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Monday, May 18, 2009
Nifty May 2009 futures at a substantial premium
May 2009 futures of RIL, ICICI Bank, SBI and DLF at premium
Nifty May 2009 futures were at 4370, at a premium of 46.85 points over the spot closing of 4323.15. Trading was halted at 11:55 IST today, 18 May 2009, as the market-wide circuit filters were applied following a thumping victory of the Congress-led United Progressive Alliance (UPA) government in the Lok Sabha elections.
The turnover on NSE's futures & options segment was a meagre Rs 2599.35 crore today. It was less than 5% on Friday (15 May 2009)'s turnover of Rs 52853 crore.
Reliance Industries (RIL) May 2009 futures were at a premium at Rs 2394 compared to the spot closing of Rs 2367.55.
ICICI Bank May 2009 futures were at premium at Rs 725 compared to the spot closing of Rs 707.10.
State Bank of India (SBI) May 2009 futures were at a premium at Rs 1605 compared to the spot closing of Rs 1576.55.
DLF May 2009 futures were at a premium at Rs 330 compared to the spot closing of Rs 322.65.
In the cash market, the S&P CNX Nifty rose 651.50 points or 17.74% at 4323.15.
A clear mandate for the Congress-led United Progressive Alliance (UPA) boosted hopes a strong coalition would be able to push through economic reforms that would boost foreign investment.
Sensex pull Asian Market Out of Gloom
Shanghai, Hang Seng, Taiex follows Sensex Rally while Sydney, Seoul linger in red
Stock market in Asian region staged a turnaround ending the day mixed on Monday, 18 May 2009, after opening mostly lower by taking cues from Wall Street, where the major indices ended lower on Friday on concerns about the economic outlook.
Towards the end of the day, the markets in Australia, New Zealand, South Korea, and Japan ended lower, the markets in China, Hong Kong, Singapore, Indonesia and Taiwan ended in positive territory.
The trigger for the turnaround was found in the markets of India that soared more than 17%, forcing regulators to stop trading for the day as markets cheered the return to power of the ruling Congress party with a clear mandate
Meanwhile, on Wall Street, stocks oscillated between red and green for the entire day but ultimately ended the day with modest losses. The Dow Jones Industrial Average ended lower by 62.68 points at 8,268.64. The Nasdaq Composite Index, ended lower by 9 points at 1,680. S&P 500 ended lower by 10 points at 882. For the week, indices registered good losses at Wall Street. In percentage terms, Dow lost 3.6%, Nasdaq lost 3.4% and S&P 500 lost 5% during the week.
In the commodity market, crude oil rose on speculation that prices fell too far at the end of last week and may rebound as optimism about an economic recovery grows.
Crude oil for June delivery rose as much as 76 cents, or 1.4%, to $57.10 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $57 at 10:16 a.m. London time. The June Nymex oil contract expires tomorrow. The more actively traded July contract was at $57.63 a barrel, up 63 cents, at 10:16 a.m. London time.
Prices rose today after dropping 3.9% on 15 May 2009, the biggest decline in almost a month, when a report showed U.S. industrial production fell for a sixth month. Crude also climbed after Nigerian militants attacked pipelines from Chevron Corporation’s Escravos terminal to domestic refineries and power stations.
Brent crude for July settlement rose as much as 82 cents, or 1.5 percent, to $56.80 a barrel on London’s ICE Futures Europe exchange. The contract was at $56.71 a barrel at 10:17 a.m. London time.
Gold traded little changed near a seven-week high in Asia as some investors may have sold the metal to meet margin calls after a drop in global stocks. Immediate-delivery gold was up 75 cents at $932.55 an ounce at 2:02 p.m. in Singapore. The metal rose to $934.20 May 15, the highest since March 27. Gold for June delivery in New York was little changed at $932.60.
In the currency market, the Japanese yen extends recent rally as the week starts on the back of weakness in stocks. Nikkei breached 9000 psychological level briefly but managed to close 226pts down at 9038. Moody's unified Japan's debt ratings to Aa2, with foreign-currency debt ratings lowered from Aaa and local currency assessment raised from Aa3. Moody's said that the rating reflects the risks of Japan's "high level of debt" and the country's fiscal position is "vulnerable to shocks or imbalances".
The Japanese yen strengthen against its most major counterparts on Monday on concern the recession in the world’s biggest economy will be prolonged as General Motors Corp nears bankruptcy and European Central Bank will cut interest rates further to spur a recovery in the European economy. The Japanese currency quoted at 94.63 per greenback.
The Hong Kong dollar was trading at HK$ 7.7516 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.
In Sydney trades, the Australian dollar weakened against its major counterparts after poor economic data from the Euro zone dampened optimism the world economy may be stabilizing, pushing investors back into safe-haven currencies. The Aussie was quoted at 74.80 cents against the greenback on Monday.
In Wellington trades, the New Zealand dollar fell to its lowest level in a week and a half against the greenback as persistent worries about world economic prospects led to rises in the United States and Japanese currencies. The NZ dollar ended the day at US58.60c from US59.30c on Friday.
The South Koran won ended at 1,259.5 won against the dollar, down 2.5 won from Friday's close, as stock market setbacks turned investors away from risky assets.
The Taiwan dollar weakened against the US dollar as it was trading lower at NT$ 32.9870, down by NT$ 0.0.370 from Friday’s close of NT$32.950.
Coming back in equities, a surge in Indian equities following a decisive election victory by the Congress Party-led coalition over the weekend-helped turn around other markets in Asia today.
In India, a clear mandate for the Congress-led United Progressive Alliance (UPA) in Lok Sabha elections send stocks surging with trading on the bourses halted for the day at about 11:55 IST. For the first time in the history of the stock markets trading was halted because the market-wide circuit were applied due to a solid surge. Earlier, there have been instances when trading was halted when market-wide circuit filters were applied due to a market crash.
The 30-share Sensex jumped 2110.79 points or 17.34% at 14,284.21 and the 50-unit S&P CNX Nifty gained 651.50 points or 17.74% to 4,323.15.
Trading was halted in just 16 seconds after the market re-opened at 11:55 IST. Earlier in the day, trading was halted within seconds of opening as the market soared following a clear mandate in the Lok Sabha election. A clear mandate for the Congress-led United Progressive Alliance (UPA) boosted hopes a strong coalition would be able to push through economic reforms that would boost foreign investment. The 30-share Sensex surged 14.70% or 1,789.88 points to 13,963.30 and the 50-unit S&P CNX Nifty gained 531.65 points or 14.48% to 4203.30.
The BSE Sensex attained its highest closing since 11 September 2008 and the S&P CNX Nifty attained its highest closing since 10 September 2008.
In rest of Asia, Japanese stock market finished the session sharply lower, on broad based slumps across the sector. Exporters and automakers dragged down the market as of strengthening yen against greenback and after Panasonic tepid earnings report. The spread of the new flu in Japan dampened investor sentiment further. The Nikkei 225 Stock Average index tumbled 226.33 points, or 2.4%, to 9,038.69, while the broader Topix index dropped 21.94 points, or 2.5% to 860.
In Mainland China, Shanghai stock market recouped early losses to finish the session slightly higher, as investors chased bargains in energy and non ferrous stocks amid speculation prices of the fuel and commodities will rise on higher demand, while Banks ended mixed after banking regulator said lenders face pressure on profits.
The Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, rose 0.3%, or 7.51 points, to close at 2,652.77, while the Shenzhen Component Index on the smaller Shenzhen Stock Exchange recovered 0.4% or 40.82 points to close at 10,314.04 points.
In Hong Kong, the stock reversed early losses in afternoon trading to finish the session higher, as rebound in energy, finance, and properties stocks on tracking sharp recovery in shanghai bourses in a bout of late-session buying. The Hang Seng Index gained 232.21 points, or 1.38%, to 17,022.91, while the Hang Seng China Enterprise Index, which tracks H shares of Chinese companies, rose 184.95 points, or 1.93% to 9,792.24.
