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Friday, June 12, 2009
NSE Bulk Deals to Watch - June 12 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
12-JUN-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,BUY,445898,1044.00,-
12-JUN-2009,ALOKTEXT,Alok Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,2681805,25.70,-
12-JUN-2009,EVERONN,Everonn Systems India Lim,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,144656,425.28,-
12-JUN-2009,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,BUY,124309,431.27,-
12-JUN-2009,IFCI,IFCI Ltd.,ADROIT SHARE & STOCK BROKER PVT. LTD.,BUY,5061032,53.22,-
12-JUN-2009,NAGARFERT,Nagarjuna Fert & Chem,PACE FINANCIAL SERVICES,BUY,2026742,43.60,-
12-JUN-2009,NOIDATOLL,Noida Toll Bridge Company,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,1307621,45.17,-
12-JUN-2009,NOIDATOLL,Noida Toll Bridge Company,NIRSHILP SECURITIES PVT. LTD.,BUY,1045524,46.23,-
12-JUN-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,SELL,444698,1044.20,-
12-JUN-2009,ALOKTEXT,Alok Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,2686604,25.77,-
12-JUN-2009,EVERONN,Everonn Systems India Lim,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,143856,425.84,-
12-JUN-2009,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,SELL,125109,431.19,-
12-JUN-2009,IFCI,IFCI Ltd.,ADROIT SHARE & STOCK BROKER PVT. LTD.,SELL,5061032,53.27,-
12-JUN-2009,MAYTASINFR,Maytas Infra Limited,IFCI LTD.,SELL,464718,93.58,-
12-JUN-2009,NAGARFERT,Nagarjuna Fert & Chem,PACE FINANCIAL SERVICES,SELL,2221403,43.65,-
12-JUN-2009,NOIDATOLL,Noida Toll Bridge Company,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,1291221,45.03,-
12-JUN-2009,NOIDATOLL,Noida Toll Bridge Company,NIRSHILP SECURITIES PVT. LTD.,SELL,707231,45.23,-
India's forex reserves down by USD 1.089 bn
India's forex reserves declined by USD 1.089 billion to USD 261.317 billion for the week ended June 5 as compared to USD 262.306 billion in the previous week. During the period, the foreign currency assets, dipped by USD 1.089 billion to 250.367 billion as compared to USD 251.456 billion in the previous week, the Reserve Bank said in
its weekly data.
Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies (such as Euro, Sterling, Yen) held in reserves, the
RBI said. The country's gold reserves and special drawing rights (SDR), during the week, stood unchanged at USD 9.604 billion and USD 1 million, respectively, the central bank said. India's reserve position in the International Monetary Fund (IMF) remain same at USD 1.245-billion, the RBI said.
Something smells fishy in Aban Offshore...
The share price of Aban Offshore has risen sharply of late. What is the reason for such a big swing? As it seems at first sight, the trading pattern of the company`s shares throws up a lot of questions.
The shares of Aban Offshore have gone up more than 350% to around Rs 1,046 in just 3 months, raising doubts and pointing to potential price manipulation by a cartel of stock brokers through circular trading. To expand the analysis a bit, look at the table (at the end of the story) of bulk deals in company`s shares over the last 3 months; looks terribly like a circular trading.
Circular trades in a particular scrip happen when a closely knit set of market entities, mainly brokers, buy and sell shares frequently among themselves to push up the stock price. Since there are no genuine intentions to trade in the case of circular trades, the trading volumes thus generated are referred to as artificial volumes.
The company has a huge debt on its books with lower than expected cash flows from its operations. According to Sharekhan`s report, the highly leveraged position of the company remains one of the biggest concerns with its USD 3.2-billion debt.
Aban Offshore has not signed any new contract in the last seven months, raising serious concerns over its future and its ability to service its high debt.
Was it value buying or circular trading, or perhaps something else which pushed up the prices?
Shares of the company closed down Rs 41.75, or 3.98%, at Rs 1,008.15. The total volume of shares traded at the BSE was 1,133,540 (Friday).
via myiris
BSE Bulk Deals to Watch - June 12 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
12/6/2009 532114 AREALTY CLSA (MAURITIUS) LIMITED B 700000 18.70
12/6/2009 532114 AREALTY SUNILTALWAR S 675315 18.70
12/6/2009 512149 AVANCE TECHN JASMINSBAJORIYA B 24300 23.92
12/6/2009 512149 AVANCE TECHN JHAVERI TRADING AND S 43006 23.90
12/6/2009 526556 AVERY INDIA RAJASTHAN GLOBAL SEC LTD B 80404 104.57
12/6/2009 526556 AVERY INDIA RATNABALI CAPITAL MARKETS LIMITED S 94737 104.62
12/6/2009 531337 CHAN GUIDE I VIJAY ASHANAND THAKKAR B 200000 24.50
12/6/2009 531337 CHAN GUIDE I RAKESH NEMICHAND JAIN S 100000 24.50
12/6/2009 531337 CHAN GUIDE I RAJESH NEMICHAND JAIN S 100000 24.50
12/6/2009 532363 COMP-U-LEARN Naman Securities & Finance Pvt. Ltd. B 91200 10.19
12/6/2009 532363 COMP-U-LEARN SANJAYARJUNDASNILWADHWA B 100000 10.20
12/6/2009 532363 COMP-U-LEARN BP FINTRADE PRIVATE LIMITED B 69948 10.13
12/6/2009 532363 COMP-U-LEARN Naman Securities & Finance Pvt. Ltd. S 99200 10.18
12/6/2009 532363 COMP-U-LEARN BP FINTRADE PRIVATE LIMITED S 69948 10.20
12/6/2009 532760 DEEP INDS SETU SECURITIES PVT LTD B 100000 121.47
12/6/2009 504000 ELPRO INTERN FARIDABAD COMPANY LIMITED B 25000 476.55
12/6/2009 504000 ELPRO INTERN KEYNOTE CAPITALS (STOCK) S 25000 476.55
12/6/2009 532876 EVERONN SYS OPG SECURITIES P LTD B 85084 441.68
12/6/2009 532876 EVERONN SYS OPG SECURITIES P LTD S 85084 442.52
12/6/2009 532022 FILAT FASH CHANDRESHCHANDRAKANTSHAH B 54851 111.72
12/6/2009 532022 FILAT FASH CHANDRESHCHANDRAKANTSHAH S 54851 112.09
12/6/2009 508918 GREYCELLS EN KBS TRADING PVT LTD B 43000 196.38
12/6/2009 508918 GREYCELLS EN HEMANG MUCHHALA S 28000 196.50
12/6/2009 509597 HARDCAS WAUD VOCATION INV & FIN CO PVT LTD B 9148 262.25
12/6/2009 509597 HARDCAS WAUD KANWARLALBOTHRA S 9000 261.57
12/6/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL B 67381 34.12
12/6/2009 516078 JUMBO BAG LT OMPARKASHGUPTA B 51200 33.44
12/6/2009 516078 JUMBO BAG LT NIKHILSSHAH B 38000 33.80
12/6/2009 516078 JUMBO BAG LT HEMENDRA AGARWAL B 50000 32.65
12/6/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL S 70344 33.24
12/6/2009 516078 JUMBO BAG LT OMPARKASHGUPTA S 51200 33.20
12/6/2009 504076 JYOTI LIMITE LARSEN & TOUBRO LIMITED S 70000 59.16
12/6/2009 532081 K SERA SERA OUDH FINANCE & INVESTMENT PVT LTD B 501610 15.16
12/6/2009 532081 K SERA SERA S V ENTERPRISES S 344485 15.01
12/6/2009 511131 KAMAN HSG PRABHUDAS LILLADHER FINANCIAL SERVICES PRIVATE LIMITED S 80000 30.82
12/6/2009 526263 MOLDTEK TECH DEVARAPALLI SAMPATH B 20739 57.41
12/6/2009 590011 MOVING PICTU-PMS CAMPHAR SEC.& ADV.P.LTD. B 50000 4.29
12/6/2009 511523 NIYAT INDUST AMINA SAMSUDINCHARANIA B 200000 1.26
12/6/2009 531611 PRRANET INDU KAMLESH NAVINCHANDRA SHAH HUF B 500000 5.13
12/6/2009 526753 ROSELABS LTD NIRMALADEVITRILOKCHANDAGRAWAL S 105000 11.00
12/6/2009 531898 SANGUINE MD SETU SECURITIES PVT LTD B 125001 5.42
12/6/2009 531898 SANGUINE MD ANGEL INFIN PRIVATE LIMITED B 305000 5.42
12/6/2009 531898 SANGUINE MD FORSEE FINANCIAL AND CONSULTANCY SERVICES PVT LTD S 200000 5.42
12/6/2009 531898 SANGUINE MD JMP SECURITIES PVT LTD S 106589 5.42
12/6/2009 512105 SHREENATH S K INVESTMENTS S 1500 68.25
12/6/2009 505729 SINGER INDI SINGER (INDIA) B.V S 7852 30.92
12/6/2009 503657 VEER ENERGY BHAVESH N SHETH B 9200 248.50
12/6/2009 503657 VEER ENERGY NIYATI INDUSTRIES LTD S 10843 248.50
12/6/2009 503657 VEER ENERGY MANISH MANILAL GOSAR HUF S 8100 248.50
Post Session Commentary - June 12 2009
Indian market lost ground after mid session to close in negative terrain due to selling pressure emerged on profit taking after sharp rise in preceding sessions. Meanwhile, the IIP number for the month of April came in at 1.4% as against a revised 0.75% fall in March. The better than expected industrial production data raised fears that the rate cutting sequence may come to an end earlier than expected. Besides, negative European markets also fueled the weak sentiments.
