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Tuesday, May 19, 2009
Sensex ends flat
The Sensex ended on a flat note with positive bias. Realty, banking, capital goods, auto and power led the advances, while IT stocks hit the most. Even secondline stocks supported the sentiment. After a stupendous rally yesterday and hitting two upper circuit in single day, markets surged at open with a gain of 473.61 points, at 14,757.82 on Tuesday. Within few seconds it slipped into the negative touching a low of 13,834.13 as profit booking sets in. Later, the index bounced back into the positive amid volatility.
Further, the Sensex gained further strength in the noon trades, touching a high of 14,930.54 as investors witnessed buying spree in index heavyweights. However, it lost all its strength and again fell into the negative at late trade to close flat.
The BSE Midcap and Smallcap index surged 3.60% and 2.52% respectively.
Among the sectoral indices, BSE Realty zoomed 12.80%, Bankex and Capital goods soared over 6% each, Auto, Power and Metal jumped over 3% each, while IT plummeted 10.10% and FMCG dropped 4.12%.
The Sensex ended the day with a gain of 17.82 points, or 0.12% at 14,302.03 after touching a high of 14,930.54 and a low of 13,834.13. The broad-based NSE Nifty declined 4.70 points, or 0.11% at 4,318.45 after hitting a high of 4,509.40 and a low of 4,167.65.
Major gainers in the 30-share index were Reliance Capital (22.93%), DLF (19.36%), State Bank Of India(11.19%), Reliance Communications (10.54%), Grasim Industries (9.50%), and Mahindra & Mahindra (9.03%).
On the other hand, Infosys Technologies (11.65%), Wipro (9.13%), Tata Consultancy Services (8.15%), Ranbaxy Laboratories (6.40%), ITC (5.63%), and Reliance Industries (5.25%) were the major losers in the Sensex.
Overall market breadth was extremely positive. Out of the total 2,714 stocks traded at BSE, 1,927 advanced, 739 declined while 48 remained unchanged.
Turnover hits record high
May 2009 futures of Reliance Industries at premium
After a solid surge in share price during the previous session, today's (19 May 2009), trading session saw a record Rs 157877.29 crore on the bourses. NSE's futures & options segment clocked a turnover of 105985.51 crore. Turnover on the cash segment of NSE totaled Rs 40,130.66 crore and BSE's cash segment clocked turnover of Rs 11761.12 crore. The previous highest turnover was recorded on 18 October 2007.
Turnover was a paltry Rs 2599.35 crore on NSE's F&O segment yesterday, 18 May 2009, as trading was restricted to just a few seconds after a solid surge in the key benchmark indices viz. the Sensex and the Nifty triggered market-wide circuit breakers and shut down the market.
Nifty May 2009 futures were at 4340.95, at a premium of 22.5 points over the spot closing of 4318.45.
Reliance Industries (RIL) May 2009 futures were at a premium at Rs 2242.15 compared to the spot closing of Rs 2230.90.
DLF May 2009 futures were at a discount at Rs 376.60 compared to the spot closing of Rs 380.55.
ICICI Bank May 2009 futures were at discount at Rs 753.70 compared to the spot closing of Rs 756.15.
State Bank of India (SBI) May 2009 futures were at a discount at Rs 1744.70 compared to the spot closing of Rs 1753.95.
In the cash market, the S&P CNX Nifty fell 4.70 points or 0.11% at 4318.45.
BSE Bulk Deals to Watch - May 19 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
19/5/2009 530499 A K CAPITAL FIRSTRAND (IRELAND) PUBLIC LIMITED COMPANY S 75000 164.85
19/5/2009 523204 ABAN OFFSHO OPG SECURITIES P LTD B 307119 890.07
19/5/2009 523204 ABAN OFFSHO OPG SECURITIES P LTD S 307119 891.49
19/5/2009 531591 BAMPSL SECUR PRAKASHCHANDGUPTA B 498310 0.52
19/5/2009 531591 BAMPSL SECUR PRAKASHCHANDGUPTA S 517995 0.50
19/5/2009 531591 BAMPSL SECUR SUNILKUMARGUPTA S 500000 0.51
19/5/2009 526987 COMMIT CAP S MIDNIGHT AGENCIES PVT. LTD B 30000 6.15
19/5/2009 526987 COMMIT CAP S KATHLEEN VYAPAAR PVT LTD B 50000 6.15
19/5/2009 526987 COMMIT CAP S B G S CREDIT PVT. LTD B 50000 6.15
19/5/2009 526987 COMMIT CAP S ARTLINE VINIMAY PVT LTD B 50000 6.15
19/5/2009 526987 COMMIT CAP S SRECKO INDHAN LIMITED S 200000 6.16
19/5/2009 526550 COUNTRY CLUB GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD S 500000 17.30
19/5/2009 523890 DS KULKARNI CHARLE MANGNE CIS FUND LTD S 182000 35.75
19/5/2009 530407 EPIC ENERGY PRASHANTPATEL B 125654 27.26
19/5/2009 530407 EPIC ENERGY RAJESHMAMANIA S 120995 27.26
19/5/2009 530407 EPIC ENERGY PRASHANTPATEL S 85623 26.84
19/5/2009 523277 G V FILMS LT Naman Securities & Finance Pvt. Ltd. B 2282599 1.25
19/5/2009 523277 G V FILMS LT Naman Securities & Finance Pvt. Ltd. S 2275585 1.24
19/5/2009 523277 G V FILMS LT BNP PARIBAS ARBITRAGE S 3119823 1.25
19/5/2009 533048 GI ENGINERG VENKATESWARARAOYARLAGADDA S 70000 4.71
19/5/2009 532800 IBN18 TALMA CHEMICAL INDUSTIRS PVT.LTD. B 1700000 100.25
19/5/2009 532800 IBN18 INDEA LONG TERM OPPERTUNITIES MASTER FUND B 1000000 100.25
19/5/2009 532800 IBN18 IL & FS PRIVATE EQUITY TRUST A/C. LEVERAGE INDIA FUND S 4000000 100.25
19/5/2009 590003 KARUR VYSYA-PMS INDIA ABSOLUTE RETURN FUND B 693000 265.00
19/5/2009 590003 KARUR VYSYA-PMS INDIA LONG TERM OPPORTUNITIES MASTER FUND B 500000 265.00
19/5/2009 590003 KARUR VYSYA-PMS STANDARD CHARTERED PRIVATE EQUITY (MAURITIUS) LIMITED S 1193000 265.00
19/5/2009 530255 KAY POW PAP BAMPSL SECURITIES LTD. S 97079 7.92
19/5/2009 532629 MCNALLY BHA ROYAL BANK OF SCOTLAND PLC AS TRUSTEE OF B 277601 80.15
19/5/2009 532629 MCNALLY BHA GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD S 256038 80.15
19/5/2009 531176 MEFCOM CAP M VIJAYMEHTA B 61283 5.71
19/5/2009 531176 MEFCOM CAP M PURUSHOTAMKUMARRAJGARHIA S 62235 5.71
19/5/2009 590011 MOVING PICTU-PMS DHEERAJ KUMAR . . . . ... B 50000 4.91
19/5/2009 570002 PANTALBNDVR BIRLA SUN LIFE INSURANCE B 364553 157.90
19/5/2009 570002 PANTALBNDVR PASSPORT INDIA INVESTMENTS (MAURITIUS) LTD S 427743 157.90
19/5/2009 500357 RAMA PAPER MANOJ DUA HUF B 50000 7.05
19/5/2009 500357 RAMA PAPER GEOMETRIC SEC & ADV.P.LTD. S 50600 7.06
19/5/2009 531898 SANGUINE MD DHIRAJLAL V SANGHVI HUF S 118037 2.21
19/5/2009 508976 SPANCO JMP SECURITIES PVT LTD B 121439 50.76
19/5/2009 508976 SPANCO JMP SECURITIES PVT LTD S 116489 50.77
19/5/2009 512048 SPLASH MEDIA RISHABHGOYAL B 10000 43.50
