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Thursday, June 25, 2009
IPO Grey Market Premium - Mahindra Holidays
Mahindra Holidays 275 to 325
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5 to 7
Post Session Commentary - June 25 2009
Indian market closed in negative note after trimming all its initial gains. Market was showing volatility during the trading on expiry of June futures and options contracts today, 25th June 2009. Selling from FIIs along with monsoon delay weigh on the investor’s sentiments. In addition, weak European markets also took beating on the bourses. However, during initial trading market was trading with gains on the back of strong sentiments across the other Asian markets. Moreover, inflation remained in the negative zone for the second week in a row as it came in at -1.14% for the week ended June 13, 2009 as against the previous week''s annual fall of 1.61%.
The market opened higher supported by firm trading in other Asian stocks along. However the US Markets closed in mixed on Wednesday strong start of the session on the back of better than expected durable-goods report and better-than-expected fourth quarter results and upside first quarter earnings per share guidance by Oracle. Further, domestic market turned volatile ahead of the expiry of the F&O series today. Benchmark indices tried to hold the gains but slipped sharply lower during last trading hours due to forecast of a below normal monsoon rains for the first time in four years and selling by foreign funds. Finally, market concluded its southward journey towards the end of session backed by significant selling pressure in key stocks. BSE Sensex ended below 14,400 level and NSE Nifty below 4,250 mark. From the sectoral front, most of the selling was emerged in Auto, Oil & Gas, PSU, Consumer Durables, Power, FMCG and Metal stocks. BSE Midcap and Smallcap stocks also folloed the same trend. However, Realty, Bank and Capital Goods stocks witnessed most of buying from these baskets.
Among the Sensex pack 19 stocks ended in red territory and 11 in green. The market breadth indicating the overall health of the market remained positive as 1410 stocks closed in green while 1214 stocks closed in red and 79 stocks remained unchanged in BSE.
The BSE Sensex closed lower by 77.11 points at 14,345.62 and NSE Nifty ended down by 51.10 points at 4,241.85. BSE Mid Caps closed with losses of 9.94 and 26.01 points at 5,049.90 and 5,693.02 respectively. The BSE Sensex touched intraday high of 14,578.46 and intraday low of 14,261.14.
Losers from the BSE Sensex pack are Tata Motors (5.43%), Sun Pharma (3.47%), Maruti Suzuki (3.10%), M&M Ltd (2.94%), BHEL (2.73%), ONGC Ltd (2.45%), Ranbaxy Lab (2.36%), ITC Ltd (2.29%), Tata Steel (2.12%), NTPC Ltd (2.11%) and Reliance (2.03%).
Gainers from the BSE Sensex pack are HDFC (2.98%), JP Associates (2.04%), Tata Power (1.85%), ACC Ltd (1.73%), ICICI Bank (1.36%), Grasim Industries (1.27%), L&T Ltd (1.25%), Hindalco (1.07%) and Sterlite Industries (0.94%).
The wholesale price index of India came in at -1.14% for the week ended June 13, 2009 as against the previous week''s annual fall of 1.61%, government data showed on Thursday. However the inflation was 11.8% during the corresponding week ended June 14, 2008 of the previous year. The index for primary articles grew 0.1% that for fuel and power by 0.4% and of manufactured products by 1%. The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is released weekly.
On the global markets front the Asian markets which opened before the Indian market, ended in green. Shanghai Composite, Hang Seng Nikkei 225, Straits Times index and Seoul Composite closed up by 2.75, 382.88, 205.76, 23.50 and 28.94 points at 2,925.05, 18,275.03, 9,796.08, 2.302.46 and 1,392.73 respectively.
European markets, which opened after the Indian market, are trading in negative terrain. In Frankfurt the DAX index is trading lower by 73.60 points at 4,762.41 and in London FTSE 100 is trading down by 33.98 points at. 4,246.
The BSE Auto index tumbled (2.18%) or 102.91 points to close at 4,618.81 on recent reports that the government may hike fuel prices. Main losers are Escorts Ltd (5.98%), Tata Motors (5.43%), Maruti Suzuki (3.10%), M&M Ltd (2.94%) and Exide Industries (2.65%).
The BSE Oil & Gas index decreased by (2.10%) or 195.57 points at 9,120.11. Aban Offshore (4.27%), Essar Oil Ltd (3.74%), HPCL (3.16%), BPCL (3.05%) and ONGC Ltd (2.45%) ended in negative territory.
The BSE PSU index dropped by (1.71%) or 135.47 points to close at 7,779.55. Losers are Engineers In (4.72%), J&K Bank (3.67%), Bank of Baroda (3.34%), HPCL (3.16%) and MMTC Ltd (3.09%).
The BSE Consumer Durable ended down by (1.43%) or 40.46 points at 2,792.82. Losers are Rajesh Export (7.00%), Titan Ind (3.18%), Gitanjali GE (2.89%) and Videocon Ind (2.48%).
The BSE Power stocks also lost (1.41%) or 40.46 points to close at 2,836.60. Major losers are Torrent Power (4.22%), Lanco Infra (3.54%), RPower (3.26%), GMR Infra (3.05%) and BHEL (2.73%).
The BSE Realty index gained (0.53%) or 17.26 points at 3,268.29. Scrips that gained are Unitech Ltd (5.19%), Pheonox Mill (4.79%), Anant Raj (3.00%), Sobha Dev (1.51%) and Omaxe Ltd (0.31%).
JSL Ltd retreated 6.07% after the company posted a net loss of Rs. 161.23 crore in Q4 March 2009 as compared to net profit of Rs. 53.11 crore in Q4 March 2008.
State Bank of India fell by 0.71%. The bank yesterday slashed its benchmark lending rate by half a percentage point to 11.75 per cent. The Benchmark Prime Lending Rate (BPLR) was revised down by 50 basis points with effect from June 29, SBI informed the Bombay Stock Exchange. This move would benefit home, car and corporate loan customers.
Bank of India dropped slightly by 0.69%. The bank will raise funds up to Rs 13,006 crore through issuance of innovative perpetual debt instruments as well as preference shares, tier II bonds and upper tier II capital bonds. The bank’s board of directors have given a green signal to rise tier I and tier II capital.
Oil and Natural Gas Corp (ONGC) lost 2.45%. The company will have to pay a royalty of Rs 13,792 crore to the government on behalf of Cairn India in the prolific Rajasthan oilfields as the firm has been made liable to pay statutory levies on total production irrespective of its stake.
Unitech Ltd is ended up by 5.19%. The company has announced the Audited results for the year ended March 31, 2009. The Company has posted a profit after tax of Rs 7396.60 million for the year ended March 31, 2009 as compared to Rs 10306.80 million for the year ended March 31, 2008. Total Income has decreased from Rs 29697.20 million for the year ended March 31, 2008 to Rs 24549.10 million for the year ended March 31, 2009.
Areva T&D went up 1.56%, as the company bagged Rs 120 crore order.
