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Friday, May 08, 2009
Inflation rises to 0.7% in week ended April 25
The annual rate of inflation, calculated on point to point basis, stood at 0.70% for the week ended April 25 as compared to 0.57% for the previous week. Inflation was at 8.27% during the corresponding week of the previous year. The Wholesale Price Index for 'All Commodities' for the week ended 25th April, 2009 rose by 0.2% to 230.7 from 230.2 for the previous week. The Government revised inflation rate for the week ended Feb. 28 to 2.47% from the provisional forecast of 2.43%, while the WPI for the same period stood at 227.8 as compared to the preliminary estimate of 227.7.
The Stress Factor
The US Financial institutions aren't collapsing - thats for now...
After the US Federal Reserve, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) came out with a report on May 7 2009 saying that the financial institutions might require to raise another $75 billion - the markets jumped because the news wasn't as bad as it was perceived to be.
Among the banks, Bank of America will need an additional capital of $33.9 billion , Wells Fargo around $13.7 billion , GMAC will need about $11.5 billion and Citigroup will need to raise S$5.5bn.
The good news was that JPMorgan Chase, Goldman Sachs, State Street and American Express won't need any additional capital raising
Tom Geithner who is the the US Treasury Secretary commented in his report
This is just a beginning, however. Even with the recent signs of stabilization in economic activity, the economic still faces significant risks and challenges. The cost of credit remains exceptionally high. We have more work to do, and recovery will take time. But we are starting to see some signs of progress toward financial repair, and we will continue to work to expand the availability of credit and improve the impact our new set of credit and lending programs.
The stress results released should provide comfort to investors and the public given that nearly all the banks that were evaluated have Tier 1 capital to absorb the higher losses envisioned under the hypothetical adverse scenario.
Next quarter results should indeed provide a feeling of how effective these stress tests really are.
Asian Markets shrug off stress of Stress Test
Nikkei, Shanghai, Hang Seng Advance Further while Sensex bucked the regional trend
Stock market in Asian region closed the day mostly higher on Friday, 8 May 2009, as the results of much-awaited stress tests on 19 U.S. banks dispelled uncertainty and speculation surrounding the health of the U.S. banking sector. Investors were relieved that there were no nasty surprises. Upbeat readings on the job market and sales at major retailers in the United States also offered some support ahead of the weekend.
On Wall Street, the major stock averages closed 1% - 2% lower before the release of the much- publicized bank stress test results, which called for banks to raise capital levels by a combined $75 billion. The Dow Jones Industrial Average lost 102.43 points, or 1.2%, to 8409.85, while the S&P 500 gave up 12.17 points, or 1.3%, to 907.36. The Nasdaq was off by 42.86, or 2.4%, at 1716.24.
After the market closed, the Federal Reserve released the results of the stress tests, saying that after taking account of losses, revenue and reserve requirements, the banks needed to increase capital levels by $75 billion. The vast majority of that needs to be in the form of Tier 1 common capital. The four banks in need of the biggest buffer building were Bank of America with $33.9 billion, Wells Fargo with $13.7 billion, GMAC with $11.5 billion, and Citigroup with $5.5 billion. Nine of the 19 banks needed no capital, however
In the commodity market, crude oil rose for a third day in New York, poised for the biggest weekly gain since March, on signs the global economy may be starting to recover.
Crude oil has advanced this week after reports showed fewer Americans filed claims for unemployment benefits, China's manufacturing expanded for the first time in nine months and Australia's jobless rate unexpectedly dropped last month.
Crude oil for June delivery rose as much as 68 cents, or 1.2%, to $57.39 a barrel in electronic trading on the New York Mercantile Exchange, and was at $57.30 at 1:31 p.m. Singapore time.
Brent crude oil for June settlement rose as much as $1.33, or 2.4%, to $57.80 a barrel on London's ICE Futures Europe exchange. It was at $57.24 a barrel at 1:34 p.m. Singapore time. The contract climbed 32 cents, or 0.6%, to end the session at $56.47 a barrel, the highest settlement since 10 November 2009.
Gold rose in London, heading for a weekly gain, on speculation central-bank measures to revive economies will spur inflation and demand for bullion as a hedge. Gold for immediate delivery rose $3.25, or 0.4%, to $913.95 an ounce by 9:54 a.m. in London, set for a 3.1 percent gain this week.
In the currency market, the Japanese yen strengthen against its most major counterparts on Friday. The Japanese currency quoted at 99.4 against the US dollar.
The Hong Kong dollar was trading at HK$ 7.7500 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 closed higher on Friday, as the results of the US government's "stress tests'' fed global risk appetite. At the local close, the dollar was trading at $US0.7570, up from Thursday's close of $US0.7519.
In Wellington trades, the New Zealand dollar ended the day at US59.36c, up from US58.85c yesterday. The kiwi rose to US59.91c in overnight trading, its highest since 7 January 2009.
The South Koran won ended at 1,247 won against the U.S. dollar, up 15.3 won from Thursday's close, as foreign investors increased their holdings of Seoul stocks.
The Taiwan dollar continued to rally further. The Taiwan dollar strengthened against the US dollar as it was trading higher at NT$ 33.0240, up by NT$ 0.108 from Thursday's close of NT$33.132.
Coming back in equities, in Japan, stock markets ended at six- month high as gains in the shares of financials stocks on bolstering sentiments after US bank “stress test” results showed that capital needs were in line with market expectations.
Steel makers, nonferrous metal and other commodity related stocks dropped as metal and other commodities prices retreated overnight, while exporters and automakers dived as yen strengthened against greenback and disappointed earning report from Toyota. Shipping and other transport retaliated issues dived.
At the closing bell, the Nikkei 225 Stock Average index gained 47.13 points, or 0.5%, to 9,432.83, while the broader Topix index added 9.42 points, or 1.1% to 895.
In Mainland China, stock market recouped from early lows to finish the session higher, touched fresh nine-month high, led by financials and properties after the People's Bank of China pledged to keep money flowing into the financial system to sustain growth and as of US bank “stress test” results, which showed that capital needs were in line with market expectation. Energy issues climbed as crude oil prices extended gains above $57 a barrel on growing confidence about the global economy. Refiners rose on expectations of a fuel price hike.
The Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, climbed up 1.1%, or 28.19 points, to close at 2,625.64. The Shenzhen Component Index on the smaller Shenzhen Stock Exchange rose 0.73% or 74.12 points to close at 10,183.06 points.
In Hong Kong, the stock market recouped early losses to finish the choppy session higher, extending winning streak for seventh day in row, as gains in the shares of financials stocks on bolstering expectations for a recovery in the Chinese economy would revive demand and US bank “stress test” results showed that capital needs were inline with market expectation.
At the closing bell, the Hang Seng Index spurted 171.98 points, or 1%, to 17,389.87, while the Hang Seng China Enterprise Index, which tracks H shares of Chinese companies, rose 154.97 points, or 1.57% to 10,051.90.
In Australia, the stock market recouped from early lows to finish the session marginal higher, hit a fresh six- month closing high as bank stocks surged after stress tests helped remove uncertainty over the health of U.S. lenders. At the closing bell, the benchmark S&P/ASX200 index has gained 3 points, or 0.08%, to 3,941.7, while the broader All Ordinaries rose 7.50 points, or 0.19%, to 3,919.60.
In New Zealand, the share market had a positive week ending on Friday. At the closing bell, the benchmark NZX50 increased 0.64% or 18.265 points to close at 2873.13. The NZX 15 was up 0.55% or 28.697 points to close at 5292.60.
In South Korea, stock markets closed higher as stress test results on U.S. banks dispelled uncertainty surrounding the health of the banking system, analysts said. The local currency hit a 7-month high against the U.S. dollar. The benchmark Korea Composite Stock Price Index (KOSPI) advanced 11.05 points to 1,412.13.
In Singapore, the Singapore stocks finished the session lower, wiped out morning gains as investors prompted for profit booking after six consecutive days of strong rally. The market witnessed heavy volume pressure across the board, led by manufacturing and multi industries, meanwhile buying pressure was evident in banks and properties as the investors' sentiments were relatively positive to US bank “stress test” results, which showed that capital needs were lower than feared previously. At the closing bell, the blue chip Straits Times Index trimmed 3.39 points, or 0.15%, to 2,238.21.