19/5/2009 512048 SPLASH MEDIA AJAYGOYAL B 10000 43.50
19/5/2009 512048 SPLASH MEDIA BHANUMATIDHARAMRAJGIRI S 20557 43.50
19/5/2009 521022 SURYAJYOTI S MAVI INVESTMENT FUND LTD. B 424300 11.75
19/5/2009 521022 SURYAJYOTI S CROWN SECURITIES PVT LTD S 289000 11.75
19/5/2009 521022 SURYAJYOTI S BLUEGOLD SECURITIES PRIVATE LIMITED S 76800 11.75
19/5/2009 530595 TELECANOR HEMANT KUMAR GUPTA B 28704 16.54
19/5/2009 519228 TEMPT.FOODS VENTURE BUSINESS ADVISORS PVT LTD S 158950 34.56
19/5/2009 531249 WELL PACK PA INTERNATIONAL TRANSMISSION PRODUCTS PVT LTD B 24000 141.50
NSE Bulk Deals to Watch - May 19 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
19-MAY-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,BUY,415577,914.31,-
19-MAY-2009,ABAN,Aban Offshore Ltd.,PRB SECURITIES PRIVATE LTD.,BUY,306438,893.95,-
19-MAY-2009,ALOKTEXT,Alok Industries Limited,SURESHKUMAR BHIKAMCHAND JAIN HUF,BUY,2700000,14.90,-
19-MAY-2009,BAJAJHIND,Bajaj Hindusthan Ltd,TOP MANAGERS PACIFIC ALPHA FUND 2,BUY,730159,130.57,-
19-MAY-2009,BLUEDART,Blue Dart Express Ltd,BRIGHT STAR INVESTMENTS PRIVATE LIMITED,BUY,500000,450.00,-
19-MAY-2009,EMCO,Emco Limited,SARALA SHANTILAL MUTTHA,BUY,413015,71.28,-
19-MAY-2009,GDL,Gateway Distriparks Limit,INDEA CAPITAL PTE LTD A/C INDEA ABSOLUTE RETURN FUND,BUY,880000,75.15,-
19-MAY-2009,GDL,Gateway Distriparks Limit,PEGASUS STOCKS AND SHARES PVT LTD,BUY,1000000,77.00,-
19-MAY-2009,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,BUY,2024144,275.88,-
19-MAY-2009,HDIL,Housing Development and I,SMC GLOBAL SECURITIES LTD.,BUY,1452816,268.52,-
19-MAY-2009,IFCI,IFCI Ltd.,ADROIT SHARE & STOCK BROKER PVT. LTD.,BUY,3886580,36.56,-
19-MAY-2009,IFCI,IFCI Ltd.,AMBIT SECURITIES BROKING PVT. LTD.,BUY,4201214,37.11,-
19-MAY-2009,IFCI,IFCI Ltd.,CITIGROUP GLOBAL MARKETS MAURITIUS PRIVATE LIMITED.,BUY,4000000,37.37,-
19-MAY-2009,IFCI,IFCI Ltd.,EXCEL FINCOM,BUY,3898854,36.94,-
19-MAY-2009,INDIACEM,The India Cements Limited,RELIANCE MUTUAL FUND,BUY,5000000,129.50,-
19-MAY-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,8640047,16.94,-
19-MAY-2009,ITI,ITI Ltd.,RAJESH AJITKUMAR MINDA,BUY,153835,34.08,-
19-MAY-2009,KSERAPRO,K Sera Sera Productions L,BASMATI SECURITIES PVT LTD,BUY,360773,10.54,-
19-MAY-2009,MADHUCON,Madhucon Projects Limited,HERITAGE CAPITAL INDIA MASTER FUND LTD,BUY,250000,98.66,-
19-MAY-2009,MBECL,Mcnally Bharat Engineerin,ROYAL BANK OF SCOTLAND PLC AS TRUSTEE OF CITI BANK N.A.,BUY,200000,80.05,-
19-MAY-2009,PUNJLLOYD,Punj Lloyd Limited,TOTAL SECURITIES LTD.,BUY,1794053,160.37,-
19-MAY-2009,RENUKA,Shree Renuka Sugars Limit,STICHING PENSIOENFONDS ABP,BUY,2823008,134.42,-
19-MAY-2009,SALORAINTL,Salora International Ltd.,M/S MANORI PROPERTIES P. LTD.,BUY,130000,32.48,-
19-MAY-2009,SRTRANSFIN,Shriram Trans Fin Co. Ltd,ICICI PRUDENTIAL LIFE INSURANCE CO LTD,BUY,10000000,300.00,-
19-MAY-2009,VINCARDS,Vintage Cards & Creations,ABDUL AMEEN BURUKKAN AKBAR,BUY,3500,22.40,-
19-MAY-2009,VOLTAS,Voltas Ltd.,BATTERYMARCH FINANCIAL MANAGEMENT INC. A/C LEGG MASON EMERG,BUY,3000000,85.58,-
19-MAY-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,1833773,16.15,-
19-MAY-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,SELL,415577,915.89,-
19-MAY-2009,ABAN,Aban Offshore Ltd.,PRB SECURITIES PRIVATE LTD.,SELL,306520,895.58,-
19-MAY-2009,ALOKTEXT,Alok Industries Limited,PRAVIN SUWALAL BAFNA,SELL,2700000,14.90,-
19-MAY-2009,BLUEDART,Blue Dart Express Ltd,DERIVE TRADING PVT LTD,SELL,500000,450.00,-
19-MAY-2009,DSKULKARNI,DS Kulkarni Dev. Ltd.,CHARLE MANGNE CIS FUND LTD,SELL,177558,35.44,-
19-MAY-2009,EMCO,Emco Limited,SAMEER SHANTILAL MUTTHA,SELL,300000,71.94,-
19-MAY-2009,GDL,Gateway Distriparks Limit,PEGASUS STOCKS AND SHARES PVT LTD,SELL,1000000,74.02,-
19-MAY-2009,GDL,Gateway Distriparks Limit,SEALAND TERMINALS PRIVATE LIMITED,SELL,1000000,77.02,-
19-MAY-2009,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,SELL,2022957,276.03,-
19-MAY-2009,HDIL,Housing Development and I,SMC GLOBAL SECURITIES LTD.,SELL,1350648,270.07,-
19-MAY-2009,IFCI,IFCI Ltd.,ADROIT SHARE & STOCK BROKER PVT. LTD.,SELL,3902340,36.65,-
19-MAY-2009,IFCI,IFCI Ltd.,AMBIT SECURITIES BROKING PVT. LTD.,SELL,4390334,37.01,-
19-MAY-2009,IFCI,IFCI Ltd.,EXCEL FINCOM,SELL,3898854,37.06,-
19-MAY-2009,INDIACEM,The India Cements Limited,MORGAN STANLEY INVESTMENT MANAGEMENT INC A/C MORGAN STANLEY,SELL,8028128,128.62,-
19-MAY-2009,INDOTECH,Indo Tech Transformers Li,TATA TD WATERHOUSE TRUSTEE CO PVT. LTD A/C TMF,SELL,57059,262.67,-
19-MAY-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,8689844,16.95,-
19-MAY-2009,ITI,ITI Ltd.,MARUDHAR VYAPAAR PRIVATE LIMITED,SELL,302290,33.89,-
19-MAY-2009,ITI,ITI Ltd.,RAJESH AJITKUMAR MINDA,SELL,153835,34.06,-
19-MAY-2009,JSWSTEEL,JSW Steel Limited,CREDIT SUISSE (SINGAPORE) LIMITED A/C CREDIT SUISSE (SINGAP,SELL,973097,494.42,-
19-MAY-2009,KSERAPRO,K Sera Sera Productions L,BASMATI SECURITIES PVT LTD,SELL,446889,10.57,-
19-MAY-2009,MADHUCON,Madhucon Projects Limited,MORGAN STANLEY MUTUAL FUND A/C MORGAN STANLEY GROWTH FUND,SELL,608386,99.77,-
19-MAY-2009,MBECL,Mcnally Bharat Engineerin,GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD,SELL,243962,80.05,-
19-MAY-2009,NAGARCONST,Nagarjuna Constr Co. Ltd,CITIGROUP GLOBAL MKTS MAURITIUS PVT LTD- SELL CODE,SELL,1600165,118.57,-
19-MAY-2009,NIITLTD,NIIT Limited,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,1058822,30.85,-
19-MAY-2009,ORBITCORP,Orbit Corporation Limited,GUJARAT FLUOROCHEMICALS LTD,SELL,232500,112.45,-
19-MAY-2009,PUNJLLOYD,Punj Lloyd Limited,TOTAL SECURITIES LTD.,SELL,1794653,160.59,-
19-MAY-2009,SALORAINTL,Salora International Ltd.,MAYANK CHAURASIA,SELL,104249,32.50,-
19-MAY-2009,SRTRANSFIN,Shriram Trans Fin Co. Ltd,UNO INVESTMENTS,SELL,10000000,300.00,-
19-MAY-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,1833773,16.20,-
Post Session Commentary - May 19 2009
Domestic market concluded its sea saw movement on flat note after a high volatile session. The benchmark indices were on upbeat mood during mid session on hopes that new stable government will lead to constructive reforms. In addition, firm global markets also supported the sentiments. However, market pared gains after rise in afternoon trading on profit booking following historic rise in previous session.
