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Friday, July 03, 2009
Post Session Commentary - July 3 2009
Indian market rebounded from initial lows to end the day with decent gains after Railway Minister Mamata Bannerjee presented the populist Railway Budget for 2009-2010. Market, overlooked the unfavorable cues from the market all over the world as she had promised to attend the concerns of average passengers. Consequently, the rail budget mainly focused on passenger’s amenities with introduction of new trains. In addition, she announced a number of new initiatives including a plan to develop important stations with world-class amenities amid keeping freight rates and passenger fare unchanged. Notably, the Union Budget 2009-2010 will be presented on Monday, 6 July 2009. BSE Sensex ended above 14,900 level and NSE Nifty above 4,400 mark.
The market opened on negative note tracking unfavorable cues from the global markets. The US stocks markets on Thursday ended with huge losses on the back of worse than expected Non-farm payroll job losses. The selling pressure erupted after the news of the June Nonfarm Payrolls report, which indicated that 467,000 jobs were lost in the month. Though, domestic market gained some ground and recovered from initial lows with recovery in some Asian stocks. Further, the benchmark indices were hovering near the dotted line till mid session with a bit of volatility. Going ahead, stocks made sharp turnaround during afternoon trade and maintained upward movement till end as Railway Budget for current fiscal cheered the market. From the sectoral front, all indices ended in positive. Among those, Bank, Pharma, Capital Gooda, Power, Oil & Gas, Realty and PSU stock witnessed most of the buying from these baskets. Mid Cap and Small Cap stocks also followed the same trend.
Union Railway Minister Mamata Banerjee today (3rd July 2009) presented the Railway Budget for current fiscal 2009-2010. This was her first rail budget for the newly constituted United Progressive Alliance. In her speech she told to focus on passenger amenities, safety and punctuality, to develop 50 stations with international facilities, depute at least one doctor in long distance trains, etc. Several new trains are planned to be started with objective to the increase in frequency of trains in key routes. ‘Turant’ trains will be introduced, which will be non-stop point-to-point non-air conditioned trains. Besides, ‘Yuva’ trains for young generation will also be introduced. In addition, Minimum Tatkal fee has been reduced from Rs 150 to Rs 100. Tatkal fee will be a percentage of the fair. Further, there is also plan to set up a 1000 MW power plant.
Among the Sensex pack 25 stocks ended in green territory and 5 in red. The market breadth indicating the overall health of the market remained positive as 1341 stocks closed in green while 1263 stocks closed in red and 82 stocks remained unchanged in BSE.
The BSE Sensex closed higher by 254.56 points at 14,913.05 and NSE Nifty ended up by 75.40 points at 4,424.45. BSE Mid Caps closed with gains of 42.95 and 24.71 points at 5,187.22 and 5,824.95 respectively. The BSE Sensex touched intraday high of 14,945.85 and intraday low of 14,499.74.
Gainers from the BSE Sensex pack are HDFC (7.74%), Tata Steel (4.32%), M&M Ltd (3.59%), Reliance Infra (3.17%), ICICI Bank (3.05%), JP Associates (3.03%), SBI (2.94%), L&T Ltd (2.82%), NTPC Ltd (2.25%), Tata Motors (2.11%), Bharti Airtel (1.64%), BHEL (1.50%) and Tata Power (1.47%).
Losers from the BSE Sensex pack are Herohonda Motors (1.08%), Hindalco (0.95%), Sterlite Industries (0.74%), RCom (0.24%) and ITC Ltd (0.03%).
On the global markets front the Asian markets which opened before the Indian market, ended mixed. Shanghai Composite, Hang Seng and Seoul Composite closed up by 28.11, 25.35 and 8.56 points at 3,008.37, 18,203.40 and 1,420.04 respectively. However, Nikkei 225 and Straits Times index ended lower by 60.08 and 21.07 points at 9,816.07 and 2,299.75 respectively.
European markets, which opened after the Indian market, are trading in red. In Frankfurt the DAX index is trading lower by 2.87 points at 4,715.62 and in London FTSE 100 is trading down by 3.53 points at. 4,230.74.
The BSE Bank stocks gained (2.19%) or 181.63 points to close at 8,459.70 on hopes of financial sector reforms in the forthcoming budget. Major gainers are Punjab National Bank (3.94%), Oriental Bank of Commerce (3.30%), Union Bank (3.28%), ICICI Bank (3.05%) and SBI (2.94%).
The BSE Capital Goods index jumped (1.90%) or 242.75 points to close at 13,013.06 on hopes the government may boost spending on the infrastructure sector in the upcoming Budget. Main gainers are Jyoti Struct (5.00%), L&T Ltd (2.82%), Thermax Ltd (2.64%), Suzlon Energy (2.40%) and Everest Kanto (2.22%).
The BSE Power index ended up by (1.84%) or 53.04 points at 2,930.23. Gainers are Lanco Infra (4.38%), GVK Power (3.96%), Reliance Infra (3.17%) and Power Grid (2.69%).
The BSE Pharma index advanced by (1.80%) or 64.67 points to close at 3,654.91. Gainers are Glenmark Pharma (7.90%), Cipla Ltd (4.77%), Ranbaxy Lab (3.53%), Aurobindo Pharma (3.16%) and Glaxosmith (2.25%).
The BSE Realty index gained (1.18%) or 40.05 points at 3,435.23. Scrips that gained are Anant Raj (4.96%), Housing Dev (2.74%), Pheonix Mill (1.94%), Indiabull Real (1.83%) and Unitech Ltd (1.52%).
The BSE Oil & Gas index increased by (0.96%) or 91.24 points at 9,597.26. RNRL (6.84%), HPCL (3.50%), Aban Offshore (2.49%), IOC Ltd (2.41%) and Gail India (1.87%) ended in positive territory.
NTPC Ltd gained 2.25% on reports it is in talks with Japan Bank for International Cooperation for a loan of $500 million for energy-efficient power projects. Also, it witnessed gains after Railway budget proposes 1,000 MW power plant in a tribal area in Andhra Pradesh.
Sun Pharmaceutical Industries Ltd. increased by 0.42%. The company announced receipt of a tentative approval from USFDA for Sun Pharma''s Abbreviated New Drug Application (ANDA) for generic Optivar, azelastine ophthalmic solution, 0.05%.
Orchid Chemicals & Pharmaceuticals Ltd (Orchid) gained 0.37%. The company has received approval from die US FDA for its ANDA (Abbreviated New Drug Application) for Amlodipine Besylate Tablets, 2,5 mg, 5 mg and 10 mg.
Ranbaxy Laboratories ended up by 3.53%. The drug maker has received US health rulators approval for oral solution Oxcarbazepine, used in treatment of epilepsy and bipolar disorder.
Cairn India Ltd shrunk 2.07% to after crude oil prices slumped nearly 4% on the New York Mercantile Exchange on Thursday, 2 July 2009.
JSW Steel Limited dropped by 0.25%. The company posted a 45% growth in crude steel production in Q1 FY 2009-10. The growth in rolled products in flat and iong products was 47% and 103% respectively.
L&T, RIL July 2009 futures at premium
Turnover rises
Nifty July 2009 futures were at 4419.95, at a discount of 4.30 points as compared to the spot closing of 4424.25. Turnover in NSE's futures & options (F&O) segment surged to Rs 54,841.47 crore from Rs 52,918.55 crore on Thursday, 2 July 2009.
Larsen & Toubro (L&T) July 2009 futures were at premium at 1620 compared to the spot closing of 1607.55.
Reliance Industries (RIL) July 2009 futures were at premium at 2036 compared to the spot closing of 2027.65.
State Bank of India July 2009 futures were at discount at 1806 compared to the spot closing of 1809.65.
In the cash market, the S&P CNX Nifty gained 75.40 points or 1.73% at 4424.25.