In Australia, the stock market finished the session lower, with broad based losses across the sector on the back of weak lead from Wall Street, collapse of Australia’s largest managed investment scheme Great Southern, a number of capital raisings, and weakness in commodity prices. At the closing bell, the benchmark S&P/ASX200 index has retreated 37.6 points, or 1%, to 3,735.60, while the broader All Ordinaries erased 37.3 points, or 0.99%, to 3,721.60.
In New Zealand, equities dipped down to commence the first trading day of the week in the negative terrain. The share market was in line with most of the Asian markets that fell early today, trailing pessimism on the Wall Street that closed in the red on Friday. The NZX50 dipped down 0.36% or 13.04 points to 2777.86. However, NZX 15 fell 0.81% or 41.71 points to close at 5078.32.
On the economic front, New Zealand’s producers' input prices, as measured in the producer price index (PPI), fell 2.5% and output prices fell 1.4%in the March 2009 quarter, Statistics New Zealand said today. Lower prices for imported crude oil and for fuel made major contributions to the fall in input prices, while lower prices in the dairy product manufacturing index drove down output prices. The 2.5% fall in the inputs index is the largest since the series began in the December 1977 quarter.
The capital goods price index (CGPI) in New Zealand rose 1.2%in the March 2009 quarter, Statistics New Zealand said today. The most significant upward contribution came from the plant, machinery and equipment index. This rise was mainly due to the depreciation of the New Zealand dollar. On an annual basis, the CGPI rose 4.9% in the year to the March 2009 quarter. This rise is the largest annual movement since the series began in the December 1989 quarter, following rises of 2.5%and 3.6%in the years to the March 2008 and the March 2007 quarters, respectively.
In South Korea, shares closed lower Monday as investors unloaded steel, shipyard and financial shares amid lingering concerns over an economic slowdown. The benchmark Korea Composite Stock Price Index (KOSPI) lost 5.05 points or 0.36% to 1,386.68, after falling to as low as 1,366.58 in early trading.
On the economic front, South Korea posted a fresh record-high trade surplus in April as imports declined faster than exports amid a protracted economic slowdown, a report showed Monday. According to the report by the Korea Customs Service, South Korea's trade surplus amounted to US$5.79 billion last month, up from the previous month's $4.28 billion. The April figure is the highest, renewing the all-time record set in March. Exports fell 19.6 percent last month from a year earlier to $30.42 billion, while imports plunged 35.6 percent over the same period to $24.63 billion, the report showed.
In Singapore, the stocks index clawed back early losses in last hour of trading to finish the session higher, as investors chased bargain hunting, buoyed up on tracking gains in Asian bourses. Finance and properties surged on tracking sharp recovery in shanghai bourses in a bout of late-session buying; meanwhile bargain hunting was evident in manufacturers and multi-industries on hopes for recovery in demand. The blue chip Straits Times Index leaped 37.20 points, or 1.74%, to 2,176.98.
On the economic front, Singapore April non-oil domestic exports down 19% on year vs. 17% fall in March, meanwhile NODX fell seasonally adjusted 1.3% month-on-month in April, reversing a 10% rise in March, according to Trade and Industry Ministry figures released Monday.
In Taiwan, stock market continued its upward run by closed the day higher, as Chinese measures to forge closer trade ties with Taiwan spurred buying in transport, tourism and property shares.
In line with the pledge of its leaders to help Taiwan alleviate its plight amid the global economic downturn, Mainland Chinese authorities offered a package of eight favorable economic measures for Taiwan, including the signing of a framework agreement for cross-Strait economic cooperation.
At the Fujian Cross-Strait Forum, Wang Yi, director of Taiwan Affairs Office, under the The Chinese government will also encourage more Chinese tourists to visit Taiwan, with the aim of boosting their number to over 600,000 this year. Moreover, the Chinese government will encourage and assist qualified Taiwanese enterprises to tap the Chinese market and take part in major infrastructure facilities and construction projects, conceived mainly for boosting domestic demand.
The main Taiex share index gained further as Taiex added 63.63 points or 0.97%, closing the day at 6577.81, highest closing since 11 May 2009 when market closed the day at 6647.50.
In Philippines, the stock market opened the week on a negative note, as investors engaged in profit taking activities. Moreover, hefty losses in the key heavyweight stocks also dragged the composite index lower. At the final bell, the benchmark index PSEi slipped 1.27% or 29.33 points to 2,279.37, while the All Shares index fell 0.78% or 11.56 points to 1,465.84.
On the economic front, the country’s external payments position improved in April to an almost complete reversal from the deficit posted the month before, the central bank reported today. Bangko Sentral ng Pilipinas (BSP) data released today showed the country’s balance of payments (BoP) swinging to a $466-million surplus in April, or an almost complete reversal from the $472-million deficit in March. This brought the year-to-date BoP to a surplus of $2.2 billion as of the end of last month, the BSP said.
Elsewhere, Malaysia's Kula Lumpur Composite index was down 0.22% or 2.20 points to 1012.01 while Indonesia’s Jakarta composite index jumped 3.01% or 52.65 points ending the day at 1803.57.
In other regional market, European shares shook off early weakness to trade higher Monday, as gains for banks such as HSBC Holdings and UniCredit offset weakness in most metal stocks. The U.K.'s FTSE 100 index rose 1.1% to 4,394.66 in Monday's action, while the German DAX 30 index climbed 0.3% to 4,751.60 and the French CAC-40 index rose 0.2% to 3,174.44.
In the UK, Rightmove House Price raised +2.4% mom, the 4th consecutive monthly increase, in May after gaining +1.8% a month ago. It's also the largest rise since the survey began in 2003. On annual basis, the reading fell -6.2%, compared with -7.3% in the previous month. The moderation in decline indicated the market turned more optimistic about the housing market.
Looking ahead, in the US, NAHB housing market index set to increase further in May after adding 5 points to 14 in April. Recent rise in the index suggested that new home sales might improve soon. US' Treasury Secretary Timothy Geithner will speak at 1530 GMT.
Post Session Commentary - May 18 2009
Market trading was halted for the day after benchmark indices triggers final upper limit of 20%. At around 11.55 am, the BSE Sensex touched the highest mark of 14,272.63 with rise of 17.24% and NSE Nifty touched the uppermost level of 4,384.30, which was 19.41% up from previous closing. The rally was backed by the surprised win for the UPA government (lead by 262 seats) in the 15th Lok Sabha election, which brought great cheers for the investors. Market is hopeful as less number of allies will direct to a stable government which will run its track of five years. SEBI, today vide their circular No. SMD/RPD/Policy/Cir-37 dated June 28, 2001 has stipulated that the index based market wide circuit breaker system shall apply at three stages of the index movement either way at 10%, 15% and 20%. Since the indices breached 20% level, there will be no further trading today.
The domestic market opened with a sharp gap and suddenly locked in at upper circuit. Trading had been halted for an hour. The market reopened at 10.55am. The sharp upward rally on Monday was in reaction to UPA’s stunned win at the general elections. The benchmark indices touched the psychological mark of 15% after one hour of halt and trading stopped once again till 11:55am as NSE Nifty hit 15% upper circuit the second 5% filter. Further, market resumed trading at 11:55am (IST) before finally halting the trading as crossed the final upper limit of 20%. On the sectoral front, all indiced ended with huge gains. Among those, most of the buying was seen in Realty, Capital Goods, Bank, Oil & Gas, Power, Metal, PSU and Teck stocks.
Among the Sensex pack all 30 stocks ended in green territory. The market breadth indicating the overall health of the market remained extremely positive as 833 stocks closed in green while 11 stocks closed in red and 2 stocks remained unchanged in BSE.
The BSE Sensex was up by 2,099.21 points at 14,272.65 and NSE Nifty was higher by 636.40 points at 4,308.05. The BSE Mid Cap increased by 276.06 points or 7.25% to 4,083.13 and the BSE Small Cap grew by 218.33 points or 5.10% to 4,497.93.