The market opened significantly higher tracking positive cues from the global markets. However, Indian benchmark indices immediately slipped into red on profit taking emerged due to profit taking after sharp rally in previous session. Market was highly instable and continued to move up and down barring some trails of upturn during afternoon trading. Finally, market was incapable to gather the momentum and closed flat. Monday, the US stock markets closed at session highs led by gains among the bank and financial services stocks that led the broader market to its best single-session percentage advance in nearly two weeks. From the sectoral front, most of the selling was witnessed in IT, Teck, Pharma, FMCG and Oil & Gas stocks. However, Realty, Bank, Capital Goods, Auto, Power and Metal stocks were in limelight as observed most of the buying from these baskets. Mid Cap and Small Cap stocks were also able to gain market favour during the trading session.
Among the Sensex pack 18 stocks ended in green territory and 12 in red. The market breadth indicating the overall health of the market remained positive as 1927 stocks closed in green while 739 stocks closed in red and 48 stocks remained unchanged in BSE.
The BSE Sensex ended marginally up by 17.82 points at 14,302.03 whereas NSE Nifty closed slightly lower by 4.70 points at 4,318.45. BSE Mid Caps and Small Caps ended with gains of 153.34 and 117.40 points at 4,407.82 and 4,784.14 respectively. The BSE Sensex touched intraday high of 14,302.03 and intraday low of 13,834.13.
Gainers from the BSE Sensex pack are DLF Ltd (19.36%), SBI (11.19%), RCom (10.54%), Grasim Industries (9.50%), M&M Ltd (9.03%), L&T Ltd (8.82%), Maruti Suzuki (7.76%), ICICI Bank (7.35%), ACC Ltd (6.61%), Reliance Infra (5.81%), ONGC Ltd (5.34%) and BHEL (4.24%).
Losers from the BSE Sensex pack are Infosys Tech (11.65%), Wipro Ltd (9.13%), TCS Ltd (8.15%), Ranbaxy Lab (6.40%), ITC Ltd (5.63%), Reliance (5.25%), Hindalco (4.14%), HUL (3.94%), JP Associates (3.49%) and NTPC Ltd (2.81%).
On the global markets front the Asian markets which opened before the Indian market, ended in higher on favorable cues from the US housing market that contributed to the overnight rally in the Wall Street. According to a reading, in US home builder sentiment increased for the second successive month and at the highest level since September 2008. In addition, banking stocks rallied in Hong Kong after China allowed yuan-denominated bonds to be issued there for the first time. Shanghai Composite, Hang Seng, Nikkei 225, Straits Times index and Seoul Composite ended higher by 23.90, 521.12, 251.60, 83.38 and 41.53 points at 2,676.68, 17,544.03, 9,290.29, 2,260.36 and 1,428.21 respectively.
European markets which opened after the Indian market are trading in green mainly due to rise in banking stocks. In Frankfurt the DAX index is trading up by 105.18 points at 4,957.14 and in London FTSE 100 is trading higher by 46.84 points at 4,493.29.
The BSE Realty index outperformed the benchmark indices as ended higher by (12.80%) or 380.01 points to close at 3,348.76 on hopes that lower rates will spur housing demand. Gainers are Housing Development (24.34%), DLF Ltd (19.36%), Sobha Dev (18.42%), Ansal Infra (17.50%) and Orbit Co (14.05%).
The BSE Bank index gained (6.84%) or 519.72 points at 8,118.36 on expectations that falling interest rates will boost lending growth. Scrips that gained are Yes Bank (16.04%), IDBI Bank (13.17%), Oriental Bank (12.81%), Indus Ind Bank (12.72%) and Kotak Bank (11.74%).
The BSE Capital Goods stocks increased by (6.33%) or 669.39 points to close at 11,245.89. Major gainers are Bharat Bijli (19.41%), Gammon Ind (17.13%), Jyoti Struct (11.44%), Elecon Eng C (10.99%), BEML Ltd (10.34%) and Crompton Greaves (10.34%).
The BSE IT index ended lower by (10.10%) or 320.35 points at 2,854.47. Patni Computers (17.52%), Mphasis Ltd (13.25%), Infosys Tech (11.65%), Wipro Ltd (9.13%) and TCS Ltd (8.15%) ended in negative territory.
The BSE Teck index dropped by (5.12%) or 135.27 points to close at 2,506.11. Main losers are Patni Computers (17.52%), Mphasis Ltd (13.25%), Infosys Tech (11.65%), Wipro Ltd (9.13%), TCS Ltd (8.15%) and Tech Mahindra (7.99%).
The BSE Pharma index ended down by (4.34%) or 148.37 points at 3,267.48. Losers are IPCA Lab (11.76%), Glaxosmith (10.50%), Ranbaxy Lab (6.40%), Wockhardt Ltd (6.15%) and Matrix Lab (6.12%).
Larsen & Toubro (L&T) ended up by 8.82%. The company and US-based GE Hitachi Nuclear Energy (GEH) signed a Memorandum of Understanding for co-operation on BWR and ABWR nuclear power plants. The recent agreement between India and USA regarding co-operation in the field of civilian nuclear power opened up new opportunities for both countries.
Amtek Auto Limited gained 10.55%. The company and Sumitomo Metal Industries of Japan have signed a Joint Venture agreement for Production and sale of forged crankshafts for automotive applications in India. This Joint Venture is to be formed with investment of 50% by Amtek, 40% by Sumitomo Metals, and 10% by Sumitomo Corporation. Sumitomo Corporation is the global partner of crankshaft business of Sumitomo Metals.
The State Bank of India (SBI) advanced by 11.19%. The largest public sector lender targets a total business of Rs 10,500 crore during the current fiscal. The deposits are targeted to be Rs 7,800 crore and the advances Rs 2,700 crore.
Tata Motors Ltd increased by 0.88%. The company said it is planning to give performance linked wage hikes to its staff for the fiscal 2009-10, but the increment would not be to the extent given last year.
Wipro Technologies lost 9.13%. The company is looking at recruiting around 1,200 employees for its BPO centre in Hyderabad over the next six months. At present, there are over 3,000 employees in the Hyderabad office.
Sell-off in IT stocks, RIL pull Sensex off 8-month high
The BSE Sensex crawled up marginally today extending gains for the second straight day on hopes a new stable government will be able to push reforms. However, the 50 unit S&P CNX Nifty fell marginally. The combined turnover in the cash and futures & options segment of BSE and NSE totaled Rs 1.57 lakh crore which is a new record.
Volatility was immense. A sell-off in IT stocks and index heavyweight Reliance Industries (RIL) pulled the market sharply off the higher level. Realty and capital goods stocks rose. Banking stocks were volatile. The Sensex rose 17.82 points or 0.12%, off close to 630 points from the day's high and up close to 470 points from the day's low
The market was highly volatile. The Sensex slipped into the red on profit taking after a sharp surge at the onset of the trading session that pushed the barometer index Sensex to its highest level in more than eight months. The market soon recovered to trade in green in morning trade. It extended gains later.
Volatility was immense in afternoon trade. The market pared gains after a sharp surge in early afternoon trade. It further pared gains in mid-afternoon trade. A sell-off in IT stocks and RIL pulled the Sensex to the break even level at about 15:00 IST. A recovery was witnessed shortly. However, the recovery proved short-lived and the market slipped into the red in late trade.
Indian stocks had witnessed a historic rally on Monday, 18 May 2009, when the key indices viz. the Sensex and the Nifty surged more than 17% each on hopes a new stable government will be able to push reforms. A clear mandate for the Congress-led United Progressive Alliance (UPA) has boosted hopes a strong coalition would be able to push through economic reforms that would boost foreign investment.
