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Tuesday, June 23, 2009
FIIs continue selling continue
Outflow of Rs 197 crore on 22 June 2009
Foreign institutional investors (FIIs) sold shares worth a net Rs 197 crore on Monday, 22 June 2009, much higher than Rs 26.20 crore on Friday, 19 June 2009.
FII outflow of Rs 197 crore on 22 June 2009 was a result of gross purchases Rs 1,617.20 crore and gross sales Rs 1,814.20 crore. The BSE Sensex lost 195.67 points or 1.35% to 14,326.22 on that day.
FII inflow in June 2009 totaled Rs 4,223.40 crore (till 22 June 2009). FII inflow in calendar year 2009 totaled Rs 25,542.80 crore (till 22 June 2009).
There are a total of 1667 foreign funds registered with the Securities & Exchange Board of India (Sebi).
Turnover surges surges
Nifty June 2009 futures at discount
Nifty June 2009 futures were at 4230.30, at a discount of 16.70 points as compared to the spot closing of 4247. Turnover in NSE's futures & options (F&O) segment surged to Rs 85,073.05 crore from Rs 71,601.05 crore on Monday, 22 June 2009.
The near-month June 2009 F&O contract will expire on Thursday, 25 June 2009.
Tata Steel June 2009 futures were at discount at 396.60 compared to the spot closing of 400.40.
DLF June 2009 futures were at discount at 314.60 compared to the spot closing of 315.90.
Jaiprakash Associates June 2009 futures were near spot price at 201.90 compared to the spot closing of 201.30.
In the cash market, the S&P CNX Nifty rose 11.75 points or 0.28% at 4247.
Troubled Tuesday reappear in Asian markets reappear
Investors across the region dump shares on renewed economic worries
Stock market in Asian region experience terrific Tuesday on 23 June 2009, as concern about the global economy recovery aggravated, forcing investors across the region to opt out for heavy sales on Tuesday. With prices of crude oil and commodities tumbling down on fears of a sharp fall in demand, resource-related stocks across Asian markets are taking a hammering today. Stocks from banking, automobile and industrial sectors are also plunging sharply on selling pressure.
The World Bank's prediction of a sharper contraction for the global economy had taken a toll of European and U.S. markets on Monday, and it is now the turn of the Asian markets to embark on a journey down south.
On Wall Street, Stocks in New York suffered sharp, broad-based declines on Monday as commodities retreated and the market absorbed a dimmer view of the global economic situation. The Dow Jones Industrial Average fell 200.72 points, or 2.4%, to 8339.01, while the S&P 500 lost 28.19 points, or 3.1%, to 893.04. The Nasdaq Composite gave up 61.28 points, or 3.4%, to 1766.19.
The Dow fell 3% last week as selling interrupted the multiweek rally, and those losses extended into Monday after news that the World Bank cut its 2009 global growth forecast. It now anticipates the world economy will shrink by 2.9%, compared to the 1.9% contraction predicted in March.
In the commodity market, crude oil fell for a third day in New York as equity markets declined amid concerns the recovery in the global economy will be slower than expected.
Crude oil for August delivery declined as much as $1.13, or 1.7 percent, to $66.37 a barrel on the New York Mercantile Exchange. It traded at $66.88 at 10:02 a.m. in London. The July contract expired yesterday at $66.93.
Brent crude oil for August settlement dropped as much as $1.08, or 1.6 percent, to $65.90 a barrel on London’s ICE Futures Europe exchange. It traded at $66.38 at 9:29 a.m. London time.
Gold fell to the lowest in six weeks in London as some investors sold the precious metal to cover losses in equity markets. Bullion for immediate delivery declined as much as $9.46, or 1%, to $913.24 an ounce, the lowest since 12 May 2009. The metal traded at $917.30 at 9:21 a.m. local time. August gold futures lost 0.4% to $917.50 an ounce on the New York Mercantile Exchange’s Comex division.
In the currency market, the Japanese yen continues its strong momentum broadly today on risk aversion. US dollar strengthens against commodity currencies but remains bounded in range against Euro and Swiss. Yen is only currency that display broad based strength today, and has so far climbed over 4% against Aussie this week and over 3.5% again Kiwi. The development in Yen, stocks and treasury yields is likely to remain the major focus in near term.
The Japanese yen strengthened against major currencies on Tuesday. The Japanese currencies strengthen to 95.05 against the US dollar.
The Hong Kong dollar was trading at HK$ 7.7502 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.
In Sydney trade, the Australian dollar has closed one and half US cents lower after touching a near four-week low on Tuesday as a sombre global growth forecast by the World Bank caused a sharp sell-off in the local currency. At the local close, the dollar was trading at $US0.7836, down 1.55 US cents - or 1.9% - from Monday's close of $US0.7990. During the day, the local unit moved between a high of $US0.7875 and a low of $US0.7792, its weakest level since 28 May 2009.
In Wellington trades, the New Zealand dollar struggled to make any headway today as investors seeking safer assets deserted it. The kiwi traded between US63.22c and US62.58c during the day, ending at 5pm at US62.77c. That was more than US1c lower than late yesterday afternoon.
The South Korean won ended at 1,290.8 won against the dollar, down 16.3 won from Monday's close. The local unit extended its losing streak to a fifth session as foreign stock selling reduced the currency's demand.
The Taiwan dollar weakened further against the greenback. The Taiwan dollar fell against the US dollar as it was trading lower at NT$ 32.9250, up by NT$ 0.0270 from Monday’s close of NT$32.8980.
Coming back in equities, Asian share markets closed broadly lower, with major indexes posting their biggest one-day losses in weeks on renewed concerns that markets have climbed too much and too fast against a backdrop of uncertainty about the global economic recovery.
In Japan, the stock index retracted, with broad based sell off across the board, on tracking weak leads from Wall Street and Europe overnight on a bleaker-than-expected forecast for the world economy renewed jitters over global economic recovery prospects. Markets were also cautious before a two-day meeting of the Federal Open Market Committee. The Nikkei 225 Stock Average index tumbled 276.66 points, or 2.82% to 9,549.61, while the broader Topix index dropped 20.79 points, or 2.25% to 901.69.
In Mainland China, stock index off an early low to finish the session slightly lower, snapping four days of winning streak, on tracking the Wall Street slump overnight after the World Bank predicted that the world economy will shrink 2.9% in 2009. Investors also booked profit amid worried that the huge run-up in global stock markets over the last three months may have been overdone.
The Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, dropped 0.1%, or 3.60 points, to 2,892.69, while the Shenzhen Component Index dived 0.58%, or 65.05 points, to 11,125.66.
On the economic front, the Ministry of Finance said in a statement that China would abolish export duties on some grains and industrial products and cut the duties for chemical fertilizers and nonferrous metals from July 1 to promote exports.
In Hong Kong, the Hong Kong stock market sank with broad based losses across the board as World Bank report on the health of global economy unearthed recovery concerns. Shares of materials energy tumbled after the World Bank’s forecast of a deeper global recession sparked a slump in commodities. The Hang Seng Index stumbled 521.18 points, or 2.89%, to 17,538.37, meanwhile the Hang Seng China Enterprise Index tumbled 358.67 points, or 3.37% to 10,280.13.
In Australia, the stock market dropped in broad based sell off following weak leads from Wall Street and Europe overnight on a bleaker-than-expected forecast for the world economy renewed concern over the global economy outlook. At the closing bell, the benchmark S&P/ASX200 index plunged 121.3 points, or 3.1%, to 3,796.9, while the broader All Ordinaries melted 117.8 points, or 3.01%, to 3,793.
On the economic front, the Australian Bureau of Agricultural and Resource Economics said Australia’s copper output for the fiscal year that starts July 1 is set to rise 13% to 1 million metric tons.
In New Zealand, stock market ended the day in the negative terrain after inching up slightly yesterday. The share market dipped down in line with most of the Asian markets that tumbled following a plunge in the United States overnight after a spokesman for US President Barack Obama said overnight unemployment in the world's biggest economy was expected to reach 10% within the next few months, as the global economic crisis rumbles on.
The NZX50 fell 1.18% or 32.905 points to 2762.01. The NZX 15 declined 1.39% or 71.168 points to close at 5057.73.
The domestic share market dipped down following a bleak outlook given by the New Zealand Institute of Economic Research (NZIER). The NZIER predict tough times ahead for the New Zealand economy in its quarterly consensus forecasts wrap for the year to March 2010. Nearly 60,000 Kiwis will lose their jobs over the next year, according to an economic think-tank. According to the survey, the outlook for the economy has worsened, with the economy now expected to shrink 1.6% over the year compared to expectations of a 0.6% contraction three months ago.
In South Korea, stocks closed lower as overnight U.S. tumbles prompted a foreign selling spree. The benchmark Korea Composite Stock Price Index (KOSPI) tumbled 39.17 points to 1,360.54, the lowest level since 29 April 2009.
In Singapore, the stocks index stumbled as investors booked profit amid fretted about the strength of a world economic recovery, fueled by weakness in commodity prices in London and pullback in crude oil prices following weak leads from Wall Street and Europe overnight on a bleaker-than-expected forecast for the world economy from World Bank renewed concern over the global economy outlook. The blue chip Straits Times Index stumbled 40.82 points, or 1.8%, to 2,226.1.
On the economic front, the Department of Statistics said Singapore's consumer price index fell 0.3% year-on-year in May after declining 0.7% in April. Excluding accommodation costs, consumer prices were down 1.5%. Month-on-month, consumer prices rose 0.6% in May, following a 1.1% drop in April. Excluding accommodation costs, consumer prices were unchanged in May.
In Taiwan, stock market retreated from its recent gains, posting its worst daily drop in a week, as World bank report on the health of global economy unearthed recovery concerns, forcing Wall Street stocks for another downhill stroll. The main Taiex share index reverted its recent gains by ending its two session rally as the Taiex index gave up 143.74 points or 2.27%, closing the day at 6197.47, strongest closing since last 18 June 2009 when market closed at 6144.53.