On the economic front, the Monetary Authority of Singapore (MAS) today signed a Memorandum of Understanding (MoU) with Qatar Central Bank (QCB), which supervises financial institutions in Qatar.
In Taiwan, stock market successfully managed to end the session with marginal gains, ending the week at 8-months high, as technology shares including offsetting profit-taking in financials after a recent rally.
The main Taiex share index crawl further as Taiex added 11 points or 0.17%, closing the day at 6583.87, highest closing since 8 September 2008 when market closed the day at 6658.69, bringing gains in the past six days to 987 points, the most since 18 January 1991.
In Philippines, the stock market closed marginally higher reversing the early losses buoyed mainly by the weighty gains in the mining & oil index. Mining & oil index gained more than 3%. The benchmark index PSEi augmented 0.13% or 3.06 points to 2,241.98, while the All Shares index climbed 0.45% or 6.47 points to 1,443.10.
On the economic front, Government spending fell short of quarter one (Q1) target. Government spending was P6.9 billion short of its P361.9-billion program in the first three months, putting at risk its aim to front-load about two-thirds of planned expenditures in the first half in a bid to pump-prime the economy. Data released yesterday by the Department of Budget and Management (DBM) showed that actual disbursements in the first quarter totaled P355 billion, against the programmed expenditure budget of P361.9 billion for the period, even as it was 16.4% more than the P305.1 billion spent in the same period last year.
In India, key benchmark indices cut losses in late trade as European stocks extended gains and as US index futures jumped. Auto stocks recovered. The BSE 30-share Sensex was down 240.51 points or 1.98% to 11,876.43. The S&P CNX Nifty was down 63.20 points or 1.72% to 3,620.70.
Elsewhere, Malaysia's Kula Lumpur Composite index was up 0.32% or 3.31 points to 1026.78 while Indonesia's Jakarta composite index added 1.84% or 33.68 points ending the day at 1862.53.
In other regional market, European shares rose sharply, with banks leading that advance after formal results were released from U.S. bank stress tests and ahead of data expected to provide some pointers on the health of the U.S. economy. On a regional level, the German DAX 30 index rose 1.3% to 4,868.05, the French CAC-40 index advanced 1.2% to 3,291.36 and the U.K. FTSE 100 index climbed 0.9% to 4,438.45.
Looking ahead for the day, the US will release non-farm payroll data accompanied by statistics on unemployment rate. Canada will also release figure for unemployment rate.
New tax code...Obama to crack down on erring corporates
US President Barack Obama proposed to plug the loopholes in corporate tax structure, including a crack down on the use of overseas tax havens to help create new jobs. The changes would raise US$210bn in tax revenues over the next 10 years. The proposals were designed to meet a promise he made during the presidential campaign, Obama said, adding that some companies are shirking tax obligations.
"I want to see our companies remain the most competitive in the world. But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens," Obama said in a announcement. The White House and Treasury Department laid out three proposals that they say will eliminate the current tax advantages US-based multinationals get for investing and creating jobs abroad.
Lambasting the current tax code, he said it is full of corporate loopholes that makes it perfectly legal for companies to avoid paying their fair share. It is a tax code that makes it all too easy for a number - a small number of individuals and companies - to abuse overseas tax havens to avoid paying any taxes at all, the US President said. "And, it is a tax code that says you should pay lower taxes if you create a job in Bangalore, than if you create one in Buffalo," he said.
He said now is the time to finally do something about the flawed tax code. "And that's why, I'm announcing a set of proposals to crack down on illegal overseas tax evasion, close loopholes, and make it more profitable for companies to create jobs here in the US," Obama said.
A key initiative would narrow a provision that allowed US companies to defer paying taxes on the profits they make on their overseas investments. Another would eliminate a loophole that allowed companies to make foreign subsidiaries disappear for tax purposes. The Obama administration also wants to make it harder for companies to abuse the foreign tax credit.
Currently companies may claim a credit against their US income taxes for taxes they paid to another country. Obama also proposed a tax cut for companies that do their research and development in the US. This would be accomplished through making permanent a research and experimentation credit that already exists.
But business groups vowed to fight the changes, complaining that they would make US companies less competitive. Tax policy experts said such measures, unless accompanied by a reduction in the corporate tax rate, will push more companies to move their operations - and jobs - overseas to more tax friendly countries.
Separately, the White House wants to tighten up rules that have encouraged thousands of Americans to open offshore bank accounts. The proposal would also give the Internal Revenue Service (IRS) new tools and money to combat international tax-fraud. Many of the White House proposals would require congressional approval. None of the new rules would go into place until 2011.
"For years, we've talked about ending tax breaks for companies that ship jobs overseas and giving tax breaks to companies that create jobs here in America. That's what our budget will finally do," Obama said. "We will stop letting American companies that create jobs overseas take deductions on their expenses when they do not pay any American taxes on their profits. And we will use the savings to give tax cuts to companies that are investing in research and development here at home so that we can jump start job creation, foster innovation, and enhance America's competitiveness."
Weekly Newsletter - May 8 2009
The stress is out of the way for now as far as the US banks are concerned. The bulls will now have to bank on the political outcome which will be known only after the next week ends.
After weeks of gains we are again at the mercy of the global markets again and of course global investors. The US unemployment rate hit a 25-year high in April, but reports say there were signs of hope as the monthly job loss total fell to the lowest level in six months. This has provided some sweet start to the US markets. Warren Buffett's Berkshire Hathaway will announce its results after US markets close.
Back home, during the week we have some big ticket results coming up. Hindustan Lever will announce its results on Sunday. The other major results to be watched for is that of SBI. We also have the IIP numbers to contend with on May 12. In short, no clear direction expected. Stay light till the election outcome
BSE Bulk Deals to Watch - May 8 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
8/5/2009 530499 A K CAPITAL FIRSTRAND (IRELAND) PUB LTD CO S 45000 153.92
8/5/2009 521070 ALOK INDUSTR SUNIDHI SECURITIES AND FINANCE LTD S 1595156 13.96
8/5/2009 516064 AROW COAT PR EPCOT SECIRITIES PVT LTD B 77076 10.80