Dr Manmohan Singh who is set to become Prime Minister of India for the second term after a thumping victory of the Congress-led UPA government in election on Tuesday, 19 May 2009, said the new government will revive economic growth and make it even more inclusive. Dr Singh said daunting challenges lay ahead as the global economy is passing through difficult times.
The Congress-led UPA defied predictions of a tight election and was only about 11 seats short of an majority from the 543 seats at stake in the recently concluded Lok Sabha election. 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.
Dr Manmohan Singh met President Pratibha Patil on Monday and submitted the resignations of his Council of Ministers. Manmohan Singh formally stepped down as the Prime Minister. President Pratibha Patil on Monday dissolved the 14th Lok Sabha with immediate effect and asked the Prime Minister and his Council of Ministers to continue in office till the new government is formed. The President is expected to invite Dr. Singh to form the next government today, 19 May 2009.
Armed with a decisive mandate, Dr Singh will meet the President to show the UPA alliance has the numbers, and formally stake claim to form a new government at the Centre.
Meanwhile, the Congress party today, 19 May 2009, elected Dr Singh as leader of its parliamentary party today, a formal stamp for Singh to take charge as prime minister for a second consecutive term. The Congress parliamentary party also elected Sonia Gandhi as its chairperson. The formalities set rolling the process of government formation, a day after Singh resigned as prime minister on Monday.
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.
A near term trigger for the market will be allocation of portfolios in the new government. It remains to be seen who gets the key ministries viz. power, transport and education sectors. Analysts say growth in these three sectors are key for India to achieve strong economic growth. If those seen as strong performers are given charge of these three ministries, the market may extend gains.
As per reports, Congress's strong showing in election means reformers will almost certainly be named to key ministerial portfolios viz. finance, trade, defence and foreign affairs. The ministers should be named this week. Fresh reformist faces may also join the cabinet for the first time, including Rahul Gandhi, heir to the powerful Gandhi dynasty and seen as pushing a new generation of leaders into the Congress.
Among the contenders for the post of the finance minister are C Rangarajan, an economic adviser to the prime minister, Montek Singh Ahluwalia, deputy chairman of the Planning Commission, Trade Minister Kamal Nath, and External Affairs Minister Pranab Mukherjee. As per market talks, P Chidambaram could retain his home portfolio.
According to analysts the new government should give priority to reforming the subsidy mechanism aimed at improving delivery mechanism while at the same time reducing costs. Restoring fiscal health is also required. In this regard, disinvestment is an immediate channel for raising funds
The fiscal deficit jumped to an estimated 10.6% of the nation's gross domestic product in the year ended 31 March 2009.
Foreign funds have aggressively bought Indian stocks in the recent past. FII inflow in May 2009 totaled Rs 10,324 crore (till 18 May 2009) while their inflow in calendar year 2009 totaled Rs 10,680.50 crore.
European stocks rose on Tuesday, gaining ground for the fourth straight session and led by banking stocks such as BNP Paribas while investors braced for key US housing data. Key benchmark indices in France, Germany and UK were up by between 0.69% to 2.06%.
Exports from the 16-nation euro region rose for a second month in March 2009, the European Union reported on Monday, 18 May 2009
The pace of contraction in world economic output appears to be easing and recovery could begin at the end of this year, World Bank President Robert Zoellick told Spanish television on Tuesday.
Asian stocks rose today as higher confidence among US homebuilders, a surge in oil prices and a drop in bank borrowing costs stoked optimism the global economy is recovering. Key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan, rose by between 0.9% to 3.83%.
Trading in US index futures indicated the Dow could rise 40 points at the opening bell on Tuesday, 19 May 2009.
US markets on Monday, 18 May 2009 closed at the session's high helped by banks and financial services stocks. The Dow gained 235.44 points, or 2.9%, to 8,504.08. The S&P 500 index gained 26.83 points, or 3%, to 909.71. The Nasdaq composite index added 52.22 points, or 3.1%, to 1,732.36. A reading showed home builder sentiment rose for the second month in a row and at the highest level since September 2008.
The BSE 30-share Sensex rose 17.82 points or 0.12% to 14,302.03 its highest closing since 11 September 2009. The Sensex jumped 646.33 points at the day's high of 14,930.54 in mid-afternoon trade, its highest level since 9 September 2008. At the day's low of 13,834.13, the Sensex fell 450.08 points in early trade.
The S&P CNX Nifty was down 4.70 points or 0.11% to 4,318.45. Nifty May 2009 futures were at 4340.95, at a premium of 22.50 points over the spot closing of 4318.45.
The turnover on NSE's futures & options segment was Rs 105985.51 crore. Turnover was a paltry Rs 2599.35 crore on NSE's F&O segment yesterday, 18 May 2009, as trading was restricted to just a few seconds after a solid surge in the key benchmark indices viz. the Sensex and the Nifty triggered market-wide circuit breakers and shut down the market.
BSE clocked a turnover of Rs 11751 crore much higher a paltry Rs 127 crore on 18 May 2009 when trading was halted at 11:55 IST after market-wide circuit filters were applied after a solid surge.
The Sensex has risen 4654.72 points or 48.24% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the has Sensex has surged 6,141.63 points or 75.26%.
Coming back to today's trade, the market breadth, indicating the overall health of the market, was strong. On BSE, 1,928 shares rose as compared with 747 that fell. A total of 42 shares remained unchanged.
From the 30 share Sensex pack, 18 stocks rose while rest fell.
The BSE Mid-Cap index rose 3.6% and the BSE Small-Cap index rose 2.5%. Both these indices outperformed the Sensex.
The BSE Realty index (up 12.8%), the BSE Bankex (up 6.84%), the BSE Capital Goods index (up 6.33%), the BSE Auto index (up 3.64%), the BSE Power index (up 3.18%), the BSE Metal index (up 3.02%), the BSE PSU index (up 2.65%), the BSE Consumer Durables index (up 0.88%) outperformed the Sensex.
The BSE IT index (down 10.1%), the BSE TECk index (down 5.12%), the BSE Healthcare index (down 4.34%), the BSE FMCG index (down 4.12%), the BSE Oil & Gas index (down 3.18%) underperfomed the Sensex.
India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) fell 5.94% to Rs 2,219 on profit taking after a recent sharp surge. 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.
Banking stocks rose in choppy trade on hopes for financial reforms by the UPA government. India's largest private sector bank by net profit ICICI Bank rose 7.35% to Rs 758.60. The stock hit the high of Rs 797 and a low of Rs 688. Its American depository receipt (ADR) rose 25.22% on Monday, 18 May 2009.
India's second largest private sector bank by operating income HDFC Bank was up 2.08% to Rs 1,407.60. The stock hit the high of Rs 1,498 and a low of Rs 1,210. Its ADR rose 21.29% overnight.
India's biggest bank in terms of branch network State Bank of India rose 11.19% to Rs 1,754.45 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 stock hit the high of Rs 1,842 and a low of Rs 1,555.
India's biggest dedicated housing finance firm by operating income HDFC was up 0.12%. As per recent reports, HDFC is likely to cut deposit rates and follow it with a cut in lending rates
Realty stocks rose on expectations stability at the Centre will attract more money from foreign investors into the sector. DLF, Housing Development & Infrastructure, and Unitech rose by between 10.61% to 24.94%.
Indiabulls Real Estate gained 1.14% extending yesterday's 28.07% surge after the company's shareholders approved raising up to $600 million through share sale to qualified institutional buyers.
But outsourcing focussed IT stocks tumbled on a firm rupee. India's second largest software services exporter by sales Infosys fell 11.65% even after its American depository receipt (ADR) rose 8.99% overnight.
India's largest software services exporter by sales TCS fell 8.15%. TCS last week it has been selected for a five-year IT services contract for auto maker Volkswagen group's operations in the United Kingdom.
India's third largest software services exporter by sales Wipro fell 9.13% even after its ADR rose 7.48% overnight.
The rupee today surged to its highest level in five months in early deals. It cooled off later. The partially convertible rupee was at 47.72 per dollar, firmer than its Monday's (18 May 2009)'s close of 47.88/90. It rose as high as 47.27 in early trade, its strongest since 19 December 2008, at which point it was up 10.4% from its record low of 52.2 in early March 2009.
