India Equity Analysis, Reports, Recommendations, Stock Tips and more!
Search Now
Recommendations
Tuesday, May 26, 2009
Post Session Commentary - May 26 2009
The domestic market extended its losses towards the closing to end near day’s low tracking negative European markets. Weak Asian markets also weighed on sentiments. However, market pared some losses during mid session on a little buying led by a statement of Finance Minister Pranab Mukherjee about prioritizing maintenance of growth momentum. Meanwhile, benchmark indices also exhibited volatility ahead of the expiry of May 2009 futures and options (F&O) contract on Thursday, 28 May 2009.
The market belled the day on positive note although lost ground immediately after start backed by mixed cues from Asian markets in early trade. The US stock markets were closed on Monday on account of Memorial Day observance. The Indian market turned instable after opening on expiry of May 2009 F&O contract due on Thursday. However, benchmark indices reported some sign of recovery during mid session, which was short-lived as stocks all over the world were hovering in red territory. Further, market slipped sharply and widened its negative gap to end the day with huge losses on intense selling pressure over the ground. BSE Sensex ended below 13,600 level and NSE Nifty around 4,100 mark. From sectoral front, investors off-loaded position across the sectors barring IT index. Besides, most of the selling was seen in Reality, Capital Goods, Power, Consumer Durables, Oil & Gas and Bank stocks. The broader markets were also out of favour today as Mid Cap and Small Cap stocks lost more than 3% each.
Among the Sensex pack 26 stocks ended in red territory and 4 in green. The market breadth indicating the overall health of the market remained negative as 1454 stocks closed in red while 1323 stocks closed in green and 33 stocks remained unchanged in BSE.
The BSE Sensex closed lower by 323.99 points at 13,589.23 and NSE Nifty ended down by 120.85 points at 4,116.70. BSE Mid Caps and Small Caps closed with losses of 166.06 and 180.77 points at 4,724.09 and 5,608.66. The BSE Sensex touched intraday high of 13,991.46 and intraday low of 13,518.79.
Losers from the BSE Sensex pack are RCom (9.56%), Ranbaxy Lab (8.36%), Tata Motors (5.91%), NTPC Ltd (5.33%), ICICI Bank (5.25%), Bharti Airtel (5.05%), DLF Ltd (4.30%), L&T Ltd (3.83%), JP Associates (3.80%), M&M Ltd (3.67%), ITC Ltd (2.98%), ONGC Ltd (2.56%), Reliance (2.25%) and Tata Steel (2.09%).
Gainers from the BSE Sensex pack are Hindalco (3.23%), Infosys Tech (2.34%), Wipro Ltd (1.54%) and Sterlite Industries (0.33%).
On the global markets front the Asian markets which opened before the Indian market, ended lower as North Korea tested its nuclear missile. Shanghai Composite, Hang Seng, Nikkei 225, Straits Times index and Seoul Composite ended lower by 21.44, 130.26, 36.19, 28.67 and 28.86 points at 2,588.58, 16,991.56, 9,310.81, 2,238.79 and 1,372.04 respectively.
European markets which opened after the Indian market are trading in red. In Frankfurt the DAX index is trading down by 107.61 points at 4,810.84 and in London FTSE 100 is trading lower by 53.60 points at 4,311.69.
The BSE Reality index dropped by (3.96%) or 136.70 points to close at 3,314.74. Main losers are Housing Development (9.88%), Sobha Dev (6.57%), Unitech Ltd (5.64%), Mahindra Life (5.20%) and DLF Ltd (4.30%).
The BSE Bank index dropped by (3.13%) or 246.11 points at 7,605.16 on profit booking after recent rise. Scrips that lost are ICICI Bank (7.62%), Karnataka Bank (7.13%), ICICI Bank (5.25%), Yes Bank (5.06%) and Indus Ind Bank (4.96%).
The BSE Capital Goods index also ended lower by (3.06%) or 340.85 points at 10,795.12. Aiaengineer (7.99%), Jyoti Struct (7.96%), Elecon Eng C (7.93%), Reliance Industrial Infra (7.55%) and Lakshmi MA W (7.40%) ended in negative territory.
The BSE Consumer Durables index lost (3.01%) or 78.99 points to close at 2,548.85. Losers are Titan Ind (8.96%), Gitanjali GE (1.75%) and Rajesh Export (1.30%).
The BSE Power plunged (2.97%) or 81.45 points at 2,658.38. Losers are Power Grid (7.22%), Lanco Infra (7.00%), Reliance Power (5.98%), NTPC Ltd (5.33%) and ABB Ltd (5.13%).
The BSE IT stocks gained (0.85%) or 24.04 points to close at 2,844.74 as rupee cooled off after a recent surge. Gainers are Infosys tech (2.34%) and Wipro Ltd (1.54%). However scrips that lost are NIIT Ltd (10.72%), Tech Mahindra (8.79%) and Rolta India (6.10%).
Bank of Baroda dropped by 1.40%. The bank has slashed its interest rates on its various maturity deposits by 0.25-0.75 per cent and the rate reduction will be effective from May 27 and will be applicable for all maturities above 181 days.
Andhra Bank lost 1.52%. The bank has restructured 58,725 accounts amounting to Rs 1,593-crore during FY 09 those comprising industries, housing loans as well as educational loans, agriculture loans and retail loans.
Punjab National Bank slipped 0.77%. The company has launched MoneyGram remittance service in partnership with Thomas Cook India Ltd and UAE Exchange & Financial Services Ltd.
Ranbaxy Laboratories Ltd plunged 8.36% on reports the firm could take a hit of as much as $50 million due to a delay in supplying a key ingredient to UK''s AstraZeneca used to make anti-ulcer drug, Nexium.
Tata Motors lost 5.91%. The company raised $840 million in debentures to partly repay a loan taken to finance its purchase of British car icons Jaguar and Land Rover.
NTPC Ltd dropped by 5.33%. A Joint Venture Company of NTPC Ltd has been incorporated on May 22, 2009 under the name "National High Power Test Laboratory Pvt Ltd" (NHPTLPL) in association with NHPC Ltd (NHPC), Power Grid Corporation of India Ltd (Power Grid) and Damodar Valley Corporation (DVC). The new Joint Venture firm is incorporated for setting up an on-line high-power test laboratory for short- circuit test facility in the country.