The market opened above the yesterday’s closing tracking positive cues from the markets all over the world. Asian stocks were higher in early trade and the US stock markets on Thursday ended up with all three major benchmarks closing at multi-month highs backed by a sharp rise in retail sales and a bigger-than-expected dip in jobless claims. Moreover, in the Advance Retail Sales Report, both total retail sales and retail sales less autos increased 0.5%, which marked the first increase in three months. Total sales were in-line with expectations, while sales excluding autos were actually stronger than expected. Further, domestic benchmark indices continued to gain till mid session backed by firm Asian markets. However, stocks were unable to prolong the same impetus and slipped lower after report of rise in IIP data. Finally market ended with losses on account of selling pressure observed in key stocks. BSE Sensex ended below15,300 level and NSE Nifty below 4,600 mark. From the sectoral front, Realty, Auto, Teck, Consumer Durable, Capital Goods, Bank and Power stocks contributed to most of the selling pressure. Mid Cap and Small Cap stocks also followed the same trend. However, Metal and Oil & Gas stocks managed to gain favour from the market.
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 2020 stocks closed in red while 706 stocks closed in green and 48 stocks remained unchanged in BSE.
The BSE Sensex closed lower by 173.53 points at 15,237.94 and NSE Nifty ended down by 54.30 points at 4,583.40. BSE Mid Caps and Small Caps closed with losses of 112.55 and 135.78 points at 5,235.03 and 6,014.66 respectively. The BSE Sensex touched intraday high of 15,600.30 and intraday low of 15,174.28.
Losers from the BSE Sensex pack are Ranbaxy Lab (6.03%), DLF Ltd (5.80%), RCom (4.38%), M&M Ltd (3.92%), Tata Motors (3.69%), SBI (3.49%), Reliance Infra (3.14%), Wipro Ltd (1.74%), Bharti Airtel (2.83%) and HDFC (2.76%).
Gainers from the BSE Sensex pack are Reliance (2.48%), Sterlite Industries (2.26%), ONGC Ltd (0.80%) and Tata Steel (0.78%).
The industrial output production (IIP) number for the month of April came in at 1.4% as against a revised 0.75% fall in March. The industrial output was 6.2% in the same month of the previous year. The manufacturing output for April has gone up to 0.7% and the mining output surged 3.8% (Y-o-Y).
On the global markets front the Asian markets which opened before the Indian market, ended mixed. Improving economic data from China and US supported the markets. According to the government, China retail sales and industrial output grew strongly in May amid heavy stimulus spending. That followed figures showing domestic investment in factories, real estate and other fixed assets soared 32.9% in the first five months of the year, even as exports and imports tumbled in May. Hang Seng, Nikkei 225 and Seoul Composite ended higher by 98.65, 154.49 and 9.2 points at 18,889.68, 10,135.82 and 1,428.59 respectively. However, Shanghai Composite and Straits Times index closed down 53.56 and 4.74 points at 2,743.76 and 2,377.07 respectively.
European markets which opened after the Indian market are trading in red. In Frankfurt the DAX index is trading lower by 22.08 points at 5,085.18 and in London FTSE 100 is trading down by 7.33 points at. 4,454.54.
The BSE Realty index decreased by (2.49%) or 93.37 points to close at 3,662.11. Main losers are Housing Development (5.82%), DLF Ltd (5.80%), Orbit Co (4.30%), Parsvnath (3.05%) and Pheonix Mill (3.02%).
The BSE Auto stocks also lost (2.41%) 121.15 points to close 4,897.83 on profit taking after recent surge. Major losers are Ashok Leyland (4.75%), Apollo Tyre (4.48%), Escorts Ltd (4.45%), Exide Indus (4.15%) and M&M Ltd (3.92%).
The BSE Teck ended down by (2.40%) or 65.68 points 2,674.21. Losers are IOL Netcom (8.37%), Tech Mahindra (6.63%), Deccan Chronicle (6.37%), IBN18 (6.21%) and Mahindra Life (5.40%).
The BSE Consumer Durable index dropped by (2.29%) or 70.30 points at 2,999.77. Gitanjali GE (7.10%), Rajesh Ecport (4.37%), Videocon Ind (3.04%), Blue Star L (2.04%) and Titan Ind (0.44%) ended in negative territory.
The BSE Capital Goods index lost (2.27%) or 302.25 points to close at 12,992.66. Losers are Usha Martin (5.61%), Punj Lloyd (5.20%), Elecon Eng C (4.99%), Gammon Indi (4.98%) and Aiaengineer (4.08%).
The BSE Metal index advanced by (1.93%) or 231.75 points at 12,220.75 as LMEX, a gauge of six metals traded on the London Metal Exchange leapt 4.2% overnight. Scrips that gained are JSW Steel (11.31%), Hindustan Zinc (7.85%), Sesa Goal TD (5.62%), Jindal Steel (5.14%) and Welspan Gujarat Sr (3.20%).
Ciba India Ltd deteriorated by 11.55% after the company posted net loss of Rs. 11.90 crore in Q4 March 2009 as compared with net profit of Rs. 2.90 crore in Q4 March 2008.
Bharat Heavy Electricals Ltd slipped 2.45% despite it has secured orders worth Rs 4015 crore from Hindalco Industries to supply power generation equipment.
Sesa Goa Ltd surged 5.62% after it acquired Goa-based V S Dempo Mining Corporation for Rs 1750 crore in an all-cash deal to boost its output of iron ore.
McNally Bharat Engineering Company Ltd ended up by 4.01%. The company has received an order for a 2.0 MTPA Pb-Zinc Beneficiation Plant at Sindesar Khurd Mines, Rajasthan from Hindustan Zinc Ltd (HZL) for a value of Rs 300 Crores including taxes and duties. The contractual period of completion of the order is 18 months.
Jubilant Organosys jumped 1.36% after its subsidiary Jubilant Biosys forged a three-year collaboration with US-based pharmaceutical firm Endo Pharmaceuticals for research in Oncology.
Bulls may prevail on strong FII inflow
Raging bulls may keep equity market firm next week amid strengthening signals of an economic recovery and expectations that a stable government will push economic reforms forcefully in its second term.
The bulls are back in business since March 2009, with soaring foreign inflows and after the ruling Congress party coalition thumped its rivals in mid-May 2009 and won a second term in office, raising expectations the big election win will pave the way to speedier reforms to boost the economy.
Foreign fund buying have bought Indian stocks worth Rs Rs 26903.10 crore in 2009 (till 11 June 2009). As Indian stocks continue to rally following last month's election result, market watchers are now shifting focus to the next likely catalyst, the government's union budget.
Finance Minister Pranab Mukherjee will present the union budget in the first week of July 2009, with focus on the common man while providing special attention to sectors hit hard by global crisis. Railway Budget for the year 2009-10 would be presented on 1 July 2009, followed by Economic Survey on 2 July 2009.
The budget will be a key indicator to see whether the stock market's recent gains are justified or whether an unrealistic pace for reform has been priced in. The deteriorating fiscal situation poses a serious threat to India's sovereign debt rating.
Surging fiscal deficit, which went up to 6.2% of GDP (gross domestic product) in 2008-09, is causing many to wonder how much more positive momentum the Indian equities market still has.
However, Suresh Tendulkar, the chairman of Prime Minister's economic advisory council, on Thursday, 11 June 2009, said India's fiscal deficit target for 2009/10 could be met with funds raised from the sale of third-generation (3G) wireless spectrum and stake sale in state-run firms. He also said he expected economic growth at about 7% in the year to March 2010.
First installment of advance tax is due on 15 June 2009. This will be a major trigger for the market next week as Indian companies are reportedly expected to pay an estimated Rs 40,000 crore as advance tax.
Despite shares becoming pricey after the rally, the rising inflow indicates that investors are betting on a big turnaround in corporate earnings growth in coming years.
The Purchasing Managers' Index (PMI) expanded for the second consecutive month in May 2009, as manufacturers reported higher new orders because of revival in domestic demand. But exports continued to remain a concern.
The index, which gets responses from purchasing managers in 500 industrial companies, increased to 55.1 in May, compared with 53.3 in the preceding month. A reading above 50 indicates expansion of that particular variable, while a reading below 50 indicates an overall decrease.
India's industrial production for April 2009 bounced back into the positive zone after declining three times in four months. The index of industrial production (IIP) rose 1.4% in April from a revised 0.75% decline in March 2009
Sensex extents gains for the 14th week in a row
The appetite of cash-flush foreign institutional investors (FIIs) for Indian shares showed no sign of waning as the market ended higher for the 14th week in a row. The modest rise in the BSE Sensex was after a solid rally in 13 preceding weeks.
Encouraging speech by the prime minister acted as a sentiment booster. Prime Minister Manmohan Singh said the economy had the potential to achieve a 9% growth rate amid the global recession. President Pratibha Patil had last week said the government would ease foreign investment rules, sell holdings in state companies and pump money into lenders to stoke growth.
FII inflow in June 2009 totaled Rs 5,595.40 crore, while the inflows in the calendar year 2009 totaled Rs 26,914.80 crore (till 11 June 2009).
Economic indicators confirmed a recovery. The industrial production for April 2009 bounced back into the positive zone after declining three times in four months. The index of industrial production (IIP) rose 1.4% in April from a revised 0.75% decline in March 2009.
Inflation based on the wholesale price index (WPI) rose 0.13% in the year through 30 May 2009, government data on Thursday showed. The annual inflation rate was 9.32% during the corresponding week of the previous year. Inflation for the week ended 4 April 2009, was revised to 0.83% as against the provisional figure of 0.18%.
The BSE 30-share Sensex rose 134.39 points, or 0.89%, to 15,237.94 in the week ended 12 June 2009. But the S&P CNX Nifty declined 3.5 points or 0.07% to 4583.40 in the week.