A firm rupee affects operating margins of IT firms negatively as IT companies derive a lion's share of revenue from exports
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. Reliance Infrastructure, Hindustan Construction Company, Bharat Heavy Electricals, Crompton Greaves, Tata Power Company, A B B, and Walchandnagar Industries rose by between 0.16% to 10.34%.
India's largest engineering and construction firm by sales Larsen & Toubro jumped 8.82% to Rs 1346.25 after the company bagged three orders aggregating Rs 518.20 crore from various customers in Oman. However the stock came off the day's high of Rs 1,469.70.
The nuclear deal will give India access to US nuclear fuel and technology without joining the 1970 Nuclear Non-Proliferation Treaty. It is potentially worth billions of dollars to US and European nuclear supplier companies and would give India more energy alternatives to drive its booming economy.
Auto stocks gained on hopes the new government will treat auto sector as a priority sector and attend to some pressing concerns of the sector, mainly differential excise duty, lack of retail finance and lack of focus on infrastructure. Maruti Suzuki India, Tata Motors, Bajaj Auto, rose by between 0.88% to 7.76%.
India's largest tractor maker by sales Mahindra & Mahindra surged 9.03% after the company said the workers union at the Nashik plant have withdrawn strike from yesterday, 18 May 2009.
FMCG stocks fell as investors pulled out from the so called defensive stocks. ITC, Hindustan Unilever, Marico, Nestle India, Dabur India fell by between, 1.68% to 7.14%.
Healthcare stocks fell as investors pulled out from the so-called defensive stocks. Dr Reddy's Laboratories, Sun Pharmaceuticals Industries, Biocon, Lupin, Pfizer, Ranbaxy Laboratories and Cipla, fell by between 1.32% to 9.35%.
Metal stocks gained following a jump in copper prices on London Metal Exchange. Tata Steel, National Aluminum Company, Sterlite Industries and Steel Authority of India, rose by between 3.09% to 13.8%.
Copper for delivery in three months jumped $131, or 2.9%, to $4,651 a metric tonne in London, leading gains in industrial metals, after US homebuilder confidence increased to an eight-month high, and on economists' expectations that US housing starts rose last month.
Construction stocks rose on expectations that the Congress-led UPA government will increase infrastructure spending, including new power plants, to boost growth. Hindustan Construction Company, Nagarjuna Construction Company, IVRCL Infrastructure & Projects and Gammon Infrastructure, rose by between 9.88% to 21.33%.
Shares of state-run companies rose 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, HMT, Corporation), Shipping Corporation of India, Hindustan Copper, Power Finance Corporation, Central Bank of India, rose by between 1.14% to 17.53%.
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.
Airlines stocks rose on hopes the newly elected government may allow foreign direct investment in the sector. Jet Airways, Kingfisher Airlines rose by between 0.12% to 3.26%.
The Indian aviation industry has been plagued by large losses, rising debt levels and a serious liquidity crunch. According to reports, measures like increasing the present cap on Foreign Direct Investment (FDI) in the aviation sector as well as withdrawing the restrictions on investment by foreign airlines in the domestic carriers are important to save the industry from the current crisis that it finds itself in.
Currently, foreign airlines are not allowed to pick up equity in aviation companies while foreign investors and financial institutions can hold up to a 49% stake.
Cals Refineries clocked the highest volume of 10.2 crore shares on BSE. Unitech (4.4 crore shares), IFCI (3.39 crore shares), Reliance Natural Resources (3.03 crore shares) and DLF (2.4 crore shares) were the other volume toppers in that order.
DLF clocked the highest turnover of Rs 897.37 crore on BSE. Reliance Capital (Rs 580.14 crore), ICICI Bank (Rs 537.55 crore), Reliance Industries (Rs 505 crore) and State Bank of India (Rs 473.96 crore) were the other turnover toppers in that order.
Pre Session Commentary - May 19 2009
Today domestic markets are likely to open with a whopping gap on the back of the stable government euphoria that had yesterday helped benchmark indices make epoch making single day gain in the history of stocks trading. The sentiments are still unearthed as majority of retail and institutional investors could not participate the rally due to market freeze. The SGX Nifty is trading up above 5% and the other Asian markets have opened with phenomenal gains. One could witness huge buying pressure during the first half of the trading session amidst relentless euphoria prevailing across the nation.
Monday, the domestic markets were bombarded by traders registering massive gains in during the first half session to close with buying freeze. The staggering win of congress with a record 206 seats has brought euphoria across the globe, inspiring investors to take fresh positions on the hope of stable government for the next five years. Sentiments were stronger than expected and therefore sensitive sectors like Realty, CG, Bankex and Oil closed with huge gains of 23.45%, 21.90%, 19.18% and 19.11% respectively. Sensex and Nifty breached 14k and 4k mark. We expect the markets to be trading with huge buying pressure.
The BSE Sensex closed high by a massive 2,110.79 points at 14,284.21 and NSE Nifty ended with mammoth of 651.50 points at 4,323.15. BSE Mid Caps and Small Caps closed with gains of 447.41 points and 387.14 points at 4,254.48 and 4,666.74 respectively. The BSE Sensex touched intraday high of 14,284.21 and intraday low of 13,479.39.
On Monday, the US stock markets closed in green. Finally after four consecutive falls the markets resurged to trade in green on the back of banking and financial services stocks. The session exuded firm trend due to overwhelming buying sentiments across the financial stocks at broader level. Bank of America was a pioneer in leading the gain as Goldman Sachs has added shares of the bank to their conviction buy list. Diversified banks jumped 8.5% followed by diversified financial services companies that advanced by a remarkable 7.6%. The April housing to be released today would further test the patientance of traders. The US light crude oil futures for June closed higher by 4.8% at $59.03 per barrel on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) inclined by 235.44 points to close at 8,504.08 The NASDAQ Composite (RIXF) index inclined by 52.22 points to close at 1,732.36 and the S&P 500 (SPX) closed up by 26.83 points at 909.71.
Today major stock markets in Asia are trading in green. Hang Seng is trading up by 412.12 points at 17,435.03 followed by Shanghai Composite which is up by 26.76 points at 2,679.54. Japan''s Nikkei is also up by 254.40 points at 9,293.09, Strait Times is up by 77.31 points at 2,254.29. Seoul Composite rose by 31.84 points at 1,418.52 respectively.
Indian ADRs ended higher. In technology sector, Infosys ended up by 8.99% along with Wipro by 7.48%. Further, Satyam gained 18.23% and Patni Computers ended higher by 9.26%. In banking sector ICICI Bank advanced by 25.22% and HDFC Bank went up by 21.29%. In telecommunication sector Tata Communication increased by 27.62% and MTNL surged 25.17%. Sterlite Industries increased by 26.03%.
The FIIs on Monday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 2,673.00 Crore and gross debt purchased stood at Rs 94.50 Crore, while the gross equity sold stood at Rs 1,672.80 Crore and gross debt sold stood at Rs. 26.30 Crore. Therefore, the net investment of equity and debt reported were Rs 1,000.20 Crore and Rs 68.20 Crore respectively.
On Monday, the partially convertible rupee ended at 47.88/90 per dollar, 3.2 percent stronger than previous close at 49.41/42. Rupee gained strength due to the Congress Party and its alliance (UPA) win a majority during the 14th Lok Sabha Election. There was mammoth rise in the benchmark indices of local stock markets increasing expectations of green back inflow.
On BSE, total number of shares traded were 1.33 Crore and total turnover stood at Rs 127.00 Crore. On NSE, total number of shares traded was 84.30 Crore and total turnover was Rs 170.32 Crore.
Top traded volumes on NSE Nifty – Unitech with 439987 shares, Suzlon Energy with 275415 shares, Reliance Petro 177989 shares, ITC with 152364 shares followed by DLF with 130572 shares.
On NSE Future and Options, total number of contracts traded in index futures was 65288 with a total turnover of Rs 1,372.38 Crore. Along with this total number of contracts traded in stock futures were 12467 with a total turnover of Rs 611.51 Crore. Total numbers of contracts for index options were 31003 with a total turnover of Rs 599.21 Crore and total numbers of contracts for stock options were 360 and notional turnover was Rs 16.24 Crore.
Today, Nifty would have a support at 4,589 and resistance at 4,682 and BSE Sensex has support at 14,856 and resistance at 15,250.