8/5/2009 516064 AROW COAT PR JASMEEN KAUR S 77076 10.80
8/5/2009 512149 AVANCE TECHN KISHANCHANDVCHELANI B 50000 10.34
8/5/2009 512149 AVANCE TECHN KIRANBENSUNILBHAISEVANI B 50000 10.34
8/5/2009 512149 AVANCE TECHN JUHIBENNITINBHAICHOITHANI B 50000 10.34
8/5/2009 512149 AVANCE TECHN DEVANG MASTER S 97000 10.34
8/5/2009 512149 AVANCE TECHN DHRUPALCHANDRAVADANMUCHHALA S 50000 10.34
8/5/2009 511664 BGIL FL TEC JINESH D BHATT S 39901 42.17
8/5/2009 500055 BHUSH STEEL OPG SECURITIES P LTD B 376501 659.83
8/5/2009 500055 BHUSH STEEL OPG SECURITIES P LTD S 376501 661.02
8/5/2009 531358 CHOIC INTERN CHOTHMAL DOONGERMAL PATODIA HUF S 20112 23.00
8/5/2009 526987 COMMIT CAP S MIDNIGHT AGENCIES PVT. LTD B 25000 7.00
8/5/2009 526987 COMMIT CAP S KATHLEEN VYAPAAR PVT LTD B 25000 7.00
8/5/2009 526987 COMMIT CAP S B G S CREDIT PVT. LTD B 25000 7.00
8/5/2009 526987 COMMIT CAP S ARTLINE VINIMAY PVT LTD B 25000 7.00
8/5/2009 526987 COMMIT CAP S SRECKO INDHAN LIMITED S 98100 7.00
8/5/2009 531270 DAZZEL CONFI PRITI V MEHTA B 48060 3.06
8/5/2009 530407 EPIC ENERGY RAJESHMAMANIA B 61232 27.75
8/5/2009 530407 EPIC ENERGY PRASHANTPATEL S 49865 27.73
8/5/2009 500180 HDFC BANK LT DEUTSCHE SECURITIES MAURITIUS LIMITED B 3782799 1114.57
8/5/2009 500180 HDFC BANK LT DBS BANK LIMITED S 11620886 1111.04
8/5/2009 530643 INFOTREK SYS BRIJKISHORKISHANGOPALSONI B 20400 12.56
8/5/2009 530643 INFOTREK SYS SARITA ANANDKUMAR GUPTA S 20000 12.55
8/5/2009 531413 KIRAN PRIN P YASH MANAGEMENT AND SATELITE LTD B 50000 11.29
8/5/2009 531413 KIRAN PRIN P SAPATRISHI PROPERTIES PVT LTD B 50100 11.29
8/5/2009 531413 KIRAN PRIN P ROHYL CONSULTANCY PRIVATE LIMITED S 100000 11.29
8/5/2009 531083 NIHAR INFO DIVYESH NIHAR BODA B 58000 2.59
8/5/2009 531083 NIHAR INFO SATYANAGASURYANARAYANA BODA S 58000 2.59
8/5/2009 512449 PACE TEXTILES INDUMSHAH B 190000 17.50
8/5/2009 512449 PACE TEXTILES SHREE THIRUMALAI MARKETING AND INVESTMENTS LTD S 190000 17.50
8/5/2009 531539 RISH DIGH ST SAVITAVADILALSHAH B 30000 9.07
8/5/2009 531539 RISH DIGH ST DEEPINDERSINGHPOONIAN S 30193 9.06
8/5/2009 526753 ROSELABS LTD SHIVKUMAR AGARWAL S 112212 9.93
8/5/2009 526071 SELLAIDS PUB RENUMADHUSUDHANPALIWAL B 50001 2.73
8/5/2009 526071 SELLAIDS PUB RAMESHHANKAREHEMLATA B 50000 2.73
8/5/2009 526071 SELLAIDS PUB VIRENDRASEVANTILALSHAH S 100000 2.73
8/5/2009 512048 SPLASH MEDIA BHANUMATIDHARAMRAJGIRI B 15909 48.05
8/5/2009 512048 SPLASH MEDIA KAMLESHNAHAR S 16364 47.93
8/5/2009 531433 SUNGOLD CAPI KAPILA CHANDRAVADAN TRIVEDI B 32500 19.70
8/5/2009 526650 TOURISM FINA PRAGNESHROHITKUMARPANDYA B 433771 19.01
8/5/2009 532311 TUTIS TECH MANOJPUNAMIYA B 175000 20.75
8/5/2009 532311 TUTIS TECH SONALMANISHSHAH S 175000 20.75
8/5/2009 531917 TWINSTA SO E PRANAV N. BHATT S 198772 1.65
8/5/2009 531917 TWINSTA SO E ASHOKMAKHANLALCHAURASIA S 144475 1.65
8/5/2009 531364 ZENU INFOTEC OMPARKASHGUPTA B 50000 6.88
8/5/2009 531364 ZENU INFOTEC SANTOSH GANGARAM MOHITE S 75000 6.62
NSE Bulk Deals to Watch - May 8 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
08-MAY-2009,ABGSHIP,ABG Shipyard Limited,SETU SECURITIES LTD,BUY,359620,150.37,-
08-MAY-2009,ALLSEC,Allsec Technologies Ltd,FIRST CARLYLE VENTURES MAURITIUS,BUY,250000,30.00,-
08-MAY-2009,ALOKTEXT,Alok Industries Limited,PFIL SECURITIES LTD.,BUY,986686,13.98,-
08-MAY-2009,ALOKTEXT,Alok Industries Limited,PRAVIN SUWALAL BAFNA,BUY,2700000,13.89,-
08-MAY-2009,ALOKTEXT,Alok Industries Limited,RAJENDRA ANIL MAYUR,BUY,2100000,13.81,-
08-MAY-2009,ALOKTEXT,Alok Industries Limited,SUNIDHI SECURITIES & FINANCE LIMITED,BUY,110760,13.65,-
08-MAY-2009,ARIHANT,Arihant Foundations & Hou,TECHSPEC SALES PVT LTD,BUY,50000,86.00,-
08-MAY-2009,BAJAJHIND,Bajaj Hindusthan Ltd,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,1426449,106.54,-
08-MAY-2009,BAJAJHIND,Bajaj Hindusthan Ltd,TOP MANAGERS PACIFIC ALPHA FUND 2,BUY,906616,106.12,-
08-MAY-2009,BHARATRAS,Bharat Rasayan Ltd,MANJU GUPTA,BUY,22574,48.50,-
08-MAY-2009,BHUSANSTL,Bhushan Steel Limited,C D INTEGRATED SERVICES LTD.,BUY,396755,654.68,-
08-MAY-2009,BIRLAPOWER,Birla Power Solutions Ltd,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,1932747,3.16,-
08-MAY-2009,BIRLAPOWER,Birla Power Solutions Ltd,JMP SECURITIES PVT LTD,BUY,4717654,3.18,-
08-MAY-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD.,BUY,90974,2318.06,-
08-MAY-2009,GMRINDS,GMR Industries Limited,GMR HOLDINGS PVT LTD,BUY,126134,78.46,-
08-MAY-2009,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,BUY,1780887,171.81,-
08-MAY-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,13194918,16.24,-
08-MAY-2009,LOGIXMICRO,Logix Microsystems Limite,ASHISH DHAWAN,BUY,270000,50.00,-
08-MAY-2009,ORBITCORP,Orbit Corporation Limited,ASIT C MEHTA INVESTMENT INTERRMEDIATES LTD.,BUY,430655,88.55,-
08-MAY-2009,ORBITCORP,Orbit Corporation Limited,CPR CAPITAL SERVICES LTD.,BUY,310960,89.03,-
08-MAY-2009,SKUMARSYNF,S. Kumars Nationwide Ltd,DIMENSIONAL FUND ADVISORS INC A/C THE EMERGING MA,BUY,1100822,26.84,-
08-MAY-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,1196387,14.78,-
08-MAY-2009,ABGSHIP,ABG Shipyard Limited,LEVERAGE INDIA FUND,SELL,255000,151.61,-
08-MAY-2009,ABGSHIP,ABG Shipyard Limited,SETU SECURITIES LTD,SELL,183491,149.21,-
08-MAY-2009,ALLSEC,Allsec Technologies Ltd,EURONET,SELL,250000,30.00,-
08-MAY-2009,ALOKTEXT,Alok Industries Limited,PFIL SECURITIES LTD.,SELL,987477,13.95,-
08-MAY-2009,ALOKTEXT,Alok Industries Limited,RAJENDRA ANIL MAYUR,SELL,2073522,13.90,-
08-MAY-2009,ALOKTEXT,Alok Industries Limited,SUNIDHI SECURITIES & FINANCE LIMITED,SELL,3715067,13.83,-
08-MAY-2009,ARIHANT,Arihant Foundations & Hou,PIONEER INTERMEDIARIES PRIVATE LIMITED,SELL,50000,86.00,-
08-MAY-2009,BAJAJHIND,Bajaj Hindusthan Ltd,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,1449249,106.51,-
08-MAY-2009,BHARATRAS,Bharat Rasayan Ltd,NISHANT GUPTA,SELL,43400,48.50,-
08-MAY-2009,BHUSANSTL,Bhushan Steel Limited,C D INTEGRATED SERVICES LTD.,SELL,396755,655.41,-
08-MAY-2009,BIRLAPOWER,Birla Power Solutions Ltd,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,2334898,3.19,-
08-MAY-2009,BIRLAPOWER,Birla Power Solutions Ltd,JMP SECURITIES PVT LTD,SELL,5693000,3.20,-
08-MAY-2009,EDSERV,Edserv Softsystems Limite,SARAVANA STOCKS PRIVATE LIMITED,SELL,100000,19.84,-
08-MAY-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD.,SELL,90974,2318.97,-
08-MAY-2009,GMRINDS,GMR Industries Limited,SATABDI INVESTMENT PVT LTD,SELL,125000,78.14,-
08-MAY-2009,GTOFFSHORE,Great Offshore Limited,ICICI PRUDENTIAL MUTUAL FUND,SELL,328266,301.92,-
08-MAY-2009,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,SELL,1780887,171.86,-
08-MAY-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,13289753,16.25,-
08-MAY-2009,LOGIXMICRO,Logix Microsystems Limite,AMITA RAVI SHETH,SELL,236539,50.00,-
08-MAY-2009,ORBITCORP,Orbit Corporation Limited,ASIT C MEHTA INVESTMENT INTERRMEDIATES LTD.,SELL,430655,89.32,-
08-MAY-2009,ORBITCORP,Orbit Corporation Limited,CPR CAPITAL SERVICES LTD.,SELL,310960,89.06,-
08-MAY-2009,PLASTIBLEN,Plastiblends India Limite,MAHASHREE PLASTIC IND PVT,SELL,57000,94.89,-
08-MAY-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,1196387,14.81,-
Rupee ends flat
Ends at 49.285/295 per dollar
Rupee rose to its highest since mid-February on Friday before ending a volatile session little changed, having been bounced about by weakness in the dollar and a 2 percent drop in the local sharemarket.