On the economic front, Taiwan’s foreign assets amounted to US$877.8 billion as of the end of 2008, up by US$10.3 billion or 1.2% from a year earlier; if deducting the total foreign liabilities of US$301.1 billion, then Taiwan’s international investment position witnessed a net asset position of US$576.7 billion or nearly NT$19 trillion, the highest of its kind ever recorded, according to the central bank here.
In Philippines, the stock market reversed its yesterday’s gain, closing lower, as investor’s sentiments were weighed down by the negative fiscal performance data released by the bureau of treasury today. Philippines posted a budget deficit in May as the government increased spending and revenue faltered amid slowing economic growth. Moreover, razor sharp losses on Wall Street overnight also forced the investor’s to stay on sideline. At the final bell, the benchmark index PSEi tumbled 1.73% or 41.82 points to 2,370.06, while the All Shares index fell 1.39% or 21.66 points to 1,528.87.
On the economic front, the country’s budget deficit had soared 556.2% year-on-year in the first five months. The government released figures showing it was 123.2 billion pesos (S$3.5 billion) in the red by the end of last month, compared with 18.8 billion pesos at the same point in 2008. The shortfall of 11.4 billion pesos ($234 million) widened the five-month deficit to 123.2 billion pesos. Finance Secretary Margarito Teves told reporters that government spending rose 16% from a year earlier to 115.6 billion pesos for the month, while revenue collection declined 2.5% to 104.2 billion pesos.
In India, The key benchmark indices drifted lower in a highly volatile trade led by losses in banks and metal stocks. Volatility ruled the roost as traders rolled over positions in the futures & options segments to July 2009 series from June 2009 series ahead of expiry of June 2009 contracts on Thursday, 25 June 2009. The BSE 30-share Sensex was down 2.21 points or 0.02% to 14,324.01. The S&P CNX Nifty was added 11.75 points or 0.28% to 4,247.
Elsewhere, Malaysia's Kula Lumpur Composite index went down 0.14% or 1.49 points to 1044.48 while Indonesia’s Jakarta composite index ended the day lower at 1914.38.
In other regional market, European shares moved between gains and losses Tuesday, with investors buying drugmakers but selling banks as they wait for signs that the outlook for economic growth has improved. In the region, the French CAC-40 index traded flat at 3,125, while the U.K.'s FTSE 100 index rose 0.43% to 4,252 and the German DAX index advanced 0.6% to 4,721.
Mahindra Holidays sees dismal response on day one dismal
Receives bids for 4.11 lakh shares as against 92.65 lakh shares on offer
Mahindra Holidays & Resorts India got poor response for its initial public offer on day one. The issue which opened for subscription today, 23 June 2009 got bids for 4.11 lakh shares (by 16:00 IST) as against 92.65 lakh shares on offer.
The company's 92.65 lakh public issue representing 11% of the post-issue paid up capital will remain open till 26 June 2009.
The IPO proceeds will be utilised in expanding current properties and adding five new properties at Kumbalgarh in Rajasthan, Kadambakkam in Tamil Nadu, Binsar in Uttaranchal, Theog in Himachal Pradesh, and Tungi in Maharashtra.
Mahindra Holidays & Resorts India, a unit of Mahindra & Mahindra, had raised nearly Rs 120 crore by selling 2% stake to State Bank of India and 1% stake to Jacob Ballas India Fund in February 2008. The transaction had taken place at Rs 479 a share.
Mahindra Holidays & Resorts India runs the shared vacation home business, Club Mahindra Holidays. India's largest tractor maker by sales Mahindra & Mahindra holds 93.64% in the company.
BSE Bulk Deals to Watch - June 23 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
23/6/2009 512149 AVANCE TECHN POOJA BHUSHAN B 70000 29.00
23/6/2009 590061 BRUSHMAN IND ASHOKA FINSTOCK LTD B 83302 14.62
23/6/2009 590061 BRUSHMAN IND SARSWATI VINCOM LTD S 96437 14.81
23/6/2009 590061 BRUSHMAN IND ASHOKA FINSTOCK LTD S 83302 14.67
23/6/2009 511505 CAPITA TRUST IC CONSTRUCTION SERVICES LTD B 1681500 7.00
23/6/2009 511505 CAPITA TRUST INDERBETHAL SINGH THAKRAL S 782300 7.00
23/6/2009 511505 CAPITA TRUST THAKRAL INVESTMENTS HOLDING (MAURITIUS ) LTD S 899200 7.00
23/6/2009 531682 CAT TECHNOL S V ENTERPRISES B 197608 6.73
23/6/2009 531682 CAT TECHNOL S V ENTERPRISES S 197608 6.83
23/6/2009 531337 CHAN GUIDE I MAMTA VIJAY THAKKAR B 33000 31.08
23/6/2009 531337 CHAN GUIDE I MANOJ HIRACHAND MOTTA S 32250 31.09
23/6/2009 531216 COMFORT INTC SUVUDHA SECURITIES PVT LTD B 140753 29.45
23/6/2009 531216 COMFORT INTC ASHOK HARGOVINDAS SONI S 139338 29.43
23/6/2009 507833 COMPUTER POI EPOCH MERCANTILES PVT LTD B 82400 5.25
23/6/2009 511636 DJS STOCK SH PADMAKANT DEVIDAS SECURITIES LTD S 132100 33.00
23/6/2009 531367 DOLLEX INDUT DEEPTI DUBEY B 192369 6.80
23/6/2009 531367 DOLLEX INDUT MAUD ESTATES PVT LTD S 192369 6.80
23/6/2009 532786 GREAT OFFSH OPG SECURITIES P LTD B 246947 416.05
23/6/2009 532786 GREAT OFFSH DPPL GOL ESCROW(DHANSHREE PROPERTIES PVT. LTD) B 1699611 403.00
23/6/2009 532786 GREAT OFFSH OPG SECURITIES P LTD S 246947 416.46
23/6/2009 532786 GREAT OFFSH LADKI TRADING & IN.LTD S 991757 403.00
23/6/2009 532786 GREAT OFFSH JYOTI B SHETH S 203152 403.00
23/6/2009 532786 GREAT OFFSH BHARAT KANAIYALAL SHETH S 191854 403.00
23/6/2009 508807 IST LIMITED ABC WEB DEVELOPMENT PRIVATE LIMITED B 75000 117.50
23/6/2009 508807 IST LIMITED SEWASTUTI FINANCE P.LTD S 75000 117.50
23/6/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL B 90608 41.60
23/6/2009 516078 JUMBO BAG LT NEELAM JAIN B 59694 41.60
23/6/2009 516078 JUMBO BAG LT HEMENDRA AGARWAL B 70000 40.54
23/6/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL S 94791 40.90
23/6/2009 522259 KALIN RAIL N SUNEET LAL B 71981 199.85
23/6/2009 522259 KALIN RAIL N SUNEET LAL S 71981 200.20
23/6/2009 531731 KUVAM INTL JAYESH ANANTRAI DOSHI B 25000 7.86
23/6/2009 531731 KUVAM INTL NEETA J. DOSHI B 25000 7.86
23/6/2009 531731 KUVAM INTL RAJINDER BANSAL S 39900 7.86
23/6/2009 531731 KUVAM INTL DILIP GOVIND RATHOD S 20000 7.86
23/6/2009 526263 MOLDTEK TECH DISAL INVESTMENTS PVT LTD B 20000 80.86
23/6/2009 533080 MOLDTK PLA SUNIDHI SECURITIES & FINANCE LTD. S 203025 46.55
23/6/2009 511702 PARSHART INV KRUPA SANJAY SONI B 40000 7.50
23/6/2009 511702 PARSHART INV SANJAY JETHALA SONI S 31506 7.52
23/6/2009 530923 PASSARI CELL SUNITHA KUMARI S 24540 32.28
23/6/2009 531769 PFL INFOTECH DHIRAJLAL V SANGHVI HUF B 23750 3.83
23/6/2009 531769 PFL INFOTECH RAMESHBHAI VAGHJIBHAI SHAH S 26000 3.83
23/6/2009 531611 PRRANET INDU SONMAL SAKALCHAND GANDHI S 600000 5.50
23/6/2009 526753 ROSELABS LTD NIRMALADEVI TRILOKCHAND AGRAWAL S 104811 10.56
23/6/2009 526365 SHYAM STAR DIPAK K SHAH B 99000 29.71
23/6/2009 526133 SUPERTEX IND KUMKUM STOCK BROKER PVT LTD B 54078 54.66
23/6/2009 526133 SUPERTEX IND KUMKUM STOCK BROKER PVT LTD S 53276 54.93
NSE Bulk Deals to Watch - June 23 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
23-JUN-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,BUY,214663,866.41,-
23-JUN-2009,BAJAJHIND,Bajaj Hindusthan Ltd,DEUTSCHE SECURITIES MAURITIUS LIMITED,BUY,1111500,196.93,-
23-JUN-2009,BAJAUTOFIN,Bajaj Auto Finance Ltd,RELIANCE CAPITAL TRUSTEE CO. LTD. A/C RELIANCE VISION FUND,BUY,235000,155.00,-
23-JUN-2009,ECEIND,ECE Industries Limited,DIPLOMAT LIMITED,BUY,214312,135.00,-
23-JUN-2009,EVERONN,Everonn Systems India Lim,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,91501,372.65,-
23-JUN-2009,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,BUY,122129,373.03,-
23-JUN-2009,IFCI,IFCI Ltd.,ADROIT SHARE & STOCK BROKER PVT. LTD.,BUY,5579488,51.36,-
23-JUN-2009,KALINDEE,Kalindee Rail Nirman (Eng,ARCADIA SHARE & STOCK BROKERS PRIVATE LIMITED,BUY,67732,205.64,-
23-JUN-2009,KALINDEE,Kalindee Rail Nirman (Eng,BP FINTRADE PRIVATE LIMITED,BUY,75778,212.34,-
23-JUN-2009,KALINDEE,Kalindee Rail Nirman (Eng,DYNAMIC STOCK BROKING (I) PRIVATE LIMITED,BUY,103362,205.54,-
23-JUN-2009,KALINDEE,Kalindee Rail Nirman (Eng,NAMAN SECURITIES & FINANCE PVT. LTD,BUY,115140,209.82,-
23-JUN-2009,RIIL,Reliance Indl Infra Ltd,GENUINE STOCK BROKERS PVT LTD,BUY,85860,1001.39,-
23-JUN-2009,RUCHINFRA,Ruchi Infrastructure Ltd.,MAVI INVESTMENT FUND LTD DEUTSCHE BANK,BUY,1410487,32.50,-
23-JUN-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,SELL,214663,866.99,-
23-JUN-2009,BAJAJHIND,Bajaj Hindusthan Ltd,JUPITER ENTERPRISES LTD,SELL,805283,190.42,-
23-JUN-2009,BAJAUTOFIN,Bajaj Auto Finance Ltd,SWISS FINANCE CORPORATION (MAURITIUS) LIMITED,SELL,246899,154.86,-
23-JUN-2009,ECEIND,ECE Industries Limited,K.M. ENTERPRISE,SELL,215000,135.01,-
23-JUN-2009,EVERONN,Everonn Systems India Lim,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,93101,372.80,-
23-JUN-2009,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,SELL,122129,373.31,-
23-JUN-2009,IFCI,IFCI Ltd.,ADROIT SHARE & STOCK BROKER PVT. LTD.,SELL,5579488,51.36,-
23-JUN-2009,KALINDEE,Kalindee Rail Nirman (Eng,ARCADIA SHARE & STOCK BROKERS PRIVATE LIMITED,SELL,43623,201.18,-
23-JUN-2009,KALINDEE,Kalindee Rail Nirman (Eng,BP FINTRADE PRIVATE LIMITED,SELL,55477,211.65,-
23-JUN-2009,KALINDEE,Kalindee Rail Nirman (Eng,DYNAMIC STOCK BROKING (I) PRIVATE LIMITED,SELL,85862,204.41,-
23-JUN-2009,KALINDEE,Kalindee Rail Nirman (Eng,NAMAN SECURITIES & FINANCE PVT. LTD,SELL,98767,209.31,-
23-JUN-2009,RIIL,Reliance Indl Infra Ltd,GENUINE STOCK BROKERS PVT LTD,SELL,85860,1002.67,-
23-JUN-2009,RUCHINFRA,Ruchi Infrastructure Ltd.,SHIVA FOUNDATION,SELL,1400000,32.50,-
Post Session Commentary - June 23 2009
Indian market ended on flat note after recovering sharply from its initial losses. The upturn during the final trading hours was led by sustained buying in key stocks. Firm European markets also contributed to the positive sentiments. However, most of the Asian stocks were in red zone, which led selling pressure in the domestic bourses. Besides, market also exhibited volatility ahead of expiry of June futures and options contracts on coming Thursday, 25th June 2009.