Gainers from the BSE Sensex pack are BHEL (32.72%), L&T Ltd (29.53%), DLF Ltd (25.82%), ICICI Bank (25.30%), HDFC (23.46%), Reliance (22.87%), RCom (22.74%), Bharti Airtel (22.53%%), Reliance Infra (22.02%), JP Associates (20.91%), SBI (20.76%), Tata Steel (17.60%), Sterlite Industries (16.53%), HDFC Bank (16.48%), Tata Motors (16.05%), Grasim Industries (14.26%), Wipro Ltd (13.83%), Hindalco (13.64%), Tata Power (13.38%) and ONGC Ltd (13.17%).
On the global markets front the Asian markets which opened before the Indian market, are trading mixed. Shanghai Composite, Hang Seng and Straits Times index are trading up by 7.52, 181.27 and 33.56 points at 2,652.78, 16,971.97 and 2,173.34 respectively. However, Nikkei 225 and Seoul Composite trading lower by 226.33 and 5.05 points at 9,038.69 and 1,386.38 respectively.
The BSE Realty index gained (25.37%) or 610.11 points to close at 3,014.98. Gainers are Indiabull Real (38.51%), Unitech Ltd (29.41%), DLF Ltd (25.81%), Housing Development (23.39%), Orbit Co (19.99%) and Parsvnath (19.94%).
The BSE Capital Goods stocks increased by (23.47%) or 2,036.30 points to close at 10,712.65. Major gainers are BHEL (32.72%), L&T Ltd (29.53%), Punj Lloyd (23.20%), Punj Lloyd (22.56%), Areva (20.99%) and Jyoti Struct (19.99%).
The BSE Bank index gained (20.27%) or 1,292.27 points at 7,667.92 hopes falling interest rates will boost lending growth. Scrips that gained are ICICI Bank (25.30%), Bank of Baroda (21.24%), Indian Overseas Bank (21.21%), SBI (20.76%), Yes Bank (20.48%) and Allahabad Bank (17.25%).
The BSE Oil & Gas stocks increased by (19.57%) or 1,665.38 points to close at 10,175. Major gainers are Reliance (22.87%), Aban Offshore (21.20%), Reliance Pet (20.23%), RNRL (19.48%), Essar Oil Ltd (15.46%) and Crompton Greaves (14.78%).
The BSE Power was up by (17.09%) or 378.90 points at 2,595.43. Gainers are BHEL (32.72%), GVK Power (27.89%), Suzlon Energy (22.56%), Reliance Infra (22.02%), GMR Infra (21.08%) and Reliance Power (17.49%).
The BSE Metal index advanced by (16.64%) or 1,310.03 points to close at 9,182.73. Main gainers are NMDC Ltd (19.99%), Steel Authority (19.38%), Ispat Indus (18.55%), Jindal Steel (18.51%), Sesa Goa Ltd (18.37%), Gujarat NRE C (18.35%) and JSW Steel (14.78%).
Tata Steel surged 17.60%. The company has taken major initiatives in retail including doubling of its outlets to 1,000 in the next 2-3 years for its branded products. This is in order to promote the sale of its steel products in the country.
MARKET makes a history
The Sensex at the opening bell (9.55am) was 1,306 points up at 13479 and Nifty was 532 points at 4203 and hit the first circuit for the day and also for the first time in the history of the Indian stock exchanges and the markets were closed for two hours. At 11.55am when the market opened again, the Sensex gained another 700 points and Nifty 150 points and hit the second circuit of the day and the market was closed for the day. For the day, the Sensex gained 2,111 points or 17.34% and closed at 14284 while Nifty gained 636 points to wrap the session at 4308.
The market breadth, the number of advancing shares to declining shares, was highly tilted in favour of advancing shares. Of the 846 stocks traded on the BSE, 833 stocks advanced, whereas 11 stocks declined. Two stocks ended unchanged. Of the 13 sectoral indices on the BSE, all closed positive gaining in the range of around 7-23%. BSE Realty moving up by 23.45% topped the list, while BSE CG (capital goods’ index), occupying the second slot, was up by around 21.90%. BSE Bankex (up 19.18%), BSE Oil & Gas (up 19.11%), BSE Power (up 18.33%), BSE PSU (up 16.42%), BSE Metal (up 16.10%) and BSE Teck (up 14.02%) posted significant gains for the day. Remaining indices were up 7-13% each.
Realty stocks were in limelight and closed with strong gains. Indiabulls Real Estate vaulted 38.51% at Rs205, Unitech soared 29.41% at Rs66, Housing Development and Infrastructure Ltd surged 26.08% at Rs229.90 and Orbit Corporation advanced 20% at Rs87.05.
Gateway Distipark attracted volumes of over 10 lakh shares on the BSE followed by Cals Refineries (6 lakh shares), K Sera Sera Productions (5 lakh shares) and IFCI (5 lakh shares).
Sensex vaults 17% as market cheers UPA's thumping victory in election; trading halted for the day
A clear mandate for the Congress-led United Progressive Alliance (UPA) in Lok Sabha election send stocks surging with trading on the bourses halted for the day at about 11:55 IST. For the first time in the history of the stock markets trading was halted because the market-wide circuit were applied due to a solid surge. Earlier, there have been instances when trading was halted when market-wide circuit filters were applied due to a market crash.
The 30-share Sensex jumped 2110.79 points or 17.34% at 14,284.21 and the 50-unit S&P CNX Nifty gained 651.50 points or 17.74% to 4,323.15.
BSE clocked a paltry turnover of Rs 77 crore. The combined turnover in the cash and the derivatives segment of BSE and NSE totaled Rs 3103. Only 846 stocks were traded on the BSE while 202 stocks witnessed action on the NSE.
Trading was halted in just 16 seconds after the market re-opened at 11:55 IST. Earlier in the day, trading was halted within seconds of opening as the market soared following a clear mandate for the UPA in the Lok Sabha election. A clear mandate for the Congress-led United Progressive Alliance (UPA) boosted hopes a strong coalition would be able to push through economic reforms that would boost foreign investment. The 30-share Sensex surged 14.70% or 1,789.88 points to 13,963.30 and the 50-unit S&P CNX Nifty gained 531.65 points or 14.48% to 4203.30, when trading was halted within seconds of opening.
While the solid surge on the bourses in opening trade was not a big surprise, what created confusion among the market was the level at which the circuit filters were applied. The market-wide circuit filters are applied taking into consideration the Sensex or Nifty's closing level on the last trading day of the previous quarter - this time based on the closing of Nifty or Sensex on 31 March 2009. If that be so, the market wide circuit filters should have applied at a gain of 975 for Sensex or a gain of 300 of Nifty whichever was achieved earlier
The index-based market-wide circuit breaker system applies at 3 stages of the index movement, either way viz. at 10%, 15% and 20%. These circuit breakers when triggered, bring about a coordinated trading halt in all equity and equity derivative markets nationwide. The market-wide circuit breakers are triggered by movement of either the BSE Sensex or the NSE S&P CNX Nifty, whichever is breached earlier.
In a circular issued after market hours, the National Stock Exchange (NSE) said the existing policy will continue to govern trading on the exchanges. Accordingly, the first level of the circuit breaker at 10% will be triggered at 300 points for Nifty and 975 for Sensex over the respective closing level of the indices today, 18 May 2009, it said. The second circuit breaker at 15% and the third circuit breaker at 20%, will be triggered at 450 points and 600 points for the Nifty respectively and 1450 points and 1950 points for the Sensex respectively, over the closing levels of today, it said.
For the record, the BSE Sensex today attained its highest closing since 11 September 2008 and the S&P CNX Nifty attained its highest closing since 10 September 2008.
As per the provisional data released by the stock exchanges after trading hours, foreign funds today bought shares worth a net Rs 44.64 crore. Domestic institutional investors sold shares worth a net Rs 8.41 crore.
The market breadth, indicating the overall health of the market, was strong. On BSE, 833 shares rose as compared with 11 that fell. A total of 2 shares remained unchanged.
The BSE Mid-Cap index rose 12.06% and the BSE Small-Cap index rose 9.09%. However, both these indices underperformed the Sensex.