Big rally at Wall Street
Financial sector coupled with strong housing report leads the rally
US stocks rallied right out of the gate on Monday, 18 May, 2009 following a better than expected earning report from home improvement retailer Lowe's. The rally was carried forward by the financial sector which surged considerably throughout the day today. Other than that, an upbeat housing report just added further fuel to the rally and stocks ended the day with sufficient gains.
Strength in the financial sector is the main reason behind today's jump in US stocks. The Indian stock market also acted as a good booster after India's BSE Sensex struck the upper circuit twice yesterday following an unexpected thumping victory by the Congress led UPA and its alliances.
The Dow Jones Industrial Average ended higher by 235 points at 8,504. The Nasdaq Composite Index, ended higher by 52 points at 1,732. S&P 500 ended higher by 26.8 points at 909.7. Nine of the ten sectors ended in the green today. Utilities sector was the only one to end in the red.
Twenty-nine of thirty Dow stocks neded in the green today. AT&T was the sole laggard.
Home improvement retailer, Lowe's was the only widely-held company to announce its latest earnings results ahead of the opening bell today. The company's better-than-expected earnings and upbeat forecast helped support an early bias to the upside. Lowe's report much less than expected drop in first quarter profit. The company's main competitor, Home Depot, is expected to announce result tomorrow.
Among the only economic report scheduled for the day, the National Association of Home Builders reported today that encouraged by low interest rates and the re-emergence of first-time buyers, U.S. home builders' spirits improved again in May bringing its sentiment index to the highest level since the collapse of Lehman Brothers. The housing report came as a much needed boost to the market today.
The NAHB-Wells Fargo index rose to 16 in May from 14 in April on a scale of zero to 100. It's the highest since the 17 recorded in September. The index got as low as 6 in January. Before the current housing meltdown, the index had never gotten below 20 in its 24-year history. It peaked at 72 nearly four years ago. At 16, the index shows that about one in six builders thinks the market for new homes is "good." The industry trade group received 733 responses to its survey in May. The report gave a strong boost to the US stocks.
The financial sector also provided good support following the fact that Bank of America was included in convention buy list by Goldman Sachs.
Crude oil prices ended substantially higher on Monday, 18 May, 2009 erasing all of prior week's losses. Prices rose today following an upbeat housing report and better than expected earning report from retailer Lowe's which boosted overall sentiments among traders. On Monday, crude-oil futures for light sweet crude for June delivery closed at $59.04/barrel (higher by $2.69 or 4.8%) on the New York Mercantile Exchange. Last week, crude ended lower by 3.9%.
In the currency market on Monday, the greenback dollar slid against major rivals as equities improved and the sentiment of home builders improved. The dollar index, which weighs the strength of dollar against the basket of six other currencies ended lower by 0.3%.
Earnings and economic reports will be in focus tomorrow. Earning reports will feature prominent retailer like Home Depot. Market is expecting similar positive earning report from the company. The housing market will again be in focus with the 8:30ET release of the April housing start and building permits report by the Commerce Department.
Market may extend gain
The market is expected to extend their gains today, a day after a historic Monday when stocks surged more than 17% on hopes a new stable government will be able to push reforms, Strong global cues may further aid the rally.
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 on Monday 18 May 2009. 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 on that day.
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.
The market soared on 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.
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.
Meanwhile, Manmohan Singh met President Pratibha Patil on Monday and submitted the resignations of his Council of Ministers. Manmohan Singh formally stepped down as the Prime Minister. President Pratibha Patil on Monday dissolved the 14th Lok Sabha with immediate effect and asked the Prime Minister and his Council of Ministers to continue in office till the new government is formed. The President is expected to invite Prime Minister to form the next government today.
Armed with a decisive mandate, Manmohan Singh will meet the President to show the UPA alliance has the numbers, and formally stake claim to form a new government at the Centre.
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 bought aggressively in Indian stocks in the recent past. As per the provisional data released by the stock exchanges after trading hours, foreign funds on 18 May 2009 bought shares worth a net Rs 44.64 crore while domestic institutional investors sold shares worth a net Rs 8.41 crore. FII inflow in May 2009 totaled Rs 10,270.60 crore in May 2009 (till 15 May 2009) while their inflow in calendar year 2009 totaled Rs 10,627.20 crore.
Asian stocks rose today as higher confidence among U.S. homebuilders, a surge in oil prices and a drop in bank borrowing costs stoked optimism the global economy is recovering. Key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan rose by between 0.91% to 3.34%.
The US markets closed on Monday, 18 May 2009 at session highs helped by banks and financial services stocks. A rise in US traded stocks from India helped kick the rally off, leading to a nearly 3 % gain as trading wound down. The Dow gained 235.44 points, or 2.9%, to 8,504.08. The S&P 500 index gained 26.83 points, or 3%, to 909.71. The Nasdaq composite index added 52.22 points, or 3.1%, to 1,732.36.A reading showed home builder sentiment rose for the second month in a row and at the highest level since September 2008.
Gains may continue
The overnight gains in international markets and positive opening in most of the Asian indices in ongoing trades may help the local market advance further. Among the key indices, the Nifty can see an up- move till 4410 levels and has a key support at 4250 levels in the near-term. The Sensex has a likely support at 14100 and may face resistance at 14450.
Major US indices finished positive on monday, after positive news about the U.S. housing market, including an upbeat profit forecast from Lowes, as well as an upgrade of Bank of America, encouraged investors to step back into the market after last week's selloff. While the Dow Jones gained by 235 points at 8504, the Nasdaq moved up by 52 points to close at 1732.
All the Indian ADRs posted sharp gains on the US bourses. Rediff led the pack with the gains of 36.55%, while Satyam, HDFC Bank, Tata Motors, ICICI Bank, MTNL and VSNL gained around 18-25% each. However, Infosys, Wipro and Patni Computers gains around 7-9% each.
Crude oil prices moved down marginally, with the Nymex light crude oil for June delivery lost 4 cents to close at $58.99 a barrel. In the commodity space, the Comex gold for June delivery lost $9.60 to settle at $921.70 an ounce.
Daily News Roundup - May 19 2009
Private equity giant Kohlberg Kravis Roberts and Diageo likely to acquire 10% & 14.99%, respectively in United Sprits. (ET)
Amtek Auto has entered into Rs1bn JV (50:50) with Sumitomo Metals, which is part of Sumitomo Corporation of Japan. (ET)
Apollo Tyres has acquired Dutch tyre maker Vredestein Banden for an undisclosed sum. (ET)
Madras HC allows TVS to use Bajaj's patented technology. (BS)
The Tiruchirappalli unit of BHEL has asked its subcontractors to increase their capacity to 50% from the current 32% in order to achieve a turnover of Rs100bn for FY10. (BS)
Indiabulls Real Estate plans to raise US$600mn through qualified institutional placement of equity shares. (ET)
ONGC to float new tender for cancelled rig contract. (BS)
M&M workers call off a 15-day-long ‘tool down’ strike at Satpur plant in Nashik. (ET)
Maytas Infra wants IL&FS to increase its stake in the Hyderabad Metro Rail Project. (FE)
Coal India board has cleared the draft agreement for the proposed fuel supply agreement with NTPC and other power utilities. (FE)
KS Oils plans to raise Rs4.5bn from a PE companies and promoters. (ET)
Aditya Birla Nuvo will allot 18.5mn convertible warrants to its promoters for Rs10bn. (ET)
MRF has declared lockout at its Arakonam plant in Tamil Nadu, effective from May 17, 2009. (FE)
Tata Motors will give performance-linked wage hikes to its employees in FY10. (BL)
The Switzerland based Oetiker Group, a supplier of clamps for Tata Nano has set up a unit in Patalganga near Mumbai. (FE)
The rupee gained 2.98% against the dollar, the biggest single-day rise in 23 years. (BS)
The Finance ministry seeks amendment to Fiscal Responsibility & Budget Management (FRBM) Act. (FE)
20 public sector banks have failed to achieve the annual farm sector lending target till November 2009. (BS)
Cement companies have added ~8mn tons capacity in April, taking the total installed level to 219mn tons. (BL)
The new Government is likely to ease curbs on fuel pricing and restore a tax brake for gas production. (FE)
RBI Governor said banks must pass the benefit of lower costs from technology-based products and services to customers. (BS)
Consumption of petroleum products grew by 4.6% in April, the second highest since September 2008. (BS)
Saudi Arabia has lifted the ban on Indian seafood imports that had been in place for several years. (BL)
Get out of shock!