The market extended its previous session’s losses and opened on downbeat note tracking weak cues from the global markets. Asian stocks were lower during early trade and the US Markets closed in deep red on Monday with the S&P 500 slipped below key 900 level on the back of the World Bank grim forecast on major economics. Further, domestic market continued to trade in negative though tried to recover during afternoon trade. However, benchmark indices were unable to hold the momentum and again slipped sharply lower. During the last trading hours market recovered smartly from all its early losses however ended the day in flat note. BSE Sensex ended below 14,400 level and NSE Nifty around 4,250 mark. From the sectoral front, most of the selling was witnessed in Bank, Metal, Consumer Durables, FMCG, Realty and IT stocks. However, Oil & Gas, PSU and Power stocks remained in limelight as observed most of buying from these baskets.
Among the Sensex pack 16 stocks ended in red territory and 14 in green. The market breadth indicating the overall health of the market remained negative as 1455 stocks closed in red while 1116 stocks closed in green and 68 stocks remained unchanged in BSE.
The BSE Sensex closed slightly lower by 2.21 points at 14,324.01 whereas NSE Nifty ended marginally up by 11.75 points at 4,247. BSE Mid Caps closed with gains of 11.83 points at 4,942.34 while Small Caps closed with losses 7.17 points at 5,592.40. The BSE Sensex touched intraday high of 14,384.19 and intraday low of 14,016.95.
Losers from the BSE Sensex pack are ICICI Bank (4.05%), HDFC Bank (3.55%), Hindalco (3.32%), ITC Ltd (3.11%), Sterlite Industries (2.82%), DLF Ltd (2.06%), L&T Ltd (1.62%), Infosys Tech (1.12%), Maruti Suzuki (0.98%), TCS Ltd (0.96%) and Bharti Airtel (0.76%).
Gainers from the BSE Sensex pack are Grasim Industries (4.13%), ONGC Ltd (3.30%), Reliance (3.26%), Tata Motors (2.70%), NTPC Ltd (2.54%), HDFC (2.34%), Tata Power (1.96%), Reliance Infra (1.31%) and Ranbaxy Lab (1.31%).
On the global markets front the Asian markets which opened before the Indian market, ended lower. Shanghai Composite, Hang Seng Nikkei 225, Straits Times index and Seoul Composite closed down by 3.61, 521.18, 276.66, 40.82 and 39.17 points at 2,892.70, 17,538.37, 9,546.61, 2.226.10 and 1,360.54 respectively.
European markets, which opened after the Indian market, are trading in green. In Frankfurt the DAX index is trading higher by 23.05 points at 4,716.45 and in London FTSE 100 is trading up by 7.45 points at. 4,241.50.
The BSE Bank index decreased by (2.14%) or 173.82 points to close at 7,950.32. Main losers are ICICI Bank (4.05%), HDFC Bank (3.55%), Kotak Bank (3.49%), Punjab National Bank (3.45%) and Axis Bank (2.25%).
The BSE Metal index dropped by (1.52%) or 164.13 points at 10,612.02. Scrips that lost are Nalco (5.69%), Hindustan Zinc (5.40%), Sesa Goa Ltd (4.42%), JSW Steel (3.46%) and Hindalco (3.32%).
The BSE Consumer Durable ended down by (1.44%) or 40.75 points at 2,788.51. Losers are Titan Ind (3.16%), Rajesh Export (2.76%) and Blue Star L (1.61%).
The BSE FMCG stocks also lost (1.35%) or 30.61 points to close at 2,241.90. Major losers are ITC Ltd (3.11%), United Brew (1.84%), Marico Ltd (1.59%), United Spr (0.99%) and Nestle Ltd (0.55%).
The BSE Oil & Gas index increased by (2.32%) or 238.19 points at 9,312.93. ONGC Ltd (3.30%), Reliance (3.26%), Reliance Pet (3.13%), Essar Oil Ltd (2.48%) and HPCL (0.79%) ended in positive territory.
The BSE PSU index gained (2.11%) or 162.95 points to close at 7,874.17.Gainers are Engineers In (9.64%), MMTC Ltd (5.00%), ST Trade Corp (4.99%), Dredg Corp (4.86%) and NMDC Ltd (4.76%).
Gujarat Industries Power Company Ltd fell 3.69% after net profit declined 16.6% to Rs. 85.32 crore in the year ended March 2009 over the year ended March 2008.
Vishal Information Technologies Ltd ended lower by 3.43%. The company has informed that the Board of Directors of the Company at its meeting held on June 23, 2009, inter alia, has recommend issue of Bonus Shares in the ratio of One new fully paid Equity Shares for every Two existing Equity Shares held by Shareholders as on Record Date.
Union Bank of India gained 0.49%. The bank has slashed its PLR by a 25-basis-point to 11.75 per cent, with effective from July 1. Union Bank of India is the first bank to cut lending rates following the Finance Minister''s meeting with the chiefs of PSU bank on June 10 in which the minister had asked banks to "explore the possibility" of bringing about a further reduction in their lending rates.
AIA Engineering Ltd advanced 0.34%, after five lakh shares changed hands in two block deals on BSE and NSE combined.
Oil stocks rally
The market undid most of the day’s losses towards the close. Taking lead from weak global indices the Sensex resumed lower from its previous close and the mood remained sombre with market slipping on profit booking in index pivotals, metal and banking stocks. The market once again witnessed selling pressure and the Sensex touched the day's low of 14017 by afternoon amid choppy session. However, the Sensex recovered shrugging off weakness in the early trades on substantial buying towards the close and ended the session at 14324, down two points. Nifty ended 12 points higher at 4247.
The market breadth was negative. Of the 2,639 stocks traded on BSE, 1,455 stocks declined, whereas 1,116 stocks advanced. Sixty eight stocks ended unchanged. Most of the sectoral indices ended lower. Even those that were up were so only marginally. The BSE Bankex was down 2.14% followed by the BSE Metal (down 1.52%) and the BSE CD index (down 1.44%). On the other hand, the BSE Oil & Gas and the BSE PSU rallied sharply by 2% each.
Select counters logged steady gains. Grasim Industries rose 4.13% to Rs2,228.65, ONGC jumped 3.30% to Rs1,026.45, Reliance Industries gained 3.26% to trade at Rs2,016.05 and Tata Motors moved up 2.70% to Rs342.60. However several index heavyweights slipped into the red and ended with losses. ICICI Bank declined 4.05% to trade at Rs697.45, HDFC Bank dropped 3.55% to Rs1,485.55, Hindalco Industries slumped 3.32% to Rs81.55, ITC shed 3.11% to Rs196.50, Sterlite Industries lost 2.82% to Rs577.20, DLF lost 2.06% to Rs316.40, Larsen & Toubro slipped 1.62% to Rs1,485.95 and Infosys Technologies was down 1.12% to Rs1,746.05.
Over 2.38 crore shares of Unitech changed hands on the BSE followed by IFCI (2.26 crore shares), Suzlon Energy (2.20 crore shares), Reliance Natural Resources (1.67 crore shares) and Cals Refineries (1.48 crore shares).
Sensex down 7% in nine trading sessions as foreign funds sell
The barometer index Sensex ended flat and the 50-unit S&P CNX Nifty clocked small gains on a day that saw wild intraday swings. The BSE was lost 2.21 points or 0.02%, up close to 310 points from the day's low and off close to 70 points from the day's high. Index heavyweight Reliance Industries and ONGC gained. Volatility ruled the roost as traders rolled over positions in the futures & options segments to July 2009 series from June 2009 series ahead of expiry of June 2009 contracts on Thursday, 25 June 2009.