BSE Bulk Deals to Watch - June 25 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
25/6/2009 532995 AVON CORP S V ENTERPRISES B 128935 10.47
25/6/2009 532995 AVON CORP S V ENTERPRISES S 114161 10.03
25/6/2009 511664 BGIL FL TEC RAJUL ATUL SHAH B 34700 34.51
25/6/2009 531682 CAT TECHNOL S V ENTERPRISES B 319447 7.40
25/6/2009 531682 CAT TECHNOL S V ENTERPRISES S 197219 7.43
25/6/2009 512199 CORE PROJECT BERMACO ENERGY SYSTEMS LIMITED B 614332 141.36
25/6/2009 511636 DJS STOCK SH RAMESH CHANDRA KAVEDIA B 29400 33.00
25/6/2009 511636 DJS STOCK SH BHANABHAI GANPAT PARMAR S 31200 33.00
25/6/2009 532022 FILAT FASH MUKESH DHIRAJLAL MAHETALIA B 32617 99.84
25/6/2009 532022 FILAT FASH CHIRAG SHAH B 34479 99.65
25/6/2009 532022 FILAT FASH MUKESH DHIRAJLAL MAHETALIA S 32617 99.85
25/6/2009 532022 FILAT FASH CHIRAG SHAH S 34479 101.14
25/6/2009 532836 GREMAC INFRA BP FINTRADE PRIVATE LIMITED B 159835 37.12
25/6/2009 532836 GREMAC INFRA BP FINTRADE PRIVATE LIMITED S 175435 37.54
25/6/2009 505982 HINDUJA FOUN MORGAN STANLEY MAURITIUS COMPANY LIMITED S 100000 56.26
25/6/2009 532264 INDAGE RES SPRITE INVESTMENT PRIVATE LIMITED S 292700 16.76
25/6/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL B 48200 43.26
25/6/2009 516078 JUMBO BAG LT OMPARKASH GUPTA B 40207 43.49
25/6/2009 516078 JUMBO BAG LT OMPARKASH GUPTA S 47410 43.36
25/6/2009 513693 KIC METALIKS CARWIN MERCANTILES PVT LTD B 83784 27.36
25/6/2009 531731 KUVAM INTL MUKESH KHANTILAL SHAH B 25000 8.11
25/6/2009 531731 KUVAM INTL NAYNA MUKESH SHAH B 25000 8.11
25/6/2009 531731 KUVAM INTL SAHIL SINGLA S 47500 8.11
25/6/2009 531731 KUVAM INTL SANJEEV KUMAR GUTPA S 21000 8.11
25/6/2009 533080 MOLDTK PLA SUASHISH DIAMONDS LTD. S 43200 43.11
25/6/2009 532798 NTWK MED INV OHM STOCK BROKER PVT LTD B 376000 129.84
25/6/2009 530923 PASSARI CELL SASI KALA S 36000 32.94
25/6/2009 500355 RALLI INDIA FIDELITY FUNDS PACIFIC FUND S 82901 575.00
25/6/2009 512413 SPECTACLE SHREY SANJEEV AEREN S 275000 47.09
25/6/2009 522091 UV DER HORST UMESH ARWA B 77300 18.32
25/6/2009 531249 WELL PACK PA PREMCHAND WALMIKI AMAR B 24351 163.39
NSE Bulk Deals to Watch - June 25 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
25-JUN-2009,APTECHT,Aptech Limited,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,240861,164.58,-
25-JUN-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD.,BUY,118324,3528.49,-
25-JUN-2009,EVERONN,Everonn Systems India Lim,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,84864,405.18,-
25-JUN-2009,EVERONN,Everonn Systems India Lim,FRONTPOINT FINANCIAL SERVICES FUND LP,BUY,265370,401.68,-
25-JUN-2009,EVERONN,Everonn Systems India Lim,MANSUKH SECURITIES & FINANCE LIMITED,BUY,103426,404.76,-
25-JUN-2009,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,BUY,181109,405.52,-
25-JUN-2009,GLORY,Glory Polyfilms Limited,SACHINPRABHAKARPAWAR,BUY,2698,23.34,-
25-JUN-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,8796304,22.20,-
25-JUN-2009,KESORAMIND,Kesoram Industries Ltd.,Minal Patel,BUY,385349,257.55,-
25-JUN-2009,RIIL,Reliance Indl Infra Ltd,C D INTEGRATED SERVICES LTD.,BUY,135600,1007.17,-
25-JUN-2009,RIIL,Reliance Indl Infra Ltd,GENUINE STOCK BROKERS PVT LTD,BUY,112565,1016.29,-
25-JUN-2009,RUCHINFRA,Ruchi Infrastructure Ltd.,MAVI INVESTMENT FUND LIMITED MM WARBURG BANK SCHWEIZAG,BUY,5000000,35.00,-
25-JUN-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,1091041,20.72,-
25-JUN-2009,ABAN,Aban Offshore Ltd.,AMERICAN CENTURY GLOBAL INVESTMENT MANAGEMENT INC A/C AMERI,SELL,311174,877.63,-
25-JUN-2009,ALOKTEXT,Alok Industries Limited,CREDIT SUISSE (SINGAPORE) LIMITED A/C CREDIT SUISSE (SINGAP,SELL,2266838,21.57,-
25-JUN-2009,APTECHT,Aptech Limited,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,240861,164.73,-
25-JUN-2009,APTECHT,Aptech Limited,CREDIT SUISSE FIRST BOSTON (SINGAPORE) LTD,SELL,397800,159.68,-
25-JUN-2009,ARVIND,Arvind Limited,BNP PARIBAS ARBITAGE SNC,SELL,1582400,26.59,-
25-JUN-2009,ARVIND,Arvind Limited,CREDIT SUISSE FIRST BOSTON (SINGAPORE) LTD,SELL,1589662,27.43,-
25-JUN-2009,BALAJITELE,Balaji Telefilms Limited,CREDIT SUISSE FIRST BOSTON (SINGAPORE) LTD,SELL,475000,56.44,-
25-JUN-2009,BALLARPUR,Ballarpur Industries Limi,CREDIT SUISSE FIRST BOSTON (SINGAPORE) LTD,SELL,3177400,19.98,-
25-JUN-2009,DCB,Development Credit Bank L,CREDIT SUISSE FIRST BOSTON (SINGAPORE) LTD,SELL,1892985,35.79,-
25-JUN-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD.,SELL,118324,3529.97,-
25-JUN-2009,ESCORTS,Escorts India Ltd.,CREDIT SUISSE FIRST BOSTON (SINGAPORE) LTD,SELL,979200,57.27,-
25-JUN-2009,EVERONN,Everonn Systems India Lim,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,84864,405.02,-
25-JUN-2009,EVERONN,Everonn Systems India Lim,MANSUKH SECURITIES & FINANCE LIMITED,SELL,104276,404.51,-
25-JUN-2009,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,SELL,181109,405.82,-
25-JUN-2009,EVINIX,Evinix Accessories Limite,SWISS FINANCE CORPORATION (MAURITIUS) LIMITED,SELL,647000,3.59,-
25-JUN-2009,GLORY,Glory Polyfilms Limited,SACHINPRABHAKARPAWAR,SELL,89261,22.86,-
25-JUN-2009,HINDUJAFO,Hinduja Foundries Limited,MORGAN STANLEY MAURITIUS COMPANY LTD,SELL,100000,56.26,-
25-JUN-2009,ISPATIND,Ispat Industries Limited,CREDIT SUISSE FIRST BOSTON (SINGAPORE) LIMITED,SELL,8092500,21.46,-
25-JUN-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,8060303,22.28,-
25-JUN-2009,NIITLTD,NIIT Limited,BNP PARIBAS ARBITRAGE,SELL,1296300,55.67,-
25-JUN-2009,NIITLTD,NIIT Limited,CREDIT SUISSE (SINGAPORE) LIMITED A/C CREDIT SUISSE (SINGAP,SELL,1008459,56.42,-
25-JUN-2009,ORCHIDCHEM,Orchid Chemicals Ltd.,CREDIT SUISSE FIRST BOSTON (SINGAPORE) LIMITED,SELL,428400,101.61,-
25-JUN-2009,RIIL,Reliance Indl Infra Ltd,C D INTEGRATED SERVICES LTD.,SELL,135600,1008.23,-
25-JUN-2009,RIIL,Reliance Indl Infra Ltd,CREDIT SUISSE (SINGAPORE) LIMITED A/C CREDIT SUISSE (SINGAP,SELL,93600,979.91,-
25-JUN-2009,RIIL,Reliance Indl Infra Ltd,GENUINE STOCK BROKERS PVT LTD,SELL,112565,1016.39,-
25-JUN-2009,RUCHINFRA,Ruchi Infrastructure Ltd.,SHIVA FOUNDATION,SELL,4958598,35.00,-
25-JUN-2009,SMSPHARMA,SMS Pharmaceuticals Limit,EUREKA CREDIT FINANCE PRIVATE LIMITED,SELL,53000,130.00,-
25-JUN-2009,SREINTFIN,SREI Infrastructure Finan,CREDIT SUISSE FIRST BOSTON (SINGAPORE) LIMITED,SELL,595000,68.68,-
25-JUN-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,1080238,20.72,-
Choppy on June expiry June
Despite Asian indices closing in the green, the Indian stock market seemed to have lost steam after opening strong . The Sensex opened53 points higher at 14476 and touched the day's high of 14578 withinminutes of trading on brisk buying in heavyweights. However, it shed its early gains on heavy selling in automobile, consumer durable (CD), oil & gas and fast moving consumer goods (FMCG)stocks and entered the negative territory by afternoon. The Sensex swung between negative and positive thereafter, as investors turned cautious due to lack of clarity. The Sensex tumbled below the 14300 mark towards afternoon session to touch the intra-day low of 14261 amid relentless selling pressure, but buying at lower levels helped it pare some losses. The Sensex finally closed at 14346, down 77 points, while Nifty ended 51 points down at 4242.