Second-rung stocks gave up recent gains with their barometer indices underperforming the main stock indices. The BSE Mid-cap index fell 174.75 points or 3.23% to 5,235.03 and the BSE Small-cap index lost 443.99 points or 6.87% to 6,014.66.
Trading for the week began on a weak note, with key benchmark indices plunging from multi-month highs on Monday, 8 June 2009, as lower European markets and US index futures triggered profit taking after a recent solid surge. That day, the BSE 30-share Sensex lost 437.63 points, or 2.9%, to 14,665.92. The S&P CNX Nifty ended down 157 points, or 3.42%, to 4,429.90.
Investors, however, saw the sharp plunge on Monday, as a buying opportunity. The market bounced back with vengeance on Tuesday, 9 June 2009, erasing all the losses incurred in the previous session. Prime minister's comment fortified investor sentiment that day, as he said Indian economy can achieve 8% to 9% growth with a high savings rate. The BSE 30-share Sensex jumped 461.08 points, or 3.14%, to 15,127, its highest closing since 12 August 2008. The S&P CNX Nifty rose 121.05 points, or 2.73%, to 4,550.95.
Firm global markets and higher US index futures helped Indian stocks register strong gains for the second straight day on Wednesday, 10 June 2009. Comments by Petroleum Secretary R.S. Pandey that the government is committed to reforms in fuel pricing also boosted the sentiment. The BSE 30-share Sensex rose 339.81 points, or 2.25%, to 15,466.81 its highest closing since 11 August 2008. The S&P CNX Nifty rose 104.95 points, or 2.31%, to 4,655.90 its highest closing since 5 June 2008.
On Thursday, 11 June 2009, the key benchmark indices snapped gains made in the preceding two sessions. Profit booking pulled the Sensex down by 55.34 points, or 0.36%, to 15,411.47. The S&P CNX Nifty ended down 17.55 points or 0.38% to 4,637.70.
The key benchmark indices extended losses for the second straight day on Friday, 12 June 2009, as investors took profits ahead of the weekend on a more than 90% rally since early March 2009. Stocks from interest rate sensitive sectors viz. auto and realty fell as an improved industrial production data raised fears that the rate cutting cycle may come to an end sooner than later. The BSE 30-share Sensex fell 173.53 points, or 1.13%, to 15,237.94. The S&P CNX Nifty ended down 54.30 points or 1.17% to 4583.40.
India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 6.55% in the week on market talks the government may extend a seven-year tax holiday given to crude oil explorers to producers of natural gas in the Union Budget 2009-2010.
Analysts expect strong growth in RIL's bottom line in coming quarters from sale of gas which it started pumping last month from its deep-sea field off the east coast.
The Bombay High Court is likely to deliver the final judgement on the legal tussle over the supply of gas from Reliance Industries (RIL) to Reliance Natural Resources (RNRL) shortly. The basic argument in the RIL-RNRL case pertains to the pricing and quantum of gas RIL has to supply s from its Krishna Godavari basin to RNRL for RNRL's upcoming 7400 megawatt (MW) power project at Dadri in Uttar Pradesh.
Realty stocks fell on profit taking after a recent sharp surge triggered by expectations that stability at the Centre will attract more money from foreign investors into the sector which in turn will boost growth. Unitech (down 11.86%), Omaxe (down 11.12%), DLF (down 9.69%), and Akruti City (down 2.75%), fell.
Unitech and Indiabulls Real Estate, have already raised funds through qualified institutional placements (QIPs). A number of other realty funds have decided to raised funds by way of QIPs. The promoters of DLF last month sold a 10% stake in the secondary equity markets.
Engineering-to-construction major Larsen & Toubro (L&T) rose 4.16% after it sold its entire 11.49% stake in UltraTech Cement on Thursday, 11 June 2009.
Among other capital goods stocks, ABB (up 7.57%), Thermax (up 8.11%), rose.
India's largest electric equipment maker by sales Bharat Heavy Electricals fell 3.13% even after it got orders worth Rs 4,015 crore from Hindalco Industries.
Some auto stocks fell on profit taking after recent surge triggered by improved sales in the month of May 2009. India's largest truck maker by sales Tata Motors (down 8.33%), and India's second largest two-wheeler maker by sales Bajaj Auto (down 10.89%), declined.
Software outsourcers moved higher on talks worst may be over for the US economy and the US banking system. Tata Consultancy Services (up 5.95%), Wipro (up 4.37%), and HCL Technologies (up 11.64%), soared.
India's second largest software exporter Infosys Technologies rose 2.21% after it won a new information technology-outsourcing contract from Telstra Corp, Australia's top phone company.
Beleaguered software company Satyam Computer Services galloped 20.89% after posting unaudited consolidated net profit of Rs 160 crore in Q3 December 2008. It reported a standalone net profit of Rs 181 crore on revenue of Rs 2,294 crore in Q3 December 2008.
Satyam said it had total bank balances of Rs 373 crore as at 31 March 2009. The employee count stood at 41,622, the statement to the stock exchanges said.
Shares of Satyam's new owner, Tech Mahindra jumped 13.53% in the week. Tech Mahindra won an auction in April this year for a controlling stake in Satyam. Tech Mahindra launched an open offer to buy up to 20% in Satyam from its shareholders on Friday, 12 June 2009. If the open offer is fully accepted, it would take Tech Mahindra's holding in Satyam to 51%.
Market slips for the second straight day on profit taking
The key benchmark indices extended losses for the second straight day as investors took profits ahead of the weekend on a more than 90% rally since early March 2009. Stocks from interest rate sensitive sectors viz. auto, banking and realty fell as an improved industrial production data raised fears that the rate cutting cycle may come to an end sooner than later. But index heavyweight Reliance Industries bucked the weak trend and so did metal stocks.
The BSE 30-share Sensex fell 173.53 points, or 1.13%, off close to 360 points from the day's high and up close to 60 points from the day's low. The market breadth, indicating the overall health of the market turned weak in contrast to a positive breadth earlier in the day.
Industrial production data rose 1.4% in April 2009 compared to an upwardly revised 0.75% fall in March 2009. Manufacturing production rose 0.7% in April 2009, data released by the government during trading hours today, 12 June 2009, showed.
The stock market was volatile. The market pared gains in early trade after a firm start triggered by higher Asian stocks. It regained strength later. The market came off the higher level after hitting its highest level in the past one year in mid-morning trade.
A sell-off was witnessed soon after the industrial production data for in April 2009 hit the market in early afternoon trade. The improved industrial production data raised fears that the rate cutting cycle may come to an end sooner than later. Volatility was immense in mid-afternoon trade.
Investors have been betting that falling interest rates in India may help sustain strong domestic demand and also support a larger capital expenditure programme of India Inc. Late last week, India's biggest private sector bank by net profit ICICI Bank cut prime lending rate by 50 basis points.
Interest rates in India are falling thanks to ample liquidity in the banking system, low headline inflation and a loose monetary policy stance of the Reserve Bank of India. However, inflation may rise if oil and metal prices which have risen sharply in 2009 continue to rally.
Finance minister Pranab Mukherjee on Wednesday said banks should provide credit at reasonable rates to spur growth, saying cuts in official rates by the Reserve Bank of India had not been passed on. This will help restore the environment for rapid growth and ensure that the growth process benefits, he said.
Overseas markets were mostly lower. European shares slipped in volatile trade ahead of a G8 meeting as investors paused for breath to discern further signs of economic recovery. Key benchmark indices in France, Germany and UK were down by between 0.34% to 0.54%.
Asian stocks were mixed. Key benchmark indices in Hong Kong and South Korea rose by between 0.52% to 0.65%. But key benchmark indices in Taiwan and Singapore fell by between 0.2% to 1.81%.
Japan's Nikkei rose 1.55% to 10,135.82, its first close above 10,000 mark since October 2008 as consumer confidence was better than expected in May 2009, climbing for a fifth-consecutive month, government figures showed Friday, 12 June 2009. The consumer confidence index, excluding one-person households, stood at 35.7 in May 2009, up from a 32.4 reading in April 2009, according to data from the Cabinet Office.
China's Shanghai Composite fell 1.91% as airlines dropped after the World Health Organization declared the first influenza pandemic since 1968 and oil prices rose, while healthcare companies rallied. China's industrial production rebounded in May 2009, adding to signs that the world's third-biggest economy is recovering from its worst slump in almost a decade. Output rose 8.9% in May 2009 over May 2008 the statistics bureau said today, after gaining 7.3% in April 2009.
US index futures reversed gains. Trading in US index futures indicates Dow could fall 8 points at the opening bell today, 12 June 2009.
US markets rose on Thursday as retail sales in May 2009 rose for the first time in three months, and initial jobless claims declined last week to the lowest level since January 2009. The Dow gained 31.90 points, or 0.4%, to 8,770.92. The S&P 500 added 5.74 points, or 0.6%, to 944.89. The Nasdaq Composite Index was up 9.29 points, or 0.5%, to 1,862.37.
Initial claims for unemployment benefits fell by 24,000 last week to 601,000, a much sharper drop than expected. Retail sales also shot up 0.5% in May 2009, marking the first gain in three months.
Closer home, Indian stocks have soared in the past three months on a view that ample global liquidity and a return of risk appetite will help India Inc help raise funds for expansion which in turn will boost corporate profits. India Inc has already raised almost Rs 5,000 crore from three qualified institutional placements (QIPs) so far in 2009 and announced plans to raise another Rs 20,000 crore.
Many equity analysts have been raising earnings forecasts of India Inc on hopes that the new government will provide thrust on the infrastructure sector and push economic reforms to boost growth. Citigroup expects the economy to grow by 6.8% in 2009/10 and 7.8% in 2010/11.