Stock market is a voting machine in the short term and weighing machine in the long term.
The double freeze at the circuit breaker may be a pleasant shock for sentimental purpose. The bulls may have enjoyed a pleasant day in the woods. But the fact remains we are not out of the woods as yet and never know which beast could cause trouble.
Plug into reality and you will realize this overdone ovation is a hope that the best brains would get their act together to decouple India from the myriad of woes plaguing the global economy. Clearly the exuberance has been overdone. Clearly there are several headwinds still to be tackled, both local and foreign.
The fact of the matter is the new Government would not like to rush into doing things that all of us want it to. It will indeed undertake reforms but gradually. So, one has to temper one's expectations and not get carried away.
Another circuit may not be on the cards and the paper gains could soon tear away. Don’t forget to book profits. You will get opportunities later to ride the momentum.
Key Results Today: Grasim, Indian Bank, Indo Rama Synthetics, Mercator Lines, Mirc Electronics, Mount Everest Mineral, Texmaco, Thermax and TRF.
FIIs were net buyers in the cash segment on Monday at Rs446.4mn while the local institutions pulled out Rs84.1mn. In the F&O segment, the foreign funds were net buyers at Rs5.12bn. On Friday, FIIs were net buyers at Rs10bn in the cash segment. Mutual Funds were net buyers at Rs3.93bn on the same day.
US stocks surged on Monday, buoyed by a positive report on the battered housing market and upbeat earnings from home improvement retailer Lowe's. An upgrade of Bank of America too encouraged investors to resume their shopping spree after last week's selloff.
The Dow Jones Industrial Average gained 235 points, or nearly 2.8%, to 8,504.08. The S&P 500 index rose 27 points or 3% to close at 909.71, bringing the broader market index back into positive territory for the year. The Nasdaq Composite index advanced 52 points or 3.1%, to 1,732.36.
US stocks slumped last week after worse-than-expected reports on retail sales, housing and weekly jobless claims put investors on the defensive. But a big rally in Indian markets helped set the bullish tone early on. The buying gained momentum in afternoon trading with retail and banking shares gaining ground.
Monday’s advance restored the S&P 500’s yearly gain, leaving it up 0.7% in 2009. The benchmark index for US stocks slid 5% last week after it reached the most expensive level relative to earnings in seven months. Between March 9 and May 8, the S&P 500 surged 37% in the steepest two-month advance since the 1930s on signs the global recession is easing.
The benchmark index for US stock options fell to the lowest level since before Lehman Brothers' September bankruptcy. The VIX, as the Chicago Board Options Exchange Volatility Index is known, slid 8.7% to 30.24. The index, which measures the cost of using options as insurance against declines in the S&P 500, is down from a record 80.86 in November.
Lowe's, the No. 2 home-improvement retailer, projected a higher fiscal second-quarter profit after posting a 22% decline in the first quarter that still managed to top analysts' forecasts. Shares rose 8%.
Two private reports helped bolster confidence in the housing market.
Confidence among US homebuilders in May increased to the highest level since September, providing further evidence the housing slump that started in 2006 may be closer to a bottom.
The National Association of Home Builders/Wells Fargo index of builder confidence rose to 16 from 14 the prior month, capping the first back-to-back gain since February 2008. This was the second successive month of gains for the homebuilders index.
Separately, the NAHB said home prices are at their most affordable in nearly two decades.
Treasury Secretary Timothy Geithner said that the US economy has stabilized, even though many people may not feel a turnaround immediately.
"Unemployment is going to keep increasing for a while," Geithner said in an appearance at the National Press Club in Washington. "It's not going to feel better for a long time for millions of Americans."
Shares of financial services companies got a boost after Bank of America was upgraded to "buy" by Goldman Sachs. Analysts said that the bank will be able to raise needed capital thanks to gains in mortgage and capital markets activity. BofA gained 10%.
Financial holding company State Street announced a $1.45 billion stock offering and said that it would also offer non-guaranteed senior notes. The company said it plans to repay its government bailout funds.
Macy’s advanced 7.2%. The second-biggest US department store chain was added to the conviction buy list at Goldman Sachs, which cited the retailer’s $400 million cost savings plan and prospects for improvement in sales as the economy recovers.
Lennar Corp. surged 14%. The fourth-biggest US homebuilder by revenue was raised to “buy” from “hold” at Citigroup. KB Home added 8.2%.
Treasury prices slumped, raising the yield on the benchmark 10-year note to 3.21% from 3.13% on Friday.
In currency trading, the dollar rose versus the yen, but fell sharply against the euro and British pound.
US light crude oil for June delivery rose $2.69 to settle at $59.03 a barrel on the New York Mercantile Exchange.
Gains in energy prices came after a Nigerian military group threatened to block waterways used for energy exports and an explosion at a Sunoco Inc. refinery affected operations in the Northeast US.
COMEX gold for June delivery fell $9.60 to settle at $921.70 an ounce.
The national average price of a gallon of unleaded gasoline rose to $2.31, its 20th consecutive increase, according to a daily reading released by the motorist group AAA. The price of gas has increased by about 25 cents a gallon in the last three weeks, according to the Lundberg Survey.
Tuesday brings readings on new home construction and building permits in April. Companies reporting quarterly results include Dow components Home Depot and Hewlett-Packard.
Financial shares rose after the London interbank offered rate, or Libor, for three-month loans in dollars fell 4 basis points to 79 basis points, the biggest decline since March 19, according to British Bankers’ Association data.
European shares advanced, led by sharp gains for banks such as HSBC and Standard Chartered. The pan-European Dow Jones Stoxx 600 index rose 2.4% to 207.83. It was the third straight winning session for the index.
The UK's FTSE 100 index rallied 2.3% to 4,446.45, in Monday's action, while the German DAX 30 index climbed 2.4% to 4,851.96 and the French CAC-40 index added 2.4% to 3,245.39.
If the outcome of the Lok Sabha elections was unbelievable and stunning, then what has happened today on the Indian bourses was even better. Today is a momentous occasion in the history of India, both in terms of politics and markets.
While the decisive verdict that the Indian voters delivered in the just concluded polls was the best that Indian parliamentary democracy has got in a long, long time, then the reaction of the stock market is unimaginable. It may not be repeated ever again.
For the first time ever, the key Indian stock indices hit an upper circuit - not once, but twice. Trading was first halted for a couple of hours within just a few seconds of opening bell, when the Nifty hit 15% upper circuit. When trading resumed at 11:55 am, it took just a few seconds for the market to freeze again. There was some buzz that the largest life insurance company may step in with basket selling, which could have kept the trading going. However, that was not to be.
The BSE Sensex soared by 2,110 points or 17.24 % to 14,284 while the NSE Nifty zoomed 651 points or 17.35% to 4,323. Total trade turnover in the markets was Rs3,103 crores Cash + F&O. Only 842 stocks were traded on the BSE while 202 stocks witnessed action on the NSE.
Shares of insurance companies rallied on Tuesday on hopes that the government may raise the FDI limit in the sector.
The government is likely to increase the FDI cap in the insurance sector to 49% from 26%. And with no resistance from the Left Parties, reforms may come faster.
Shares of ICICI Bank shot up over 25% followed by SBI (up 21%), Max India (up 20%), and Reliance Capital (up 26.95%).
Shares of PSU companies were also on a roll on hopes of recommencement of the PSU disinvestment programme after the Congress-led UPA government.
Shares of Neyveli Lignite surged over 15% followed by SCI (up 13.56%), MMTC (up 10%) and PFC (up 14%).
Infrastructure shares soared on expectations that the UPA government may boost spending on infrastructure sector.
L&T surged 20%, JP Associates advanced 18%, BHEL (up 17%), Gammon India (up 19%), Punj Lloyd (up 20%), GMR Infra (up 20%) and IVRCL Infra (up 18%).
After a magnificent Monday, Indian markets would look to extend its dream run post the Congress led UPA win. Should the NSE Nifty index hit 4,608 on Tuesday, markets would once again stop trading. However, one cannot rule out profit booking after a stupendous rally.
Offtopic - Disturbing exposé on Christian conversions
A new mood of aggressive evangelism has been emanating from America. Well-funded, superbly networked, backed by the highest of the land, seized of its moral supremacy, it has India as one of its key targets, reveals VK Shashikumar in a disturbing exposé
This could be the plot of a fevered thriller. A jingoistic president, multi-million dollar corporations, high technology, a grand if furtive mission, networks spanning the globe, and biblical invocations.