The market breadth was firm, as gainers outpaced losers. Of the 2,701 stocks trading on the BSE, 1,408 stocks advanced, whereas 1,216 stocks advanced. Seventy seven stocks ended unchanged. Select sectoral indices slipped sharply. The BSE Auto dropped 2.18% followed by BSE Oil (down 2.10%), BSE PSU (down 1.71%) and BSE CD (down 1.43%).
Most of the index heavyweights witnessed correction. Among the Sensex majors, Tata Motors tumbled5.43% to Rs337.60, Maruti Suzuki India dropped 3.10% to Rs1,026.90, Mahindra & Mahindra Ltd lost 2.94% to Rs702.65, Bharat Heavy Electricals slumped 2.73% to Rs2,133.20, Oil and Natural Gas Corporation slipped2.45% to Rs1,025.20, Ranbaxy Laboratories shed 2.36% at Rs266.85, ITC lost 2.29% at Rs194.10, Sun Pharmaceutical Industries fell 2.24% to Rs1,315, Tata Steel crumbled 2.12% toRs397.95 and National Thermal Power Corporation dipped 2.11% to Rs194.40. Other front-line stocks lost around 1-2% each. However, select counters saw some buying and ended with gains. HDFC advanced 2.98% to Rs2,378.10 while JP Associates, Tata Power, ACC, ICICI Bank and Grasim Industries ended with modest gains.
Over 2.71 crore shares of Unitech changed hands on the BSE followed by Suzlon Energy (1.93 crore shares), JP Hydro (1.53 crore shares), Cals Refineries (1.31 crore shares) and Reliance Natural Resource (1.24 crore shares).
Suzlon Energy was the most actively traded counter on the BSE and registered a turnover of Rs230 crore followed by Unitech (Rs224 crore), Reliance Industries (Rs192 crore), Educomp Solutions (Rs192 crore) and Tata Steel (Rs166 crore).
Nifty July 2009 futures at premium futures
Turnover surges
Nifty July 2009 futures were at 4278, at a substantial premium of 36.15 points as compared to the spot closing of 4241.85. Turnover in NSE's futures & options (F&O) segment surged to Rs 95,928.31 crore from Rs 82,940.03 crore on Wednesday, 24 June 2009.
Rollover in Nifty futures from June 2009 series to July 2009 series was about 41.05% at the end of Wednesday's (24 June 2009) trade. June 2009 derivative contracts expired today, 25 June 2009.
Suzlon Energy July 2009 futures were at premium at 119.50 compared to the spot closing of 117.60.
Bharat Heavy Electricals July 2009 futures were at premium at 2157 compared to the spot closing of 2129.60.
Oil & Natural Gas Corporation July 2009 futures at premium at 1040.10 compared to the spot closing of 1019.70.
In the cash market, the S&P CNX Nifty lost 51.10 points or 1.19% at 4241.85.
Auto, FMCG stocks edge lower on worries over monsoon
Key benchmark indices edged lower in what was a highly volatile trading session. The BSE 30-share Sensex lost 77.11 points or 0.53%, off 232.84 points from the day's high, but up 84.48 points from the day's low. Auto and FMCG stocks led the losses on fears lower monsoon rains would hurt rural demand. Sustained selling by foreign funds also weighed on the sentiment.
The BSE Sensex has lost 1121.19 points or 7.24% from a multi-month closing high of 15,466.81 on 10 June 2009
Volatility was high today as traders rolled over positions from June 2009 series to July 2009 ahead of the expiry of June 2009 contracts. The June 2009 derivatives contracts expired today, 25 June 2009. Rollover in Nifty futures from June 2009 series to July 2009 series was about 41.05% at the end of Wednesday's (24 June 2009) trade. The rollover in Min Nifty futures was pegged at nearly 44%.
After a firm opening, the market soon pared gains on forecast of a below normal monsoon rains for the first time in four years. The BSE Sensex pared most of its earlier gains by mid-morning trade as selling from foreign funds weighed on the investor sentiment. The market recovered later on firm Asian stocks and higher US index futures. Volatility ruled the roost in afternoon trade.
The market weakened in mid-afternoon trade. It cut losses later. The market weakened again later with the Sensex hitting a fresh intraday low at about 15:00 IST. The market cut losses in choppy late trade.
There are concerns that poor rains could cap a recovery in the economy. Monsoon rains, which run from June to September, have weakened and are expected to be below normal, Prithviraj Chavan, minister of science and technology, said after trading hours on Wednesday, 24 June 2009 in a briefing in New Delhi. The minister said the 2009 monsoon rainfall would be 93% of the long-term average, lower than an earlier forecast of 96%.
However, the market has heaved a sigh of relief after the government ruled out the possibility of a drought
But foreign funds have been on a selling drive recently after aggressively buying during the past three months or so. As per the provisional figures on the NSE, foreign institutional investors (FIIs) sold shares worth Rs 791.85 crore on Wednesday, 24 June 2009 while domestic institutional investors purchased shares worth Rs 728.26 crore.
Inflation based on the wholesale price index remained in the negative zone for the second week in a row, data released by the government today, 25 June 2009, showed. Inflation based on the wholesale price index declined 1.14% in the year through 13 June 2009 government data released today, 25 June 2009 showed. The decline was, however, smaller than a 1.61% fall in the year through 6 June 2009. Inflation had dipped to negative in early June 2009 for the first time since 1977-78.
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.
European markets were subdued today, 25 June 2009 as the Federal Reserve disappointed investors by refraining from increasing bond purchases and the International Monetary Fund said banks in Ireland face losses of as much as $49 billion through 2010. Key benchmark indices in UK, Germany and France were down by between 0.74% and 1.34%.
But Asian stocks rose, led by mining and technology companies, as the US Federal Reserve said the pace of economic contraction is slowing and South Korea raised its gross domestic product forecast. Key benchmark indices in Hong Kong, China, Taiwan, South Korea, Singapore and Japan were up by between 0.09% and 2.15%.
The US Federal Reserve at the end of its two-day policy meet on Wednesday, 24 June 2009 signalled that a weak economy likely will keep prices in check despite growing concerns that the trillions it's pumping into the financial system will ignite inflation. Fed chairman Ben Bernanke and his colleagues held a key bank lending rate at a record low of between zero and 0.25%, and pledged again to keep it there for an extended period to help brace activity going forward.