A comfortable victory last month for the Congress-led United Progressive Alliance (UPA) government in elections for the 15th Lok Sabha has raised hopes for economic reforms. Reforms virtually came to a halt in the past five years of the Congress-led alliance government at the centre, when the Communists provided support to the government from outside for a large part of the five-year term. Left parties are opposed to economic reforms.
Foreign funds are aggressively buying in Indian stocks. FII inflow in June 2009 totaled Rs 5,595.40 crore (till 11 June 2009). FII inflow in calendar year 2009 totaled Rs 26,914.80 crore (till 11 June 2009).
Mutual funds, too, have started received fresh investor money after a solid surge in the stock prices in the past three months. Net inflows into domestic equity mutual funds rose to Rs 1,930 crore in May 2009, the highest in 14 months, and more than twice the amount in the first four months of 2009, according to data from the Association of Mutual Funds in India.
Finance minister Pranab Mukherjee on Thursday said there was a need to find ways to bring the economy back to higher growth path without increasing the fiscal deficit. He said the government would focus on infrastructure, agriculture and employment generating sectors to protect growth and jobs.
But rising metal prices is a cause of concerns for manufacturing companies as their raw material costs may shoot up.
The government's oil subsidy bill may remain high and it could continue to put pressure on the already high fiscal deficit if the government does not resort to decontrol of oil prices. However, the surging rupee against the dollar may mitigate the impact to some extent as India is a major importer of crude.
Petroleum Secretary R.S. Pandey on Wednesday said the government is committed to reforms in fuel pricing but it wants to ensure affordable fuel supply. Pandey's comments come in the backdrop of a newspaper report on Tuesday that the government may defer a proposal to decontrol pricing of gasoline and diesel because of the increase in crude oil prices. Trinamool Congress (TC), a key ally in Prime Minister Manmohan Singh's government, opposes lifting controls on fuel pricing. With her eye on a series of local elections coming up in West Bengal, she told a Bengali television channel on Monday that her party would protest against any move which would result in higher fuel prices.
The government fixes the price of petrol and diesel and compensates state refiners, such as Indian Oil Corporation, HPCL and BPCL by supplying domestic crude oil at a discount and by issuing bonds to shore up their balance sheets.
The petroleum minister had said late last month that he will submit a proposal for deregulation of oil products to the Cabinet in six to eight weeks. If government removes price controls on petrol and diesel, it would benefit PSU OMCs and also the government, which has been issuing oil bonds to share PSU OMC's burden. It would also persuade private refiners, such as Reliance Industries and Essar Oil, to reenter the oil-marketing business.
Finance Minister Pranab Mukherjee on 26 May 2009 said that a sustained stimulus to economic growth is possible by next round of reforms. He said reviving growth momentum is a top priority for the government adding that fiscal prudence will also be kept in mind.
Investor expectations from the new government are high. Investors expect financial sector reforms such as increase in the cap on foreign direct investment in insurance sector to 49%, from 26% at present.
Unveiling the agenda of the government, President Pratibha Patil in her speech addressed to a joint session of both houses had last week indicated government's intension to divest stake in state-run firms. The government, however, intends to retain control over state-run firms and will continue to hold at least 51% stake. But some investors are concerned that the government's two key allies viz. the DMK and Trinamool Congress (TC) may oppose economic reforms.
Prime Minister Manmohan Singh on Tuesday said India will achieve an economic growth of at least 7% this fiscal and promised more resources for areas like infrastructure and public services. He said India will be able a growth rate of 8-9%, even when the world grows at a lower rate.
The Prime Minister said the reason behind his optimism was that India's savings rate, which determines the money that can be deployed for development projects, was still high at 35% of gross domestic product (GDP).
Manmohan Singh also sought to allay fears that pump priming of the economy by way of stimulus packages announced earlier and measures that will follow in the ensuing months would fuel inflation. "It (expenditure towards infrastructure) will not add to inflation, but to our economic growth."
According to the Prime Minister, fiscal deficit had increased sharply but even then India had enough resources to spend on flagship programmes thanks to the average annual growth of 8.6% achieved during the past five years. He also said that his government was deeply committed to the agenda listed in the President's address, adding flagship programmes will be further strengthened and public delivery system made more transparent.
The BSE 30-share Sensex fell 173.53 points, or 1.13%, to 15,237.94. The Sensex rose 188.83 points at the day's high of 15,600.33 in early afternoon trade, its highest level since 18 June 2008. At the day's low of 15,174.28, the Sensex fell 237.19 points in mid-afternoon trade.
The S&P CNX Nifty was down 54.30 points or 1.17% to 4,583.40. It hit a high of 4,693.20 in mid-morning trade, its highest since 6 June 2008.
Nifty June 2009 futures were near spot price at 4584.35, as compared to the spot closing of 4583.40. Turnover in NSE's futures & options (F&O) segment surged to Rs 75,452.41 crore from Rs 63,464.28 crore on Thursday, 11 June 2009.
On the back of heavy buying by foreign funds, the Sensex has jumped 5,590.63 points or 57.95% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex has risen 7077.54 points or 86.73%.
BSE clocked a turnover of Rs 7,868 crore, higher than Rs 7,628.57 crore on Thursday, 11 June 2009.
The BSE Mid-Cap index was down 2.1%. The BSE Small-Cap index was down 2.21%. Both the indices underperformed the Sensex.
The BSE Metal index (up 1.93%), the BSE Oil & Gas index (up 1.38%), outperformed the Sensex.
The BSE Realty index (down 2.49%), the BSE Auto index (down 2.41%), the BSE TECk index (down 2.4%), the BSE Consumer Durables index (down 2.29%), the BSE Capital Goods index (down 2.27%), the BSE Bankex (down 2.12%), the BSE Power index (down 1.62%), the BSE IT index (down 1.53%), the BSE Healthcare index (down 1.36%), the BSE PSU index (down 1.29%), the BSE FMCG index (down 1.16%), underperfomed the Sensex.
The market breadth, indicating the overall health of the market turned weak from the positive breadth earlier in the day. On BSE, 707 shares rose as compared with 2,026 that declined. A total of 45 shares remained unchanged.
From the 30 share Sensex pack 26 fell while the rest rose.
India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 2.48% to Rs 2,372.30 on market talks the government may extend a seven-year tax holiday given to crude oil explorers to producers of natural gas in the Union Budget 2009-2010. But the stock came off the day's high of Rs 2,372.30.
Analysts expect strong growth in RIL's bottom line in coming quarters from sale of gas which it started pumping last month from its deep-sea field off the east coast.
The Bombay High Court is likely to deliver the final judgement on the legal tussle over the supply of gas from Reliance Industries (RIL) to Reliance Natural Resources (RNRL) shortly. The basic argument in the RIL-RNRL case pertains to the pricing and quantum of gas RIL has to supply s from its Krishna Godavari basin to RNRL for RNRL's upcoming 7400 megawatt (MW) power project at Dadri in Uttar Pradesh.
Realty stocks fell on profit taking after a recent sharp surge triggered by expectations that stability at the Centre will attract more money from foreign investors into the sector which in turn will boost growth. Akruti City, Unitech, DLF, and Omaxe fell by between 0.17% to 5.8%.
Unitech and Indiabulls Real Estate, have already raised funds through qualified institutional placements (QIPs). A number of other realty funds have decided to raised funds by way of QIPs. The promoters of DLF last month sold a 10% stake in the secondary equity markets.
Engineering-to-construction major Larsen & Toubro (L&T) was down 2.6% after it sold its entire 11.49% stake in UltraTech Cement yesterday, 11 June 2009. Other capital goods stocks, Punj Lloyd, Praj Industries, Crompton Greaves fell by between 1.22% to 5.2%.
India's largest electric equipment maker by sales Bharat Heavy Electricals fell 2.45% even after it got orders worth Rs 4,015 crore from Hindalco Industries.
Auto stocks fell on profit taking after recent surge triggered by improved sales in the month of May 2009. Tata Motors, Mahindra & Mahindra, Hero Honda Motors, Bajaj Auto, Maruti Suzuki India fell by between 0.31% to 3.92%.
Metal stocks rose as LMEX, a gauge of six metals traded on the London Metal Exchange jumped 4.2% in on Thursday. Hindustan Zinc, Tata Steel, Sterlite Industries and National Aluminum Company rose by between 0.78% to 7.85%.
Iron ore miner Sesa Goa rose 5.62% after it acquired the mining assets of Dempo Group in the western state of Goa for Rs 1750 crore to boost its output of iron ore. The announcement was made after market hours on Thursday, 11 June 2009. With the acquisition, Sesa Goa will have access to Dempo's mining leases, rights and infrastructure.
Bank stocks reversed early gains as a surge in bond yields will result in diminution in value of banks' bond portfolio. Bond yield rose to a two-month high on Friday after an unexpected rise in industrial output in April from a year earlier, suggesting the economy is turning around faster than expected.
At 12:56 IST, the yield on the benchmark 10-year bond was at 6.94%, the highest since 8 April 2009, from 6.88% before the data. It had ended at 6.89% on Thursday. The yield on the most traded 6.07% bond maturing in 2014 was at 6.64%. It rose to 3 basis points to 6.69% after the data was released. It had ended at 6.63% in the previous session. Bond yields and bond prices are inversely related.
India's biggest bank in terms of branch network State Bank of India (SBI) fell 3.49% on reports its standard loans restructured together with pending applications for restructured loans from clients is close to Rs 21000 crore or about 4% of the loan book.
SBI chairman O.P. Bhatt during trading hours on Wednesday said said SBI's first priority is to absorb its associate banks. It is also looking to grow by buying domestic banks.
India's second largest private sector bank by operating income HDFC Bank fell 1.36% even as its ADR rose 2.03% on Thursday.
India's largest private sector bank by net profit ICICI Bank fell 1.31%. Its American depository receipt (ADR) rose 0.13% on Thursday, 11 June 2009. ICICI Bank cut prime lending rate by 50 basis points to 15.75% with effect from Friday, 5 June 2009. All the existing floating rate customers to benefit from the cut.