BSE Bulk Deals to Watch - May 26 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
26/5/2009 530499 A K CAPITAL FIRSTRAND (IRELAND) PUBLIC LIMITED COMPANY S 75000 184.00
26/5/2009 532811 AHLUWALIA CO MACQUARIE BANK LIMITED S 453047 68.59
26/5/2009 532797 AUTOIND STANDARD CHARTERED BANK MAURITIUS LTD A/C EMERGING IND B 200000 99.25
26/5/2009 532797 AUTOIND AKULA ADVISERS (P) LTD S 75000 98.10
26/5/2009 532797 AUTOIND DUKE ADVISORS (P) LTD S 109871 100.27
26/5/2009 531733 BAFNA SPINNI VINODPUKHRAJJAIN S 425000 1.95
26/5/2009 531530 BETALA GLO S BISWANATH MONDAL B 30000 6.80
26/5/2009 531530 BETALA GLO S HITESHRAMJIJAVERI S 32000 6.80
26/5/2009 531719 BHAGIR CHE I VVSS ESTATES PRIVATE LIMITED B 30000 52.30
26/5/2009 531719 BHAGIR CHE I SSVV AGRO FARMS PRIVATE LIMITED B 50500 48.85
26/5/2009 531719 BHAGIR CHE I VIJAYALAKSHMI INS AND PEST LTD S 99875 50.49
26/5/2009 590059 BIHAR TUBES SECUROCROP SEC INDIA PVT LTD B 100000 64.65
26/5/2009 590059 BIHAR TUBES HSBC BANK (MAURITIUS) LIMITED S 154103 64.65
26/5/2009 531682 CAT TECHNOL BASMATI SECURITIES PVT LTD B 670208 5.61
26/5/2009 531682 CAT TECHNOL JMP SECURITIES PVT LTD B 270000 5.61
26/5/2009 531682 CAT TECHNOL BASMATI SECURITIES PVT LTD S 602708 5.61
26/5/2009 505923 CEEKAY DIAKI ISF SECURITIES LIMITED B 29498 28.05
26/5/2009 531358 CHOIC INTERN ADCHO CONSULTANTS PLTD S 32148 35.45
26/5/2009 532760 DEEP INDS SUMEET BALDEV CHOPRA B 158059 105.39
26/5/2009 532876 EVERONN SYS OPG SECURITIES P LTD B 304915 335.12
26/5/2009 532876 EVERONN SYS OPG SECURITIES P LTD S 304915 335.46
26/5/2009 590024 FERT CHEM PUNEET SECURITIES PRIVATE LIMITED S 36645 43.09
26/5/2009 532768 FIEM INDS MANMOHANDAMANI B 150000 50.00
26/5/2009 532768 FIEM INDS ANIL BABULAL VEDMEHTA S 200000 50.04
26/5/2009 532959 GAMMON INFRA BNP PARIBAS ARBITRAGE B 2248918 111.95
26/5/2009 532959 GAMMON INFRA ABN AMRO BANK NV S 2248918 111.95
26/5/2009 532857 GLORY POLY HANURANG VINIMAY PVT LTD S 150000 28.01
26/5/2009 504176 HIGH ENERGY GRISHMA V JHAVERI B 7850 96.89
26/5/2009 504176 HIGH ENERGY MAHENDRAGIRDHARILALWADHWANI B 10000 106.30
26/5/2009 504176 HIGH ENERGY GRISHMA V JHAVERI S 7850 99.59
26/5/2009 504176 HIGH ENERGY PRAKASHMOHANLALMODI S 36000 100.60
26/5/2009 532873 HOUSING DEV SANSARCAPITALMGMT LLC A/C SANSAR SPECIALOPPORTUNITIESMAURITIUSLTD B 1400000 264.75
26/5/2009 532873 HOUSING DEV MORGAN STANLEY MAURITIUS COMPANY LIMITED S 2156825 269.40
26/5/2009 532081 K SERA SERA BASMATI SECURITIES PVT LTD B 520936 12.08
26/5/2009 532081 K SERA SERA S V ENTERPRISES B 1806353 12.25
26/5/2009 532081 K SERA SERA BASMATI SECURITIES PVT LTD S 515126 12.05
26/5/2009 532081 K SERA SERA S V ENTERPRISES S 1806353 12.22
26/5/2009 531687 KARUTURI GLO KMUK A/C SANDSTONE CAPITAL INDIA MASTER FUND LTD B 4560148 13.55
26/5/2009 532283 KASHYAP TEC JMP SECURITIES PVT LTD B 4327218 0.92
26/5/2009 532283 KASHYAP TEC JMP SECURITIES PVT LTD S 4821225 0.92
26/5/2009 530255 KAY POW PAP BAMPSL SECURITIES LTD. B 73462 7.34
26/5/2009 530255 KAY POW PAP NARENDERGUPTA B 75000 7.66
26/5/2009 530255 KAY POW PAP GIRRAJPRASADGUPTA B 85000 6.80
26/5/2009 530255 KAY POW PAP BAMPSL SECURITIES LTD. S 73076 7.04
26/5/2009 530255 KAY POW PAP NARENDERGUPTA S 75000 6.52
26/5/2009 530255 KAY POW PAP B.S.KHANDELWAL S 95539 7.02
26/5/2009 509048 LANCOR HOLDS GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD S 145418 37.78
26/5/2009 590011 MOVING PICTU-PMS DHEERAJ KUMAR . . . . ... S 50000 5.82
26/5/2009 532986 NIRAJ CEMENT AYODHYAPATI INVESTMENT PVT LTD B 67725 31.48
26/5/2009 532986 NIRAJ CEMENT AYODHYAPATI INVESTMENT PVT LTD S 64839 30.54
26/5/2009 526747 P G FOILS LT PREM CABLES PVT LTD S 35999 25.07
26/5/2009 503031 PENLAND LTD BNP PARIBAS ARBITRAGE B 3000000 69.45
26/5/2009 503031 PENLAND LTD SWISS FINANCE CORPORATION (MAURITIUS) LIMITED S 3000000 69.45
26/5/2009 507864 PIONEER INVE GURUBHAKTI PROPERTIES PRIVATE LIMITED S 200000 46.70
26/5/2009 506618 PUNJAB CHEM PRIMORE SOLUTIONS PVT.LTD B 34774 202.20
26/5/2009 506618 PUNJAB CHEM PRIMORE SOLUTIONS PVT.LTD S 34774 201.72
26/5/2009 506618 PUNJAB CHEM N VGRAPICE & ADVERTISING P LTD S 34500 196.86
26/5/2009 532665 RAJVIR IND JAIN BROKING PRIVATE LIMITED B 17000 51.00
26/5/2009 532665 RAJVIR IND PEGASUS STOCK & SHARES PVT LTD S 22400 50.92
26/5/2009 513558 REAL STRIP L VINOD BABULAL SANGHVI B 26000 46.00
26/5/2009 513558 REAL STRIP L SHANTILALSHETH S 24975 46.00
26/5/2009 526753 ROSELABS LTD AABHASSHIVKUMARAGRAWAL S 106000 10.25
26/5/2009 531715 SHUKUN CONST NAJMUDDINGULAMHUSAINKHERAZ S 332417 0.59
26/5/2009 508976 SPANCO STRAWBERRY FIELDS TELEVENTURES PRIVATE LIMITED B 1085000 56.00
26/5/2009 508976 SPANCO AVL INDIA LEASING &FINANCE P LTD S 1085000 56.00
26/5/2009 512640 STOCKNET INT MILINDGUNAJIKASALKAR S 33540 1.03
26/5/2009 524394 VIMTA LABS L DB (INTL) OWN TRADING B 117618 33.64
26/5/2009 524394 VIMTA LABS L DB (INTL) OWN TRADING S 117618 33.57
26/5/2009 532360 VINTAGE CARD LAXMI PAT DUDHERIA S 3082 24.10
NSE Bulk Deals to Watch - May 26 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
26-May-09,ALLSEC,Allsec Technologies Ltd,FIRST CARLYLE VENTURES MAURITIUS,BUY,260000,39,-
26-May-09,ALOKTEXT,Alok Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,6129236,21.44,-
26-May-09,ARROWTEX,Arrow Textiles Limited,TARUNA SUBHASH SHARMA,BUY,31968,13.45,-
26-May-09,DCM,DCM Ltd,VIBGYOR INVESTORS & DEVELOPERS PVT LTD,BUY,166500,30.53,-
26-May-09,EVERONN,Everonn Systems India Lim,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,130117,332.07,-
26-May-09,EVERONN,Everonn Systems India Lim,GENUINE STOCK BROKERS PVT LTD,BUY,82566,330.38,-
26-May-09,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,BUY,160197,331.23,-
26-May-09,EVERONN,Everonn Systems India Lim,PRB SECURITIES PRIVATE LTD.,BUY,109992,334.53,-
26-May-09,EVINIX,Evinix Accessories Limite,HI-GROWTH CORPORATE SERVICES PVT. LTD.,BUY,698111,3.78,-
26-May-09,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,BUY,1499890,276.12,-
26-May-09,IBREALEST,Indiabulls Real Estate Li,SLOANE ROBINSON LLP A/C SR PHOENICIA(M) LIMITED-CLASS A PH P,BUY,1622485,198.87,-
26-May-09,IFCI,IFCI Ltd.,CLEAN FINANCE & INVESTMENT LTD.,BUY,4337962,45.69,-
26-May-09,INDOWIND,Indowind Energy Limited,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,296034,34.34,-
26-May-09,ISPATIND,Ispat Industries Limited,EXCEL FINCOM,BUY,8576623,23.96,-
26-May-09,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,19349539,24.05,-
26-May-09,KSERAPRO,K Sera Sera Productions L,BASMATI SECURITIES PVT LTD,BUY,685886,12.17,-
26-May-09,NORTHGATE,Northgate Technologies Li,PELICAN PORTFOLIO SERVICES PRIVATE LIMITED,BUY,250000,38.55,-
26-May-09,OILCOUNTUB,Oil Country Tubular Ltd,UNITED STEEL ALLIED INDUSTRIES PRIVATE LIMITED,BUY,526436,68.56,-
26-May-09,RENUKA,Shree Renuka Sugars Limit,G I INDIA II,BUY,1400000,130,-
26-May-09,SKUMARSYNF,S. Kumars Nationwide Ltd,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,1462916,39.52,-
26-May-09,VIMTALABS,Vimta Labs Limited,DB (INTERNATIONAL) STOCK BROKERS LTD.,BUY,121075,33.46,-
26-May-09,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,2746868,23.34,-
26-May-09,ALLSEC,Allsec Technologies Ltd,VCUSTOMER SERVICES INDIA PVT LTD,SELL,265699,39.02,-
26-May-09,ALOKTEXT,Alok Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,6107084,21.45,-
26-May-09,ARROWTEX,Arrow Textiles Limited,TARUNA SUBHASH SHARMA,SELL,86811,13.5,-
26-May-09,BOMDYEING,Bombay Dyeing & Mfg Co.,DSP MERRILL LYNCH TOP 100 EQUITY FUND,SELL,300000,308.9,-