Rupee ended at 49.285/295 per dollar, virtually unchanged from Thursday's close of 49.28/29. The rupee rose as high as 49.22 during trade, its strongest since 17 February 2009.
Nifty May 2009 futures at premium
Turnover surges
Nifty May 2009 futures were at 3627.65, at a premium of 6.95 points as compared to the spot closing of 3,620.70. Turnover in NSE's futures & options (F&O) segment surged to Rs 56,236.37 crore from Rs 48,471.10 crore on Thursday, 7 May 2009.
Jaiprakash Associates May 2009 futures were at premium at 143.35 compared to the spot closing of 142.10.
Housing Development & Infrastructure May 2009 futures were at premium at 174.55 compared to the spot closing of 173.50.
Tata Steel May 2009 futures were at discount at 281.45 compared to the spot closing of 282.40.
In the cash market, the S&P CNX Nifty lost 63.20 points or 1.72% at 3,620.70.
Post Session Commentary - May 8 2009
Profit booking dragged down the market to end in red terrain after reporting gain in previous session. Indian market dropped sharply lower and tanked around 2% as intense selling pressure was witnessed in key indices. Rise in inflation to 0.70% for the week ended 25th April 25009, as against 0.57% the week before also depreciated the sentiments. Volatility gripped the market during the trading as polling is going on for India''s 15th Lok Sabha.
The market opened on flat note tracking mixed cues from the global markets and soon turned volatile. The US stock markets on Thursday closed lower on the back of a weak government bond auction. After the market hours, the US bank stress tests results released that said that 10 of the 19 financial firms tested would need to raise a total of $75 billion in additional capital. Further, Indian benchmark indices slipped into red after inflation data and continued to extend their losses. Favorable cues from the European markets and positive US index futures were unable to bring any respite. Global markets observed firmness after the results of US banks’ stress tests did not disclosed negative effects. Finally, market closed with losses with BSE Sensex ended below 11,900 level and NSE Nifty closed lower than 3,650 mark. From sectoral indices, investors off-loaded positions across the sectors barring Consumer Durable index. Besides, Bank Metal, IT, Teck, Power, Realty, and Pharma stocks contributed to most of the selling pressure.
Among the Sensex pack 26 stocks ended in red territory and 4 in green. The market breadth indicating the overall health of the market remained flat as 1266 stocks closed in green while 1266 stocks closed in red and 91 stocks remained unchanged in BSE.
The BSE Sensex closed lower by 240.51 points at 11,876.43 and NSE Nifty ended down by 63.20 points at 3,620.70. BSE Mid Caps closed with loss of 6.52 points at 3,770.42 while Small Caps closed with gain of 13.66 at 4,277.26. The BSE Sensex touched intraday high of 12,180.07 and intraday low of 11,765.06.
Losers from the BSE Sensex pack are Wipro Ltd (6.59%), ICICI Bank (5.19%), Maruti Reliance Infra (5.07%), Sterlite Industries (4.93%), M&M Ltd (4.28%), HDFC (4.19%), RCom (61.85%), RCom (4.11%), Tata Steel (4.03%), ACC Ltd (3.55%) and BHEL (3.44%).
Gainers from the BSE Sensex pack are JP Associates (2.53%), HUL (0.98%), L&T Ltd (0.42%) and Grasim Indus (0.03%).
The annual rate of inflation grew marginally to 0.7% for the week ended April 25 as against 0.57% the week before. The indices for manufactured products and primary articles increased 0.3% and 0.2% respectively. However, the index for fuel, power, light and lubricants remained unchanged at its previous week''s level of 323 (provisional).
On the global markets front the Asian markets which opened before the Indian market, ended modestly higher ahead of US employment data which is due to be released later tonight. US job report could strengthen or weaken a growing belief that recession in the world''s largest economy is starting to ease. Shanghai Composite, Hang Seng, Nikkei 225 and Seoul Composite ended up by 28.2, 171.98, 47.13 and 11.05 points at 2,625.65, 17,389.87, 9,432.83 and 1,412.13 respectively. However, Straits Times index dropped marginally by 3.39 points at 2,238.21.
European markets which opened after the Indian market are trading in green. In Frankfurt the DAX index is trading up by 121.44 points at 4,925.54 and in London FTSE 100 index is trading higher by 64.55 points at. 4,463.23. The European Central Bank slashed its main interest rate and announced a three-pronged drive of unconventional steps to drive down borrowing costs. The ECB lowered the ref rate by a quarter percentage point to a new record low of 1.0%.
The BSE Bank index decreased by (3.21%) or 198.99 points to close at 6,007.47. Major losers are Axis Bank (3.45%), Yes Bank (3.40%), Canara Bank (3.36%), IDBI Bank (3.35%) and ICICI Bank (3.22%).
The BSE Metal index closed down by (2.52%) or 205.21 points at 7,949.87 on profit booking. Main losers are Sterlite Industries (6.72%), Hindalco (6.05%), JSW Steel (5.21%), Hindustan Zinc (4.37%) and Jindal Steel (3.64%).
The BSE IT index lost (2.15%) or 59.90 points at 2,725.35 the US government plans to scrap tax incentives that encourage American firms to ship jobs overseas. Scrips that lost are Wipro Ltd (4.34%), Infosys Tech (2.08%), NIIT Ltd (2.02%), HCL Tech (1.34%) and Aptech Ltd (1.33%).
The BSE Teck stocks also declined by (1.93%) or 43.83 points to close at 2,226.61. Major losers are Wipro Ltd (4.34%), Zee Ent (23.97%), Balaji Tele (2.94%), Jagaran Prak (2.76%) and Adlabs Films (2.66%).
The BSE Power index lost (1.72%) or 38.15 points to close at 2,176.34. Losers are Suzlon energy (3.88%), Reliance Infra (3.41%), GVK Power (3.35%), BHEL (2.29%) and Siemens Ltd (1.91%).
The BSE Realty ended down by (1.13%) or 26.90 points at 2,355.61. Losers are Penland Ltd (5.28%), Unitech Ltd (2.78%), Anant Raj (2.73%), Akruti City (1.60%) and Pheonix Mill (1.10%).
Tata Steel dropped by 4.03%. The company said its sales volume increased by 31 per cent to 4.52 lakh tonnes in April as against 3.43 lakh tones in the corresponding period last year and this growth was due to robust demand from auto as well as construction sectors
Bank of Baroda decreased by 2.41%. The bank has slashed its deposits rates by 0.25 per cent for all maturities above 181 days. The revised rates will come into effect from 11th May, 2009.
DLF dropped by 0.88%. The company may have to pay additional tax of Rs 300-400 crore to the government for the financial year 2005-06, after the Income-Tax (I-T) department in a special investigation found that the company showed a lower income of Rs 1,200 crore for the given year.
Union Bank of India lost 0.28%. The bank in joint venture with KBC Group, Belgium-based company is looking at the option to foray into mutual funds business by December this year and hopes to receive Sebi''s approval to set up the firm by June 30.