India's biggest dedicated housing finance firm by operating income HDFC fell 2.76%. HDFC plans to raise up to Rs 4000 crore after its board yesterday approved a proposal to raise Rs 4000 crore by selling bonds and warrants. The maximum dilution on conversion of all warrants to shares would be 3.5% of the expanded capital, HDFC said in a statement to the stock exchange after trading hours on Tuesday.
Power stocks fell on profit taking after a recent surge triggered by hopes that the government will focus on the infrastructure sector to boost growth. Reliance Infrastructure, NTPC, Tata Power Company fell by between 1.13% to 1.86%.
Healthcare stocks fell on profit taking after recent surge triggered by hopes the government will give primary importance to healthcare segment and health of citizens. Biocon, Dr Reddy's Laboratories, Ranbaxy Laboratories, Sun Pharmaceuticals Industries, Lupin, Cipla fell by between 1.75% to 6.03%.
Outsourcing focussed IT stocks fell on worries higher borrowing costs and oil prices will threaten a recovery of the US economy. US is the biggest market for the Indian firms.
India's second largest software firm by sales Infosys Technologies fell 1.35%. The company said on Tuesday it had won a new IT outsourcing contract from Telstra Corp, Australia's top phone company. The total value of the outsourcing contract is A$450 million ($355 million) over five years, Infosys said in a statement, but didn't disclose its share in the deal. EDS, a unit of Hewlett-Packard Co, and US technology major IBM are also part of the project. Its American depository receipt (ADR) fell 0.45% on Thursday.
India's largest software services exporter by sales TCS fell 1.42%. India's third largest software services exporter by sales Wipro fell 3.14% after Azim Premji Foundation sold 3 lakh shares or 0.02% stake in the company through open market transaction. Its ADR rose 2.22% on Thursday.
Satyam Computer Services fell 0.49% to Rs 80.45 after 98.70 lakh shares changed hands in six block deals on both the stock exchanges at a weighted average price of Rs 86.84 today. It posted a standalone net profit of Rs 181 crore ($38 million) on revenue of Rs 2290 crore in Q3 December 2008, it said in a filing to the stock exchange during trading hours on Tuesday.
It said it had total bank balances of Rs 373 crore as at 31 March 2009. Satyam was plunged into crisis after its founder quit in saying profits and assets had been falsified. Outsourcer Tech Mahindra won an auction in April 2009 for a controlling stake in Satyam.
The Indian rupee shed almost all the day's gains on Friday afternoon, following losses in local shares and the dollar's gains versus major currenices overseas but a better-than-expected factory output data supported. The partially convertible rupee was at 47.59/60 per dollar, almost unchanged from its Thursday's close of 47.61/62.
A firm rupee affects operating profit of IT firms negatively as they earn most of their revenues from exports.
Satyam Computer Services clocked the highest volume of 6.7 crore shares on BSE. Unitech (2.27 crore shares), Sesa Goa (2.22 crore shares), Ispat Industries (2.02 crore shares) and Suzlon Energy (1.76 crore shares) were the other volume toppers in that order.
Satyam Computer Services clocked the highest turnover of Rs 545.22 crore on BSE. Sesa Goa (Rs 451.72 crore), Reliance Industries (Rs 267.93 crore), Reliance Capital (Rs 224.56 crore), Tata Steel (Rs 220.95 crore) were the other turnover toppers in that order.
US stocks register good gains
Indices pare most of their earlier gains but manage a strong end
US stocks ended with good gains on Thursday, 11 June, 2009 following a full day of strong rally. With the help of financial and energy stocks, US stocks started the day on a strong mode. Top of it, couple of encouraging economic reports helped market rally right out of the gate today. Crude prices ended substantially higher today after International Energy Agency increased the 2009 global demand forecast for oil for the first time in ten months.
The Dow Jones Industrial Average ended higher by 32 points at 8,770.02. The Nasdaq Composite Index, ended higher by 9.3 points at 1,862.08. S&P 500 ended higher by 5.7 points at 944. During session highs, Dow went up higher by more than 136 points.
Seven of the ten sectors advanced today led by utilities and energy sectors. Consumer discretionary sector posted the biggest loss.
Financial stocks provided key support today after diversified financial services stocks and regional banks moved markedly higher. Strength was witnessed in the sector amid news that Goldman Sachs raised its ratings on several regional banks.
The Labor Department in USA reported on Thursday, 11 June, 2009 that while first-time claims for state unemployment benefits have declined or been flat over the most recent four weeks of data, ongoing claims have continued to reach fresh weekly highs. The number of initial claims fell 24,000 to 601,000 in the week ended 6 June, 2009. For the week ended 30 May, continuing claims for benefits reached a new record high, rising 59,000 to 6.82 million from an upwardly revised level in the prior week.
Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs. Benefits are generally available for those who lose their full-time job through no fault of their own. Those who exhaust their unemployment benefits are still counted as unemployed if they are actively looking for work.
The Commerce Department in USA reported today that sales at U.S. retail stores increased 0.5% in May. But despite the report, the retail sector was the main laggard today. As per the report, sales rose for just the fourth time in the past 12 months and the first time since February. Compared with May 2008, sales are down 9.6%, reflecting the huge contraction in consumer spending as the recession tightened its grip. Compared with the first five months of 2008, sales so far this year are down 10.2%.
A separate report showed that business inventories for April declined 1.1%, which is slightly steeper than the 1% downturn that was widely expected. Meanwhile, business inventories for March were downwardly revised to show a 1.3% decline.
Oil prices ended substantially higher on Thursday, 11 June, 2009. Price rose today after International Energy Agency increased the 2009 global demand forecast for oil for the first time in ten months. Prices also rose today after energy department reported sudden draw in crude inventories for last week yesterday.
On Thursday, crude-oil futures for light sweet crude for July delivery closed at $72.68/barrel (higher by $1.35 or 1.9%). Last week, crude ended higher by 3.2%.
In a monthly report released on Thursday, the IEA, an energy advisor to 28 developed countries, increased its global oil demand estimate for this year by 120,000 barrels a day to 83.3 million barrels a day.
In the currency market on Thursday, the dollar reversed its earlier gains. The dollar index, which weighs the strength of dollar against the basket of six other currencies, went down 1.2%.
Among economic data for tomorrow, Import & Export Prices (May) and the University of Michigan Consumer Sentiment-Prelim. (June) are set for release shortly before 10:00ET. There are no major earnings announcements.
Stocks to Watch - June 12 2009
Steel Authority of India (SAIL) is likely to cut its Rs 780 billion expansion plans by 13% to save Rs 100 billion. Shares of the company gained Rs 3.25, or 1.9%, to end at Rs 174.55.
National Thermal Power Corporation (NTPC) and Bharat Heavy Electricals (BHEL) have joined hands to set up a major power projects equipment manufacturing unit in Andhra Pradesh (AP). Shares of BHEL closed down Rs 81.35, or 3.46%, at Rs 2,271.45.
Mercator Lines is planning to invest Rs 5 billion to acquire three gearless post-Panamax bulk carriers totalling 2.77 lakh dead-weight tonnage (DWT) on a charter basis. Shares of the company gained Rs 2.8, or 4.21%, to end at Rs 69.30.
Maruti Suzuki India is intending to tap new markets for exports, as the demand is shifting towards compact cars globally. Shares of the company closed down Rs 14.8, or 1.33%, at Rs 1,094.65.
Sesa Goa acquired Goa-based Dempo group`s mining assets for Rs 17.50 billion in an all-cash deal. Shares of Sesa Goa closed up Rs 12, or 6.66%, at Rs 192.10.
ONGC said it will borrow about Rs 270 billion over next three to four years to fund its projects. Shares of the company closed down Rs 46.7, or 4.01%, at Rs 1,117.90.
All the 10,000 surplus employees of Satyam Computer, who feared unemployment, can breathe easy now as the company`s new owner Tech Mahindra said there will be no retrenchment. Shares of the company closed up Rs 7.35, or 10%, at Rs 80.85
Pre Session Commentary - June 12 2009
Today domestic markets are likely to open positive as most of the Asian markets have opened positive and the US markets have shown better than expected retail sales data. The northward movement of frontline stocks would however test the profit booking pressure. The mid cap and small cap stocks seem to have lost its shine and therefore much movement in that space is less likely. Sesa Goa will be in the limelight today as the company is acquiring a major stake in Dempo for Rs.1,750 crore. The further movement of the markets would depend on the opening of European markets.
On Thursday, the domestic markets closed nearly flat with minimal loss. After a subdued opening the domestic bench mark indices drifted towards the southward on cues of gyrating Asian markets. The sentiments were weak since the opening bell, however throughout day the domestic markets traded range bound. The frontline stocks pared off some gains at this high level and in the stock specific move, Satyam (+10% to Rs80.85) closed with a buying freeze for the third consecutive day. During the last hour of the trade, the markets managed to pare off its early losses to close flat. The inflation numbers fell to three decades low at 0.13% and its has been learned that Finance Minister Pranab Mukherjee has asked banks to reduce interest rates to lend more for the growth in country’s economic activity. We expect the markets to be trading volatile.
The BSE Sensex closed with a loss of 55.34 points at 15,411.47 and NSE Nifty ended with a marginal loss of 17.55 points at 4,637.70. BSE Mid Caps and Small Caps closed with losses of 11.92 points and 55.98 points at 5,347.58 and 6,150.44 respectively. The BSE Sensex touched intraday high of 15,568.74 and intraday low of 15,240.73.
