perspective. It is evident from the charts of Amtek Auto that following a breakthrough of the significant support at Rs 150 in October 2008, the stock witnessed sharp sell-off. It breached the significant support at Rs 100 during this decline.
The decline finally halted at Rs 42 in late November, which is also a 52-week low. The stock has been on an intermediate-term uptrend since then, forming higher tops and higher lows. The 21 and 50-day moving averages were penetrated in early February 2009 and the stock is trading well above these averages currently.
On 26 February, 7 per cent surge was recorded, accompanied with very high volume. This gain has reinforced its bullish momentum. The daily relative strength index is featuring in the bearish zone and the weekly RSI is on the brink of entering the neutral region from the bearish zone.
We are bullish on the stock from both short as well as medium-term perspective. Traders with a medium-term perspective can buy with a stop at Rs 59, with the target at Rs 100. Target for short-term is Rs 82 and the stop-loss for this time-frame should be at Rs 70.
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