Andhra Bank dropped by 1.62%. The bank has posted 61.94% increase in its standalone net profit to Rs 2,012.105 million for the quarter ended March 31, 2009 as compared to Rs 1,242.507 million for the quarter ended March 31, 2008.
UCO Bank advanced by 4.83%. The Bank has reported 19.27% rise in its net profit to Rs 1,025.60 million for the quarter ended March 31, 2009 as compared to Rs 859.90 million for the quarter ended March 31, 2008.
Oil and Natural Gas Corporation (ONGC) gained 0.72%. The corporation is looking at the option to exit Cairn India''s Rajasthan oilfields due to unviability of the project due to the Government levies that it will have to bear.
Sun Pharmaceutical Industries closed up by 0.54%. The company announced that USFDA has granted its subsidiary a tentative approval for Abbreviated New Drug Application (ANDA) for generic Uroxatral Extended Release tablets.
Bulls proclaim victory for the ninth week in a row
Firm market sentiments on the back of sustained buying support from foreign institutional investors (FIIs) helped the benchmark index BSE Sensex to close in the positive terrain in the week, completing its ninth winning-week. But volatility ruled the roost as some market participants booked profits ahead of the keenly-awaited general election outcome next week.
FII inflow in May 2009 totaled Rs 3,269.60 crore, and the inflow in calendar year 2009 totaled Rs 3,982.40 crore (till 7 May 2009).
The 30-share BSE Sensex rose 473.18 points or 4.15% to 11,876.43, in week ended 8 May 2009. The broader 50-unit Nifty rose 146.75 points or 4.22% to 3620.70 in the week.
The BSE Mid-Cap index rose 7.30% to 3,770.42 and the BSE Small-Cap index rose 8.54% to 4,277.26 in the week.
Trading for the week began on an upbeat note, with key benchmark indices striking 7-month highs on Monday, 4 May 2009. Strong domestic and global economic data and aggressive build-up of fresh derivatives positions in May 2009 series triggered a solid rally on the bourses. The BSE 30-share Sensex jumped 731.50 points, or 6.41%, to 12,134.75, registering its biggest single day point gain since 31 October 2008. The S&P CNX Nifty advanced 180.05 points, or 5.18%, to 3,654.
The two key benchmark indices - the BSE Sensex and the S&P CNX Nifty saw divergent trend on Tuesday, 5 May 2009, with the Sensex falling marginally and the S&P CNX Nifty rising slightly in what was a highly choppy trading session. The BSE 30-share Sensex ended lower by 3.67 points, or 0.34%, at 12,092.96. The S&P CNX Nifty rose 7.90 points, or 0.22%, to 3,661.90
Political uncertainty pulled the market lower in a choppy trading session on Wednesday, 6 May 2009, with the barometer index BSE Sensex falling below the psychological 12,000 mark. There was a sudden sell-off after the Sensex surged to a 6-month high in afternoon trade on the back of rally in Asian shares. The BSE 30-share Sensex lost 178.33 points, or 1.47%, to 11,952.75. The S&P CNX Nifty shed 36.85 points, or 1.01%, to 3,625.05.
Firm global markets lifted the domestic bourses in what was a highly volatile trading session on Thursday, 7 May 2009. The BSE 30-share Sensex rose 164.19 points, or 1.37%, to 12,116.94. The S&P CNX Nifty gained 58.85 points or 1.62% to 3,683.90, its highest closing since 3 October 2008.
Indian markets drifted lower Friday, 8 May 2009, as political uncertainty loomed large. The BSE 30-share Sensex fell 240.51 points, or 1.98%, to 11,876.43. The S&P CNX Nifty fell 63.20 points or 1.72% to 3,620.70.
India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 5.23% in the week on market expectations of a strong growth in bottom line in coming quarters from sale of gas which it started pumping last month from its deep-sea field off the east coast.
India's biggest engineering & construction firm by revenue Larsen & Toubro (L&T) rose 12.65%. L&T on 16 April 2009, said the company expects its order inflow to grow by 25-35% in FY 2010.
Auto stocks spurted on higher sales last month. The BSE Auto index rose 153.78 points or 4.40% to 3,652.02 in the week
India's largest car maker by sales Maruti Suzuki India rose 1.58% after vehicle sales rose about 15% to 71,748 units in April 2009 over April 2008. In the domestic market, sales grew by 9% at 64,857 units in April 2009 as against 59,539 units in April 2008, while exports grew by 146% at 6,891 units as against 2,797 units last year, the company said in a statement. This is the fourth consecutive month of sales crossing 70,000-units mark, it added.
India's largest tractor maker by sales Mahindra & Mahindra rose 1.65% after its total vehicle sales rose 14.84% to 23,004 units in April 2009 over April 2008. Domestic sales rose 16.6% to 22,617 units in April 2009 over April 2008. Exports fell 39.3% to 387 units.
India's largest commercial vehicle maker by sales Tata Motors rose 8.31%. Tata Motors total vehicle sales fell 1.7% to 37,518 units in April 2009 over April 2008. Domestic sales rose 1.2% to 36,257 units, while commercial sales rose 8.8% to 22,847 units. Passenger vehicles sales, however, declined 4.1% to 14,615 units and exports fell 45% to 1,261 in April 2009 over April 2008.
Metal stocks soared after manufacturing in China expanded for the first time in nine months. The BSE Metal index surged 1,064.06 points or 15.45% to 7,949.87.
India's largest steel maker by sales Tata Steel rose 18.67%. The company said its sales volume surged by 31% to 4.52 lakh tonnes in April 2009 over April 2008 led by robust demand from auto and construction sectors. Steel Authority of India (up 14.36%), Sterlite Industries (up 20.27%), National Aluminum Company (up 15.34%), Hindustan Zinc (up 20.73%) and Hindalco Industries (up 26.83%), soared.
A China purchasing manager's index rose to a seasonally adjusted 53.5 in April 2009 from 52.4 in March 2009, according to a 1 May 2009, statement from the Federation of Logistics and Purchasing. A reading above 50 indicates an expansion.
Banking stocks rose on brisk buying. The BSE Bankex rose 322.25 points or 5.67% to 6,007.47.
India's second largest private sector bank by market capitalisation HDFC Bank rose 3.89% in the week. However, the stock fell 2.83% on Friday, 8 May 2009, after DBS Group, Southeast Asia's biggest bank, sold its entire 2.7% stake in HDFC Bank through the block deals on BSE that day.
India's largest private sector bank by net profit ICICI Bank rose 8.97%.
India's largest bank in terms of assets and branch network State Bank of India (SBI) rose 3.71%. SBI will announce Q4 March 2009 results on Saturday, 9 May 2009. A total 13 brokerages expect a between 15% fall to a 39% rise in SBI's net profit at between Rs 1601.20 crore to Rs 2626.60 crore in Q4 March 2009 over Q4 March 2008.
Outsourcing focussed IT stocks shrugged off US governments' plan to scrap tax incentives that encourage American firms to ship jobs overseas. The BSE IT index rose 62 points or 2.33% to 2,725.35 in the week.
India's second largest software services exporter by sales Infosys rose 0.94%. India's third largest software services exporter by sales Wipro jumped 7.41%. India's largest software services exporter by sales TCS rose 1.13%.
Analysts feel that US government's plan to scrap tax incentives that encourages American firms to ship jobs overseas is unlikely to dent business for Indian outsourcers. US president Barack Obama on Monday, 4 May 2009, announced plans to reduce tax breaks for US-based multinationals shipping jobs to places like India. Instead, the tax incentives would now go to those creating jobs inside the US, in places like the Buffalo city, New York.
Currently, US businesses that invest overseas can take an immediate tax deduction for expenses supporting their overseas investments. They can also defer the payment of US taxes on the profits they make from such investments. But, now the Obama Administration wants to ensure that companies do not receive deductions for expenses supporting their offshore investments until they pay tax on their offshore profits. This is intended to disincentivise US companies from retaining profits abroad.
Infosys said the proposal, if implemented, was unlikely to reverse the outsourcing of a gamut of services by US firms to Indian companies. "The current proposal, as we understand, is to close corporate tax loopholes on US multinational corporations and crack down on their overseas tax havens," the company said in a statement. "We do not believe that it has anything to do with IT outsourcing done by US corporations.", Infosys said.