On Thursday, the US Markets closed with moderate gains on the back of better than expected macro economic indicators. Retail sales data recorded a growth of 0.5%, the best in the first three months. Initial weekly jobless claims are declining at a phenomenal pace but the unemployment claims climbed to a record high. Utilities stocks were the charm of the day as it gained a remarkable 2.0% followed by impressive gains among energy stocks, which finished 1.8% higher. The recent surge in crude oil prices has pushed energy stocks to new high and thanks to the good oil demand forecast by IEA for 2009. The US light crude oil for July delivery closed high by 1.81% at $72.60 per barrel marking a new 2009 high on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed high by 31.90 points at 8,770.92 the NASDAQ Composite (RIXF) index inclined by 9.29 points to close at 1,862.37 and the S&P 500 (SPX) closed high by 5.74 points at 944.89.
Today major stock markets in Asia are trading positive. Hang Seng is up by 186.17 points at 18,977.20. Shanghai Composite is low by 16.34 points at 2,780.886. Japan''s Nikkei is trading up by 90.71 points at 10,072.04. Strait Times is also low by 9.87 points at 2,371.94. KLSE Composite is up by 5.99 at 1,088.
The FIIs on Thursday stood as net buyers in equity and no trade in debt. The Gross equity purchased stood at Rs 3,851.50 Crore and gross debt purchased stood at Rs 0.00 Crore, while the gross equity sold stood at Rs 3,133.80 Crore and gross debt sold stood at Rs 0.00 Crore. Therefore, the net investment of equity and debt reported were Rs 717.60 Crore and Rs 0.00 Crore respectively.
On Thursday, the partially convertible rupee closed at 47.60/61 per dollar, 0.80% weaker than it previous close at 47.24/25. The rupee fell due to lackluster trading in local stock markets.
On BSE, total number of shares traded were 55.54 Crore and total turnover stood at Rs 7,618.57 Crore. On NSE, total number of shares traded was 126.29 Crore and total turnover was Rs 23,892.48 Crore.
Top traded volumes on NSE Nifty – Unitech with 88512670 shares, Suzlon Energy with 61687941 shares, Idea Cellular with 35040268 shares, Hindalco with 26673066 shares, followed by Reliance Power with 15355920 shares.
On NSE Future and Options, total number of contracts traded in index futures was 620479 with a total turnover of Rs 13,799.74 Crore. Along with this total number of contracts traded in stock futures were 452149 with a total turnover of Rs 27,097.97 Crore. Total numbers of contracts for index options were 869113 with a total turnover of Rs 20,333.09 Crore and total numbers of contracts for stock options were 39153 and notional turnover was Rs 2,233.47 Crore.
Today, Nifty would have a support at 4,541 and resistance at 4,713 and BSE Sensex has support at 15,275 and resistance at 15,605.
Ashok Leyland
We recommend a sell in Ashok Leyland from a short- and medium-term perspective. The stock has been charting a strong up-trend since its January trough of Rs 13.4. The rally that ensued from this level has resulted in a retracement of over 50 per cent of the decline from January 2008 peak. The stock has significant long-term resistance at Rs 37 and the rally from January lows could have ended at the recent peak of Rs 37.9. The bearish engulfing pattern in the weekly candlestick chart and sell signals in weekly as well as daily oscillators support this view. Investors with a short-term perspective can sell the stock with a stop at Rs 34.2. We expect a decline to 29.4 in the near term. The medium-term target for this stock is Rs 26.
via BL
Market set for uncertain start
The key benchmark indices may open in green tracking gains in most of Asia. However volatility may be high as investors may remain cautious after recent surge in Indian stocks. The investors will take further cues from Industrial output data for the month of April 2009 due today. Industrial production showed a decline 2.3% in March 2009 as compared to a rise of 5.5% during March 2008.
Most of the Asian stocks rose today as improved economic indicators pointed to an easing of the U.S. recession and metal prices jumped the most in 10 days. Key benchmark indices in Hong Kong, South Korea, Japan, and Singapore rose by between 0.4% to 0.98%.
But,China's Shanghai Composite fell 0.35% even as China's industrial production rebounded in May 2009, adding to signs that the world's third-biggest economy is recovering from its worst slump in almost a decade. Output rose 8.9 % in May 2009 over May 2008 the statistics bureau said today, after gaining 7.3 % in April 2009. Taiwan's Taiwan Weighted fell 0.65%.
The US markets closed flat yet again on Thursday, 11 June 2009, well off their earlier highs. Wall Street got an early boost from the pre-market economic reports, which showed jobless claims fell last week and retail sales ticked higher in May 2009. The Dow gained 31.90 points, or 0.4%, to 8,770.92. The S&P 500 added 5.74 points, or 0.6%, to 944.89. The Nasdaq Composite Index was up 9.29 points, or 0.5%, to 1,862.37
Some encouraging economic data lifted the sentiment on Wall Street yesterday initial claims for unemployment benefits fell by 24,000 last week to 601,000, a much sharper drop than expected. Retail sales also shot up 0.5% in May 2009, marking the first gain in three months, boosted by rising gasoline prices.
Closer home, Indian stocks have soared in the past three months on a view that ample global liquidity and a return of risk appetite will help India Inc help raise funds for expansion which in turn will boost corporate profits. India Inc has already raised almost Rs 5,000 crore from three qualified institutional placements (QIPs) so far in 2009 and announced plans to raise another Rs 20,000 crore.
Foreign funds are aggressively buying in Indian stocks. As per the provisional figures on NSE, foreign funds bought shares worth Rs 786.57 crore on Thursday, 11 June 2009. Foreign funds are aggressively buying in Indian stocks. FII inflow in June 2009 totaled Rs 4,602.30 crore (till 10 June 2009). FII inflow in calendar year 2009 totaled Rs 25,921.70 crore (till 10 June 2009).
On the back of heavy buying by foreign funds, the Sensex jumped 5,819.50 points or 60.32% in calendar year 2009 as on 10 June 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex jumped 7,306.41 points or 89.53% on 10 June 2009.
Net inflows into domestic equity mutual funds rose to Rs 1,930 crore in May 2009, the highest in 14 months, and more than twice the amount in the first four months of 2009, according to data from the Association of Mutual Funds in India.
Meanwhile, the government reportedly is considering a proposal to restore the rate of service tax to its earlier level of 12%. The government had reduced the service tax rate to 10% in the third stimulus package which was unveiled in February 2009. This option of withdrawing the service tax cut is being weighed on account of spiralling government expenditure, a result of the government's attempts to boost the economy and shrinking revenues due to the slowdown in economic activity.
Finance minister Pranab Mukherjee on Thursday said there was a need to find ways to bring the economy back to higher growth path without increasing the fiscal deficit. He said the government would focus on infrastructure, agriculture and employment generating sectors to protect growth and jobs.
Mukherjee had on Wednesday said banks should provide credit at reasonable rates to spur growth, saying cuts in official rates by the Reserve Bank of India had not been passed on. This will help restore the environment for rapid growth and ensure that the growth process benefits, he said. Mukherjee said banks have agreed to explore the possibility of reducing rates after a meeting with chiefs of state-run banks.
Interest rates in India are falling thanks to ample liquidity in the banking system, low headline inflation and a loose monetary policy stance of the Reserve Bank of India. However, inflation may rise if oil and metal prices which have risen sharply in 2009 continue to rally.
A change in the Reserve Bank of India's current loose monetary policy stance if and when it takes place may weigh on equities. Investors have been betting that falling interest rates in India may help sustain strong domestic demand and also support a larger capital expenditure programme of India Inc. Late last week, India's biggest private sector bank by net profit ICICI Bank cut prime lending rate by 50 basis points.
Rising metal prices is a cause of concerns for manufacturing companies as their raw material costs may shoot up.
The government's oil subsidy bill may remain high and it could continue to put pressure on the already high fiscal deficit if the government does not resort to decontrol of oil prices. However, the surging rupee against the dollar may mitigate the impact to some extent as India is a major importer of crude.
Petroleum Secretary R.S. Pandey on Wednesday said the government is committed to reforms in fuel pricing but it wants to ensure affordable fuel supply. Pandey's comments come in the backdrop of a newspaper report on Tuesday that the government may defer a proposal to decontrol pricing of gasoline and diesel because of the increase in crude oil prices. Trinamool Congress (TC), a key ally in Prime Minister Manmohan Singh's government, opposes lifting controls on fuel pricing. With her eye on a series of local elections coming up in West Bengal, she told a Bengali television channel on Monday that her party would protest against any move which would result in higher fuel prices.
The government fixes the price of petrol and diesel and compensates state refiners, such as Indian Oil Corporation, HPCL and BPCL by supplying domestic crude oil at a discount and by issuing bonds to shore up their balance sheets.
Any disappointment on reforms may weigh on the stock market at a time when many equity analysts have been raising earnings forecasts of India Inc on hopes that the new government will push economic reforms to boost growth.
The petroleum minister had recently said he will submit a proposal for deregulation of oil products to the Cabinet in six to eight weeks. If government removes price controls on petrol and diesel, it would benefit PSU OMCs and also the government, which has been issuing oil bonds to share PSU OMC's burden. It would also persuade private refiners, such as Reliance Industries and Essar Oil, to reenter the oil-marketing business.
Finance Minister Pranab Mukherjee on 26 May 2009 said that a sustained stimulus to economic growth is possible by next round of reforms. He said reviving growth momentum is a top priority for the government adding that fiscal prudence will also be kept in mind.
Investor expectations from the new government are high. Investors expect financial sector reforms such as increase in the cap on foreign direct investment in insurance sector to 49%, from 26% at present.
Unveiling the agenda of the government, President Pratibha Patil in her speech addressed to a joint session of both houses had last week indicated government's intension to divest stake in state-run firms. The government, however, intends to retain control over state-run firms and will continue to hold at least 51% stake. But some investors are concerned that the government's two key allies viz. the DMK and Trinamool Congress (TC) may oppose economic reforms.