26-May-09,DHANUS,Dhanus Technologies Limit,CITIGROUP GLOBAL MARKETS MAURITIUS PRIVATE LIMITED,SELL,100000,28.95,-
26-May-09,DSKULKARNI,DS Kulkarni Dev. Ltd.,DEUTSCHE SECURITIES MAURITIUS LIMITED,SELL,267576,61.71,-
26-May-09,EVERONN,Everonn Systems India Lim,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,125317,332.25,-
26-May-09,EVERONN,Everonn Systems India Lim,GENUINE STOCK BROKERS PVT LTD,SELL,83452,330.48,-
26-May-09,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,SELL,160197,331.33,-
26-May-09,EVERONN,Everonn Systems India Lim,PRB SECURITIES PRIVATE LTD.,SELL,108392,334.57,-
26-May-09,EVINIX,Evinix Accessories Limite,HI-GROWTH CORPORATE SERVICES PVT. LTD.,SELL,656249,3.79,-
26-May-09,GOLDENTOBC,Golden Tobacco Limited,LICMF SPECIAL UNIT SCHEME,SELL,100000,78.2,-
26-May-09,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,SELL,1499890,276.23,-
26-May-09,IFCI,IFCI Ltd.,CLEAN FINANCE & INVESTMENT LTD.,SELL,4335962,45.72,-
26-May-09,INDOWIND,Indowind Energy Limited,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,296034,34.37,-
26-May-09,ISPATIND,Ispat Industries Limited,EXCEL FINCOM,SELL,8701123,23.97,-
26-May-09,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,19598739,24.05,-
26-May-09,KSERAPRO,K Sera Sera Productions L,BASMATI SECURITIES PVT LTD,SELL,717713,12.17,-
26-May-09,NORTHGATE,Northgate Technologies Li,INDIA CAPITAL FUND LTD,SELL,500000,38.55,-
26-May-09,NORTHGATE,Northgate Technologies Li,PELICAN PORTFOLIO SERVICES PRIVATE LIMITED,SELL,125000,38.55,-
26-May-09,PUNJABCHEM,Punj Chem & Crop Prot Ltd,N.VGRAPICE & ADVERTISING P LTD,SELL,36000,196.26,-
26-May-09,RENUKA,Shree Renuka Sugars Limit,MURKUMBI NARENDRA MADHUSUDAN,SELL,6000000,130.01,-
26-May-09,SKUMARSYNF,S. Kumars Nationwide Ltd,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,1554116,39.69,-
26-May-09,VALECHAENG,Valecha Engineering Limit,MACKERTICH CONSULTANY PVT. LTD.,SELL,97000,81.38,-
26-May-09,VIMTALABS,Vimta Labs Limited,DB (INTERNATIONAL) STOCK BROKERS LTD.,SELL,117575,33.58,-
26-May-09,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,2713517,23.31,-
Sensex cools, drops 3 tonne
The market began on a positive note at 13930 and touched the day's high of 13991, but remained range-bound as trading progressed. After slipping below 14800 level in noon trades, the Sensex plunged deep into the red towards the close on unabated selling in reality, banking and capital goods stocks, touching the day's low of 13519. The Sensex signed off the session down 2.33% or 324 points at 13589. Nifty tumbled by 121 points to close at 4117.
The market breadth was marginally weak. Of the 2,810 stocks traded on the BSE, 1,454 stocks declined, whereas 1,323 stocks advanced. Thirty three stocks ended unchanged. All the sectoral indices were hammered today bar the BSE IT. The BSE Realty led the slump crashing by 3.96% to 3315. The BSE Bankex was 3.13% down at 7605, the BSE CG lost 3.06% at 10795 and the BSE CD dropped 3.01% at 2549. Other sectoral indices slipped by around 1-2% each.
Out of the 30 Sensex stocks, 26 ended in the red, with realty stocks taking a strong beating. Among realty stocks, Housing Development and Infrastructure Ltd (HDIL) plummeted by 9.88% at Rs264.60 and Sobha Developers crashed by 6.57% at Rs180.75. Banking majors Kotak Mahindra Bank slumped 7.62% at Rs630.95 and Karnataka Bank lost nearly 7.13% at Rs133.45. Index heavyweight Reliance Communications plunged 9.56% at Rs291.45, Ranbaxy Laboratories shed 8.36% at Rs244.40, Tata Motors declined by 5.91% at Rs325.50, National Thermal Power Corporation slipped by 5.33% at Rs201.40 and Bharti Airtel fell by 5.05% at Rs770.40.
Over 14.16 crore shares of Cals Refineries changed hands on the BSE followed by Ispat industries (3.36 crore shares), Satyam Computer Services (2.78 crore shares), Unitech (2.24 crore shares) and Reliance Natural Resources (1.98 crore shares).
In value terms, Reliance Capital registered a turnover of Rs294 crore followed by HDIL (Rs230 crore), Reliance Industries (Rs178 crore), Unitech (Rs169 crore) and Reliance Natural Resources (Rs153 crore).
Bharti Airtel, ICICI Bank lead 324 points Sensex slide
The key benchmark indices lost ground today, 26 May 2009, on concerns a glut of share sales will soak liquidity from the secondary market. Oil & gas, banking, realty and auto stocks led the decline. The BSE 30-share Sensex fell 323.99 points or 2.33% to 13,589.23., off close to 405 points from the day's high. Weak global markets also weighed on the domestic bourses.
Finance Minister Pranab Mukherjee's comments that the government is ready to deliver further fiscal stimulus to arrest a slowdown in growth of the economy heightened worries about the already high fiscal deficit even as the finance minister said fiscal prudence is also a priority.
Volatility was high ahead of the expiry of May 2009 futures and options (F&O) contract on Thursday, 28 May 2009. The market edged higher in early trade. It soon lost ground later. After hitting a fresh intraday low, the market cut losses in mid-morning trade. The market edged lower after swinging between positive and negative zones in early afternoon trade. The market slumped in afternoon trade. It extended losses later. Volatility was high in last one hour of trade
Concerns that a glut in share supply will soak liquidity from the secondary market weighed on the bourses. In the last six weeks, three realty firms Unitech, DLF and Indiabulls Real Estate have together raised Rs 8000 crore through qualified institutional placements (QIPs). As per reports, over Rs 40000 crore of rights, QIP and debenture issues are in the pipeline.
India's top mobile operator by sales, Bharti Airtel extended decline for the second straight day after the company announced a potential deal to buy 49% in South African telecom firm MTN during trading hours on Monday, 25 May 2009. India's largest drugmaker by sales Ranbaxy Laboratories dropped after jumping more than 20% yesterday.
Finance Minister Pranab Mukherjee said in a television interview today that maintaining growth momentum and fiscal prudence are priorities of the new government. He said the growth projection for 2008/09 will be in and around 7%
Mukherjee also said he would like to move faster on infrastructure projects. The minster said the government cannot indulge in fiscal profligacy. He also said that the problems of export sector have to be addressed. The government will release its 2009/10 budget in the first week of July 2009, and it would address some of the problems faced by the economy, Mukherjee said in a television interview.
A newspaper report had quoted Mukherjee on Monday as saying that the President's address on 4 June 2009 will unveil the new agenda of the government. The newspaper had quoted the Finance Minister as saying that the government is all set to take legislative measures to put the economy back on track. When a stable government is in place, credit flows and other measures needed to boost the economy become easier, Mukherjee had said in the newspaper interview.
High fiscal deficit may lead to downgrade of India's sovereign credit rating by global rating agencies which in turn may restrict fresh inflow into India by foreign institutional investors (FIIs). It may, in fact, trigger selling of Indian stocks by FIIs. The fiscal deficit jumped to an estimated 10.6% of the nation's gross domestic product in the year ended 31 March 2009.