The BSE Realty index (up 25.37%), the BSE Capital Goods index (up 23.47%), the BSE Bankex (up 20.27%), the BSE Oil & Gas index (up 19.57%) outperformed the Sensex.
The BSE FMCG index (up 6.78%), the BSE Healthcare index (up 8.04%), the BSE IT index (up 11.41%), the BSE Auto index (up 12.12%), the BSE Consumer Durables index (up 13.63%), the BSE TECk index (up 14.95%), the BSE PSU index (up 15.76%), the BSE Metal index (up 16.64%), the BSE Power index (up 17.09%), underperfomed the Sensex.
The market soared today, 18 May 2009, following a thumping victory of the Congress-led United Progressive Alliance (UPA) government in the Lok Sabha elections. A clear mandate for the UPA boosted hopes a strong coalition would be able to push through economic reforms that would boost foreign investment
The Sensex has risen 4636.90 points or 48.06% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the has Sensex has surged 6,123.81 points or 75.04%.
Coming back to today's trade, Bharat Heavy Electricals, Reliance Industries, HDFC, Reliance Infrastructure, ICICI Bank, Bharti Airtel, Larsen & Toubro, DLF, Reliance Communications, Jaipraksh Associates, State Bank of India, rose by between 20.76% to 32.72%.
Infrastructure shares jumped on hopes the Congress-led UPA government may boost spending on infrastructure sector after emerging victorious in the general elections. India's biggest engineering & construction firm by revenue L&T rose nearly 30% to Rs 1280. India's biggest power equipment maker by revenue Bharat Heavy Electricals rose 32.7% to Rs 2266.
Among other infrastructure stocks, Jaiprakash Associates, Gammon India, GVK Power & Infrastructure, GMR Infrastructure, and IVRCL Infrastructures & Projects rose 20% to 38.3%
Punj Lloyd surged 23.2% ahead of the Q4 March 2009, ahead of the announcement its Q4 March 2009 results later today, 18 May 2009.
Shares of power and capital goods companies surged following a thumping victory of the Congress-led United Progressive Alliance (UPA) government in the Lok Sabha elections, clearing the way for the landmark civilian nuclear deal with the US. Areva T&D jumped 21%, Reliance Infrastructure rose 22%, Hindustan Construction Company rose 25%, Crompton Greaves rose 13.8%, Tata Power Company rose 13%, Rolta gained 13%, ABB rose 13.9%, NTPC gained 11.9%, and Walchandnagar Industries rose 10%
State-run companies advanced on hopes of recommencement of the PSU disinvestment programme after the Congress-led UPA government got a clear mandate in the Lok Sabha election. Dredging Corporation of India rose 20%, Engineers India advanced 19.3%, HMT rose 20%, Neyveli Lignite Corporation advanced 17%, Shipping Corporation of India rose 10%, Hindustan Copper rose 10%, MMTC rose 20%, NMDC rose 20%, Power Finance Corporation rose 13.3% and Central Bank of India rose 18%
It may be recalled that the BJP-led National Democratic Alliance (NDA) had vigorously pursued PSU divestment. However, it was put in deep freeze in the last five years by the Congress-led United Progressive Alliance (UPA) government as the Left parties which supported the UPA government from outside, were bitterly opposed to the idea.
Consequently, in the past five years, the government raised just Rs 8,500 crore from disinvestment as against Rs 28,000 crore raised by the BJP-led government in the preceding five-year period.
The UPA government's thumping victory in the 15th Lok Sabha elections without the support of the Left parties has raised expectations that the government may revive disinvestment programme. The Congress party had in its manifesto released before polls promised to go ahead with disinvestment while retaining a majority holding in the state-run companies.
India's largest bank in terms of assets and branch network State Bank of India soared 20.76% on hopes the Congress-led UPA government may go ahead on a plan to merge six associate banks with State Bank of India to create a Indian banking behemoth.
The process of creating a Indian banking behemoth was set in motion two years ago, but got derailed due to resistance from the Left parties. Although the board of SBI and its associate bank, the State Bank of Saurashtra, had approved the merger in August 2007, the government approved it only in August 2008 after the Left withdrew its support to the government.
A merger of the associate banks with itself will give SBI the full benefit of size. SBI and its associate banks enjoy a fourth of the market share.
The SBI management may well be keen to merge the six associates at the earliest, but that will hinge on government approval since the government controls 59.41% of the equity in the bank.
India's largest motorbike maker by sales Hero Honda Motors soared 15.83% as index focused mutual funds took position in the stock ahead of its entry in the coveted BSE 30-share Sensex with effect from 29 June 2009. After trading hours on Friday, 15 May 2009, the BSE announced that Hero Honda will replace Ranbaxy Laboratories in the barometer index BSE Sensex with effect from 29 June 2009
prime minister Manmohan Singh's coalition defied predictions of a tight election and was only about 11 seats short of an majority from the 543 seats at stake, according to election commission data. Congress' alliance took 261 seats, sweeping aside its nearest rival, the bloc led by the Hindu-nationalist Bharatiya Janata Party (BJP), which won only 159 combined. Congress, which alone won 205 seats, needs a handful of partners to reach the 272 seats needed to take power, and is expected to seek the support of more smaller parties or independents. Congress leaders will meet on Tuesday to officially endorse Manmohan Singh as prime minister, after which the party will meet its coalition partners to decide potential new allies.
Armed with a popular mandate, the Congress led UPA government is going to stake claim today to run India for another five years. The Congress and its allies will go to meet President Pratibha Patil today to show that they have the numbers. The first meeting of the newly-constituted Congress Parliamentary Party (CPP) is expected to convened in a day or two to elect its leader. Singh, who is already the Prime Ministerial candidate of the Congress, is also likely to be elected by the MPs at a joint meeting of the UPA parties. The Congress must form a government by 2 June 2009.
Financial sector reforms are likely to get a push in the coming days, which were relegated to the back seat due to persistent opposition from the Left parties, with the Congress-led UPA set to form the next government. Left-less victory of the UPA over BJP-led National Democratic Alliance (NDA) would not only signify the formation of a stable government, but also revive hopes of a slew of pro-market policy changes.
Pre Session Commentary - May 18 2009
Today domestic markets are likely to open with huge gap up. The 14th Lok Sabha election results have once again bestowed Congress party with a responsibility of leading the nation for another five years. The 262 seats of Congress and its alliance UPA, has exuded the nation’s belief in the Manmohan Singh’s government. There will be a lot of movement in the Banking and Infrastructure stocks as the government is expected to allocate good amount of money in these sectors in the coming budget. Foreign funds will most likely pour a lot of money in anticipation of a stable government. Hence rupee would gain strength through a major break through of FIIs. The day will witness huge buying sentiments across the broader level.
On Friday, the domestic markets closed in green. Phenomenal opening of the Asian markets along with positive closing of the US markets brought a good feel factor for domestic investors and therefore benchmark indices spurred at opening bell. The bounce back was less anticipated ahead of the Lok Sabha election results to be announced on 16th May 2009. However investors surprised the markets by showing huge buying interest responding positive cues from other markets. Bankex, CG, CD and Teck closed with gains of 3.86%, 3.57%, 3.18% and 3.05% respectively. However FMCG was the only sector to close with a loss of 0.24%. Mid and Small cap stocks also managed to close with moderate gains of 3.86% and 0.57% respectively. We expect the markets to be trading positive.
The BSE Sensex closed high by 300.51 points at 12,173.42 and NSE Nifty ended with gain of 78.20 points at 3,671.65. BSE Mid Caps and Small Caps closed with gains of 50.14 points and 35.45 points at 3,807.07 and 4,279.60 respectively. The BSE Sensex touched intraday high of 12,219.54 and intraday low of 11,948.70.