Prime Minister Manmohan Singh on Tuesday said India will achieve an economic growth of at least 7% this fiscal and promised more resources for areas like infrastructure and public services. He said India will be able a growth rate of 8-9%, even when the world grows at a lower rate.
The Prime Minister said the reason behind his optimism was that India's savings rate, which determines the money that can be deployed for development projects, was still high at 35% of gross domestic product (GDP).
Manmohan Singh also sought to allay fears that pump priming of the economy by way of stimulus packages announced earlier and measures that will follow in the ensuing months would fuel inflation. "It (expenditure towards infrastructure) will not add to inflation, but to our economic growth."
According to the Prime Minister, fiscal deficit had increased sharply but even then India had enough resources to spend on flagship programmes thanks to the average annual growth of 8.6% achieved during the past five years. He also said that his government was deeply committed to the agenda listed in the President's address, adding flagship programmes will be further strengthened and public delivery system made more transparent.
Daily News Roundup - June 12 2009
Reliance and Essar Oil are in talks with the Petroleum Ministry and Cairn Energy to lift a portion of Cairn’s Mangala crude in Rajasthan. (BL)
Sesa Goa has agreed to takeover the mining assets of Dempo Group for Rs17.5bn in an all cash deal. (BL)
Infosys is in discussion with five-six of its clients for acquiring their technology units. (BL)
ONGC to borrow Rs270bn in the next three-four years to fund projects. (ET)
Tech Mahindra may not hike open offer price for Satyam Computer from Rs58 per share. (ET)
NTPC-BHEL, plan to jointly set up a Rs60bn power equipment manufacturing unit in Andhra Pradesh, has been allocated 750 acres of land for the greenfield project. (BL)
Hindustan Unilever has decided to enter into the kitchen cleaning surface market by bringing its international brand, Cif. (BL)
Reliance Power to raise Rs120bn debt for its 4,000MW ultra mega power project at Krishnapatnam in Andhra Pradesh. (ET)
Maruti Suzuki will manufacture Nissan Pixo at its Manesar plant. (BL)
Orissa Government has pruned Vedanta Aluminium’s plans to expand its smelter and refining capacity due to lack of bauxite linkages and environmental issues. (BL)
L&T sold its 14.3mn shares in Ultratech, 11.5% stake in the company, thus registering a profit on sale of shares of Rs10.4bn. (BL)
TCS is competing for 5-6 BPO deals worth US$150-200mn. (ET)
Jet Airways is negotiating with Boeing to cancel its order for B777 jet, worth Rs7.3bn. (BS)
Satyam has launched a cost cutting plan which is expected to save Rs10mn a day. (ET)
Maruti to launch A-Star into Africa and Latin America markets. (ET)
SAIL to cut its Rs780bn expansion plans by 13% to save Rs100bn. (ET)
Novartis India has successful closed its open offer to buy shares in Indian arm and rejects suggestion of de-listing. (ET)
Real-estate private equity firm Red- Fort Capital has acquired 18% stake in Parsvnath Developers premium residential project in New Delhi. (ET)
Tata Tea is scouting to acquire global brands in Russia, South America and Asia Pacific region. (FE)
Tech Mahindra will make a preferential issue to raise its holding in Satyam Computers if its open offer flounders. (FE)
Pantaloon Retail’s same store sales grew to the highest in May as consumer demand improved. (BS)
Following a drop in orders Suzlon has decided to cut 160 jobs, more than half of its workforce, at its US plant. (BL)
Jubilant Organosys subsidiary Jubilant Biosys has entered into 3- year collaboration with US based pharmaceutical firm Endo Pharmaceuticals for research in oncology. (BL)
Tata Tea has initiated a strategic reorganization plan of its beverages business. (BL)
ADAG to repay Rs40bn of debt which was backed by shares of its 3 group companies. (BS)
Shiv Vani Oil plans to raise Rs6bn from domestic and international markets. (BL)
GM India beings trial production of new mini car, to be launched later this year. (BL)
Inflation for the week ended May’ 30 dropped to 0.13% as against 0.48% in the previous week. (ET)
Finance Minister is not keen to do away with STT as of now. (ET)
DoT open to hiking reserve price for 3G spectrum to Rs35.4bn. (ET)
World Health Organization has declared first flu pandemic of 21st century. (ET)
PM economic advisory council expects 7% GDP growth in the FY10. (ET)
BJP ruled states are against the introduction of Goods and Services Tax (GST) from April 1, 2010. (ET)
Retail fuel price differential between PSU’s and private players is expected to rise to Rs2-2.5/litre from Rs1-1.5/litre currently. (BL)
IIP…Index of Improved Performance!
No great improvements in the lot of mankind are possible until a great change takes place in the fundamental constitution of their modes of thought.
Investors seem happy with the small changes in economy and great changes in the market. After Thursday’s pullback, bulls are all set to rule again. We expect the Indian market to open higher and stay firm. IIP data for April will be out today. Expectations are of continued improvement. Besides, March’s dismal figure (-2.3%) may also be revised upwards. What’s more, inflows from both, foreign and local funds have been pretty strong despite a choppy week.
Global cues are encouraging, barring the surge in oil prices. Key global markets in the US and Asia have hit multi-month highs. Stocks in Europe ended up for a third successive day. The advance is largely on belief that the worst of the global recession is history. Economic reports from across the globe show that the severity of economic slump is easing. Unless we are hit by any nasty surprises, the positive trend in equity markets is likely to hold, though the speed of the rise may slow a bit.
The immediate issues confronting this rally are: rising bond yields, spike in commodity prices, a possible weak monsoon, budget disappointments, policy delays and corporate earnings missing estimates. Meanwhile, the WHO has declared swine flu a global pandemic.
Watch out for Sesa Goa as the iron ore exporter has bought mining assets of the Dempo group for Rs17.5bn.
Gail India and Indian Hotels will announce their results today.
FIIs were net buyers in the cash segment on Thursday at Rs7.86bn while the local institutions pumped in Rs5.58bn. In the F&O segment, the foreign funds were net sellers at Rs7.98bn. On Wednesday, FIIs were net buyers at Rs7.17bn in the cash segment. Mutual funds were net buyers at Rs9.49bn on the same day.
US stocks ended modestly higher on Thursday, with all three major benchmarks closing at multi-month highs, spurred by the day's positive economic reports. The Standard & Poor’s 500 Index ended at a seven-month high.
The Dow Jones Industrial Average gained nearly 32 points, or 0.4%, to 8,770.92. Despite falling short of its 2008 finish, the index ended at its highest level since Jan. 6. The S&P 500 index added over 5 points, or 0.6% to 944.89, its highest close since Nov. 5.
The Nasdaq Composite index climbed 9 points, or 0.5%, to 1,853.40, ending at its best point since Oct. 6.
US stocks have been on the rise since bottoming March 9, with the Dow up 34%, the S&P 500 up 40% and the Nasdaq up 47%, as of Thursday's close. But they have fluctuated this week as rising Treasury yields and higher commodity prices sparked worries about inflation hampering the economic recovery.
A rise in retail sales and a bigger-than-expected dip in jobless claims raised hopes that the pace of the recession is slowing. But the early advance lost momentum; the S&P 500 failed to hold on after briefly hitting a key level that traders and other market pros watch.
A comparatively strong 30-year bond auction helped temper worries about pricing pressures, at least in the short term. Treasury prices jumped, lowering the corresponding yields. The benchmark 10-year note yield fell to 3.85%, down from 4% early Thursday morning. The yield touched 4% during Wednesday's session for the first time since last October.
Retail sales climbed 0.5% in May, the Commerce Department reported. The report was in line with forecasts and showed an improvement from April, when sales fell a revised 0.2%.
Sales excluding autos rose a bigger-than-expected 0.5%. Economists had forecast that sales without volatile autos would rise 0.2% after falling a revised 0.2% in April. But the report mostly reflects the recent rise in gas prices, rather than any new direction for the consumer.
A Federal Reserve report showed Americans saw $1.3 trillion in wealth disappear in the first quarter of this year, as home values declined and the stock market tanked. But the rate of decline was slower than last year. In the fourth quarter alone, $5.1 trillion in wealth disappeared, the biggest quarterly plunge since the Fed started tracking data in 1951.
Another report showed that foreclosure filings fell 6% in May from April, but still saw the third-worst month on record. The report showed that one of every 398 households received some kind of filing in the month, including notices of default, scheduled auctions or bank repossession.
The number of Americans filing new claims for unemployment fell 24,000 to 601,000 last week, according to a Labor Department report released Thursday morning. Economists though claims would dip to 615,000. However, continuing claims, the number of Americans who have been receiving benefits for a week or more, rose to 6,816,000 from a revised 6,757,000 in the previous week.
Bank of America CEO Ken Lewis stressed that pressure from the government played a key role in the company's decision to complete its purchase of Merrill Lynch last year. He said the federal government threatened to remove management or board members if the company went back on its promise to buy Merrill, even though Merrill's financial state was deteriorating.
In currency trading, the dollar fell versus the euro and the yen.
US light crude oil for July delivery rose $1.35 to settle at $72.68 a barrel on the New York Mercantile Exchange, the highest close since October.
COMEX gold for August delivery rose $7.30 to settle at $962 an ounce.
European shares rose, owing to strength in drugmakers and banks. The pan-European Dow Jones Stoxx 600 index advanced 1% to close at 214.80, up for a third straight session.
Germany's DAX 30 index climbed 1.1% to 5,107.26, while the French CAC-40 index rose 0.6% to finish at 3,334.94 and the UK's FTSE 100 index was up 0.6% to end at 4,461.87.