BSE Bulk Deals to Watch - July 3 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
3/7/2009 524412 AAREY DRUGS NIKHILALBHAI VINAKANTBHAI SHAH B 27000 36.52
3/7/2009 524412 AAREY DRUGS KUMKUM STOCK BROKER PVT LTD B 32000 36.30
3/7/2009 524412 AAREY DRUGS KAUSHIK SHAH SHARES & SEC. LTD B 100000 39.04
3/7/2009 524412 AAREY DRUGS RONAK ASHWIN CHOKSI B 46000 36.47
3/7/2009 524412 AAREY DRUGS NIKHILALBHAI VINAKANTBHAI SHAH S 27000 36.47
3/7/2009 524412 AAREY DRUGS JIPAL PINESH SHAH S 30500 38.45
3/7/2009 524412 AAREY DRUGS NIKHILBHAI VINAKANTBHAI SHAH S 32000 36.30
3/7/2009 532914 ARCOTECH LTD TEJINDER SINGH S 550000 3.00
3/7/2009 526556 AVERY INDIA DEUTSCHE TRUSTEE SERVICESINDIAPVTLTD AC DWSMONEYPLUSADVANTAGEFUND B 267619 133.47
3/7/2009 532995 AVON CORP S V ENTERPRISES B 96215 9.33
3/7/2009 511628 BRESCON CORP I TENEBLE INDIA LTD B 127397 80.01
3/7/2009 511628 BRESCON CORP JDP SHARES AND FINANCE P. LTD S 132397 80.00
3/7/2009 526839 CCAP LTD MOHITA DHOOT B 25000 30.75
3/7/2009 526839 CCAP LTD HASMUKH PAREKH B 25000 32.70
3/7/2009 526839 CCAP LTD ARPIT DHOOT B 25001 31.80
3/7/2009 526839 CCAP LTD MOHITA DHOOT S 25000 31.80
3/7/2009 526839 CCAP LTD MADHUMITA PODDAR S 26400 32.70
3/7/2009 526839 CCAP LTD ARPIT DHOOT S 25001 30.75
3/7/2009 533026 CHEMCEL SANJUKUMARI RANKA B 185000 7.32
3/7/2009 533026 CHEMCEL RIMA PAWAN MEHTA S 184030 7.32
3/7/2009 531216 COMFORT INTC KIRIT V DAVE S 107197 30.00
3/7/2009 532696 EDUCOMP SOLN OPG SECURITIES P LTD B 125452 4381.88
3/7/2009 532696 EDUCOMP SOLN OPG SECURITIES P LTD S 125452 4383.05
3/7/2009 532022 FILAT FASH KURMI GANGARAM JAGNARAYAN S 34896 100.24
3/7/2009 508918 GREYCELLS EN INDIA MAX INVESTMENT FUND LTD B 30000 160.96
3/7/2009 508918 GREYCELLS EN KIRITKUMAR MUCHHALA HEMANG S 29900 161.00
3/7/2009 504336 INDTRADECO L SKYLARK INDUSTRIAL CLEANERS PVT LTD S 1500000 0.77
3/7/2009 506522 J L MORISO I MOHITA DHOOT B 8000 196.00
3/7/2009 506522 J L MORISO I SWETA PHOPHALIA B 8011 203.00
3/7/2009 506522 J L MORISO I MOHITA DHOOT S 8000 203.00
3/7/2009 506522 J L MORISO I SWETA PHOPHALIA S 8011 196.00
3/7/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL B 42076 53.67
3/7/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL S 42500 53.50
3/7/2009 522259 KALIN RAIL N TRANSGLOBAL SECURITIES LTD. B 56401 223.97
3/7/2009 522259 KALIN RAIL N ARCADIA SHARE & STOCK BROKERS PVT. LTD B 58270 222.37
3/7/2009 522259 KALIN RAIL N MATRIX EQUITRADE PVT. LTD. B 83152 223.10
3/7/2009 522259 KALIN RAIL N OPG SECURITIES P LTD B 92071 222.41
3/7/2009 522259 KALIN RAIL N DYNAMIC STOCK BROKING INDIA PVT LTD B 71523 223.29
3/7/2009 522259 KALIN RAIL N TRANSGLOBAL SECURITIES LTD. S 56401 223.97
3/7/2009 522259 KALIN RAIL N ARCADIA SHARE & STOCK BROKERS PVT. LTD S 58270 222.40
3/7/2009 522259 KALIN RAIL N MATRIX EQUITRADE PVT. LTD. S 83152 223.35
3/7/2009 522259 KALIN RAIL N OPG SECURITIES P LTD S 92071 222.81
3/7/2009 522259 KALIN RAIL N DYNAMIC STOCK BROKING INDIA PVT LTD S 67033 223.56
3/7/2009 502933 KATARE SPG. HIMAT .P. JATANIA B 25000 14.51
3/7/2009 502933 KATARE SPG. RAMESH G GOKANI B 18000 14.62
3/7/2009 502933 KATARE SPG. AMI STOCK & SHARE BROKERS PVTLTD S 25000 14.51
3/7/2009 502933 KATARE SPG. KISHORPTHUMAR S 25000 14.63
3/7/2009 531602 KOFF BR PICT DIPESH SURESH JAIN S 390750 3.59
3/7/2009 526263 MOLDTEK TECH RAMAIAH VENKATA KAZA B 41790 85.81
3/7/2009 526263 MOLDTEK TECH SEEPRA JAJOO S 36400 84.93
3/7/2009 502893 NEEMTEK ORG DUKE ADVISORS (P) LTD B 17335 95.05
3/7/2009 502893 NEEMTEK ORG DUKE SPECIAL OPPORTUNITIES FUND LLC S 17715 95.23
3/7/2009 511702 PARSHART INV SANJAY JETHALAL SONI S 19216 8.68
3/7/2009 590077 RANKLIN SOLU PULAVARTHI RAMASURYAANIL SEKHA B 36375 30.28
3/7/2009 533083 RISHABHDEV Naman Securities & Finance Pvt. Ltd. B 168124 21.22
3/7/2009 533083 RISHABHDEV MOHAN OVERSEAS PVT LTD. S 75000 21.75
3/7/2009 533083 RISHABHDEV Naman Securities & Finance Pvt. Ltd. S 168124 21.26
3/7/2009 505141 SCOOTERS IND ZAVERCHAND M CHHEDA S 14535 28.20
3/7/2009 531626 SILVER SMITH DYTOP COMMODEAL LTD S 24600 11.88
3/7/2009 526133 SUPERTEX IND KUMKUM STOCK BROKER PVT LTD B 55730 56.83
3/7/2009 526133 SUPERTEX IND KUMKUM STOCK BROKER PVT LTD S 72000 56.79
3/7/2009 532757 VOLTAMP TRAN DEUTSCHE SECURITIES MAURITIUS LIMITED B 310000 869.99
3/7/2009 532757 VOLTAMP TRAN PATEL LALITBHAI HARIBHAI S 260000 870.00
NSE Bulk Deals to Watch - July 3 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
03-JUL-2009,AHMEDFORGE,Ahmednagar Forgings Ltd,OLYMPIA BUILDERS PVT LTD,BUY,174000,49.55,-
03-JUL-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD.,BUY,132902,4352.90,-
03-JUL-2009,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,BUY,176956,432.73,-
03-JUL-2009,EVERONN,Everonn Systems India Lim,MULTIPLEX CAPITAL LTD.,BUY,130648,431.66,-
03-JUL-2009,FSL,Firstsource Solutions Lim,JAYPEE CAPITAL SERVICES LTD.,BUY,2500866,24.55,-
03-JUL-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,7702109,21.67,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,A TO Z STOCK TRADE PRIVATE LIMITED,BUY,64208,217.66,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,ARCADIA SHARE & STOCK BROKERS PRIVATE LIMITED,BUY,173043,223.49,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,ASHWIN STOCKS AND INVESTMENT PRIVATE LIMITED,BUY,72893,216.59,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,CPR CAPITAL SERVICES LTD.,BUY,150408,222.73,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,INDIA ADVANTAGE SECURITIES LTD.,BUY,103968,219.73,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,LPC SECURITIES LTD,BUY,60208,224.26,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,MBL & COMPANY LTD.,BUY,75607,220.15,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,NAMAN SECURITIES & FINANCE PVT. LTD,BUY,61094,225.46,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,OM INVESTMENTS,BUY,181106,222.14,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,OUTSPEED TRADING PVT LTD,BUY,60243,222.59,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,SMART EQUITY BROKERS PRIVATE LIMITED,BUY,58952,223.95,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,STANDARD SECURITIES & INVESTMENT INTERMEDIATES LIMITED,BUY,73280,223.31,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,TOTAL SECURITIES LTD.,BUY,67517,225.47,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,TRANSGLOBAL SECURITIES LTD.,BUY,68340,223.18,-
03-JUL-2009,NOIDATOLL,Noida Toll Bridge Company,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,985222,43.54,-
03-JUL-2009,PROVOGUE,Provogue (India) Limited,INDEA LONG TERM OPPERTUNITIES MASTER FUND,BUY,710500,45.50,-
03-JUL-2009,RUCHINFRA,Ruchi Infrastructure Ltd.,RUCHI SOYA INDUSTRIES LTD.,BUY,2000000,31.00,-
03-JUL-2009,AHMEDFORGE,Ahmednagar Forgings Ltd,MSR MARKETING PRIVATE LTD,SELL,174000,49.55,-
03-JUL-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD.,SELL,132902,4355.37,-
03-JUL-2009,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,SELL,176956,433.11,-
03-JUL-2009,EVERONN,Everonn Systems India Lim,MULTIPLEX CAPITAL LTD.,SELL,130648,431.92,-
03-JUL-2009,FSL,Firstsource Solutions Lim,JAYPEE CAPITAL SERVICES LTD.,SELL,2422241,24.56,-
03-JUL-2009,INDUSFILA,Indus Fila Limited,INDIA INFOLINE INVESTMENT SERVICES PVT LTD,SELL,190000,18.92,-
03-JUL-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,7866120,21.66,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,A TO Z STOCK TRADE PRIVATE LIMITED,SELL,64208,218.03,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,ARCADIA SHARE & STOCK BROKERS PRIVATE LIMITED,SELL,173225,223.77,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,ASHWIN STOCKS AND INVESTMENT PRIVATE LIMITED,SELL,72893,216.94,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,CPR CAPITAL SERVICES LTD.,SELL,150158,222.78,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,INDIA ADVANTAGE SECURITIES LTD.,SELL,103968,219.93,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,LPC SECURITIES LTD,SELL,60208,224.41,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,MBL & COMPANY LTD.,SELL,75607,220.33,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,NAMAN SECURITIES & FINANCE PVT. LTD,SELL,64676,226.27,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,OM INVESTMENTS,SELL,181106,222.35,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,OUTSPEED TRADING PVT LTD,SELL,60243,222.74,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,SMART EQUITY BROKERS PRIVATE LIMITED,SELL,58952,224.45,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,STANDARD SECURITIES & INVESTMENT INTERMEDIATES LIMITED,SELL,73280,224.09,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,TOTAL SECURITIES LTD.,SELL,67517,225.53,-
03-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,TRANSGLOBAL SECURITIES LTD.,SELL,69031,223.52,-
03-JUL-2009,NOIDATOLL,Noida Toll Bridge Company,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,1075422,43.52,-
03-JUL-2009,PROVOGUE,Provogue (India) Limited,THE INDIA FUND INC,SELL,1000500,45.50,-
03-JUL-2009,RUCHINFRA,Ruchi Infrastructure Ltd.,NITESH SHAHRA,SELL,1700000,31.00,-
Union Budget 2009-2010 to set direction
The Union Budget 2009-2010 at 11:00 IST on Monday, 6 July 2009, will play a key role in dictating further market direction as it will help in gauge the new government's policy stance. Hopes of big bang economic reforms by the Congress-led government after its thumping victory in the 15th Lok Sabha elections has triggered a solid pre-budget rally. The BSE Sensex jumped 5265.74 points or 54.58% in calendar year 2009 to 14,913.05 on 3 July 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 6752.65 points or 82.74% to 14,913.05 on 3 July 2009.