Annual rate of inflation as measured by the wholesale price index rose marginally 0.7% in the week ended 25 April 2009 from 0.57% the week before, data released by government showed on 8 May 2009.
The six core industries which constitute 26.7% of the Index of Industrial Production (IIP) grew at 2.9% in March 2009. Core sector growth in March 2009 was better due to higher output of cement and electricity, which was supported by the coal and petroleum products sectors. However, crude and finished carbon steel output contracted, compared to March 2008, pulling down the overall growth rate of the core sector.
According to data released by the ministry of commerce and industry on Wednesday 29 April 2009, the core sector grew at 2.7% during the financial year ended March 2009, compared to a growth of 5.9% in the financial year ended March 2008.
Data for the IIP for March 2009 will be released on 12 May 2009, by the Central Statistical Organisation.
The ABN AMRO Bank purchasing managers' index (PMI) based on a survey of 500 companies, rose to 53.3 in April 2009 from March 2009's 49.5. The figure above 50 indicates expansion while below 50 indicates contraction of manufacturing activity.
Global cues, foreign fund flows to dictate trend
Volatility may surge in the forthcoming week ahead of the outcome of the month long parliamentary elections on 16 May 2009. Till the election results, the domestic bourses will take cues from global markets
Markets across the globe have rebounded sharply from March 2009 lows on signs of improving global economy. A government report on 30 April 2009 showed Japan's industrial production rose in March 2009 for the first time in six months and at twice the pace estimated by economists. The CLSA China Purchasing Managers' Index rose in April 2009, the first gain in nine months, CLSA Asia Pacific Markets said 4 May 2009.
US government on 4 May 2009 reported that construction spending in the country rose for the first time in six months in March 2009 as stimulus spending kicked in, while pending sales of existing homes rose 3.2% for the month.
The US government's much awaited stress test conducted on Thursday, 7 May 2009 on the health of 19 major banks showed better than expected results with nearly all appeared to have weathered a winter of economic turmoil. The US Federal Reserve said that after taking account of losses, revenue and reserve requirements the banks needed to increase capital levels by $75 billion.
Back home, political uncertainty is likely to trigger high volatility on the bourses in the coming week. The counting of votes will take place on 16 May 2009. Opinion polls carried out before voting began predicted neither the Congres led United Progressive Alliance (UPA) nor the main opposition bloc led by the Bharatiya Janata Party (BJP) would win a clear mandate, leaving both to find new allies in order to form a government.
State Bank of India, India's biggest bank in terms of branch network unveils Q4 March 2009 results on Saturday, 9 May 2009. Results next week included Hindustan Unilever, Tata Teleservices (Maharashtra), Kotak Mahindra Bank, Chambal Fertilizers & Chemicals and State Trading Corporation of India.
Earnings unveiled by Indian companies so far have been better than expectations.
Firm global cues and buying support from foreign institutional investors triggered a solid 3716.03 points or 45.53% surge in the BSE 30-share Sensex to 11,876.43 on 8 May 2009 from a 3-year closing low of 8,160.40 on 9 March 2009. It has gained 2229.12 points or 23.10% in the calendar year 2009.
Foreign institutional investors (FIIs) have been the key drivers of the recent rally. Their inflow in May 2009 totaled Rs 3,269.60 crore (till 7 May 2009) and Rs 3,982.40 crore in calendar year 2009. Earlier, FIIs had resorted to heavy selling of Indian stocks in the first two months of calendar 2009.
Sensex falls 2% on political uncertainty
Political uncertainty triggered profit taking after a sharp recent sharp surge in share prices. Nevertheless, the market cut losses in late trade as European stocks extended gains and as US index futures jumped. Auto stocks recovered. Index heavyweights Reliance Industries and Larsen & Toubro came off the day's lows.
The market was volatile. The BSE 30-share Sensex was down 240.51 points or 1.98%, up close to 110 points from the day's low and off close to 305 points from the day's high. The barometer index today, 8 May 2009, fell below the psychological 12,000 mark.
Domestic bourses slipped today, 8 May 2009, despite higher global markets. World stocks rose after the results of stress tests on US banks showed no nasty surprises. Banking, IT and metal stocks fell. The market breadth turned negative from strong breadth seen in early trade.
Volatility was high. After initial gains tracking higher US index futures, the market slipped into the red. It later moved between the positive and negative terrain in mid-morning trade. The market slipped to the day's low in early afternoon trade after the inflation data. The market extended losses in afternoon trade. After a steep slide at about 13:54 IST, the market cut losses in late trade.
Political uncertainty weighed on the bourses with polling underway for India's 15th Lok Sabha. The month-long a parliamentary elections that began on 16 April 2009 will conclude on 13 May 2009. Poll estimates point to a fractured mandate. Consumption and investment decisions will be significantly impacted by any signs that the new government is unstable. The counting of votes will take place on 16 May 2009. A party/alliance needs 272 seats in the 543-member parliament to claim power at the Centre.
Recovery in the Indian economy triggered a solid rally on the domestic bourses recently. The rally was also a part of a sharp surge in global equities triggered by hopes the worst of the global economic recession may be over. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex jumped 3,956.54 points or 48.48% to 12116.94 on 7 May 2009.
Meanwhile, the Federal Reserve stress result announced on Thursday determined that 10 US banks need to raise a total of $74.6 billion in capital, a finding that Chairman Ben S. Bernanke said should reassure investors about the soundness of the financial system.
The results showed that losses at the banks under more adverse economic conditions than most economists anticipate could total $599.2 billion over two years. Mortgage losses present the biggest part of the risk, at $185.5 billion. Trading accounts were the second-largest vulnerability, with potential losses of $99.3 billion. The conclusion of the unprecedented probe of the health of the largest 19 lenders opens an exit for some of the firms from a tense partnership between Wall Street and the government. Others will have six months to fill their capital shortfalls and may be forced to accept expanded federal ownership that could prompt changes in their management.
Bank of America Corp. was judged to need $33.9 billion in additional capital under regulators' criteria, the largest gap. Wells Fargo & Co.'s shortfall is $13.7 billion, while Citigroup Inc.'s gap is $5.5 billion. New York-based Citigroup has already announced plans to bolster its tangible common equity ratio by converting some of its preferred shares into common stock.
Fifth Third Bancorp's capital need is $1.1 billion, KeyCorp's is $1.8 billion, PNC Financial Services Group Inc.'s is $600 million, Regions Financial Corp.'s is $2.5 billion and SunTrust Banks Inc.'s is $2.2 billion. GMAC LLC needs $11.5 billion, while Morgan Stanley's assessment was $1.8 billion.
Goldman Sachs Group Inc., JPMorgan Chase & Co., Bank of New York Mellon Corp., MetLife Inc., American Express, State Street Corp., BB&T Corp., US Bancorp and Capital One Financial Corp. were deemed not to need additional funds, according to the results.
European shares extended gain on Friday, 8 May 2009, as financial stocks advanced after the results of stress tests on US banks showed no nasty surprises, while miners tracked higher metals prices. Key benchmark indices in France, Germany and UK were up by between 1.78% to 2.92%.
Asian shares rose after the US bank stress results provided no negative surprises. Key benchmark indices in Hong Kong, Japan, China, Taiwan, Singapore, South Korea were up by between 0.17% to 1.09%. Volatility was high in Asia.
Chinese State Council Vice Premier Wang Qishan wrote in an editorial Friday, 8 May 2009, that the global financial crisis and economic slump are getting worse, in contrast to more optimistic recent comments from US officials. The world economy is going to get worse before it gets better, and the situation remains serious, Wang said in a commentary published in the Financial Times. Wang called for greater cooperation between the UK and China in order to foster recovery, and repeated earlier comments by other Chinese officials calling for more international regulation to prevent future crises.