Trading in the US index futures indicated the Dow could fall 8 points today, 25 June 2009.
US stocks rose broadly on Wednesday as durable goods orders jumped unexpectedly, reinforcing the belief the economy was healing, while quarterly results from software maker Oracle boosted technology shares. The Dow Jones Industrial Average was down 23.05 points, or 0.28%, at 8,299.86. But the Standard & Poor's 500 Index was up 5.84 points, or 0.65%, at 900.94 and the Nasdaq Composite index climbed 27.42 points, or 1.55%, at 1,792.34
In key economic data, the durable goods orders for May 2009 saw a 1.8% jump, beating the consensus estimates of 0.9% decline in total orders. A gauge of capital spending in the report also jumped. Orders for non-defense capital goods excluding aircraft rose by 4.8%, after decreasing 2.9% in April. It was the largest increase since 8.2% in September 2004. On the housing front, May 2009 new home sales data was down 0.6%. It showed an annualised rate of 342,000 units, below the 360,000 unit consensus.
The BSE 30-share Sensex lost 77.11 points or 0.53% to 14,345.62. The Sensex opened 53.42 points higher at 14,476.15. At the day's high of 14,578.46, the Sensex rose 155.73 points in early trade. The Sensex lost 161.59 points at the day's low of 14,261.14 in late trade.
The S&P CNX Nifty shed 51.10 points or 1.19% to 4,241.85. Nifty July 2009 futures were at 4278, at a substantial premium of 36.15 points as compared to the spot closing. Turnover in NSE's futures & options (F&O) segment surged to Rs 95,928.31 crore from Rs 82,940.03 crore on Wednesday, 24 June 2009.
The barometer index the BSE Sensex is up 4698.31 points or 48.70% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex has risen 6185.22 points or 75.79%.
BSE clocked a turnover of Rs 5623 crore, lower than Rs 5727 crore on Wednesday, 24 June 2009
Though the market breadth, indicating the overall health of the market, was positive, it weakened compared to a strong breadth in early trade. On BSE, 1429 shares advanced as compared with 1218 that declined. 78 shares remained unchanged.
The BSE Mid-Cap index fell 0.20% to 5,049.90 and the BSE Small-Cap index declined 0.45% to 5,693.02. Both these indices outperformed the Sensex
Sectoral indices on BSE displayed mixed trend. The BSE Capital Goods index (up 0.09%), the BSE TECk index (down 0.37%), the BSE IT index (down 0.37%), BSE Bankex (up 0.38%), and the BSE Realty index (up 0.53%), outperformed the Sensex
The BSE Power index (down 1.41%), the BSE Healthcare index (down 0.67%), the BSE Auto index (down 2.18%), the BSE Consumer Durables index (down 1.43%), the BSE FMCG index (down 0.99%), the BSE Oil & Gas index (down 2.10%), the BSE PSU index (down 1.71%), the BSE Metal index (down 0.82%), underperformed the Sensex.
Among the 30-member Sensex pack, 18 declined while the rest gained.
Auto stocks were in reverse gear on fears lower monsoon rains would hurt rural demand. Auto companies derive a substantial revenue from sales in the rural market.
India's largest commercial vehicle maker by sales Tata Motors slumped 5.88% to Rs 336 on reports the firm may report a consolidated loss of about Rs 300 crore for the first time in eight years due to poor performance by its UK subsidiary. The company is scheduled to announce its consolidated results tomorrow, 26 June 2009. It was the top loser from the Sensex pack.
India's largest car maker by sales Maruti Suzuki India fell 2.79%. India's largest tractor maker by sales Mahindra & Mahindra slipped 2.47%
Fears of a hike in fuel prices also weighed on auto counters. The government may increase petrol price by Rs 2 a litre and diesel by Re 1 on firming international crude prices, according to recent reports. State run oil marketing firms Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation are currently losing Rs 6.08 a litre on petrol and Rs 2.96 a litre on diesel sales. These PSU OMC's suffer revenue loss on sale of auto and cooking fuels as they sell these products at a controlled price.
FMCG companies edged lower on forecast of below normal monsoon rains for the first time in four years. Hindustan Unilever (down 2.21%), ITC (down 2.34%), Britannia Industries (down 0.71%), and Tata tea (down 2.31%), slipped. FMCG firms derive a substantial revenue from rural markets.
But liquor major United Spirits rose 6.39% to Rs 917.80 on reports the company will significantly deleverage its balance sheet within the next two weeks.
India's top dam builder by sales Jaiprakash Associates gained 2.74% to Rs 219.25 on reports its unlisted unit Jaiprakash Power Venture is set to merge with Jaiprakash Hydro-Power. The proposed move is reportedly aimed at helping Jaiprakash Power Venture raise funds though equity route. Jaiprakash Associates' holds 84.28% stake in Jaiprakash Power Venture and 63.34% in Jaiprakash Hydro-Power. It was the top gainer from the Sensex pack.
India's largest cement firm by sales ACC rose 2.21% after a unit of the company entered into an agreement with the Madhya Pradesh State Mining Corporation for setting up a joint venture company for coal mining. The company made this announcement after trading hours on Wednesday, 24 June 2009.
However diversified firm Grasim Industries slipped 0.79%. As per reports, the Aditya Birla group is looking at consolidating its cement business currently being run by Grasim Industries and UltraTech Cement following the exit of Larsen & Toubro (L&T) from UltraTech recently.
The move will create India's top cement firm, with a combined production capacity of 42 million tonnes a year, overtaking ACC controlled by Switzerland's Holcim that will have 30 million tonnes by 2010.
IVRCL Infrastructures & Projects rose 5.86% to Rs 346.20 on buzz the firm is likely to raise about Rs 250 crore by divesting up to 49% stake in its three build-operate-transfer (BOT) road projects to private equity investors. However, the company denied any such development in a communique issued on bourses after trading hours
Banking and financial shares rose mirroring firm ADRs and hopes of financial sector reforms in the Union Budget for 2009-10. India's largest mortgage finance firm Housing Development Finance Corporation gained 2.37%
India's largest private sector bank by net profit ICICI Bank gained 1.40% after its American depository (ADR) rose 0.39% on Wednesday, 24 June 2009. India's second largest private sector bank by net profit HDFC Bank rose 0.43% after its ADR advanced 3.25% on Wednesday, 24 June 2009.
However India's biggest bank in terms of branch network State Bank of India (SBI) slipped 0.44% to Rs 1709 after striking day's high of Rs 1740. The bank on Wednesday said it will cut its benchmark prime lending rate by 50 basis points to 11.75% per annum from 29 June 2009.
Kotak Mahindra Bank (up 1.59%), Axis Bank (up 1.09%), Canara Bank (up 1.24%), and Punjab National Bank (up 1.26%), edged higher
Indiabulls Financial Services jumped 4.68% after a block deal of ten lakh shares was executed on BSE at Rs 173.25 per share. The block deal constituted 0.39% of the company's equity.
The Reserve Bank of India today said it will announce its quarterly monetary policy in its quarterly meet scheduled to be held on 28 July 2009. The Reserve Bank of India reviews policy in April, July, October and January.
Metal shares gained after LMEX, a gauge of six metals traded on the London Metal Exchange, climbed 4.8% on Wednesday, 25 June 2009, the most since 19 March 2009. Copper jumped 3.1% in New York.
JSW Steel (up 0.29%), Sesa Goa (up 0.62%), Sterlite Industries (up 0.97%), Hindalco Industries (up 2.03%), gained. However India's largest private sector steel maker by sales Tata Steel slipped 2.35% ahead of its Q4 March 2009 results
JSL plunged 6.74% after the company posted a net loss of Rs 161.23 crore in Q4 March 2009 as compared to net profit of Rs 53.11 crore in Q4 March 2008. The company announced the results after market hours on Wednesday, 24 June 2009.