The broad expectations from the budget are thrust on infrastructure, including easier financing of long-gestation infrastructure projects, a plan for disinvestment, some reforms such as hiking foreign direct investment limit for insurance and a clear road map to rein in the high fiscal deficit in the future. Consumption is likely to be shored up through the various rural spending programmes. At the same time, the government may rollback tax sops given to sectors doing well such as services.
The corporate sector is expecting a removal of the fringe benefit tax (FBT). Under the current dispensation, an employer has to pay FBT at 30% on the fringe benefit, the taxable value of which is determined in accordance with a formula. FBT is a tax levied on perquisites-or fringe benefits -provided by an employer to his employees.
Domestic brokerages and fund houses want the government to remove securities transaction tax (STT) on trading in securities in the Budget. The Securities & Exchange Board of India (Sebi) members have already forwarded the demand of premier stock exchanges, BSE and NSE, to Finance Minister Pranab Mukherjee for scrapping STT in the Budget.
STT, which was introduced in the Union Budget 2004-05 by the then Finance Minister P Chidambaram, taxes every purchase and sale of securities entered into in a recognised stock exchange in India in securities like shares, debentures, bonds, and units of mutual funds. Equity investors pay an STT of 0.125% for every transaction in cash for the delivery of shares.
Meanwhile, before the budget, investors will also be keenly watching the outcome of the Employees' Provident Fund Organisation (EPFO's) apex advisory body meet on 4 July 2009. The Central Board of Trustees (CBT) will take a view on the Finance Ministry's proposal to invest 15% of its corpus in equity. The EPFO has a corpus of about Rs 1,82,000 crore and the permission to invest 15% funds in equity could have positive implications for the capital market. A proposal to park funds in the stock market was earlier rejected by the EPFO's Finance and Investment Committee (FIC) at its meeting on 26 March 2009.
Foreign fund activity will also be closely watched. Foreign institutional investors (FII) were the key drivers of the recent solid surge on the bourses. FII inflow in the calendar year 2009 amounted to Rs 25,109.90 crore (till 2 July 2009).
The latest macro economic data confirmed that the economy is recovering. The Markit Purchasing Managers' Index (PMI) based on a survey of 500 companies, fell slightly to 55.34 in June 2009 from 55.7 in May 2009, which was the highest in eight months, data released on 1 July 2009 showed. Still, it is above the threshold of 50 that separates expansion from contraction. It hit a trough of 44.4 in December 2008 and has steadily risen since then. The new orders index fell to 58.6 in June 2009 from 59.1 in May 2009.
Investors will also monitor the progress of India's annual monsoon. India's south-west monsoon has covered all parts of the country, the weather department said on Friday, 3 July 2009. Rainfall during 1 June to 1 July 2009 was 92.2 millimeter, 46% below normal.
Earlier the Minister of Science and Technology, Prithviraj Chavan, in a press conference, on 24 June 2009 said that India's monsoon, which runs from June to September, will be below normal this year. Monsoon rains will be 93% of long term average.
The June-September monsoon rains are a major influence on the economy, as two-thirds of Indians depend on agriculture and large areas of the vast south Asian country suffer from a lack of modern irrigation facilities. Poor monsoon rains could dent rural demand, hurt corporate profitability and undermine sentiment in financial markets.
The Economic Survey for 2008-09 presented by Finance Minister Pranab Mukherjee in Parliament on 2 July 2009 said that India's industry is recovering from a slowdown in the last financial year. There are positive signs the Indian industry may have weathered the most severe part of the shock and is moving toward a recovery, the survey indicated.
Oil stocks lead rally
Stock and sector-specific buying was the order of the day based on expectations of sops in the Union Budget 2009-2010. Oil stocks rose after the government unexpectedly hiked petrol and diesel prices. Shares of state-run firms rose on hopes the government will revive stake sale in the current year. Construction shares were in demand on a likely thrust of the budget on the infrastructure sector which may boost orders for construction firms.
The 30-share BSE Sensex rose 148.41 points or 1.01% to 14,913.05 in the week ended Friday, 3 July 2009. The BSE Small-Cap index rose 24.20 points or 0.42% to 5,824.95 in the week. The BSE Mid-Cap index 16.32 points or 0.32% to 5,187.22 in the week.
Stocks have risen sharply in the past four months or so, on heavy buying by foreign funds. The Sensex is up 5,265.74 points or 54.58% in calendar year 2009 as on 3 July 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex has risen 6,752.65 points or 82.74% as on 3 July 2009.
A strong global liquidity and increase in risk appetite boosted inflows after a comfortable victory for the Congress-led UPA government in parliamentary elections raised expectations of economic reforms. Foreign institutional investors (FIIs) bought shares worth a net Rs 25,109.90 crore in calendar 2009 (till 2 July 2009).
Trading for the week began on a positive note as the Sensex inched up 21.10 points or 0.14% on Monday, 29 June 2009. But the market dropped the next day as a rush to raise funds through share sales by corporate India raised concerns that a glut in share sales will suck liquidity from the secondary market. The BSE Sensex lost 291.90 points or 1.97%, on Tuesday, 30 2009.
Brokers expect companies to raise over $10 billion in the current financial year by way of share placements and initial public offers. The raising of funds will help corporates finance expansion and reduce debt. But it will result in equity dilution which the stock market normally does not like due to earnings dilution.
Data showing strong auto sales in the month just gone by, firm global markets and speculative build up of positions in the run up to the budget, triggered a recovery the next day. The BSE 30-share Sensex gained 151.63 points or 1.05%, on Wednesday, 1 July 2009
The latest macro data confirmed that the economy is recovering. The Markit Purchasing Managers' Index (PMI) based on a survey of 500 companies, held above the threshold of 50 in June 2009 that separates expansion from contraction.
The key benchmark indices ended a choppy trading session flat on Thursday, 2 July 2009. The BSE 30-share Sensex rose 13.02 points or 0.09%. The annual economic survey by the finance ministry in parliament during trading hours suggested a strong push for policy reforms. The survey also called for sweeping tax reforms.
Stocks surged on Friday, 3 July 2009, after the Railway Minister Ms Mamta Banerjee announced a number of new initiatives in the 2009-2010 Rail Budget including a plan to improve infrastructure facilities across a large number of railway stations. The progress of India's annual monsoon also aided sentiment. The Indian meteorological department said that monsoon has covered the entire country. The quantum and distribution of rain in this crucial sowing month holds key.
India's biggest commercial vehicles maker by market share Tata Motors came under selling pressure after reporting a net loss of Rs 2505.25 crore in the year ended March 2009 on consolidated basis as compared with net profit of Rs 2167.70 crore in the year ended March 2008. Net sales jumped 98.73% to Rs 70370.40 crore in the year ended March 2009 over the year ended March 2008. However the figures are not comparable as the year-ago numbers did not include that of Jaguar and Land Rover, as well as some other assets the company bought and sold during the year.
PSU OMCs rose after the government announced a hike petrol and diesel prices after trading hours Wednesday, 1 July 2009. BPCL rose 9.22% to Rs 459.80, HPCL rose 9.4% to Rs 330.95 and Indian Oil Corporation rose 4.59% to Rs 562.60 in the week.
Higher fuel prices will reduce underrecoveries at the state-run oil firms on domestic sale of petrol and diesel at a controlled price. Petrol price was hiked by Rs 4 per litre and diesel by Rs 2 per litre.
India's biggest state-run oil exploration firm ONGC surged after chairman and Managing Director R. S. Sharma said the company's fuel subsidy burden for the current year will be significantly lower than the previous year, if the crude prices stay around the current level. India's largest private sector firm by market capitalisation Reliance Industries (RIL) was almost unchanged in the week. The company said on Wednesday, 1 July 2009, it would appeal to the Supreme Court against a ruling that it should enter into a gas supply agreement with former group firm Reliance Natural Resources (RNRL).
RIL had said on Tuesday, 30 June 2009, it could not sign a gas supply agreement with Reliance Natural Resources (RNRL) as there was no clarity on government approval for the terms. RIL said it wanted the terms such as price, quantity and tenure to be subject to government approval. The Bombay High Court, in its order dated 15 June 2009, had directed that Anil Ambani's RNRL will get assured gas supply of 28 million metric standard cubic metre per day (mmscmd) of gas from RIL's Krishna-Godavari basin for 17 years at $2.34 million per metric British thermal unit (mmbtu). This is 44.28% less 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.