Trading in US index futures showed the Dow could rise 115 points at the opening bell on Friday, 8 May 2009. US stocks fell on Thursday 7 May 2009 before the results of the stress tests. The Dow slipped 102.43 points, or 1.2%, to 8,409.85. The S&P 500 index was down 12.14 points, or 1.3%, to 907.39, and the Nasdaq composite index fell 42.86 points, or 2.4%, to 1,716.24. The results of the stress test were announced after trading hours in the US on Thursday.
In economic news in US, initial jobless claims fell more than expected to the lowest level since January 2009. The numbers for the week ending 2 May 2009 totaled 601,000, which was less than expected and down from the preceding week. Continuing claims climbed to a new record of 6.35 million, which was in-line with expectations.
Closer home, foreign institutional investors (FIIs) are in an aggressive buying mode after they made heavy sales in the first two months of calendar 2009. Foreign institutional investors (FIIs) bought shares worth a net Rs 395.20 crore on Thursday, 7 May 2009. FII inflow in May 2009 totaled Rs 3,269.60 crore (till 7 May 2009). FII inflow in calendar year 2009 totaled Rs 3,982.40 crore (till 7 May 2009).
Asia ex-Japan equity funds took in $1.62 billion in the week though 6 May 2009, up from $1.1 billion the previous week, according to the latest data from EPFR Global which tracks global funds with assets totaling some $10 trillion. Two-thirds of the inflows in Asia ex-Japan equity funds was targeted at the Greater China region. Emerging-market stock funds worldwide took in $3.6 billion during the period, while those focused on the US and Europe posted outflows.
A pattern that started in late March 2009, with cash coming off the sidelines and bypassing funds geared to developed markets in favor of emerging markets equity, high-yield bond and some sector funds carried into the first week of May 2009, EPFR Global said.
Activity in Indian factories expanded for the first time in five months in April 2009 as a swelling orders pipeline pointed to a tentative recovery, a survey showed on Monday, 4 May 2009. The ABN AMRO Bank purchasing managers' index (PMI) based on a survey of 500 companies, rose to 53.3 in April 2009 from 49.5 in March 2009, climbing above the threshold of 50 that separates expansion from contraction. The latest reading is the highest in seven months and it has steadily risen after hitting a trough of 44.4 in December 2008.
Manufacturing makes up about 16% of India's gross domestic product. The boost in manufacturing index came from a surge in new orders. The new orders index rose to 54.9 in April 2009 from 49.5 in March 2009. Several research notes in the past few days have pointed to improvement in economic activity in the months ahead.
Inflation based on the wholesale price index rose 0.7% in the year though 25 April 2009, higher than previous week's annual rise of 0.57%, data released by the government during trading hours today, 8 May 2009, showed.
The BSE 30-share Sensex was down 240.51 points or 1.98% to 11,876.43. The Sensex rose 63.13 points at the day's high of 12,180.07 in early trade. At the day's low of 11,765.06 Sensex fell 351.88 points in mid-afternoon trade.
The S&P CNX Nifty was down 63.20 points or 1.72% to 3,620.70. Nifty May 2009 futures were at 3627.65, at a premium of 6.95 points as compared to the spot closing of 3,620.70. Turnover in NSE's futures & options (F&O) segment surged to Rs 56,236.37 crore from Rs 48,471.10 crore on Thursday, 7 May 2009.
The BSE clocked a turnover of Rs 6612 crore, higher than Rs 4704.45 crore on Thursday 7 May 2009.
The BSE Consumer Durables index (up 1.89%), the BSE FMCG index (down 0.48%), the BSE PSU index (down 0.66%), the BSE Oil & Gas index (down 0.76%), the BSE Capital Goods index (down 0.78%), the BSE Auto index (down 0.78%), the BSE Healthcare index (down 1.02%), the BSE Realty index (down 1.13%), the BSE Power index (down 1.72%), the BSE TECk index (down 1.93%), outperformed the Sensex.
The BSE Bankex (down 3.21%), the BSE Metal index (down 2.52%), the BSE IT index (down 2.15%) underperfomed the Sensex.
The market breadth, indicating the overall health of the market, was even. It had turned negative in mid-afternoon trade from a strong breadth earlier in the day. On BSE, 1,277 shares rose as compared with 1,287 that fell. A total of 53 shares remained unchanged.
The BSE Mid-Cap index fell 0.17%. The BSE Small-Cap index gained 0.32%. Both these indices outperformed the Sensex
From the 30 share Sensex pack, 26 stocks fell while rest gained.
India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) fell 0.89% to Rs 1,897. Nevertheless, the stock came off the day's low of Rs 1,875. Analysts expect strong growth in bottom line in coming quarters from sale of gas which it started pumping last month from its deep-sea field off the east coast.
India's biggest engineering & construction firm by revenue Larsen & Toubro (L&T) rose 0.54% to Rs 992, off the day's low of Rs 961.85. L&T on 16 April 2009 said the company expects its order inflow to grow by 25-35% in FY 2010. Other capital goods stocks BEML, Praj Industries, Crompton Greaves and Thermax rose by between 0.25% to 2.21%.
PSU OMCs fell on rise in oil prices. Indian Oil Corporation BPCL and HPCL fell by between 0.14% to 2.55%. Crude oil futures rose Friday in Asia on relative dollar weakness, staying near six-month highs. On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded at $57.84 a barrel up $1.13 or 2% in the Globex electronic session. State-run oil marketing firms suffer revenue loss on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.
Auto stocks cut losses on higher sales in the month just gone by. India's largest commercial vehicle maker by sales Tata Motors was down 1.36% to Rs 268.40, off the day's low of Rs 262. India's largest car maker by sales Maruti Suzuki India was down 1.1% to Rs 830.05, off the day's low of Rs 817.25. India's largest tractor maker by sales Mahindra & Mahindra was down 4.28% to Rs 494.25, off the day's low of Rs 486.75.
Metal stocks fell as copper futures for July 2009 delivery declined 1% yesterday, 7 May 2009, retreating from a three-week high on the London Metal Exchange. Aluminum slid 0.4% at $1,561 a tonne.
India's largest steel maker by sales Tata Steel fell 4.08% even after the company said its sales volume surged by 31% to 4.52 lakh tonnes in April 2009 over April 2008 led by robust demand from auto and construction sectors. Steel Authority of India, Sterlite Industries, National Aluminum Company, Hindustan Zinc and Hindalco Industries, fell by between 0.1% to 4.98%.
Rate sensitive banking stocks fell on profit taking after a sharp surge in the past few days. India's second largest private sector bank by operating income HDFC Bank fell 2.83% to Rs 1,143.50. Three block deals were executed in the HDFC stock on BSE. Two deals of 38.82 lakh shares each were executed at Rs 1140 per share while another deal of 38.82 lakh shares was executed at Rs 1175 per share.
DBS Group, Southeast Asia's biggest bank, sold its entire 2.7% stake in HDFC Bank through the block deals on BSE today, 8 May 2009.
India's largest private sector bank by net profit ICICI Bank fell 5.19% as its ADR fell 5.79% on Thursday.
India's largest bank in terms of assets and branch network State Bank of India (SBI) fell 3.06%. SBI announces Q4 March 2009 results on Saturday, 9 May 2009. A total 13 brokerages expect a between 15% fall to a 39% rise in SBI's net profit at between Rs 1601.20 crore to Rs 2626.60 crore in Q4 March 2009 over Q4 March 2008.
India's biggest dedicated housing finance firm by operating income HDFC fell 4.19%.
Outsourcing focussed IT stocks fell for the third straight day on US government plans to scrap tax incentives that encourage American firms to ship jobs overseas. India's second largest software services exporter by sales Infosys fell 2.4% as its American depository receipt (ADR) slipped 1.4% on Thursday 7 May 2009.
India's third largest software services exporter by sales Wipro fell 6.59% as its ADR fell 3.49% on Thursday. India's largest software services exporter by sales TCS fell 0.29% to Rs 630.25 off the day's low of Rs 610.
Analysts, however, feel that US government's plan to scrap tax incentives that encourages American firms to ship jobs overseas is unlikely to dent business for Indian outsourcers. US president Barack Obama on Monday, 4 May 2009, announced plans to reduce tax breaks for US-based multinationals shipping jobs to places like India. Instead, the tax incentives would now go to those creating jobs inside the US, in places like the Buffalo city, New York.