India's largest private sector firm by market capitalisation Reliance Industries (RIL) fell 1.45% to Rs 1971 extending a recent sharp slide triggered by an unfavourable court ruling on gas sales. The stock came off day's high of Rs 2028.80
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. According to analysts the lower gas sale price will result in lower-than-expected earnings from gas sales for RIL.
India's largest oil exploration firm by sales Oil & Natural Gas Corporation (ONGC) dropped 1.05% to Rs 1040 after net profit declined 16% to Rs 2206.76 crore on a 12.30% fall in net sales to Rs 13703.80 crore in Q4 March 2009 over Q4 March 2008. The results were declared after market hours on Wednesday, 24 June 2009. The stock recovered from day's low of Rs 1005.
Outsourcing focussed IT stocks reversed early gains after the US Federal Reserve said the US economy is likely to remain weak. US is the biggest market for Indian IT firms. India's second largest software firm by sales Infosys Technologies slipped 0.46% even as its American depository receipt (ADR) rose 1.89% on Wednesday, 24 June 2009.
India's largest software services exporter by sales TCS slipped 0.20%. India's third largest software services exporter by sales Wipro fell 0.07% despite a 3.64% rise in its ADR on Wednesday, 24 June 2009.
Suzlon Energy topped the turnover chart on BSE with a turnover of Rs 231.00 crore, followed by Unitech (Rs 224.09 crore), Reliance Industries (Rs 193.16 crore), Educomp Solutions (Rs 192.27 crore) and Tata Steel (Rs 16,689 crore).
Unitech led the volume chart clocking volume of 2.70 crore shares followed by Suzlon Energy (1.93 crore shares), Jaiprakash Hydropower (1.53 crore shares), Cals Refineries (1.31 crore shares) and Reliance Natural Resources (1.24 crore shares).
HT Media slipped 2.93% after a block deal of five lakh shares was executed on BSE at Rs 97.50 per share. The block deal constituted 0.21% of the company's equity.
Unitech galloped 5.58% after the company said it was seeing a pick up in demand for new residential projects. Unitech is focusing on low-cost mass housing projects to prop up volumes and Unitech's managing director Sanjay Chandra said there was good demand.
Navneet Publications (India) jumped 10.15% after net profit vaulted 344.23% to Rs 9.24 crore in Q4 March 2009 over Q4 March 2008. The company announced the results during trading hours today, 25 June 2009.
Wyeth rose 4.04% after net profit surged 52.1% to Rs 18.50 crore in Q4 March 2009 over Q4 March 2008. The company announced the results after market hours on Wednesday, 24 June 2009.
Cadila Healthcare galloped 7.38% to Rs 370.45. Earlier this month, foreign brokerage Goldman Sachs & Co. raised its rating on the stock to 'buy' from 'neutral'.
Apollo Hospitals Enterprise climbed 7.14% to Rs 569.75. The company will declare its year ended March 2009 results on 29 June 2009. The International Finance Corporation, or IFC, a World Bank entity, recently granted a $50 million (Rs 241.2 crore) loan to Apollo Hospitals for expanding its network of Reach Hospitals. The chain is designed specifically for under-developed population centers.
US stocks manage a steady end
Stocks give up gains after Fed statement
US stocks ended in a mixed mode on Wednesday, 24 June. Dow registered modest losses while Nasdaq and S&P 500 registered modest gains. Federal Reserve's monetary policy statement was the main highlight of the day today. The major averages were putting in solid gains prior to the release, but the market moved lower afterwards. Other than that, there were a couple of economic reports. Better than expected earning report from Oracle helped Nasdaq register modest gains today.
The Dow Jones Industrial Average ended lower by 23 points at 8,299.73. The Nasdaq Composite Index, ended higher by 27 at 1,792. S&P 500 ended higher by 5.8 points at 900.
The stock market started the day on a strong note. But the stock market sold off sharply midday. The major averages climbed higher toward the end of the session.
All ten sectors ended in the green today led by the technology and financial sectors. 3M, Du Pont, Caterpillar, Merck and Johnson& Johnson were the main Dow winners. Boeing, United Technologies, American Express, Mc Donalds and Exxon Mobil were the main Dow laggards.
The Nasdaq was a leader for most of the day following Oracle's better-than-expected fourth quarter results and upside first quarter earnings per share guidance after the close last night. Other tech stocks like Apple and Intel too supported the Nasdaq today.
Today's FOMC policy statement stated that the pace of economic contraction in US is slowing. It also stated that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period of time. The Fed left the fed funds rate unchanged at 0.00% to 0.25%, as expected.
The FOMC also stated that its Treasury purchase program size remains unchanged. That pressured Treasuries and took the benchmark 10-year Note from positive ground to negative ground and pushed its yield up more than 10 basis points to 3.69%.
Among economic reports for the day, The Commerce Department reported on Wednesday, 24 June, 2009 that durable-goods orders increased 1.8% in May. Stronger orders for airplanes and machinery translated into a better-than-expected 1.8% increase in durable-goods orders in May.
It was the third increase in the past four months for durable-goods orders. Despite the recent increases, however, the level of new orders for big-ticket items during May was down 5.1% from December. Shipments of durable goods fell 2.1% in May and are down 19.3% in the first five months of the year compared with a year earlier.
Inventories of durable goods fell 0.8%. The inventory-to-shipment ratio rose to 1.90 from 1.89, indicating that manufacturers' inventories are getting further out of whack despite massive efforts to cut production and sell off inventories.
In a separate report, the Commerce Department also reported on Wednesday, 24 June, 2009 that sales of new homes in the United States were essentially unchanged near record-low levels in May as home builders continued to slash their inventories of unsold homes.
Sales dropped 0.6% to a seasonally adjusted annual rate of 342,000 in May from a downwardly revised 344,000 in April. Seasonally adjusted sales have been essentially flat since January, when they dropped to a postwar record low of 329,000.
All the Indian ADRs ended in the green today. HDFC Bank and Wipro Technologies were the main gainers rising 3.6% and 3.2% respectively today.
Crude prices at Nymex dropped today after rising initially on Wednesday, 24 June, 2009. Prices fell today as the dollar rallied again. Prices fell despite energy department's weekly inventory report which showed more than expected drop in crude inventories for last week. On Wednesday, crude-oil futures for light sweet crude for July delivery closed at $58.67/barrel (lower by $0.57 or 0.7%). Earlier during the day, it hit a high of $69.86.
In the currency market on Wednesday, the dollar rallied after the Federal Reserve left interest rates unchanged and said it will continue to buy Treasurys and other securities as previously announced. The dollar index, which measures the strength of the dollar against a basket of six other currencies, rose as much as 0.8%. Federal Reserve policy makers began a two-day meeting yesterday. The central bank has held its benchmark interest rate near zero since December.
Tomorrow will again be a day heavy in economic data. Initial unemployment claims for the week ended 20 June and the final first quarter GDP reading are both due at 8:30ET.
Pre Session Commentary - June 25 2009
Today domestic markets are likely to open positive as majority of Asian markets have opened with phenomenal gains. Despite the lethargic macro economic data of US, the Asian markets have opened with staggering gains. One may witness an early gain in the broader level followed by a northward movement further. The expiry of the F&O today will play a major role in deciding the trend of the day, as bulls have shown some reluctance for the rollovers.