Shares of India's biggest dedicating housing finance firm by operating income rose 6.19% to Rs 2586.25 in the week on market talks the government may increase tax sops on housing loan.
India's largest private sector aluminium maker by sales Hindalco lost 3.35% to Rs 83.75 in the week after consolidated net profit declined 77.88% to Rs 485 crore in year ended March 2009 over year ended March 2008. Net sales rose 9.35% to Rs 65625 crore in year ended March 2009 over year ended March 2008. The results were announced during market hours on Tuesday, 30 June 2009.
The company's board of directors approved raising funds upto $500 million by selling shares to institutional investors.
Power stocks rose on expectations of a thrust to the power sector in the Union Budget 2009-2010. India's biggest thermal based power generation firm by revenue NTPC rose 4.82% to Rs 204.35. One of the expectations is that the government may extend income tax benefit under section 80-IA. The tax benefit available to project developers ends this year.
Market gains for the third day in a row ahead of Union budget
Key benchmark indices rose for the third day in a row after the Railway Minister Ms Mamta Banerjee today announced a number of new initiatives in the 2009-2010 Rail Budget including a plan to improve infrastructure facilities across a large number of railway stations. The market ignored weak global cues a day ahead of the announcement of the Union Budget 2009-2010 on Monday, 6 July 2009. The market breadth was positive after swinging between positive and negative zone in intraday trade.
The BSE Sensex has risen 419.21 points or 2.89% in the past three trading sessions from 14,493.84 on Tuesday, 30 June 2009. The progress of India's annual monsoon also aided sentiment. The Indian meteorological department today said that monsoon has covered the entire country. The quantum and distribution of rain in this crucial sowing month holds key.
The BSE 30-share Sensex rose 239.63 points or 1.63%, up close to 400 points from the day's low. Index heavyweight Reliance Industries (RIL) edged higher in volatile trade. Banking, healthcare, capital goods and power stocks rose.
Volatility was high. After a weak opening, the market soon cut losses on intraday rebound in many Asian stocks. The weak opening was due to an overnight setback in US stocks caused by dismal US job data. The recovery gathered steam when the Sensex moved into the green from red in morning trade. The market surged in early afternoon trade after the Rail Minster began her speech on rail budget.
The market slipped into the red in choppy afternoon trade after the Rail Minister announced a populist plan to issue passes for Rs 25 to the poor for a to travel up to 100 kilometre. The market bounced back later.
The Railway Minster kept freight rates and passenger pare unchanged. Improving passenger amenities is a priority area for the Indian railways and it will set up a panel to look at innovative financing for unviable projects, the Rail minister said on Friday . Ms Banerjee announced a populist plan to issue passed for Rs 25 to poor for to travel up to 100 kilometre. This is for lower income groups with salary up to Rs 1500 per month. Rail projects should not be gauged by economic viability but governed by social viability, she said.
The Railway Minister said the Railways will set up a new coach factory in public-private partnership. The railway ministry has plans to develop important stations through private-public partnership, she said The Rail Minister also said that the Raiways will put land to productive use along freight corridor. The Raiways Minister said a panel will be set up to look at utilisation of railways optic fibre network.
Ms Banerjee said private operation of freight terminals will be encouraged. She said the Railways will develop 50 stations with international level facilities and improving passenger amenities is a priority area. The Railway Minister said the Raiways will develop multi-functional complexes at railway stations.
Raiways will buy 18,000 wagons in the current financial year which could boost orders for wagon makers BEML, Titagarh Wagons and Texmaco. Monthly season ticket called Izzat at Rs 25 announced for travel up to 100 km. The Railways plan to develop multi-functional complexes with shopping malls, food stalls, medicines and variety stores in different parts of the country. The Railways will also provide infotainment services in major long-distance trains. The Raiways will introduce twelve non-stop point-to-point trains between select cities. India will provide additional budgetary support of Rs 5,000 crore to its railways in 2009/10 and its financing arm Indian Railways Finance Corporation will issue tax-free bonds, the railways minister said on Friday.
Earlier in the day, Finance Minister Pranab Mukherjee said in a written reply to parliament that price stability is high on the government agenda. Meanwhile, junior finance minister Namo Narayan Meena said the government expects to expects to raise Rs 1,854 crore ($386 million) from stake sales in two state-run firms NHPC and Oil Indiain the current financial year to March 2010. The government is also considering revival of loss making Tyre Corporation of India and CIWTC.
European stocks dropped in a volatile trade on grim US jobs data. The key benchmark indices in France and Germany were down by between 0.07% to 0.5%. UK's FTSE 100 rose 0.19%.
Asian stocks were mixed. Key benchmark indices in Japan, Taiwan, South Korea, Singapore fell by between 0.03% to 0.61%. But key benchmark indices in China, Hong Kong, and South Korea rose by between 0.14% to 0.92%. A weak US job data stoked concern the global economic recovery is faltering.
US stocks tumbled on Thursday, 2 July 2009 on disappointing jobs data. The Dow Jones plunged 223.32 points, or 2.6%, to 8,280.74. The S&P 500 index fell 26.91 points, or 2.9%, to 896.42 and the Nasdaq Composite Index fell 49.20 points, or 2.7%, to 1,796.52. US labor department said US employers cut 4,67,000 jobs in June 2009, over 100,000 more than economists had forecast. That pushed the nation's unemployment rate to 9.5% a level not seen since August 1983.
US market remains shut on Friday, 3 July 2009, on account of Independence Day.
Back home, the near-term major trigger for the stock market is the Union Budget 2009-10 on Monday, 6 July 2009. The Union Budget 2009-2010 attains significant importance in the wake of the global financial crisis.
Suggesting sweeping tax reforms, the Economic Survey released yesterday, 2 July 2009 called for a review and phasing out of surcharges, cesses and transaction taxes such as commodities transaction tax (CTT), securities transaction tax (STT) and fringe benefit tax (FBT). The survey also suggested a rationalising the dividend distribution tax (DDT) so that dividend is taxed in the hands of receiver. As per the current dispensation, a company pays tax on dividend declared to shareholders which is called dividend distribution tax. The dividend is tax-free in shareholders hand.
The Economic Survey said economy could grow around 7% in the year ending March 2010 if the US economy recovers by September 2009. It further said economy could return to 8.5-9% growth in medium terms if reforms are pursued. It said government should free diesel and petrol prices at the earliest. The report said government should take advantage of the recent low price in oil costs to free petrol and diesel prices.
The Economic Survey has called for introduction of standardized credit default swaps on exchanges subject to strict contols, introduction of exchange traded derivatives such as interest rates swaps, foreign direct investment in multi format retail starting with food retail, raising foreign equity share in insurance to 49%, rationalising dividend distribution tax and revival of disinvestment plan to generate at least Rs 25,000 crore annually. The survey has also called for reforms in petroleum, fertilizers, food subsidies to reduce leakages, ensure targeting. The survey also called for an auction of third-generation mobile phone spectrum.
It also called for implementation of a goods and services tax (GST) by April 2010 to maximise revenues and simplify the tax regime. It also called for "greater urgency" to removing hurdles to investment in infrastructure by government and the private sector. The survey said inflation is no longer a worry and called for an urgent return to the targeted fiscal deficit of 3%.
The survey said it be challenging to fund $500 billion of planned spending on roads and power plants over five years as the economic slowdown and the global financial crisis have made it difficult to raise funds.
The survey has also called for passage of pending bills on pension, insurance and forward contract reforms.
Meanwhile, corporate India appears to be in a rush to raise funds by share sales to institutional investors. GVK Power & Infrastructure's qualified institutional placement was reportedly oversubscribed. Reports also suggest that Emami has garnered Rs 310 crore through a qualified institutional placement (QIP).
Earlier, Bajaj Hindusthan (BHL) on Wednesday raised Rs 723 crore through a QIP. A number of firms announced plans this week to raise funds through shares sales to institutional investors, taking advantage of a solid surge in share prices in the past three months. Brokers expect companies to raise over $10 billion in the current financial year by way of share placements and initial public offers. But a glut in share sales by companies may keep a lid on share prices in the secondary market. On the flip side, the raising of funds will help corporates finance expansion and reduce debt. But it will result in equity dilution which the stock market normally does not like due to earnings dilution.
The BSE 30-share Sensex rose 254.56 points or 1.74% to 14,913.05. The Sensex opened 105.77 points lower at 14,552.74. The Sensex lost 158.75 points at the day's low of 14,499.74 in early trade. At the day's high of 14,945.85, the Sensex rose 287.36 points in late trade.
The S&P CNX Nifty rose 75.40 points or 1.73% to 4,424.25.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,334 shares rose as compared with 1,264 that fell. 82 shares remained unchanged.
Among the 30-member Sensex pack, 25 rose while rest fell.
The stock market has risen sharply in the past four months or so, on heavy buying by foreign funds. The BSE Sensex is up 5,265.74 points or 54.58% in calendar year 2009 as on 3 July 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex has risen 6,752.65 points or 82.74% as on 3 July 2009.