After an initial sell-off triggered by weak global stocks, the market soon cut losses as index heavyweight Reliance Industries (RIL) rose. But the intraday rebound proved short-lived as the market weakened again in mid-morning trade. Selling by foreign funds also weighed on investor sentiment. Possibility of rollback in expansionary policies by the central bank further dampened the sentiment after a jump in consumer price inflation.
The market rebounded from lower level once again in early afternoon trade as Chinese stocks cut losses. The recovery gathered steam after US index futures reversed losses. Volatility was immense in mid-afternoon trade. The Sensex moved into the green from red for a brief period before the barometer index hit a fresh intraday high in choppy late trade. The market slipped into the red again later.
The market may remain volatile this week ahead of the expiry of June 2009 futures and options (F&O) contracts on Thursday.
European shares rose after fluctuating between gains and losses. Key benchmark indices in France, Germany and UK were up by between 0.08% to 0.62%.
As the preliminary data, Markit's purchasing managers index in the euro zone rose to 44.4 in June, up from 44.0 in May. A reading of less than 50 indicates a contraction in activity, while a figure of more than 50 signals expansion. Economists had forecast a rise to 45.5. The euro-zone services PMI reading fell to 44.5 from 44.8 in May, while the June manufacturing PMI rose to 42.4 from 40.7 in May. The euro-zone manufacturing output index rose to 44.2 in June from 42.6 the previous month.
Asian stocks fell today, as concern an economic recovery will be delayed dragged commodity prices lower and spurred demand for the yen as a safe haven. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 1.8% to 2.82%. China's Shanghai Composite Index fell 0.12% but well off day's moratorium.
World stocks were also cautious before a two-day meeting of the Federal Open Market Committee that begins later today, 23 June 2009. Although the Federal Reserve is expected to keep interest rates unchanged, investors will examine the post-meeting statement for clues as to how long the interest rates will remain at the current near zero. Investors also want to know whether the Fed policymakers will say the US economy is recovering or still in need of aid.
But US index futures reversed early losses. Trading in the US index futures indicated Dow could rise 27 points at the opening bell today, 23 June 2009.
Wall Street suffered its worst day in two months on Monday, 22 June 2009 as markets closed deep into the red. Financials and commodities led the decline. The Dow lost 200.72 points, or 2.4%, to 8,339.01. The S&P 500 fell below the psychological 900 level, dropping .28.19 points, or 3.1 %, to 893.04. The Nasdaq Composite Index fell 61.28 points, or 3.4%, to 1,766.19.
US stocks have lost ground several times in the last month on fears that rising interest rates and inflation would upend an economic recovery.
The World Bank on Monday predicted that the global economy will shrink 2.9% this year, a deeper fall than the 1.7% contraction it predicted in March 2009.
But the good news for India is that the World Bank has raised India's growth forecast for 2009 to 5.1% from earlier projection of 4%. It has projected an 8% growth for India in 2010 which will make it the fastest growing economy in the world in 2010, overtaking China's expected 7.7% growth relative to the robust performance prior to the current crisis.
On the flip side, the latest data showed the Consumer Price Index (CPI), inflation based on rural and agricultural workers rose to 10.2% in May 2009. The higher consumer inflation may cause Reserve Bank of India to reverse the expansionary monetary policy and might even curb the central government's spending plans which may cause hindrance in efforts to boost the slowing economy.
India's fiscal deficit in April 2009 was at Rs 54,158 crore ($11 billion), or 16.3 % of the full-year target, the government said in a statement on Tuesday.
Meanwhile, the south-west monsoon, which had been stalled since 7 June 2009, revived on 21 June 2009 and is likely to cover more parts of Maharashtra, Karnataka and Andhra Pradesh, the weather department said on Monday morning. The revived monsoon may cover Maharashtra and Madhya Pradesh by first week of July 2009.
A weak initial phase of the monsoon has stoked fears of fall in agricultural production and a surge in prices of essential commodities which may spur inflation. The country's monsoon rainfall during 1 June 2009 to 17 June 2009 was at 39.5 millimeter, 45% below the normal, the India Meteorological Department said on 18 June 2009. A weak monsoon in this season may cast its shadow on a likely recovery in India's economy. Rural demand has been strong in recent years due to good monsoon in the past few years.
The next major trigger for the market is the Union Budget 2009-2010. 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 the year ending March 2010 (FY 2010) and 7.8% in the year ending March 2011 (FY 2011).
Finance Minister Pranab Mukherjee would present the budget on 6 July 2009. The Railway Budget will be presented on 3 July 2009 and the Economic Survey would be presented on 2 July 2009.
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.
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.
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.
But foreign funds sold shares recently after aggressively buying during the past three months or so. Foreign funds sold shares totaling Rs 1,908.90 crore in six trading sessions from 15 June 2009 to 22 June 2009. FII inflow in June 2009 totaled Rs 4,223.40 crore (till 22 June 2009). FII inflow in calendar year 2009 totaled Rs 25,542.80 crore (till 22 June 2009).
Meanwhile, the data on advance tax payments reported last week for the first quarter of the financial year indicated banks and fast moving consumer goods (FMCG) firms have done well in the first quarter, but realty companies continue to perform badly. Automobile sector have also paid higher taxes this year, show the revenue department's initial estimates. Indian companies paid around Rs 23,000 croe in advance tax for the first quarter of FY 2010, almost flat at the previous year's receipts.
The BSE 30-share Sensex was down 2.21 points or 0.02% to 14,324.01. The Sensex rose 67.97 points at the day's high of 14,394.19 in late trade. At the day's low of 14,016.95, the Sensex fell 309.27 points in early trade.
The S&P CNX Nifty was up 11.75 points or 0.28% to 4,247. Nifty June 2009 futures were at 4230.30, at a discount of 16.70 points as compared to the spot closing of 4247. Turnover in NSE's futures & options (F&O) segment surged to Rs 85,073.05 crore from Rs 71,601.05 crore on Monday, 22 June 2009.
The market breadth was weak. On BSE, 1,118 shares rose as compared with 1,454 shares that declined. A total of 69 shares remained unchanged.
From the 30 share Sensex pack 16 stocks fell and rest rose.
BSE clocked a turnover of Rs 5,664 crore, higher than Rs 5,143.85 crore on Monday, 22 June 2009.
From a multi-month closing high of 15,466.81 on 10 June 2009, the Sensex has lost 1,142.80 points or 7.38% in the past nine trading sessions. The barometer index is up 4,676.70 points or 48.47% in calendar year 2009 as on 23 June 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex has risen 6,163.61 points or 75.53% as on 23 June 2009.
Coming back to today's trade, the BSE Mid-Cap index was up 0.24%, outperforming the Sensex. The BSE Small-Cap index was down 0.13% and underperformed the Sensex.
The BSE Oil & Gas index (up 2.62%), the BSE PSU index (up 2.11%), the BSE Power index (up 1.31%), outperformed the Sensex.
The BSE Bankex (down 2.14%), the BSE Metal index (down 1.52%), the BSE Consumer Durables index (down 1.44%), the BSE FMCG index (down 1.35%), the BSE Realty index (down 0.88%), the BSE IT index (down 0.67%), the BSE Auto index (down 0.55%), the BSE TECk index (down 0.51%), the BSE Capital Goods index ( down 0.37%), the BSE Healthcare index (down 0.23%), underperfomed the Sensex.
India's largest private sector firm by market capitalisation Reliance Industries (RIL) rose 3.26% to Rs 2,016.05 after NTPC Chairman R S Sharma said the company is open to buying Reliance Industries' gas at $4.2 per million metric British thermal unit (mmBtu) except for the plants under dispute in the court. The RIL stock came off the day's low of Rs 1,901.10.
The RIL stock had tumbled in the past few days hit by an unfavourable court ruling on gas sales. The Bombay High Court has directed RIL and Reliance Natural Resources (RNRL) to sign gas supply deal. The court has asked RIL to supply 28 million metric standard cubic meters per day (mmscmd) of gas for 17 years at $2.34 per million metric British thermal unit (mmbtu) to RRNL. This is much lower than the price fixed by the government for gas sale from the RIL block in the KG basin at $4.2 million per metric British thermal unit. The lower gas sale price will result in lower-than-expected earnings from gas sales for RIL.
RIL's advance tax payment fell 7.65% to Rs 1,068 crore in Q1 June 2009 over Q1 June 2008.
In January 2009, the Bombay High Court had issued an interim order saying Reliance Industries was allowed to sell gas at $4.2 per million British thermal units from its KG-D6 block in the Krishna Godavari basin off eastern India, pending a final judgment.
India's largest oil exploration firm by sales ONGC rose 3.3% on reports it has struck oil and gas in three new blocks. One of these blocks, off the eastern coast of India, could prove as rich as the Reliance Industries' D-6 block.
ONGC's advance tax fell 33% to Rs 890.50 crore in Q1 June 2009 over Q1 June 2008.
India's largest thermal power producer by sales NTPC rose 2.54% on acquiring a 44.6% stake in Transformers & Electricals Kerala for Rs 31.34 crore from the Kerala state government. Transformers and Electricals, Kerala makes and repairs heavy duty transformers.
India's largest electric equipment maker by sales Bharat Heavy Electricals rose 1.94% after the heavy industries minister Vilasrao Deshmukh recently said the centre will consider selling 10% stake in the company.
FMCG stocks fell on profit taking after recent gains triggered by hopes the government will focus on the rural sector in the forthcoming budget. FMCG firms derive substantial revenue from the rural markets. ITC, Tata Tea, Marico, United Breweries, Nestle India fell by between 0.41% to 3.11%
But India's largest FMCG maker by sales Hindustan Unilever rose 0.42% on reports company has moved away from focusing on fewer bigger brands, and is deploying its entire portfolio in the marketplace to regain lost market share and drive growth.
India's largest commercial vehicle maker by sales Tata Motors rose 2.7% on reports it plans to introduce Jaguar and Land Rover, or JLR, brands to small towns in India and is likely to set up a broad dealer network for selling premium cars.