Before the election outcome, global credit rating agency Fitch on 14 May 2009 said the government needs to cut fiscal budget deficit to avoid having its credit rating lowered. Fitch, currently has a BBB- rating on India, its lowest investment grade rating. While current economic conditions are prompting many governments to undertake counter-cyclical stimulus measures, the recent deterioration in India's fiscal position accentuates underlying structural weaknesses in public finances that, if unaddressed, could undermine sovereign creditworthiness, Fitch said.
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.
Meanwhile, the Union Council of Ministers is expected to be expanded on Thursday 28 May 2009 during which representatives of DMK and other UPA allies would be among those inducted in the government, according to reports. The indications of the second phase of swearing-in taking place on Thursday came after a Congress core group meeting chaired by party president Sonia Gandhi on Tuesday.
PM Manmohan Singh met Congress chief Sonia Gandhi to finalize the list of inductees. The meeting, which was attended by finance minister Pranab Mukherjee, defence minister AK Antony, political secretary to the Congress president Ahmed Patel, discussed threadbare allocation of ministerial berths and portfolios.
Issues related to allocation of ministerial berths and portfolios have been sorted out with all allies, reports suggest. There was speculation that Trinamool Congress (TMC) leader Mamata Banerjee wanted eight ministerial berths one Cabinet and seven ministers of state against the seven ministerial berths, one Cabinet and six MoS already allocated to her party. However, latest report said there were no issues with TMC.
Even matter regarding pulls and pressures over the ministerial berths and portfolios in Congress, have also been addressed. Prime Minister Manmohan Singh and Sonia Gandhi on Tuesday had a four-hour-long meeting to discuss expansion of the council of ministers which was initially expected today.
Trading in the US index futures indicated Dow could fall 26 points at the opening bell today 26 May 2009.
Weak global markets also weighed on the domestic bourses. In Europe, Germany's DAX fell 1.38% after first-quarter real GDP shrank 3.8% from the fourth quarter, data on Tuesday showed. The drop was in line with the flash estimate which was published 15 May 2009. It was the sharpest decline since records began in 1970. Key benchmark indices in France and UK were down by between 0.89% to 1.4%.
Asian stocks were trading lower today, 26 May 2009 after reports North Korea fired two short-range missiles from its east coast yesterday, a day after it tested a nuclear device and three missiles, caused geopolitical jitters. Japan's Nikkei stock average was down 0.39% weighed down by tech shares such as TDK Corp. But trade was thin, with a number of investors waiting to see how Wall Street will reopen on Tuesday, 26 May 2009, after the Memorial Day holiday on Monday.
South Korea's stocks fell 2.06% key benchmark indices in China, Singapore, Hong Kong and Taiwan fell by between 0.6% to 1.2%.
US President Barack Obama told reporters in Washington on Monday that the US will work with its friends and allies to stand up to North Korea. The United Nations Security Council agreed to pursue new measures against the communist regime.
South Korea said Tuesday it will participate in the U.S.-led initiative to contain the spread of advanced weapons and related materials, reversing its earlier resistance in the wake of North Korea's latest nuclear weapons test, according to reports from the region.
Closer home, on the political front, Kapil Sibal is seen as front-runner for the ministry of human resource development while former Karnataka chief minister Veerappa Moily is seen to be in reckoning for the ministry of shipping and surface transport or law. The health or tourism ministries are being mentioned with regard to Ambika Soni while power could go to former Maharashtra CM Sushil Shinde. Ghulam Nabi Azad, who is tipped for parliamentary affairs, will get another ministry as well. Jaipal Reddy is expected to retain urban development while Vayalar Ravi may go back to labour.
Amongst allies, NCP's Praful Patel will be back, most probably as MoS with independent charge of civil aviation, a charge he held in the previous government as well. The DMK quota will be filled by M K Azhagiri, A Raja and Dayanidhi Maran at the Cabinet level and S S Palanimanickam, Napolean, S Jagathrakshakan and S Gandhiselvam. The Trinamool quota could be filled by Mukul Roy, Sudip Bandhopadhyaya, Saugato Roy, Sultan Ahmed, Dinesh Trivedi, Shishir Adhikary and Chaudhary Mohan.
Speculation is rife over what portfolios lies in store for the DMK. DMK supremo M Karunanidhi's nephew Dayanidhi Maran is slated to get the Textile portfolio. Karuna's son MK Azhagiri will be given the Chemical and Fertilizers portfolio. Another former minister A Raja will be handed the reigns of the information technology portfolio.
The UPA government got down to business in its second term with five of the six key Cabinet ministers alloted portfolios assuming charge of their respective offices on Monday 25 May 2009 and setting out their priorities. P Chidambaram, A K Antony and Sharad Pawar returned to the Home, Defence and Agriculture ministries they were in-charge during Manmohan Singh's first term while Pranab Mukherjee came back to the Finance Ministry, a portfolio he had held 25 years back in the Indira Gandhi government.
S M Krishna, the former Karnataka chief minister and ex-Maharashtra governor, assumed office as the new External Affairs minister after making his Cabinet debut.
All the ministers convened meetings of their top officials to get a quick update on pressing issues. Mamata Banerjee, who was given the Railways portfolio, is in Kolkata and was yet to assume charge. Only six of the 19 Cabinet ministers who took oath along with Prime Minister Manmohan Singh last Friday have been allocated portfolios.
Dr Manmohan Singh was on 22 May 2009 sworn-in as Prime Minister for a second consecutive term. A day after the swearing-in of the UPA government on Friday 22 May 2009, the Union cabinet met under the chairmanship of Prime Minister Manmohan Singh on Saturday 23 May 2009. The cabined took a decision to convene the Parliament session from 1 June to 9 June 2009. A meeting with leaders of various parties will be held in the first week of June 2009 for finalising the dates of the budget session, home minister P Chidambaram said after the cabinet meeting on Saturday. He said government is quite hopeful of passing the budget by 31 July 2009.
The Speaker's election would be held on 3 June 2009 and President Pratibha Patil will address the joint sitting on 4 June, the day Rajya Sabha will also be convened. This will be followed by the debate on motion of thanks. Explaining the process of passing the general budget, Chidambaram said this has to be completed by 31 July 2009 failing which a vote-on-account will have to be approved.
A comfortable victory for the Congress-led coalition government in election has raised expectations of a strong push for economic reforms by the government. Dr Manmohan Singh has reportedly prepared the broad contours of an economic revival plan to be taken up soon after the new government is formed, reports suggest. While recommendations to revive growth and ease the credit squeeze are likely to find a place in the plan, tax proposals are expected to be taken up as budget recommendations.
The telecom ministry has prioritised the much delayed auction of 3G airwaves and WiMAX spectrum. It has also prioritised introduction of a new spectrum policy.
The petroleum ministry has reportedly prepared a draft Cabinet note on a partial decontrol of petrol and diesel prices after which they will be linked to international movements. The new government is also likely to pursue disinvestment of state-run undertakings, reports suggest.
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.
The Congress party-led coalition has the support of 322 lawmakers, Prime Minister-elect Manmohan Singh said on Wednesday, 20 May 2009, giving it a clear majority in a new government. Congress said it has support of 274 members of the 15th Lok Sabha. In addition, the Bahujan Samaj Party, the Samajwadi Party and the Rashtriya Janata Dal sent letters of support for a Manmohan Singh-led government directly to the President, taking the support base to 322.
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.
The BSE 30-share Sensex fell 323.99 points or 2.33% to 13,589.23. The Sensex rose 78.24 points at the day's high of 13,991.46 in early trade. At the day's low of 13,518.79, the Sensex fell 394.43 points in late trade.
The S&P CNX Nifty was down 120.85 points or 2.85% to 4,116.70. Nifty May 2009 futures were at 4120, at a premium of 3.30 points as compared to the spot closing of 4116.70. Turnover in NSE's futures & options (F&O) segment surged to Rs 77,396.06 crore from Rs 65,141.03 crore on Monday, 25 May 2009.
BSE clocked a turnover of Rs 6,893 crore, lower than Rs 7327.05 crore on Monday 25 May 2009.
The Sensex is up 3,941.92 points or 40.86% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 5,428.83 points or 66.52%.
The market breadth, indicating the overall health of the market, turned negative in late trade from a strong breath earlier in the day. On BSE, 1,321 shares rose as compared with 1,449 that fell. A total of 32 shares remained unchanged.
The BSE Mid-Cap index was down 3.4% and the BSE Small-Cap index was down 3.12%. Both the indices underperformed the Sensex.