A strong global liquidity and increase in risk appetite boosted inflows after a comfortable victory for the Congress-led UPA government in parliamentary elections raised expectations of economic reforms. Foreign funds bought shares worth Rs 565.60 in first two days of July 2009. Foreign institutional investors (FIIs) bought shares worth a net Rs 3,224.70 crore in the month of June 2009 while their inflow in calendar year 2009 totaled Rs 25,109.90 crore (till 2 July 2009).
Coming back to today's trade, the BSE Mid-Cap index rose 0.83% and the BSE Small-Cap index rose 0.43%. But both the indices underperformed the Sensex.
The BSE Bankex (up 2.19%), the BSE Capital Goods index (up 1.9%), the BSE Power index (up 1.84%), the BSE Healthcare index (up 1.8%) outperformed the Sensex.
The BSE IT index (up 0.24%), the BSE FMCG index (up 0.42%), the BSE Metal index (up 0.53%), the BSE TECk index (up 0.56%), the BSE Consumer Durables index (up 0.63%), the BSE Auto index (up 0.85%), the BSE PSU index (up 0.87%), the BSE Oil & Gas index (up 0.96%), the BSE Realty index (up 1.18%) underperformed the Sensex.
India's largest private sector firm by market capitalisation Reliance Industries (RIL) rose 0.78% to Rs 2,025.85. But the stock witnessed intraday volatility. The company said on Wednesday, 1 July 2009, said it would appeal to the Supreme Court against a ruling that it should enter into a gas supply agreement with former group firm Reliance Natural Resources (RNRL).
RIL had said on Tuesday, 30 June 2009, it could not sign a gas supply agreement with Reliance Natural Resources (RNRL) as there was no clarity on government approval for the terms. RIL said it wanted the terms such as price, quantity and tenure to be subject to government approval. The Bombay High Court, in its order dated 15 June 2009, had directed that Anil Ambani's RNRL will get assured gas supply of 28 million metric standard cubic metre per day (mmscmd) of gas from RIL's Krishna-Godavari basin for 17 years at $2.34 million per metric British thermal unit (mmbtu). This is 44.28% less 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.
PSU OMCs rose for the second day in a row after the government hiked petrol and diesel prices on Wednesday, 1 July 2009. HPCL, BPCL, Indian Oil Corporation, rose by between 1.46% to 3.5%. The government on Wednesday hiked petrol price by Rs 4 per litre and diesel by Rs 2 per litre. Higher fuel prices will reduce underrecoveries at the state-run oil firms on domestic sale of petrol and diesel at a controlled price.
Power stocks rose on hopes the government may boost spending on the power sector in the budget. NTPC, Powergrid Corporation of India, Reliance Infrastructure, Reliance Power and Tata Power Company rose by between 0.94% to 3.17%.
Capital goods and infrastructure stocks rose on hopes the government may boost spending on the infrastructure sector in the budget on Monday. Siemens, Praj Industries, Thermax, Siemens, ABB, Thermax, Larsen & Toubro, Bharat Heavy Electricals rose by between 0.94% to 2.82%.
Among construction stocks, Hindustan Construction Company, Nagarjuna Construction Company, IVRCL Infrastructure & Company, rose by between 1.92% to 2.99%.
Banking stocks rose on expectations of financial sector reforms in the forthcoming budget. India's biggest bank in terms of branch network State Bank of India (SBI) rose 2.94%. The bank on Tuesday, 30 June 2009 introduced a new home loan scheme under which it offer loans up to Rs 30 lakh at fixed rates of 8% for the first year and 9% for the next two years. The bank's earlier offer of home loans at a fixed rate of 8% for the first year ended on Tuesday, 30 June 2009.
India's largest private sector bank by net profit ICICI Bank rose 3.05% even as its American depository receipt (ADR) fell 2.86% overnight. But, India's second largest private sector bank by net profit HDFC Bank rose 0.95% even as its American depository receipt (ADR) fell 2.07% overnight.
India's biggest dedicated housing finance firm by operating income Housing Development Finance Corporation (HDFC) rose 7.74% on hopes the government may increase tax soaps on housing loan in the budget.
Healthcare stocks rose after economic survey suggested a decontrol of drug prices. Cipla, Biocon, Sun Pharmaceutical Industries, Lupin, Dr Redy's Laboratories, Ranbaxy Laboratories rose by between 0.42% to 4.77%. The survey suggested removal of price controls on all drugs except on essential drugs which have less than five producers.
Fertiliser stocks rose after the economic survey called for reforms in fertilizer sector. GNFC, GSFC, National Fertiliser, Rashtriya Chemical & Fertilisers, Chambal Fertilisers & Chemicals rose by between 1.12% to 8%.
The Economic survey on Thursday suggested removal of pricing controls on fertilizers and converting subsidies to fertiliser producers into subsidies for consumers.
Jain Irrigation rose 8.15% on a likely rural focus in Union budget. The market expects government will increase its budgetary allocation to irrigation from the last year's Rs 20,000 crore which might benefit the firm.
IT stocks rose on reports the forthcoming Union Budget may extend the corporate tax holiday enjoyed by export-oriented units and software parks by three more years, as the government looks forward to clearing the air for companies in these segments reeling under a demand slump in key Western markets. India's second largest software firm by sales Infosys Technologies rose 0.28% even as its American depository receipt (ADR) fell 3% on Thursday.
India's largest software services exporter by sales TCS rose 0.32%. India's third largest software services exporter by sales Wipro rose 1.13%
Telecom firms were mixed after the economic survey suggested auctioning radio frequencies for the forthcoming 3G mobile services. Bharti Airtel, Idea Cellular rose by between 0.07% to 1.64%. But, India's second largest telecom player by sales Reliance Communications fell 0.24%.
The survey suggested disaggregating spectrum from telecom licence. At present, a pan-Indian telecom licence comes bundled with spectrum. For GSM services, the licence has 4.4 MHz of start-up spectrum while a CDMA operator gets 2.2 MHz of air waves. The survey also suggested that spectrum should be "traded" freely among telcom firms having licences.
FMCG stocks rose on rural focus by the government in the forthcoming budget. FMCG firms derive substantial revenue from the rural markets. United Spirits, Nestle India, Marico, Dabur India, Tata Tea, Hindustan Unilever rose by between 0.19% to 3.1%.
Metal stocks fell after LMEX, a gauge of six metals traded on the London Metal Exchange, fell 1.15% yesterday, 2 July 2009. Sterlite Industries, Hindalco Industries, Hindustan Zinc, National Aluminum Company fell by between 0.68% to 1%.
Some steel stocks rose after the Railway Minister kept the freight rates unchanged. Jindal Steel, Steel Authority of India, Tata Steel rose by between 0.93% to 4.32%.
Cement stocks rose as there was no change in freight rates in rail budget. Ambuja Cements, Ultratech Cement, Grasim Industries and ACC rose by between 0.28% to 3.01%.
Realty stocks rose on hopes government may announce measures to stimulate demand for new homes. DLF, Indiabulls Real Estate and Unitech rose by between 0.37% to 1.83%.
Real estate firms had recently taken up QIP route to meet their working capital and debt requirements faced by liquidity crunch due to sharp slump in demand for new homes.
Shares of three train wagon makers fell even after the Railways announced a plan to buy 18,000 wagons in the current fiscal that ends in March 2010. BEML and Titagarh Wagons fell by between 4.98% to 5 %.
Texmaco was locked at lower circuit limit of 5% at Rs 114.45 on reports the company is not looking at making double-decker air-conditioned coaches immediately.
Reliance Natural Resources clocked the highest volume of 2.26 crore shares on BSE. Suzlon Energy (1.49 crore shares), Ispat Industries (1.33 crore shares), Sanraa Media (1.09 crore shares) and Satyam Computer Services (1.07 crore shares) were the other volume toppers in that order.
Educomp Solutions clocked the highest turnover of Rs 385.81 crore on BSE. Tata Steel (Rs 290.89 crore), Reliance Industries (Rs 220.96 crore), Reliance Natural Resources (Rs 195.94 crore) and Suzlon Energy (Rs 159.63 crore) were the other turnover toppers in that order.
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Pre Session Commentary - July 3 2009
Today domestic markets are likely to open negative as the US markets have closed with huge losses on the back of disappointing Non-Farm unemployment data. The Asian markets have also opened with blood bath exuding signs of weakness at broader level. In the domestic arena the Railway budget to be announced today will be the head line in news and traders would take safer positions ahead of the Union Budget to be announced on Monday July 6.
On Thursday, domestic markets closed flat. The trading started with a subdued note on mixed cues from Asian markets as well as due to cautiousness amongst local traders ahead of the Union Budget due on Monday, July 6. The Economic survey that called for sweep reforms hardly pumped the traders’ sentiments. There was lack of buying effort across the broader level as investors are desperately waiting for the real budget stimulus. The weak opening of the European markets further pulled the market sentiments as the domestic benchmark indices kept gyrating throughout the day. Sectors like Metal, PSU, Realty and HC gained by 3.26%, 1.95%, 1.55% and 0.84% respectively. BSE Midcap and Smallcap managed to close with gains of 0.33% and 0.74% respectively. There could be a range bound trade today with negative bias.
The BSE Sensex closed up by 13.02 points at 14,658.49 and NSE Nifty ended up by 7.95 points at 4,348.85. BSE Mid Caps closed with gains of 16.76 points and 42.82 points at 5,144.27 and 5,800.24 respectively. The BSE Sensex touched intraday high of 14,764.35 and intraday low of 14,469.69.