Read more here
Bullion metals turn pale
Upbeat housing data take shine away from precious metals
Precious metals ended lower on Monday, 18 May, 2009 at Comex. Prices fell today following an upbeat housing report which boosted US stocks today thereby reducing the appeal of precious metals as a safe haven against investment.
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 Monday, Comex Gold for June delivery lost $9.6 (1%) to close at $921.7 an ounce on the New York Mercantile Exchange. Last week, gold ended higher by 1.8%. Year to date, gold prices are higher by 6.3%.
For the month of April, gold had 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 (10.9%) since then.
On Monday, Comex silver futures for July delivery lost 18 cents (1.3%) at $13.83 an ounce. Year to date, silver has climbed 17% this year. For 2008, silver had lost 24%.
The National Association of Home Builders reported today that encouraged by low interest rates and the re-emergence of first-time buyers, U.S. home builders' spirits improved again in May bringing its sentiment index to the highest level since the collapse of Lehman Brothers.
The NAHB-Wells Fargo index rose to 16 in May from 14 in April on a scale of zero to 100. It's the highest since the 17 recorded in September. The index got as low as 6 in January. Before the current housing meltdown, the index had never gotten below 20 in its 24-year history. It peaked at 72 nearly four years ago. At 16, the index shows that about one in six builders thinks the market for new homes is "good." The industry trade group received 733 responses to its survey in May.
The report gave a strong boost to the US stocks and the Dow ended 235 points higher for the day.
In the currency market on Monday, the greenback dollar slid against major rivals as equities improved and the sentiment of home builders improved. The dollar index, which weighs the strength of dollar against the basket of six other currencies ended lower by 0.3%.
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 lower by Rs 541 (3.7%) at Rs 14,206 per 10 grams. Prices rose to a high of Rs 14,719 per 10 grams and fell to a low of Rs 14,180 per 10 grams during the day's trading.
At the MCX, silver prices for July delivery closed Rs 831 (3.7%) lower at Rs 21,734/Kg. Prices opened at Rs 22,491/kg and fell to a low of Rs 21,632/Kg during the day's trading.
Crude takes a huge leap
Crude erases all of prior week's loss
Crude oil prices ended substantially higher on Monday, 18 May, 2009 erasing all of prior week's losses. Prices rose today following an upbeat housing report and better than expected earning report from retailer Lowe's which boosted overall sentiments among traders.
On Monday, crude-oil futures for light sweet crude for June delivery closed at $59.04/barrel (higher by $2.69 or 4.8%) on the New York Mercantile Exchange. Last 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 59.8% since then. Year to date, in 2009, crude prices are higher by 24.8%. On a yearly basis, crude prices are lower by 45%.
The National Association of Home Builders reported today that encouraged by low interest rates and the re-emergence of first-time buyers, U.S. home builders' spirits improved again in May bringing its sentiment index to the highest level since the collapse of Lehman Brothers.
The NAHB-Wells Fargo index rose to 16 in May from 14 in April on a scale of zero to 100. It's the highest since the 17 recorded in September. The index got as low as 6 in January. Before the current housing meltdown, the index had never gotten below 20 in its 24-year history. It peaked at 72 nearly four years ago. At 16, the index shows that about one in six builders thinks the market for new homes is "good." The industry trade group received 733 responses to its survey in May.
The report gave a strong boost to the US stocks and the Dow ended 235 points higher for the day.
Last 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. This perhaps kept further rise in crude prices from check.
Also at the Nymex on Monday, June-dated reformulated gasoline gained 7.75 cents, or 4.6%, to $1.7581 a gallon, and June heating oil rose 5.69 cents, or 4%, to $1.4757 a gallon.
Natural gas for June delivery also rose, up 4.1 cents, or 1%, to $4.139 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 2,856/barrel, higher by Rs 28 (0.99%) against previous day's close. Natural gas for May delivery closed at Rs 196.9/mmbtu, lower by Rs 6.6/mmbtu (3.2%)
July 3 or 8 likely dates for Budget
The UPA government is all set to showcase its reforms programme in the 2009-10 Budget early July, it is learnt.
The forthcoming Budget will be the first instrument for the UPA government to initiate the economic reforms it wants to, it is learnt. "Without the Left pressure, this government can announce bold reform measures, and some of that could be seen in the Budget," a government official pointed out.
While the new government's effort will be to present the Budget on July 1, the process may take a little longer, according to sources. The two possible dates that are being talked about for the Budget are July 3 and July 8. Strictly speaking, the validity of the interim Budget, presented earlier this year, is only till June 30.
Interestingly, this will be the seventh continuous Budget (including the interim) by the UPA government.
The Department of Revenue in the finance ministry has started the Budget exercise already, including interactions with the industry. However, the policy areas of the Budget will have to be specified by the new government.
Even as Pranab Mukherjee was holding the dual charge of external affairs and finance ministry at the time of the Interim Budget, now the new government wants to appoint a full-time FM. Deputy chairman of the Planning Commission Montek Singh Ahluwalia's name is doing the rounds for the post of the FM, but Mukherjee is also a likely candidate for the portfolio.
After the swearing-in of the government on June 21 or 22, it will take the new regime over a month to put in place the full-fledged Budget document. Recently, every ministry was asked by the PMO to identify areas of significance as well as pending issues. Some of the inputs, from across ministries, may also be included in the Budget.
Also, a 100-day action plan is being drawn by the government, to focus on pushing up the growth rate back to 9% after last year's decline, a government official indicated. It is likely to include targets on productivity, disinvestment and financial sector reforms.
Infrastructure would be a priority area for the new regime, covering sectors such as power, railways, roads and aviation (including airport development). A higher resource allocation for the UPA's dream scheme, Bharat Nirman, is also not being ruled out.
In a series of meetings with finance ministry officials, industrialists have demanded reduction of the highest personal income tax rate by 5% to 25% in the Budget to boost consumer spending and revive the industry. Business chambers including Ficci have also sought fiscal reform measures to push investment-led growth.
The UPA government had tabled the interim budget in February.
via DNA
India the best performing market
The 2,111-point surge on ‘Magnificent Monday ’ pushed the Indian stock market ahead of competition as the best performing market across the world with over 48% gains.
With factors like the government’s stability and the Left’s clipped wings, investors furiously bought sensex constituents, keeping the ‘India story’ alive and kicking.
From sub-10 ,000 point levels at the end of 2008, the Indian benchmark has gained over 4,600 points in less than six months—thanks to the rally that began in early March.
Before Monday, the sensex had gained 26% in 2009. But the one-minute bull blitz leading to the unprecedented gain turned out to be the game-changer for the open slot of the best performing market this year. Marketmen expect India to turn into one of the lowest risk, highest growth investment destinations globally.
India could outperform emerging markets (EMs) in the coming 12-months especially if the government delivers on policy front, said Ridham Desai of Morgan Stanley . He has an year-end target of 15,300 for sensex.
“Global investors will be chasing outperformance and the Indian economy can offer them the best chance with 7-8 % GDP growth in the next few years. While investors were earlier chasing value, now they will chase growth. The mindset has changed and there is lot of money waiting to come into India,’’ said Seturam Iyer, chief investment officer at Shinsei AMC.
With political risk less of an issue, the Indian stock market—still under owned by FIIs—is being re-rated . With the re-rating process still unfinished, many expect India to continue to outperform other countries like China , Brazil, Taiwan, Russia and Vietnam.
In terms of year-to-date performance, India’s sensex is followed by China’s Shanghai SE A-Share index with 45.6% gains, Taiwan’s TAIEX (up 43.3%), Russia’s RTS-2 (33.2% gain) and Indonesia’s Jakarta Composite (up 31.2%), Bloomberg data shows.
Even if equity markets head lower sharply later in the year, $10-15 billion of capital may be transferred from global financial investors to Indian corporates and their major shareholders before that, Credit Suisse analyst Nilesh Jasani said.
While some experts feel there could some consolidation before the market moves on, analysts at Credit Suisse believe Indian stocks could overshoot considerably , global markets permitting, from pre-budget period to July. With investors in developed nations like Australia, France, the US, the UK and even Switzerland registering 1-6 % losses or at best, flat gains in 2009, experts believe India’s outperformance will bring in more FIIs, hedge funds and big institutional investors.
via ET
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