The BSE IT index (up 0.85%), the BSE Metal index (down 1.23%), the BSE Healthcare index (down 1.58%), the BSE FMCG index (down 2.22%) outperformed the Sensex.
The BSE Realty index (down 3.96%), the BSE Bankex (down 3.13%), the BSE Capital Goods index (down 3.06%), the BSE Consumer Durables index (down 3.01%), the BSE Power index (down 2.97%), the BSE PSU index (down 2.56%), the BSE Auto index (down 2.43%), the BSE Oil & Gas index (down 2.42%), The BSE TECk index (down 2.42%), underperfomed the Sensex.
From the 30 share Sensex pack, 26 stocks fell while the rest gained.
Oil stocks fell on recent reports the new UPA government plans to cap profits of crude oil producers such as Oil & Natural Gas Corporation (ONGC), Oil India (OIL), Reliance Industries (RIL) and Cairn India, as part of a transparent and sustainable subsidy-sharing system for the sector.
India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) was down 2.25% to Rs 2,144.05 and India's largest state-run oil exploration firm by revenue ONGC fell 2.56%.
Auto stocks fell on concerns a partial decontrol of petrol and diesel prices will result in an immediate rise in petrol and diesel prices. Maruti Suzuki India, Hero Honda Motors, Bajaj Auto, Mahindra & Mahindra and Tata Motors, fell by between 1.55% to 5.91%.
As per recent reports, the petroleum ministry has prepared a draft Cabinet note on freeing petrol and diesel prices from government control, after which they will be linked to international movements.
Bank stocks fell on profit taking after a recent surge triggered by hopes the UPA government will pursue financial sector reforms. India's biggest bank in terms of branch network State Bank of India (SBI) was down 1.85%. As per reports, 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 government may also re-introduce the State Bank of India (Amendment) Bill that will enable Centre to reduce its stake in SBI to 51% from current 59.41%.
India's largest private sector bank by net profit ICICI Bank fell 5.25%. India's biggest dedicated housing finance firm by operating income HDFC was down 0.24%. As per recent reports, HDFC is likely to cut deposit rates and follow it with a cut in lending rates.
With a decisive mandate, there are expectations that the UPA government may pursue financial sector reforms. There is likely to be some movement on passage of the Bill to amend the Insurance Act, 1938. Apart from raising the foreign investment ceiling to 49%, from 26% at present, the Bill had proposed to do away with the stipulation on Indian promoters having to mandatorily sell a part of their holdings after 10 years of operation.
There are two other Bills - for providing statutory backing to the pensions regulator and to amend the Banking Regulation Act which have been pending in Parliament for over five years, mainly due to the opposition from the Left parties. But now the Left is no longer an ally of the re-elected UPA, the Bills may finally be enacted.
The Pension Fund Regulatory & Development Authority Bill will allow the regulator to issue regulations, instead of the present system where it has to enter into agreements with service providers such as the fund managers. In addition, it will also help PFRDA regulate the pension products offered by life insurance companies. The new government may also announce tax benefits on investment in the New Pension Scheme, which will help make it attractive for investors, reports suggest
The amendments to the Banking Regulation Act will allow foreign investors to exercise voting rights in line with their shareholding. While the Reserve Bank of India has concerns on greater play for foreign banks, it will have no reservations in getting more powers for regulation of banks and supercession of borads, which are provided for in the Bill.
The government may also re-introduce the Micro-finance Development and Regulation Bill
Realty stocks fell on profit taking after recent strong gains triggered by expectations that stability at the Centre will attract more money from foreign investors into the sector. DLF, Unitech, Akruti City, Indiabulls Real Estate and Housing Development & Infrastrucutre fell by between 2% to 9.88%.
Healthcare stocks fell on profit taking after the recent gains triggered by hopes the newly elected UPA government will give primary importance to healthcare segment and health of citizens. Cipla, Biocon, Pfizer, Sun Pharmaceuticals Industries, Dr Reddy's Laboratories, Glenmark Pharmaceuticals fell by between 0.41% to 7.52%.
India's largest drugmaker by sales Ranbaxy Laboratories dropped 8.36% on reports the firm could take a hit of as much as $50 million due to a delay in supplying a key ingredient to UK's AstraZeneca used to make anti-ulcer drug, Nexium.
The stock had surged 20.73% on Monday 25 May 2009 after its chief executive officer resigned on Sunday, 24 May 2009, as part of efforts to turn around the company. In a swift and unexpected move, Japanese drug maker Daiichi Sankyo on Sunday, 24 May 2009, took complete control of Ranbaxy Laboratories in which it had acquired 63.9% stake in June 2008 after all representatives of the former Indian promoter family resigned from the board. Following a board meeting on Sunday morning, former promoter Malvinder Mohan Singh, whose term was originally supposed to run till 2013, resigned as Chairman and Managing Director.
Besides Singh, two other Singh-family Board nominees, Sunil Godhwani and Balvinder Dhillon, also resigned. Tsutomu Une from Daiichi has been appointed chairman. Atul Sobti, who was originally nominated on the board by the former Indian promoters, has been appointed as CEO and MD for three years.
India's top mobile operator by sales, Bharti Airtel fell 5.05% extending the decline for the second straight day after the company said on Monday a potential deal to buy 49% in South African telecom firm MTN will dilute its earnings in the first year. The company, however, expects earnings-per-share to pick up thereafter. The deal being discussed would also have the South African firm taking a 25% interest in Bharti and its shareholders taking another 11%, Bharti said in a statement.
Bharti said the potential value of what is a complex deal in which both firms pay cash and stock for stakes in each other, was more than $23 billion. Bharti Airtel sees the deal to dilute its earnings in the first year, but expects earnings-per-share to pick up thereafter. "The broader strategic objective would be to achieve a full merger of MTN and Bharti as soon as is practicable to create a leading emerging market telecom operator, which today would have combined revenue of over $20 billion and a customer base of over 200 million," the companies said in separate statements.
Bharti said it would be the primary vehicle to expand in India and Asia, while MTN would drive growth in Africa and the Middle East. The stock had declined 5.41% on Monday.
Outsourcing focussed IT stocks as rupee dropped after a recent solid surge. India's second largest software services exporter by sales Infosys was up 2.34%. India's third largest software services exporter by sales Wipro rose 1.54%. But,India's largest software services exporter by sales TCS fell 1.15%.
The rupee dropped for a second day on Tuesday on the back of the dollar's gains versus major currencies, with traders also bracing for demand from oil refiners. The partially convertible rupee was at 47.62 per dollar, weaker than its previous close of 47.28/30.
Concerns of a firm rupee had weighed heavily on IT stocks in the past few days. A firm rupee affects operating profit of IT firms negatively as they earn most of their revenues from exports.
FMCG stocks fell after investors pulled out from so called defensive stocks. ITC, United Breweries, Dabur India, United Spirits, Nestle India and Marico fell by between 0.23% to 7.39%.
Cals refineries clocked the highest volume of 14.16 crore shares on BSE. Ispat Industries (3.36 crore shares), Satyam Computer Services (2.78 crore shares), Unitech (2.24 crore shares) and Reliance Natural Resources (1.98 crore shares) were the other volume toppers in the order.
Reliance Capital clocked the highest turnover of Rs 251.71 crore on BSE. Housing Development & Infrastructure (Rs 222.34 crore), Reliance Industries (Rs 176.77 crore), Unitech (Rs 163.65 crore) and Reliance Natural Resources (Rs 153.71 crore) were the other turnover toppers in that order.
Pre Session Commentary - May 26 2009
Today domestic markets are likely to open negative due to mixed cues from the other Asian markets. Yesterday’s subdued trading exudes lack of any specific news that would drive the markets. On corporate news, Bharti Airtel is paving its way to merge with the MTN to form one amongst the top five largest telecom companies in the world. On a whole the markets would trade volatile due to lack of any supportive news.
On Monday, the domestic markets closed flat after a volatile trading session. After the subdued opening the markets turned volatile within a short period due to lack of cues from other markets across the world. CD, Realty, HC and FMCG managed to record respective gains of 4.79%, 4.25%, 2.83% and 2.73%. On the other hand sectors like Tech and IT closed with marginal losses of 0.89% and 0.33% respectively. Mid cap and Small cap stocks were under the limelight as they recorded phenomenal gains of 2.83% and 5.01% respectively. We expect the markets to be trading volatile.