On Thursday, the US Markets ended with huge losses on the back of worse than expected Non-farm payroll job losses. The session started with stocks diving sharply lower amidst expectations of disappointing jobs report. The selling pressure erupted after the news of the June Nonfarm Payrolls report, which indicated that 467,000 jobs were lost in the month. The number was very huge as against the May job losses of 322,000 and much beyond the expected 365,000 losses. The national unemployment data stands at 9.5% parallel with the expected 9.6%.On the other hand May factory orders inclined by a surprising 1.2% better than the expected 0.9%. The employment data shadowed the May factory orders news and therefore sellers became emboldened till the end of the trading session. The S&P 500 plummeted below the psychological number of 900 level. US light crude oil for August Futures delivery declined by 3.7% at $66.73 per barrel on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) slipped by a drastic 218.94 points at 8,285.12 the NASDAQ Composite (RIXF) index lost 49.20 points at 1,796.52 and the S&P 500 (SPX) declined by 26.18 points at 897.15.
Today major stock markets in Asia are trading in negative. Hang Seng is low by 97.53 points at 18,080.52. Shanghai Composite is up by 8.04 points at 3,068.298. Japan''s Nikkei is trading down by 122.45 points at 9,753.70. Strait Times is low by 20.48 points at 2,300.34. Seoul Composite is low by 5.65 points at 1,405.83 and KLSE Composite is flat at 1,078.71.
Indian ADRs ended in red on Thursday. In the IT space, Infosys was down 3%, Patni Computers was down 3.07% while Satyam Computers was up 2.77% and Wipro ended up 0.43%.In the banking space, ICICI Bank was down 2.86% and HDFC Bank was down 2.07%. In the telecom space, Tata Communication was down 2.82% and MTNL was down 2.04%. In other sectors, Tata Motors was down 2.82%, Dr Reddy''s Labs was down 1.17% while Sterlite Industries was up 0.47%.
The FIIs on Thursday stood as net buyers in equity and debt. The Gross equity purchased stood at Rs 1,448.60 Crore and gross debt purchased stood at Rs 225.80 Crore, while the gross equity sold stood at Rs 1,284.90 Crore and gross debt sold stood at Rs 41.40 Crore. Therefore, the net investment of equity and debt reported were Rs 163.70 Crore and Rs 184.30 Crore respectively.
On Thursday, the partially convertible rupee ended at Rs 47.94/95, 5 paise weaker as compared to its previous close at 47.89/90. The green back has showed a relative strength as other currencies across the world.
On BSE, total number of shares traded were 37.35 Crore and total turnover stood at Rs 5,990.73 Crore. On NSE, total number of shares traded was 84.80 Crore and total turnover was Rs 17,751.14 Crore.
Top traded volumes on NSE Nifty – Unitech with total volume traded 44874603, followed by Suzlon Energy with 41203690, Tata Steel with 17134163, DLF with 15020544 and SAIL with 11287767.
On NSE Future and Options, total number of contracts traded in index futures was 760367 with a total turnover of Rs 15,808.29 Crore. Along with this total number of contracts traded in stock futures were 590708 with a total turnover of Rs 17,099.03 Crore. Total numbers of contracts for index options were 839717 with a total turnover of Rs 18,779.7 Crore and total numbers of contracts for stock options were 38600 and notional turnover was Rs 1,231.53 Crore.
Today, Nifty would have a support at 4,276 and resistance at 4,382 and BSE Sensex has support at 14,415 and resistance at 14,812.
Market may slip tracking weak global cues after faltering US jobs data
The key benchmark indices may slip tracking weak global markets as worsening job markets in the U.S. raised doubts the global economy will recover soon. Meanwhile, the investors will keenly watch for any surprises in the Rail Budget which will be presented by Railway minister Mamta Banerjee today, 3 July 2009 the day after the dream economic survey presented by the finance minister Pranab Mukherjee yesterday.
As per media reports, another fare cut is unlikely because Lalu Prasad's Interim Railway Budget in February 2009 has already strained the Indian Railways' finances. Lalu Prasad had announced a 2% reduction in passenger fares. Similarly, any increase in freight rates looks unfeasible because of the current economic downturn. With the present economic conditions not providing much scope for either large-scale fare concessions or an across-the-board increase in freight rates, the highlight of the Railway Budget for 2009-10 is likely to be a big push to public-private partnership (PPP) initiatives to enhance the Indian Railways' capacity to earn higher revenues on a sustainable basis.
Asian stocks fell for a third day today as rising unemployment in the U.S. stoked concern the global economic recovery is faltering. The key benchmark indices in China, Japan, Hong Kong, South Korea, Singapore fell by between 0.15% to 1.03%.
The US markets recorded a sharp slump yesterday, 2 July 2009 on disappointing jobs data. The US markets will remain shut today on account of their Independence Day.
The Dow Jones plunged 223.32 points, or 2.6%, to 8,280.74. The S&P 500 index fell 26.91 points, or 2.9%, to 896.42 and the Nasdaq Composite Index fell 49.20 points, or 2.7%, to 1,796.52.
Labor Department said U.S. employers cut 4,67,000 jobs in June 2009, over 100,000 more than economists had forecast. That pushed the nation's unemployment rate to 9.5% a level not seen since August 1983.
Back home, the near-term major trigger for the stock market is the Union Budget 2009-10 on Monday, 6 July 2009. The Union Budget 2009-2010 attains significant importance in the wake of the global financial crisis. Despite the country being relatively unharmed compared to the West, the UPA government will have many tasks on its to-do list, which includes boosting growth and demand, continuing to maintain liquidity, balancing inflation and also containing the country's worrying fiscal situation.
Suggesting sweeping tax reforms, the Economic Survey released yesterday, 2 July 2009 for the fiscal year ending in March 2010, asked for rationalising the dividend distribution tax (DDT) so that dividend is taxed in the hands of receiver. As per the current dispensation, a company pays tax on dividend declared to shareholders which is called dividend distribution tax. The dividend is tax-free in shareholders hand.
The survey also called for a review and phasing out of surcharges, cesses and transaction taxes such as commodities transaction tax (CTT), securities transaction tax (STT) and fringe benefit tax (FBT).
The Economic Survey said economy could grow around 7% in the year ending March 2010 if the US economy recovers by September 2009. It further said economy could return to 8.5-9% growth in medium terms if reforms are pursued. It said government should free diesel and petrol prices at the earliest. The report said government should take advantage of the recent low price in oil costs to free petrol and diesel prices.
The Economic Survey has called for introduction of standardized credit default swaps on exchanges subject to strict contols, introduction of exchange traded derivatives such as interest rates swaps, foreign direct investment in multi format retail starting with food retail, raising foreign equity share in insurance to 49%, rationalising dividend distribution tax and revival of disinvestment plan to generate at least Rs 25,000 crore annually. The survey has also called for reforms in petroleum, fertilizers, food subsidies to reduce leakages, ensure targeting. The survey also called for an auction of third-generation mobile phone spectrum.
It also called for implementation of a goods and services tax (GST) by April 2010 to maximise revenues and simplify the tax regime. It also called for "greater urgency" to removing hurdles to investment in infrastructure by government and the private sector. The survey said inflation is no longer a worry and called for an urgent return to the targeted fiscal deficit of 3%.
The survey said it be challenging to fund $500 billion of planned spending on roads and power plants over five years as the economic slowdown and the global financial crisis have made it difficult to raise funds.
The survey has also called for passage of pending bills on pension, insurance and forward contract reforms.
Meanwhile, corporate India appears to be in a rush to raise funds by share sales to institutional investors. GVK Power & Infrastructure's qualified institutional placement was reportedly oversubscribed which closed yesterday. The company was looking to raise $125-150 million via QIP. Bajaj Hindusthan (BHL) on Wednesday raised Rs 723 crore through a QIP. A number of firms have announced plans this week to raise funds through shares sales to institutional investors, taking advantage of a solid surge in share prices in the past three months. Brokers expect companies to raise over $10 billion in the current financial year by way of share placements and initial public offers.
A glut in share sales by companies may keep a lid on share prices in the secondary market. On the flip side, the raising of funds will help corporates finance expansion and reduce debt. But it will result in equity dilution which the stock market normally does not like due to earnings dilution.
As per the provisional figures on NSE, foreign funds bought shares worth Rs 247.26 crore and domestic funds bought shares worth Rs 212.65 crore on Tuesday, 2 July 2009.