Indian markets ended with marginal losses on Thursday ending a two day 5% rally. Weak cues from the US coupled with mixed cues from the Asian markets prompted the traders and investors to book some profits at higher levels. Inflation numbers which fell to 30-year low had a minimal impact on sentiment. India’s Inflation fell to 0.13% for the week ended May 30 as against 0.48% in the previous week.
The Sensex slipped 55 points or 0.36% to end at 15,411 after touching a high of 15,517 and a low of 15,240. The index had opened at 15,517 against the previous close of 15,466. The NSE Nifty slipped 18 points or 0.4% to shut shop at 4,637.
Shares of UltraTech Cement declined by over 4% to Rs735 after Larsen & Toubro Limited sold its complete stake of 11.49% in the company in the open market.
The sale was carried out at an average price of around Rs725 per share. L&T had exited its cement business through a demerger and sale to Grasim in 2004, and had retained 11.49% stake in Ultratech with a commitment to sell the stake on or before 31st Dec,
2009
The sale of its complete stake in Ultratech Cement Limited is in accordance with L&T’s obligations under its agreement with Grasim, and is also in line with L&T’s strategy of focusing on its core business. In its efforts to get the best value for its shareholders, the company decided that the present market conditions were correct for disinvestment of its stake.
Shares of L&T also ended lower by 0.5% to Rs1624 after hitting an intra-day low of Rs1669 and Rs1586 recording volumes of over 0.9mn shares on BSE.
Shares of Mahindra & Mahindra Financial advanced by 2.5% to Rs285 after ~6.81mn shares or 7% of its equity changed hands in three transactions. The scrip touched an intra-day high of Rs293 and a low of Rs263 and recorded volumes of over 7mn shares on NSE.
Shares of EKC gained by over 5% to Rs226 after ~4.7% equity shares of the company changed hands in a single transaction. The scrip touched an intra-day high of Rs234 and a low of Rs209 and recorded volumes of over 0.8mn shares on BSE.
Shares of GTL Infrastructure gained 1.6% to Rs46 after the Board of directors of the company would meet on June 11, 2009, to consider allotment of equity shares consequent to Conversion Notice(s) received for conversion of FCCBs at a conversion price of Rs53.04 per share. The scrip touched an intra-day high of Rs47.4 and a low of Rs44 and recorded volumes of over 4.6mn shares on BSE.
Shares of Shiv Vani Oil advanced by 2.7% to Rs318 after the board of directors of the company approved to raise funds through issue of equity shares / GDRs / ADRs / FCCBs/ securities for an amount not exceeding Rs6bn or its equivalent in any foreign currency, either through preferential issue and / or qualified institutional placement (QIP) and / or private placement or otherwise.
Shares of GMR Infra ended lower by 3% to Rs157. GMR Energy Ltd (GEL), the 100% subsidiary company along with other group company owns 33.34% of the issued and outstanding capital of Homeland Energy Group Ltd (HEG), Canada, listed on Toronto Stock Exchange.
HEG, Canada, through its subsidiaries has major interest in coal projects in South Africa including an operating mine and also other investment in uranium exploration Company etc. GEL has nominated three directors, Mr. B V Nageswara Rao, Mr. Raaj Kumar and Mr. Ashis Basu on the Board of HEG, representing 50% of the Board."
Shares of DS Kulkarni slipped by 3.2% to Rs55.9 after the company announced that it has terminated an agreement with GTC Cyprus Holding. GTC agreement was for joint venture development of SEZ said the company. The scrip touched an intra-day high of Rs60 and a low of Rs55 and recorded volumes of over 0.15mn shares on BSE.
Looking at the choppy trades on Thursday, markets would continue to struggle for direction in the coming days. The 4,650 levels for Nifty would continue to be crucial, a break out above or below the vital mark on either side would be the trend decider. Market players would also be awaiting the release of the industrial production numbers to be released on Friday noon. The consensus forecast is for a flat IIP as against a drop of 2.3% in March.
Market may open positive
Yesterday's pullback and firm economy outlook may help the market advance further. Asian indices coupled with US indices are displaying a subdued trend in the ongoing trades and may exert some pressure on the domestic indices. However, players are maintaining their bets on almost all the sectors. Among the key local indices, the Nifty has a support at 4600 and a break below this level could see it slip further to 4550-4500, while on the upside the index could test higher level at 4700. The Sensex has a likely support at 15300 and may face resistance at 15600.
Major US indices Stocks cut losses, but still ended lower Wednesday, as spiking Treasury yields and rising commodity prices added to worries that inflation could limit any recovery effort. While the Dow Jones moved down by 24 points at 8739, the Nasdaq moved down by 7 points to close at 1853.
Most of the Indian ADRs traded firm on the US bourses. Satyam led the pack with gains of 35.71% while HDFC Bank, Dr Reddy, Tata Motors, ICICI Bank and Patni Computers jumped over 0.09-4% each. Among the laggards Rediff lost 6.67%, Wipro, Infosys, MTNL and VSNL lost marginally.
Crude oil prices raised, with the Nymex light crude oil for July delivery falling by $1.32 to close at $71.33 a barrel. In the commodity space, the Comex gold for August delivery reamined unchanged at $954.70 an ounce.
Crude shoots up
Prices rise as International Energy Agency increases the 2009 global demand forecast
Oil prices ended substantially higher on Thursday, 11 June, 2009. Price rose today after International Energy Agency increased the 2009 global demand forecast for oil for the first time in ten months. Prices also rose today after energy department reported sudden draw in crude inventories for last week yesterday.
On Thursday, crude-oil futures for light sweet crude for July delivery closed at $72.68/barrel (higher by $1.35 or 1.9%). Last week, crude ended higher by 3.2%.
Crude ended the month of May, 2009, higher by 30%. This was the largest month gain for crude in almost a decade. Prior to May, crude ended April and March, 2009 higher by 2.9% and 10.9% respectively. It rallied 11.3% in the first quarter. Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 50% since then. Year to date, in 2009, crude prices are higher by 43.9%.
In a monthly report released on Thursday, the IEA, an energy advisor to 28 developed countries, increased its global oil demand estimate for this year by 120,000 barrels a day to 83.3 million barrels a day.
Yesterday, the EIA had reported that crude inventories fell by 4.4 million barrels in the week ended 5 June, 2009. Refineries operated at 85.9% of their operable capacity last week, slightly lower than a week ago. EIA also reported that crude imports fell 676,000 barrels a day from the previous week, while gasoline demand over the past four weeks rose 0.4% from the same period last year. Meanwhile, gasoline inventories fell 1.6 million barrels, and distillate stockpiles declined 300,000 barrels.
Earlier this week, the Energy Information Administration raised its outlook for this year's crude-oil and gasoline prices. The body said that crude prices are expected to average $58.70 a barrel this year. That's up from the $52 a barrel the EIA had forecast a month ago. It also raised the outlook for next year's crude price to $67.42 from $58. The EIA also said regular gasoline prices are expected to average close to $2.70 a gallon in July. The average regular gasoline price averaged across the full year is expected to be $2.33 a gallon.
Also at the Nymex on Thursday, July reformulated gasoline rose 4.96 cents, or 2.5%, to $2.0649 a gallon and July heating oil gained 2.08 cents, or 1.1%, to $1.8534 a gallon.
July natural gas rallied 22.5 cents, or 6.1%, to $3.933 per million British thermal units. It rallied to $4.067 earlier. EIA reported today that U.S. inventories rose 106 billion cubic feet in the week ended 5 June, 2009. At 2,443 billion cubic feet, stocks were 568 billion cubic feet higher than last year at this time and 438 billion cubic feet above the five-year average.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
At the MCX, crude oil for June delivery closed at Rs 3,456/barrel, higher by Rs 88 (2.6%) against previous day's close. Natural gas for June delivery closed at Rs 187.8/mmbtu, higher by Rs 11.7/mmbtu (6.6%).
Precious metals end higher
Drop in dollar imparts shine on them
Precious metal prices shot up on Thursday, 11 June, 2009. They gave up earlier losses as the dollar lost sheen and dropped increasing their appeal as a hedge against inflation.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.
On Thursday, Comex Gold for June delivery ended at $962, higher by $7.3 (0.8%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 1.8%. Year to date, gold prices are higher by 10.8%.
Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months. Before this, gold had suffered losses in prior two months. For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.
On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (8%) since then.
On Thursday, Comex silver futures for July delivery rose 26 cents (1.7%) at $15.49 an ounce. Last week, silver ended lower by 1.4%. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 37.7% this year. For 2008, silver had lost 24%.
In the currency market on Thursday, the dollar reversed its earlier gains. The dollar index, which weighs the strength of dollar against the basket of six other currencies, went down 1.2%.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
At the MCX, gold prices for August delivery closed higher by Rs 70 (0.5%) at Rs 14,665 per 10 grams. Prices rose to a high of Rs 14,694 per 10 grams and fell to a low of Rs 14,525 per 10 grams during the day's trading.
At the MCX, silver prices for July delivery closed Rs 373 (1.6%) higher at Rs 23,948/Kg. Prices opened at Rs 23,650/kg and rose to a high of Rs 24,018/Kg during the day's trading.
FIIs continue buying
Inflow of Rs 717.70 crore on 10 June 2009
Foreign institutional investors (FIIs) bought shares worth a net Rs 717.70 crore on Wednesday, 10 June 2009, lower than Rs 990.70 crore on Tuesday, 9 June 2009.
FII inflow of Rs 717.70 crore on 10 June 2009 was a result of gross purchases Rs 3851.50 crore and gross sales Rs 3133.80 crore. The BSE Sensex surged 339.81 points, or 2.25%, to 15,466.81 on that day.
FII inflow in June 2009 totaled Rs 4,602.30 crore (till 10 June 2009). FII inflow in calendar year 2009 totaled Rs 25,921.70 crore (till 10 June 2009).
There are a total of 1660 foreign funds registered with the Securities & Exchange Board of India (Sebi).
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