On Wednesday, domestic markets closed in green after a gyrating trade throughout the day. After a weak opening the market traded volatile till the mid session. However the positive cues from the European markets helped the frontline stocks gain momentum ahead of the F&O expiry. Roll over by Bulls are still under apprehensions. The domestic fund houses have been keen on buying the FIIs selling. On stock specific movements, Jindal Stainless marked a phenomenal gain of 17% on the back of news that the company is planning to revamp its debt structure. The second stock in the lime light was Educomp which closed with a remarkable gain of 11% on new that Pearson is like to take some stake in one of its unit. Suzlon also gained momentum of 9% gain on reports that the company is selling its stake in one of its arms. Sectors like Power, CG, HC and Realty were the top gainers with 2.82%, 2.52%, 2.39% and 2.07% respectively. Mid cap and Small cap outperformed the benchmark indices with exemplary gains of 2.38% and 2.26% respectively. We expect the markets to be trading positive.
The BSE Sensex closed with a gain of 98.72 points at 14,422.73 and NSE Nifty ended with a gain of 45.95 points at 4,292.95. BSE Mid Caps and Small Caps closed with phenomenal gains of 117.50 points and 126.63 points at 5,059.84 and 5,719.03 respectively. The BSE Sensex touched intraday high of 14,479.82 and intraday low of 14,207.02.
On Wednesday, the US Markets closed mixed after a flurry of events. The much awaited FOMC policy statement had very little to surprise the investors. The statement said that the economic contraction is slowing and the economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period of time. The Fed also left the fed funds rate unchanged at 0.00% to 0.25% in line with the expected. On macro economic news the durable goods order for the month of May recorded better than expected growth of 1.8%. Further the May new home sales data recorded an annualized rate of 3,42,000 uints below the consensus 360,000 units. The month-over-month growth rate was down by 0.6% as against the expected 2.3% increase. The US light crude oil for August Futures delivery inclined by 2.6% at $69.25 per barrel on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed low by 23.05 points at 8,299.86 the NASDAQ Composite (RIXF) index inclined by 27.42 points at 1,792.34 and the S&P 500 (SPX) gained by 5.84 points at 900.94.
Today major stock markets in Asia are trading positive. Hang Seng is up by 267.20 points at 18,159.35. Shanghai Composite is up by 7.809 points at 2,930.108. Japan''s Nikkei is trading up by 151.55 points at 9,741.87. Strait Times is up by 15.85 points at 2,294.81. KLSE Composite is up by 13.37 points at 1,057.85.
Indian ADRs ended higher on Wednesday. In the IT space, Satyam Computers was up 4%, Wipro was up 3.64%, Infosys was up 1.89% and Patni Computers was up 0.68%. In the telecom space, Tata Communication was up 3.25% and MTNL was up 1.02%. In the banking space, HDFC Bank was up 3.25% and ICICI Bank was up 0.39%. In other sectors, Tata Motors was up 4.01%, Dr Reddy''s Labs was up 1.16%. However, Sterlite Industries, which was the sole loser among the ADRs, was down 1.69%.
The FIIs on Wednesday stood as net sellers in equity and net buyers in debt. The Gross equity purchased stood at Rs 2,047.30 Crore and gross debt purchased stood at Rs 235.80 Crore, while the gross equity sold stood at Rs 2,705.50 Crore and gross debt sold stood at Rs 4.00 Crore. Therefore, the net investment of equity and debt reported were Rs (658.20) Crore and Rs 231.80 Crore respectively.
On Wednesday, the partially convertible rupee closed flat at 48.55 per dollar as compared to its previous close at 48.56/57. The Indian rupee ended flat due to importers buying on dollars to settle there monthly bill and also banks covering their short positions.
On BSE, total number of shares traded were 47.74 Crore and total turnover stood at Rs 5,727.29 Crore. On NSE, total number of shares traded was 101.50 Crore and total turnover was Rs 17,946.49 Crore.
Top traded volumes on NSE Nifty – Unitech with total volume traded 76862747, followed by Suzlon Energy with 68606726, DLF with 13878187, SAIL with 12579650 and NTPC with 9872187.
On NSE Future and Options, total number of contracts traded in index futures was 831354 with a total turnover of Rs 17,416.64 Crore. Along with this total number of contracts traded in stock futures were 624472 with a total turnover of Rs 34,118.28 Crore. Total numbers of contracts for index options were 1349186 with a total turnover of Rs 29,111.88 Crore and total numbers of contracts for stock options were 39090 and notional turnover was Rs 2,293.24 Crore.
Today, Nifty would have a support at 4,348 and resistance at 4,428 and BSE Sensex has support at 14,510 and resistance at 14,694.
Market seen opening firm; volatility may zoom on F&O expiry
Key benchmark indices are seen opening firm on positive global cues. The SGX Nifty futures for June 2009 expiry jumped 45.50 points in Singapore. Volatility is likely to remain high as futures and options (F&O) contracts for June 2009 series expire today, 25 June 2009. However forecast of below normal monsoon rains for the first time in four years and recent selling from foreign funds may dampen sentiment.
As per reports, rollover of Nifty positions from June 2009 series to July 2009 series stood at 41% while stock futures rollover of positions was 52% as of Wednesday, 24 June 2009.
Monsoon rains, which runs from June to September, have weakened and are expected to be below normal, Prithviraj Chavan, minister of science and technology, said on Wednesday, 24 June 2009 in a briefing in New Delhi. The India Meteorological Department on 17 April 2009 predicted rains in the June- September period to be near normal. The minister said the 2009 monsoon rainfall would be 93% of the long-term average, lower than an earlier forecast of 96%.
The outlook is among the nation's most widely watched indicator as monsoon rains are a major influence on output of key crops, economic activity and also affects sentiment in the country's financial markets.
Asian markets were trading firm today, 25 June 2009 on the back of gains in commodity prices which helped spur metal shares. Key benchmark indices in Hong Kong, China, Taiwan, South Korea, Singapore and Japan were up by between 0.33% and 2.26%.
US markets ended on a mixed note on Wednesday, 24 June 2009 as the Federal Reserve failed to enthuse investor sentiments after the central bank held the federal funds rate steady in its 2-day policy meeting which began Wednesday, 24 June 2009 and reiterated concerns about the economic outlook. The Dow Jones Industrial Average was down 23.05 points, or 0.28%, at 8,299.86. But the Standard & Poor's 500 Index was up 5.84 points, or 0.65%, at 900.94 and the Nasdaq Composite index climbed 27.42 points, or 1.55%, at 1,792.34
In key economic data that was released, the durable goods orders for May 2009 saw a 1.8% jump, beating the consensus estimates of 0.9% decline in total orders. On the housing front, May 2009 new home sales data was down 0.6%. It showed an annualised rate of 342,000 units, below the 360,000 unit consensus.
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.
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.
In its semi-annual Economic Outlook released on 24 June 2009, the Organisation for Economic Co-operation and Development (OECD) called on the Indian government to restore fiscal discipline, speed up structural reform and increase sales of public-sector assets.
Brazil, India, China and Russia – collectively, the BRICs – held their first summit in Paris this month, underlining the quartet's growing political as well as economic clout.
The OECD had been forecasting GDP growth for India of 4.3% in 2009 and 5.8% in 2010. OECD said that with the gradual recovery of the global economy and easier financial conditions, growth is projected to gradually regain momentum.
But foreign funds sold shares recently after aggressively buying during the past three months or so. As per the provisional figures on the NSE, foreign institutional investors (FIIs) sold shares worth Rs 791.85 crore on Wednesday, 24 June 2009 while domestic institutional investors purchased shares worth Rs 728.26 crore.
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.