On Friday, the US stock markets closed negative. For the fourth session in the week the markets closed in red. The session was choppy in the early trade which further instigated selling pressure across broader level. On the macro economic level the consumer price index for the month of April met expectations. However the industrial production fell by 0.5%. The life insurance companies will get an access to $22 billion in TARP funds. This news also raised apprehensions about low grading of these companies and therefore the life and health insurers closed with a loss of 3.5%. The US light crude oil futures for June closed lower by 3.6% at $56.52 per barrel on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) fell by 62.68 points to close at 8,268.64 The NASDAQ Composite (RIXF) index declined by 9.07 points to close at 1,680.14 and the S&P 500 (SPX) closed low by 10.19 points at 882.88.
Today major stock markets in Asia are trading in red. Hang Seng is trading low by 246.18 points at 16,544.52 followed by Shanghai Composite which is low by 33.22 points at 2,612.04. Japan''s Nikkei is also low by 238.22 points at 9,026.80, Strait Times is low by 15.54 points at 2,124.24. Seoul Composite fell by 18.58 points at 1,373.15 respectively.
Indian ADRs ended up. In technology sector, Infosys ended up by 1.72% along with Wipro by 2.99%. Further, Satyam gained 0.56% and Patni Computers ended higher by 5.48%. In banking sector ICICI Bank advanced by 4.93% and HDFC Bank went up by 2.72%. In telecommunication sector Tata Communication decreased by 2.20% and MTNL lost 2.36%. Sterlite Industries increased by 0.88%.
The FIIs on Friday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 1,523.40 Crore and gross debt purchased stood at Rs 255.70 Crore, while the gross equity sold stood at Rs 1,869.10 Crore and gross debt sold stood at Rs. 673.20 Crore. Therefore, the net investment of equity and debt reported were Rs (345.70) Crore and Rs (417.40) Crore respectively.
On Friday, the partially convertible rupee ended at 49.41/42 per dollar, 0.7 percent stronger than previous close at 49.78/79. Rupee gained strength due to phenomenal rise in local stock markets.
On BSE, total number of shares traded were 40.65 Crore and total turnover stood at Rs 5,113.70 Crore. On NSE, total number of shares traded was 83.68 Crore and total turnover was Rs 14,820.51 Crore.
Top traded volumes on NSE Nifty – Unitech with 55560935 shares, Cairn India with 32770419 shares, Suzlon Energy with 32303136 shares, DLF 24067427 shares followed by ICICI Bank with 13335097 shares.
On NSE Future and Options, total number of contracts traded in index futures was 682881 with a total turnover of Rs 12,034.37 Crore. Along with this total number of contracts traded in stock futures were 386175 with a total turnover of Rs 15,583.22 Crore. Total numbers of contracts for index options were 1284823 with a total turnover of Rs 23,723.20 Crore and total numbers of contracts for stock options were 34676 and notional turnover was Rs 1,512.21 Crore.
Today, Nifty would have a support at 3,732 and resistance at 3,795 and BSE Sensex has support at 12,355 and resistance at 12,712.
Gains may continue
Friday's pullback and result of election may help the market advance further. Global indices are displaying a weak trend in the ongoing trades and may put some pressure on the domestic indices. However, players are maintaining their bets on almost all the sectors. Among the key local indices, the Nifty has a support at 3640 and a break below this level could see it slip further to 3600-3550, while on the upside the index could test higher level at 3710. The Sensex has a likely support at 12025 and may face resistance at 12325.
Major US indices registered loss on Friday, with the Dow Jones lost by 63 points at 8269, the Nasdaq moved down by 9 points to close at 1680.
Most of the Indian ADRs traded firm on the US bourses. Patni Computers led the pack with gains of 5.48% while Infosys, Wipro, Tata Motors, ICICI Bank and Satyam jumped over 1-4% each. Among the laggards Rediff lost 4.23%, VSNL & MTNL dropped 2% each, while Dr Reddy ends with marginal loss.
Crude oil prices raised, with the Nymex light crude oil for June delivery gaining by a cents to close at $56.35 a barrel. In the commodity space, the Comex gold for June delivery raised by $2.90 to settle at $931.30 an ounce.
Market set to surge on UPA's thumping victory in election
The Indian stock market is set to surge today following the impressive performance of the United Progressive Alliance (UPA) in the just concluded Lok Sabha elections. The market will now keenly watch as to who gets the key economic ministries viz. finance, commerce & industry etc.
Prime Minister Manmohan Singh's coalition defied predictions of a tight election and was only about 11 seats short of an majority from the 543 seats at stake, according to election commission data. Congress' alliance took 261 seats, sweeping aside its nearest rival, the bloc led by the Hindu-nationalist Bharatiya Janata Party (BJP), which won only 159 combined. Congress, which alone won 205 seats, needs a handful of partners to reach the 272 seats needed to take power, and is expected to seek the support of more smaller parties or independents. Congress leaders will meet on Tuesday to officially endorse Manmohan Singh as prime minister, after which the party will meet its coalition partners to decide potential new allies.
Armed with a popular mandate, the Congress led UPA government is going to stake claim today to run India for another five years. The Congress and its allies will go to meet President Pratibha Patil today to show that they have the numbers. The first meeting of the newly-constituted Congress Parliamentary Party (CPP) is expected to convened in a day or two to elect its leader. Singh, who is already the Prime Ministerial candidate of the Congress, is also likely to be elected by the MPs at a joint meeting of the UPA parties. The Congress must form a government by 2 June 2009.
Financial sector reforms are likely to get a push in the coming days, which were relegated to the back seat due to persistent opposition from the Left parties, with the Congress-led UPA set to form the next government. Left-less victory of the UPA over BJP-led National Democratic Alliance (NDA) would not only signify the formation of a stable government, but also revive hopes of a slew of pro-market policy changes.
Foreign funds are in aggressive buying modeian stocks. As per the provisional figures on NSE, foreign institutional investors (FIIs) bought shares worth Rs 983.86 crore and domestic funds bought shares worth Rs 432.47 crore on Friday, 15 May 2009. FII inflow in May 2009 totaled Rs 9270.40 crore (till 14 May 2009) while their inflow in calendar year 2009 totaled Rs 9627 crore.
Asian stocks fell today as Panasonic Corp. and Mizuho Financial Group Inc. reported losses and oil prices slumped. Treasuries and the yen advanced as declines in equities prompted investors to seek safe-haven assets. Key benchmark indices in China, Hong Kong, Japan, South Korea and Singapore fell by between 0.95% to 2.86%. Taiwan's Taiwan Weighted rose 0.09%.
The US markets closed lower on Friday, 15 May 2009 as energy shares tumbled on worries about weak demand. The Dow Jones Industrial average was down 62.68 points, or 0.75%, to 8,268.64 and the Nasdaq Composite Index slipped 9.07 points, or 0.54%, to 1,680.14. The Standard & Poor's 500 Index was down 10.19 points, or 1.14%, to 882.88.
Nifty Circuit Limits today
Nifty Circuit Limits for today are :
10% 3973.75
15% 4124.80
20% 4275.85
Like circuit limits on individual stocks, there are restrictions on the movement of indices (Sensex and Nifty). There are 3 types of circuit limits 10%,15% and 20% limits. These circuit limits are applicable for the movement of the indices either in positive direction or in negative direction.
Trading in both the exchanges will come to halt if the movement exceeds the limits in any one of the exchanges.
If the 10% movement takes place before 1:00 p.m. then market will be halted for an hour and if it takes place at or after 1:00 p.m. but before 2:30 p.m. then market will be halted for half an hour. If the movement takes place after 2:30 p.m. then there won’t be any trading halt.
On resumption of trading after the halted period is elapsed, if the market hits 10% again there won’t be any halt in the trading. But if the market hits 15%, there shall be a halt of 2 hours if the movement happens before 1 p.m. If the 15% limit is breached at or after 1 p.m. but before 2 p.m. then there would be trading halt of 1 hour. If it happens after 2 p.m. then there won’t be further trading on that day.
On the resumption if the market hits 20% limit at any time during the trading hours, the trading will be suspended on that day.
These limits are put in place to stop excessive speculation and control the liquidity.