Daily News Roundup - July 3 2009
Reliance Industries will partially shut its old Jamnagar refinery for 2-3 weeks to carry out maintenance work. (FE)
Hindalco has received approval from lenders to amend terms of US$982mn loan it obtained to part finance the acquisition of Novelis. (BL)
Hindalco plans to raise US$500mn via QIP to fund its capex plans and retire debt. (ET)
NTPC is in talks with JBIC to raise US$500mn for green energy. (ET)
Tech M plans a second preference allotment of shares to increase its stake in Satyam. (FE)
L&T and Tata Projects have submitted offers for the Rs15bn balance of plant job of Coastal Energen. (BL)
Reliance Infrastructure won IT consultancy projects in 5 electricity distribution companies in Karnataka. (BL)
Shaw Wallace has sold its entire 10.27% stake in United Spirits for Rs9bn. (FE)
Punj Lloyd bagged 3 contracts worth Rs18.7bn from the Housing and Infrastructure Board of Libya. (FE)
Yes Bank plans to raise US$200mn tier-I equity capital either through a follow-on public issue or through a QIP. (BL)
US drug regulator has approved Ranbaxy Laboratories oral solution Oxcarbazepine. (BS)
Future Capital Holdings is setting up a mall development company to manage, develop and own retail properties in the country. (ET)
Adlabs Films has lined up a capex of Rs1.5bn for this fiscal. (FE)
Coal India will float tenders for development and operation of high capacity underground mines in 7 blocks on a long term basis within the next 2 weeks. (BL)
Max India approved issuance of shares for Rs4.5bn in one or more tranches. (BL)
Ashok Leyland bagged a Rs3bn order for 1500 buses from Tamil Nadu State Transport Corporation. (BL)
Emami raised Rs3.1bn through QIP. (BL)
Network18 sold 12.79% stake to SAIF III Mauritius for Rs1.2bn. (BS)
Strides Arcolab bought back US$18.5mn of its FCCBs at a 12% discount. (BL)
Jubilant Pharmaceuticals NV, a subsidiary of Jubilant Organosys, recalled its hypertension drug from the UK market on an order issued by the UK regulator. (BL)
Auditors say that Wockhardt will have to repay Rs14.1bn debt before end of 2009 if it fails to reschedule its debt through CDR program. (BS)
Areva France announced that it was disposing all its transmission and distribution businesses globally, including Areva T&D India Ltd. (FE)
HDIL has raised Rs16.8bn through QIP placement to KKR, Blackstone and fidelity. (BS)
Webel-SL Energy plans to raise Rs600mn by private placement of shares with QIB. (BL)
Maytas Infrastructure announced that its lenders have agreed to infuse Rs1bn capital along with restructuring of Rs16bn debt. (BS)
S Kumars Nationwide plans to raise Rs10bn through issue of shares on QIP basis to fund its expansion plans. (FE)
Drug price regulator, NPPA, issued notices to recover around Rs13bn from pharmaceutical companies for allegedly overcharging consumers. (ET)
Inflation remained in the negative territory for the 3rd week at -1.3% for the week ended June 20. (FE)
Economic survey 2008-09 reported a GDP growth of 6.7% after stimulus measures. (FE)
Economic survey has suggested allowing FDI in multi brand retailing. (FE)
Economic Survey re-iterated at divestment in profit making PSU’s, thus raising Rs250bn. (FE)
Economic survey suggested decontrolling of petrol prices. (FE)
Economic survey advocated bringing all regulators including commodities, FMC under SEBI. (FE)
Economic survey also indicated to phasing out of surcharges, cess and transaction tax and lift ban on farm futures, free sugar and fertilizer sectors. (FE)
Economic survey suggested major reforms in the telecom sector including auctioning spectrum for mobile services. (BL)
Economic Survey has recommended deregulation of coal sector by introducing 49% FDI. (ET)
Economic Survey has recommended implementing the GST throughout the country and also favors dual GST structure levied on both center and state. (BS)
MET department stated that the monsoon for the week ended July 1 was 29% below normal, improving from a 68% shortfall in the previous 7 days. (FE)
Ministry of road transport seeks fast track clearance for 30 public-private road projects. (BL)
The centre is planning to open the nuclear sector to private and foreign players. (BL)
Independence from global cues
Nothing fixes a thing so intensely in the memory as the wish to forget it.
Though most market players in India are currently focused on the Railway Budget and Union Budget one must not forget we are still in the midst of a global economic crisis. Even the Economic Survey has based its FY10 GDP growth projection on the global recovery, especially in the US.
The US economy shed 467,000 jobs last month, and the unemployment rate rose to 9.5%, its highest level in 26 years. Euro-zone unemployment rate has also hit a 10-year high. Three more US banks have failed, bringing the year's total to 51. Meanwhile,, the ECB left its key lending rate unchanged at an all-time low of 1%.
However, the Asian markets are down but not as much as their western counterparts. Wall Street will enjoy an extended Independence Day weekend with US markets shut today. We expect a slightly lower opening, which should not be as bad as the one witnessed by the US and Europe. After yesterday's collapse, there might be a mild recovery.
The NSE Nifty could find strong option related support at 4200 levels. The Union Budget is just a couple of days away and further course of action should be decided post that only. Volatility will prevail ahead of Union Budget. Railway-related stocks may swing as Mamata Banerjee unveils the Railway Budget today. High time you get out of those counters today. Stocks which could be in action would be BEML, Titagarh Wagon, Kalindee Rail Nirman, Texmaco and Kernex Micro.
Monsoon seems to have picked up momentum after a delayed start. But, will economic growth too follow suit is anybody’s guess. Passage of a few crucial reforms is critical for India to return to its high growth path of 7-8%. The Economic Survey has made all the right prescriptions. The million dollar question is whether the UPA can muster enough gumption to follow the same.
Among the biggest worry is the ballooning fiscal deficit. The intent is clearly there as far as UPA II is concerned, what is needed badly is the courage to execute the remedies suggested in the Economic Survey.
FIIs were net buyers in the cash segment on Thursday at Rs2.47bn while the local institutions too poured in Rs2.13bn. In the F&O segment, the foreign funds were net buyers at Rs957.6mn. On Wednesday, FIIs were net buyers at Rs1.64bn in the cash segment.
The BSE says that it will probe the technical snag that led to discrepancies in scrip rates on Thursday. In fact, even the NYSE witnessed some "system irregularities" and had to extend the trading session.
The results season will kick off in the US on Wednesday, when Alcoa reports its financial data. Otherwise, a quiet week lies ahead with President Barack Obama out of the country and little economic data due. The central banks of South Korea and Australia are likely to keep rates on hold next week, while the Philippines is likely to cut rates. Indonesia will hold presidential elections on Wednesday.
US stocks tumbled on Thursday, with the Dow losing over 200 points, after a worse-than-expected jobs report hammered hopes that the economy is close to stabilizing.
The Dow Jones Industrial Average fell 212 points, or 2.5%. The S&P 500 index lost 27 points, or 2.9% and the Nasdaq Composite index was down 49 points, or 2.7%.
The New York Stock Exchange extended trading, so as to allow customers to put through orders that were impacted by system irregularities. The NYSE did not specify what the irregularities were.
Stocks tumbled at the open and remained in the red throughout the session as investors considered the broader implications of the dismal June jobs report. Declines were broad based, with all 30 Dow stocks falling, led by oil components.
Economically sensitive trucking and railroad stocks plunged, dragging down the Dow Jones Transportation average by 3.7%. Financial shares too tumbled. Market breadth was negative and volume was light with Wall Street pros checking out early for the holiday.
All US financial markets are closed Friday for the Independence Day holiday.
The jobs report was kind of a rude awakening, prompting people to think that the stock market rally doesn't mean the US economy is coming back. What it could mean is that there is a lot more pain to be endured before there can be a recovery.
Since bottoming at a 12-year low, the S&P 500 had surged over 40% through June 11. But in the weeks since then, it has lost 5% of that.
In the April-June quarter, the S&P 500 gained 15.2%, its best quarter in more than a decade. The Dow rose 11% and the Nasdaq 20%. Both indexes posted their best quarters since the second of 2003.
American employers cut 467,000 jobs from their payrolls in June, after cutting 322,000 jobs in May, the Labor Department reported Thursday. That made June the first month in four in which job losses rose from the previous month. Economists had expected 365,000 job losses.
The unemployment rate, generated by a separate survey, rose to 9.5% from 9.4%, short of forecasts for an increase to 9.6%.
The weekly jobless claims report was overshadowed by the June payrolls report. The number of Americans filing new claims for unemployment fell to 614,000 last week from a revised 630,000 the previous week, the Labor Department reported. Economists had forecast claims would fall to 615,000.
May factory orders rose 1.2%, the Commerce Department reported, versus forecasts for a rise of 0.9%. Factory orders rose a revised 0.5% in April.
Exelon has sweetened its hostile takeover offer for rival power generator NRG Energy. The all-stock offer is $8 billion versus the previous offer of $7 billion.
Johnson & Johnson will take an 18% equity stake in biotech Elan in exchange for a $1 billion investment. J&J will also buy Elan's share of its Alzheimer's disease treatment program with Wyeth. US-traded shares of Elan gained 11% in active New York Stock Exchange trading.
Energy prices tumbled, with US light crude oil for August delivery falling $2.37 to $66.94 a barrel on the New York Mercantile Exchange.
COMEX gold for August delivery fell $10.60 to settle at $930.70 an ounce.
Treasury prices rallied, lowering the benchmark 10-year note yield to 3.5% from 3.53%.
In currency trading, the dollar gained versus the euro and fell against the yen.
European shares fell sharply on Thursday. The pan-European Dow Jones Stoxx 600 index declined 2.4% to 204.47, erasing the prior session's gains. Germany's DAX index dropped 3.8% to 4,718.49, while the French CAC-40 index declined 3.1% to 3,116.41 and the UK's FTSE 100 index fell 2.5% to 4,234.27.
Indian markets ended on a flat note on Thursday amid choppy trades. Traders and investors remained restrained ahead of the Railway Budget tomorrow and the Union Budget which would be presented on Monday.