Metal stocks fell after LMEX, a gauge of six metals traded on the London Metal Exchange, fell 5.39% on Monday, 22 June 2009. Hindustan Zinc, Sterlite Industries, Tata Steel, Hindalco Industries, Jindal Steel, National aluminum Company fell by between 0.53% to 5.69%.
Bank stocks fell after American depository receipts (ADR) fell overnight. India's second largest private sector bank by operating income HDFC Bank fell 3.55% as its American depository receipt (ADR) fell 7.04% on Monday. HDFC Bank's advance tax payment rose 16.28% to Rs 250 crore in Q1 June 2009 over Q1 June 2008.
India's biggest dedicated housing finance firm by operating income Housing Development Finance Corporation (HDFC) rose 2.34%.
HDFC and HDFC Bank recently reduced interest rates on term deposits by up to 0.25%.
India's largest private sector bank by net profit ICICI Bank fell 4.05% as its ADR fell 5.46% on Monday. ICICI Bank's advance tax payment rose 7.64% to Rs 366 crore in Q1 June 2009 over Q1 June 2008. ICICI Bank is reportedly taking cost control measures that could save the bank up to Rs 1300 crore in the year to March 2010.
But, India's biggest bank in terms of branch network State Bank of India (SBI) rose 0.8%. The boards of State Bank of India and its associate State Bank of Indore have approved an acquisition of the latter by the former. State Bank of India has already absorbed State Bank of Saurashtra and has said it is progressively looking to merge its other associate banks.
SBI aims to keep interest margins steady and has no plans for any rights issue or share sale in any unit, Chairman O.P. Bhatt said on Friday 19 June 2009.
Rate sensitive realty stocks fell on profit taking after a recent 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. DLF, Indiabulls Real Estate, Unitech, Akruti City fell by between 0.01% to 3.25%.
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.
Some healthcare stocks rose on hopes the government will give primary importance to healthcare segment and health of citizens. Ranbaxy's Laboratories, Dr Reddy's Laboratories, Lupin, Pfizer, rose by between 0.92% to 1.5%.
Construction and cement stocks rose on hopes the government may boost spending on the infrastructure sector. IVRCL Infrastructure & Projects, Gammon Infrastructure, Hindustan Construction Company rose by between 0.69% to 2.34%.
India's largest engineering and construction firm by sales Larsen & Toubro fell 1.62%. Its advance tax payment rose 15.79% to Rs 110 crore in Q1 June 2009 over Q1 June 2008.
Among cement shares, ACC, Grasim Industries, India Cements, Ultratech Cements rose by between 0.23% to 4.13%.
IT stocks fell on renewed economic worries as World Bank on Monday said the US economy will shrink 3% in 2009. US is the biggest market for the IT firms. India's second largest software firm by sales Infosys Technologies fell 1.12% as its American depository receipt (ADR) fell 2.99% on Monday 22 June 2009.
India's largest software services exporter by sales TCS fell 0.96%. TCS's advance tax payment fell 33.33% to Rs 50 crore in Q1 June 2009 over Q1 June 2008. India's third largest software services exporter by sales Wipro fell 0.45% as its ADR fell 6.08% on Monday.
Unitech clocked the highest volume of 2.38 crore shares on BSE. IFCI (2.26 crore shares), Suzlon Energy (2.2 crore shares), Reliance Natural Resources (1.67 crore shares) and Cals Refineries (1.48 crore shares were the other volume toppers in that order.
Reliance Industries clocked the highest turnover of Rs 363.94 crore on BSE. Suzlon Energy (Rs 236.32 crore), Reliance Capital (Rs 230.34 crore), Unitech (Rs 183.72 crore) and ICICI Bank (Rs 172.90 crore) were the other turnover toppers in that order.
Grey Market Premium - Mahindra Holidays and Resorts
Mahindra Holidays 275 to 325 42 to 45
Rishabhdev TechnoCable 29 to 33 5 to 7
Slide may continue continue
After witnessing a slump of over 200 points in last trades, the market is likely to remain shaky on weak global markets. Although FIIs and domestic mutual funds have been providing cushion by remaining net buyers, the sentiment is likely to remain bearish. Among the key domestic indices, the Nifty may get support at 4200 and may test higher levels at 4280. The Sensex has a likely support at 14150 and on the upside could test 14450 levels.
US Indices tumbled on Monday, ending at three-week lows, as the World Bank's weak outlook on global growth and a selloff in commodity prices sent investors heading for the exits. While the Dow Jones tumbling by 201 points to close at 8339. The Nasdaq declined 61 points on weak tech stocks and closed at 1766.
Except MTNL, all the Indian ADRs ended with sharp declines. Satyam plummeted 10.68%, VSNL & HDFC Bank crashed over 7% each. While, Wipro, Tata Motors, ICICI Bank, Rediff, Infosys and Dr Reddy dropped 1-6% each.
Crude oil prices fell further, with the Nymex light crude oil for July series slipped by $2.62 to close at $66.93 a barrel. In the commodity segment, the Comex gold for August delivery slumped $15.20 to settle at $921 an ounce.
Pre Session Commentary - June 23 2009
Today domestic markets are likely to open negative as the US markets closed with heavy loss, the worst in the last two months. The Asian markets have also opened with heavy losses following the similar trend in US markets. One could witness some selling pressure during the opening session as there are weak cues emanating from Asia. Banking stocks could be under pressure accompanied with selling across broader level. The Sensex might test the 14k mark at lower level during the day’s trade.
On Monday, the domestic markets closed in red. The markets opened positive on the back of positive cues from other Asian markets and better business confidence data of Japan. The traders could not hold the buying sentiments and therefore the benchmark indices plunged in red after the weak opening of European markets. Trading thorough the day was with low volume ahead of the F&O expiry. Sectors like Oil & Gas, Power, Metal and Realty gained remarkably by 3.33%, 2.47%, 2.38% and 2.33% respectively. Mid cap and Small cap also felt the heat as they lost by 0.57% and 0.33% respectively. We expect the markets to be trading negative.
The BSE Sensex closed with a loss of 195.67 points at 14,326.22 and NSE Nifty ended with loss of 78.35 points at 4,235.25. BSE Mid Caps and Small Caps closed with losses of 28.22 points and 18.39 points at 4,930.51 and 5,599.57 respectively. The BSE Sensex touched intraday high of 14,668.40 and intraday low of 14,269.77.
On Monday, the US Markets closed with sharp losses. Due to lack of news and weak global cues the US markets suffered the worst single day loss in two months. Broad based selling erupted across the markets specifically in the financial space. Financials shed 6.2% and kept there southward descend throughout the session. Diversified financial services fell by 7.5% and specialized finance declined by 7.3% constituting the weakest performing stocks in the financial sector. Profit booking gulped the financial stocks as they are up nearly 50% from their March lows. Energy and materials stocks also fell by 4.6% and 5.3% respectively. The US light crude oil for July delivery, which expired at the close of the pit trade, fell by 3.6% at $67.06 per barrel on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed low by 200.72 points at 8,339.01 the NASDAQ Composite (RIXF) index declined by 61.78 points at 1,766.19 and the S&P 500 (SPX) fell by 28.19 points at 893.04.
Today major stock markets in Asia are trading negative. Hang Seng is low by 599 points at 17,460.52. Shanghai Composite is low by 40.53 points at 2,855.72. Japan''s Nikkei is trading low by 269.02 points at 9,557.25. Strait Times is also low by 37.10 points at 2,229.82. KLSE Composite is low by 13.53 points at 1,045.97.
Indian ADRs ended lower on Monday. In the IT space, Satyam Computers was down 10.68%, Wipro was down 6.08%, Infosys was down 2.99% while Patni Computers remained unchanged. In the banking space, HDFC Bank was down 7.04% and ICICI Bank was down 5.46%. In the telecom space, Tata Communication was down 7.08% while MTNL was up 4.44%. In other sectors, Sterlite Industries was down 6.99%, Tata Motors was down 5.88% and Dr Reddy''s Labs was down 0.39%.
The FIIs on Monday stood as net sellers in equity and net buyers in debt. The Gross equity purchased stood at Rs 1,894.40 Crore and gross debt purchased stood at Rs 614.70 Crore, while the gross equity sold stood at Rs 1,920.50 Crore and gross debt sold stood at Rs 509.90 Crore. Therefore, the net investment of equity and debt reported were Rs (26.20) Crore and Rs 104.70 Crore respectively.
On Monday, the partially convertible rupee closed at 48.60/61 per dollar, 0.52 paise weaker than its previous close at 48.09/10. The local currency fell due to downtrend in local stock markets.
On BSE, total number of shares traded were 38.87 Crore and total turnover stood at Rs 5,143.85 Crore. On NSE, total number of shares traded was 89.57 Crore and total turnover was Rs 16,560.31 Crore.
On NSE Future and Options, total number of contracts traded in index futures was 779136 with a total turnover of Rs 16,446.80 Crore. Along with this total number of contracts traded in stock futures were 469049 with a total turnover of Rs 25,661.64 Crore. Total numbers of contracts for index options were 1245822 with a total turnover of Rs 27,238.21 Crore and total numbers of contracts for stock options were 38476 and notional turnover was Rs 2,254.40 Crore.
Today, Nifty would have a support at 4,077 and resistance at 4,169 and BSE Sensex has support at 13,910 and resistance at 14,152.
Market to extend Monday's losses tracking sharp slide in global stocks
The key benchmark indices may extend Monday's losses tracking weak global stocks after the World Bank on Monday predicted that the global economy will shrink 2.9% this year, a deeper fall than the 1.7% contraction it predicted in March 2009. Recent selling by foreign funds may also weigh on investor sentiment. However, volatility may remain high ahead of the expiry of June 2009 futures and options (F&O) contracts on Thursday, 25 June 2009.
Asian stocks fell today, as concern an economic recovery will be delayed dragged commodity prices lower and spurred demand for the yen as a haven. The key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan fell by between 1.77% to 3.55%.