A point to be noted here is that the absolute values of these 10%, 15% and 20% limits are not based on the previous day’s close as in case of individual stocks circuit limits. These values are calculated and announced by the bourses (NSE and BSE) at the beginning of each quarter. The absolute points are calculated based on closing level of index on the last day of the trading in a quarter and rounded off to the nearest 10 points in case of Nifty. This limit is applicable for the entire quarter.
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Daily News Roundup - May 18 2009
Tatas, M&M, Maruti join hands for hybrid models. (BL)
Bharti Airtel says it is open to acquiring domestic telecom operators as part of its strategy to add another 100mn subscribers in three years.(BL)
MTNL launches 3G mobile services in Mumbai.(BL)
IDBI, ICICI Bank cut deposit rates.(BL)
Alcatel receives a five-year contract of about US$150mn from Unitech Wireless.(TOI)
MTNL looks at demerger of tower operations.(FE)
HCL Technologies plans to cancel hedging contracts worth US$600mn. (BS)
Bank of India, the largest promoter in its life venture company-Star Union Dai-ichi Life, may offload around 3% stake in favour of Union Bank of India.(DNA)
Tata Steel will pre-pay £200mn debt.(FE)
M&M may move production of key models out of Nashik. (BS)
Ashok Leyland Nissan JV to delay by six months due to the current economic slowdown and delay in land acquisition. (BS)
Maruti Suzuki to demonstrate 10 hybrid vehicles in Commonwealth Games. (BS)
Pantaloon Retail sales jump over 20% in April as against sales clocked in the same period last year. (BS)
Voltamp Transformers defers the construction work of its new manufacturing facility at Savli in Vadodara to save cost. (BS)
IOC, BPCL and HPCL raised the aviation turbine fuel price by Rs585 per kilolitre in Delhi to Rs32,199 with effect from midnight tonight. (BS)
BoB likely to start insurance business by March 2010. (BS)
GTL bags Rs3.2bn Maharashtra electricity deal.(BL)
Aegis BPO, the back office arm of the Essar Group, has entered into a definitive agreement to acquire Australian contact centre company UCMS Group for Rs2bn.(BL)
MTNL drops plan to acquire Sri Lankan telecom company Suntel. (BS)
Bharti Airtel crosses 100 mn customers. (BS)
Infosys Technologies receives the eBiz project of the Department of Industrial Policy and Promotion under the Union Commerce and Industry Ministry. (BS)
Tata Teleservices Maharashtra says it will spend over Rs10bn this year, mainly to launch its GSM network in Mumbai and Maharashtra.(DNA)
British government ready to guarantee loans to Tata group-owned Jaguar Land Rover. (ET)
M&M in advanced stages of talks with US-based Caterpillar for a 51:49 joint venture, which will make engines for the US firm’s tractor range. (ET)
Tata Steel to double its outlets to 1,000 in the next 2-3 years for sale of its branded products. (ET)
Ranbaxy Labs has chalked out plans to revamp its US business. (ET)
Piramal Life Sciences to invest Rs2bn in next two years for its ambitious programme to discover and develop new chemical entities and Novel Drug Delivery Systems. (ET)
Spice Group's mobile retailing arm HotSpot to spend Rs2bn on acquisitions and expansion of its operations across the country. (ET)
Captain Gopinath open to the idea of selling his 10% stake in Kingfisher Airlines. (ET)
Unitech plans to generate Rs9bn from the sale of two hotels in Gurgaon and a commercial office complex in Saket, New Delhi, by the end of June. (BS)
Shriram Transport Finance plans to set up a subsidiary for equipment finance for a proposed capital of around Rs1.5bn. (BS)
Tech Mahindra to set up BPO in Kolkata. (ET)
Promoters of Essar Shipping are considering delisting the company. (ET)
Congress wins a resounding victory in the elections to the 15th Lok Sabha, bagging as many as 206 seats, a sharp rise from 145 in the 14th Lok Sabha.(BS)
Government lifts ban on futures trading in wheat. (BL)
Foreign exchange reserves increased by US$4.2bn to US$255.9bn for the week ended May 8.(BL)
CERC to set new criteria of power generation, transmission. (ET)
MNC units abroad to come under drug regulator scanner.(BL)
Committee set up by the DoT to review the spectrum allocation policy suggest no operator should be allowed to own more than 25% of the total available spectrum in a circle.(BL)
Government is expected to issue bonds worth more than Rs 100bn before the end of this month.(DNA)
Gujarat Electricity Regulatory Authority has raised the limit of wind power purchase by distribution licensees. It has been increased to 6% for fiscal 2009-10 and 7% for financial years 2010-11 and 2011-12. (BS)
Pharma companies seek government to increase spending on healthcare from 1% to at least 3%. (ET)
Bulls to chant victory mantra
Victory has a thousand fathers, but defeat is an orphan.
Cong-ratulations to the UPA. Prepare for a major blast off today, notwithstanding the weakness in Asian markets. Nothing less than an upper circuit in the main indices is what we expect. If it doesn’t happen traders and investors will get more time to play around. The stunning triumph of the Congress in the Lok Sabha polls could not have come at a more opportune time. The economic turnaround could actually be accelerated now.
A lot of money that was waiting to be deployed will now make its way into the market. The icing on the cake is that we will have a much stronger, stable and cohesive regime which doesn’t have to bother about the pulls and pressures of coalition politics.
However, don’t lose sight of the global factors. Our own economy remains sluggish. Inflation at consumer level is still quite high, and the fiscal situation is in a mess. There could be a short-term rally in the run up to the budget. However, expectations will have to be realistic. There are bound to be some hiccups along the way including this week.
Key Results Today: Dr. Reddy's, Essar Oil, Essar Shipping, HT Media, Punj Lloyd and Sobha Developers.
FIIs were net buyers in the cash segment on Friday at Rs9.84bn while the local institutions poured in Rs4.32bn. In the F&O segment, the foreign funds were net sellers at Rs2.88bn. On Thursday, FIIs were net sellers at Rs3.46bn in the cash segment. Mutual Funds were net sellers at Rs598mn on the same day.
US stocks fell on Friday, as investors reacted to economic news and word of General Motors' dealership closings. The Dow Jones lost 63 points, or 0.8% to 8268.64 while the S&P 500 index shed 10 points, or 1.1% to 882.88. The Nasdaq Composite index dropped 9 points or 0.5% to 1680.14.
On the week though, all the three key US indices ended in the red. The Dow Jones fell 3.6%, its first weekly drop in three weeks. The S&P 500 lost 5%, also its first weekly loss in three weeks, and the Nasdaq dived 3.4%, representing its first weekly loss in 10 weeks.
Still, the S&P 500 index and the Dow are up 31% and 26%, respectively, from their 12-year lows set March 9.
In currency trading, the dollar gained versus the euro and fell against the yen.
US light crude oil for June delivery fell $2.28 to settle at US$56.34 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery rose $2.90 to settle at $931.30 an ounce.
There was some relatively good news Friday. US industrial production and New York-area manufacturing activity contracted less than economists expected. And a Reuters/ University of Michigan index of consumer sentiment rose to an eight-month high this month. But traders saw in the data little reason to bid up stocks.
Not all the news was positive though. The Treasury Department agreed to extend billions in bailout funds to six big life insurers. The move is good for the insurers but also suggests their problems pose a serious risk to the financial system.
Hartford Financial Services Group said it was eligible for $3.4 billion from the Troubled Asset Relief Program, or TARP, and Lincoln National said it has been initially approved for a $2.5-billion injection. Shares of Hartford fell 1%, and Lincoln declined 0.7%.
GM dropped 5.2% after it began telling 1,100 dealers that their franchise pacts would not be renewed.
Energy stocks slumped as oil slid $2.28 to $56.34 a barrel. Schlumberger lost 3.5%. Devon Energy sank 5.7%.
A growing sense of economic optimism has lifted US shares since the March 9, multi-year lows that many market pros think represent a bear market bottom. But last week brought more bad news than good in the form of weaker-than-expected reports on retail sales, housing and weekly jobless claims.