Currently, US businesses that invest overseas can take an immediate tax deduction for expenses supporting their overseas investments. They can also defer the payment of US taxes on the profits they make from such investments. But, now the Obama Administration wants to ensure that companies do not receive deductions for expenses supporting their offshore investments until they pay tax on their offshore profits. This is intended to disincentivise US companies from retaining profits abroad.
Infosys said the proposal, if implemented, was unlikely to reverse the outsourcing of a gamut of services by US firms to Indian companies. "The current proposal, as we understand, is to close corporate tax loopholes on US multinational corporations and crack down on their overseas tax havens," the company said in a statement. "We do not believe that it has anything to do with IT outsourcing done by US corporations.", Infosys said.
Rate sensitive realty stocks fell on profit taking after recent surge in prices. Unitech, Phoenix Mills, Anant Raj Industries, fell by between 0.93% to 2.04%.
DLF fell 1.84% on reports the promoters are close to finalising a deal worth around Rs 3000 crore with some foreign and domestic institutional investors to offload a little over 7% stake.
Some healthcare stocks fell on profit taking after they rose as most of the healthcare firms reported better than expected Q4 March 2009 result. Piramal Healthcare, Sun Pharmaceuticals Industries, Pfier, Biocon, Cipla, Dr Reddy's Laboratories fell by between 0.22% to 3.69%.
India's largest FMCG maker by sales Hindustan Unilever rose 0.98% to Rs 232.90 after a block deal of 3.33 lakh shares was executed on NSE at Rs 233.25 per share.
United Spirits fell 6.7% after reports Diageos talks to buy a stake in the alcohol maker have hit a roadblock.
Cement stocks fell on recent reports cement prices could fall by up to 10% in the coming months, pushed lower by new supply and slower construction activity during the monsoon season. Ultratech Cements, India Cements, ACC and Ambuja Cements, fell by between 0.43% to 4.73%.
Cals Refineries clocked the highest volume of 6.62 crore shares on BSE. Ispat Industries (3.07 crore shares), Reliance Natural Resources (1.43 crore shares), Suzlon Energy (1.36 crore shares), HDFC Bank (1.36 crore shares) were the other volume toppers in that order.
HDFC Bank clocked the highest turnover of Rs 1,524.22 crore on BSE. Reliance Industries (Rs 203.51 crore), ICICI Bank (Rs 186.57 crore), Tata Steel (Rs 177.99 crore) and Housing Development & Infrastructure (Rs 166.25 crore) were the other turnover toppers in that order.
Crude ends little higher
Prices pare most of their early gains but manage to climb up
Crude oil ended little higher on Thursday, 07, May, 2009. Prices gave up earlier gains today. Still prices ended higher due to a couple of positive economic reports hitting the wires.
On Thursday, crude-oil futures for light sweet crude for June delivery closed at $56.71/barrel (higher by $0.37 or 0.7%) on the New York Mercantile Exchange. Last week, crude ended higher by 3.2%.
Crude ended April higher by 2.9%. Previously, March trading ended up 10.9%. It rallied 11.3% in the first quarter. For the month of February, crude prices had ended higher by 1.5%.
Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 61% since then. Year to date, in 2009, crude prices are higher by 20.4%. On a yearly basis, crude prices are lower by 43%.
Among major economic reports for the day, The Labor Department reported on Thursday, 07 May, 2009 that the number of initial claims in the week ended 2 May, 2009 fell 34,000 to stand at 601,000. The four-week average for first-time claims also fell, down 14,750 to 623,500.
The four-week average is considered a better gauge of labor market conditions than the volatile weekly figures because it smoothes out one-time distortions caused by holidays, bad weather or strikes. Reported weekly claims are one of the best tools for spotting turning points in the economy. A moderation in claims could mean that the pace of deterioration in the labor market is slowing.
The Labor Department also reported on Thursday, 07 May, 2009, that productivity rose in the first quarter as U.S. firms slashed their workforce, outpacing the drop in output. Compared with the first quarter in the prior year, productivity was up 1.8%, while unit labor costs rose 2.4%.
Yesterday, EIA had reported that crude inventories increased by 600,000 barrels in the week ended 1 May, 2009. Gasoline inventories fell by 200,000 barrels. Market was expecting a buildup of more than 2 million barrels in crude inventories and a 750,000 increase in gasoline inventories. Crude inventories, meanwhile, still remained at the highest level since September 1990.
The report also showed that total petroleum demand over the past four weeks was 7.9% lower than a year ago. EIA also reported U.S. refineries increased their capacity utilization of 85.3%, up from 82.7% a week ago.
Also at the Nymex on Thursday, June reformulated gasoline rose 3.75 cents, or 2.3%, to $1.6655 a gallon and June heating oil added 1.39 cents, or 0.9%, to $1.4852 a gallon.
Natural gas for June delivery rose 19.3 cents, or 4.1%, to $4.08 per million British thermal units. EIA reported on Thursday that U.S. natural-gas inventories rose 95 billion cubic feet in the week ended 1 May, 2009. Stockpiles were 491 billion cubic feet higher than last year at this time and 362 billion cubic feet above the five-year average.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
At the MCX, crude oil for May delivery closed at Rs 2,768/barrel, lower by Rs 10 (0.35%) against previous day's close. Natural gas for May delivery closed at Rs 198.3/mmbtu, higher by Rs 7/mmbtu (3.65%).
Shipping Corporation
We recommend a ‘buy’ in the Shipping Corporation of India from a short-term horizon. It is clearly visible from the charts of Shipping Corporation that after finding support at Rs 70 in early March, a significant long-term support level, it bounced up. Since its March low, the stock has been on a medium-term uptrend. However, in mid-April the stock encountered resistance at around Rs 98 and witnessed a pull back to Rs 81, retracing 61.8 per cent (Fibonacci retracement) of its prior up move. Subsequently, the stock resumed its medium-term uptrend taking support from the up trendline recently. The stock is trading well above its 21 and 50-day moving averages. We notice that the volumes are high during the advance days. The daily relative strength index (RSI) has re-entered into the bullish zone from the neutral levels. The weekly RSI is gradually rising in the neutral region towards the bullish zone. Our short-term outlook is bullish on this stock. We expect the stock to move up until it hits our price target of Rs 102 in forthcoming trading sessions. Traders with short-term trading perspective can buy the stock while maintaining a stop-loss at Rs 87.
via BL
Bullion metals shine
Precious metals rise for fourth straight day as European Central Bank cut interest rates
Precious metals ended higher for fourth straight time on Thursday, 07 May, 2009 at Comex. Prices rose today as European Central Bank cut interest rates and also due to the weak dollar.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.
On Thursday, Comex Gold for June delivery gained $4.5 (0.5%) to close at $915.5 an ounce on the New York Mercantile Exchange. Earlier in the day, it rose to a high of $926.5. Last week, gold ended lower by 3%. Year to date, gold prices are higher by 2.9%.
For the month of April, gold lost 3.7%, the second consecutive monthly drop. For the month of March, gold fell 2.1%, down for the first month in five. But the metal gained 4.3% in the first quarter. Before March, for the month of February, gold ended higher by 7.4%. For January, 2009, gold had gained 3.9%.
On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (15%) since then.
On Thursday, Comex silver futures for July delivery gained 32.5 cents (2.3%) at $14.03 an ounce. Year to date, silver has climbed 18.2% this year. For 2008, silver had lost 24%.
Today, European Central Bank cut its benchmark interest rate to a record low of 1%, raising worries about global inflation.
In the currency market on Thursday, the dollar stayed weak against its counterparts. The dollar index, which weighs the strength of dollar against the basket of six other currencies fell by 0.1%.
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 June delivery closed higher by Rs 47 (0.32%) at Rs 14,533 per 10 grams. Prices rose to a high of Rs 14,655 per 10 grams and fell to a low of Rs 14,441 per 10 grams during the day's trading.
At the MCX, silver prices for May delivery closed Rs 325 (1.45%) higher at Rs 22,650/Kg. Prices opened at Rs 22,350/kg and rose to a high of Rs 22,826/Kg during the day's trading.
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