Daily News Roundup - June 25 2009
SBI slashes PLR by 0.5% to 11.75%. (ET)
ONGC will have to pay Rs137.9bn in royalty to the government on behalf of Cairn India for its Rajasthan oil field. (BS)
Aditya Birla Group may merge Grasim and Ultratech. (ET)
PowerGrid may raise Rs30bn via follow-on offer. (BL)
Jaiprakash Power Ventures, a wholly owned subsidiary of Jaiprakash Associates is set to merge with Jaiprakash Hydro Power. (BS)
RCom signs a long term revenue sharing deal with US based EA Mobile under which, the latter will offer its award winning games to the telco. (BL)
RCom to launch MobiTV on GSM. (BL)
Tech Mahindra to raise Rs10bn. (ET)
ABB bags orders worth Rs2.2bn from Tata Projects to provide power products and solutions. (FE)
Ashok Leyland has deferred construction of its proposed LCV facility in partnership with Nissan. (BS)
TVS Motors launches Flame SR125 without twin spark plug. (BS)
Essar E&P, a wholly owned subsidiary of Essar Oil, is set to begin CBM production at Ranigunj block in West Bengal. (BL)
Bank of India to raise up to Rs130bn. (BS)
Glenmark’s diabetes drug to enter Phase III trials by 2009-end. (FE)
Educomp has sold 50% stake in its vocational education and skill training subsidiary to the UK-based publishing house Pearson for US$17.5mn. (ET)
Peninsula Land to raise Rs7.5bn by way of equity issue. (BS)
KS Oils has acquired an additional 35,000 acres of land in Indonesia for oil palm plantation. (ET)
Srei Equipment Finance plans to raises up to Rs75bn debt in the current financial year. (BS)
MET now expects the monsoon to be below normal. (ET)
OECD has raised India’s growth forecast to 5.9% for the current year. (BS)
The coal ministry has decided to take the auction route for allotting captive coal blocks. (FE)
Raw sugar imports set to touch a record 2.5mn tons in the current sugar season ending September. (BS)
Fed booster on the cards
The positive thinker sees the invisible, feels the intangible, and achieves the impossible.
The Federal Reserve is positive about the prospects of the US economy and has left key rates unchanged. It no longer sees any threat from deflation while inflation is likely to remain subdued for some time. We expect the key indices to open higher, spurred by the advance in most global markets. Volatility will remain elevated due to the F&O expiry. Since the immediate outlook is still a little murky, one should adopt a wait-n-watch approach. Stock centric action may continue though.
Meanwhile, the government has scalded down its monsoon forecast, from ‘near normal’, to ‘below normal’. There is no need to press the panic button as yet. In fact, if all things fall into place, including monsoon and budget, FY10 GDP growth could even spring a pleasant surprise. At present though, the market appears to be in no-man’s-land.
This trend may prevail till at least the budget. Earnings will also have some say for sure. Among the other key variables include: global cues and mood of the FIIs. Lately, the foreign funds have turned cautious. Local funds are having other plans.
Tata Steel, Unitech, Matrix Labs, Indiabulls Securities and Gulf Oil will declare their annual results today.
FIIs were net sellers in the cash segment on Wednesday at Rs7.92bn while the local institutions pumped in Rs7.28bn. In the F&O segment, the foreign funds were net buyers at Rs15.2bn. On Tuesday, FIIs were net sellers at Rs6.58bn in the cash segment. Mutual Funds were net buyers of Rs819mn on the same day.
Asian stock indices were on the rise with technology shares supporting in Tokyo and Seoul. But markets did not have much of a lead from Wall Street, and the much-awaited Fed statement turned out to be fairly benign, offering little clue as to when the US central bank might end its very low interest rates regime.
Separately, Berkshire Hathaway chairman Warren Buffett told a US business channel that he is having some trouble seeing the so-called "green shoots" of economic recovery in the US. Buffett said he had cataract surgery on his left eye about a month ago. He thought that might help, but he said it didn't.
"The risk of a collapse in the financial system has past, but we have not got the economy moving again," he said. The billionaire investor said the US may need a second economic stimulus package as unemployment is poised to continue rising.
On Wall Street, the Dow Jones Industrial Average marked its fourth straight loss on Wednesday. Dow component Boeing was a drag, while Oracle helped lift the tech sector. The Dow dropped 23.05 points, or 0.3%, to 8299.86, their first close below 8300 in a month. They now have fallen seven of the last eight sessions for a loss of 499.40 points, or 5.7%.
The Standard & Poor's 500-stock index rose 5.84 points, or 0.7%, to 900.94. The Nasdaq Composite Index gained 27.42, or 1.6%, to 1792.34, its biggest point and percent gain since June began.
The Nasdaq trimmed gains and the Dow dipped after the Fed kept a key short-term interest rate near zero, but said nothing about expanding a program meant to keep long-term rates from spiking.
US stocks rose from the opening bell through early afternoon on a better-than-expected reading on durable goods orders and Oracle's quarterly results and forecast. But the advance lost steam after the Fed announcement.
The US central bank opted to hold the fed funds rate, a key short-term bank lending rate, near zero, and said in its statement that the pace of economic contraction is slowing.
Stock have struggled over the last week on concerns that higher bond yields will undermine any stabilisation in the housing market. The three-month rally was fueled by bets the recession is starting to ease off. But stocks have retreated on worries that the advance was too premature.
Durable goods orders rose 1.8% in May, the government reported Wednesday morning. Economists thought orders would fall 0.9%. Orders rose a revised 1.8% in April as well.
May new home sales fell to a 342,000 annualized unit rate from 344,000 in April. Economists thought sales would rise to a 360,000 rate.
Oracle reported weaker quarterly sales and earnings that topped estimates, profit margins at a record high and software sales that fell less than expected. The business software maker also forecast first-quarter sales and earnings that are above analysts' forecasts. Shares jumped 7%.
Citigroup said it was boosting the base pay of its employees, but keeping total compensation unchanged, as it looks for ways to retain talent despite bonus limits imposed by Congress. Citi has received two government bailouts and one of the terms of the help is a limit on bonuses.
Treasury prices tumbled, raising the yield on the benchmark 10-year note to 3.68% from 3.63%.
US light crude oil for August delivery fell 57 cents to $68.67 a barrel on the New York Mercantile Exchange.
COMEX gold for August delivery rose $10.10 to $934.40 an ounce.
In currency trading, the dollar gained versus the euro and the yen.
European shares rose for the first time in three days. The pan-European Dow Jones Stoxx 600 index advanced 2.5% to 206.40, after closing lower in the previous two sessions. Germany's DAX index rose 2.7% to 4,836.01, the French CAC-40 index gained 2.2% to 3,184.76 and the U.K. FTSE 100 index climbed 1.2% to 4,279.98.
Markets ended with modest gains on Wednesday. After a sluggish start and a range bound first half, key indices perked up in the second half as the bulls stepped on the gas. Power, Capital Goods, Pharma and the Realty stocks stock led from the front. However banking stocks were under pressure. The Mid-Cap and the Small-Cap indices outperformed the benchmark indices.
The BSE Sensex gained by 93 points to end at 14,422 after touching a high of 14,480 and a low of 14,207. The index had opened at 14,376 against the previous close of 14,324. The NSE Nifty gained 46 points or 1% to shut shop at 4,293.
Among the BSE Sectoral indices BSE Power index was the top gainer gaining 2.8%, followed by the BSE Capital Goods index up 2.5%, BSE Pharma index up 2.3% and BSE Realty index up 2%. However, the BSE Bankex index ended in the red down 0.12%.
Even the BSE Mid-Cap index gained 2.3%, BSE Small-Cap index up 2.2%.
Shares of Educomp shot up by over 11% to Rs3427 after Pearson and Educomp announced that they have established a 50:50 joint venture to offer vocational and skills training in India. As part of the agreement, Pearson would acquire a 50% ownership stake in Educomp's existing vocational training business.
The joint venture will provide vocational training to students and professionals across a range of industries including financial services, retail and construction. It will have a focus on English language training, which is often critical to an individual's employment prospects. Training will be delivered both online and through Educomp's network of centres, using Pearson's educational content, technology and related services.