In addition, Chrysler said it was cutting around 25% of its dealerships and GM announced that it was cutting the first 1,100 of what is expected to be a 40% cut of its dealerships. GM remains on the brink of bankruptcy as it struggles to gain concessions from creditors and its union by the end of the month.
The week ahead brings uncertainty as investors sort through reports on housing, leading economic indicators, jobless claims and a slew of profit reports from retailers.
Across the Atlantic, Barclays led the banking sector higher in Europe on Friday, though losses from drugmakers and food producers kept gains for the broader market in check. The pan-European Dow Jones Stoxx 600 index rose 0.6% to 202.89, with banks the strongest performers. But the index was still down about 3% for the week.
The French CAC-40 index gained 0.4% to 3,169.05. But the German DAX 30 index lost 0.2% to 4,731.50 and London's UK FTSE 100 index declined 0.3% to 4,348.11.
It was the second straight day of losses for the Indian markets. The sharp slide could be attributed to a sell off witnessed in the US and the Asian markets.
Finally, the Sensex slipped by 146 points or 1.2% to close at 11,872 after touching a high of 11,936 and a low of 11,695. The index had opened at 11,744 against the previous close of 12,020.
The NSE Nifty lost 42 points or 1% to shut shop at 3,593. On the other hand, the Small-Cap and Mid-Cap shares posted marginal gains with the corresponding BSE indices gaining by 0.7% and 0.38%, respectively.
Inflation again slipped lower, India’s Inflation for the week ended May 02, 2009 stood at 0.48% as compared to 0.7% for the previous week ended April 25, 2009 and 8.73% during the corresponding week May 03, 2008 of the previous year.
Shares of Maharashtra Seamless gained by 5% to Rs203. According to reports, the company has deferred its plans to set up two separate steel plants by almost two years. The scrip touched an intra-day high of Rs210 and a low of Rs187 and recorded volumes of over 0.1mn shares on BSE.
Shares of Godrej Consumer surged by over 4.5% to Rs147 after reports stated that the company may consider a price hike in September following strong demand. The scrip touched an intra-day high of Rs148 and a low of Rs139 and recorded volumes of over 63,000 shares on BSE.
Shares of Piramal Life Science edged lower by 0.7% to Rs51. The company announced that it received government approval for combination trail of Cancer. The scrip touched an intra-day high of Rs54 and a low of Rs51 and recorded volumes of over 10,000 shares on BSE.
DLF announced that it plans to raise about Rs100bn in over 2-3 years selling its non-core businesses and some land parcels.
The company also said that it plans to list DLF Assets Pvt over 18-24 months and halve its debt by end of fiscal year in March. The stock was ended at Rs249 gaining over 7% after hitting an intra-day high of Rs252 and a low of Rs222 and recorded volumes of over 9.2nm shares on BSE.
Shares of the shipping companies ended with smart gains as the Baltic dry freight index surged 3.7% hitting 2009 high of 2,332 points.
Stocks like SCI surged by over 2.6% to Rs95, GE Shipping rose over 6% to Rs245, ABG Shipyard rallied over 7% to Rs154, MLL advanced by 7% to Rs43 and Bharti shipyard surged over 10% to Rs114.
Shares of Britannia advanced by 2% to Rs1600 after reports stated that the company has taken full control of the Bangalore based bakery foods retailer Daily Bread. The scrip touched an intra-day high of Rs1622 and a low of Rs1564 and recorded volumes of over 2,000 shares on BSE.
All eyes would be on the election results s drama is what we expect on the political front. With the grueling month-long election over, political parties have kicked off post-poll efforts to lure potential partners in crime. This will give rise to speculation, uncertainty and of course increased volatility in the markets.
Oscillating US stocks end in the red
Indices witnesses their first weekly loss in a long time
US stocks ended lower for the week that ended on Friday, 15 May, 2009. While earning season is approaching to an end, economic reports dominated the week. But after almost eight consecutive weeks of gains, it was Dow's first weekly loss in two month's time. All the ten sectors ended in the red led by the financial sectors. The other sectors that led the declines were industrials, consumer discretionary and energy sectors.
The Dow Jones Industrial Average lost 306.01 points (3.6%) for the week to end at 8,268.64. Tech - heavy Nasdaq lost 58.86 (3.4%) to end at 1,680.14. S&P 500 lost 46.35 (5%) to end at 882.88.
The indices registered losses during the three alternate days of the week – Monday, 11 May, Wednesday, 13 May and Friday, 15 May.
Among earning news for the week, retailers dominated the headlines. Kohl's posted better-than-expected first quarter earnings and in-line guidance for the second quarter. Kohl's also raised its outlook for fiscal 2010, but the company's forecast still falls short of the consensus forecast. Also, retail giant Wal-Mart reported in-line quarterly earnings and in-line outlook.
The Commerce Department reported on Tuesday, 12 May, 2009, that the U.S. trade gap with the rest of the world increased in March for the first time in eight months, as exports declined faster than imports. The trade deficit, the difference between exports and imports, increased by 5.5% to $27.6 billion in March from a nine-year low of $26.1 billion in February as the global recession tightened in major U.S. trading partners in North America, Europe and Asia.
On Wednesday, 13 May, the Commerce Department reported in USA that U.S. retail sales dropped a seasonally adjusted 0.4% in April, the eighth decline in the past 10 months. Markets on average had expected a slight increase. The Commerce Department's retail sales data measure revenues at stores selling durable and nondurable goods. Consumer spending accounts for about 70% of the U.S. economy and is a key element in economic growth.
A separate report showed that business inventories for March decreased 1%, which is on par with the 1.1% decline that was widely forecast, and not as bad as the 1.4% decrease seen in February.
Stocks managed to rebound back on Thursday, 14 May, 2009.
Finally, on Friday, 15 May, 2009, stocks oscillated between red and green for the entire day but ultimately ended the day with modest losses. The Dow Jones Industrial Average ended lower by 62.68 points at 8,268.64. The Nasdaq Composite Index, ended lower by 9 points at 1,680. S&P 500 ended lower by 10 points at 882. Dow was up by 47 points at one time. As a result, stocks logged a weekly loss of 5%, which is its worst in two months.
Market started on a strong note on news on Friday that the Treasury will offer $22 billion in TARP funds for certain life insurers. However, there has been some recent concern that the TARP funds may not help the ratings of certain companies.
Weakness in the financial and energy sectors acted as a hindrance for market's hindrance. The technology sector got some support from big names like RIMM, Microsoft and Google.
Among economic reports for the day, the Labor Department reported on Friday, 15 May, 2009, that falling energy prices offset another big jump in cigarette prices in April, leaving the U.S. consumer price index flat for the month. With energy prices down 20% since April 2008, the CPI has fallen 0.7% in the past 12 months, the largest decline since 1955.
However, core inflation - which excludes volatile food and energy prices - has not declined and in fact has accelerated in the past four months, rising 0.3% in April, the biggest increase since July. The core CPI was boosted in April by a 9.3% increase in tobacco prices as a new federal excise tax to pay for children's health care kicked in.
Crude oil prices ended lower on Friday, 15 May, 2009. With Friday's losses, crude suffered its first weekly loss in a month's time. Prices ended lower as traders remained a bit pessimist about hopes of quick global recovery from the current recession. International Energy Agency reducing its crude demand forecast in the latest monthly report and the movement of dollar also affected the crude prices.
On Friday, crude-oil futures for light sweet crude for June delivery closed at $56.34/barrel (lower by $2.28 or 3.9%) on the New York Mercantile Exchange. For the week, crude ended lower by 3.9%.
Executive Summary
For the week, indices registered good losses at Wall Street. The financial sector led the pack of decliners after surging last week following the stress test results by banks. This week's loss marked the first weekly loss for Dow after almost eight consecutive weeks of gains. Economic reports and earning reports from retailers dominated the headlines.
In percentage terms, Dow lost 3.6%, Nasdaq lost 3.4% and S&P 500 lost 5% during the week.