The Wall Street suffered its worst day in two months on Monday, 22 June 2009 as markets closed deep in the red, the S&P 500 slipped below 900. Financials and commodities led the stocks down. Losses were further fuelled by news that the world bank cut its forecast for major economies like that of the US. The Dow slipped 200.72 points, or 2.4%, to 8,339.01. The S&P 500 index fell 28.19 points, or 3.1 %, to 893.04. The Nasdaq Composite Index fell 61.28 points, or 3.4%, to 1,766.19.
World Bank predicted on Monday that the global economy will shrink 2.9% in 2009, a deeper fall than the 1.7% contraction it predicted in March 2009. It also warned that international capital will continue to flow out of developing nations, with international capital flows projected to fall to $363 billion in 2009 from their peak of $1.2 trillion in 2007. The world has entered an era of slower growth that will require tighter and more effective oversight of the financial system, the bank said in a statement.
Even as the “world is entering an era of slower growth” and "deepening recession", India's economy is set to expand 5.1 % in 2009 and by 8.0 % in 2010, the World Bank forecast said. Without India and China the developing countries' output would shrink 1.6 per cent, the Bank said in its Global Development Finance 2009 report. Global GDP growth is expected to rebound to 2 per cent in 2010 and 3.2 per cent by 2011. In developing countries, growth is expected to be higher, at 4.4 % in 2010 and 5.7 % in 2011, albeit subdued relative to the robust performance prior to the current crisis.
Back home, price rise experienced by consumers - the Consumer Price Index (CPI) reportedly rose to 10.2% in May 2009, for which month the wholesale price inflation (WPI) remained less than half-a-percentage point. The higher consumer inflation may cause Reserve Bank of India to reverse the expansionary monetary policy and might even curb the central government's spending plans which may cause hindrance in efforts to boost the slowing economy.
Meanwhile, the south-west monsoon, which had been stalled since 7 June 2009, revived on 21 June 2009 and is likely to cover more parts of Maharashtra, Karnataka and Andhra Pradesh, the weather department said on Monday morning. The revived monsoon may cover Maharashtra and Madhya Pradesh by first week of July 2009.
A weak initial phase of the monsoon has stoked fears of fall in agricultural production and a surge in prices of essential commodities which may spur inflation. The country's monsoon rainfall during 1 June 2009 to 17 June 2009 was at 39.5 millimeter, 45% below the normal, the India Meteorological Department said on 18 June 2009. A weak monsoon in this season may cast its shadow on a likely recovery in India's economy. Rural demand has been strong in recent years due to good monsoon in the past few years.
The next major trigger for the market is the Union Budget 2009-2010. 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 the year ending March 2010 (FY 2010) and 7.8% in the year ending March 2011 (FY 2011).
Finance Minister Pranab Mukherjee would present the budget on 6 July 2009. The Railway Budget will be presented on 3 July 2009 and the Economic Survey would be presented on 2 July 2009.
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.
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.
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.
But foreign funds sold shares recently after aggressively buying during the past three months or so. As per the provisional figures on NSE, foreign funds sold shares worth Rs 300.29 crore on Monday, 22 June 2009. Foreign funds sold shares totaling Rs 1,711.90 crore in five trading sessions from 15 June 2009 to 19 June 2009. FII inflow in June 2009 totaled Rs 4,420.30 crore (till 19 June 2009). FII inflow in calendar year 2009 totaled Rs 25,739.70 crore (till 19 June 2009).
Meanwhile, the data on advance tax payments reported last week for the first quarter of the financial year indicated banks and fast moving consumer goods (FMCG) firms have done well in the first quarter, but realty companies continue to perform badly. Automobile sector have also paid higher taxes this year, show the revenue department's initial estimates. Indian companies paid around Rs 23,000 croe in advance tax for the first quarter of FY 2010, almost flat at the previous year's receipts.
US stocks rattled by World Bank report
Maximum losses for US stocks in almost two months
US stocks ended substantially lower on Monday, 22 June, 2009. With lack of news and support from any specific sector, US stocks lingered in the red since morning till the end today. The selling effort was in the wake of the World Bank's downwardly revised forecast for the major economies. The financial, energy and material sectors were the main laggards. There was no economic report scheduled today.
The Dow Jones Industrial Average ended lower by 200 points at 8,339.73. The Nasdaq Composite Index, ended lower by 61 at 1,766. S&P 500 ended lower 28 points at 893.
Today's loss marked the worst percentage loss for US indices in two months time.
Eight of the ten sectors ended in the red today. The financial sector ended the day with the maximum loss. The materials and energy sector also bore the maximum burnt of today's weakness due to the rebounding dollar. Healthcare sector too failed to stick to its recent gains. Only the telecom and utility sectors managed to trade with partial gains.
Among earning reports for the day, drug retailer Walgreen weighed on the group after posting quarterly earnings results that missed the consensus estimate.
Yesterday, the World Bank revised down global growth forecast in 2009 from - 1.7% to - 2.9%. US economy is expected to contract deeper by - 3.0%, down from - 2.4%. Euro zone is expected to contract by - 4.5%, down from - 2.7% while Japan is expected to contract by - 6.8%, down from - 5.3%. Outlook for emerging markets are mixed with Russia expected to drop - 7.5%, down from - 4.5% and Brazil to contract - 1.1%, down from 0.5%. However, China's economy is expected to expand 7.2%, up from 6.5% while India's economy is expected to expand 5.1%, up from 4.0%.
Crude prices at Nymex ended substantially lower on Monday, 22 June, 2009. The strong dollar and forecast from World Bank that the global economy will contract more than expected this year, hammered oil prices today. On Monday, crude-oil futures for light sweet crude for July delivery closed at $66.93/barrel (lower by $2.62 or 3.8%). Last week, crude ended lower by 3.3%.
In the currency market on Monday, the U.S. dollar rose against most other major currencies except the Japanese yen after the World Bank warned of a deeper global economic contraction. The dollar index, which measures the strength of the dollar against a basket of six other currencies, rose by more than 0.5%.
Economic data will be in focus with the Existing Home Sales report at 10:00ET. Among earning reports expected, Oracle is a major name.
Daily News Roundup - June 23 2009
ONGC has struck oil and gas in three new blocks - KG basin off the Andhra coast and Charada-3 offshore block in Cambay basin and Matar in Vadodara district in Gujarat. (ET)
Indian telecom players Bharti Airtel and Reliance Communications have joined the race to acquire the African business of the Kuwait-based Zain Group. (BS)
Bhel has bagged Rs1bn order from IOC for setting up a captive power plant at the latter’s Barauni refinery complex. (ET)
NTPC to get gas from Reliance at US$4.2/mBTu. (BL)
The Central Electricity Regulatory Commission has allowed NTPC to hike tariff of electricity generated from the Kayamkulan plant in Kerala. (FE)
Hotel Leela to exit from offshore casino in Goa. (BS)
GMR Infrastructure has allotted 13mn fully paid up equity shares of Rs2 each at a premium of Rs113 to IDFC Infrastructure Fund - India Development Fund on preferential basis. (BS)
Jindal Saw bagged orders worth Rs10bn for supply of large diameter pipes and ductile iron pipes in domestic and export markets, which are to be executed by March, 2010. (BL)
ABB received an order of Rs0.6bn to provide the electrical infrastructure for modernisation of Kolkata airport. (BL)
NTPC to buy 44.6% stake in Transformers and Electricals Kerala Ltd (TELK), from the Kerala Government. (BL)
Nagarjuna Construction has secured orders worth Rs3.6bn for infrastructure related works. (FE)
Union Bank of India reduced its benchmark prime lending rate (BPLR) by 25 bps to 11.75%, effective from July 1. (BS)
Maruti Suzuki expects to maintain about 10% sales growth in June sales. (ET)
Emami paves path to list reality biz post-revamp. (BL)
IFCI is exploring options to rope in a strategic investor by issuing convertible instruments or by facilitating the acquisition of shares from existing partners. (BS)
United Bank of India is planning an initial public offering (IPO) by December 2009 to raise around Rs4bn. (BS)
IDBI has reduced interest rates on deposit by 25-50bps across various maturities. (ET)
HCC’s shareholders have approved fund raising plan of Rs15bn. (FE)
TCS management has announced that the company will not change its forex positions. (ET)
HUL has hiked trade margins and offered incremental margins of 4-5% to bigger distributors to regain market share and drive volume growth. (ET)
Nacil is working on plans to reduce its expenditure on Air India staff by Rs5bn a year. (FE)
Rolta to buy back bonds worth US$150mn. (BS)
DS Kulkarni Developers plans to go ahead with its Rs40bn multi-service SEZ in Pune, despite its overseas partner pulling out of the venture. (FE)
The BK Modi group plans to raise ~US$1bn in an initial public offering after scrapping a share sale in Dubai. (BS)
Aircel has begun negotiations to sell its 12,000 mobile telephone towers as it requires funds for a US$5bn expansion plan to be pan-India operator by the end of 2010. (ET)
Renault puts India car plans on the fast track, plans to produce cars in its Chennai plant by 2011. (BL)
Texmaco plans to raise funds through equity and debt to finance its proposed heavy engineering projects. (BL)
The three-year lock in clause, aimed at preventing owners of companies which acquired telecom licenses in 2008 from making windfall profits, is likely to stay. (ET)
The Government may increase petrol price by Rs2 a litre and diesel by Re1 per liter unless excise duty on the two fuels are cut to nutralise the impact of firming international oil rates. (ET)
The Government has recommended imposition of a special duty on import of crankshaft from China. (ET)
The Government plans to link the royalty on iron ore to market prices, discontinuing the fixed rates system. (FE)
Irda has proposed to make a tie-up between a life insurance and a general or health insurance company mandatory for any policy that combines health insurance and pure term life insurance. (BS)
Investment in airport infrastructure is expected to go up to Rs45.9bn by 2013 from Rs25.5bn in 2008. (FE)
The Maharashtra state government is drafting debt waiver scheme of Rs3bn to cover three lakh farmers. (ET)
Overseas borrowings by India Inc increased by 65% mom to US$494mn in May 2009. (ET)
The Karnataka State Industrial Investment Development Corporation is likely to float tenders towards ~Rs57.7bn high speed rail link project in the next three months. (FE)
World doesn’t Bank on turnaround!