The BSE Sensex closed high by 26.07 points at 13,913.22 and NSE Nifty ended flat at 4,237.55. BSE Mid Caps and Small Caps closed with phenomenal gains of 134.47 points and 276.27 points at 4,890.15 and 5,789.43 respectively. The BSE Sensex touched intraday high of 14,028.06 and intraday low of 13,819.25.
On Monday, the US stock markets were closed due to Memorial Day.
Today major stock markets in Asia are trading mixed. Hang Seng is trading low by 34.15 points at 17,087.67 followed by Shanghai Composite which is low by flat at 2,606.91. Japan''s Nikkei is low by 63.08 points at 9,283.92, Strait Times is low by 6.40 points at 2,261.06. Seoul Composite is low by 11.91 points at 1,388.99 respectively.
The FIIs on Monday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 2,412.00 Crore and gross debt purchased stood at Rs 21.20 Crore, while the gross equity sold stood at Rs 3,106.70 Crore and gross debt sold stood at Rs. 69.90 Crore. Therefore, the net investment of equity and debt reported were Rs (694.71) Crore and Rs (48.60) Crore respectively.
On BSE, total number of shares traded were 87.86 Crore and total turnover stood at Rs 7,327.05 Crore. On NSE, total number of shares traded was 130.83 Crore and total turnover was Rs 18,831.9 Crore.
Top traded volumes on NSE Nifty – Unitech with 77099481 shares, Suzlon Energy with 52572126 shares, DLF with 16888138, Ranbaxy 16093586 shares followed by Bharti Airtel with 11857653 shares.
On NSE Future and Options, total number of contracts traded in index futures was 753744 with a total turnover of Rs 15,939.06 Crore. Along with this total number of contracts traded in stock futures were 523384 with a total turnover of Rs 26,927.70 Crore. Total numbers of contracts for index options were 964304 with a total turnover of Rs 20,598.33 Crore and total numbers of contracts for stock options were 30720 and notional turnover was Rs 1,675.94 Crore.
Today, Nifty would have a support at 4,165 and resistance at 4,280 and BSE Sensex has support at 13,810 and resistance at 13,998.
Market likely to open flat
The market may witness cautious trend as US indices were closed on account of Memorial Day and Asian indices are exhibiting mix trends in the morning trades. Although the bias remains positive, investors should maintain caution as profit taking at higher levels may pull down the market. Among the local indices the Nifty could test 4200 and 4150 on the downside while on the upper side it may move up to 4300. The Sensex has a likely support at 13750 and may face resistance at 14050.
U.S. financial markets are closed Today for the Memorial Day holiday, while British markets are also shut for a bank holiday.
Daily trend of FII/MF investment in equities
On May 22 2009, FIIs were net sellers of stocks to the tune of Rs695 crore (purchases worth Rs2412 crore and sales of Rs3107 crore).
Stocks with +ve bias: Neyveli Lignite (SL 129), Suzlon (SL 87), REC Ltd (146)
Stocks for Short Term delivery: Orbit Corporation
Stocks for Investment: Man Industries, Godrej Consumer, BEL, Orient Paper
Important Results : Tata communications.
Market may remain volatile
Key benchmark indices may open lower tracking weak Asia. However volatility may remain high this week ahead of the expiry of May 2009 futures and options (F&O) contract on Thursday, 28 May 2009.
Investors
may also book profits after recent sharp rally in Indian stocks. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 5,752.82 points or 70.49% to 13,913.22 on Monday 25 May 2009. The Sensex is up 4,265.91 points or 44.21% in calendar year 2009.
While, recent buying by the foreign institutional investors (FIIs) may support the market . As per the provisional figures on NSE, foreign funds bought shares worth Rs 427.97 crore on Monday 25 May 2009 while domestic funds bought shares worth Rs 197.68 crore. FII inflow in May 2009 totaled Rs 14,242.40 crore (till Friday, 22 May 2009). FII inflow in calendar year 2009 totaled Rs 14,955 crore (till 22 May 2009).
Most of the Asian stocks were trading lower today, 26 May 2009. Japan's Nikkei stock average fell 0.86% on Tuesday, weighed down by tech shares such as TDK Corp though slides were checked by rises in shares such as drugmakers and telecommunications companies. But trade was thin, with a number of investors waiting to see how Wall Street will reopen after the Memorial Day holiday and in the wake of a public holiday in the United Kingdom.
South Korea's stocks fell 0.97% on concern that North Korea will conduct more nuclear tests after the communist state said yesterday it successfully held an underground explosion. Singapore's Straits Times fell 0.17% in a choppy trade. Hong Kong's Hang Seng fell 0.05%. Key benchmark indices in China, and Taiwan rose by between 0.19% to 0.24%.
US markets remained shut on Monday, 25 May 2009 due to Memorial Day holiday.
Back home in the political front, activity regarding expansion of the Manmohan Singh ministry gathered momentum on Monday 25 May 2009 with the Prime Minister meeting Congress chief Sonia Gandhi to finalize the list of inductees even though the sudden outbreak of violence in Punjab occupied the government's attention.
While there was no official word on the ceremony, it was hoped that the expansion could still be held today with the nominees of Trinamool Congress and DMK already in or on their way to Delhi.
. If the swearing-in of ministers does take place, it is expected to include the DMK contingent and several minister of state (MoS) nominees from Trinamool.
The UPA government got down to business in its second term with five of the six key Cabinet ministers alloted portfolios assuming charge of their respective offices on Monday 25 May 2009 and setting out their priorities.
P Chidambaram, A K Antony and Sharad Pawar returned to the Home, Defence and Agriculture ministries they were in-charge during Manmohan Singh's first term while Pranab Mukherjee came back to the Finance Ministry, a portfolio he had held 25 years back in the Indira Gandhi government.
S M Krishna, the former Karnataka chief minister and ex-Maharashtra governor, assumed office as the new External Affairs minister after making his Cabinet debut.
All the ministers convened meetings of their top officials to get a quick update on pressing issues. Mamata Banerjee, who was given the Railways portfolio, is in Kolkata and was yet to assume charge. Only six of the 19 Cabinet ministers who took oath along with Prime Minister Manmohan Singh last Friday have been allocated portfolios.
Dr Manmohan Singh was on Friday 22 May 2009 sworn-in as Prime Minister for a second consecutive term. Among others who took oath as Cabinet Ministers include Pranab Mukherjee, Sharad Pawar, A K Antony, P Chidambaram, Mamata Bannerjee, S M Krishna, Ghulam Nabi Azad, Sushil Kumar Shindae, S Jaipal Reddy, Vayalar Ravi, Meira Kumar, Ambika Soni.
A day after the swearing-in of the UPA government on Friday 22 May 2009, the Union cabinet met under the chairmanship of Prime Minister Manmohan Singh on Saturday 23 May 2009. The cabined took a decision to convene the Parliament session from 1 June to 9 June 2009. A meeting with leaders of various parties will be held in the first week of June 2009 for finalising the dates of the budget session, home minister P Chidambaram said after the cabinet meeting on Saturday. He said government is quite hopeful of passing the budget by 31 July 2009.
The Speaker's election would be held on 3 June 2009 and President Pratibha Patil will address the joint sitting on 4 June, the day Rajya Sabha will also be convened. This will be followed by the debate on motion of thanks. Explaining the process of passing the general budget, Chidambaram said this has to be completed by 31 July 2009 failing which a vote-on-account will have to be approved.
A newspaper report quoted Mukherjee as saying that the President's address on 4 June 2009 will unveil the new agenda of the government. Mukherjee said the government is all set to take legislative measures to put the economy back on track. When a stable government is in place, credit flows and other measures needed to boost the economy become easier, Mukherjee said. The Finance Minster (FM) said he was hopeful that the economy will recover by the second half of the year ending March 2010.
On the impact of the stimulus packages, the minister said that their effect would be felt in sectors like automobiles soon. The minister said that he was not in the alarmists' column over fiscal deficit.
Soon after taking charge of his office on Monday, the finance minister, Mr Pranab Mukherjee, held closed-door consultations with senior ministry officials and advisers where the talks focused on efforts to present the general budget 2009-10 in time to complete the entire process by 31 July 2009. The government had earlier indicated that it might take another vote on account for a brief period in case the finance bill was not passed before 31 July.
A comfortable victory for the Congress-led coalition government in election has raised expectations of a strong push for economic reforms by the government. Dr Manmohan Singh has reportedly prepared the broad contours of an economic revival plan to be taken up soon after the new government is formed, reports suggest. While recommendations to revive growth and ease the credit squeeze are likely to find a place in the plan, tax proposals are expected to be taken up as budget recommendations.