For the year 2009, Dow, Nasdaq and S&P 500 are down by 5.6%, 3% and 5.9% respectively.
The following week will look forward to earning reports from H-P and Home Depot. Other than that, there will be a couple of economic reports.
Crude slips again
Crude suffers its first weekly loss in a month
Crude oil prices ended lower on Friday, 15 May, 2009. With Friday's losses, crude suffered its first weekly loss in a month's time. Prices ended lower as traders remained a bit pessimist about hopes of quick global recovery from the current recession. International Energy Agency reducing its crude demand forecast in the latest monthly report and the movement of dollar also affected the crude prices.
On Friday, crude-oil futures for light sweet crude for June delivery closed at $56.34/barrel (lower by $2.28 or 3.9%) on the New York Mercantile Exchange. For the week, crude ended lower by 3.9%.
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%. On a yearly basis, crude prices are lower by 42%.
Earlier during the week, the International Energy Agency reported on Thursday that it now expects demand to fall 2.6 million barrels a day from 2008 levels. This is 200,000 barrels more than the IEA had projected a month ago.
In the currency market on Friday, the greenback tumbled against the yen but gained against the euro. The dollar index, which weighs the strength of dollar against the basket of six other currencies ended higher by 0.6%.
Among economic reports for the day, the Labor Department reported on Friday, 15 May, 2009, that falling energy prices offset another big jump in cigarette prices in April, leaving the U.S. consumer price index flat for the month. With energy prices down 20% since April 2008, the CPI has fallen 0.7% in the past 12 months, the largest decline since 1955.
The EIA had reported on Wednesday, 13 May, that U.S. crude inventories excluding those in the Strategic Petroleum Reserve decreased by 4.7 million barrels in the week ended 8 May, 2009. Market was expecting a gain of more than 1 million barrels. The drop in the inventories level was helped by weak imports. Oil imports averaged 8.7 million barrels per day last week, down 1.2 million barrels per day from the previous week.
EIA also reported that demand still remained weak. Total petroleum demand over the past four weeks averaged 18.2 million barrels a day, down by 7.9% from a year ago. In individual petroleum products, gasoline demand fell 1.2% from a year ago, distillate fuel, which include diesel and heating oil, dropped 14.1%, while jet fuel consumption declined 10.3%.
Also at the Nymex on Friday, June-reformulated gasoline skidded 4.31 cents, or 2.5%, to $1.6806 a gallon, and June heating oil lost 7.59 cents, or 5.1% to $1.4188 a gallon
Natural gas for June delivery also dropped, giving up 19.4 cents, or 4.5%, to $4.098 per million British thermal units.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
At the MCX, crude oil for June delivery closed at Rs 2,828/barrel, lower by Rs 25 (0.87%) against previous day's close. Natural gas for May delivery closed at Rs 203.5/mmbtu, lower by Rs 1.7/mmbtu (0.82%).
Indiainfoline
We recommend a buy in India Infoline from a short-term trading perspective. It is apparent from the charts of India Infoline that in early March of this year it took support at Rs 40, a significant long-term support level. Subsequently, the stock changed trend and began to rally, breaching the 21- and 50-day moving averages. Since March low, the stock has been on a medium-term uptrend. It conclusively penetrated the long-term moving average (200-day) in early May and is trading well above this average. We notice that this medium-term uptrend is backed by good volume. The daily relative strength index (RSI) is featuring in the bullish zone and the weekly RSI has entered this zone. Taking into consideration that the medium-term uptrend line is intact, we are bullish on the stock from a short-term perspective. We anticipate the stock to move up until it hits our price target of Rs 105 during the approaching trading session. Traders with short-term trading perspective can buy the stock while maintaining a stop-loss at Rs 89.
FII deluge ?
Foreign institutional investors are expected to raise a toast to the Indian equity market in the coming week as they see the political stability and continuity in policies to give a fillip to the domestic economy.
“One can expect a deluge of FII inflow next week. Investors in the Far East and the UK have been keenly following the Indian elections. With this win, money will come in from all across the globe,” said Mr Saurabh Mukherjea, Head of Indian Equities, Noble Group.
Global Investment bank Goldman Sachs said the election results may help India “decouple” further from the global economy by giving a fillip to domestic demand. “There are now upside risks to our GDP growth forecast of 5.8 per cent for FY10.”
Market players agree that India will be back on the FII radar in a big way as an attractive investment destination as the new Government is expected to press ahead with the much delayed economic and financial reforms agenda.
“Long-only FIIs, who have been waiting on the sidelines for the event risk to pass, would also come in. Global emerging market funds are 2.5 per cent in cash and Asia dedicated funds are 3.5 per cent in cash which needs to be deployed,” said Mr Amitabh Chakarborty, President-Equity, Religare Capital Markets.
“Liquidity in global markets is reasonably strong, local mutual funds have been in cash for some time and internationally, the risk appetite has increased significantly. The volatility index, commonly seen as the ‘fear index’ doesn’t look quite as fearful as it used to. Further, India continues to enjoy a competitive advantage among emerging economies,” said ICICI Securities Managing Director and CEO Madhabi Puri Buch.
As the newly elected Government has won the mandate for “good Governance”, one can expect five years of stability in the economy and the capital markets, said Mr Motilal Oswal, Chairman and Managing Director of Motilal Oswal Securities.
“With this win, India has become an even more attractive investment destination. So one can expect a lot of FII money to come in.”
Since the beginning of the new financial year, FIIs have been net buyers of equities. “FIIs will view the election outcome positively. They will draw comfort from the fact that there will be no roll back or changes in the present policies and framework. So we could see a lot more inflows from them.” said Mr C.J. George, Managing Director at Geojit BNP Paribas Financial Services.
“FDI/FII investment prospects for India are very bright considering the inherent advantages that the country has and its huge potential to absorb capital for its development and growth. As far as investing through P-Notes route is concerned, further liberalisation cannot be ruled out,” said Mr Dinesh Thakkar, Chairman and Managing Director at Angel Broking.
via BL
UPA win revives dabba trading
A clear majority to the Congress led United Progressive Alliance (UPA) in the national elections, revived dabba trading or the illegal share market that offers carry-forward and leverage facilities to small operators.
Sources said, over 50,00,000 futures contract worth over Rs 200 crore of the widely tracked National Stock Exchange (NSE) Nifty index were traded in the grey market in Mumbai, Gujarat and Rajasthan on Saturday alone. The bets were likely to cross Rs 500 crore on Sunday, said sources.
Nifty was quoting at a premium of 300 points or 8.17 percent to its Friday's close of 3.671.65 on NSE. Going by this estimation, the 30-share Sensex on the Bombay Stock Exchange (BSE) could rise above 900 points when it opened on Monday. However, there were also Nifty sellers at 4,000 levels.
The bets were accepted within a couple of hours after television channels showed that UPA had managed to acquire over 250 seats at around 3 pm. Punters, who were not willing to wait for the markets to open on Monday, were betting in grey market. They were sure that markets would rise as UPA would not require support from Left parties. In the house of 543 seats a party requires a majority of 272 sets, which the UPA was close to.
Among individual stocks, punters were buying futures contract of Reliance Industries Ltd. (RIL) and TISCO. Volumes in these scrips could form around 10 to 15 percent of entire trades in Nifty.
Dabba trades are not executed on the stock exchange, but in the books of dabba operators, who are a cartel of stockbrokers. Punters take positions in this market as the settlement is done in cash and margin requirement is not more than 10 per cent.
Grey market was in a state of hibernation as benchmark indices had crashed by nearly 60 percent since last year. Also, not many many investors were willing to trade in the grey market after the debacle of Reliance Power public issue. The Reliance Power shares were listed at a much below price than expected by grey markets.
Talking about its outlook for benchmark equity indices on Monday stock brokers too were of the view that markets could register significant gains as without the Left parties, Congress is likely to aggressively push for economic reforms.
According to sources, the settlement of Saturday's grey market trades would be done through havala, after Monday's closing of benchmarks on stock exchanges.
via Gunaah
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