Shares of Bajaj Auto were in top gear, the stock surged by over 2.5% to Rs960 after the Reserve Bank permitted FIIs to purchase the shares of the company as their holding in Bajaj Auto has gone below the trigger limit of 24% following the company's demerger of two non-banking finance companies.
"The restriction placed on the purchase of shares of Bajaj Auto on behalf of FIIs may be treated as withdrawn," RBI said in a release.
Earlier, RBI had asked FIIs not to purchase any further shares in Bajaj Auto as their holding had touched 24 per cent.
Shares of ABB surged by over 4.5% to Rs754 after the company announced that it won orders worth Rs2.2bn from Tata Projects Ltd to provide power products and solutions for a super-critical coal-fired power plant under construction in the southern India state of Andhra Pradesh.
Shares of Nagarjuna Const advanced by over 3.5% to Rs125 after the company announced that the board would meet on June 29 to consider private placement.
Shares of Andrew Yule were locked at 5% upper circuit to end at Rs51.10 after reports stated that government has given approval to the company for its disinvestment program. The scrip touched an intra-day high of Rs51.10 and a low of Rs51.10 and has recorded volumes of over 7,000 shares on BSE.
Shares of Renaissance Jewelry further extended gains and rallied by over 7% to Rs49.9. The stock sky rocketed by over 58% in the last four trading sessions.
The stock hit an intra-day high of Rs54 and an intra-day low of Rs48. The total traded quantity on the counter had exceeded over 0.5mn equity shares as compared to 0.2mn shares traded on Tuesday and mere 58,000 shares on Monday.
Renaissance Jewelry had hit a 52-week high of Rs68.35 on June 23, 2008 and 52-week low of Rs18.15 on March 05, 2009.
Shares of Torrent Power rallied by over 16% to Rs164 on the back of unusual volumes witnessed in the counter. The stock has hit an intra-day high of Rs169 and an intra-day low of Rs141. The total traded quantity has exceeded the average of 20 days traded volumes. Total volumes traded were ~2.8mn equity shares on the NSE.
The stock had hit a 52-week high of Rs177 on June 12, 2009 and 52-week low of Rs50 on October 28, 2008.
The total traded quantity has exceeded the average of 20 days traded volumes. Total volumes traded were ~2.8mn equity shares on the NSE.
IMD downgrades monsoon forecast
In the second official estimate, the India Meteorological Department (IMD) has downgraded monsoon forecast to 93% from 96%, with an error margin of 4%.
IMD's long range forecast for the 2009 southwest monsoon season (June to September) is that the rainfall for the country as a whole is likely to be Near Normal. Quantitatively, monsoon season rainfall is likely to be 96% of the long period average with a model error of ± 5%. The Long period average rainfall over the country as a whole for the period 1941-1990 is 89 cm.
IMD's long range forecast update for the 2009 south-west monsoon season (June to September) is that the rainfall is likely to be below normal. Quantitatively, monsoon season rainfall for the country as a whole is likely to be 93% of the long period average with a model error of ±4%. The Long period average rainfall over the country as a whole for the period 1941-1990 is 89 cm. Over the four broad geographical regions of the country, rainfall for the 2009 South-West Monsoon Season is likely to be 81% of its LPA over North-West India, 92% of its LPA over North-East India, 99% of its LPA over Central India and 93% of its LPA over South Peninsula, all with a model error of ± 8 %.
Nifty June 2009 futures at premium
Turnover declines
Nifty June 2009 futures were at 4305, at a premium of 12.05 points as compared to the spot closing of 4292.95. Turnover in NSE's futures & options (F&O) segment was Rs 82,940.03 crore, lower than Rs 85,073.05 crore on Tuesday, 23 June 2009.
The near-month June 2009 F&O contract will expire tomorrow, 25 June 2009. Rollover in the Nifty futures was 29.19% as at end of Tuesday's (23 June 2009) trade.
ICICI Bank June 2009 futures were at premium at 692.50 compared to the spot closing of 689.40.
Reliance Industries June 2009 futures were at discount at 2001 compared to the spot closing of 2002.5.
Unitech June 2009 futures were near spot price at 78.15 compared to the spot closing of 77.95.
In the cash market, the S&P CNX Nifty rose 45.95 points or 1.08% at 4292.95.
Precious metals rise further
Gold and silver rise ahead of Fed's policy statement
Precious metal prices rose at USA on Wednesday, 24 June, 2009 ahead of the Federal Reserve's afternoon monetary-policy statement. Traders mulled over the fact that Fed won't be able to move quickly enough to withdraw the trillions of dollars thrown at the financial system, which could lead to higher inflation. That would encourage more purchases of precious metals, an alternate source for investment. Prices rose today despite the strong dollar.
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 Wednesday, gold for August delivery ended at $934.4, higher by $10.1 (1%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 0.5%. Year to date, gold prices are higher by 7.5%.
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 Wednesday, Comex silver futures for July delivery rose 7 cents (0.5%) at $13.91 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 27.2% this year. For 2008, silver had lost 24%.
In the currency market on Wednesday, the dollar rallied after the Federal Reserve left interest rates unchanged and said it will continue to buy Treasurys and other securities as previously announced. The dollar index, which measures the strength of the dollar against a basket of six other currencies, rose as much as 0.8%. Federal Reserve policy makers began a two-day meeting yesterday. The central bank has held its benchmark interest rate near zero since December.
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 128 (0.88%) at Rs 14,613 per 10 grams. Prices rose to a high of Rs 14,823 per 10 grams and fell to a low of Rs 14,463 per 10 grams during the day's trading.
At the MCX, silver prices for July delivery closed Rs 73 (0.32%) higher at Rs 22,631/Kg. Prices opened at Rs 22,304/kg and rose to a high of Rs 22,631/Kg during the day's trading.
Crude registers marginal drop marginal
Crude prices drop as dollar rallies
Crude prices at Nymex dropped today after rising initially on Wednesday, 24 June, 2009. Prices fell today as the dollar rallied again. Prices fell despite energy department's weekly inventory report which showed more than expected drop in crude inventories for last week.
On Wednesday, crude-oil futures for light sweet crude for July delivery closed at $58.67/barrel (lower by $0.57 or 0.7%). Earlier during the day, it hit a high of $69.86. 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 53% since then. Year to date, in 2009, crude prices are higher by 37.5%.
EIA reported today that crude inventories fell 3.8 million barrels in the week ended 19 June, 2009. Market was expecting a decline of 1.2 million barrels. Refiners boosted production in anticipation of higher fuel demand in the summer driving season. U.S. refineries ran at 87.1% of their operable capacity last week.
The government also reported that gasoline inventories increased by 3.9 million barrels last week, more than the buildup of 1 million barrels expected. Distillate inventories rose by 2.1 million barrels last week. Gasoline production stood at 9.2 million barrels a day last week, up 1% from the previous week. Total implied demand for petroleum products over the last four-week period has averaged 18.3 million barrels a day, down by 6.6% compared to the similar period last year
In the currency market on Wednesday, the dollar rallied after the Federal Reserve left interest rates unchanged and said it will continue to buy Treasurys and other securities as previously announced. The dollar index, which measures the strength of the dollar against a basket of six other currencies, rose as much as 0.8%. Federal Reserve policy makers began a two-day meeting yesterday. The central bank has held its benchmark interest rate near zero since December.
Also at the Nymex on Wednesday, July reformulated gasoline fell 5 cents to end at $1.843 a gallon and July heating oil dropped 3.10 cents to finish at $1.738 a gallon.
July natural gas futures fell 11.80 cents to end at $3.761 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 3,335/barrel, lower by Rs 6 (0.18%) against previous day's close. Natural gas for July delivery closed at Rs 190.2/mmbtu, lower by Rs 5.6/mmbtu (2.8%).
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