The telecom ministry has prioritised the much delayed auction of 3G airwaves and WiMAX spectrum. It has also prioritised introduction of a new spectrum policy.
The petroleum ministry has reportedly prepared a draft Cabinet note on a partial decontrol of petrol and diesel prices after which they will be linked to international movements. The new government is also likely to pursue disinvestment of state-run undertakings, reports suggest.
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.
Meanwhile, three days after the Congress and Dravida Munnettra Kazhagam (DMK) cracked the formula over portfolio allocations, DMK seems to have taken a soft approach. It now says it's ready to accept any portfolio that the Prime Minister Dr Manmohan Singh offers. With three DMK leaders being accommodated in the Cabinet and four as Ministers of State (MoS), a deal which for now seems to have the backing of the DMK.
However, now speculation is rife over what portfolios lies in store for the DMK. DMK supremo M Karunanidhi's nephew Dayanidhi Maran is slated to get the Textile portfolio. Karuna's son MK Azhagiri will be given the Chemical and Fertilizers portfolio. Another former minister A Raja will be handed the reigns of the information technology portfolio.
DMK on Thursday 21 May 2009 said it has decided not join the the Congress-led UPA government but the party will provide support the government from outside. This after the talks between DMK and Congress over ministerial berth for DMK broke down over berth sharing.
The Congress party-led coalition has the support of 322 lawmakers, Prime Minister-elect Manmohan Singh said on Wednesday, 20 May 2009, giving it a clear majority in a new government. Congress said it has support of 274 members of the 15th Lok Sabha. In addition, the Bahujan Samaj Party, the Samajwadi Party and the Rashtriya Janata Dal sent letters of support for a Manmohan Singh-led government directly to the President, taking the support base to 322. Dr Singh was renominated as Congress Parliamentary Party leader on Tuesday (19 May 2009).
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.
Oil Prices could hit 150$ again
Saudi Arabia warned oil prices could spike to beyond the near $150 record high of 2008 within three years as it joined other energy
leaders on Monday to call for more investment to boost production over the long term.
Energy ministers and officials at the Group of Eight energy summit wrapped up the two-day meeting by urging the industry to pump money into projects to expand capacity despite the credit crisis, which has put the brakes on investment.
The meeting came as oil prices hover at a six-month high of over $60 a barrel, but producers fret that it remains below the $75 level needed to spur investment while consumer nations fear further rise in prices could hurt global economic prospects.
The recent rally in prices is expected to have eased OPEC concerns about high inventories and weak demand, and OPEC officials have suggested an output cut is unlikely at a Thursday meeting, though Libya says that possibility still exists.
Saudi Arabian Oil Minister Ali al-Naimi said the world was heading for a fresh spike after the current phase of faltering demand and lower prices, which he said reflected the economic downturn rather than being an indicator of things to come.
"We are maintaining our long-term focus rather than being swayed by the volatility of short-term conditions," he said in prepared remarks at the summit.
"However, if others do not begin to invest similarly in new capacity expansion projects, we could see within two-to-three years another price spike similar to or worse than what we witnessed in 2008."
Naimi painted a bleak picture of the investment scenario, saying low prices, weak demand, high costs, tight credit markets and energy policies focused on alternative fuel sources had all combined to hurt spending on new projects.
GLOBAL OIL AGENCY
The Saudi warning was echoed by a top IMF official, who forecast price spikes over the medium-term would follow relatively stable markets in the short-term.
"With long time-to-build lags, significant setbacks to oil investment today could set the stage for future sharp price increases," IMF First Deputy Managing Director John Lipsky said.
He said energy investments were likely to remain subdued in 2010, after an expected decline in 2009. The International Energy Agency predicts investment in oil and gas exploration and production will fall 21 percent in 2009.
Paolo Scaroni, CEO of Italy's Eni, said a solution could be to create a global oil agency representing producers and consumers that would combat price volatility and ensure investments keep flowing into the energy sector.
While major producer and consumer nations debated the right oil price to spur investment without hurting the chances of an economic recovery, the World Bank urged leaders not to forget the poor in Africa.
The G8 energy summit had aimed at tackling climate change, promoting investment in new projects, spurring dialogue between producers and consumer nations and boosting energy resources in poorer countries.
It brought officials from major producer and consumer nations ahead of Thursday's OPEC meeting, when the producer group is expected to keep output levels unchanged.
Saudi Arabia's Naimi has previously said he expects OPEC to "stay the course" when it meets, and Algeria says all members agree that there is no need for an output cut.
Libya, however, says the possibility of a cut still remains, as the group considers whether the recent price rise is a trend or simply volatility.
Consumer nations like the United States have urged OPEC to keep its focus on price stability to prevent an oil spike that could derail hopes of an economic recovery.
The two sides ought to agree on a "respectful band" for prices that prevents volatility and allows for investment in the sector, Egypt's oil minister said, echoing the concerns of consumer nations who fear a spike in prices.
"Yes, there is an economic and financial crisis, but in the oil and gas sector you cannot sleep," Sameh Fahmy told Reuters. "When the high prices come back again what are you going to do?"
via ET
Stocks to watch: BoB, PNB, ONGC...
Following stocks are likely to be in the limelight today, May 26.
Bank of Baroda (BoB) has reduced interest rates on its various maturity deposits by 0.25-0.75%. Shares of the bank closed up Rs 17.5, or 4.14%, at Rs 439.95**.
Punjab National Bank (PNB) is planning to open five overseas offices over the next one year. Shares of the bank closed down Rs 19.2, or 2.89%, at Rs 644.05**.
Oil & Natural Gas Corporation (ONGC) said it would lose about Rs 140 billion if it was forced to continue in Cairn India`s prolific Rajasthan oilfields as it would have to pay all government levies. Shares of ONGC closed down Rs 6.2, or 0.59%, at Rs 1,039.10**.
Tata Motors is likely to roll over close to USD 1.05 billion of debt remaining out of the USD 3-billion bridge loan it had taken in 2008 to fund the acquisition of British automobile company Jaguar and Land Rover. Shares of Tata Motors closed up Rs 0.25, or 0.07%, at Rs 345.95**.
Ranbaxy Laboratories missed the deadline of May 2009 to start supplying raw materials to British drugmaker Astrazeneca. Shares of Ranbaxy Laboratories closed up Rs 45.8, or 20.73%, at Rs 266.70**.
Bharti Airtel, India`s leading mobile telephone service provider, announced on Monday that it has renewed its effort for a significant partnership with MTN Group (`MTN`) and is exploring a potential transaction whereby, pursuant to a scheme of arrangement, Bharti would acquire a 49% shareholding in MTN and, in turn, MTN and its shareholders would acquire an approximate 36% economic interest in Bharti, of which 25% would be held by MTN with the remainder held directly by MTN shareholders. Bharti and MTN have agreed to discuss the potential transaction exclusively with one another until Jul. 31, 2009. Shares of the company closed down Rs 46.45, or 5.41%, at Rs 811.40**.
Rural Electrification Corporation (REC), a Navratna Public Sector company registered a sharp rise in net profit for the quarter ended March 2009. During the quarter, the company posted 65.05% rise in profit of Rs 3,880.40 million compared with Rs 2,351 million in the same quarter previous year. Total income for the quarter jumped 44.68% to Rs 14,470.90 million, when compared with the prior year period. Shares of the company closed up Rs 10.6, or 7.65%, at Rs 149.20**.
IDEA Cellular, one of the leading telecom operators in the country has now entered Tamil Nadu, with the launch of its GSM mobile services in 130 towns across the state. IDEA`s 2.75G EDGE enabled network will progressively cover Chennai and over 500 towns and villages by the end of current financial year. Shares of the company gained Rs 1.9, or 2.67%, to settle at Rs 72.95**.
Jet Airways India, leading airline operator, turned to profit for the quarter ended March 2009. During the quarter, the company posted profit of Rs 529.90 million compared with a loss of Rs 2,211.80 million in the same quarter previous year. Shares of the company closed up Rs 1.95, or 0.64%, at Rs 305.25**.
**Closing share prices as on, Monday, May 25.
US dollar: Destination known, road unknown
by Vivek Kaul, DNA
"The US dollar is not strong because people want to hold the dollar, but it's strong because people have debt in dollars."