Any time you think you have the game conquered; the game will turn around and punch you right in the nose.
Just when confidence was returning regarding the economic recovery comes a punch from the World Bank in terms of a grim forecast. It expects the global economy to shrink 2.9% this year versus its earlier prediction of 1.7%. However, there’s good news for India. The World Bank has lifted its GDP growth estimates for India for 2009 and 2010. A good monsoon season will be icing on the cake. Even if there are a few blips on this front, one shouldn’t get unduly perturbed, as India has enough foodgrain stocks. But then, we live in a correlated world and have to put up with the vagaries of the global marketplace.
Coming back to the markets, it is all red across the world. Asian markets are down sharply this morning following the overnight tumble on Wall Street. Stock benchmarks in Europe and elsewhere also slid on concerns about the health of the global economy. The Indian market surely will open weak. A bounce back could happen if global meltdown ebbs a little. Volatility is a given as we head into F&O expiry.
Market players should keep an eye on the record $104bn bond auction in the US this week. Bond yields in India too have been steadily rising on worries about Government’s massive borrowings. The Federal Reserve will hold a two-day monetary policy meeting on Tuesday and Wednesday with investors focusing on the central bank's guidance on growth and any potential hints on expanding its $300 billion programme of bond purchases.
Tech Mahindra and Punj Lloyd are likely to see some positive action.
FIIs were net sellers in the cash segment on Monday at Rs3bn while the local institutions pumped in Rs4.14bn. In the F&O segment, the foreign funds were net buyers at Rs8.63bn. On Friday, FIIs were net sellers at Rs262mn in the cash segment. Mutual Funds were net buyers of Rs4.08bn on the same day.
The yen today strengthened to a three-week high against the euro, as Asian stocks slumped on concern that the global recession will be prolonged, spurring demand for the relative safety of Japan’s currency.
US stock benchmarks tanked on Monday after the World Bank cut its forecast for the global economy. Commodities like oil, gold and metals came under selling pressure while the dollar held its own as investors turned cautious.
The Dow Jones Industrial Average fell 200 points, or 2.4%, to 8,339.01. The S&P 500 index slipped 28 points, or 3%, to 893.04 and the Nasdaq Composite index was down 61 points, or 3.4%, to 1,766.10.
The World Bank cut its 2009 forecast, predicting that global growth will shrink by 2.9% versus its earlier forecast for a 1.7% contraction. Global trade is expected to plummet 9.7% this year, it said. Developing countries have been especially hard, with the exception of booming China and India. Growth is expected to return in 2010 at 2%, less than the 2.3% forecast about three months ago.
Nouriel Roubini, the New York University economics professor who predicted the financial crisis, said that the global economy may suffer another slump due to higher oil prices and widening budget deficits. "I see the worry of a double whammy from energy costs and fiscal burdens, increasing the risk of a setback in the economic recovery," Roubini told a conference in Paris. Oil may rise to $100 a barrel, he said.
The benchmark index for US stock options jumped the most since April 20. The VIX, as the Chicago Board Options Exchange Volatility Index is known, increased 11% to 31.17. The index, which measures the cost of using options as insurance against declines in the S&P 500, is down from a record 80.86 in November yet above its 20 average over its 19-year history.
A three-month rally propelled the S&P 500 by as much as 40% off of 12-year lows. But the advance has lost steam lately amid growing worries that the worst global recession in several decades may not end as soon as had been anticipated earlier.
The S&P 500 has now lost 6.6% off the highs from two weeks ago. Stock declines on Monday were broad based, with 27 out of 30 Dow issues falling.
Apple said it sold more than one million copies of its new iPhone 3GS in the first three days it was on sale, in what was being described as the most successful launch of a smartphone ever. Apple shares fell modestly.
A number of financial stocks plunged, including American Express, Bank of America and JPMorgan Chase. The KBW Bank sector index fell 6.7%.
Walgreen shares slipped after it posted a bigger-than-expected drop in quarterly profits.
No economic reports were due on Monday, with readings on housing, consumer spending and the labor market due later in the week.
Treasury prices rallied, lowering the yield on the benchmark 10-year note to 3.70% from 3.83% on Friday.
US light crude oil for July delivery fell to a two-week low, tumbling $2.62, or 3.8%, to settle at $66.93 a barrel on the New York Mercantile Exchange. The July contract expired on Monday. August becomes the active trading month on Tuesday.
COMEX gold for August delivery fell $15.20 to settle at $921 an ounce.
In currency trading, the dollar rose versus the euro and fell against the yen.
Gas prices retreated for the first time in 55 days, falling three-tenths of a percent to $2.69 per gallon, according to AAA. Prices had risen 32% since April 29.
European shares dropped sharply on Monday, with oil producers pacing the broad-based fall. The pan-European Dow Jones Stoxx 600 index declined 2.6% to 202.77 on a day when the US S&P 500 turned negative for the year. The Stoxx 600 is still in positive territory in 2009 with an advance of over 2%.
The UK's FTSE 100 index fell 2.6% to 4,234.05, the German DAX index lost 3% to 4,693.40 and the French CAC-40 index declined 3% to 3,123.25.
Markets ended with a sharper cut on Monday with the NSE Nifty index ending below the 4,250 levels. After a promising start, markets were unable to hold on to their gains as all round selling in scrips across the sectors dragged the key indices lower. Sentiments were also dampened after the European markets stated off with a negative bias.
The Oil & Gas, Power and the Metals stocks were among the major losers on the other hand bucking the negative trend were, the FMCG and the Capital Goods stocks.
Finally, the Sensex slipped 195 points or 1.4% to end at 14,326 after touching a high of 14,668 and a low of 14,269. The index had opened at 14,591 against the previous close of 14,522. The NSE Nifty declined 78 points or 1.8% to shut shop at 4,235.
Among the BSE Sectoral indices BSE Oil & Gas index was the top loser losing 4%, followed by the BSE Metal index down 3%, BSE Power index down 3%, BSE Realty index down 2.7% and BSE Consumer Durables index down 2.2%.
Shares of IRB Infrastructure advanced by over 3% to Rs140 after the company announced that it emerged as the lowest bidder for its first BOT project worth Rs12bn. The scrip touched an intra-day high of Rs142 and a low of Rs135 and recorded volumes of over 0.5mn shares on BSE.
Shares of UCO Bank edged lower by 0.5% to Rs39.9. Reports stated that the company proposed a 50bps reduction in its benchmark prime lending rate with effect from June 27. The scrip touched an intra-day high of Rs42 and a low of Rs39 and recorded volumes of over 0.33mn shares on BSE.
Shares of Titagarh Wagons were locked at 5% upper circuit to Rs383.05 following reports that the company plans to buy stake in the sick wagon unit of the S K Birla Group, Cimmco-Birla.
Dolphin Offshore received a LoI for Structural Modification work at unmanned platforms in MH worth Rs1.06bn for deployment of Modular rig on turn key basis by M/s. Instrumentation Ltd.Shares of Dolphin Offshore gained by over 3.5% to Rs269.
McNally Bharat received an order worth Rs306mn including taxes and duties. The project is to Design, Manufacture, Supply, Installation and Commissioning of 02 Nos, 3000 TPH capacity Reclaimers at Paradip, Dist: Jagatsinghpur, Orissa from Paradip Port Trust. Shares of McNally Bharat were locked at 5% upper circuit to end at Rs109.10.
Looking at the all round selling on the bourses, markets would further be under pressure. Another choppy day is in the offing, however, one cannot rule out a bounce back at lower levels. Technically, 4,200 is where the Nifty is finding some support, however, once breached would see the index slide to 4,100 levels in the coming days.RIL June 2009 futures at discount futures
Turnover declines
Nifty June 2009 futures were at 4226, at a discount of 9.25 points as compared to the spot closing of 4235.25. Turnover in NSE's futures & options (F&O) segment was Rs 71,601.05 crore, much lower than Rs 79,597.86 crore on Friday, 19 June 2009.
Reliance Industries (RIL) June 2009 futures were at discount at 1935 compared to the spot closing of 1952.50.
Suzlon Energy June 2009 futures were at discount at 108.20 compared to the spot closing of 108.85.
IFCI June 2009 futures were near spot price at 51.65 compared to the spot closing of 51.90.
In the cash market, the S&P CNX Nifty lost 78.35 points or 1.82% at 4235.25.
Precious metals slump slump
Gold and silver drop as dollar gathers strength
Precious metals slumped on Monday, 22 June, 2009. The sliding crude price and strong dollar reduced the appeal of precious metals as a hedge against inflation thereby pushing their prices down.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.
On Monday, gold for August delivery ended at $921, lower by $15.2 (1.6%) an ounce on the New York Mercantile Exchange. It was the lowest level for the yellow metal in six weeks. Last week, gold ended lower by 0.5%. Year to date, gold prices are higher by 6.2%.
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 (10%) since then.
On Monday, Comex silver futures for July delivery fell 49.7 cents (3.5%) at $13.703 an ounce. Last week, silver ended lower by 4.5%. 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 25.7% this year. For 2008, silver had lost 24%.
In the currency market on Monday, the U.S. dollar rose against most other major currencies except the Japanese yen after the World Bank warned of a deeper global economic contraction. The dollar index, which measures the strength of the dollar against a basket of six other currencies, rose by more than 0.5%.
Yesterday, the World Bank revised down global growth forecast in 2009 from - 1.7% to - 2.9%. US economy is expected to contract deeper by - 3.0%, down from - 2.4%. Euro zone is expected to contract by - 4.5%, down from - 2.7% while Japan is expected to contract by - 6.8%, down from - 5.3%. Outlook for emerging markets are mixed with Russia expected to drop - 7.5%, down from - 4.5% and Brazil to contract - 1.1%, down from 0.5%. However, China's economy is expected to expand 7.2%, up from 6.5% while India's economy is expected to expand 5.1%, up from 4.0%.
In the crude market today, July crude futures dropped $2.62, or 3.8%, to $66.93 a barrel, the lowest closing level since 3 June, 2009. Monday's loss came after crude sustained a 3% decline last week.