The Economic Survey for FY09 was presented in the parliament today in which the government stated that the Indian Economy may grow as much as 7.75% in the current fiscal year ending in March 2010. Markets indeed reacted positively as the BSE Sensex hit the day’s high in the afternoon trades. However, a sudden bout of profit booking in scrips across the sectors dragged the benchmark indices to day’s low.
Bulls however dint give up as buying momentum in the index heavyweights like DLF, Tata Steel, ONGC and Grasim lifted the benchmark indices to end almost flat.
Inflation numbers continue to fall for the third straight week, the annual rate of inflation on point to point basis, stood at -1.30% for the week ended June 20, 2009 as compared to -1.14% for the previous week ended June 13, 2009 and 11.91% during the corresponding week ended June 21, 2008 of the previous year.
However, Wholesale Price Index for 'All Commodities' for the week ended June 20, 2009 rose by 0.2% to 234.6 from 234.2 for the previous week.
Meanwhile, throughout the day there were price discrepancies and confusion on select stocks as some stocks were trading above the circuit filters on the BSE.
Finally, the BSE Sensex ended flat at 14,658 after touching a high of 14,764 and a low of 14,470. The index had opened at 14,694 against the previous close of 14,645.
The NSE Nifty gained 8 points or 0.2% to shut shop at 4,349.
Asian markets ended in the red; the Nikkei index in Japan slipped 0.7% at 9,876, Australia's S&P/ASX ended flat at 3,877. Hang Seng index declined 1.1% at 18,178.
Elsewhere in the Europe, stocks were trading in the red. The FTSE index was down 0.7% at 4,313. The DAX index slipped 1.5% at 4,837. CAC 40 index was down 1.2% at 3,178.
Coming back to India, among the BSE Sectoral indices BSE Metal index was the top gainer gaining 3.2%, followed by the BSE PSU index up 2%, BSE Realty index up 1.5% and BSE Pharma index up 1%.
The BSE Mid-Cap index ended marginally higher by 0.3% and BSE Small-Cap index was up 0.8%.
In the Sensex, the major gainers were ONGC, Tata Steel, Grasim, Sterlite, DLF, Sun Pharma, HDFC and NTPC.
On the other hand, major losers were BHEL, Reliance Industries, Bharti, RCom, Tata Motors and Maruti.
Among the big gainers in the broader market were Torrent Power, GMDC, Sintex Ind, PFC, IRB Infra and REC Ltd.
Outside the frontline indices, the top losers included REI Agro, Bank of Baroda, Mundra Port, Biocon, Areva, Renuka Sugar and TTML.
Shares of oil marketing companies ended with gains after the Government on Wednesday hiked retail prices of petrol and diesel. Petrol has now become costlier by Rs4 per litre while diesel prices have been raised by Rs2 a litre. At the same time, prices of politically sensitive PDS kerosene and LPG have been left untouched.
The last time fuel prices were raised was on June 4, 2008. It was followed by two rounds of price cuts in December 2008 and January 2009, as global crude prices tumbled from record peak of around US$147 a barrel struck in August 2008. As a result, petrol became cheaper by Rs10 a litre and diesel by Rs4 a litre. But, since then, crude oil prices have more than doubled from US$33.98 a barrel on February 12.
Shares of Hindalco gained by 1.4% to Rs84.5 after the company reached an agreement and received lenders consent on revised terms including covenant relaxations relating to the US$ 982mn bank loan.
The new terms allow the company significant flexibility to plan its future business and pursue its capital expenditure aspirations going forward. Under the new agreement reached banks have agreed to waive requirement to test covenants on consolidated financials
Shares of McNally Bharat were locked at 5% upper circuit to Rs132 after the company announced that it won two orders worth Rs468.8mn. The scrip touched an intra-day high of Rs138 and a low of Rs124 and recorded volumes of over 87,000 shares on BSE.
Bajaj Auto total sales in June stood at 193,202 units versus 196,741 translating in to a 1.8% decline. Motorcycle sales were at 167,945 versus 175,903 units. Three Wheeler sales were at 24,731 versus 19,629 units. Exports also grew at 67,726 as against 64, 878 units.
The stock was down 3.1% to Rs977 after hitting an intra-day high of Rs1005 and a low of Rs963 and has recorded volumes of over 0.12nm shares on BSE.
FIIs continue buying
Inflow of Rs 163.70 crore on 1 July 2009
Foreign institutional investors (FIIs) bought shares worth a net Rs 163.70 crore on Wednesday, 1 July 2009, lower than 228.90 crore on Tuesday, 30 June 2009.
The net inflow of Rs 163.70 crore on 1 July 2009 was a result of gross purchases Rs 1,448.60 crore and gross sales Rs 1,284.90 crore. The BSE Sensex gained 151.63 points or 1.05% to 14,645.47 on that day.
FII inflow in calendar year 2009 totaled Rs 24,708 crore (till 1 July 2009).
There are a total of 1672 foreign funds registered with the Securities & Exchange Board of India (Sebi).
Precious metals lose sheen again
Dollar strengthens on weak job report
Precious metal prices fell at USA on Thursday, 02 July, 2009. Prices lost some luster today after the dollar strengthened today following a disappointing job market report from the Labor Department.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.
On Thursday, gold for August delivery ended at $931, lower by $10.3 (1.1%) an ounce on the New York Mercantile Exchange. Yesterday, prices had gone up by almost 1.5%. Last week, gold ended higher by 1%. This was the first weekly gain for the yellow metal in four weeks. Year to date, gold prices are higher by 5.3%.
For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had 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 Thursday, Comex silver futures for July delivery lost 35.2 cents (2.6%) at $13.408 an ounce. Last week, silver ended lower by 0.5%.
Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. For second quarter, silver rose 4.5%. Year to date, silver has climbed 18.6% this year. For 2008, silver had lost 24%.
In the currency market on Thursday, the dollar index, a six-currency measure of the greenback's value, rose, rose by almost 1%. The dollar index dropped by 6.4% in the second quarter and is lower by 0.5% on a y-t-d basis.
The Labor Department reported on Thursday, 02 July, 2009 that the U.S. economy shed jobs at a faster pace in June than in May. As per the report, nonfarm payrolls shrank by 467,000 in June, 2009, higher than the 325,000 decline expected and the 322,000 jobs lost in May.
The unemployment rate ticked higher to 9.5% in June from 9.4% in the previous month. There was only a very slight 8,000-downward revision to payroll losses in April and May.
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 65 (0.44%) at Rs 14,484 per 10 grams. Prices rose to a high of Rs 14,542 per 10 grams and fell to a low of Rs 14,418 per 10 grams during the day's trading.
At the MCX, silver prices for September delivery closed Rs 367 (1.7%) lower at Rs 21,624/Kg. Prices opened at Rs 21,990/kg and fell to a low of Rs 21,480/Kg during the day's trading.
Crude drops further
Price drops as weak job report rekindles demand concerns
Crude prices fell lower at Nymex on Thursday, 02 July, 2009. Prices fell today as disappointing job report at Wall Street once again rekindled fears about the recovery of the economy from current recession. The strong dollar was also the reason for today's slipping crude price.
On Thursday, crude-oil futures for light sweet crude for August delivery closed at $66.73/barrel (lower by $2.58 or 3.7%). For the week, crude ended lower by 3.5%. Trading is closed on Friday in observance of the Independence Day holiday.
For the month of June, 2009, crude ended higher by 5.5%. In May, crude had registered the largest monthly gain in a decade rising 30%. For the second quarter, crude ended higher by 40%. It was the largest quarterly gain for crude since Saddam Hussain's invasion of Kuwait in 1990's third quarter. Prices rallied in second quarter due to supply concerns and weak dollar. The dollar index dropped by 6.4% in the second quarter and is lower by 1% on a y-t-d basis. Crude prices had rallied 11.3% in the first quarter of 2009.
Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 57% since then. Year to date, in 2009, crude prices are higher by 52%.
In the currency market on Thursday, the dollar index, a six-currency measure of the greenback's value, rose, rose by almost 1%. The dollar index dropped by 6.4% in the second quarter and is lower by 0.5% on a y-t-d basis.
The Labor Department reported on Thursday, 02 July, 2009 that the U.S. economy shed jobs at a faster pace in June than in May. As per the report, nonfarm payrolls shrank by 467,000 in June, 2009, higher than the 325,000 decline expected and the 322,000 jobs lost in May.
The unemployment rate ticked higher to 9.5% in June from 9.4% in the previous month. There was only a very slight 8,000-downward revision to payroll losses in April and May.
Energy Information Administration reported yesterday that crude oil inventories rose 200,000 barrels to 28.6 million barrels in the week ended 26 June, 2009, rising for the first week since the week in five weeks.
Meanwhile, gasoline inventories increased 2.3 million barrels and distillate stockpiles, which include heating oil and diesel, gained 2.9 million barrels. Gains in both products came bigger than expectations. The report also showed that demand for petroleum products still remained weak. Total products supplied over the last four-week period have averaged 18.4 million barrels per day, down by 5.8% compared to the similar period last year.
Also at the Nymex on Thursday, August reformulated gasoline fell 6.82 cents, or 3.7%, to $1.7908 a gallon and August heating oil dropped 6.41 cents, or 3.6%, to $1.7016 a gallon.
August natural-gas futures fell 4.7 cents, or 0.5%, to $3.615 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 3,238/barrel, lower by Rs 64 (1.93%) against previous day's close. Natural gas for July delivery closed at Rs 180.1/mmbtu, lower by Rs 3.7/mmbtu (2%).
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