--George Soros, renowned hedge fund manager
"You know, I have been here for almost a month now and still haven't figured out what I want to do," she said, late on a Sunday afternoon.
"When you don't know where you are going, the journey is the reward," I replied.
"So funny," she replied rather agitatedly.
"OK, let's go out somewhere," I said, grabbing her hand and leading her out of the house.
"What's on your mind? You know, you can be really weird at times," she said as we reached the bus stop.
"We'll take the first bus that comes here, wherever that goes," I said, sounding weirder.
One did five minutes later; a 33 to somewhere. We hopped on and bought two tickets to the last stop.
"Where does this bus go?" she asked.
"I don't know!" I replied.
"Is this some sort of a joke?"
"Like I said, when you don't know where you are going, the journey is the reward. So, enjoy it."
"Oh! I think I'll flip the point you are trying to make. Take the US dollar, for instance. From what we have been discussing, we know it will ultimately crash --- when and how, we don't know. Destination known; road unknown. You know where you are going, but not how and when you will get there. Is the journey still the reward?"
And I thought I had the penchant for linking anything to anything.
"Interesting," I said. "But I think I have some idea of how the US dollar will get there. For 2009, the projected fiscal deficit of the United States is $1.85 trillion. That's four times higher than the maximum deficit the US has previously run. This estimate has been made by the Congressional Budget Office (CBO). It also estimates that the deficit will be $1.4 trillion in 2010. Estimates made also suggest that between 2010 and 2019, the US will run a total deficit of $10 trillion. As you know, fiscal deficit is essentially the difference between what the government earns and what the government spends. And given that it plans to spend more than what it earns, the remaining money needs to be borrowed. Also, like most forecasts, this forecast is also a wee-bit optimistic, I feel."
"As in?"
"See every forecast is made using some assumptions. The CBO has assumed an unemployment rate of 8.8% for 2009. The rate has already touched 8.9% at the end of April. Also, from the way it looks, unemployment in the US is only going to increase in the days to come. Other than this, CBO assumes that the gross domestic product (GDP) growth in 2010 will be 3.8%. Now, given that the GDP contracted by 6.1% in the first quarter of 2009, hoping it will grow at 3.8% the very next year is pretty optimistic. My view is the US fiscal deficit will be more than what it is being projected. And all this money will have to be borrowed."
"Yeah, it will have to be borrowed. But with countries like China and Japan ready to lend to the US, where is the problem?"
"Hold on. In March, China and Japan were net buyers of $48.5 billion of financial securities issued by the US government. These financial securities pay a certain rate of interest and are issued to borrow money. Even Russia bought $8.3 billion of financial securities issued by the US government. Some experts have questioned the credibility of these figures, but assuming you and I trust these figures, there are some serious problems otherwise as well," I said, looking out the window, and realising how little traffic the city had on a Sunday afternoon.
"And what are these problems, if I may ask."
"Estimates suggest the US government needs to borrow $1 trillion by September. It will be very difficult to raise such humongous amount of money given that exports of the major buyers of these securities are falling. Chinese exports are down 41% and Japanese exports are down 38%. These countries earn US dollars through exporting goods and services.
These dollars, in turn, are used to buy securities issued by the US government. When exports fall, dollar earnings also fall. Given that, where will all the dollars to buy these securities come from? Also, we need to remember that the US is not the only country in the world that is running a fiscal deficit. Most of Europe is running a fiscal deficit, and so is Japan. And all these countries need to borrow. One estimate suggests the US, Japan and Europe need to borrow $5 trillion over the next two years. Now, let me be optimistic for a change and assume that there are enough buyers for these securities. But even with that, will the US government manage to find buyers for financial securities amounting to another $5 trillion, which it needs, over the next four years? This, given that the government will continue to spend more than it earns."
"Hmmm... I see even optimism can lead to pessimism. So what is the way out?" she asked as a spurt of wind blew her hair on to my face.
"I guess the only way out is to print money. The Federal Reserve of the US is currently authorised to print $1.75 trillion. This money will be used to buy back financial securities issued by the US government. The theory is that more money in the economy will lead to people spending people more and that in turn will revive the economy. Most western economies are resorting to this in order to get their economies up and running again. Bank of England is planning to buy back bonds worth 75 billion pounds. And the European Central Bank, the central bank of the European Union countries, also recently announced that it would start printing money."
"But wouldn't all this money printing be disastrous?"
"Over a period of time? Yes. But right now, the impact of this has been extremely benign. See, the idea was that increased money in the economy will make people spend more and that in turn will lead to people spending more. But right now, people are tired of spending and not in the mood to spend. That cannot continue forever, and as and when they do start spending again, too much money will chase too few goods and inflation will start showing its ugly head."
"I recently read an interview of Ben Bernanke, where he said, "When the economy begins to recover, that will be the time that we need to unwind those programmes, raise interest rates, reduce the money supply, and make sure that we have a recovery that does not involve inflation.""
"At the cost of repeating myself, economics is not an exact science and I am sure Bernanke also knows that, notwithstanding what he said in that interview. So assume prices start rising in the US and the US government along with the Federal Reserve to start reducing money supply. The simplest way to do it would be to start selling the financial securities they have been buying these days. Once they start doing that, they will be able to suck out money from the market, at least theoretically. But imagine what impact that would have. The biggest buyer of these financial securities would suddenly turn into the biggest seller. Given that, at that point of time, will there be enough buyers of these securities? The prices of these financial securities will crash, as there would be very few buyers at that point of time. Also, as inflation rises, investors who have bought these financial securities would want to sell out."
"Why would they want to sell out?"
"Inflation reduces the value of the money and given that expectation, investors would want to get out and spend that money. All this will lead to the price of these financial securities crashing. And that will also lead to the US dollar crashing because countries like China, Japan and Saudi Arabia own most of these financial securities. Once they have sold off these securities, they would want to convert the dollars they have got selling these securities into their own currencies. A spate of dollar sales is likely to hit the market, and that in turn will lead to the value of the dollar crashing against other currencies."
"And when will this happen? she asked.
"I wish I knew. But as renowned economist Nouriel Roubini, who predicted this crash, recently said, "This decline of the dollar might take more than a decade, but it could happen even sooner if we do not get our financial house in order. The United States must rein in spending and borrowing, and pursue growth that is not based on asset and credit bubbles. For the last two decades, America has been spending more than its income, increasing its foreign liabilities and amassing debts that have become unsustainable," I said.
There was a tap on my shoulder. "Last stop," the conductor said, asking us to get down.
"So where are we?" she asked.
"Goregaon," I said, looking around. "Now that we are here, let us find a coffee shop first."
(The example is hypothetical)
Orchid Chemicals
We recommend a buy in the Orchid Chemicals & Pharmaceuticals from a short-term horizon. It is evident from the charts of Orchid Chemicals that after recording a multi-year low of Rs 56 in early March, it began to trend up. Since then, the stock has been on an intermediate-term uptrend, forming higher peaks and higher bottoms. The stock emphatically penetrated its 21 and 50-day moving averages during late March and is currently trading well above these averages. On May 25, the stock broke through a significant long-term resistance level of Rs 120 by gaining 9 per cent. We observe high volumes during the advance days of the uptrend, signalling strength in the current trend. The daily relative strength index (RSI) is featuring in the bullish zone and the weekly RSI has also entered into this zone. The daily moving average convergence and divergence is also hovering in the positive territory. We are bullish on the stock from a short-term perspective. We anticipate the stock to rally further until it hits our price target of Rs 144 in the approaching trading sessions. Traders with short-term trading perspective can buy the stock while maintaining a stop-loss at Rs 123.
via BL
FIIs in selling mode
Outflow of Rs 694.70 crore on 22 May 2009
Foreign institutional investors (FIIs) sold shares worth a net Rs 694.70 crore on Friday, 22 May 2009, as against an inflow of Rs 146.90 crore on Thursday, 21 May 2009.
FII outflow of Rs 694.70 crore on 22 May 2009 was a result of gross purchases Rs 2,412 crore and gross sales Rs 3,106.70 crore. The BSE Sensex had gained 150.61 points or 1.10% to 13,887.15 on that day.
FII inflow in May 2009 totaled Rs 14,242.40 crore (till 22 May 2009). FII inflow in calendar year 2009 totaled Rs 14,955 crore (till 22 May 2009).
There are a total of 1656 foreign funds registered with the Securities & Exchange Board of India (Sebi).
Subscribe to:
Posts (Atom)