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 lower by Rs 34 (0.23%) at Rs 14,508 per 10 grams. Prices rose to a high of Rs 14,589 per 10 grams and fell to a low of Rs 14,444 per 10 grams during the day's trading.
At the MCX, silver prices for July delivery closed Rs 423 (1.86%) lower at Rs 22,263/Kg. Prices opened at Rs 22,630/kg and fell to a low of Rs 22,225/Kg during the day's trading.
Crude slips slips
Crude prices drop the most in three weeks
Crude prices at Nymex ended substantially lower on Monday, 22 June, 2009. The strong dollar and forecast from World Bank that the global economy will contract more than expected this year, hammered oil prices today.
On Monday, crude-oil futures for light sweet crude for July delivery closed at $66.93/barrel (lower by $2.62 or 3.8%). Last week, crude ended lower by 3.3%.
Crude had 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 51% since then. Year to date, in 2009, crude prices are higher by 35.6%.
In the currency market on Monday, the U.S. dollar rose against most other major currencies except the Japanese yen after the World Bank warned of a deeper global economic contraction. The dollar index, which measures the strength of the dollar against a basket of six other currencies, rose by more than 0.5%.
Yesterday, the World Bank revised down global growth forecast in 2009 from - 1.7% to - 2.9%. US economy is expected to contract deeper by - 3.0%, down from - 2.4%. Euro zone is expected to contract by - 4.5%, down from - 2.7% while Japan is expected to contract by - 6.8%, down from - 5.3%. Outlook for emerging markets are mixed with Russia expected to drop - 7.5%, down from - 4.5% and Brazil to contract - 1.1%, down from 0.5%. However, China's economy is expected to expand 7.2%, up from 6.5% while India's economy is expected to expand 5.1%, up from 4.0%.
Also at the Nymex on Monday, July gasoline slumped 6.47, or 3.4%, to $1.8597 a gallon and July heating oil dropped 5.92 cents, or 3.3%, to $1.7275 a gallon.
Natural gas for July delivery also fell, down 9.9 cents, or 2.5%, to $3.933 per million British thermal units.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
At the MCX, crude oil for July delivery closed at Rs 3,289/barrel, lower by Rs 97 (2.86%) against previous day's close. Natural gas for July delivery closed at Rs 197.8/mmbtu, lower by Rs 7.4/mmbtu (3.6%).
CESC
We recommend a sell in CESC from a short-term trading perspective. It is apparent from the charts of CESC that it had been on an intermediate-term up-trend between the early March low and early June peak, from Rs 180 to Rs 376. However, the stock changed its trend after the negative divergence displayed in the daily relative strength index (RSI) and after encountering significant resistance around Rs 375. Since then, the stock has been on a short-term down-trend. While trending down, it breached 21-day moving average and the intermediate-term up-trendline recently. The daily RSI has entered in to the bearish zone and the weekly RSI is declining in the neutral region. After signalling a sell, the daily moving average convergence and divergence indicator are declining and are on the verge of entering the negative territory. Our short-term prediction for the stock is bearish. We anticipate the stock’s short-term down-trend to continue until it hits our price target of Rs 262. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 309.
via BL
Rakesh Jhunjunwala - Interview with CNBC
In a candid interview with CNBC-TV18’s
“If the Nifty breaks 4650 decisively and holds for a week or so, it could hit 5900-6000,” Jhunjhunwala said. The markets would consolidate between 4,000-5,000 for three-four years, he added.
The correction seen in the latter part of 2008, he said, was a part of a major bull run that continues and which started in September 2001. “The bull market started in September 2001. We had the first leg up to September 2002 after which there was a correction. Then it started from April 2003, that leg lasted till 21,000,” the ace investor said. “That gets corrected back now to 7,500-8,000 and now we have resumed that bull market. So we can go to 20,000 and again come back to 16,000-15,000, make a range and then make a move which goes above 21,000.”
Q: We spoke on the day after the election results. I do not think even we imagined the market would be here. What is the screen telling you now?
A: The screen is telling me that the bear correction of the larger bull market in
Despite people’s apprehension and doubts about the economic scenario worldwide, it could be that the fall [in 2008] was just a correction. I also feel so because of the way the [subsequent] rise took place with its tremendous breadth, tremendous pace with good volumes — but with a lot of cynicism and lack of participation among the larger people.
Q: You do not agree with the consensus feeling right now that we should be scared by the pace of the rise. That we are now approaching a mini bubble kind of a situation?
A: You first asked what the screen was saying, you never asked me what my opinion was.
Just like others, there is a fair amount of doubt in my mind too. Internationally, things are not clear at all and I do not think that the downturn in the western economies — even if there is some kind of an improvement in the next 12-24 months — has really peaked. So with that knowledge about the world economy, it clouds the judgement of what can happen in
However, If you look at the other side of the story, I see no reason why — if Indian software exports grow by 10-15%, commodity prices hold at reasonable levels and we have good government policies —
The fact is that market is just going up in an unexpected pace and everybody is worrying. Surely I am also apprehensive about the valuation and the pace but markets are markets.
Q: When you look at the screen, what worries you? Does it worry you that valuations are far ahead of fundamentals or do you see the kind of participation or mania that you saw in 2007 or that is not visible just yet?
A: Not at all, not even 5%. I don’t go to any cocktail party where stock markets are even talked because everybody is totally left out. And the futures positions are indicative, the number of calls you get, the apprehension that people have in the buy stocks — I don’t know where the buyers are coming from but I don’t think there is even 20% of the participation of that what was in 2007.
Q: Will they all get sucked in you think before this rally tops out, people who have been sitting out?
A: It is very difficult to leave a burning cigarette in a rising market. Everybody will ultimately join. I don’t know how many calls I got when we made a 52-week high. Normally, a lot of channels call me, no channel called me to get an opinion when the market was at a 52-week high. I don’t even know how many people know we were at a 52-week high.
So I think crowd psychology-wise or sentiment-wise, I don’t think at all we are anywhere near any kind of a top.
Q: Are you trading yourself with a bit more caution because you were saying you are also in two minds right now or are you trading the kind of volumes you were trading in the big momentum of 2007?
A: I don’t think I am trading the way II was in 2007. After all, I am a human too and I am also affected by what my thoughts are. However, I am far surer about the [country’s] longer-term growth prospects and the strength than most people.
Q: Why did you pick out the level 4,000? Any significance or do you think below that…
A: Instead of 4,000, I would say 3,800 or maybe even 3,600 — no level is sacrosanct — but I would say the level where this market made a gap, that should not be violated on the downside. If it breaks 4,650 decisively, that’s what my technical analyst tells me, that market will make or at least challenge the previous high of 6,100.
Q: Do you think 6,100 is possible in 2009?
A: Did you think 4,500 was possible?
Q: I am asking you.
A: Ok. What the technical analyst says — and I also think — if it breaks 4,650 decisively on a weekly basis and holds it for a week or two, then surely we can go to 5,800-5,900-6,000 levels. We could go there, then come back to 5,000-5,200 or maybe 4,800-4,500, make a range and consolidate for a year or so and then make a new high. Another scenario: we break 4,650, we are going to go to 5,850-5,900-6,000, come back to somewhere around 3,300-3,400 and maybe spend three-four years there.
Q: Do you think that’s also possible — that the market goes there, halves from there and then spends a big…
A: It happened in 1991. So at this moment, I won’t rule out any of the scenarios but I am more inclined towards the first that we will reach 5,800-5900-6000 and then we consolidate — maybe in the 4,500-5,000 or 4,600-5,200 or even 4,000-5,000 range for the next 12-18 months. Then we go into a new high — 6,100 — and go upwards or we go back to 3,000 to 4,000 where we spend two-three years to resume higher.
Q: What is your best guess for the rest of 2009? Do you think we will actually go to 5,800-5,900 in 2009?
A: I have put a lot of caveats there — that the index should cross 4,650 decisively on a weekly basis, hold for a week or two, then I think it should. I don’t know where and what range the markets go into, but they will go into a range, spend time and only then are we going to see a big move. We have already seen a big move, we don’t know whether this move will end at: 4,800, 5,800, 5,900, 6,000? I think it will surely end before 6,000.
I do not think the Sensex will cross 21,000 in a straight line. We have to correct and we have to make a range and only then we can have the next move.
Q: Range in terms of price or time?
A: Price.
Q: And that range according to you is?
A: Who knows where it will be.
Q: What is your best case?
A: I think it will be anywhere between 3,800 and 5,000.
Q: That big a range?
A: The range could be narrower but 3,800 would be the bottom and 5,000 would be the top in that range. The range could be 4,000 to 4,500, it could be 4,500 to 5,000.
Q: After that you think a bigger bull market will commence, which goes to a new high?
A: The bull market, which has started in September 2001. We had a bull market up to 2008, we had the first leg up to September 2002 after which there was a correction. Then it started from April 2003, that leg lasted till 21,000.
That gets corrected back now to 7,500-8,000 and now we have resumed that bull market. So we can go to 20,000 and again come back to 16,000-15,000, make a range and then make a move which goes above 21,000.
Q: Right now what sums up your state of mind: wildly optimistic, terribly and totally bullish or cautiously bullish?
A: All three.
Q: With an accent on what, the caution or the bullishness?
A: I am cautious.
Q: Why? You said yourself that nobody is participated; the gaon is not into stocks.
A: I am also part of the gaon.
Q: You are a sophisticated member of the gaon.
A: Even the sophisticated ones are caught.
Q: What is making you cautious? You said valuations are not crazy and who are we to say valuations are excessive? Is it global cues which you think may turn?
A: Yes, it is the sheer psychology of the fact that the global economy is in a terrible downturn. That is put into our brains.
Q: It is not the experience of the horrific 2008?
A: No, not all that. We have had more horrific experiences.
Q: Have you? 60% down in one year?
A: Yes, why not? ‘92, though I made a lot of money back then by shorting but we also 2000, which was the worst year when from 6,000, you came back to 2,900.
Q: So the fear is global, nothing else?
A: Yes, the fear is global.
via CNBC-TV18/Moneycontrol.com
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